MANACOP VS CA

FLORANTE F. MANACOP vs. COURT OF APPEALS and E & L MERCANTILE, INC.,

G.R. No. 97898

August 11, 1997

Facts:

          Petitioner Florante F. Manacop and his wife Eulaceli purchased on March 10, 1972 a residential lot with a bungalow, in consideration of P75,000.00. On March 17, 1986, Private Respondent E & L Merchantile, Inc. filed a complaint against petitioner and F.F. Manacop Construction Co., Inc. before the Regional Trial Court of Pasig, Metro Manila to collect an indebtedness of P3,359,218.45. Instead of filing an answer, petitioner and his company entered into a compromise agreement with private respondent, the salient portion of which provides: That defendants will undertake to pay the amount of P2,000,000.00 as and when their means permit, but expeditiously as possible as their collectibles will be collected. On April 20, 1986, the trial court rendered judgment approving the aforementioned compromise agreement. It enjoined the parties to comply with the agreement in good faith. On July 15, 1986, private respondent filed a motion for execution which the lower court granted. However, execution of the judgment was delayed. Eventually, the sheriff levied on several vehicles and other personal properties of petitioner. In partial satisfaction of the judgment debt, these chattels were sold at public auction for which certificates of sale were correspondingly issued by the sheriff.

          On August 1, 1989, petitioner and his company filed a motion to quash the alias writs of execution and to stop the sheriff from continuing to enforce them on the ground that the judgment was not yet executory. They alleged that the compromise agreement had not yet matured, as there was no showing that they had the means to pay the indebtedness or that their receivables had in fact been collected.

Issue:

          Whether or not the final and executory decision promulgated and a writ of execution issued before the effectivity of the Family Code can be executed on a family home constituted under the provisions of the said Code.

Ruling:

          Yes. The Supreme Court held that Under the Family Code, a family home is deemed constituted on a house and lot from the time it is occupied as a family residence. There is no need to constitute the same judicially or extrajudicially as required in the Civil Code. If the family actually resides in the premises, it is, therefore, a family home as contemplated by law. Thus, the creditors should take the necessary precautions to protect their interest before extending credit to the spouses or head of the family who owns the home.

          Article 155 of the Family Code also provides as follows: Art. 155. The family home shall be exempt from execution, forced sale or attachment except: (1) For nonpayment of taxes; (2) For debts incurred prior to the constitution of the family home; (3) For debts secured by mortgages on the premises before or after such constitution; and (4) For debts due to laborer, mechanics, architects, builders, material men and others who have rendered service or furnished material for the construction of the building. The exemption provided, as aforestated is effective from the time of the constitution of the family home as such, and lasts so long as any of its beneficiaries actually resides therein. In the present case, the residential house and lot of petitioner was not constituted as a family home whether judicially or extrajudicially under the Civil Code. It became a family home by operation of law only under Article 153 of the Family Code. It is deemed constituted as a family home upon the effectivity of the Family Code on August 3, 1988 not August 4, one year after its publication in the Manila Chronicle on August 4, 1987 (1988 being a leap year).