Johnson & Johnson v. Court of Appeals

G.R. No. 102692 (September 23, 1996)

Facts:

This case arose from a complaint filed by Johnson & Johnson (Phils.), Inc. against spouses Delilah A. Vinluan and Capt. Alejo M. Vinluan for the collection of a sum of money amounting to P235,880.89, which was incurred by Delilah Vinluan in her business, Vinluan Enterprises. The obligation was evidenced by several checks issued by Delilah that bounced due to insufficient funds. Despite repeated demands for payment and extensions granted by the plaintiff, the defendants failed to settle the obligation, prompting the plaintiff to file a complaint in the Regional Trial Court of Makati.

After trial, the court rendered a decision on February 5, 1985, holding Delilah solely liable for the debt, as there was no privity of contract between the plaintiff and her husband, Alejo. The trial court found that the obligations were incurred without Alejo's knowledge or consent and that the conjugal partnership did not benefit from Delilah's business, which had incurred losses.

Subsequently, a writ of execution was issued to enforce the judgment against Delilah's properties. However, the notices of levy included not only her paraphernal properties but also the conjugal properties, leading Alejo to file a third-party claim to lift the levy on the conjugal properties. The trial court denied this claim, asserting that Alejo's consent to his wife's business activities was implied due to his failure to object and his involvement in negotiations for settling the debt.

Alejo appealed to the Court of Appeals, which ruled in his favor, declaring the trial court's orders null and void, stating that the trial court had effectively reversed its own final judgment by allowing the execution against the conjugal properties.

Legal Issues:

1. Whether a husband can be held liable for the debts of his wife incurred without his consent and which did not benefit the conjugal partnership.
2. Whether a judgment declaring a wife solely liable can be executed upon conjugal property over the objection of the husband.

Arguments:

• Petitioner (Johnson & Johnson):

  • The petitioner argued that the trial court's decision did not absolve the conjugal partnership from liability, as the husband’s consent was implied through his actions and negotiations regarding the debt.
  • The petitioner contended that the enforcement of the judgment against the conjugal property was merely a compliance with the law, and that the trial court's subsequent orders were clarificatory rather than a modification of the final judgment.

• Respondent (Alejo Vinluan):

  • Alejo argued that the trial court's orders to levy on the conjugal properties effectively reversed its final decision, which had already declared him not liable for his wife's debts.
  • He maintained that the obligations incurred by Delilah did not benefit the conjugal partnership and that he had not given consent for her business activities.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the decision of the Court of Appeals, ruling that the trial court had no authority to modify its final judgment. The Court emphasized that a judgment that has become final and executory cannot be altered except to correct clerical errors. The Court reiterated that the trial court had previously found that Alejo did not consent to his wife's business and that the debts incurred did not benefit the conjugal partnership.

The Court held that the trial court's later orders attempting to levy on the conjugal properties were improper, as they contradicted the final judgment that had already established Delilah as solely liable for the debt. The Court underscored the principle that a judgment must be executed according to its terms, and any attempt to modify the judgment post-finality is impermissible.

Significant Legal Principles Established:

1. A husband cannot be held liable for his wife's debts incurred without his consent and which do not benefit the conjugal partnership.
2. A final and executory judgment cannot be modified or reversed by the court, except to correct clerical errors.
3. The properties of a conjugal partnership cannot be levied upon for the personal debts of one spouse unless the obligations were incurred for the benefit of the conjugal partnership and with the consent of the other spouse.