TITLE IV.

PROPERTY RELATIONS BETWEEN HUSBAND

AND WIFE

ARTICLE TITLE ASSIGNED TO

74-81 General Provisions Alcazar, Dianah A.

82-87 Donations by Reason of Marriage Bagsit, Ma. Ruby

88-90 System of Absolute Community Banduriao, Michelle V.

91-93 Section 2. What Constitutes

Community Property

94-95 Charges and Obligations of the Calderon, Alexis J.

Absolute Community

96-98 Ownership, Administrative,

Enjoyment and Disposition of the
Community Property

99-101 Dissolution of Absolute Tagupa, Marian Teresa

Community Regime G.

102-104 Liquidation of the Absolute

Community Assets and Liabilities
Dianah A. Alcazar

TITLE IV
PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

Chapter 1. General Provisions

As provided under Article 1 of the Family Code “Marriage is a special

contract of permanent union between a man and a woman xxx whose nature,

consequences, and incidents are xxx not subject to stipulation, except that

marriage settlements may fix the property relations during the marriage within

the limits provided by the Family Code”.

Based on the foregoing, marriage seeks to establish as muchas possible

the complete union of husband and wife. Hence,

GR: The husband and the wife cannot sell property

to each other.

XPN: a) When a separation of property was agreed

upon in the marriage settlement.

b) When there has been a judicial separationof

property. (Article 1490 of the Civil Code)

However, the law recognizes that as to their property relations,the

husband and the wife shall primarily be governed by theirmarriage settlement.

ARTICLE 74. The property relations between husband and wife shall be
governed in the following order:

1) By marriage settlements executed before the marriage

  Marriage settlement is commonly known as prenuptial agreement or an

antenuptial contract. And in order for marriage settlement to be valid, it must

comply with the requisites laid down by law.

2) By the provisions of the Family Code

 If there is no marriage settlement agreed upon or if the same is void,

then the provisions of the family code will apply particularly the

absolute community of property.

3) By the local customs

 When the parties stipulate in their marriage settlement that local custom

shall apply.

 When that the absolute community of property regime shall not govern

their property relations but fail to stipulate what property regime will be

applied

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
marriage settlement, or when the regime agreed upon is void, the system of
absolute community of property as established in the Family Code shall
govern.

 Types of Property Regime

1. Absolute Community Property (ACP)

2. Conjugal Partnership of Gains (CPG)

3. Complete Separation of Property (CSP)

GR: If future spouses

 failed to indicate the property regime that will govern = ACP

 marriage settlement executed by the parties is void = ACP

 XPN:

 marriage is terminated by death of one spouse and the = CSP

the surviving spouse marries again without initiating any

judicial or extrajudicial settlement of properties of his/her

previous spouse within one (1) year from the death the

deceased spouse

4. Other regime (The parties are allowed by law to design their own

property regime PROVIDED that it is not in violation of any law)

 Parties can stipulate or agree on any arrangement on any agreement in their

marriage settlement provided that it is within the limits provided in the Family

Code.

ARTICLE 76.In order that any modification in the marriage settlement

may be valid, it must be made before the celebration of the marriage,
subject to the provisions of Art. 66, 67, 128, 135 and 136.

GR: Any modification in marriage settlement must be made before the

celebration of marriage.

XPN: Can be made after the marriage ceremony, but such post-marriage

modification shall need judicial approval and should only refer to

instances:

Only via court a) When spouses in legal separation proceeding reconciled after judicial
order recorded in
decree of legal separation has been rendered. (Art.66)
proper civil
registries. b) Revival of former property regime upon reconciliation in legal separation

proceeding. (Art.67)
Upon issuance by
court of a decree c) In cases of abandonment or failure to comply with his/her marital
of judicial
separation of obligations, on petition of the agrrieved spouse.(Art.128)
property
d) Further grounds for judicial separation of property. (Art. 135)
 e) When spouses file voluntary and verified petition in court to modify their

property regime into a separate community of property regime. (Art.

136)

ARTICLE 77. The marriage settlements and any modification thereof

shall be in writing, signed by the parties and executed before the
celebration of marriage. They shall not prejudice third persons unless they
are registered in the local civil registry where the marriage contract is
recorded as well as in the proper registries of properties.

 In order to be valid and enforceable, the following REQUISITES OF

MARRIAGE SETTLEMENT must be present, to wit:

1. Must be in writing

- not only for the purpose of enforceability but more importantly for its validity.

Hence, oral marriage settlement = void / cannot be ratified by any claim or partial

execution or absence of objection.

2. Must be signed by the parties

- Both parties must have signed freely, voluntarily, intelligently, and preferably upon

competent and independent advice. The validity of the marriage settlement may still

be considered if the disadvantaged spouse appears to have understanding about the

nature and consequences of their agreement.

3. Made prior to the celebration of marriage

- Pre/ante (before) + nuptial (marriage) = must be executed before marriage and its

effectivity will start at the precise moment of the celebration of marriage.

 In order to bind third persons, marriage settlement must be:

1. Registered in the local civil registrar where the marriage contract is

recorded;

2. Registered in the proper registries of property.

- For failure to register the marriage settlement, the same will not affect third

persons. It will only be valid between the spouses.

ARTICLE 78. A minor who according to law may contract marriage may
also execute his or her marriage settlements, but they shall be valid only if
the persons designated in Article 14 give consent to the marriage are made
parties to the agreement subject to the provisions of Title IX of this Code.

 The above provision is deemed impliedly repealed considering that no

minor now may contract a valid marriage. Therefore, an 18-year old

person deciding to marry may validly execute a marriage settlement even

without obtaining the consent of parents.

ARTICLE 79. For the validity of any marriage settlements executed by a

person upon whom a sentence of civil interdiction has been pronounced or
who is subject to any other disability, it shall be indispensable for the
guarding appointed by a competent court to be made a party thereto.

 Civil interdiction, as provided under the Revised Penal Code, shall

deprive the offender during the time of his sentence of the rights of

parental authority, or guardianship, either as to the person or property of

any ward, of marital authority, of the right to manage his property by any

act or any act of conveyance inter vivos.

GR: Any individual upon reaching 18 years of age has legal capacity which

makes him qualified or responsible for all acts of his civil life.

XPN: When a sentence of civil interdiction has been pronounced or who is subject

to any other disability. (Indispensable for the guardian, appointed by the

court, to be made a party to the written marriage settlement.)

Article 80. In the absence of a contrary stipulation in a marriage

settlement, the property relations of the spouses shall be governed by
Philippine laws, regardless of the place of the celebration of the marriage
and their residence.

This rule shall not apply:

(1) Where both spouses are aliens;

 (2) With respect to the extrinsic validity of contracts affecting
property not situated in the Philippines and executed in the country
where the property is located; and

(3) With respect to the extrinsic validity of contracts entered into in

the Philippines but affecting property situated in a foreign country
whose laws require different formalities for its extrinsic validity.

 If contracting parties:

Both Filipino
GR: the property relations will be governed by Philippines laws in the absence of
any agreement. (applies even if they married or resided abroad)

XPN: Real Property and personal property subject to the law of the
country where it is situated. (Art. 16 of the Civil Code)

Article 81. Everything stipulated in the settlements or contracts referred to

in the preceding articles in consideration of a future marriage, including
donations between the prospective spouses made therein, shall be rendered
void if the marriage does not take place. However, stipulations that do not
depend upon the celebration of the marriages shall be valid.

 Marriage is a condition sine qua non for the efficacy of marriage

settlement. If the marriage does not take place, the marriage

settlement is generally rendered void.

 If the provisions are invalid but do not affect the rest of the provisions,

only the invalid provisions will be rendered ineffectual. On the same

vein, stipulations that do not depend upon the celebration of marriage

shall be valid.
 CHAPTER 2
DONATIONS BY REASON OF MARRIAGE
Articles 82-87
Reporter: Bagsit, Ma. Ruby

Art. 82: Donations by reason of marriage are those, which are made before its
celebration, in consideration of the same, and in favor of one or both of the
future spouses. (126)

Art. 83: These donations are governed by the rules on ordinary donations
established in Title III of Book III of the Civil Code, insofar as they are not
modified by the following articles. (127a)

Art. 84: If the future spouses agree upon a regime other than the absolute
community of property, they cannot donate to each other in their marriage
settlements more than one-fifth of their present property. Any excess shall be
considered void. Donations of future property shall be governed by the
provisions on testamentary successionand the formalities of wills. (130a)

RELEVANT ARTICLES OF THE CIVIL CODE

74  It can be even contained in a marriage settlement
8  The rules governing the validity of the present property donated, rules on
ordinary donations under title 3 book 3 of the civil code must be observed.
 The donee must accept the donation personally, or through an authorized
person with special power for the purpose
 The donations of a movable may be made orally or in writing
 If the value of personal property donated exceeded five thousand pesos,
the donation and the acceptance shall be made in writing. Otherwise the
donation shall be void.
74  Immovable donations must be made in a public document.
9  Acceptance maybe made in the same deed of donation or in a separate
instrument.
 The donor shall be notified in an authentic form, if the acceptance is made
in a separate instrument.
81  Donations propter nuptias of future property shall be governed by the
0 provisions on testamentary succession and the formalities of a will.
 Documents containing the donation of future property maybe handwritten.

DONATION BETWEEN FUTURE SPOUSES:

Giving a donation propter nuptias to a would-be spouse would be useless if the
property regime that will govern their marriage is the absolute community of
property.If one of the would-be spouse wants to validly make a donation propter
nuptias, the following requisites must concur:

1. There must be a valid marriage settlement

2. The marriage settlement must stipulate a property regime other than the
absolute community of property
3. The donation contained in the marriage must not be more than one-fifth of his
or her present property.
4. The donation must be accepted by the would-be spouse and;
5. It must comply with the requisites established in the Title III of Book III of the
Civil Code donations

DONATION BETWEEN SPOUSES:

1. A valid marriage settlement must stipulate another regime than Absolute

Community of Property (ACP)
2. Donation cannot be more than 1/5 of the present property of the donee
spouse.
3. Must be accepted and comply with other.
Exception: 1/5 rule will not apply if donation is in a separate deed, provided he
has enough to support himself and those relying on him.

Procedure for Movable:

1. Accepted personally or representative

2. Made in lifetime of donor and done
3. Can be orally given as long as with simultaneous delivery or document
representing right of donated (if above 5000 then must be in writing)

Procedure for Immovable:

1. Must be in public document

2. Acceptance made in that document or separate
3. Must be made in lifetime of donor.

DONATIONS EXCLUDED:

1. Made in favor of the spouses after the celebration of the marriage

2. Executed in favor of the future spouses but not in consideration of marriage
3. Granted to persons other than the spouses even though they may be founded
on the marriage.

BONIFACIA MATEO vs. GERVACIO LAGUA

29 SCRA 864
October 30, 1969
FACTS:
Sometime in 1917, the parents of Alejandro Lagua donated two lots to him in
consideration of his marriage to petitioner Bonifacia Mateo.The marriage was
celebrated on May 15, 1917 and thereafter the couple took possession of the lots,
but the certificates of title remained in the donor’s name.

In 1923, Alejandro died, leaving behind his widow Bonifacia with their infant
daughter, who lived with the father-in-law Cipriano Lagua who in turn undertook to
farm on the donated lots. At first, Cipriano gave to Bonifacia the share from the lots’
harvests, but in 1926 he refused to deliver to petitioner the said share, which reason
prompted her to initiate an action and won for her possession of the lots plus
damages.

On July 31, 1941, Cipriano executed a deed of sale of the said lots in favor of his
younger son, herein respondent Gervacio. Petitioner learned of this only in 1956
when Cipriano stopped giving to petitioner her share to the harvest. A Transfer
Certificate of Title (TCT) was issued under respondent’s name by the Registry of
Deeds (ROD) of Pangasinan.

The CFI of Pangasinan declared the TCT issued to respondent null and void and
ordered cancelled by the ROD, and for respondent to vacate and deliver the lots to
petitioner. In 1957, Gervacio and Cipriano filed with the CFI for the annulment of the
donation of the two lots. While the case was pending, Cipriano died in 1958. It was
dismissed for prescription, having been filed after the lapse of 41 years. When
appealed, the CA in 1966 held that the donation to Alejandro of the two lots with the
combined area of 11,888 sq. m. exceeded by 494.75 sq. m. his legitime and the
disposable portion that Cipriano could have freely given by will, and to the same
extent prejudiced the legitime of Cipriano’s other heir, Gervacio. The donation was
thus declared inofficious and herein petitioners were ordered to reconvey to
Gervacio a portion of 494.75 sq. m. from any convenient part of the lots.

ISSUE:
Whether or not the Court of Appeals correctly reduced the donation propter nuptias
for being inofficious.

HELD:
Decision of CA based on unsupported assumptions set aside; trial court’s order of
dismissal sustained.

Before the legal share due to a compulsory heir may be reached, the net estate of
the decedent must be ascertained, by deducting all payable obligations and charges
from the value of the property owned by the deceased at the time of his death; then,
all donations subject to collation would be added to it. With the partible estate thus
determined, the legitimes of the compulsory heirs can be established, and only
thereafter can it be ascertained whether or not a donation had prejudiced the
legitimes. Certainly, in order that a donation may be reduced for being inofficious,
there must be proof that the value of the donated property exceeds that of the
disposable free portion plus the donee’s share as legitime in the properties of the
donor. In the present case, it can hardly be seen that, with the evidence then before
the court, it was in any position to rule on the inofficiousness of the donation involved
here, and to order its reduction and reconveyance of the deducted portion to the
respondents.

Article 908. To determine the legitime, the value of the property left at the death of
the testator shall be considered, deducting all debts and charges, which shall not
include those imposed in the will.To the value of the hereditary estate, shall be
added the value of all donations by the testator that are subject to collation, at the
time he made them.
 Article 85: Donations by reason of marriage of property subject to
encumbrances shall be valid. In case of foreclosure of the encumbrance and
the property is sold for less than the total amount of the obligation secured,
the donee shall not be liable for the deficiency. If the property is sold for more
than the total amount of said obligation, the donee shall be entitled to the
excess. (131a)

DEFINITION OF TERMS:

 Encumbrance – is any right or interest that exists in someone other than the
owner of an estate and that restricts or impairs the transfer of the estate or
lowers its value.
 Donee– a person who is given a power of appointment.
 Donor– a person who donates something, especially money to a fund or
charity
 Debtor– a person who is in debt or under financial obligation to another
(opposed to creditor)

Encumbrance:

If the object of the donation is encumbered it is still valid but the donee’s rights is still
subject to the encumbrance.

IN CASE OF ENCUMBRANCE OF PROPERTY:

1. Doneewon’t be liable for insufficiency of property to creditor. The donor will

still be liable for that.
2. Donee can keep excess if property more than satisfies the debt.
3. Donee cannot ask for reimbursement from donor if mortgage is foreclosedbut
won’t be liable for deficiency, and gets the excess if sold for more than
amount.
Art. 86: A donation by reason of marriage may be revoked by the donor in the
following cases:

1. If the marriage is not celebrated or judicially declared void ab initio

except donations made in the marriage settlements, which shall be
governed by Article 81;
2. When the marriage takes place without the consent of the parents or
guardian, as required by law;
3. When the marriage is annulled, and the donee acted in bad faith;
4. Upon legal separation, the donee being the guilty spouse;
5. If it is with a resolutory condition and the condition is complied with;
6. When the donee has committed an act of ingratitude as specified by the
provisions of the Civil Code on donations in general.

STATUS OF MARRIAGE PRESCRIPTION EXCEPTION

1. Marriage is not celebrated Marriage is void: If the donation is in
or is void ab initio (including  5 years from Judicial the marriage
art. 52-53) Declaration of Nullity. settlement, it will be
 If doesn’t want to give revoked by operation
it back: prescribe after: of law.
o 8 years for
movable; If the marriage is
o 30 years for void due to Article
immovable 40, or Article 44,
then automatically
Marriage not celebrated: revoked.
 5 years from when it
was not celebrated
2. Marriage takes place 5 years from the time he had
without consent of parents knowledge that consent was
not obtained, after the
marriage.
3. Marriage is annulled, and 5 years from finality of
the donee acted in bad faith decree.
4. Upon legal separation 5 years from finality of If the ground for
when donee is the guilty decree. legal separation is
spouse infidelity in the form
of adultery or
concubinage it will
be automatically
void.
5. When there is a resolutory 5 years from the happening Between husband
cause and the condition has of the resolutory condition. and wife prescription
been complied with does not run.
6. Acts of ingratitude: 1 year from the time the
 Donee commits an donor had knowledge of the
offense against the fact of ingratitude
person or property of
the donor, his wife, or
children
 Donee imputes to the
donor any criminal
offense involving
moral turpitude unless
 it against the donee
 Donee unduly refuses
to support donor when
he is legally or morally
bound to give support.

VALDES VS. RTC 

260 SCRA 221
FACTS:
Antonio Valdez and Consuelo Gomez were married in 1971 and begotten 5 children.
Valdez filed a petition in 1992 for a declaration of nullity of their marriage pursuant to
Article 36 of the Family Code, which was granted hence, marriage is null and void on
the ground of their mutual psychological incapacity. Stella and Joaquin are placed
under the custody of their mother while the other 3 siblings are free to choose which
they prefer.

The RTC of Quezon City rendered judgment and declared the marriage null and void
under Art. 36 of the FC on the ground of their mutual psychological incapacity to
comply with their essential marital obligations and ordered the liquidation of their
common properties as defined by Art. 147 of the FC and to comply with the
provisions of Art. 50, 51 and 52 of the FC

Gomez sought a clarification of that portion in the decision regarding the procedure
for the liquidation of common property in “unions without marriage”. During the
hearing on the motion, the children filed a joint affidavit expressing desire to stay
with their father.

The court explained in an order dated May 5, 1995 that the property including the
family home acquired during their union are presumed to have been obtained
through joined efforts and the property would be owned by them in equal shares and
the liquidation and partition of property would be governed by the regime of co-
ownership. The court also explained that Art 102 does not apply since it refers to the
procedure for liquidation of conjugal partnership property. Art 129 also does not
apply because it refers to procedures for liquidation of the absolute community of
property .

Antonio moved for a reconsideration of the order. The motion was denied.

ISSUES:
WON Art 147 is the correct law governing the disposition of property in the case at
bar and WON it applies to marriages declared null and void pursuant to Art. 36

HELD:
In void marriages, the property relations of the parties during the cohabitation period
is governed by the provisions of Art. 147 or Art. 148. In the case at bar, Art. 147
applies because there was no legal impediment to their marriage and they were
capacitated wherein the word capacitated refers to legal capacity of a party to
contract marriage.The Supreme Court ruled that in a void marriage, regardless of
the cause thereof, the property relations of the parties are governed by the rules on
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 be considered as having contributed thereto jointly if
said party’s efforts consisted in the care and maintenance of the family.
 Art. 87: Every donation or grant of gratuitous advantage, direct or indirect,
between the spouses during the marriage shall be void, except moderate gifts
which the spouses may give each other on the occasion of any family
rejoicing. The prohibition shall also apply to persons living together as
husband and wife without a valid marriage. (133a)

What constitutes a moderate gift depends on the financial capacity of the

donor.Under the last sentence of Art. 87it must be shown that the donation was
made at a time when they were still living together as husband and wife without the
benefit of marriage. Validity of donation or transfer cannot be challenged by anyone
unless those that will be affected by the donation.

RESERVA TRONCAL:

The ascendant who inherits from his descendant any property which the later may
have acquired by gratuitous title from another ascendant or sibling is obliged to
reserve such property for the benefit of relatives within the 3rd degree and who
belong to the same line.

Example:

H is married to W and has a son S. H has a brother B. H dies and donates to S his
property. After which, S dies without any heirs and thus the property goes to W. If W
dies the property does not go to her heir but to B sothat the property stays in the
same line of the original owner (once owned by H) and is within the third degree of
S.

VOID DONATIONS:
1. To a stepchild who has no compulsory or legal heirs
2. To a common child who has o compulsory or legal heirs
3. To the parents of the other spouse
4. To the other souse’s adopted child
5. To common adopted child who has no other compulsory and or legal heirs.
Banduriao, Michelle V.
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).
Alexis J. Calderon

Section 3. CHARGES UPON 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;

SUPPORT (Art. 194) – comprises everything indispensable for sustenance, dwelling,

clothing, medical attendance, education and transportation, in keeping with the financial
capacity of the family.

In terms of education, it will include schooling or training for a profession, trade or vocation,
and it may even extend beyond the age of majority. For transportation, it will include
expenses when travelling to and from school or place of work.

For support of illegitimate children, it will be taken from the separate property of the parent-
spouse.

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;

If the debt/ obligation contracted during the marriage provided benefits to the community,
and was entered into by the designated administrator- spouse, or both spouses entered into
said transaction, or only one spouse have transacted but with the consent of the other
spouse, the ACP shall be liable for said debt / obligation.

3) Debts and obligations contracted by either spouses without the consent of

the other to the extent that the family may have been benefited;

In case the spouse entered into an obligation but without the consent of the other spouse,
the ACP shall be liable only to that extent wherein the family have benefited from said
transaction. An example would be when the debt was utilized to pay for some of the
expenses in the children’s schooling.

4) All taxes, liens, charges and expenses, including major or minor repairs,
upon the community property;
If the community property was taxed, or underwent repairs or renovations, they can be
charged against the ACP. This will be allowed following the general rules of co-ownership.

5) All taxes and expenses for mere preservation made during marriage upon
the separate property of either spouse used by the family;

Such expenses will only be an ACP liability as long as said separate properties of any
spouse is being or was used by the family during the marriage.

6) Expenses to enable either spouse to commence or complete a professional

or vocational course, or other activity for self- improvement;

Similar to the provisions on Support, the expenses for the education and training of either
spouse is a liability of the ACP.

7) Antenuptial debts of either spouse insofar as they have redounded to the

benefit of the family;

Debts and obligations incurred by either of both spouses shall be liabilities of the ACP, as
long as the community/ family has benefited from it.

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;

Separate from the legitime of the compulsory heirs, amounts to be donated by the spouses
for their common children for their professional, vocational courses and activities for self-
improvement will be a liability of the ACP.

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

The ACP shall be liable to said conditions only when the separate property is insufficient or
absent. But said liability shall be considered as advances, which will be deducted from the
share of the debtor spouse upon liquidation of the community.

For quasi-delict, which is a fault or negligence occurring between two parties who have no
pre-existing contractual relation, the ACP shall be liable, but said charges shall be
considered as advances, which upon liquidation of the community will be deducted from the
share of the debtor-spouse.

10) Expenses of litigation between the spouses unless the suit is found to be
groundless.

The litigation must be between the husband and the wife, and that said case is not
groundless. If so, the expensesmay be a liability of the ACP.

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, 1163a, 202a-205a)

The solidary liability of spouses means that their creditors can demand from any of the
spouses for the full amount of the debt, not just the share of the debt. Under the Code, if the
ACP is insufficient, the spouses are both solidarily liable for their unpaid balance using their
separate properties. Exceptions shall be:

1) Ante-nuptial debts which did not benefit the family;

2) the support of illegitimate children by either spouse; and
3) liabilities incurred by reason of a crime or quasi-delict.

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. (164a)

The Code aims for the integrity of the ACP, to shield it from possible losses due to unwilful
activities such as gambling or games of chance. So any losses in like activities shall be
borne solely by the losing spouse. Again, for the benefit of the ACP, any winnings by said
gambling spouse shall be included in the ACP for the benefit of the family.

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 husband’s 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.

As co-owners of the properties introduced into the marriage and those that they both
acquired after the marriage ceremony, the administration and benefits of the ACP are
vested on BOTH spouses. The Code emphasizes though the authority of the husband
during a disagreement, which the wife may seek recourse in the court for a period of five
years from the implementation of the disputed contract.

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 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 acceptance by the other
spouse or authorization by the court before the offer is withdrawn by either or both
offerors. (206a)

The Code provides that if one of the spouse is incapacitated or incapable to participate in
the administration of the common properties, the other spouse is may be designated to
assume administrative powers over their ACP. Unless given court authority or written
consent by the stricken spouse, the administering spouse cannot dispose or encumber said
ACP.

Art. 97: Either spouse may dispose by will of his or her interest in the community
property. (n)

WILL – an act whereby a person is permitted to control to a certain degree the disposition of
his estate, to take effect after his death.

LEGITIME – part of the testator’s property which cannot be disposed of because the law has
reserved it for compulsory heirs.

Testate disposition will be limited only to his/her respective share of the ACP, and shall take
effect after the testator’s death

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 property for charity or on occasions of
family rejoicing or family distress. (n)

ACP – co-ownership between both spouses, any donation from the ACP must be consented
for by both spouses/ co-owners.
Moderate donations, even without consent, can be made in cases of charitable activities, or
during occasions of family rejoicing (such as birthdays or anniversary celebrations) or
distress (medical emergencies, death).
Marian Teresa G. Tagupa

Section 5. Dissolution of Absolute Community Regime

Art. 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. (175a)

COMMENT: Generally, there is no absolute community property in a void marriage. The

rules of liquidation shall be in accordance with the rules on co-ownership. A man and a

woman who lived together as husband and wife without the benefit of marriage or under void

marriage, the rule shall apply. However, if there is only one party of the said void marriage is

in good faith, the share of the party who acted in bad faith shall be forfeited in favor of the

common children or their descendants. In the absence thereof, the shares shall belong to the

innocent party.

Furthermore, by way of exception, there is a special case wherein the absolute

community or conjugal partnership of gains could govern void marriage. This exception is in

accordance with Art. 40 of the Family Code where the absolute nullity of marriage may be

invoked for the purpose of remarriage on the sole basis of a final judgment declaring the

marriage void.

JUDICIAL SEPARATION OF PROPERTY – Judicial Separation of Property can be

voluntary or involuntary. If it is voluntary, the parties can file an agreement of separation of

property to the court to obtain necessary court approval. In case of reconciliation and revival

if the property regime no voluntary separation of property may thereafter be granted. If

involuntary, it must be fo a sufficient cause and must have court approval.The sufficient

cause for legal separation is stated under Art 135 of the Family Code.

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;

(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)

Example: A and B are married. B, without any justifiable reason, left the conjugal

dwelling. She cannot ask for support. But if she left the conjugal dwelling because she is

being maltreated, insulted by her husband, A; then, she can ask for the support.

Suppose there is a need to sell or encumber theproperty of the spouses where the

consent of the other is necessary and it cannot be obtained because of the fact that B has left

the conjugal dwelling. Then, A can go to court and ask for judicial authorization for such

sale. Theauthorization shall be sufficient substitute for such consent.

Art. 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)

NOTE: Separation in Fact shall not affect the absolute community property of the spouses.

Hence, the absolute community property will still be liable for any obligations incurred by

either of the spouses for the benefit of the family. Exceptions were stated under Art. 100 of

this code.

NO SUPPORT – If the spouse left the conjugal dwelling without just cause, he/ she shall not

be entitled for support.

Example: H and W were husband and wife. H decided to live with his parents for the

mean time since they are still looking for a house to settle down. W disagreed because of

frequent misunderstandings with her in-laws. H insisted since it is only temporary. W, due to

her disappointment, left the house and said that she will never come back until H decides to

leave the house of his parents. Furthermore, W asked for support from H. H did not

responded and so, W asked the court for H to give support. The court denied the plea of W. Is

the dismissal of the case justifiable?

Answer: Yes. W left the dwelling without compelling reason therefore; she is not

entitled for support.

However, the spouse who left the conjugal dwelling can be entitled for support if the

reason of leaving is justifiable enough or it is valid.

 Example: A and B were husband and wife. One night, A asked B to do an undesirable

sexual act. However, B refused to do so. A dragged B outside the house and then thereafter,

A left the conjugal dwelling. After a month, B asked for support from A. A refused because

he alleged that B is not entitled for support because she cannot fulfill her marital obligations.

B counterfeited the allegations of A and said that she had been habitually abused by her

husband also, alleged that A is a drunkard man and he is forcing her to do an undesirable

sexual act. Those are the reason why she left the conjugal home. Can B be entitled for

support?

Answer: Yes, because the reason of B from leaving the conjugal dwelling is valid.

Example: A and B are married. A left the conjugal dwelling without justifiable cause.

B can ask for judicial authority to administer some properties of B and use the fruits to

satisfy A’s share.

If the husband brings a concubine in the conjugal dwelling, maltreats her, insults her,

or forces her to live with persons whose habits, character, and language are offensive to her

dignity, or compels her to be merely subordinate to his mother, the same may justify the wife

to live separately from him and pray for separate maintenance for her.

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 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 there in no such majority, the court shall decide,

taking into consideration the best interests of said children. (n)

LIQUIDATION PROCESS

1. INVENTORY– All properties or assets at the time of the dissolution, whether

community property or separate property should be inventoried.

2. PAYMENT OF DEBTS – After the inventory, all debts which the community

property is liable must be paid.

3. DELIVERY OF EXCLUSIVE PROPERTIES – After the payment, the remains

shall be delivered to the spouse.

4. PARTITION OF NET ASSESTS–The remainder of the community shall be divided

equally.

5. DELIVERY OF THE PRESUMPTIVE LEGITIME – After the finality of

annulment, the remaining proceeds shall be distributed to the legitimes.

 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 extra-judicially within six months

from the death of the deceased spouse. If upon the lapse of the six months 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. (n)

Example: C and D were husband and wife. Unfortunately, C died after 1 year. D did

not care about the properties. After 1 year, D fell in love with E. after 3 months, they got

married. Prior to their marriage, they wanted to adopt an absolute community property,

however, D failed to liquidate the properties. Therefore, they cannot have the absolute

community property but the separate property instead.

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 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 community the existing properties belong, the same shall be

divided between the different communities in proportion to the capital and duration of

each. (189a)