BANDURIAO, MICHELLE V.

Article 88-93
Chapter 3
SYSTEM OF ABSOLUTE COMMUNITY
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.
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.
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.
In Absolute Community of Property, the husband and wife become joint owners of all
the properties of the marriage.
ACP is constituted:
(1) When it is agreed upon the marriage settlements;
(2) When the spouses did not execute a marriage settlement; or
(3) When the regime agreed upon in the marriage settlement is void.

Governing Rules of ACP:

(1) The provisions of the marriage settlement so long as it does not vitiate the
mandatory provisions of FC and the provisions of ACP shall be suppletory.
(2) In all matters not provided in the C, the rules of co-ownership shall govern.
(3) If the ACP is the chosen regime, the provisions of FC shall primarily govern and
the rules on co-ownership shall be suppletory.
When ACP commences:
ACP commences at the precise moment that the marriage is celebrated.
Under this Article, it is submitted that the spouses who are legally separated may not
adopt ACP as their new regime although this is allowed under AM 02.-11-11-SC.
Since the right of each spouse in the net asset of the ACP does not vest until after the
dissolution of the marriage, or until the dissolution and liquidation of the interest of each
spouse in the ACP, any waiver of such right, interest, shares or effects of the ACP
during the marriage cannot be made. (Except when made in case of judicial separation
of property.
PETITION FOR SEPARATION OF PROPERTY
ELENA BUENAVENTURA MULLER v. HELMUT MULLER, GR NO. 149615, 2006-08-
29
Facts:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in
Hamburg, Germany on September 22, 1989. The couple resided in Germany at a house
owned by respondent's parents but decided to move and reside permanently in the
Philippines in 1992. By this time, respondent had inherited the house in Germany from
his parents which he sold and used the proceeds for the purchase of a parcel of land in
Antipolo, Rizal at the cost of P528,000.00 and the construction of a house amounting to
P2,300,000.00.
The Antipolo property was registered in the name of petitioner
Due to incompatibilities and respondent's alleged womanizing, drinking, and
maltreatment, the spouses eventually separated.
the trial court rendered a decision which terminated the regime of absolute community
of property between the petitioner and respondent.
With regard to the Antipolo property, the court held that it was acquired using
paraphernal funds of the respondent. However, it ruled that respondent cannot recover
his funds because the... property was purchased in violation of Section 7, Article XII of
the Constitution.
Respondent appealed to the Court of Appeals which rendered the assailed decision
modifying the trial court's Decision.
It held that respondent merely prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of ownership to him. It also...
considered petitioner's ownership over the property in trust for the respondent.
Respondent Elena Buenaventura Muller is hereby ordered to REIMBURSE the
petitioner the amount of P528,000.00 for the acquisition of the land and the amount... of
P2,300,000.00 for the construction of the house situated in Atnipolo, Rizal
Hence, the instant petition for review
Issues:
Whether respondent is entitled to reimbursement of the funds used for the acquisition of
the Antipolo property.
Ruling:
Invoking the principle that a court is not only a court of law but also a court of equity, is
likewise misplaced. It has been held that equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public policy, cannot be done...
directly.
in the instant case, respondent cannot seek reimbursement on the ground of equity
where it is clear that he willingly and knowingly bought the property despite the
constitutional prohibition.
Further, the distinction made between transfer of ownership as opposed to recovery of
funds is a futile exercise on respondent's part. To allow reimbursement would in effect
permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus,
it is likewise... proscribed by law.
Principles:
He who seeks equity must do equity, and he who comes into equity must come with
clean hands.

Section 2
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.
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.
If not excluded in Article 92 of FC or in the marriage settlement, a piece of property is
community property regardless of the spouses’ respective contribution to its acquisition
and despite the fact that the same is registered solely in the name of one of the spouses
is part of ACP.
In ACP, spouses may agree to exclude from the community property whatever they may
have at the time of the celebration of the marriage and include only the properties
acquired during the marriage.
For the fruits and income of said properties, their agreement shall prevail. But in the
absence of agreement, they are to be considered part of the ACP.
There is always a presumption in favor of ACP so it is submitted that proof of acquisition
during the coverture must not be considered a condition sine qua non.
In 92 (1), in case of a joint donation to the spouses, the share of each spouse, as well
as the fruits and income, shall form part of the exclusive/separate properties.
In 92 (3), the purpose of this provision is to facilitate identification of properties from
which the legitimate descendants in the prior marriage may later on lay a claim. The
future spouses are not allowed to exclude these in the marriage settlements.
In case of a property of either spouse excluded from ACP by reason of marriage
settlement is sold or exchanged for another property, the proceeds or the property
acquired shall be part of the ACP. If the property is excluded by reason of the
mandatory provisions of the law, it shall be part of the exclusive property of the
spouses.

Munoz vs. Ramirez

G.R. No. 156125, [August 25, 2010]
DOCTRINE:
Property acquired during marriage by gratuitous title by either spouse is excluded from
the community property; When the value of the paraphernal property is considerably
more than the conjugal improvement, said paraphernal property does not
become conjugal property.
FACTS:
The residential lot in the subject property was registered in the name of Erlinda
Ramirez, married to Eliseo Carlos (respondents). On April 6, 1989, Eliseo, a Bureau of
Internal Revenue employee, mortgaged said lot, with Erlinda’s consent, to the GSIS to
secure a P136,500.00 housing loan, payable within twenty (20) years, through monthly
salary deductions of P1,687.66. The respondents then constructed a thirty-six (36)-
square meter, two-story residential house on the lot. On July 14, 1993, the title to the
subject property was transferred to the petitioner by virtue of a Deed of Absolute Sale,
dated April 30, 1992, executed by Erlinda, for herself and as attorney-in-fact of Eliseo,
for a stated consideration of P602,000.00.
On September 24, 1993, the respondents filed a complaint with the RTC for the
nullification of the deed of absolute sale, claiming that there was no sale but only a
mortgage transaction, and the documents transferring the title to the petitioner’s name
were falsified. The respondents presented the results of the scientific examination
conducted by the National Bureau of Investigation of Eliseo’s purported signatures in
the Special Power of Attorney dated April 29, 1992 and the Affidavit of waiver of rights
dated April 29, 1992, showing that they were forgeries. The petitioner, on the other
hand, introduced evidence on the paraphernal nature of the subject property since it
was registered in Erlinda’s name.
The RTC ruled for petitioner finding that the property is paraphernal and consequently,
the NBI finding that Eliseo’s signatures in the special power of attorney and in
the affidavit were forgeries was immaterial because Eliseo’s consent to the sale was not
necessary. The CA reversed and held that pursuant to the second paragraph of Article
158 of the Civil Code and Calimlim-Canullas v. Hon. Fortun, the subject property,
originally Erlinda’s exclusive paraphernal property, became conjugal property when it
was used as collateral for a housing loan that was paid through conjugal funds –
Eliseo’s monthly salary deductions.
ISSUE:
Whether the subject property is paraphernal or conjugal
HELD:
The property is paraphernal property of Erlinda.
RATIO:
As a general rule, 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. In the present
case, clear evidence that Erlinda inherited the residential lot from her father has
sufficiently rebutted this presumption of conjugal ownership pursuant to Articles 92and
109 of the Family Code. The residential lot, therefore, is Erlinda’s exclusive paraphernal
property.
Moreover, we cannot subscribe to the CA’s misplaced reliance on Article 158 of
the Civil Code and Calimlim-Canullas. As the respondents were married during
theeffectivity of the Civil Code, its provisions on conjugal partnership of gains
(Articles 142 to 189) should have governed their property relations. However, with the
enactment of the Family Code on August 3, 1989, the Civil Code provisions
on conjugal partnership of gains, including Article 158, have been superseded by those
found in the Family Code (Articles 105 to 133).
Article 120 of the Family Code, which supersedes Article 158 of the Civil Code, provides
the solution in determining the ownership of the improvements that are 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. Applying the said provision to the present case, we
find that Eliseo paid a portion only of the GSIS loan through monthly salary  deductions.
From April 6, 1989 to April 30, 1992, Eliseo paid about P60,755.76, not the entire
amount of the GSIS housing loan plus interest, since the petitioner advanced the
P176,445.27 paid by Erlinda to cancel the mortgage in 1992. Considering the
P136,500.00 amount of the GSIS housing loan, it is
fairly reasonable to assume that the value of the residential lot is considerably more
than theP60,755.76 amount paid by Eliseo through monthly salary deductions. Thus,
the subject property remained the exclusive paraphernal property of Erlinda at the time
she contracted with the petitioner; the written consent of Eliseo to the transaction was
not necessary. The NBI finding that Eliseo’s signatures in the special power of attorney
and affidavit were forgeries was immaterial.
Nonetheless, the RTC and the CA apparently failed to consider the real nature of
the contract between the parties (where the SC found that the contract is an equitable
mortgage and not one of sale).