PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE
EFFECT OF INCAPACITY OF ONE OF THE SPOUSES ON ADMINISTRATION
If the spouse is (1) absent, (2) separated in fact, or (3) has abandoned the other, or (4) the consent is withheld = the proper remedy is a summary proceeding under Art. 253, FC.
If the spouse is incompetent (comatose, stroke, brain dead etc.), the proper remedy is a judicial guardianship under Rule 93, ROC.
In any event, should the administering spouse decide to sell real property as such administrator, he or she must observe the rule on the sale of the ward’s estate required of judicial guardians under Rule 95 of the ROC.
o This is so, because as the administrator spouse, he or she must perform the duties of a guardian.
The spouse who assumed such power of administration cannot dispose or encumber property without judicial approval or the written consent of the incapacitated spouse. Otherwise, any such sale or encumbrance will be void.
CONTINUING OFFER AND PERFECTION: The only legal significance of a void transaction is to treat the same as a continuing offer on the part of the consenting spouse and the third person. Perfection can be attained only upon (1) written acceptance by the other spouse or (2) authorization by the Court before the offer is withdrawn by either or both offerors. The effectivity of the contract shall take effect only upon such written acceptance or court authorization.
Art. 97. Either spouse may dispose by will of his or her interest in the community property. (n)
A spouse can validly dispose any of his or her specific separate properties in a will, provided it will not infringe on the legitime of the compulsory heirs.
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But as regards properties in the ACP, the spouse can only dispose of his or her interest in the community (not specific) property.
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)
Whether a donation is moderate or not depends upon the financial situation of the spouses and the ACP.
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 Articles 134 to 138. (175a)
The termination of the ACP does not necessarily mean the termination of the marriage. But the termination of the marriage necessarily terminates the ACP.
After the dissolution comes the liquidation and partition.
PAR. (1): DEATH: Because civil personality is extinguished. The ACP shall be liquidated in the same proceeding as the settlement of the estate.
PAR. (2): LEGAL SEPARATION DECREE: Remember though that the offending spouse shall have no right to any share of the net profits earned by the ACP.
PAR. (3a): ANNULMENT DECREE: Dissolution, etc. must be contained in the decision granting the annulment. Forfeiture also against the offending spouse.
PAR. (3b): NULLITY DECREE: As a general rule, there is no absolute community of property in a void marriage. Again, the exception is when the marriage is void for being compliant with Article 40. This is where the said paragraph applies.
PAR. (4): JUDICIAL SEPARATION OF PROPERTY: If it is voluntary, the parties can file the agreement for separation of property in court to obtain the necessary court approval. (Art.
136, FC) Article 135 provides for the grounds on which the separation of property may be based.
o After approval, the parties can nevertheless file a revival of their property regime. But once revived, no voluntary separation of property may thereafter be granted. (Art.
141 (7), FC)
If the separation of property is involuntary, it must be for a sufficient cause and must likewise have court approval.
LIQUIDATION AFTER AFFIDAVIT OF REAPPEARANCE: The ACP of the subsequent marriage will be dissolved after the spouse who was supposedly dead files an affidavit of reappearance. Any party in the subsequent marriage who is in bad faith shall forfeit his or her share in the net profits.
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;
76 (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)
PAR. (1): NO SUPPORT: Fault must always be proven. The mere fact of separating from the conjugal roof, which cannot be presumed to be culpable, when there is no evidence of any fault or guilt on the part of the one who separates, does not constitute a reason for annulling the right of support.
o If he/she separated for a valid cause, he/she still has a right to be supported, given the general rule in the first part of the article.
o If fault is found, he/she loses the right to be supported from the ACP.
However, the ACP may still be held liable for the expenses he/she might have incurred for the benefit of the family, especially those enumerated in Article 94.
PAR. (2): COURT AUTHORIZATION: Any spouse can seek relief as regards these transactions.
o Whether he/she was the one who left the conjugal home without a valid cause.
PAR. (3): SOLIDARY LIABILITY AND ADMINISTRATION OF SEPARATE PROPERTY: To be able to effectively enforce the solidary nature of the separate properties in cases where the spouses are separated from each other, Article 100(3) likewise provides that the spouse present shall, upon proper petition in court, be given judicial authority through summary proceedings to administer or encumber any specific property of the other
spouse and use the fruits or proceeds thereof to satisfy the latter’s share.
o It must be noted that only the present spouse is given standing by the law to file this petition.
o The authority granted to the present spouse, however, is limited to only one purpose, namely, to enable the present spouse to satisfy the other’s spouse’s share in the obligations used to support the family which should be totally paid by the ACP had it not been insufficient.
o So the separate property of the absent spouse may be ordered to pay half of the obligation which should have been paid by the ACP had it been sufficient.
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)
ABANDONMENT: 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
77 do so. There must be absolute cessation of marital relations,
duties, and rights with the intention of perpetual separation.
o Not mere physical estrangement but also amount to financial and moral desertion.
Aside from separation of property, the innocent spouse can also petition the court for receivership or for authority to be the sole administrator of the ACP.
This article, along with Art. 128, merely provides a presumption.
FAILURE TO COMPLY WITH FAMILY OBLIGATIONS: If a designated administrator abuses his or her administration, any of the reliefs provided in this article can be availed of.
o However, it has been held that the mere refusal or failure of the administrator of the property to inform the other spouse of the progress of the family business does not, by itself, constitute abuse.
o Abuse connotes willful and utter disregard of the interest of the partnership, evidenced by a repetition of deliberate acts and/or omissions prejudicial to the latter.
o Negligence or inefficiency is not merely isolated, but so gross that it is likewise constantly done without any effort or only a token effort to improve.
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: In a voluntary judicial separation of property, the liquidation may be governed by the agreement of the parties, provided the Court approves the same. This is only the default.
INVENTORY: The properties must be itemized, and valued.
o It is an error to determine the amount to be divided by adding up the profits which had been made on each year
78 of the community’s continuance and saying that the result
thereof is that amount.
o In the appraisal of the properties, it is not the purchased but the market or, in default thereof, the assessed value at the time of the liquidation that must be taken into account.
o If the proceedings take a long time and the values have suffered some alterations, there is nothing to prevent a new valuation when the last stage is reached.
PAYMENT OF DEBTS: Includes all obligations in Art. 94.
DELIVERY OF EXCLUSIVE PROPERTIES: These refer to any properties stipulated to be separate in the pre-nup, and those enumerated in Art. 92. But advances to the ACP must be paid first before delivery should be made.
PARTITION OF NET ASSETS: The interest of the parties is limited to these net assets or net remainder. As clearly seen, until a liquidation has been made, it is impossible to say whether or not there will be a net remainder to be divided between the parties.
Equal sharing will not apply if there is a different proportion or division agreed upon in the marriage settlement, or unless there has been a valid voluntary waiver of such share.
o If the waiver of rights refers to those made during the subsistence of the ACP, such waiver is invalid and ineffective as it is prohibited under Art. 89.
o A valid waiver can only occur upon a judicial separation of property or after the marriage has been dissolved or annulled, and it must be contained in a public instrument as provided for under the second paragraph of Article 89.
This is where forfeiture happens when one spouse is in bad faith.
Forfeiture shall take place upon termination of cohabitation.
However, this rule will not apply to void marriages because of non-compliance with Article 40. It is specifically provided that
what will apply is Article 50 in relation to Article 43(2), which is the forfeiture rule in case of liquidation of ACP in that case.
DELIVERY OF PRESUMPTIVE LEGITIME: Only done when the case was annulment or of nullity based on Article 40. This is not done when the marriage is void or the case was for legal separation only.
o Presumptive legitime shall be computed as of the date of the final judgment of the trial court.
o Must be delivered in cash, property or sound securities
Unless the parties have mutually agreed for such matters in a judicially approved agreement.
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)
Remember SpecPro on settlement of estate. Judicial or extrajudicial settlement; partition.
Any encumbrance of any specific property prior to liquidation is void because upon the death, only the interest to the property and not any physical and definite property is vested on the heirs.
o In fact, if there are creditors of the decedent, the interest will only vest after payment of the debts of the decedent.
79 o Remember, they can sell their interest but not any specific
property. The sale of the former is valid.
Consequently, if the deceased spouse is survived by a spouse and compulsory heirs, the ACP which has been dissolved upon the death, evolves into a co-ownership between the surviving spouse and the heirs.
o As co-owner, the spouse or the heirs can undertake any act of dominion over their interest, share or participation, but not over specific property.
Also, prior to the liquidation and partition, the interest of an heir in the estate of the deceased person may nevertheless be attached for purposes of execution, even if the estate is in the process of settlement before the courts.
o However, the attachment is subject to the administration of the estate. The administrator retains control over the properties and will still have the power to sell them, if necessary for the payment of the debts of the deceased.
In case some of the heirs sell the whole inherited but unliquidated property without the consent of the other heirs, the remedy of the aggrieved heirs is to file an action for partition so that the properties will be finally liquidated and distributed.
o The specific properties that will be adjudicated corresponding to the shares of the selling-heirs will be the only one retained by the buyer who, while the case is pending, holds the property as trustee for the benefit of the aggrieved heirs.
CLAIMS AGAINST THE ESTATE: Upon the death of one spouse, the ACP is terminated. No complaint for the collection of indebtedness chargeable to the community property can be brought against the surviving spouse.
o Unless, such surviving spouse has committed himself to be solidarily liable for the claim against the ACP.
o If the said spouse did not commit himself, then all claims must be claimed and paid in the settlement of estate proceedings of the deceased spouse.
MANDATORY COMPLETE SEPARATION OF PROPERTY: Again, if the first marriage is terminated by death by one of the spouses, and the other remarries without liquidation of the ACP, the second marriage shall be governed by separation of property.
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)
This refers to at least 2 marriages contracted prior to August 3, 1988, in which the 2 marriages are liquidated simultaneously.
o WHY? Because in the Family Code, there are enough safeguards to ensure this will not happen
o Like (1) excluding from the ACP any property from a previous marriage with legitimate descendants; (2) making separation of property the property regime for subsequent marriages in which there was no liquidation of property for the first marriage; and (3) making co-ownership the property regime in case the subsequent marriage is void.
In case of doubt, it shall be divided between or among the different communities in proportion to the capital and duration of each.
There are 5 scenarios foreseeable in doubtful situations.
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1st scenario: When only the two marriages are equal in duration but the assets in each marriage is unknown. Total FMV of assets liquidated is 15,000. Each marriage shall receive 7,500.
2nd scenario: Same with 1st scenario but the duration is not equal.
1st marriage lasted for 2 years while the 2nd one lasted for 3 years.
1st marriage then will receive 2/5 of 15,000 (which is 6,000) while the 2nd marriage will receive 3/5 (which is 9,000).
3rd scenario: Durations of each marriage are the same, the assets of the first and second marriage are both known, and the value of
3rd scenario: Durations of each marriage are the same, the assets of the first and second marriage are both known, and the value of