CHAPTER

CONJUGAL PARTNERSHIP OF GAINS  

Section 7. Liquidation of the Conjugal Partnership Assets and Liabilities

Article 129. Upon the 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 a 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 interests of said children. (181a, 182a, 183a, 184a, 185a)

Note: 

* In the dissolution of the conjugal partnership regime, it is necessary in the inventory to separate the listing of the conjugal and the separate assets. 

* In reference with the provision number three, if one of the spouses owns a lot where a building was built with conjugal funds, on the assumption that the value of the building is more than that of the land, the conjugal partnership shall reimburse the spouse owning the land during the liquidation of the partnership. This is so because, it is only  when the value of the land has been paid to the  spouse that ownership shall be vested in the partnership. 




Reference: 
Family Code of the Philippines by Albano

CHAPTER

CONJUGAL PARTNERSHIP OF GAINS  

Section 6. Dissolution of Conjugal Partnership Regime

Article 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 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. (167a, 191a)

Explanation:

         

          The article above deals with unjust abandonment (which we have discussed in Article 100 of this Code) of one spouse by the other spouse.

Again, as stated and discussed in Article 100 and the above article, if a spouse abandons another without just cause, he or she may petition the court for receivership, judicial of property or for authority to be the sole administrator of the conjugal partnership property.

Source: 
Family Code of the Philippines by ALBANO

CHAPTER

CONJUGAL PARTNERSHIP OF GAINS  

Section 3. Conjugal Partnership Property

Article 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 acquisition 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 spouse 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 borne exclusively by the loser-spouse. (153a, 154, 155, 159)

In Flores vs. Flores, 48 Phil. 288, a man married three (3) times. During the second marriage, he bought a parcel of land with some conjugal funds. He was able to register the land after his second wife died. Under this situation, the land belongs to the partnership of the second marriage.

Flores and Flores v. Flores

G.R No. 24173, November 24, 1925

FACTS: A man was married three times. During his second marriage, he bought some land with conjugal funds. After the second wife died, the husband registered the land under his own name in the Torrens System. Later, he married for the third time. Who owns the land?

HELD: The conjugal partnership of the second marriage is the owner of the land. In Sec. 70 of the Land Registration Act (No. 496) it is among other things, expressly declared that nothing in that Act shall be construed to relieve registered land or the owners thereof from any rights incident to the relation of husband and wife... except as otherwise provided in the Act. Property acquired during the marriage with conjugal funds pertain to the conjugal partnership regardless of the form in which the title is then or thereafter taken.

Sources: 
Family Code of the Philippines by Albano

Section 6. Liquidation of the Absolute Community Assets

and Liabilities

Article 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 properties 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 the properties, the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom

Separate listing of:

Ø  Absolute community

Ø  Exclusive properties of each spouse

Payment of Debts and Obligations of the Absolute Community

Ø  Absolute community assets; and

Ø  If insufficient, the separate properties (solidarily)

The rule of forfeiture is that the absolute community of property or the conjugal partnership, as the case may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith, his or her share of the net profits of the community property or conjugal partnership property shall be forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a previous marriage or in default of children, the innocent spouse.

Another rule is that the absolute community 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 accordance with the provisions of Article 63(2) of the Family Code.

Sources: 
Family Code of the Philippines by Albano

Section 5: Dissolution of Absolute Community Regime

Article 101. 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 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. (178a)

Explanation:

          The above Article provides a remedy if a spouse has been abandoned. Such as Petition for Receivership, Judicial separation of property and petition for authority to be the sole administrator of the absolute community of property.

There is abandonment by one spouse when he/she left the conjugal dwelling without any intention of returning and when he/she no longer complies with his/her marital, parental and property relations with the family. Said spouse is presumed to have abandoned the family if:

(a) he/she left the conjugal dwelling for a period of three (3) months; or

(b) he/she has failed within three (3) months to give any information as to his or her whereabouts.

The law mentions the obligations of the spouses to the marriage like marital, parental, or property relations;

Ø  If a spouse does not perform the obligation to live with the other for a period of three (3) months, the other spouse may go to court and ask for relief. This is so, because the husband and wife are obliged to live together. (Article 68, Family Code).

Ø  If one of the spouses fails or refuses to perform the duties to the family like support, care, custody of children; then, there can be abandonment, and the other spouse may go to court and ask for the reliefs granted under the law.

Ø  One of the duties to the marriage is the administration of properties of the husband and wife. In fact, the husband and wife have joint administration of the properties of the absolute community (Article 96, Family Code) and the conjugal partnership of gains. (Article 124, Family Code). If one of the spouses fails or refuses to comply with the duty, then, the other spouse may go to court and ask that he/she be appointed the sole administrator of the properties.

Sources: 
Family Code of the Philippines by Albano

Section 5: Dissolution of Absolute Community Regime

Article 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;

(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 latter’s share.

(178a)

The Article refers to a separation de facto. In the proper case there can be:

(a)         loss of support;

(b)         judicial authorization instead of marital consent;

(c)         subsidiary solidary liability of the separate property;

(d)        judicial authority to administer or encumber the separate property (including fruits

and proceeds) of the other spouse.

Spouses Ricky and Anita Wong, et al. vs.

IAC, et al.

G.R. No. 70082, August 19, 1991

Facts:

Romarico and Katrina are married. They have three children, but they have been living separately from each other most of the time. During the marriage, Romarico acquired a lot consisting of 1,787  square meters. In 1972, while in Hong Kong, Katrina entered into a contract with Anita Wong, whereby she consigned to her pieces of jewelry worth P321,830.95. When she failed to return the jewelries, Anita demanded the payment where Katrina issued a check for P55,000.00. When it bounced, she was sued criminally, but since the obligation was purely civil in nature, a suit for collection of sum of money was filed against her. Judgment was rendered against Katrina. When it became final and executory, the parcel of land was levied upon and sold at a public auction.

Issues:

(1) Whether or not the property is conjugal or not;

(2) Whether the property is liable for the indebtedness of Katrina.

Held:

(1) Having been acquired during the marriage, the property is presumed to belong to the conjugal partnership (Cuenca vs. Cuenca, 168 SCRA 335), even though Romarico and Katrina had been living separately. (Flores vs. Escudero, 92 Phil. 786).

The presumption of the conjugal nature of the properties subsists in the absence of clear, satisfactory, and convincing evidence to overcome said presumption or to prove that the properties are exclusively owned by Romarico. (Ahern vs. Julian, 39 Phil. 607). While there is proof that Romarico acquired the properties with money he had borrowed from an officemate, it is unclear where he obtained the money to repay the loan. If he paid it out of his salaries, then the money is part of the conjugal assets and not exclusively his. Proof on this matter is of paramount importance considering that in the determination of the nature of a property acquired by a person during coverture, the controlling factor is the source of the money utilized in the purchase.

(2) The conjugal nature of the properties notwithstanding, Katrina’s indebtedness may not be paid for with the same since her obligation was not shown by the petitioners to be one of the charges against the conjugal partnership. (Lacson vs. Diaz, 14 SCRA 183). In addition to the fact that her rights over the properties are merely inchoate prior to the liquidation of the conjugal partnership, the consent of her husband and her authority to incur such indebtedness had not been alleged in the complaint and proven at the trial. (Manaois-Salonga vs. Natividad, 107 Phil. 268). Furthermore, under the Civil Code (before the effectivity of the Family Code on August 3, 1988), a wife may bind the conjugal partnership only when she purchases things necessary for the support of the family or when she borrows money for the purpose of purchasing things necessary for the support of the family if the husband fails to deliver the proper sum; when the administration of the conjugal partnership is transferred to the wife by the courts or by the husband, and when the wife gives moderate donations for charity. Having failed to establish that any of these circumstances occurred, the Wongs may not bind the conjugal assets to answer for Katrina’s personal obligations to them.

Sources: 
Family Code of the Philippines by Albano 

Chapter 3

System of Absolute Community

Section 1: General Provisions

Article 90. The provisions on co-ownership shall apply to the absolute community of property between the spouses in all matters not provided for in this Chapter. (n)

Explanation:

·         All matters not covered by the Family Code are governed by the rules on co-ownership.

Note: 

Ø  The law provides for the property regime in case of common-law relationships and even if the marriage is void, the distribution of the properties shall be based on co-ownership where the parties shall share and share alike.

In Valdez vs. RTC of Quezon City, et al., G.R. No. 122749, July 31, 1996, 72 SCAD 967, said that the property relationship in void marriages ab initio is co-ownership and if ever there is a declaration of nullity of a void marriage, even if based on psychological incapacity, the dissolution of the properties or distribution shall be based on the law on co ownership where the parties shall share and share alike.

Antonio Valdes vs. Regional Trial Court

G.R No. 122749, July 31, 1996

Facts:

Antonio Valdes and Consuelo Gomez were married in 1971 and begotten during the marriage were five children. Valdes sought the declaration on nullity of marriage pursuant to Article 36 of the Family Code which was granted and hereby declared null and void on the ground of their mutual psychological incapacity to comply with their essential marital obligations.

Both Valdes and Gomez are directed to start proceedings on the liquidation of their common properties as defined in Article 147, of the Family Code which explicitly provides that the property acquired by both parties during their union, in the absence of proof to the contrary, are presumed to have been obtained through the joint efforts of the parties and will be owned by them in equal shares, plaintiff and defendant will own their 'family home' and all their other properties for that matter in equal shares. Also, the property regime of petitioner and respondent shall be governed by the rules on co-ownership.

Antonio Valdes moved for reconsideration of the order but was denied.

Issue:

          Whether or not Article 147 does not apply to cases where the parties are psychological incapacitated.

Held:

The trial court correctly applied the law. In a void marriage, regardless of the cause thereof, the property relations of the parties during the period of cohabitation is governed by the provisions of Article 147 or Article 148, such as the case may be, of the Family Code. Article 147 is a remake of Article 144 of the Civil Code as interpreted and so applied in previous cases;[6] it provides:

"ART. 147. When 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, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.

"In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household.

This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term "capacitated" in the provision (in the first paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any "male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 37 and 38"^[7] of the Code.

Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as having contributed thereto jointly if said party's "efforts consisted in the care and maintenance of the family household."^[8] Unlike the conjugal partnership of gains, the fruits of the couple's separate property are not included in the co-ownership.

Sources: 
Family Code of the Philippines by Albano