Bance Notes on Property Relations Chapter 3 System of Absolute Community

Bance
Notes on Property Relations 1

Chapter 3
System of Absolute Community
Section 1. General Provisions

Art. 88. The absolute community of property between spouses shall commence at the precise moment that the
marriage is celebrated. Any stipulation, express or implied, for the commencement of the community regime at any
other time shall be void.

Absolute Community of Property, Definition
All properties owned by the contracting parties before the marriage ceremony and those which they may
acquire thereafter shall comprise the absolute community of property regime.
[Note] In partial separation of property regime, what is not specified as separate shall pertain to the absolute
community.
Commencement of Absolute Community

It shall commence at the precise moment that the marriage is celebrated which means the particular time when
the spouses make their personal declarations that they take each other as husband and wife followed by the solemnizers
pronouncement that they are henceforth man and wife. Until then, the parties are not united in matrimony.
Alien Married to Filipino Has no Interest in Community Property
In both absolute community of property and conjugal partnership of gains, an alien married to a Filipino cannot
have any interest in the community or partnership property.
[Opinion: It is submitted however that this only applies to real property as the constitutional prohibition only
applies to the acquisition of public land. Community property is not merely real property and may include assets in the
form of cash and stocks which the alien spouse, if the property regime is one of community property, has an interest
over.]
Art. 89. No waiver of rights, interests, shares and effects of the absolute community of property during the marriage
can be made except in case of judicial separation of property.

When the waiver takes place upon a judicial separation of property, or after the marriage has been dissolved or
annulled, the same shall appear in a public instrument and shall appear in a public instrument and shall be recorded
as provided in Article 77. The creditors of the spouse who made such waiver may petition the court to rescind the
waiver to the extent of the amount sufficient to cover the amount of their credits.

Article 89, Prohibitory provision
This provision is clearly prohibitory, violation of which would render the act void.
Waiver, When Valid

The waiver of rights may be done after the marriage, once it is annulled or declared void, or during marriage in
an action for judicial separation of property. If done at any other time, it will be void.
Oral Waiver, Void
When the waiver takes place upon a judicial separation of property or after dissolution or annulment of the
marriage, it must be duly registered with the local civil registry as well as with the appropriate registry of property to bind
third persons. However, current creditors with rights recognized by law cannot be prejudiced by the waiver. Accordingly,
the article allows them to judicially rescind the waiver to the extent of their creditors.
Why Waiver During Marriage is Void
If the waiver takes place without a judicial separation of property decree, such waiver shall be void because it
is contrary to law and public policy pursuant to Art. 6 of the NCC. The same shall also constitute an act which is against a
prohibitory law as provided in Art. 5 of the NCC.
Art. 90 The provisions on co-ownership shall apply to the absolute community of property between the spouses in all
matters not provided in this Chapter.

Rules on Co-Ownership, Suppletory
Rules on co-ownership applies in matters not provided for in the Family Code regarding System of Absolute
Community. Co-ownership exists whenever the ownership of an undivided thing or right belongs to different persons.
[Note] The system of absolute community of property is a kind of co-ownership as the spouses are co-owners
of their communal properties.
Bance Notes on Property Relations

Altiora Peto

Bance Notes on Property Relations 2

Special Type of Co-ownership
The absolute community of property is a special type of co-ownership. As such:
1.
Each of the spouses may use the thing owned in common provided he or she does so in accordance with
the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership of
prevent the other co-owners from using it according to their rights. (Art. 486, NCC)
2.
Any one of the co-owners may bring an action for ejectment. (Art. 487, NCC)
[Note] As such, any one of the spouses may file an action for ejectment, and the same will prosper even if the
other spouse did not participate as one of the injured party.
Not like an ordinary co-ownership, no waiver of rights
There shall be no waiver of rights, interest, shares and effects of the absolute community of property during
the marriage except in case of judicial separation of property. This is because the interest of the parties are merely
inchoate.
Inchoate an expectancy prior to liquidation.
Section 2. What Constitutes Community Property

Art. 91. Unless otherwise provided in this chapter or in the marriage settlements, the community property shall
consists of all the property owned by the spouses at the time of the celebration of the marriage or acquired
thereafter.

Automatic Conversion to Community Property
Upon the celebration of marriage, the present property of either spouse at the time of the marriage and the
future property acquired thereafter are automatically converted into the community property without need of any juridical
act for the purpose.
Registration of Marriage Settlements, Buyer in Good Faith

If the properties are titled properties, the titles should be registered in the names of both spouses through the
registration of their marriage settlement with the proper registry of property. Otherwise, third persons acting in good faith
relying on the titles in the name of only one of the spouses shall not be prejudiced.
Art. 92. The following shall be excluded from the community property:
(1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits as well as the
income thereof, if any, unless it is expressly provided by the donor, testator or grantor that they shall
form part of the community property;

(2) Property for personal and exclusive use of either spouse; however, jewelry shall form part of the
community property;

(3) Property acquired before the marriage by either spouse who has legitimate descendants by a former
marriage, and the fruits as well as the income, if any, of such property.

Four Kinds of Excluded Property
There are four kinds of excluded property, 3 statutory exclusions and 1 exclusion by parties:
1.
2.
3.
4.
Those acquired by gratuitous title, its income and fruits.

Those for personal and exclusive use.
Those property from previous marriage with legitimate descendants.
By will of the parties in the marriage settlement.
Gratuitous Title
This must be a valid gratuitous acquisition, for the law will not allow that which cannot be done directly to be
done indirectly.
Personal and Exclusive Use
These personal and exclusive properties must be interpreted in terms of value. Hence, if a spouse has an
expensive car like a Mercedes Benz which is worth millions of pesos and which is for his personal and exclusive use, this
must be considered as part of the absolute community of property if the net worth of the family shows that the spouses
are not even rich to just simply afford a car like a Mercedes Benz.

Altiora Peto


Property from Previous Marriage
The law uses the term descendants so it does not only mean children but includes, grandchildren, greatgrandchildren and all other descendants. Likewise, the descendants must be legitimate.
Scenarios:
1. If the first marriage is void by reason of the spouses being first degree cousins, and the husband marries
again, his share of liquidated properties in the first marriage shall belong to the absolute community in the
second marriage even if there are descendants to the first marriage. Since these descendants are
illegitimate for being born in a void marriage, they are not entitled to this.
2. If the first marriage is void by reason of Art. 36 or void because of Art. 40 in relation to Art. 52 and 53, the
children are legitimate and as such, the properties in the first marriage shall be separate properties of the
spouse who remarries.
3. If the first marriage is terminated by death and there is no liquidation of the property regime of the first
marriage, the subsequent marriage shall be governed by the complete separation of property regime.
4. If the first marriage is terminated by death and there is liquidation of the property regime, the subsequent
marriage shall be governed by the absolute community of property.
5. If the first marriage is terminated by death and there is liquidation of the property regime but one of the
contracting spouse has legitimate descendants in the first marriage, the properties in the first marriage
shall be the separate properties of the said contracting spouse as provided in Art. 92, even if the property
regime that governs the second marriage is one of absolute community of property.
Art. 93. Property acquired during the marriage is presumed to belong to the community, unless it is proved that it is
one of those excluded therefrom.

Bienes Gananciales, Concept
All properties of the spouses are presumed communal property (bienes gananciales) until the contrary is
proved. The presumption applies until the liquidation of the community property. It is not necessary to prove that the
property was acquired with funds of the community.
[Note] The presumption applies even if the spouses are living separately. What is important is that the absolute
community is subsisting.
Properties acquired by exclusive/personal money

The rule on absolute community of property does not provide for a counterpart rule like that in conjugal
partnership of gains, which allows for exclusive properties of the spouses acquired through their exclusive money. Hence,
it is to be construed that any property, even acquired by a one of the spouses exclusive money or income from the fruits
of their properties acquired through gratuitous title, are part of the absolute community of property.
Ex.
1.
2.
3.
Husband has 1M considered to be his separate property. If the same 1M was used to buy a house used by
the family as conjugal dwelling, then the house, even though it was bought from his separate property, is
considered to be part of the community property.
Husband was given a house by his parents, which he later sold during the marriage. The income from the
sale, even though what was sold was one acquired through gratuitous title, will form part of the absolute
community.
If a property acquired by gratuitous title was exchanged with another through barter, then the subsequent
property will still form part of the absolute community and no longer the separate property of the said
spouse.
[Note] There is nothing in the law which provides that if sold, bartered or exchanged, the proceeds of the same
shall still be considered separate. The proceeds or objects received by way of the sale, exchange or barter is entirely a
different property, object or subject matter. They are not anymore the protected or excluded properties under Article 92.
The constitute a part of the absolute community of property.
Section 3.
Charges upon and obligations of the Absolute Community

Art. 94. The absolute community of property shall be liable for:
1) The support of the spouses, their common children and legitimate children of either spouse; however,
the support of illegitimate children shall be governed by the provisions of this Code on Support;
2) All debts and obligations contracted during the marriage by the designated administrator-spouse for
the benefit of the community, or by both spouses, or by one spouse with the consent of the other;
3) Debts and obligations contracted by either spouses without the consent of the other to the extent that
the family may have been benefited;

Altiora Peto


4)
All taxes, liens, charges and expenses, including major and minor repairs, upon the community
property;
5) All taxes and expenses for mere preservation made during the marriage upon the separate property of
either spouse used by the family;
6) Expenses to enable either spouse to commence or complete a professional or vocational course, or
other activity for self-improvement;
7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;
8) The value of what is donated or promised by both spouses in favor of their common legitimate children
for the exclusive purpose of commencing or completing a professional or vocational course or other
activity for self-improvement;
9) Antenuptial debts of either spouse other than those falling under paragraph (7) of this Article, the
support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of
a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of the debtor-
spouse, the payment of which shall be considered as advances to be deducted from the share of the
debtor-spouse upon liquidation of the community; and
10) Expenses of litigation between the spouses unless the suit is found to be groundless.

If the community property is insufficient to cover the foregoing liabilities, except those falling under
paragraph 9, the spouses shall be solidarily liable for the unpaid balance with their separate properties.

Support
This is the most sacred and important of all obligations imposed by law and is imposed with overwhelming
reality. Support comprises everything indispensable such as:
(a) sustenance
(b) dwelling
(c) clothing
(d) medical attendance
(e) education and
(f) transportation.
[Note] Even support of the legitimate children of either spouse is under the obligation charged to the absolute
community. The support of the illegitimate children shall be taken from the separate property of the parent-spouse. In
this regard, in case of absence or insufficiency of the exclusive property of the parent of the illegitimate children, the
absolute community of property shall pay such support but the payments shall be considered as advances to be deducted
from the share of the parent concerned upon liquidation of the community.
Debts and obligations

The payment of debts and obligations may fall within the following scenarios:
a.
b.
c.
When the administrator-spouse contracted an obligation without the consent and knowledge of the other
spouse, the obligation may be applied to the community property if it can be shown that the obligation
incurred by the administrator-spouse redounded to the benefit of the family.
Even if the benefit did not redound to the benefit of the family, the absolute community will still be liable if
such debt or obligation were contracted during the marriage by both spouses or by anyone of them with
the consent of the other. Consent may be express or implied.
If the debt and obligation was contracted by only one spouse without the consent of the other spouse, the
absolute community of property shall be liable to the extent that the family may have been benefited.
Ex. Wife borrowed P100,000; 50k of which was spent on fixing the family home. The community
property will be liable for the 50k which was spent on the house since the law provides that the
community property shall be liable to the extent that the family may have been benefited.
d.
e.
If the debt were contracted by either spouse prior to the marriage, the absolute community of property
shall be liable for as long as the same redounded to the benefit of the family. If such debt or obligation did
not redound to the benefit of the family, the separate property of the debtor-spouse shall be liable.
Any loss resulting from the exercise of a profession or family business by any spouses shall be chargeable
to the absolute community of property.
[Note] However, in all instances, the absolute community of property may be held liable when the exclusive
property of the debtor-spouse is insufficient or absent. The same shall be considered as advances to be deducted from
the share of the debtor-spouse upon liquidation of the community.
Taxes, Liens, Charges and Repairs

All taxes, liens, charges and expenses, including major or minor repairs, upon the community property shall be
chargeable to the absolute community of property. This can be done even without the consent of the other spouse
following the general rules on co-ownership.

Altiora Peto


[Note] Minor or ordinary repairs - are such as are required by the wear and tear due to the natural use of the
thing and are indispensable for its preservation.
Major or extra-ordinary repairs are those caused by abnormal or exceptional circumstances and are not needed
for the preservation or those caused by natural use but not needed for preservation.
Taxes, Expenses for Preservation of Separate Property

Charges against the community property are allowed because they are for the preservation of property which
will benefit the family. The preservation does not involve major repairs but only minor ones. If the property needs major
repairs, although used by the family, it is the owner-spouse who should shoulder the expenses therefore considering that
he or she has the greatest interest to conserve it being the owner thereof.
Expenses or Donation for Self-Improvement
Expenses or donation for self-improvement are within the ambit of support for which the absolute community
of property is likewise liable. The donation to common children must be made by both spouses, if only one of the spouses
donate, this may fall under the prohibition under Art. 87 making donations between the spouses, direct or indirect, void.
Except moderate gifts which the spouses may give each other on the occasion of any family rejoicing.
[Note] A donation by one spouse to a common child who has no descendants or compulsory heir other than his
or her parents is an indirect donation to the other spouse.
Antenuptial Debts of Either Spouse

The general rule: Debts incurred before the marriage by either spouse as a rule must be paid by the separate
property alone of said spouse.
Except: when the indebtedness has redounded to the benefit of the family and only up to the extent of the
benefits received.
Example: A prospective husband borrowed money from a bank to buy a house for the family and the house
became a community property after the marriage pursuant to the marriage settlement, the community property is liable
to the extent of the amount used in the purchase of the house.
Advances made by the Community Property for Acts for which it is not Originally Liable
The community property shall advance for:
(a) antenuptial debts which did not benefit the family;
(b) support of illegitimate children of either spouse;
(c) liabilities incurred by reason of a crime or quasi-delict, if and when the debtor-spouse has no exclusive
property or if the same is insufficient for the payment of the foregoing obligations.
Liabilities Incurred by Reason of Crime or Quasi-Delict
General rule: The absolute community of property shall not be liable to pay the obligation or debt arising from
crime or quasi-delict of a particular spouse. The separate property of the erring spouse shall be liable.
Except: in case of absence or insufficiency of the exclusive property of the debtor spouse, the absolute
community of property shall pay but such payments shall be considered as advances to be deducted from the share of
the debtor spouse upon liquidation of the community.
Litigation Expenses
If there are cases between spouses, the expenses incurred thereby shall be chargeable to community property
except when the suit is groundless. Examples of these are:
(a)
(b)
(c)
(d)
(e)
legal separation,
annulment of marriage
judicial separation of property
exclusive administration of the community property
support and custody of children.
/Case/ The legal expenses of the wife in a criminal suit against her brought by her husband for adultery may be
charged to the community property as defending herself in a criminal case for adultery was as necessary as a claim for
support, inasmuch as the right to a good name and reputation and the right to personal liberty are, at least, as vital and
deserving of protection as the right to existence which is, in the last analysis, the meaning of the right to support. Seva
vs. Nolan

Altiora Peto


Solidary obligations
Solidary obligations are those where several creditors or debtors or both concur, and where each creditor has
the right to demand and each debtor is bound to perform, in its entirety, the prestation constituting the object of the
obligation.
Ex. In an ordinary contract, if two debtors solidarily owe a creditor an amount of money, the creditor may
demand payment from both debtors, or he may choose to ask payment from anyone of the debtors. In both cases, the
creditor can ask for the full amount of the obligation, not only the part constituting the share of each of the debtors with
respect to the debt.
Solidary liability of spouses

In the event that the community assets are not sufficient to pay the foregoing liabilities, except par. 9, the
spouses shall be solidarily liable for the unpaid balance with their separate properties. Creditors are thus doubly secured
first from the community property and second from the separate properties. On the second, they may pursue their full
claims against any one of the spouses, the liability being solidary (Art. 1216, NCC). But the spouse who paid the entire
obligation is entitled to a corresponding reimbursement from the other (Art. 1217, NCC).
Spouses are not solidarily liable for:
The solidary liability of the spouses do not include:
(a) antenuptial debts not redounding to the benefit of the family;
(b) the support of illegitimate children by either spouse;
(c) and liabilities incurred by reason of a crime or quasi-delict;
Insolvency of Spouses
So long as the absolute community subsists, its property shall not be among the assets to be taken possession
of by the assignee for the payment of the insolvent debtors obligations, except insofar as the latter have redounded to
the benefit of the family.
Art. 95. Whatever may be lost during the marriage in any game of chance, betting, sweepstakes, or any other kind of
gambling, whether permitted or prohibited by law, shall be borne by the loser and shall not be charged to the
community but any winnings therefrom shall form part of the community property.

Gains and Losses in Games of Chance
If the spouse spends community assets in gambling, his share in the community property shall be answerable
aside from incurring other liability such as the loss of the right to co-administer the community property if by his
gambling, he fails to comply with obligations to the family. Engaging in any game of chance, betting, sweepstakes, or any
kind of gambling whether permitted or prohibited by law, will unduly increase the probability of uselessly depleting the
resources of the community property which principally must answer for all the important obligations enumerated in Art.
94.
Situation: if a stranger, without consideration, gives one of the spouses a ticket which later won, the winning
shall belong to only one spouse as the same is acquired by gratuitous title.
Income, as defined by the National Internal Revenue Code, includes any prize and winnings derived from
whatever source.
Betting distinguished from Gambling

Gambling refers to a game of chance like jueteng, while betting to games of skill like chess.
Section. 4
Ownership, Administration, Enjoyment and Disposition of the Community Property

Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of
disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for a proper remedy,
which must be availed of within five years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common
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 written consent of the other spouse. In the
absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn
by either or both offerors.

Joint Administration and Enjoyment

Altiora Peto


Joint administration and enjoyment highlight the fact that the spouses are co-owners of the properties they
introduced into the marriage and acquired thereafter. However, the administration may be validly delegated to only one
spouse in a marriage settlement executed prior to the marriage.
Joint administration or management does not require that the husband and the wife always acts together. Each
spouse may validly exercise full power of management alone, subject to the intervention of the court in proper case. Each
spouse may act individually, even without the consent of the other.
Decision of Husband shall Prevail

Should there be any disagreement in any matter involving the administration and enjoyment of the community
property between the spouses, the decision of the husband shall prevail in order that a void or a vacuum will not arise. It
is the husbands decision which shall temporarily prevail because tradition and experience show that, in very serious
matters concerning the family, it is usually the husband who makes the ultimate choices. The judicial proceeding shall be
summary in nature pursuant to Article 253 of the Family Code.
[Note] If it is the husband who does not give his consent or refuses to the undertaking, the wife may go to the
courts for adequate relief. If the wife despite the disagreement still pursues the same, the husband can go to court for
adequate relief.
Effect of Alienation and Encumbrance

1. If disposition was made completely without the knowledge and consent of one spouse, the following shall be
its effects:
a. the contract shall be null and void. Vda. De Ramones vs Agbayani
b. the action to nullify the contract will not have any prescriptive period.
[Note] There are however instances when a third-party purchaser is protected by law. If the TCT indicates that
the seller is single when in fact he is married and therefore governed by the absolute community of property, the sale of
said property by the registered owner to the third person, who is an innocent purchaser-for-value and who in good faith
relies on what is officially annotated in the TCT, the sale cannot be voided. PNB vs Court of Appeals
2. If the disposition was with the knowledge but without the consent of the other spouse, the following shall be
its effects:
a. The contract entered into by the husband, whose decisions will prevail in cases of disagreement, shall not
be considered void but merely annullable at the instance of the wife.
b. The wife shall have five years from the date of the contract implementing the decision to go to court to
seek a proper remedy which includes the annulment of the contract.
c.
However, if the wife ratifies the contract by any express or implied act, she cannot seek the annulment of
the contract even within the 5-year prescriptive period. In this case, the contract shall be deemed not
have suffered from any legal infirmity and would be considered effective as of the time the contract was
entered into.
[Note] The law clearly provides that the wife has the right to nullify or annul, as the case may be, not only her
share in the property involved but the entire contract itself.
Proper Remedy; Judicial Guardianship vs Sole Administrator Proceeding

In case one of the spouses is incapacitated or otherwise unable to participate in the administration of the
common properties, the other spouse may assume sole powers of administration. The appointment of the spouse as the
sole administrator shall be in a summary proceeding under Art. 253 of the Family Code if it involves:
(a) absent
(b) separated in fact
(c) abandoned the other
(d) consent is withheld
If the subject is an incompetent who is in a comatose or semi-comatose condition, a victim of stroke,
cerebrovascular accident, without motor and mental faculties, and with diagnosis of brain stem infarct, the proper remedy
is a judicial guardianship proceeding under the Rules of Court.
Limitations on Sole Administratorship

The spouse who assumed such power of administration cannot dispose or encumber property without judicial
approval or the written consent of the incapacitated spouse. Otherwise, any contract of encumbrance, disposition or
alienation shall be considered void.
Continuing Offer, Concept
The only legal significance of such a void transaction is to treat the same as a continuing offer on the part of
the consenting spouse and the third person. The contract may be perfected by the acceptance of the other spouse or by

Altiora Peto


authorization of the court before the offer is withdrawn by either or both offerors. The effectivity of the contract shall take
effect only upon such written acceptance or court authorization.
Art. 97. Either spouse may dispose by will of his or her interest in the community property.

Disposition by Will
A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain
degree the disposition of his estate, to take effect after his death. A testator can provide that certain properties after his
or her death will go to whoever he or she wishes the property will go, provided that the grant will not encroach on the
lawful legitimes of his compulsory heirs.
A legitime is that part of the testators property which cannot be disposed of because the law has reserved it
for certain heirs who are therefore called compulsory heirs.
Hence, a spouse can validly dispose any of his or her specific separate properties in a will provided it will not
infringe on the legitime of the compulsory heirs. However, considering that an absolute community of property is a coownership, the spouse can only dispose his or her interest in the community property and not in a specific property.
Disposition by Will, Why it does not Violate Art. 89 on Waivers during Marriage
Disposition made in a will of an interest in the community property cannot be considered a waiver of such
interest which is prohibited under Art. 89. The act of disposition precisely highlights the testators intent to control the
property to take effect after death.
Only interest, not specific properties
What is allowed to be disposed of is not specific property in the absolute community but only the interest
therein. The reason for this being that until the liquidation of the absolute community, it is not known what property
remains and which ones shall be adjudicated to the individual spouses.
Art. 98. Neither spouse may donate any community property without the consent of the other. However, either spouse
may, without the consent of the other, make moderate donations from the community for charity or on occassions of
family rejoicing or family distress.

Reason for prohibiting Donations
This is to protect the interest of the other spouse from the prodigality of a reckless or faithless spouse.
However, donations by both spouses or by one spouse with the consent of the other will generally be valid, subject to
revocation or reduction should such donations turn out to be inofficious or they infringe on the legitime or successional
rights of another compulsory heir.
[Note] However, even though the donation is made with the consent of one spouse, the donor spouse cannot
make a substantial donation, direct or indirect, to the consenting spouse during the marriage. Such indirect or direct
donation is void under Art. 87.
Exceptions
Excepted from the prohibition are moderate donations for charity or on occassions of family rejoicing or family
distress.
Section 5.
Dissolution of Absolute Community Regime

Art. 99. The absolute community terminates:
(1) Upon death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the marriage under Articles 134 to 138.

Dissolution of Community Property
The termination of the absolute community of property does not necessarily mean the termination of the
marriage. But the termination of a marriage simultaneously results in the dissolution of the absolute community of
property.
Death of either Spouse

The death of either spouse terminates the marriage. Civil personality is extinguished by death (Art. 42 of NCC).
The effect of death upon the rights and obligations of the deceased is determined (a) by law, (b) by contract and (c) by
will. Art. 103 provides that, upon the termination of the marriage by death, the community of property shall be liquidated
in the same proceeding for the settlement of the estate of the deceased.

Altiora Peto


Legal Separation Decree
The effect of a decree of legal separation is the that the absolute community of property or the conjugal
partnership shall be dissolved and liquidated but the offending spouse shall have no right to any share of the net profits
earned by the absolute community or the conjugal partnership, which shall be forfeited in favor of the common children,
or the children of the guilty spouse by a previous marriage, or in default of children, the innocent spouse in accordance
with Art. 43 (2). If the parties reconcile however, they may choose to revive the property regime subject to provisions of
Art. 67.
Annulment Decree
As a consequence of an annulment decree, the absolute community of property shall be dissolved and
liquidated, but if either of the spouses acted in bad faith, his or her share shall be forfeited in favor of:
(a) common children
(b) children of the guilty spouse by a previous marriage
(c) innocent spouse (Art. 43, par. 2)
Nullity Decree
General rule: There is no absolute community of property in a void marriage. The property arrangement
described in either Art. 47 or Art. 48 governs a void marriage.
Art. 147 is applicable where a man and a woman who are capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of marriage or under a void marriage. It shall be liquidated in
accordance with the rules on co-ownership and not under Art. 102 of the Family Code dealing with the absolute
community of property.
However, when only one of the parties is in good faith, the share of the party in bad faith in the coownership shall be forfeited in favor of their common children or their descendants, each vacant share shall
belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the
innocent party.
Art. 148 will apply in case of a void marriage not falling under Art. 147 even if both parties are in bad faith.
The Special Case
An absolute community of property or conjugal partnership of gains could govern a void marriage when it is a
subsequent void marriage because of non-observance of Article 40. Upon the declaration of nullity of the subsequent
marriage, Article 50 of the Family Code sets in which provides that marriages which are declared void ab initio by final
judgment under Article 40 are subject to Art. 43 (2) the dissolution of the absolute community of property and the
forfeiture procedure. Thus, a subsequent void marriage by reason of Art. 40 follows Art. 50, not Art. 147.
Judicial Separation of Property

Judicial separation of property may be voluntary or involuntary.
1.
2.
If voluntary, the parties can file the agreement for separation of property in court to obtain the necessary
court approval. After approval, the parties can nevertheless file a revival of their property regime but once
revived, no voluntary separation of property may thereafter be granted [Art. 141 (7)].
If involuntary, it must be fore the sufficient causes provided in Art. 135 of the Family Code which are:
a) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction;
b) That the spouse of the petitioner has been judicially declared an absentee;
c) That loss of parental authority of the spouse of petitioner has been declared by the court;
d) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her
obligations to the family as provided in Article 101;
e) That the spouse granted the power of administration in the marriage settlements has abused
that power; and
f)
That at the time of the petition, the spouses have been separated in fact for at least one year
and reconciliation is highly improbable.
Liquidation After Affidavit of Reappearance

The reappearance of an absentee spouse or a spouse judicially declared dead has the effect of terminating the
subsequent marriage and as such, the community property or the conjugal property.
Art. 100. The separation in fact between husband and wife shall not affect the regime of absolute community except
that:
(1) the spouse who leaves the conjugal home or refuses to live therein, without just cause, shall not have
the right to be supported;

Altiora Peto


(2) when the consent of one spouse to any transaction of the other is required by law, judicial
authorization shall be obtained in a summary proceeding;
(3) In the absence of sufficient community property, the separate property of both spouses shall be
solidarily liable for the support of the family. The spouse present shall, upon proper petition in a
summary proceeding, be given judicial authority to administer or encumber any specific separate
property of the other spouse and use the fruits or proceeds thereof to satisfy the latters share.

De Facto Separation, Meaning
The separation in fact between spouses or de facto separation is cessation of cohabitation. The spouses no
longer live together as husband and wife under the same roof but there is no decree of legal separation obtained by
either of them such that in law, their regime of absolute community is still subsisting.
De Facto Separation vs Total Abandonment

In de facto separation, the spouses may still be providing support to one another and also to the children.
However, in real or total abandonment of the family, it implies a departure from the family with the avowed intent never
to return, followed by a prolonged absence without just cause, and without in the meantime providing in the least for
ones family, although able to do so. More, there must be an absolute cessation of martial relations, duties and rights with
the intention of perpetual separation.
Effect of Separation in Fact
General rule: The separation in fact of spouses will not affect the absolute community of property. As such, the
obligations and charges provided in Art. 94 shall still be charged against the community property.
No Support
The spouse who leaves the conjugal home or refuses to live therein, without just cause, shall not have the right
to be supported from the absolute community of property. However, fault must always be proven. The mere fact of
separating from the conjugal roof when there is no evidence of any fault or guilt on the part of the one who so separates
does not constitute a reason for annulling the right of support. If the spouse left with a valid cause, then he or she can
still be supported from the absolute community of property considering that mere separation de facto will not affect the
absolute community of property.
If it is proven that the leaving spouse is at fault or that he or she left the conjugal home without just cause,
such erring spouse cannot be supported from the absolute community. This is a drastic penalty for his or her act of
disrupting the unity of the family which the law seeks to nurture. However, the absolute community of property may still
be held liable for the expenses he or she might have incurred for the benefit of the family, especially those enumerated in
Article 94.
Court Authorization
Any of the spouses, even the one who left the conjugal dwelling, may ask for judicial authorization when the
consent of the spouse to any transaction is required by law. Any of the spouses may ask for judicial relief.
Solidary Liability and Admnistration of Separate Property
The present spouse may file a petition in court to administer or encumber any specific property of the other
spouse and use the fruits or proceeds thereof to satisfy the latters share. Only the present spouse is given standing by
the law to file this petition. The authority granted to the present spouse, however, is limited to only one purpose, namely:
to enable the present spouse to satisfy the other spouses share in the obligations used to support the family which
should be totally paid by the absolute community of property had it not been for its insufficiency.
Art. 101. If a spouse without just cause abandons the other or fails to comply with is or her obligations to the family,
the aggrieved spouse may petition the court for receivership, for judicial separation of property or for authority to be
the sole administrator of the absolute community, subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling without intention of
returning. The spouse who has left the conjugal dwelling for a period of three months or has failed within the same
period to give any information as to his or her whereabouts shall be prima facie presumed to have no intention of
returning to the conjugal dwelling.

Abandonment, Meaning
This is desertion of the conjugal dwelling without the intention of returning. There must be an absolute
cessation of marital relations, duties and rights with intention of perpetual separation. It must not only be physical
estrangement but also amounts to financial and moral desertion. Dela Cruz vs Dela Cruz
Receiver, Definition

Altiora Peto


A receiver is an officer appointed by a court to assume the custody and control of property, and to preserve
and sequester the same, pending litigation concerning its disposal.
Failure to Comply with Family Obligations

If either of the spouses fails to comply with his or her obligations to the family, whether marital, parental or
property relationships, the other spouse may file relief.
[Note] For abuse to exist, it is not enough that the husband performs an act or acts prejudicial to the wife. Nor
is it sufficient that he commits act injurious to the partnership, for these may be the result of mere inefficient or negligent
administration. Abuse connotes willful and utter disregard of the interest of the partnership, evidenced by a repetition of
deliberate acts and/or omissions prejudicial to the latter. Dela Cruz vs Dela Cruz
Section 6
Liquidation of the Absolute Community Assets and Liabilities

Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:
1) an inventory shall be prepared, listing separately all the properties of the absolute community and the
exclusive properties of each spouse;
2) the debts and obligations of the absolute community shall be paid out of its assets. In case of
insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their
separate properties in accordance with the provisions of the second paragraph of Article 94;
3) Whatever remains of the exclusive proeprties of the spouses shall thereafter be delivered to each of
them;
4) The net remainder of the properties of the absolute community shall constitute its net assets, which
shall be divided equally between husband and wife, unless a different proportion or division was
agreed upon in the marriage settlements, or unless there has been a voluntary waiver of such share as
provided in this Code. For purposes of computing the net profits subject to forfeiture in accordance
with Articles 43, No. (2) and 63, No. (2), the said profits shall be the increase in value between the
market value of the community property at the time of the celebration of the marriage and the market
value at the time of its dissolution;
5) The presumptive legitimes of the common children shall be delivered upon partition, in accordance
with Article 51;
6) Unless otherwise agreed upon by the parties, in the partition of properties, the conjugal dwelling and
the lot on which it is situated shall be adjudicated to the spouse with whom the majority of the
common children choose to remain. Children below the age of seven years are deemed to have chosen
the mother, unless the court has decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interests of said children.

Liquidation Procedure
Dissolution of the absolute community property occurs upon (a) death, (b) decree of legal separation, (c)
annulled or declared void and (d) judicial separation of property as provided in Art. 99. However, in a voluntary judicial
separation, the liquidation may be governed by the agreement of the parties provided that the court approves.
Step-by-step Procedure
1. Inventory
All properties at the time of the dissolution, whether community property or separate property,
will be itemized and valued.
The value will be determined not by the purchase value, but the market value or in default
thereof, the assessed value at the time of liquidation.
Since the process of liquidation takes time, a new appraisal may be done since a prior appraisal
is not conclusive upon parties and the courts. (Padilla vs Paterno)
2.
Payment of debts and obligations
All debts for which the absolute community property is liable must be paid, including all the
obligations in Art. 94.
However, payments made by the community property due to the insufficiency of the separate
property of the debtor-spouse for ante-nuptial debts which did not redound to the benefit of the
family, support of illegitimate children of the debtor- spouse and liabilities incurred by debtorspouse by reason of a crime or a quasi-delict are considered advances to be deducted from the
share of the debtor-spouse upon liquidation of the community property.
In case the absolute community property is insufficient to pay all its obligations, the spouses
shall be solidarily liable for the unpaid balance with their separate properties.
3.
Delivery of exclusive properties
The exclusive properties or their remainder in case the absolute community was insufficient will
be delivered to the spouses.

Altiora Peto


4.
These properties are those stipulated in the marriage settlements as exclusive or even during
the marriage and the three statutory exclusions in Art. 92.
Partition of net assets
Equal division of the net assets, unless a different proportion or division has been agreed upon
in the marriage settlement or unless a valid waiver has been made.
For a waiver to be valid, it must be made upon a judicial separation of property or after the
marriage has been dissolved or annulled and it must be contained in a public instrument.
In annulment and legal separation, the spouse who is in bad faith shall forfeit his/her share in
the net profits in favor of the common children, or the children of the guilty spouse, or the
innocent spouse.
In case of a void marriage that is governed by Art. 147, the share (meaning all of it and not just
the net profit) of the party in bad faith shall be forfeited in favor of (1) the common children or
their descendants, or (2) the innocent party.
Net Profits = Market Value of the Community Propert at the time of Dissolution Market Value of the
Community Property at the celebration of marriage
5.
Delivery of the presumptive legitimes
Delivery of the presumptive legitimes is only made after the finality of a judicial decree of
annulment on grounds provided in Art. 45 or of nullity of a subsequent void marriage under Art.
40 in relation to Articles 52 and 53.
Delivery of the presumptive legitimes is made only in termination of marriage either by

annulment or nullity judgment in accordance with Art. 51.
6.
Adjudication of the conjugal dwelling
Unless otherwise agreed upon by the parties (in the marriage settlement or during
adjudication), the conjugal dwelling and the lot on which it is situated shall belong to the spouse
with whom majority of the children choose to remain.
A child below 7 years old is deemed to have chosen the mother, unless the court has decided
otherwise.
If there is no such majority, the court shall decide, taking into consideration the best interests of
the said children.
Net Assets vs Net Profits

Net assets constitutes the net remainder of the community of conjugal property after payment of debts and
obligations of the community or conjugal property.
Net profits constitute the increase in value between the market value of the community property at the time of
the celebration of marriage and the market value at the time of dissolution.
[Note] It must be understood that debts and obligations must have been paid first and that there is still a
remainder before any net profits could be considered.
Forfeiture of Net Profits

Article 43 (in relation to Article 50 detailing effects for voidable marriages) and Article 63 (Effects of Decree of
legal separation) provides for forfeiture of shares in the net profits, and not the capital of a spouse who acted in bad
faith.
However, Art. 147 and 148 (unions without marriage) mention also forfeitures when a partner acted in bad
faith but what is to be forfeited is not net profit but the share of the errant partner in the co-ownership.
Judicial Intervention in Adjudication of Conjugal Dwelling

The mother is accorded primary importance in considering children below seven years based on the truism that
the mothers care and affection for the child during its tender years are acceptedly needed more than that of the father.
Except: When the court finds that there is a valid reason for separating the child from the mother. As such, a
mother who was found to have committed and subsequently convicted of adultery is unfit to be a mother and leaving the
custody of the children to their grandmother. (Cortes vs Castillo)
Art. 103. Upon the termination of the marriage by death, the community property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the community property either
judicially or extrajudicially within one year from the death of the deceased spouse. If upon the lapse of the said

Altiora Peto


period, no liquidation is made, any disposition or encumbrance involving the community property of the terminated
marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance with the foregoing requirements, a
mandatory regime of complete separation of property shall govern the property relations of the subsequent
marriage.
Marriage Terminated by Death; Community Property How Liquidated
The procedure to follow in case the marriage is terminated because of death of one spouse is different from
that in Art. 102. Two key points:
The liquidation shall be made in the same proceeding for the settlement of the estate of the deceased.
The spouse may or may not institute a judicial settlement of the estate of the deceased spouse.
Liquidation upon Death

In case the marriage is dissolved by the death of one spouse, Rule 73 of the Rules of Court provides that:
Community property shall be inventoried, administered and liquidated
Debts thereof paid in the estate or intestate proceedings of the deceased spouse.
If both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of
either.
Except:
If the decedent spouse left no will and no debts, and the heirs are all of age, or the minors are represented by
their judicial or legal representatives, duly authorized for the purpose, the parties may without securing letters of
administration from the court, divide the estate among themselves as they see fit by means of a public instrument filed in
the office of the register of deed, and should they disagree, they may do so in an ordinary action for partition.
If there is only one heir, he may adjudicate to himself the entire estate by means of an affidavit filed in the
office of the register of deeds.
Consequences of Failure to Liquidate within One Year

Failure to liquidate within one year shall have the following effects:
1. Any disposition or encumbrance involving community property shall be void
This is so because only the interest to the property and not any physical and definite property is
vested on the heirs. In fact, if there are creditors of the decedent, the interest will only vest after payment of
the debts of the decedent. It is only after liquidation and partition when specific properties are definitely and
physically determined that a sale of such allotted property can be made.
Hence, an heir can only sell, waive or even alienate their interest to the property they inherit, but not
a specific property as the same can only be determined after liquidation and partition.
2.
If the surviving spouse contracts a subsequent marriage, a mandatory regime of complete separation of
property shall govern the property relations of the subsequent marriage.
The reason for this is to protect the children of the first marriage considering that their shares in the
estate of the deceased parent have not yet been adjudicated to them there being no settlement and these
shares might be mixed up with the property of the second marriage if the rule of absolute separation of
property is not provided.
Nature of Interest of Heirs Prior to Liquidation

While the spouses have an interest in the absolute community property or the conjugal partnership property,
the spouses cannot claim any definite property at the time when the absolute community property or conjugal
partnership is still in existence. The rights of the heirs vest only upon the dissolution of the absolute community property.
Specific Instances:
When the absolute community or conjugal partnership is dissolved through death, it evolves into a coownership between the surviving spouse on the one hand, and the heirs on the other. (Marigsa vs
Macabuntoc)
As a co-owner, the spouse or the heirs can undertake any act of dominion over their interest, share or
participation but not over a specific concrete property. Thus, 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, although the effect of the alienation or mortgage, with respect to the co-owners shall be limited to the
portion which may be allted to him in the division upon termination of the co-ownership. (Lopez vs Gonzaga
vda De Cuaycong)

Altiora Peto


Prior to the liquidation and partition, the interest of an heir in the estate of the deceased person may
nevertheless be attached for purposes of execution, even if the estate is in the process of settlement before
court. (De Borja vs De Borja)
[Important] It is only after liquidation that definable property can be claimed by and adjudged to them from
the remainder of their properties after satisfaction of all the obligations which the community property has to
pay. Thus, specified and concrete properties cannot be donated by any co-heir prior to liquidation and partition.
(Hagosojos vs Court of Appeals)
Claim against the Estate

No complaint for the collection of indebtedness chargeable to the community or conjugal properties can be
bought against the surviving spouse, unless such surviving spouse has committed himself or herself to be solidarily liable
for the claim against the absolute community or the conjugal partnership property.
If the claim is brought against the surviving spouse who did not commit himself or herself to be solidarily
liable, and a judgment is rendered is void. This is because all debts chargeable to the community or conjugal property,
which has already been dissolved, must therefore be claimed and paid in the settlement of estate proceedings of the
deceased spouse. The reason for this is that upon the death of one spouse, the powers of administration of the surviving
spouse ceases and is passed to the administrator appointed by the court having jurisdiction over the settlement of estate.
Art. 104. Whenever the liquidation of the community properties of two or more marriages contracted by the same
person before the effectivity of this Code is carried out simultaneously, the respective capital, fruits, income of each
community shall be determined upon such proof as may be considered according to the rules of evidence. In case of
doubt as to which community the existing properties belong, the same shall be divided between among or the
different communities in proportion to the capital and duration of each.

Simultaneous Liquidation
Art. 104 refers to at least two marriage contracted prior to August 3, 1988, the effectivity of the Family Code,
and the properties of the two marriages are to be liquidated simultaneously.
The five scenarios in case of doubt:
1.
When only the duration of each marriage, which is equal, and the fair market value of the inventoried
assets at the time of the liquidation is known; the assets shall be divided equally between the two
marriages.
As such: duration of marriage = equal; inventoried assets = P15,000 share = 7,500 each
2.
When the duration of each marriage is known and unequal, and the fair market value of the inventoried
assets at the time of the marriage; the assets shall be prorated in relation to the duration of each
marriage.
As such: marriage 1 = 2 years, marriage 2 = 3 years; inventoried assets = P15,000
Marriage 1 share = 2/5; marriage 2 share = 3/5
3.
When the duration of each marriage is known but equal, the assets are both known and the assets to be
inventoried are also known; the assets shall be prorated on the amount of known assets/ capital of each
particular marriage.
As such: marriage 1 = 1,000, marriage 2 = 2,000; inventoried assets = P15,000
Marriage 1 share = 1/3; Marriage 2 = 2/3
4.
When duration of each marriage are known but different, the assets are known but equal and the amount
of the total inventoried assets; the assets shall be prorated based on the different duration vis--vis the
inventoried assets at the time the liquidation.
As such: marriage 1 = 2 years, marriage 2 = 3 years; inventoried assets = P15,000
Marriage 1 share = 2/5; marriage 2 share = 3/5
5.
When the duration of each marriage are known but different, the amounts of assets in each marriage are
known, and also the amount of the assets to be inventoried; the respective duration will be related to the
assets for each year and then prorated with the amount of the assets to be inventoried.
[Note] This is already not possible under the New Family Code since Article 92 (3) excludes from the absolute
community of a subsequent marriage properties acquired before the marriage by a spouse with legitimate descendants.
As such, the law protects the properties of the previous marriage from the possibility of mixing with the properties of the
second marriage whether or not there was a liquidation of properties in the previous marriage.

Altiora Peto


Chapter 4
Conjugal Partnership of Gains

Art. 105. In case the future spouses agree in the marriage settlements that the regime of conjugal partnership of gains
shall govern their property relations during marriage, the provisions in this Chapter shall be of supplementary
application.

The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between the
spouses before the effectivity of this Code without prejudice to vested rights already acquired in accordance with the
Civil Code or other laws as provided in Article 256.

Conjugal Partnership, To Govern Marriage
For this property regime to govern the marriage, it must be agreed in the marriage settlements. The terms and
conditions in the marriage settlement shall primarily govern the property relations of the spouses and the provision of the
Family Code shall only be supplementary.
Conjugal Partnership is a Single Entity

Where the husband incurred liability, the conjugal partnership cannot be made liable jointly and severally. The
conjugal partnership is a single entity. (Gelano vs CA)
Immutability of Matrimonial Property Regime
The provisions of Chapter 4 shall be applicable to conjugal partnership of gains already existing before the
effectivity of this code, even existing conjugal partnerships before August 3, 1988 which came about for failure to agree
on any other regime. The same shall be valid without being converted into absolute community regime. The principle of
immutability of matrimonial property regime is followed, that is, the original regime of property relations is maintained.
Art. 106. Under the regime of conjugal partnership of gains, the husband and the 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 by chance, and upon dissolution of the marriage or of the partnership, the net gains or benefits
obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage
settlements.

Conjugal Partnership of Gains, Concept
It is a partnership established through the marriage of a man and a woman, who as partners, place in a
common fund
(1) the proceeds, products, fruits and income from their separate properties;
(2) those acquired by either or both of them through their efforts;
(3) those acquired by them by chance;
and upon dissolution thereof, the partners shall divide the net gains equally, unless otherwise agreed upon in
their marriage settlement.
Character of Conjugal Conjugal partnership

No unilateral declaration by one spouse can change the character of a conjugal property. The conjugal nature
of a property is determined by law and not by will of one of the spouses. The proof of acquisition of the property during
the marriage suffices to render the statutory presumption of conjugality to attach. (Go vs Yamane)
Distinction Between Conjugal Partnership and Ordinary Partnership
Basis of Comparison
1. Commencement
2. Legal personality
3. Purpose
4. Management
5. Division of gains
6. Causes for Dissolution
Conjugal Partnership
At the moment of the celebration of
marriage;
Not a juridical person;
Not created for profit
Right of management is joint;
husbands decision shall prevail
subject to recourse by the wife in
court.
Equally divided, irrespective of the
amount
of
contribution,
unless
otherwise agreed upon in marriage
settlements;
Only upon:

Altiora Peto

Ordinary Partnership
On the date agreed upon by the
partners;
It is a juridical person with personality
separate and distinct from the
personality of the partners;
Created for profit
Rights of management are the same
to all as individual partners, except
when one or more
partners are
designated as managers;
Depends upon the agreement of the
parties; in the absence thereof, it
would depend on the amount of the
capital contributed by each partner;
Upon:

(1)
(2)
(3)
(4)
7. Liquidation of Net Gains
death of either spouse;

decree of legal separation;
annulment or nullity
judicial
separation
of
property during marriage
No liquidation until the partnership is

dissolved.
(1) death;
(2) insolvency;
(3) civil interdiction;
(4) termination of the term;
(5) express will of any partner;
(6) other provisions in NCC
Liquidation may be made without
dissolution of partnership.
Nature of Interest in the Partnership

The interest of each spouse in the conjugal partnership property is merely inchoate or a mere expentancy until
the liquidation. Hence, the interest of a spouse in the conjugal partnership cannot be attached or sold on execution as it
is a mere expentancy and constitutes neither legal nor an equitable estate and does not ripe into title until it appears that
there are assets in the community after liquidaion and settlement.
Art. 107. The rules provided in Articles 88 and 89 shall also apply to conjugal partnership of gains.

Art. 88
Provides for when the conjugal partnership shall commence which is the precise moment when the marriage
ceremony is celebrated. What is considered is the hour and not the date of the marriage.
Art. 89
Provides that no waiver of rights, interests, shares and effects of the conjugal partnership of gains can be made
during the marriage.
Rationale: to avoid undue pressure and influence exerted upon the weaker spouse who may be persuaded and
coerced into parting with his or her interests.
Art. 108. The conjugal partnership shall be governed by the rules on the contract of partnership in all that is not in
conflict with what is expressly determined in this Chapter or by the spouses in their marriage settlements.

Special Type of Partnership
Rules on partnership that may apply in conjugal partnership of gains:
1. Any stipulation which excludes the partners from any share of the profits and losses of the partnership is
void.
2. A partner is a co-owner with his other partner of specific partnership property. As such, one spouse may
file an action without making the other spouse a party in the action. (Carandang vs Heirs of De Guzman)
3. Every partner must account to the partnership for any benefit, and hold the trust for it any profits derived
by him without the consent of the other partner from any transaction connected with the formation,
conduct or liquidation of the partnership or from any use by him or her of its property.
4. Without the consent of the other partner, a partner cannot assign the partnership property in trust for
creditors.
5. No act of a partner in contravention of a restriction on authority shall bind the partnership to person
having knowledge of the restriction.
Section 2.
Exclusive Property of Each Spouse

Art. 109. The following shall be the exclusive property of each spouse:
1) That which is brought to the marriage as his or her own:
2) That which each acquires during the marriage by gratuitous title;
3) That which is acquired by right of redemption; by barter or by exchange with property belonging to
only one of the spouses; and
4) That which is purchased with exclusive money of the wife or of the husband.

Properties brought into the Marriage
These are properties which the spouses already owned before and which they have brought to the marriage. It
is necessary that the property be acquired before the marriage. The properties cannot be encumbered, alienated nor
disposed of by the other spouse without the consent of the owner-spouse. The nature of the property as separate
property shall remain unless the contrary is proved by positive and convincing evidence.
As such:
1. Admission or acknowledgement of one person that the money used to purchase the property came from
the other spouse even though bought during the marriage is sufficient proof that the property is a
separate property of that spouse. (Del Mundo vs Court of Appeals)

Altiora Peto


2.
If the property is asserted as a separate property and a title has been issued under the name of the
spouse asserting the same and acts have been undertaken clearly indicating that the property is separate
and the other spouse did not promptly oppose the acts of dominion of said spouse, the other spouse
cannot belatedly claim the conjugal nature of the disputed property. (PNB vs Court of Appeals)
Even if the property was bought before the marriage and was only registered under the name of the
owner-spouse and together with the other spouse as co-owner, the said property is still the exclusive
property of the spouse who bought it by his or her exclusive fund. The registration after the marriage of
the certificate of title under the co-ownership to both spouses only creates a trust, thus the restoration to
the real owner-spouse of the subject property upon liquidation. (Plata vs Yatco)
3.
Purpose of Exclusive Properties Brought to the Marriage

These exclusive properties shall be principally used for the (1) payment of personal debts, not redounding to
the benefit of the family, contracted by the owner-spouse before the marriage; (2) fine and indemnities imposed upon
the owner-spouse; and (3) support of illegitimate children of the owner-spouse.
Acquired by Gratuitous Title
Anything received by each spouse from any source by way of an act of liberality of the giver, such as a
donation or gift, shall belong exclusively to the spouse-recipient and will not belong to the conjugal partnership property.
Under this category fall acquisitions through:
a.
Succession mode of acquisition wherein property, rights and obligations of a person are transmitted
through his death to another or to others by his will or by operations of law.
Devise and/or legacy are gifts of real and personal property which are respectively given by virtue of a
will.
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
another who accepts it
Gratuity
Remission or condonation is essentially gratuitous, and requires the acceptance of the obligor.
Free patent
other modes wherein no recompense is involved.
b.
c.
d.
e.
f.
g.
As such:
1. Proceeds from the insurance policy secured by the husband made payable to the wife as beneficiary is
separate property of the wife. (Gercio vs Sun Life Assurance)
2. Death benefits, though in the nature of insurance, do not form part of the conjugal partnership because it
is not obtained during the marriage but precisely after its dissolution. (Lavides vs Flores)
3. Unearned increment is an acquisition by gratuitous title for it is the increase in the value of a property
without any effort, labor or industry exerted, nor any investment of conjugal assets or funds.
4. Loans through mortgage by the wife using her separate property as security makes the loan her separate
property. (Lim Queco vs Ramirez)
5. If the loan is obtained using the spouses separate property with the consent of the latter and the loan
constituted a charge on the conjugal partnership, the loan is conjugal. (Palanca vs Smith, Bell and
Company)
6. Property acquired by succession even if it was before or after the marriage is a separate property of the
recipient-spouse. (Villanueva vs IAC)
[Note] In the conjugal partnership, the income and fruits of the property acquired by gratuitous title form part
of the conjugal property. The law does not include fruits and income of property received by gratuitous title as separate
property, unlike that in absolute community of property.
Redemption, Barter, Exchange

a.
Redemption
The property shall belong to the spouse who has the right to redeem regardless of whether or not he or
she uses personal funds. However, if conjugal funds were used to effect the redemption, the wife shall
reimburse the conjugal fund. (Santos vs Bartolome)
In the absence of proof that the right of redemption pertained to any of the spouses it shall be
construed to form part of the conjugal partnership. (Zulueta vs Pan American World Airways, Inc.)
b.
Barter/ Exchange
Barter one person transfers to another the ownership of non-fungible things with the obligation on the
part of the latter to give things of the same kind, quantity and quality. The new property shall still be
the exclusive property of the owner-spouse who bartered/parted with his/her exclusive property.
Purchased with Exclusive Money

Altiora Peto


Property purchased using the exclusive money of one spouse shall belong to such spouse, except when: property is registered to both spouses. As such, it should be determined whether it shall result in a gift from one spouse
whose money was used to effect the purchase, or a trust in favor of such spouse.
The controlling factor is the source of the money used, or the money promised to be paid.
Art. 110. The spouses retain the ownership, possession, administration and enjoyment of their exclusive properties.

Either spouse may, during the marriage, transfer the administration of his or her exclusive property to the other by
means of a public instrument, which shall be recorded in the registry of property of the place where the property is
located.

Administration of Exclusive Properties
Administration includes entering into contracts, engaging in litigation and the collection of fruits, income, profits
arising from the separate proerpty. The owner-spouse may transfer administration to the other spouse, provided that the
same is recorded, but may still donate, encumber or alienate the property. Owner-spouse may even transfer
administration to a third person even without the consent of the other spouse.
As such, a wife whose exclusive property was attached and sold to pay off her husbands personal obligations
may file a separate action to annul the sale. She is a third person who under the Rules of Court may file an action to
vindicate their claims if their property was wrongfully sold to satisfy a judgment debt of another person. She is considered
to be a third person and 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. (Naguit vs Court
of Appeals)
Art. 111. A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her exclusive property,
without the consent of the other spouse, and appear alone in court to litigate with regard to the same.

Right to dispose and encumber exclusive property
Either spouse may dispose of his or her exclusive property. He can sell, mortgage or encumber it without the
consent of the other. However, in actions for recovery of rents or profits arising out of the paraphernal property of the
wife, being conjugal, the husband must be included as a necessary party. (Quison vs Salud)
Art. 112. The alienation of any exclusive property of a spouse administered by the other automatically terminates the
administration over such property and the proceeds of the alienation shall be turned over to the owner-spouse.
Automatic Termination of Delegated Administration upon Alienation of Property

The right of the owner-spouse to dispose of his property is not affected by the delegation of administration to
the other spouse. If however the property is sold, it shall automatically terminate the administration and the proceeds will
be turned over to the spouse-owner.
Art. 113. Property donated or left by will to the spouses, jointly and with designation of determinate shares, shall
pertain to the donee-spouse as his or her own exclusive property, and in the absence of designation, share and share
alike, without prejudice to the right of accretion when proper.

Accretion
Art. 1015 provides that accretion is a right by virtue of which, when two or more persons are called to the same
inheritance, devise or legacy, the part assigned to the one who renounces or cannot receive his share or who died before
the testator is added or incorporated to that of his co-heirs, co-devisees, or co-legatees.
Accretion Rules in Donation

The general rule in ordinary donation: in a joint donation, one could not accept independently of his co-donee,
for there is no right of accretion unless expressly so provided
Exception to the rule: when the donation is made in favor of husband and wife jointly, in which case, there
shall be a right of accretion except when except when the contrary has been provided by the donor.
As such:
1. If a donation is given to the wife and husband jointly where the wife gets and the husband gets , if
the wife does not accept her part, then her share will go to the husband, except when the testator or
grantor provided otherwise.
2. If there is no determinate shares, meaning it does not provide the share of either husband or wife, the
same rule will still apply.
3. However, if the designation is not of determinate shares but determinate (specific) properties, accretion
will not apply.

Altiora Peto


Accretion Rules in Properties Left by Will
The rule: in order for accretion to apply in a property left by will, it shall be necessary:
1. That the husband and wife are called to the same inheritance or to the same portion thereof pro indiviso
2. One of the spouses dies before the testator or renounces the inheritance or incapacitated to receive it.
(Art. 1016)
[Note] Even though the will provides for a designation (ex. , etc.), the same does not make the designation
divisible. It is still pro indiviso since it only provides for proportionate sharing and does not make the properties specific.
Art. 114. If the donations are onerous, the amount of the charges shall be borne by the exclusive property of the
donee-spouse, whenever they have been advanced by the conjugal partnership of gains.

Donation Subject to Charges is Still an Exclusive Property
Strictly speaking, the donation referred to is not onerous donations, that is a donation with a burden equivalent
to the thing donated. Rather, it refers to a donation which is subject to some obligations or charges upon the donee. If
conjugal funds were used to comply/pay the obligation, the owner-spouse shall reimburse the conjugal partnership but
the same shall remain the separate property of the owner-spouse.
Art. 115. Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits shall be governed by the
rules on gratuitous or onerous acquisitions as may be proper in each case.

Nature of Pensions, Annuities, Gratuities
Whether retirement benefits, pensions and annuities are conjugal or separate will depend upon how it was
obtained and the circumstances of the case. Benefits, pensions, annuities, gratuities, usufructs, and similar others will be
considered gratuitous and onerous acquisitions depending on whether or not their creation or establishment was for free
or for a consideration. If for free, the rules on gratuitous acquisitions shall govern, other the rules on onerous
acquisitions.
Gratuity
Generally, a gratuity is an act of pure liberality. It is acquired through lucrative title and as such, a separate
property. Amount given by the government because of a previous work is in a form of gratuity. (Mendoza vs Dizon)
Annuity
Is not a gratuity if the owner is entitled thereof as a matter of right. As such, retirement pay is considered
onerous. (Heirs of Berganon vs Imperial)
Pensions
Are in the nature of compensation for services previously rendered for which full and adequate compensation
was not received at the time of the rendition of the service. It is in effect, pay withheld, as such, these are generally not
considered donations or gratuities. Pension is gratuity only when it is granted for services previously rendered and which
at the time they were rendered gave rise to no legal obligation. (Pirovano vs Dela Rama Steamship)
Life Insurance
If the beneficiary is somebody other than the insured or his estate, the beneficiary is the owner of the
insurance indemnity regardless of whether or not the premiums were paid out of the insureds separate property or the
conjugal funds. (Del Val vs Del Val) The contract of life insurance is a special contract and the destination of the proceeds
thereof is determined by special law which deals exclusively on the subject. However, if the insured made his estate the
beneficiary and the premiums were paid by conjugal funds, the proceeds of the insurance constitute conjugal property.
(BPI vs Posadas)
Usufructs
Usufructs gives a right to enjoy the property of another with the obligation of preserving its form and
substance. If usufruct is acquired through gratuitous tile, it is exclusive property. But the fruits thereof are conjugal.
Section 3
Conjugal Partnership Property

Art. 116. All property acquired during the marriage, whether the acquisition appears to have been made, contracted
or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved.

Acquisitions during Marriage, Presumed Conjugal
Whether the acquisition appears to have been (a) made, (b) contracted, or (c) registered in the name of one or
both spouses, the presumption is that the property is conjugal. The presumption is overcome only by contrary strong,
clear and convincing evidence.

Altiora Peto


[Note] Before the presumption attaches however, it is imperative that proof of acquisition during the marriage
be presented. As such:
1.
2.
Registration of property is not proof of acquisition as the property may have been acquired prior to the
marriage but only registered after the ceremony. (Metropolitan Bank and Trust Company vs Tan)
Proof consisting of tax declaration in the name of one of the spouses obtained during the marriage is not
sufficient proof to give rise to the presumption that the property is conjugal (Pintiano-Anno vs Anno)
[Note] There is a confidential relation between the husband and wife that as such, because of the feelings of
trust existing between them, certificates of titles are often secured in the name of both or either, regardless of the true
ownership of the property and regardless of the source of the purchase money. It is thus but fair that on liquidation of
the partnership, the trust should be recognized and enforced, so that the real ownership of the property may be
established.
In case of de facto separation
The presumption of conjugality applies even though the spouses are living separately. (Wong vs IAC)

Art. 117. The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the
acquisitions be for the partnership, or for only one of the spouses;
(2) Those obtained from the labor, industry, work or profession of either or both of the spouses;
(3) The fruits, natural, industrial or civil, due or received during the marriage from the common property,
as well as the net fruits from the exclusive property of each spouse;
(4) The share of either spouses in the hidden treasure which the law awards to the finder or owner of the
property where the treasure is found;
(5) Those acquired through occupation such as fishing or hunting;
(6) Livestock existing upon the dissolution of the partnership in excess of the number of each kind
brought to the marriage by either spouse; and
(7) Those which are acquired by chance, such as winnings from gambling or betting. However, losses
therefrom shall be borned exclusively by the loser-spouse.

Acquisitions by Onerous Title
Properties acquired during marriage purchased from the conjugal funds belongs to or form part of the conjugal
partnership. This is true even if the acquisition is for the partnership or for only one of the spouses.
As such:
1. Damages granted by the courts in favor of a contract financed by the conjugal partnership and
consequently breached by the third person belongs to the conjugal partnership. (Zulueta vs Pan American
World Airways)
2. Damages arising out of illegal detention of the exclusive property shall pertain to the conjugal partnership
if it has deprived the partnership of the use and earnings of the same.
Acquisitions through Industry, Labor, Profession and Occupation

Anything obtained from the labor, industry, work and profession of either or both of spouses is conjugal.
Fruits and earnings from properties
This includes:
1. Fruits and earnings from the common property
2. Net fruits from the exclusive property of each spouse.
Only net fruits from the exclusive property form part of the conjugal funds since the fruits of the exclusive
properties shall be applied first to the administration of said separate property and the remaining balance of the said
fruits shall constitute the net fruits which shall belong to the conjugal property.
Hidden Treasure
Hidden treasure contemplate artifacts or objects which have undergone transformation from their original raw
state, such as earring, necklaces, bracelets and the like. Hidden treasure, according to Art. 439, is any hidden and
unknown deposits of money, jewelry, or other precious objects, the lawful ownership of which does not appear.
[Note] Gold nuggets, precious stones in their raw state and oil are not treasures.
Art. 118. Property bought on installments paid partly from exclusive funds of either or both spouses and partly from
conjugal funds belongs to the buyer if full ownership was vested before the marriage and to the conjugal partnership
if such ownership was vested during the marriage. In either case, any amount advanced by the partnership or by
either or both spouses shall be reimbursed by the owner or owners upon liquidation of the partnership.

Altiora Peto


Property bought on Installment Basis if Partly Paid from Mixed Funds, Ownership
The determinative factor in considering the ownership of the property is the time when full ownership is vested.
If it was vested before the marriage, the owner is the buyer-spouse or both of them as the case may be; if it was vested
during the marriage, the conjugal partnership is the owner. However, any amount advanced by the partnership or by
either or both of them shall be reimbursed by the owner or owners upon liquidation of the partnership.
Property bought during the Marriage, Mixed Funds

In Castillo Jr vs Pasco where a property was bought with the paraphernal funds and partly with conjugal funds,
the Court held that the property belongs to both patrimonies in common, in proportion to their contributions to the total
purchase price.
[Note] Sta. Maria however submits that it should have been declared as part of the conjugal partnership in line
with the policy of the state in creating a unified ownership of properties between husband and wife during the marriage,
subject to reimbursement.
Art. 119. Whenever an amount or credit payable within a period of time belongs to one of the spouses, the sums which
may be collected during the marriage in partial payments or by installments on the principal shall be the exclusive
property of the spouse. However, interests falling due during the marriage on the principal shall belong to the
conjugal partnership.
Collectible Credits Payable on Installments with Interests

All payments on the principal falling due during the marriage shall belong to the conjugal partnership, as
interest is considered a fruit derived from a particular property and is therefore included under Art. 117.
Art. 120. The ownership of improvements, whether for utility or adornment, made on the separate property of the
spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the
conjugal partnership, or to the original owner-spouse, subject to the following rules:

When the cost of the improvement made by the conjugal partnership and any resulting increase in value are more
than the value of the property at the time of the improvement, the entire property of one of the spouses shall belong
to the conjugal partnership, subject to reimbursement of the value of the property of the owner-spouse at the time of
the improvement; otherwise, said property shall be retained in ownership by the owner-spouse, likewise subject to
reimbursement of the cost of the improvement.

In either case, the ownership of the entire property shall be vested upon the reimbursement which shall be made at
the time of the liquidation of the conjugal partnership.

Purpose
The purpose of the law is to encourage the construction of conjugal buildings during the marriage on vacan
lands belonging to one of the spouses. (Tabotabo vs Molero)
Improvements Made on Separate Property; Ownership

If the value of the improvement and any resulting increase in value are more than the value of the separate
property at the time of the improvement, the entire property of one of the spouses shall belong to the conjugal
partnership. However, ownership shall vest only upon reimbursement to the owner-spouse which shall be made at the
time of the liquidation of the conjugal partnership.
vs Ferrer)
[Note] Article 120 only allows claims from the husband if he is still the owner of the lot upon liquidation. (Ferrer
Usufructuary
The conjugal partnership may use both the land and the improvement, but it does so not as owner but in the
exercise of usufruct. The ownership of the land remains the same until the value of the land is paid, and this payment can
only bee demanded in liquidation of the partnership. (Maramba vs Lozano citing Coingo vs Flores; Paterno vs Vda de
Padilla)
Hence, prior to reimbursement/liquidation, the owner-spouse still owns her separate property and therefore,
the same cannot be levied upon to satisfy a conjugal debt, unless the conjugal funds are insufficient to pay the conjugal
debts, in which case the separate property can be held solidarily liable.
Transfer of Ownership
As said, the ownership of the entire property shall be vested only upon reimbursement to be made at the
liquidation of the conjugal partnership. Until the reimbursement, the owner-spouse retains the ownership of the property.
(Paterno vs Vda de Padilla), although the partnership has the right to use the property during interregnum. (Coingco vs
Flores) Upon reimbursement, ownership retroacts to the time of the construction of the improvement.

Altiora Peto


Section 4
Charges Upon and Obligations Of the Conjugal Partnership

Art. 121. The conjugal partnership shall be liable for:

1) The support of the spouses, their common children, and the legitimate children of either spouse;
however, the support of illegitimate children shall be governed by the provisions of this Code on
Support;
2) All debts and obligations contracted during the marriage by the designated administrator-spouse for
the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent
of the other;
3) Debts and obligations contracted by either spouse without the consent of the other to the extent that
the family may have been benefited;
4) All taxes, liens, charges and expenses, including major or minor repairs upon the conjugal partnership
property;
5) All taxes and expenses for mere preservation made during the marriage upon the separate property of
either spouse;
6) Expenses to enable either spouse to commence or complete a profession, vocational, or other activity
for self-improvement;
7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;
8) The value of what is donated or promised by both spouses in favor of their common legitimate children
for the exclusive purpose of commencing or completing a professional or vocational course or other
activity for self-improvement; and
9) Expenses of litigation between the spouses unless the suit is found to be groundless.

If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the
unpaid balance with their separate properties.

Liabilities, When Chargeable
Liabilities shall only be chargeable to the conjugal partnership if it benefits the same. The burden of proof that
a debt redounded to the benefit of the family lies with the creditor. The benefit must be a direct result of the obligation
and cannot simply be a by-product or a spin-off of the obligation or loan itself.
As such:
Creditors cannot go against the conjugal partnership in satisfying the obligation incurred by the
husband in signing a surety agreement which did not directly redound to the benefit of the family.
(Ayala Investment vs CA)
The benefit to the family must be proven and not just bare allegations that the loan to finance housing
units redounded to the benefit of the family. (Homeowners Savings and Loan Bank vs Dalio)
Debts incurred in a commercial enterprise for gain or the exercise of the industry or profession by which
the husband contributes to the support of the family cannot be deemed to be his exclusive and private
debts. The conjugal partnership shall be liable for the same.
[Note] Where the husband contracts obligations on behalf of the family business, the law presumes that such
obligation will redound to the benefit of the conjugal partnership. On the other hand, if the money or services are given
to another person or entity, that contract cannot by itself alone be categorized as falling within the content of obligations
for the benefit of the conjugal partnership.
Implied Consent
Where the wife signs a contract as a mere witness showed that she impliedly consented to the contract.
(Pelayo vs Perez)
Solidary Obligation
If the conjugal partnership is insufficient to cover the debts and obligations enumerated in Art. 121, the
creditors may demand payment or any of the spouses with their respective separate properties. He or she who made the
payment may claim from the other his or her share.
[Note] The separate properties of the spouses may be held solidarily liable if they both expressly made
themselves liable in a solidary manner.
Insolvency of Spouses
So long as the conjugal partnership subsists, its property shall not be among the assets to be taken possession
of by the assignee for the payment of the insolvent debtors obligations, except insofar as the latter have redounded to
the benefit of the family.

Altiora Peto


Art. 122. The payment of personal debts contracted by the husband or the wife before or during the marriage shall
not be charged to the conjugal partnership, except insofar as they have redounded to the benefit of the family.

Neither shall the fines and indemnities imposed upon them be charged to the partnership.

However, the payment of the personal debts contracted by either spouse before the marriage, that of fines and
indemnities imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced
against the partnership assets after the responsibilities enumerated in the preceding Article have been covered, if the
spouse who is bound should have not exclusive property or if it is insufficient; but at the time of the liquidation of the
partnership, such spouse shall be charged for what has been paid for the purpose above-mentioned.

Debts, Fines, Pecuniary Indemnities Incurred Before or During the Marriage
General rule: For as long as the debts and obligations redounded to the benefit of the family, such debts and
obligations may be charged to the conjugal partnership.
For the third paragraph (payment of obligations that did not redound to the benefit of the family), two (2)
things must be shown: (a) that the obligations in Art. 21 have been covered and that (b) the debtor-spouse has
insufficient or no exclusive properties to pay the debt or obligation involved.
Such payment for fines and pecuniary indemnities may be charged against the partnership assets before the
liquidation of the partnership, provided that it has complied with the requisites in Art. 122. (People vs Lagrimas)
[Note] In doing justice to the heirs of the murdered victim, no injustice is committed to the family of the
offender. It is made a condition under this article that responsibilities enumerated under Art. 121 covering primarily the
maintenance of the family, education of the children as well as other preferential obligations are first satisfied. (People vs
Lagrimas)
Difference from the Absolute Community Rule

The conjugal partnership is liable for the personal debts, fines and indemnities of either spouse contracted
before the marriage only after (1) payment of all the liabilities of the conjugal partnership are covered and (2) when the
separate properties of the debtor-spouse are insufficient.
In the absolute community, the community property is liable for the personal debts, fines and indemnities of
either spouse when the debtor-spouse has no or insufficient separate properties, subject to reimbursement upon
liquidation.
Reason for this rule: in absolute community regime, the spouses have fewer if any at all, exclusive properties
with which to meet their personal obligations. Thus, it is no longer required that all the charges upon the absolute
community be satisfied before such personal obligations be paid by the community.
Crime or Quasi-Delict/ The Baffling Question of Whether Liabilities from Crime or Quasi-Delict Be Chargeable
There are two conflicting points on this:
1.
2.
In the case of People vs Lagrimas (1962), the court allowed certain properties of the conjugal partnership
to be attached in payment of the civil liability of the husband who was charged with murder. The court
basically held: that as long as the preferential obligations chargeable against the community property were
satisfied, the obligation may be charged against the conjugal partnership. The provision was thus worded
to minimize the possibility that such additional liability of an accused would be rendered nugatory. In
doing justice to the heirs of the murdered victim, no injustice is committed against the family of the
offender.
In the case of Spouses Buado vs Court of appeals (2009), the court did not allow the payment of liability
of Erlinda Nicol arising from a crime stating that conjugal property cannot be held liable for the personal
obligation contracted by one spouse. It stated further that the conjugal partnership of gains has no duty
to make advance payments for the liability of the debtor spouse.
Debts
Insofar as debts are concerned, Art. 122 clearly limits the application of this advance-reimbursement
mechanism to personal debts not redounding to the benefit of the family contracted by either of the spouses before the
marriage and not during the marriage.
Computation
Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse
shall be credited to the conjugal partnership as an asset thereof.

Altiora Peto


Art. 123. Whatever may be lost during the marriage in any game of chance, or in betting, sweepstake, or any other
kind of gambling whether permitted or prohibited by law, shall be borne by the loser and shall not be charged to the
conjugal partnership but any winnings therefrom shall form part of the conjugal partnership property.

Game of Chance
Winnings can be considered as income of the common property and income of the separate property which,
therefore, make them part of the conjugal partnership of gains.
Section 5
Administration of the Conjugal Partnership Property

Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of
disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for a proper remedy,
which must be availed of within five years from the date of the contract implementing such decision.

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. However, the transaction
shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be
perfected by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors.

Sale of Conjugal Property; When Void
The sale of a conjugal property without the knowledge and consent of the other spouse is void. It cannot be
ratified by compromise. (Guiang vs CA) If the consent is vitiated, ratification can cure the defect. (ibid) A void and illegal
contract cannot be cured by any subsequent act. (Spouses Antonio vs CA)
Proper Remedy; Judicial Guardianship vs Sole Administrator Proceeding

In case one of the spouses is incapacitated or otherwise unable to participate in the administration of the
common properties, the other spouse may assume sole powers of administration. The appointment of the spouse as the
sole administrator shall be in a summary proceeding under Art. 253 of the Family Code if it involves:
(a) absent
(b) separated in fact
(c) abandoned the other
(d) consent is withheld
If the subject is an incompetent who is in a comatose or semi-comatose condition, a victim of stroke,
cerebrovascular accident, without motor and mental faculties, and with diagnosis of brain stem infarct, the proper remedy
is a judicial guardianship proceeding under the Rules of Court.
[Note] Copied from the same provision in Art. 96 concerning absolute community.
Section 6
Dissolution of Conjugal Partnership Regime

Art. 126. The conjugal partnership terminates:
1) Upon the death of either spouse:
2) Where there is a decree of legal separation;
3) When the marriage is annulled or declared void; or
4) In case of judicial separation of property during the marriage under Articles 134 and 138.
Same discussion as Art. 98

Art. 127. The separation in fact between husband and wife shall not affect the regime of conjugal partnership, except
that:
(1) The spouse who leaves the conjugal home or refuses to live therein, without just cause, shall not have
the right to be supported;
(2) When the consent of one spouse to any transaction of the other is required by law, judicial
authorization shall be obtained in a summary proceeding;
(3) In the absence of sufficient conjugal partnership property, the separate property of both spouses shall
be solidarily liable for the support of the family. The spouse present shall, upon petition in a summary
proceeding, be given judicial authority to administer or encumber any specific separate property of
the other spouse and use the fruits or proceeds thereof to satisfy the latters share.


Altiora Peto


Art. 128. If a spouse without just cause abandons the other or fails to comply with his or her obligations to the family,
the aggrieved spouse may petition the court for receivership, for judicial separation of property or for authority to be
the sole administrator of the conjugal partnership property, subject to such precautionary conditions as the court
may impose.

The obligation to the family mentioned in the preceding paragraph refer to marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling without intention of
returning. The spouse who has left the conjugal dwelling for a period of three months or has failed within the same
period to give any information as to his or her whereabouts shall be prima facie presumed to have no intention of
returning.

Art. 129. Upon dissolution of the conjugal partnership regime, the following procedure shall apply:
1) An inventory shall be prepared, listing separately all the properties of the conjugal partnership and
the exclusive properties of each spouse;
2) Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either
spouse shall be credited to the conjugal partnership as an asset thereof;
3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property
or for the value of his or her exclusive property, the ownership of which has been vested by law in the
conjugal partnership;
4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal assets. In case of
insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their
separate properties, in accordance with the provisions of paragraph (2) of Article 121;
5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of
them;
6) Unless the owner had been indemnified from whatever source, the loss or deterioration of movables
used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid
to said spouse from the conjugal funds, if any;
7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be
divided equally between husband and wife, unless a different proportion or division was agreed upon
in the marriage settlements or unless there has been voluntary waiver or forfeiture of such share as
provided in this Code;
8) The presumptive legitimes of the common children shall be delivered upon partition in accordance
with Article 51;
9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless
otherwise agreed upon by the parties, be adjudicated to the spouse with whom the majority of the
common children choose to remain. Children below the age of seven years are deemed to have chosen
the mother, unless the court has decided otherwise. In case there is no such majority, the court shall
decide, taking into consideration the best interest of said children.

Liquidation of Partnership
The conjugal partnership may be liquidated by extrajudicial settlement, ordinary action of partition or by way of
testate or intestate proceedings. (Villocino vs Dayon)
Art. 130. Upon termination of the marriage by death, the conjugal partnership property shall be liquidated in the
same proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the conjugal partnership
property either judicially or extra-judicially within one year from the death of the deceased spouse. If upon the lapse
of the one-year period no liquidation is made, any disposition or encumbrance involving the conjugal partnership
property of the terminated marriage shall be void.

Should the surviving spouse contract a subsequent marriage without compliance with the foregoing requirements, a
mandatory regime of complete separation of property shall govern the property relations of the subsequent
marriage.

Same as Art. 103
Art. 131. Whenever the liquidation of the conjugal partnership properties of two or more marriages contracted by the
same person before the effectivity of this Code is carried out simultaneously, the respective capital, fruits and income
of each partnership shall be determined upon such proof as may be considered according to the rules of evidence. In
case of doubt as to which the partnership shall be determined upon such proof as may be considered according to the
rules of evidence. In case of doubt as to which partnership the existing proeprties belong, the same shall be divided
between and among the different partnerships in proportion to the capital and duration of each.


Altiora Peto


Simultaneous Liquidation
The subsequent partnership cannot be liquidated without the liquidation of the prior one.
Art. 132. The Rules of Court on the administration of estates of deceased persons shall be observed in the appraisal
and sale of property of the conjugal partnership, and other matters which are not expressly determined in this
Chapter.

Art. 133. From the common mass of property support shall be given to the surving spouse and to the children during
the liquidation of the inventoried property and until what belongs to them is delivered; but from this shall be
deducted the amount received for support which exceeds the fruits or rents pertaining to them.

Advances
Once a spouse dies, the surviving spouse and the children become co-heirs of the estate left by the deceased.
Hence they have a right to get certain amounts from what they technically own to support themselves. The amount which
they are allowed to get must at least be equivalent to the fruits or rents arising from the share which they will eventually
obtain after liquidation. If what they took exceeded the fruits of their share, the excess shall be taken from the part of the
property which has been given to them as their separate property after liquidation. (Santos vs Bartolome)
The allowances for support to the children and the spouse of the deceased pending liquidation of the estate are
subject to collation and deductible from their share of the inheritance in so far as they exceed what they are entitled to as
fruits of income. (Lesaca vs Lesaca)
Who are entitled to support

Only the surviving spouse and the children are entitled to get the allowances for support contemplated in this
Article. Other heirs such as grandchild are not include. (Babao vs Villavicencio)
As such:
Even the fact that the children are already of age, gainfully employed or married is of no moment as
these factors should not be taken into account in relation to the determination of the rights of the
mentioned heirs.
Chapter 5
Separation of Property of the Spouse and Administration of Common Property by One Spouse During the Marriage

Art. 134. In the absence of an express declaration in the marriage settlements, the separation of property between
spouses during the marriage shall not take place except by judicial order. Such judicial separation of property may
either be voluntary or for sufficient cause.

Judicial Separation of Property
If there was no marriage settlement providing that the property relation of husband and wife will be one of
complete separation of property regime, they cannot, after the marriage ceremony, alter their property relationship to a
separate property regime without mandatory judicial approval. Judicial approval is needed whether the separation of
property was voluntary or for sufficient cause.
Rationale
The separation of property regime is not in harmony with the unity of the family and the mutual help and
protection expected of the spouses and as such, to discourage the said regime, it shall not prevail unless expressly
stipulated in the marriage settlements before the union is solemnized or by judicial decree during the existence of the
marriage.
Art. 135. Any of the following shall be considered sufficient cause for judicial separation of property:
1) That the spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction;
2) That the spouse of the petitioner has been judicially declared an absentee;
3) That loss of parental authority of the spouse of petitioner has been decreed by the court;
4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or her
obligations to the family as provided for in Article 101;
5) That the spouse granted the power in administration in the marriage settlements has abused that
power; and
6) That at the time of the petition, the spouses have been separated in fact for at least one year and
reconciliation is highly improbable.

In the cases provided for in number (1), (2) and (3), the presentation of the final judgment against the guilty or absent
spouse shall be enough basis for the grant of the decree of judicial separation of property.

Civil Interdiction

Altiora Peto


Civil interdiction deprives the offender during the time of his sentence of the rights of parental authority or
guardianship, either to the person or property of any ward, of marital authority, of the right to manage his property and
of the right to dispose of such property by any act of any conveyance inter vivos.
Declaration of Absence
When is an absentee declared as such:
Two years having elapsed without any news about the absentee or since the receipt of the last news,
and five years in case the absentee has left a person in charge of the administration, his absence
may be declared. (Art. 384 of the Civil Code)
Who may
institute an action for judicial declaration of absence:

The spouse present
The heirs instituted in a will who may present an authentic copy of the same;
The relatives who may succeed by law of intestacy
Those who may have some right to a property of the absentee subordinated to the condition of his
death. (Art. 385)
The judicial declaration of absence shall not take effect until six months after its publication in a newspaper of
general circulation. (Art. 386)
Loss of Parental Authority

Loss of parental authority here refers to the loss of parental authority of the spouse of petitioner over their
common children or over the child of the spouse of the petitioner with another person.
Grounds for Termination of Parental Authority
The loss of parental authority should indicate malice, abuse, bad faith or culpable negligence on the part of the
petitioner.
Ex. If a spouse sexually abuses his or her child.
Abuse of Administration
For abuse to exist, it is not enough that the spouse granted the power of administration performs an act or acts
prejudicial to the other spouse. Nor is it sufficient that he or she commits acts injurious to the community of property or
conjugal partnership property, for these may be the result of mere inefficient or negligent administration.
Abuse connotes willful and utter disregard of the interests of the partnership, evidenced by a repetition of
deliberate acts and/or omissions prejudicial to the latter. (De la Cruz vs De la Cruz)
Separation in Fact
At the time of the petition, the spouses must have been (a) separated for at least one year; and (b)
reconciliation is highly improbable.
Art. 136. The spouses may jointly file a verified petition with the court for the voluntary dissolution of the absolute
community or the conjugal partnership of gains, and for the separation of their common properties.

All creditors of the absolute community or of the conjugal partnership of gains, as well as the personal creditors of the
spouse, shall be listed in ht petition and notified of the filing thereof. The court shall take measures to protect the
creditors and other persons with pecuniary interest.

Altiora Peto



Altiora Peto

Bance Notes on Property Relations Chapter 3 System of Absolute Community

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bance Notes on Property Relations Chapter 3 System of Absolute Community

Uploaded by

Copyright:

Available Formats

Bance

Notes on Property Relations 1

Commencement of Absolute Community

Waiver, When Valid

Bance Notes on Property Relations

Bance Notes on Property Relations 2

Section 2. What Constitutes Community Property

Registration of Marriage Settlements, Buyer in Good Faith

Those acquired by gratuitous title, its income and fruits.

Bance Notes on Property Relations

Bance Notes on Property Relations 3

Properties acquired by exclusive/personal money

Bance Notes on Property Relations

Bance Notes on Property Relations 4

Debts and obligations

Taxes, Liens, Charges and Repairs

Bance Notes on Property Relations

Bance Notes on Property Relations 5

Taxes, Expenses for Preservation of Separate Property

Antenuptial Debts of Either Spouse

Bance Notes on Property Relations

Bance Notes on Property Relations 6

Solidary liability of spouses

Betting distinguished from Gambling

Bance Notes on Property Relations

Bance Notes on Property Relations 7

Decision of Husband shall Prevail

Effect of Alienation and Encumbrance

Proper Remedy; Judicial Guardianship vs Sole Administrator Proceeding

Limitations on Sole Administratorship

Bance Notes on Property Relations

Bance Notes on Property Relations 8

Death of either Spouse

Bance Notes on Property Relations

Bance Notes on Property Relations 9

Judicial Separation of Property

Liquidation After Affidavit of Reappearance

Bance Notes on Property Relations

Bance Notes on Property Relations 10

De Facto Separation vs Total Abandonment

Bance Notes on Property Relations

Bance Notes on Property Relations 11

Failure to Comply with Family Obligations

Payment of debts and obligations

Delivery of exclusive properties

Bance Notes on Property Relations

Bance Notes on Property Relations 12

Partition of net assets

Delivery of the presumptive legitimes

Delivery of the presumptive legitimes is made only in termination of marriage either by

Adjudication of the conjugal dwelling

Net Assets vs Net Profits

Forfeiture of Net Profits

Judicial Intervention in Adjudication of Conjugal Dwelling

Bance Notes on Property Relations

Bance Notes on Property Relations 13

Liquidation upon Death

Community property shall be inventoried, administered and liquidated

Consequences of Failure to Liquidate within One Year

Nature of Interest of Heirs Prior to Liquidation

Bance Notes on Property Relations

Bance Notes on Property Relations 14

Claim against the Estate