The document discusses property relations under the system of absolute community between spouses. It states that the absolute community commences at the celebration of the marriage and covers all property owned by the spouses at that time and acquired thereafter, except for certain exclusions. Property acquired during marriage is presumed to belong to the community unless proven otherwise. The exclusions are: 1) property acquired by gratuitous title unless donors intend it for the community; 2) property for the personal and exclusive use of either spouse except for jewelry; and 3) property acquired before marriage by a spouse with descendants of a prior marriage.
The document discusses property relations under the system of absolute community between spouses. It states that the absolute community commences at the celebration of the marriage and covers all property owned by the spouses at that time and acquired thereafter, except for certain exclusions. Property acquired during marriage is presumed to belong to the community unless proven otherwise. The exclusions are: 1) property acquired by gratuitous title unless donors intend it for the community; 2) property for the personal and exclusive use of either spouse except for jewelry; and 3) property acquired before marriage by a spouse with descendants of a prior marriage.
The document discusses property relations under the system of absolute community between spouses. It states that the absolute community commences at the celebration of the marriage and covers all property owned by the spouses at that time and acquired thereafter, except for certain exclusions. Property acquired during marriage is presumed to belong to the community unless proven otherwise. The exclusions are: 1) property acquired by gratuitous title unless donors intend it for the community; 2) property for the personal and exclusive use of either spouse except for jewelry; and 3) property acquired before marriage by a spouse with descendants of a prior marriage.
The document discusses property relations under the system of absolute community between spouses. It states that the absolute community commences at the celebration of the marriage and covers all property owned by the spouses at that time and acquired thereafter, except for certain exclusions. Property acquired during marriage is presumed to belong to the community unless proven otherwise. The exclusions are: 1) property acquired by gratuitous title unless donors intend it for the community; 2) property for the personal and exclusive use of either spouse except for jewelry; and 3) property acquired before marriage by a spouse with descendants of a prior marriage.
ARTICLE 75. The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern.
I. General Provisions
When does absolute community commence?
ARTICLE 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.
System of Absolute Community as a Special Co-Ownership
ARTICLE 89. No waiver of rights, 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 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. (146a)
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University of Cebu School of Law 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.
Notes:
● Waiver: ○ Article 6 of the Civil Code provides: “Rights may be waived, unless the waiver is contrary to law, public policy, morals or good customs or prejudicial to a third person with a right recognized by law.” Therefore:
■ A waiver of rights during the marriage is not valid for being contrary to law and public policy in the light of the prohibition in Article 89 of The Family Code.
■ Article 89 (2) tackles the remedy for third persons (creditors) whose rights may be prejudiced by the waiver of one spouse to the rights in the absolute community. For the benefit of this third person, the Court, upon petition, may rescind the waiver to the extent of the amount sufficient to cover the amount of their credits.
● The system of absolute community is a special type of co-ownership hence, for matters not provided in Title IV, Chapter 3 of The Family Code, the provisions on co-ownership shall apply.
○ There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. (Art. 484, NCC)
○ Co-ownership is defined as "the right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided.” (Sanchez v. CA, G.R. No. 152766)
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University of Cebu School of Law ■ Example of applicable Co-ownership provisions: ● Art. 487. Any one of the co-owners may bring an action in ejectment. ● Art. 487 now allows a Co-Owner to bring an action for ejectment which covers all kinds of actions for the recovery of possession, including forcible entry and unlawful detainer, without the necessity of all other co-owners to join as co-plaintiffs because this action is deemed to be instituted for the benefit of all co-owners. (Paras, 2008)
II. What constitutes community property?
ARTICLE 91. Unless otherwise provided in this Chapter or in the marriage settlements, the community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter.
What are excluded in the absolute community?
ARTICLE 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.
ARTICLE 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.
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University of Cebu School of Law Notes: ● General Rule: All properties of both spouses acquired before the celebration of marriage and during its subsistence belong to the community of property. ○ RATIONALE: The underlying intent of the absolute community of property is to make the husband and wife one in all aspects. The intent of the Family Code to foster the essential unity of husband and wife and to make the family a unified and strong nuclear unit which is the foundation of the society overrides all other consequences arising from property relations.
○ EXHAUSTED LIST OF EXCEPTIONS: There are four excluded properties from the absolute community, to wit:
■ Those provided in marriage settlements; ● This is in accordance with Article 1 of the Family Code which provides x x x x marriage settlements may fix the property relations during the marriage within the limits provided by this Code. x x x x
■ Gratuitous title; ● Requisite it must be a valid gratuitous acquisition. ● Proviso: u nless it is expressly provided by the donor, testator or grantor that they shall form part of the community property originally refers to the fruits and income from the property acquired via gratuity but further deliberations of the Civil Code and Family Code Committee resulted in extending this qualification to the property itself, specifically those obtained thru valid gratuitous acquisition [Article 92 (1)].
■ Personal and exclusive use; and ● PIECES OF JEWELRY with SUBSTANTIAL VALUE BELONGS TO THE ABSOLUTE COMMUNITY.
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University of Cebu School of Law ● The exception of jewelry to the exclusion of properties belonging to the absolute community highlights the fact that the “property for personal and exclusive use” referred to must be interpreted in terms of value. ○ Example: a car that is personally and exclusively used by either spouse belongs to the absolute community regardless of the personal and exclusive use of the property exercised by the spouse. (Except if this property has been stipulated as exclusive in the marriage settlement.)
■ Property from previous marriage. ● Qualify: Property acquired from the previous marriage by a spouse who has LEGITIMATE descendants (not limited to children alone) from that marriage. ● This exclusion is for previous marriages that were judicially declared null and void or annulled and previous marriages that were terminated by death provided that liquidation of the property regime of such marriage was made. If the property regime of the previous was not liquidated, apply Art. 103. ○ Revisit Article 50, 52 and 53. ARTICLE 50. x x x x
The final judgment in such cases (Arts. 40 and 45) shall provide for the liquidation, partition and distribution of the properties of the spouses, the custody and support of the common children, and the delivery of their presumptive legitimes, unless such matters had been adjudicated in previous judicial proceedings. x x x x
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University of Cebu School of Law ARTICLE 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the children’s presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect third persons. (n)
ARTICLE 53. Either of the former spouses may marry again after compliance with the requirements of the immediately preceding Article; otherwise, the subsequent marriage shall be null and void.
○ Analysis: ■ Previous void marriage was governed by ACP. The ACP was liquidated and distributed. The share of the spouse from the liquidated ACP of the previous marriage cannot be brought into the ACP of the second marriage but his/her exclusive property from the first marriage may be brought into the ACP of the second marriage.
■ If previous void marriage was governed by CPG and the CPG was liquidated, the share of the spouse from the CPG cannot form part of the ACP of the subsequent marriage but the properties of the spouse outside of the CPG of the first marriage can be brought into the ACP of the second marriage
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University of Cebu School of Law ● Status of properties acquired using exclusive property of either spouse: ○ Unlike under conjugal partnership regime where properties bought using the exclusive property is likewise excluded from the regime, the property bought using an excluded property belongs to the absolute community.
● NOTE: IN ACP, PROPERTIES ACQUIRED DURING THE MARRIAGE IS PRESUMED TO BE PART OF THE COMMUNITY OF PROPERTY, UNLESS IT IS PROVED THAT SUCH PROPERTY QUALIFIES TO BELONG IN THE EXCLUSIONS.
III. Charges upon and obligations of the absolute community
ARTICLE 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 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 community property;
(5) All taxes and expenses for mere preservation made during 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;
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University of Cebu School of Law (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. (161a, 162a, 163a, 202a-205a)
ARTICLE 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.
Notes: ● The following may be charged upon the ACP: a. Support to spouses, common children, and legitimate children of either spouse. . ■ SUPPORT IS THE MOST IMPORTANT OBLIGATION. ■ Support compromises everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. (Article 194). b. Debts and obligations
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University of Cebu School of Law ■ Contracted by the administrator spouse for the benefit of the ACP; ■ Contracted by either spouse for the benefit of the family; ■ Contracted by both spouses; and ■ Contracted by either spouse with the consent of the other spouse. ■ Antenuptial debts of either spouse that redounded to benefit of the family c. Taxes, liens , charges and repairs upon the community property, even without the consent of the other. (Apply co-ownership) d. Taxes and expenses for the preservation of exclusive property used by the family. ■ Example: Maintenance expense for the house obtained by gratuitous acquisition, and thus, not belonging to the community property, but is used as residence of the family. e. Expenses for self improvement of either spouse and donation promised for self-improvement of common legitimate child ■ This is also covered by “support” ■ Caution: Value of donation promised by the spouses for the education/self-improvement of a common child must be given by BOTH SPOUSES otherwise, it may qualify as void donation under Article 87 for being an indirect donation to the other spouse. A donation given to a legitimate common child with no other compulsory heir by ONLY ONE OF HIS/HER PARENT is an indirect donation to the spouse. f. Support of illegitimate children, antenuptial debts that do not fall under paragraph 7 and liabilities arising from the civil component of crimes, quasi-delict, when the exclusive property of the concerned spouse is absent or insufficient but the amount is deemed as advances of the concerned spouse from his share of the ACP upon liquidation.
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University of Cebu School of Law ■ Article 100 of the Revised Penal Code provides that every person who is criminally liable shall also be civilly liable for the felony committed.
■ Art. 2176 of the NCC provides that “whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done.” (quasi delict) ● ARTICLE 2180. The obligation imposed by article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. (NCC)
g. Litigation fee, provided that ■ Suit is between the husband and wife and has grounds; ■ Suit is for the benefit of the family. ● If the community property is insufficient to satisfy its liabilities, except for par. 9, each spouse is solidarily liable. The balance can be paid out of the separate funds of the spouses. ● In case of insolvency of a debtor spouse, the ACP cannot be subject to attachment except insofar as the debt redounded to the benefit of the family. In which case, if the husband is the insolvent, the administration of the community will be transferred to the wife or to a third person other than the assignee in an insolvency proceeding to prevent the debtor spouse from dissipating the properties which may be assigned to satisfy his obligations. ● In Article 95:
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University of Cebu School of Law a. Profits from gambling belong to the absolute community; b. Losses from gambling shall be charged upon the exclusive property of the loser; ■ If the profit came from a sweepstake ticket that was given or gifted to either spouse, the profit is part of the exclusive property by virtue of Art. 92 (1)
IV. Ownership, Administration, Enjoyment, and Disposition of the Community Property
ARTICLE 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for 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 disposition or encumbrance without 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 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.
Notes: 1. Joint Administration and enjoyment - a manifestation of co-ownership a. One spouse can act freely to repair or improve a property. 2. If there is a disagreement, the husband’s will prevails for the meantime subject to recourse by the court in the instance of the wife; if the wife proceeds with her objective, the husband can also seek relief from the court.
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University of Cebu School of Law Act Reason Proceeding
Appointment as sole Absence, abandonment of Article 253 of TFC
administrator the other spouse, separation in fact
Appointment as sole Comatose, 1964 Revised Rules of
administrator cerebrovascular accident, Court etc. that render the other spouse incompetent
Sale of property Comatose, 1964 Revised Rules of
belonging to the absolute cerebrovascular accident, Court Community etc. that render the other spouse incompetent N.B.: As the administrator spouse, he/she must perform the duties of a guardian. (Abalos v. Macatangay, G.R. No. 155043)
Sale of property Absence, abandonment of If the other spouse will
belonging to the absolute the other spouse, not consent, summary Community separation in fact proceedings under Chapter 2, Title XI
3. In case one spouse is incapacitated or otherwise unable to jointly administer the common properties, by reason of such spouse being absent, has abandoned the other spouse, or the spouses are separated in fact, the other spouse may assume sole powers of administration. The appointment of the spouse as the sole administrator can be done in a summary proceeding under Article 253 of the Family Code. (Monteclar, 2011) Article 253 sets that the judicial procedures for the appointment of sole administration shall be under Chapter 2 and 3 of Title XI, or Summary Judicial Proceedings for Separations in fact of husband and wife and parental authority.
4. In Uy vs. Court of Appeals, decided on November 29, 2000, the Court however, qualified that if the inability of the spouse to co-administer the community of property is due to being in the comatose stage, or a victim of
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University of Cebu School of Law stroke or cerebrovascular accident, which makes him “incompetent”, the proper remedy is a judicial guardianship proceeding under Rule 93 of the 1964 Revised Rules of Court and not a summary proceeding for appointment as sole administrator under Article 253 of the Family Code This proceeding for the appointment of guardians.
5. The authority to solely administer the community property does not include the powers of disposition or encumbrance. The sole administrator spouse cannot sell or encumber the common property without the consent of the other spouse or the authority from the court. The sale of a community property by one spouse without the consent of the other is null and void. However, although the sale is void it can be ratified later on if the non-consenting spouse will give his/her consent or the court grants the required authorization. This is so because 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. 6. An action to nullify the sale which was executed without the consent of the other spouse does not prescribe. 7. If the third party buyer acted in good faith, the sale cannot be voided (PNB vs. Court of Appeals). Remedy for aggrieved spouse: Compel the erring spouse to account the amount of the sale as it is part of the absolute community.
ARTICLE 97. Either spouse may dispose by will of his or her interest in the community property. (n)
Notes: ● This is not a contravention of Article 89 which prohibits waiver of rights in the ACP since the will takes effect only after the death of the testator spouse. ● 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
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University of Cebu School of Law the grant will not encroach the lawful legitimes of his compulsory heroes. ● Considering the co-ownership nature of the ACP, the spouse-testator can only dispose of his or her interest in the community property and not in a specific property.
ARTICLE 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 property for charity or on occasions of family rejoicing or family distress.
Notes: ● Rationale: To protect the share of the other spouse in the community property which may be prejudiced by reckless generosity of the other. ● Exceptions: Moderate donations for charity or occasions of family rejoicing or distress.
V. Dissolution of Absolute Community Regime
ARTICLE 99. The absolute community terminates: (1) Upon the 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 Article 134 to 138.
Notes: ● Termination of ACP is not equivalent to termination of marriage. Termination of marriages, however, terminates ACP altogether. ● ‘Modes by which ACP terminates: ○ Death ○ Legal Separation ○ Annulment ○ Nullification: ■ NO ACP in Void marriages
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University of Cebu School of Law ■ Article 147 and 148 governs the property relations of a void marriage ■ Article 147 - For parties capacitated to marry each other and lived exclusively together as husband and wife without the benefit of marriage. The rule on co-ownership applies. In case of bad faith, the share to the property shall be forfeited in the following order: ● Common children and their descendants; ● In default of or waiver by any descendant, share shall belong to surviving descendants; ● In absence of descendants, with the innocent spouse. ● CAUTION: THIS IS NOT A REPRODUCTION OF ARTICLE 43(2) GOVERNING TERMINATION OF MARRIAGE UPON REAPPEARANCE OF ABSENT SPOUSE. Note that in Art. 147, the order of persons who will benefit from forfeiture due to bad faith includes only common children and their descendants, unlike in Article 43(2) where the order is: (1) common children, (2) children of guilty spouse from previous marriage, and (3) innocent spouse.
■ ARTICLE 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
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University of Cebu School of Law absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith. ■ ● Article 43 (2) applies only to forfeiture of share of the profits of the ACP for marriages that terminate upon the reappearance of the absentee spouse, for void marriages under Article 40, and voidable marriages under Article 45. For any other reason for termination of marriage, forfeiture proceeding, Article 147 and 148 applies.
○ Judicial Separation of property - provided under Article 136
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; Note: Proceeding for judicial authorization is under Title XI. Ch. 2 (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)
Notes:
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University of Cebu School of Law ● This is a reiteration of the last paragraph of Art. 94 and the joint obligation of the spouses to support the family under Article 70 of the Family Code;
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 her 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)
Notes: ● When can a spouse be deemed to have abandoned the other? ○ Departure without intent to return followed by prolonged absence without just cause; ○ A spouse who has left for three month with failure to inform of his whereabouts ○ Abandonment shall not only be appreciated by physical absence but also moral and financial desertion. (Dela Cruz vs. Dela Cruz) ● Remedies to the present spouse: ○ Petition the court for receivership or be appointed as sole administrator of the community property ○ Judicial Separation of property - Art. 136 ○ Failure to comply with obligations to the family under Article 101 may constitute psychological incapacity, a ground for declaration of nullity of marriage (Art 36);
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University of Cebu School of Law ○ Unjustified abandonment for a period of over 1 year constitutes ground for LEGAL SEPARATION (Art 55 par. 10).
VI. 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 provided in this Code. For purpose 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 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
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University of Cebu School of Law there is no such majority, the court shall decide, taking into consideration the best interests of said children. (n)
Notes: ● In a voluntary judicial separation, the liquidation may be governed by the terms agreed by the parties if the court approves.
● INVENTORY: Notes: ● The properties must be itemized and valued. ● The assessed value at the time of the liquidation must be appreciated, not the purchase value. ● A new valuation may be conducted if the liquidation took long or during the course thereof, there is a significant change in the current market value of the property.
● Payment of debts ○ Debts and obligations chargeable to the ACP under Article 94shall be paid from the assets of the ACP. ○ In case of insufficiency of the ACP to settle the liabilities, the spouses’ exclusive property will be used to pay the debts. ○ In the case of Article 94(9), the liabilities that were paid for by the ACP assets shall be deducted from the concerned spouses’ share of the ACP net profit. ● Delivery of exclusive properties ○ Whatever is left of their exclusive properties after paying off all the creditors shall be returned to them. ● Partition ○ If the common properties are more than enough to pay the absolute community obligations, the remainder shall be considered as the net assets to be divided by the spouses. The net assets shall be divided equally by the husband and wife, unless a different proportion or
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University of Cebu School of Law division was agreed upon in the marriage settlement or when there is a valid waiver of rights. The waiver will not be contrary to Article 89 if it is made only upon the declaration of judicial separation of property, or nullity, or annulment of the marriage. ○ Forfeiture of net share to the net profit of the spouse in bad faith takes effect herein according to law (Article 43 par. 2 for nullity cases under Article 40, 42, annulment cases under Article 45 and Legal separation pursuant to Article 63 par. 2; and Article 147 and 148 for other void marriages) ● Delivery of presumptive legitimes PURSUANT TO ART. 51 ○ This is only needed for marriages annulled under Article 45 or nullified under Article 40. ○ HOWEVER, the delivery of presumptive legitime in a judicial separation of property case (Noveras v. Noveras, 2014) was affirmed by the Court notwithstanding the phrase “in accordance with Article 51.” ● Alien married to Filipino ○ An alien married to a filipino cannot have any interest in the absolute community or CPG consisting of real estate and he cannot claim refund for the value of the property. (Muller v. Muller)
ARTICLE 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 one year period, no liquidation is made, any disposition or encumbrance involving the community property of the terminated marriage shall be void.
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University of Cebu School of Law 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. (n)
Notes: ● 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 if a public instrument in the office of the register of deeds. ● In case of disagreement, they may file an ordinary action for partition. ● Any disposition or encumbrance of any specific property before the process of liquidation shall have been completed shall be void because upon the death of the spouses, only the interest to the property and not the physical and definite property is vested upon the heirs. If there are creditors, the interest will only vest after the payment of the debts. ● When both spouses are alive and the community still exists, one cannot claim any definite property because they co-own the absolute community of property. ● If the decedent is survived by a spouse and compulsory heirs, the ACP evolves into a co-ownership between the surviving spouse and the heirs. ● Mandatory COMPLETE SEPARATION OF PROPERTY IF THE SURVIVING SPOUSE FAILS TO LIQUIDATE PRIOR TO REMARRIAGE.
ARTICLE 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 and 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
A report by Rosalie O. Abatayo 1L-M5
University of Cebu School of Law community the existing properties belong, the same shall be divided between the different communities in proportion to the capital and duration of each. (189a)
Notes; (Paras) 1. This article applies only to those marriages contracted BEFORE the effectivity of the Family Code. 2. In the distribution of the Property Between the Two Marriages a. Adduce proof as determined by the rules of evidence b. In case of doubt, get proportion of: 1) capital, and 2) duration of each marriage. 3. No Uniformity Prior to Advent of the Family Code Before the advent of the Family Code, the Supreme Court has not been uniform in its rulings as to whether there is need for judicial declaration of nullity of a void marriage although it would seem that of late, there was really a need for judicial decree on nullity of a void marriage. Under Art. 40 of the Family Code, a final judgment declaring a marriage void is necessary for purposes of remarriage.