Order governing property relations between husband and wife:
- Marriage settlements executed before the marriage;
- By the provisions of this Code; and
- By the local custom.
Interest of each spouse in the conjugal assets prior to liquidation is inchoate, a mere expectancy. – More significantly, it has been held that prior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement. The interest of each spouse is limited to the net remainder or “remanente liquido” (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution.27 Thus, the right of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally determined that, after settlement of conjugal obligations, there are net assets left which can be divided between the spouses or their respective heirs.[1] (Citations omitted)
“Significantly, the Family Code has introduced some changes particularly on the aspect of the administration of the conjugal partnership. The new law provides that the administration of the conjugal partnership is now a joint undertaking of the husband and the wife. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal partnership, the other spouse may assume sole powers of administration. However, the power of administration does not include the power to dispose or encumber property belonging to the conjugal partnership.36 In all instances, the present law specifically requires the written consent of the other spouse, or authority of the court for the disposition or encumbrance of conjugal partnership property without which, the disposition or encumbrance shall be void.”[2]
Under the Civil Code, separation of property is discouraged. – Consistent with its policy of discouraging a regime of separation and not in harmony with the unity of the family and the mutual affection and help expected of the spouses, the Civil Codes (both old and new) require that separation of property shall not prevail unless expressly stipulated in marriage settlements before the union is solemnized or by formal judicial decree during the existence of the marriage (Article 190, new Civil Code; Article 1432, old Code); and in the latter case, it may only be ordered by the court for causes specified in Article 191 of the new Civil Code:
ART. 191. The husband or the wife way ask for the separation of property, and it shall be decreed when the spouse of the petitioner; has been sentenced to a penalty which carries with it civil interdiction, or has been declared absent, or when legal separation has been granted.
In case of abuse of powers of administration of the conjugal partnership property of the husband, or in case of abandonment by the husband, separation of property may also be ordered by the court according to the provisions of articles 167 and 173, No. 3.
In all these cases, it is sufficient to present the final judgment which has been entered against the guilty or absent spouse.
The husband and the wife may agree upon the dissolution of the conjugal partnership during the marriage, subject to judicial approval. All the creditors of the husband and of the wife, as well as of the conjugal partnership, shall be notified of any petition for judicial approval of the voluntary dissolution of the conjugal partnership, so that any such creditors may appear at the hearing to safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership, the court shall take such measures as may protect the creditors and other third persons.
After dissolution of the conjugal partnership, the provisions of Arts 214 and 215 shall apply. The provisions of this Code concerning the effect of partition stated in Arts. 498 to 501 shall be applicable.
This enumeration must be regarded as limitative, in view of the Code’s restrictive policy.[3]
Under the Civil Code, the wife does not administer the conjugal partnership. – In the system established by the Code the wife does not administer the conjugal partnership unless with the consent of the husband, or by decree of court and under its supervision (Arts. 168, 196) “with such limitations as they (the courts) may deem advisable” (Art. 197 in relation to Article 196). Legally, therefore, the wife can not mismanage the conjugal partnership property or affairs, unless the husband or the courts tolerate it. In the event of such maladministration by the wife (and disregarding the case of judicial authorization to have the wife manage the partnership, since such a case is not involved), the remedy of the husband does not lie in a judicial separation of property but in revoking the power granted to the wife and resume the administration of the community property and the conduct of the affairs of the conjugal partnership. He may enforce his right of possession and control of the conjugal property against his wife (Perkins vs. Perkins, 57 Phil., 205) and seek such ancillary remedies as may be required by the circumstances, even to the extent of annulling or rescinding any unauthorized alienations or incumbrances, upon proper action filed for that purpose. For this reason, the articles above quoted contemplate exclusively the remedies available to the wife (who is not the legal administrator of the partnership) against the abuses of her husband because normally only the latter can commit such abuses.
A Compromise Agreement allowing the guilty spouse to share in the conjugal property is valid. – Yes. “Under Article 143 of the Family Code, separation of property may be effected voluntarily or for subsequent cause, subject to judicial approval. The questioned Compromise Agreement which was judicially approved is exactly such a separation of property allowed under the law. This conclusion holds true even if the proceedings for the declaration of nullity of marriage was still pending. However, the Court must stress that this voluntary separation of property is subject to the rights of all creditors of the conjugal partnership of gains and other persons with pecuniary interest pursuant to Article 36 of the Family Code.”[4]
The absence of participation of the Solicitor General and the city of provincial prosecutor in the approval of the compromise agreement for liquidation of the conjugal partnership of gains does not render the Compromise Agreement by the parties void. – No. “The settlement had no relation to the questions surrounding the validity of their marriage. Nor did the settlement amount to a collusion between the parties.”[5]
Conviction of adultery does not carry with it the accessory penalty of civil interdiction. – “The conviction of adultery does not carry the accessory penalty of civil interdiction:
Art. 34. Civil Interdiction. – Civil interdiction 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 and of the right to dispose of such property by any act or any conveyance inter vivos.
Under Article 333 of the same Code, the penalty for adultery is prision correccional in its medium and maximum periods. Article 333 should be read with Article 43 of the same Code. The latter provides:
Art. 43. Prision correccional – Its accessory penalties. – The penalty of prision correccional shall carry with it that of suspension from public office, from the right to follow a profession or calling, and that of perpetual special disqualification from the right of suffrage, if the duration of said imprisonment shall exceed eighteen months. The offender shall suffer the disqualification provided in this article although pardoned as to the principal penalty, unless the same shall have been expressly remitted in the pardon.
It is clear, therefore, and as correctly held by the CA, that the crime of adultery does not carry the accessory penalty of civil interdiction which deprives the person of the rights to manage her property and to dispose of such property inter vivos.”[6]
Abandonment as a ground for judicial separation of property. – “Moreover, abandonment, under Article 101 of the Family Code quoted above, must be for a valid cause and the spouse is deemed to have abandoned the other when he/she has left the conjugal dwelling without intention of returning. The intention of not returning is prima facie presumed if the allegedly abandoning spouse failed to give any information as to his or her whereabouts within the period of three months from such abandonment.[7]
Abandonment under the Civil Code as a ground for separation of property. – The extraordinary remedies afforded to the wife by article 178 when she has been abandoned by the husband for at least one year are the same as those granted to her by article 167 in case of abuse of the powers of administration by the husband. To entitle her to any of these remedies, under article 178, there must be real abandonment, and not mere separation. 1 The abandonment must not only be physical estrangement but also amount to financial and moral desertion.
Although an all-embracing definition of the term “abandonment ” is yet to be spelled out in explicit words, we nevertheless can determine its meaning from the context of the Law as well as from its ordinary usage. The concept of abandonment in article 178 may be established in relation to the alternative remedies granted to the wife when she has been abandoned by the husband, namely, receivership, administration by her, or separation of property, all of which are designed to protect the conjugal assets from waste and dissipation rendered imminent by the husband’s continued absence from the conjugal abode, and to assure the wife of a ready and steady source of support. Therefore, physical separation alone is not the full meaning of the term “abandonment”, if the husband, despite his voluntary departure from the society of his spouse, neither neglects the management of the conjugal partnership nor ceases to give support to his wife.[8]
[9]Abandonment implies a departure by one spouse with the avowed intent never to return, followed by prolonged absence without just cause, and without in the meantime providing in the least for one’s family although able to do so. 5 There must be absolute cessation of marital relations, duties and rights, with the intention of perpetual separation. 6 This idea is clearly expressed in the above-quoted provision, which states that “a spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling without any intention of returning.”
Separation in fact for more than one year as a ground for judicial separation of property. – In Noveras v. Noveras[10], the Court applied this ground for the grant of judicial separation of property of the spouses, noting that “The records of this case are replete with evidence that Leticia and David had indeed separated for more than a year and that reconciliation is highly improbable. First, while actual abandonment had not been proven, it is undisputed that the spouses had been living separately since 2003 when David decided to go back to the Philippines to set up his own business. Second, Leticia heard from her friends that David has been cohabiting with Estrellita Martinez, who represented herself as Estrellita Noveras. Editha Apolonio, who worked in the hospital where David was once confined, testified that she saw the name of Estrellita listed as the wife of David in the Consent for Operation form.20 Third and more significantly, they had filed for divorce and it was granted by the California court in June 2005.
Having established that Leticia and David had actually separated for at least one year, the petition for judicial separation of absolute community of property should be granted”
May the civil liability of a spouse convicted of a crime be enforced against the assets of the conjugal partnership of gains. – Yes. In the case of Pana v. Heirs of Juanite Sr., and Juanite Jr.[11], it was held that Article 122 of the Family Code allows for such payment, in view of the finding that the wife criminally liable had no exclusive property of her own. However, such payment must be made only after the responsibilities enumerated under Article 121 shall have been covered:
Art. 122. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family.
Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership.
However, the payment of personal debts contracted by either spouse before the marriage, that of fines and indemnities imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced against the partnership assets after the responsibilities enumerated in the preceding Article have been covered, if the spouse who is bound should have no exclusive property or if it should be insufficient; but at the time of the liquidation of the partnership, such spouse shall be charged for what has been paid for the purpose above-mentioned.
Since Efren does not dispute the RTC’s finding that Melecia has no exclusive property of her own,24 the above applies. The civil indemnity that the decision in the murder case imposed on her may be enforced against their conjugal assets after the responsibilities enumerated in Article 121 of the Family Code have been covered.25 Those responsibilities are as follows:
Art. 121. The conjugal partnership shall be liable for:
(1) The support of the spouse, their common children, and the legitimate children of either spouse; however, the support of illegitimate children shall be governed by the provisions of this Code on Support;
(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other;
(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have benefited;
(4) All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership property;
(5) All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse;
(6) Expenses to enable either spouse to commence or complete a professional, vocational, or other activity for self-improvement;
(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;
(8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement; and
(9) Expenses of litigation between the spouses unless the suit is found to be groundless.
If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties.1âwphi1
Contrary to Efren’s contention, Article 121 above allows payment of the criminal indemnities imposed on his wife, Melecia, out of the partnership assets even before these are liquidated. Indeed, it states that such indemnities “may be enforced against the partnership assets after the responsibilities enumerated in the preceding article have been covered.”[26]No prior liquidation of those assets is required. This is not altogether unfair since Article 122 states that “at the time of liquidation of the partnership, such [offending] spouse shall be charged for what has been paid for the purposes above-mentioned.”[12]
Application of Art. 147 of the Family Code with respect to properties acquired during the marriage on installment but paid after separation in fact of the parties. – In the construction of the term “acquired,” this Court must be guided by the basic rule in statutory construction that when the law does not distinguish, neither should the court.40 A reading of Article 147 of the Family Code would show that the provision did not make any distinction or make any qualification in terms of the manner the property must be acquired before the presumption of co-ownership shall apply. As such, the term “acquired” must be taken in its ordinary acceptation. For as long as the property had been purchased, whether on installment, financing or other mode of payment, during the period of cohabitation, the disputable presumption that they have been obtained by the parties’ joint efforts, work or industry, and shall be owned by them in equal shares, shall arise. Applied in this case, since the Ayala Alabang and Rockwell properties were purchased while the petitioner and the respondent were living together, it is presumed that both parties contributed in their acquisition through their joint efforts (which includes one’s efforts in the care and maintenance of the family and of the household), work or industry. Thus, the properties must be divided between them equally.[13]
Should the surviving spouse secure the consent of his or her new spouse in a sale or disposition of property belonging to the first or prior marriage if the prior marriage was terminated without liquidating the conjugal partnership of property?-
The third paragraph of Article 130 of the Family Code provides that a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage should the surviving spouse contract a subsequent marriage without liquidating the conjugal partnership property, thus:
x x x x
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)
When a complete or total separation of property governs the property relations, no portion of the properties of the marriage will be common, and the fruits of the properties of either spouse, as well as his or her earnings from any profession, work or industry, will belong to him or her as exclusive property.Each spouse owns the property which he or she brings to the marriage or which he or she may acquire during the marriage by onerous or gratuitous title.
The ownership rights of each spouse in a regime of separation of property are provided in Article 145 of the Family Code, which states:
ART. 145. Each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without need of the consent of the other. To each spouse shall belong all earnings from his or her profession, business or industry and all fruits, natural, industrial or civil, due or received during the marriage from his or her separate property. (214a)[14]
Article 129 of the Family Code applies to the dissolution of the conjugal partnership of gains, even though the marriage was celebrated under the Civil Code. – Second, since at the time of the dissolution of the petitioner and the respondent’s marriage the operative law is already the Family Code, the same applies in the instant case and the applicable law in so far as the liquidation of the conjugal partnership assets and liabilities is concerned is Article 129 of the Family Code in relation to Article 63(2) of the Family Code. The latter provision is applicable because according to Article 256 of the Family Code “[t]his Code shall have retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other law.”[15]
Definition of “vested right”. – A vested right is one whose existence, effectivity and extent do not depend upon events foreign to the will of the holder, or to the exercise of which no obstacle exists, and which is immediate and perfect in itself and not dependent upon a contingency. The term “vested right” expresses the concept of present fixed interest which, in right reason and natural justice, should be protected against arbitrary State action, or an innately just and imperative right which enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny.
To be vested, a right must have become a title—legal or equitable—to the present or future enjoyment of property. (Citations omitted)
In our en banc Resolution dated October 18, 2005 for ABAKADA Guro Party List Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary Eduardo R. Ermita, we also explained:
The concept of “vested right” is a consequence of the constitutional guaranty of due process that expresses a present fixed interest which in right reason and natural justice is protected against arbitrary state action; it includes not only legal or equitable title to the enforcement of a demand but also exemptions from new obligations created after the right has become vested. Rights are considered vested when the right to enjoyment is a present interest, absolute, unconditional, and perfect or fixed and irrefutable. (Emphasis and underscoring supplied)
From the foregoing, it is clear that while one may not be deprived of his “vested right,” he may lose the same if there is due process and such deprivation is founded in law and jurisprudence.[16]
What is “net profits” under the Family Code. – “XX. Moreover, as to the definition of “net profits,” we cannot but refer to Article 102(4) of the Family Code, since it expressly provides that for purposes of computing the net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2), Article 102(4) applies. In this provision, net 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.”72 Thus, without any iota of doubt, Article 102(4) applies to both the dissolution of the absolute community regime under Article 102 of the Family Code, and to the dissolution of the conjugal partnership regime under Article 129 of the Family Code. Where lies the difference? As earlier shown, the difference lies in the processes used under the dissolution of the absolute community regime under Article 102 of the Family Code, and in the processes used under the dissolution of the conjugal partnership regime under Article 129 of the Family Code.”[17]
Upon the parties’ filing of a petition for the declaration of nullity of marriage, trial courts also acquire jurisdiction over matters incidental and consequential to the marriage. Among these is the settlement of the parties’ common properties. By filing another petition for the determination of which properties form part of the co-ownership, a party commits forum shopping by splitting causes of action.[18]
In this regard, contracts falling under Article 166 may be considered a special type of voidable contract. Like ordinary voidable contracts, they are valid until annulled. They may be ratified and any action thereon prescribes in accordance with the law. Unlike ordinary voidable contracts that are governed by Articles 1390 to 1402, however, contracts executed in contravention of Article 166 may, by express mandate of Article 173, be brought only by the wife, “during the marriage and within ten years from the questioned transaction.[19]
Applicable law and jurisprudence on alienation or encumbrance of conjugal properties without the consent of the other spouse. – “Thus, it is an opportune time for the Court to clarify any confusion besetting the applicable laws and jurisprudence in transactions involving alienation or encumbrance of conjugal properties, without consent of the other spouse, which is determinative of the remedies available to the aggrieved parties and the prescriptive period of actions. At this juncture, the Court holds that more than the date of the marriage of the spouses, the applicable law must be reckoned on the date of the alienation or encumbrance of the conjugal property made without the consent of the other spouse, to wit:
1. The alienation or encumbrance of the conjugal property, without the wife’s consent, made before the effectivity of the Family Code, is not void but merely voidable. The applicable laws are Articles 166 and 173 of the Civil Code. The wife may file an action for annulment of contract within 10 years from the transaction; and
2. The alienation or encumbrance of the conjugal property, without the authority of the court or the written consent of the other spouse, made after the effectivity of the Family Code is void. The applicable Jaw is Article 124 of the Family Code without prejudice to vested rights in the property acquired before August 3, 1988. Unless the transaction is accepted by the non-consenting spouse or is authorized by the court, an action for declaration of nullity of the contract may be filed before the continuing offer on the part of the consenting spouse and the third person becomes ineffective.[20]
[1] Abalos v. Dr. Macatangay, G.R. No. 155043, September 30, 2004
[2] Abalos v. Dr. Macatangay, G.R. No. 155043, September 30, 2004
[3] Garcia v Manzano, G.R. No. L-8190, May 28, 1958
[4] Maquilan v. Maquilan, G.R. No. 155409, June 8, 2007
[5] Maquilan v. Maquilan, G.R. No. 155409, June 8, 2007
[6] Maquilan v. Maquilan, G.R. No. 155409, June 8, 2007
[7] Noveras v. Noveras, G.R. No. 188289, August 20, 2014
[8] Dela Cruz v. Dela Cruz, G.R. No. L-19565, January 30, 1968
[9] Partosa-Jo v. CA, G.R. No. 82606, December 18, 1992
[10] Noveras v. Noveras, G.R. No. 188289, August 20, 2014
[11] G.R. No. 164201, December 10, 2012
[12] Pana v. Heirs of Juanite, G.R. No. 164201 December 10, 2012
[13] Paterno v. Paterno, G.R. No. 213687, January 8, 2020
[14] Heirs of the late Apolinario Caburnay, et al v. Heirs of Teodulo Sison, et al. G.R. No. 230934, December 2, 2020
[15] Quiao v. Quiao, et al, G.R. No. 176556, July 4, 2012
[16] Quiao v. Quiao, et al, G.R. No. 176556, July 4, 2012, citing Go Jr. v. CA, G.R. No. 172027, July 29, 2010m and ABAKADA Party List .v Hon. Ermita, et. al., G.R. No. 168056; Aquilino Q. Pimentel, Jr., et al. v. Executive Secretary Eduardo R. Ermita, et al., G.R. No. 168207; Association of Pilipinas Shell Dealers, Inc., et al. v. Cesar V. Purisima, et al., G.R. No. 168461; Francis Joseph G. Escudero v. Cesar V. Purisima, et al, G.R. No. 168463; and Bataan Governor Enrique T. Garcia, Jr. v. Hon. Eduardo R. Ermita, et al., G.R. No. 168730.
[17] Quiao v. Quiao, et al, G.R. No. 176556, July 4, 2012,
[18] Tanyag v. Tanyag, G.R. No. 231319, November 10, 2021
[19] Spouses Cueno v. Spouses Bautista, et al. G.R. No. 246555, March 2, 2021
[20] Alexander v Spouses Escalona and Reygan Escalona, G.R. No. 256141, July 19, 2022