GELANO vs.

CA
GR No. L-39050 – Feb. 24, 1981
De Castro

SUBJECT: Charges upon ACP

FACTS:
 Respondent Insular Sawmill is a corporation with a corporate life of 50 years (Sept. 17, 1945-
Sept. 17, 1995) w/ the purpose of carrying on a lumber and sawmill business. To carry on this
business, it leased the paraphernal property of petitioner-wife Guillermina Gelano at Paco,
Manila for P1.2k/month.
 Between Nov. 19, 1947-Dec. 26, 1950 petitioner-husband Carlos Gelano obtained P25,950 as
cash advances from Insular on the agreement that Insular could deduct the same from the monthly
rentals of the leased premises until said cash advances are fully paid.
 With that said, Carlos was able to pay the 5k but left a balance of 20k. Guillermina refused to pay
the balance because the amount was for the personal account of Carlos asked for by, and given to
him, w/o her knowledge and consent and did not benefit the family.
 Also, from May 4, 1948 to Sept. 11, 1949 petitioner sps. made credit purchases of lumber
materials from Insular w/c totaled P1.1k for the repair and improvement of their residence. Carlos
only made 1 installment and left a balance of P946.
 On July 14, 1952, in order to accommodate and help the sps. renew previous loans obtained by
them from the China Bank, Insular executed a joint and several promissory note w/ Carlos in
favor of said bank in the amount of 8k payable in 60 days. The total amount is 9.1k w/ interest
but Carlos was only able to pay 5k.
 And so, Insular filed a collection case on May 29, 1959. But while pending, the corporation
shortened its life up to Dec. 31, 1960. (This was the main issue.)

CFI and CA ruled in favor of Insular regarding the collection case making them jointly liable.

ISSUE: WON petitioner spouses should be jointly and severally liable.

HELD: No.
When Guillermina alleged that the obligations contracted by Carlos from Nov. 19, 1947-Aug.
18, 1950 (before NCC) and from Dec. 26, 1950-July 14, 1952 (during NCC) were his personal
obligations, hence, petitioner sps. should not be held jointly and severally liable.

So the SC stated that the CA erred in ruling that they should be held jointly and severally liable.
Since it redounded to the benefit of the family, hence, the conjugal property should be liable for
the debt of Carlos. The SC considered the conjugal property as a single entity.