KELLEY VS PLANTERS PRODUCT

SPOUSES AUTHER G. KELLEY, JR. and DORIS A. KELLEY vs. PLANTERS PRODUCTS, INC. and JORGE A. RAGUTANA,

G.R. No. 172263
July 9, 2008

Facts:
          Petitioner Auther G. Kelley, Jr. (Auther) acquired agricultural chemical products on consignment from respondent Planters Products, Inc. (PPI) in 1989. Due to Auther’s failure to pay despite demand, PPI filed an action for sum of money against him in the Regional Trial Court of Makati City. After trial on the merits, the RTC Makati City decided in favor of PPI and issued a writ of execution. After being belatedly informed of the said sale, petitioners Auther and his wife Doris A. Kelley filed a motion to dissolve or set aside the notice of levy in the RTC Makati City on the ground that the subject property was their family home which was exempt from execution.

Issue:
          Whether or not the subject property is the family home of the petitioners.

Ruling:
          Under the Family Code, there is no need to constitute the family home judicially or extrajudicially. All family homes constructed after the effectivity of the Family Code (August 3, 1988) are constituted as such by operation of law. All existing family residences as of August 3, 1988 are considered family homes and are prospectively entitled to the benefits accorded to a family home under the Family Code.

          The exemption is effective from the time of the constitution of the family home as such and lasts as long as any of its beneficiaries actually resides therein. Moreover, the debts for which the family home is made answerable must have been incurred after August 3, 1988. Otherwise (that is, if it was incurred prior to August 3, 1988), the alleged family home must be shown to have been constituted either judicially or extrajudicially pursuant to the Civil Code.

          The rule, however, is not absolute. The Family Code, in fact, expressly provides for the following exceptions: Article 155. The family home shall be exempt from execution, forced sale or attachment except: (1) For non-payment of taxes; (2) For debts incurred prior to the constitution of the family home; (3) For debts secured by a mortgage on the premises before or after such constitution; and (4) For debts due to laborers, mechanics, architects, builders, material men and others who have rendered service or furnished material for the construction of the building.

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