CHICO-NAZARIO,J.

: Facts: Quirino de Guzman and the Spouses Carandang are stockholders as well as corporate officers of Mabuhay Broadcasting System (MBS), with equities at fifty four percent (54%) and forty six percent (46%) respectively. On November 26, 1983, the capital stock of MBS was increased, from P500,000 to P1.5 million and P345,000 of this increase was subscribed by the spouses Carandang o Thereafter, on March 3, 1989, MBS again increased its capital stock, from P1.5 million to P3 million, the spouses Carandang yet again subscribed to the increase. o They subscribed to P93,750 worth of newly issued capital stock. De Guzman claims that, part of the payment for these subscriptions were paid by him, P293,250 for the November 26, 1983 capital stock increase and P43,125 for the March 3, 1989 Capital Stock increase or a total of P336,375. o Thus, on March 31, 1992, [de Guzman] sent a demand letter to the spouses Carandang for the payment of said total amount. The spouses Carandang refused to pay the amount, contending that a pre-incorporation agreement was executed between Arcadio Carandang and de Guzman, whereby the latter promised to pay for the stock subscriptions of the former without cost, in consideration for Arcadio Carandangs technical expertise, his newly purchased equipment, and his skill in repairing and upgrading radio/communication equipment therefore, there is no indebtedness on their part. On June 5, 1992, de Guzman filed his complaint, seeking to recover the P336,375 together with damages. After trial on the merits, the trial court disposed of the case in favor of de Guzman o Accordingly, the spouses Carandang are ordered to jointly and severally pay de Guzman P336,375.00 representing the spouses Carandangs loan to de Guzman; interest on the preceding amount at the rate of twelve percent (12%) per annum from June 5, 1992 when this complaint was filed until the principal amount

shall have been fully paid; P20,000.00 as attorneys fees; and Costs of suit. spouses Carandang appealed the RTC Decision to the Court of Appeals, which affirmed the same in the 22 April 2003 assailed Decision Issues: 1. Whether or not the RTC Decision is void for failing to comply with Section 16, Rule 3 of the Rules of Court 2. Whether or not the RTC should have dismissed the case for failure to state a cause of action, considering that Milagros de Guzman, allegedly an indispensable party, was not included as a party-plaintiff 3. Whether or not respondents were able to prove the loan sought to be collected from petitioners 4. Whether or not the liability of the spouses Carandang is joint and solidary Held: 1. NO SC stated that unlike jurisdiction over the subject matter which is conferred by law and is not subject to the discretion of the parties, jurisdiction over the person of the parties to the case may be waived either expressly or impliedly. o Implied waiver comes in the form of either voluntary appearance or a failure to object. Not only do the heirs of de Guzman interpose no objection to the jurisdiction of the court over their persons; they are actually claiming and embracing such jurisdiction. o In doing so, their waiver is not even merely implied (by their participation in the appeal of said Decision), but express (by their explicit espousal of such view in both the Court of Appeals and in this Court). o The heirs of de Guzman had no objection to being bound by the Decision of the RTC. Thus, lack of jurisdiction over the person, being subject to waiver, is a personal defense which can only be asserted by the party who can thereby waive it by silence. SC ruled that the RTC Decision is valid despite the failure to comply with Section 16, Rule 3 of the Rules of Court, because of the express waiver of the heirs to the jurisdiction over their persons, and because there had been, before the promulgation of the RTC Decision, no further proceedings requiring the appearance of de Guzmans counsel. 2. No

SC agrees with the CA in its ruling that the joint account of spouses Quirino A de Guzman and Milagros de Guzman from which the four (4) checks were drawn is part of their conjugal property and under both the Civil Code and the Family Code the husband alone may institute an action for the recovery or protection of the spouses conjugal property. Petitioners erroneously interchange the terms real party in interest and indispensable party. o A real party in interest is the party who stands to be benefited or injured by the judgment of the suit, or the party entitled to the avails of the suit. o An indispensable party is a party in interest without whom no final determination can be had of an action, o A necessary party, which is one who is not indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action. The spouses Carandang are indeed correct that (i)f a suit is not brought in the name of or against the real party in interest, a motion to dismiss may be filed on the ground that the complaint states no cause of action.

However, what dismissal on this ground entails is an examination of whether the parties presently pleaded are interested in the outcome of the litigation, andn ot whether all persons interested in such outcome are actually pleaded. The latter query is relevant in discussions concerning indispensable and necessary parties, butnot in discussions concerning real parties in interest. Both indispensable and necessary parties are considered as real parties in interest, since both classes of parties stand to be benefited or injured by the judgment of the suit. 3. Yes The petitioners offered the following argument o It is an undeniable fact that payment is not equivalent to a loan. For instance, if Mr. A decides to pay for Mr. Bs

obligation, that payment by Mr. A cannot, by any stretch of imagination, possibly mean that there is now a loan by Mr. B to Mr. A. There is a possibility that such payment by Mr. A is purely out of generosity or that there is a mutual agreement between them. As applied to the instant case, that mutual agreement is the pre-incorporation agreement (supra) existing between Mr. de Guzman and the petitioners --- to the effect that the former shall be responsible for paying stock subscriptions of the latter. Thus, when Mr. de Guzman paid for the stock subscriptions of the petitioners, there was no loan to speak of, but only a compliance with the preincorporation agreement. SC disagrees and offers the following justifications o If indeed a Mr. A decides to pay for a Mr. Bs obligation, the presumption is that Mr. B is indebted to Mr. A for such amount that has been paid. This is pursuant to Articles 1236 and 1237 of the Civil Code. SC ruled that Articles 1236 and 1237 are clear that, even in cases where the debtor has no knowledge of payment by a third person, and even in cases where the third person paid against the will of the debtor, such payment would produce a debt in favor of the paying third person. o In fact, the only consequences for the failure to inform or get the consent of the debtor are the following: the third person can recover only insofar as the payment has been beneficial to the debtor; and the third person is not subrogated to the rights of the creditor, such as those arising from a mortgage, guarantee or penalty. SC claims that this is merely a presumption. o By virtue of the parties freedom to contract, the parties could stipulate otherwise and thus, as suggested by the spouses Carandang, there is indeed a possibility that such payment by Mr. A was purely out of generosity or that there was a mutual agreement between them. o

But such mutual agreement, being an exception to presumed course of events as laid down by Articles 1236 and 1237, must be adequately proven. The de Guzmans have successfully proven their payment of the spouses Carandangs stock subscriptions. Unfortunately for the spouses Carandang, the only testimony which touched on the existence and substance of the pre-incorporation agreement, that of petitioner Arcardio Carandang, was stricken off the record because he did not submit himself to a crossexamination of the opposing party. There being no testimony or documentary evidence proving the existence of the pre-incorporation agreement, the spouses Carandang are forced to rely upon an alleged admission by the original plaintiff of the existence of the pre-incorporation agreement. As there was no admission, and as the testimony of Arcardio Carandang was stricken off the record, we are constrained to rule HOMEOWNERS SAVINGS & LOAN BANK, petitioner, vs. MIGUELA C. DAILO, respondent. DECISION TINGA, J.: This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, assailing the Decision[1] of the Court of Appeals in CA-G.R. CV No. 59986 rendered on June 3, 2002, which affirmed with modification the October 18, 1997 Decision[2] of the Regional Trial Court, Branch 29, San Pablo City, Laguna in Civil Case No. SP-4748 (97). The following factual antecedents are undisputed. Respondent Miguela C. Dailo and Marcelino Dailo, Jr. were married on August 8, 1967. During their marriage, the spouses purchased a house and lot situated at Barangay San Francisco, San Pablo City from a certain Sandra Dalida. The subject property was declared for tax assessment purposes under Assessment of Real Property No. 94-051-2802. The Deed of Absolute Sale, however, was executed only in favor of the late Marcelino Dailo, Jr. as vendee thereof to the exclusion of his wife. [3] On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of Attorney (SPA) in favor of one Lilibeth Gesmundo, authorizing the latter to obtain a loan from petitioner Homeowners Savings and Loan Bank to be secured by the spouses Dailos house and lot in San Pablo City. Pursuant to the SPA, Gesmundo obtained a loan in the amount of P300,000.00 from petitioner. As security therefor, Gesmundo executed on the same day a Real Estate Mortgage constituted on the subject property in favor of petitioner. The abovementioned transactions, including the execution of the SPA in favor of Gesmundo, took place without the knowledge and consent of respondent. [4] Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial foreclosure proceedings on the mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in favor of petitioner as the highest bidder. After the lapse of one year without the property being redeemed, petitioner, through its vice-president, consolidated the ownership thereof by executing on June 6, 1996 an Affidavit of Consolidation of Ownership and a Deed of Absolute Sale. [5]

In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of her visits to the subject property, respondent learned that petitioner had already employed a certain Roldan Brion to clean its premises and that her car, a Ford sedan, was razed because Brion allowed a boy to play with fire within the premises. Claiming that she had no knowledge of the mortgage constituted on the subject property, which was conjugal in nature, respondent instituted with the Regional Trial Court, Branch 29, San Pablo City, Civil Case No. SP-2222 (97) for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale, Reconveyance with Prayer for Preliminary Injunction and Damages against petitioner. In the latters Answer with Counterclaim, petitioner prayed for the dismissal of the complaint on the ground that the property in question was the exclusive property of the late Marcelino Dailo, Jr. After trial on the merits, the trial court rendered a Decision on October 18, 1997. The dispositive portion thereof reads as follows: WHEREFORE, the plaintiff having proved by the preponderance of evidence the allegations of the Complaint, the Court finds for the plaintiff and hereby orders: ON THE FIRST CAUSE OF ACTION: 1. The declaration of the following documents as null and void: (a) The Deed of Real Estate Mortgage dated December 1, 1993 executed before Notary Public Romulo Urrea and his notarial register entered as Doc. No. 212; Page No. 44, Book No. XXI, Series of 1993. The Certificate of Sale executed by Notary Public Reynaldo Alcantara on April 20, 1995. The Affidavit of Consolidation of Ownership executed by the defendant The Affidavit of Consolidation of Ownership executed by the defendant over the residential lot located at Brgy. San Francisco, San Pablo City, covered by ARP No. 95-091-1236 entered as Doc. No. 406; Page No. 83, Book No. III, Series of 1996 of Notary Public Octavio M. Zayas. The assessment of real property No. 95-051-1236.

(b) (c) (c)

(d)

2. The defendant is ordered to reconvey the property subject of this complaint to the plaintiff. ON THE SECOND CAUSE OF ACTION 1. The defendant to pay the plaintiff the sum of P40,000.00 representing the value of the car which was burned. ON BOTH CAUSES OF ACTION 1. The defendant to pay the plaintiff the sum of P25,000.00 as attorneys fees; 2. The defendant to pay plaintiff P25,000.00 as moral damages; 3. The defendant to pay the plaintiff the sum of P10,000.00 as exemplary damages; 4. To pay the cost of the suit. The counterclaim is dismissed. SO ORDERED.[6] Upon elevation of the case to the Court of Appeals, the appellate court affirmed the trial courts finding that the subject property was conjugal in nature, in the absence of clear and convincing evidence to rebut the presumption that the subject property acquired during the marriage of spouses Dailo belongs to their conjugal partnership.[7] The appellate court declared as void the mortgage on the subject property because it was constituted without the knowledge and consent of respondent, in accordance with Article 124 of the Family Code. Thus, it upheld the trial courts order to reconvey the subject property to respondent.[8] With respect to the damage to respondents car, the appellate court found petitioner to be liable therefor because it is responsible for the consequences of the acts or omissions of the person it hired to accomplish the assigned task. [9] All told, the appellate court affirmed the trial courts Decision, but deleted the award for damages and attorneys fees for lack of basis. [10] Hence, this petition, raising the following issues for this Courts consideration:

1. WHETHER OR NOT THE MORTGAGE CONSTITUTED BY THE LATE MARCELINO DAILO, JR. ON THE SUBJECT PROPERTY AS CO-OWNER THEREOF IS VALID AS TO HIS UNDIVIDED SHARE. 2. WHETHER OR NOT THE CONJUGAL PARTNERSHIP IS LIABLE FOR THE PAYMENT OF THE LOAN OBTAINED BY THE LATE MARCELINO DAILO, JR. THE SAME HAVING REDOUNDED TO THE BENEFIT OF THE FAMILY.[11] First, petitioner takes issue with the legal provision applicable to the factual milieu of this case. It contends that Article 124 of the Family Code should be construed in relation to Article 493 of the Civil Code, which states: ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Article 124 of the Family Code provides in part: ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. . . . In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. . . . Petitioner argues that although Article 124 of the Family Code requires the consent of the other spouse to the mortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse from exercising full ownership over the portion of the conjugal property pertaining to him under the concept of co-ownership. [12] Thus, petitioner would have this Court uphold the validity of the mortgage to the extent of the late Marcelino Dailo, Jr.s share in the conjugal partnership. In Guiang v. Court of Appeals ,[13] it was held that the sale of a conjugal property requires the consent of both the husband and wife. [14] In applying Article 124 of the Family Code, this Court declared that the absence of the consent of one renders the entire sale null and void, including the portion of the conjugal property pertaining to the husband who contracted the sale. The same principle in Guiang squarely applies to the instant case. As shall be discussed next, there is no legal basis to construe Article 493 of the Civil Code as an exception to Article 124 of the Family Code. Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the absence of a marriage settlement, the system of relative community or conjugal partnership of gains governed the property relations between respondent and her late husband. [15] With the effectivity of the Family Code on August 3, 1988, Chapter 4 on Conjugal Partnership of Gains in the Family Code was made applicable to conjugal partnership of gains already established before its effectivity unless vested rights have already been acquired under the Civil Code or other laws. [16] The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance.[17] Unlike the absolute community of property wherein the rules on co-ownership apply in a suppletory manner, [18] the conjugal partnership shall be governed by the rules on contract of partnership in all that is not in conflict with what is expressly determined in the chapter (on conjugal partnership of gains) or by the spouses in their marriage settlements. [19] Thus, the property relations of respondent and her late husband shall be governed, foremost, by Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the rules on partnership under the Civil Code. In case of conflict, the former prevails because the Civil Code provisions on partnership apply only when the Family Code is silent on the matter. The basic and established fact is that during his lifetime, without the knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a real estate mortgage on the subject property, which formed part of their conjugal partnership. By express provision of Article 124 of the Family Code, in the absence of (court) authority or written consent of the other spouse, any disposition or encumbrance of the conjugal property shall be void.

The aforequoted provision does not qualify with respect to the share of the spouse who makes the disposition or encumbrance in the same manner that the rule on co-ownership under Article 493 of the Civil Code does. Where the law does not distinguish, courts should not distinguish. [20] Thus, both the trial court and the appellate court are correct in declaring the nullity of the real estate mortgage on the subject property for lack of respondents consent. Second, petitioner imposes the liability for the payment of the principal obligation obtained by the late Marcelino Dailo, Jr. on the conjugal partnership to the extent that it redounded to the benefit of the family.[21] Under Article 121 of the Family Code, [T]he conjugal partnership shall be liable for: . . . (3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited; . . . . For the subject property to be held liable, the obligation contracted by the late Marcelino Dailo, Jr. must have redounded to the benefit of the conjugal partnership. There must be the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. Certainly, to make a conjugal partnership respond for a liability that should appertain to the husband alone is to defeat and frustrate the avowed objective of the new Civil Code to show the utmost concern for the solidarity and well-being of the family as a unit.[22] The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with the creditor-party litigant claiming as such. [23] Ei incumbit probatio qui dicit, non qui negat (he who asserts, not he who denies, must prove).[24] Petitioners sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to finance the construction of housing units without a doubt redounded to the benefit of his family, without adducing adequate proof, does not persuade this Court. Other than petitioners bare allegation, there is nothing from the records of the case to compel a finding that, indeed, the loan obtained by the late Marcelino Dailo, Jr. redounded to the benefit of the family. Consequently, the conjugal partnership cannot be held liable for the payment of the principal obligation. In addition, a perusal of the records of the case reveals that during the trial, petitioner vigorously asserted that the subject property was the exclusive property of the late Marcelino Dailo, Jr. Nowhere in the answer filed with the trial court was it alleged that the proceeds of the loan redounded to the benefit of the family. Even on appeal, petitioner never claimed that the family benefited from the proceeds of the loan. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. [25] A party may change his legal theory on appeal only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory. [26] WHEREFORE, the petition is DENIED. Costs against petitioner. G.R. No. 92284 July 12, 1991 TEODORO J. SANTIAGO, petitioner, vs. THE COMMISSION ON AUDIT, and the GOVERNMENT SERVICE INSURANCE SYSTEM, respondents. Leven S. Puno for petitioner. Cesar R. Vidal for respondent GSIS.

CRUZ, J.:p The basic issue presented in this case is the correct interpretation of Executive Order No. 966, Section 9, providing as follows: Sec. 9. Highest Basic Salary Rate. The compensation of salary or pay which may be used in computing the retirement benefits shall be limited to the highest salary rate actually received by an official/employee as fixed by law and/or indicated in his duly approved appointment. This shall include salary adjustments duly authorized and implemented by the presidential issuance(s) and budget circular(s), additional basic compensation or salary indicated in an appointment duly approved as an exception to the prohibition on additional or double compensation, merit increases, and compensation

for substitutionary services or in an acting capacity. For this purpose, all other compensation and/or fringe benefits such as per diems, allowances, bonuses, overtime pay, honoraria hazard pay, flying time fees, consultancy or contractual fees, or fees in correcting and/or releasing examination papers shall not be considered in the computation of the retirement benefits of an official/employee. The question was raised by the petitioner in connection with the computation of his retirement benefits which he claims was not made in conformity to the above-quoted requirement. The petitioner was employed in the Commission on Audit as State Auditor IV with a monthly salary of P7,219.00. In 1988, he was assigned to the COA Auditing Unit at the Department of Transportation and Communications and detailed to the Manila International Airport Authority. On July 1, 1988, the board of directors of the MIAA passed the following resolution: 1 RESOLUTION NO. 88-70 RESOLVED, that, as recommended by Management, the designation of Mr. Teodoro J. Santiago, Jr., as Assistant General Manager for Finance and Administration, effective 15 August 1988, be approved, as it is hereby approved, subject to the following conditions: 1. He will retain his plantilla position in COA; 2. His compensation from MIAA, shall be the difference between the salary of AGM for Finance and Administration (MIAA) and that of State Auditor IV (COA); and 3. His retirement benefits shall be chargeable against COA. This resolution was duly communicated to the COA on July 11, 1988, with a request for the petitioner's indefinite detail to the MIAA. In reply, Chairman Eufemio C. Domingo wrote MIAA on July 14, 1988, as follows: 2 . . . please be informed that we are authorizing such detail through appropriate office order up to February 15, 1989. The order includes authority to collect representation and transportation allowances (RATA) of P1,200.00 each month and other allowances attendant to the position chargeable against the funds of the NAIAA. As regards your proposal that Mr. Santiago be allowed to collect the difference in salary of his position in the COA as State Auditor IV and his designated position as Assistant General Manager thereat, likewise chargeable against the funds of that office, this Commission interposes no objection to the proposal to pay him the difference between his present monthly salary of P7,219.00 and that of Assistant General Manager which reportedly amounts to P13,068.00 a month or a monthly difference of P5,849.00, provided that he is formally designated (not appointed) Assistant General Manager by the Board of Directors, NAIAA, and that payment of his salary differential is approved by the same office.xxx xxx xxx On August 10, 1988, Secretary Reinerio O. Reyes, concurrently chairman of the MIAA board of directors, issued an office order formally designating the petitioner as Acting Assistant General Manager for Finance and Administration, effective August 16, 1988. 3 The petitioner served in this capacity and collected the differential salary of P5,849.00 plus his salary of P7,219.00 for a total compensation of P13,068.00. He received this compensation until December 5, 1988, when he was transferred to the Presidential Management Staff under COA Office Order No. 8811448 dated December 6, 1988. On March 1, 1989, the petitioner retired after working in the government for 44 years. In computing his retirement benefits, the Government Service Insurance System used as basis the amount of P13,068.00, considering this the highest basic salary rate received by the petitioner in the

course of his employment. 4 The COA disagreed, however, and paid his retirement benefits on the basis of only his monthly salary of P7,219.00 as State Auditor IV. 5 The petitioner requested recomputation based on what he claimed as his highest basic salary rate of P13,068.00. This was denied on December 8, 1989, and he was so notified on February 5, 1990. On March 7, 1990, he came to this Court to seek reversal of the decision of the COA on the ground of grave abuse of discretion. We note at the outset that there is no dispute regarding the legality of the petitioner's occupying the second position in the MIAA and receiving additional compensation for his services therein. As the Solicitor General observed. "What the petitioner was receiving from the MIAA was the additional compensation allowed under Section 17 of Act No. 4187 which, in turn, is allowed under Section 8, Paragraph B, Article IX of the Constitution." 6 In Quimzon v. Ozaeta, 7 this Court held that double appointments are not prohibited as long as the positions involved are not incompatible, except that the officer or employee appointed cannot receive additional or double compensation unless specifically authorized by law. The additional compensation received by the petitioner is not an issue in the case at bar because of its express approval by the COA and the admission of the Solicitor General that it is allowed under the cited provision. More specifically, Section 17 of Act No. 4187 provides: Any existing act, rule or order to the contrary notwithstanding, no full time officer or employee of the government shall hereafter receive directly or indirectly any kind of additional or extra compensation or salary including per diems and bonuses from any fund of the government, its dependencies, and semi-government entities or boards created by law except: (1) Officers serving as chairman or members of entities and enterprise organized, operated, owned or controlled by the government, who may be paid per them for each meeting actually attended or when an official travel; (2) Auditors and accountants; (3) Provincial and municipal treasurers and their employees; (4) Employees serving as observers of the Weather Bureau; and (5) Those authorized to receive extra or additional compensation by virtue of the provision of this Act. (Emphasis supplied) The Solicitor General argues, albeit not too strongly, that the additional compensation received by the petitioner was merely an honorarium and not a salary. As a mere honorarium, it would not fall under the provision of Section 9 and so should not be added to his salary in computing his retirement benefits. We cannot accept this contention. An honorarium is defined as something given not as a matter of obligation but in appreciation for services rendered, a voluntary donation in consideration of services which admit of no compensation in money. 8 The additional compensation given to the petitioner was in the nature of a salary because it was receive by him as a matter of right in recompense for services rendered by him as Acting Assistant General Manager for Finance and Administration. In fact, even Chairman Domingo referred to it in his letter dated July 14, 1988, as the petitioner's "salary differential." The Solicitor General's main argument is that the petitioner cannot invoke Section 9 because he was not appointed to the second position in the MIAA but only designated thereto. It is stressed that under the said provision, "the compensation of salary or pay which may be used in computing the retirement benefits shall be received by an official employee as fixed by law and/or indicated in his duly approved appointment." The petitioner's additional salary was fixed not in a duly approved appointment but only in a designation.

Belittling this argument, the petitioner maintains that there is no substantial distinction between appointment and designation. He cites Mechem, who defines appointment as "the act of designation by the executive officer, board or body, to whom that power has been delegated, of the individual, who is to exercise the functions of a given office." 9 He also invokes Borromeo v. Mariano, 10 where this Court said that "the term "appoint," whether regarded in its legal or in its ordinary acceptation, is applied to the nomination or designation of an individual." Strictly speaking, there is an accepted legal distinction between appointment and designation. While appointment is the selection by the proper authority of an individual who is to exercise the functions of a given office, designation, on the other hand, connotes merely the imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier appointment (or election). 11 Thus, the appointed Secretary of Trade and Industry is, by statutory designation, a member of the National Economic and Development Authority. 12 A person may also be designated in an acting capacity, as when he is called upon to fill a vacancy pending the selection of a permanent appointee thereto or, more usually, the return of the regular incumbent. In the absence of the permanent Secretary for example, an undersecretary is designated acting head of the department. 13 As the Court said in Binamira v. Garrucho:
14

Appointment may be defined as the selection, by the authority vested with the power, of an individual who is to exercise the functions of a given office. When completed, usually with its confirmation, the appointment results in security of tenure for the person chosen unless he is replaceable at pleasure because of the nature of his office. Designation, on the other hand, connotes merely the imposition by law of additional duties on an incumbent official, as where, in the case before us, the Secretary of Tourism is designated Chairman of the Board of Directors of the Philippine Tourism Authority, or where, under the Constitution, three Justices of the Supreme Court are designated by the Chief Justice to sit in the Electoral Tribunal of the Senate or the House of Representatives. It is said that appointment is essentially executive while designation is legislative in nature. Nevertheless, we agree with the petitioner that in the law in question, the term "appointment" was used in a general sense to include the term "designation." In other words, no distinction was intended between the two terms in Section 9 of Executive Order No. 966. We think this to be the more reasonable interpretation, especially considering that the provision includes in the highest salary rate "compensation for substitutionary services or in an acting capacity." This need not always be conferred by a permanent appointment. A contrary reading would, in our view, militate against the letter of the law, not to mention its spirit as we perceive it. That spirit seeks to extend the maximum benefits to the retiree as an additional if belated recognition of his many years of loyal and efficient service in the government. As thus interpreted, Section 9 clearly covers the petitioner, who was designated Acting Assistant General Manager for Finance and Administration in the office order issued by Secretary Reyes on August 10, 1988. The position was then vacant and could be filled either by permanent appointment or by temporary designation. It cannot be said that the second position was only an extension of the petitioner's office as State Auditor IV in the Commission on Audit as otherwise there would have been no need for his designation thereto. The second office was distinct and separate from his position in the Commission on Audit. For the additional services he rendered for the MIAA, he was entitled to additional compensation which, following the letter and spirit of Section 9, should be included in his highest basic salary rate. It is noteworthy that the petitioner occupied the second office not only for a few days or weeks but for more than three months. His designation as Acting Assistant General Manager for Finance and Administration was not a mere accommodation by the MIAA. On the contrary, in his letter to Chairman Domingo requesting the petitioner's services. MIAA General Manager Evergisto C. Macatulad said, "Considering his qualifications and work experience, we believe that a finance man of his stature and caliber can be of great help in the efficient and effective performance of the Airport's functions." Retirement laws should be interpreted liberally in favor of the retiree because their intention is to provide for his sustenance, and hopefully even comfort, when he no longer has the stamina to continue earning his livelihood. After devoting the best years of his life to the public service, he deserves the appreciation of a grateful government as best concretely expressed in a generous retirement gratuity commensurate with the value and length of his services. That generosity is the least he should expect now that his work is done and his youth is gone. Even as he feels the weariness in his bones and glimpses the approach of the

lengthening shadows, he should be able to luxuriate in the thought that he did his task well, and was rewarded for it. WHEREFORE, the petition is GRANTED. The challenged resolution is SET ASIDE and judgment is hereby rendered DIRECTING the computation of the petitioner's retirement benefits on the basis of his Highest Basic Salary Rate of P13,068.00, It is so ordered. CONSOLACION VILLANUEVA vs. INTERMEDIATE APPELLATE COURT GR No. 74577 192 SCRA 21 Dcember 4, 1990 FACTS: Dorothea and Teodoro Aranas borrowed P18,000 from private respondent Jesus Bernas, mortgaging as collateral their father Modestos property, Lot 13-C. In the loan agreement between them on Oct. 30, 1975, the Aranas described themselves as the absolute co-owners. When Dorothea and Teodoro failed to pay the loan, Bernas caused the extrajudicial foreclosure of the mortgage in 1977 and acquired the land as the highest bidder. After the foreclosure sale, the Aranases executed a deed of extrajudicial partition in 1978, in which they adjudicated the same lot 13-C unto themselves in equal share pro-indiviso. Bernas then consolidated his ownership over the lot when the mortgagors failed to redeem it withn the reglementary period, and had the title in the name of Modesto cancelled and another TCT issued in his name. On November 24, 1978, herein petitioner Consolacion Villanueva and Raymundo Aranas (witness to the deed of mortgage in 1975) filed a complaint with the RTC of Roxas ity against respondents spouses Jesus and Remedios Bernas, for the cancellation of the TCT under the name of the Bernases, and they (Villanueva and Aranas) be declared co-owners of the land. Petitioner alleged that spouses Modesto and Victoria Aranas in 1987 and 1958 executed two separate wills: first bequeathing to Consolacion and Raymundo and to Dorothea and Teodoro, in equal shares pro diviso, all of said Victorias shares from the conjugal partnership property; and second Modestos interests in his conjugal partnership with Victoria as well as his separate properties bequeathed to Dorothea and Teodoro (his illegitimate children). The trial court dismissed the complaint, declaring herein respondents as the legal owners of the disputed property. Upon appeal, the Intermediate Appellate Court (IAC) affirmed the lower courts decision in

toto.

ISSUE: Whether or not Villanueva had a right over Lot 13-C and the improvements thereon made by Victoria rendered the lot as conjugal property. HELD: Lot 13-C was not a conjugal partnership property of Victoria and Modesto. It was Modestos exclusive, private property, which he inherited from his parents. Moreover, since Victoria died ahead of Modesto, Victoria did not inherit said lot from him and therefore had nothing of Lot 13-C to bequeath by will of otherwise to Consolacion. Article 158 of the Civil Code says that improvements, whether for utility or adornment made on the separate property of the spouses through advancements from the partnership or through the industry of either spouse belong to the conjugal partnership, and buildings constructed at the expense of the partnership during the marriage on land belonging to one of the spouses also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the same. Proof, therefore, is needful of the time of the making or construction of the improvements and the source of the funds used therefor in order to determine the character of the improvements as belonging to the conjugal partnership or to one spouse separately. No such proof was presented or proffered by Villanueva. What is certain is that the land on which the improvements stand was the

exclusive property of Modesto and that where the property is registered in the name of one spouse only and there is no showing of when precisely the property was acquired, the presumption is that is belongs exclusively to said spouse [PNB vs. CA, 153 SCRA 435, 1987 ]. It is not therefore possible to declare the improvements to be conjugal in character. Furthermore, Bernas mode of acquisition of ownership over the property appears in all respect to be regular, untainted by any defect whatsoever. Bernas must therefore be deemed to have acquired indefeasible and clear title to Lot 13-C which cannot be defeated or negated by claims subsequently arising and of which he had no knowledge or means of knowing prior to their assertion and ventilation. NOVERNIA P. NAGUIT, petitioner, vs. THE COURT OF APPEALS, OSLER U. PADUA and NORBERTO B. MAGSAJO, respondents. DECISION GONZAGA-REYES, J.: In a decision rendered on 15 October 1991, the Regional Trial Court (RTC) of Makati, Branch 133, found Rolando Naguit liable for violation of Batas Pambansa Blg. 22, and ordered him to idemnify private respondent Osler U. Padua in the amount of P260,000.00 and to pay the costs of the action (Criminal Case No. 90-2645). A writ of execution was issued by said court on 23 June 1992 and pursuant thereto, respondent Sheriff Norberto B. Magsajo levied upon a condominium unit covered by Condominium Certificate of Title No. 7362 of the Registry of Deeds for the City of Makati, which notice of levy was annotated at the back of the title. Consequently, the property was sold at a public auction for P318,050.00 in favor of private respondent, as the highest bidder. The certificate of sale was issued in the name of private respondent and registered with the Registry of Deeds on 25 August 1994. On 8 August 1995, petitioner filed a complaint with the RTC of Makati against private respondent Padua and respondent Sheriff Magsajo for the annulment of sale and for damages, with a prayer for the issuance of a writ of preliminary injunction in order to enjoin the final conveyance of title over the condominium unit to private respondent (Civil Case No. 95-1182). Petitioner claimed that the debt contracted by her husband did not redound to the benefit of the family, nor was it made with her consent, and therefore, should not be charged to the conjugal partnership of gains or to her exclusive property; that the condominium unit levied upon and sold to private respondent is her exclusive property, not the judgment obligors; and that consequently, the levy and sale of the condominium unit are void. i[1] On 20 September 1995, Branch 136 of the RTC of Makati denied petitioners prayer for the issuance of preliminary injunction, explaining that The perceived anomaly in the auction sale of the property subject of this case, which [is] claimed to be owned by the petitioner is a matter within the competence of the Court which authorized the levy on execution of judgment, of property of plaintiff in this case. If plaintiff believes that there were irregularities in the auction sale of the property subject of this case which [is] claimed to be owned by the petitioner, the problems should have been threshed out before [the] RTC Makati, Branch 133, which court authorized the levy on execution of judgment of property of plaintiff in this case. Besides, the petitioner should have elevated the matter to the higher tribunal, and seek proper injunctive relief, and not to refer to this Court which does not exercise an appellate authority over the court that issued the aforesaid writ of execution. The Court agrees with the argument of the defendant that the present action of the plaintiff in seeking relief with this Court is legally misplaced. It is an elementary rule of procedure, which is too well settled to be ignored, that trial courts have no power to interfere by injunction and are enjoined from intervening with the proceedings of a co-equal, concurrent and coordinate court of the same jurisdiction.ii[2] On 5 July 1996, the trial court issued an order denying petitioners motion for reconsideration and dismissing the case on the ground of lack of jurisdiction. iii[3] The Court of Appeals upheld the trial courts decision to dismiss the case. In its decision promulgated on 18 November 1998, the appellate court explained that since petitioner is the spouse of the judgment debtor she cannot be considered a stranger to the case wherein the writ of execution was issued and thus, she should have presented her third-party claim therein. In the event that her claim is denied, only then should petitioner bring the matter before the appellate court.iv[4] Petitioner filed a motion for reconsideration, which was denied by the Court of Appeals on 9 February 1999.

Hence, the present petition, wherein petitioner asks that the 18 November 1998 Decision and 9 February 1999 Resolution of the Court of Appeals be set aside and that the action for annulment of sale be tried on the merits.v[5] The petition is imbued with merit. A third-party claimants right to bring an independent action to assert his claim of ownership over the properties seized is sanctioned by Section 17 of Rule 39 of the old Rules of Civil Procedure, which provides that Proceedings where property claimed by third person. - If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. In case of disagreement as to the value, the same shall be determined by the court issuing the writ of execution. The officer is not liable for damages, for the taking or keeping of the property, to any third party claimant unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein contained shall prevent such claimant or any third person from vindicating his claims to the property by any proper action. [emphasis supplied]vi[6] xxx xxx xxx

The proper action mentioned in Section 17 would have for its object the recovery of ownership or possession of the property seized by the sheriff, as well as damages resulting from the allegedly wrongful seizure and detention thereof despite the third party claim and it may be brought against the sheriff and such other parties as may be alleged to have colluded with him in the supposedly wrongful execution proceedings, such as the judgment creditor himself. If instituted by a stranger to the suit in which execution has issued, such proper action should be a totally separate and distinct action from the former suit.vii[7] In addition to the filing of a proper action, the third-party claimant may also avail of the remedy known as terceria, by executing an affidavit of his title or right of possession over the property seized and serving the same upon the officer making the levy and the judgment creditor. Thereafter, the officer shall not be bound to keep the property, unless the judgment creditor or his agent indemnifies the officer against such claim by a bond in a sum not greater than the value of the property levied on. An action for damages may be brought against the officer within one hundred twenty (120) days from the date of the filing of the bond. These abovementioned remedies are cumulative and any one of them may be resorted to by a thirdparty claimant without availing of the others. Thus, the availment of the remedy of terceria is not a condition sine qua non to the filing of a proper action. An independent action may be resorted to even before or without need of filing a claim in the court which issued the writ. viii[8] In the case at bar, petitioner filed an independent action for the annulment of the certificate of sale issued in favor of private respondent, contending that the property levied upon and sold to private respondent by virtue of the writ of execution issued in Criminal Case No. 90-2645 was her exclusive property, not that of the judgment obligor. Pursuant to our ruling in Sy v. Discaya,ix[9] petitioner is deemed a stranger to the action wherein the writ of execution was issued and is therefore justified in bringing an independent action to vindicate her right of ownership over the subject property. Contrary to the stand taken by the trial court, the filing of such an independent action cannot be considered an encroachment upon the jurisdiction of a co-equal and coordinate court. The court issuing the writ of execution may enforce its authority only over properties of the judgment debtor; thus, the sheriff acts properly only when he subjects to execution property undeniably belonging to the judgment debtor. If the sheriff levies upon the assets of a third person in which the judgment debtor has no interest, then he is acting beyond the limits of his authority and is amenable to control and correction by a court of competent jurisdiction in a separate and independent action. x[10] This is in consonance with the well-established principle that no man shall be affected by any proceeding to which he is a stranger. Execution of a judgment can only be issued against a party to the action, and not against one who has not yet had his day in court.xi[11] WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of Appeals, promulgated on 18 November 1998 and 9 February 1999, respectively, are hereby SET ASIDE. This case is remanded to the trial court for further proceedings

i ii iii iv v vi vii viii ix x xi