Article 105 In case the future spouses agree in the marriage settlements that the regime of conjugal partnership of gains shall govern their property relations during marriage, the provisions in this Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between the spouses before the effectivity of this Code without prejudice to vested rights al- ready acquired in accordance with the Civil Code or other laws as provided in Article 256.
Article 106 Under the regime of conjugal partnership of gains, the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage settlements. Conjugal Partnership of Gains
• Agree to CPG = common fund the fruits of their separate properties and the income from their work or industry
• Fruits of paraphernal property – separate property of the wife • Effort - activity or undertaking which may or may not be rewarded • Chance – activities like gambling or betting
• No unilateral declaration by one spouse can change the character of a conjugal property o Determined by law
• Proof of acquisition of property during marriage – presumption of conjugality attaches • Dissolution of marriage = net gains divided equally between spouses
• After August 3, 1988 – governed by provisions on CPG under Family Code •
When the Conjugal Partnership shall Commence
• Commence at the precise moment marriage ceremony is celebrated • HOUR not date of the marriage
Prohibition on Waiver
• no waiver of rights, interests, shares, and effects of the conjugal partnership of gains can be made during the marriage except upon judicial separation of property
• Avoid undue pressure and influence exerted upon the weaker spouse who may be persuaded or coerced into parting with his interests
Article 108 The conjugal partnership shall be governed by the rules on the contract of partnership in all that is not in conflict with what is expressly determined in this Chapter or by the spouses in their marriage settlements.
Special Type of Partnership
• CPG – governed by the rules on the contract of partnership in all that are not in conflict with Chapter or by the spouses in their marriage settlements
• In case of conflict between rules of Civil Code and provisions of Family Code – Family Code shall prevail
• Any stipulation which excludes the partners from any share of the profits and losses of the partnership = VOID
• Partner = co-owner with other partner of specific parternship property • Every partner must account to the partnership for any benefit
• Without CONSENT of other partner – CANNOT assign the partnership property in trust for creditors or on the assignee’s promise to pay the debts of the partnership, confess a
judgment, enter into a compromise concerning a partnership claim or liability, submit a partnership claim or liability to arbitration and renounce a claim of the partnership
• No act of a partner in contravention of a restriction on authority shall bind the partnership to person having knowledge of the restriction
• Any wrongful act or omission by partner – ordinary course of business or with authority of co-partner
o Partnership is liable to the same extent as the partner acting or omitting to act • Carandang v. Heirs of Quirino A. De Guzman
o Partner is a co-owner with other partners in the specific partnership property o May separately bring an action for recovery
o Do not have to join all other co-owners as co-plaintiffs ! Suit presumed to be filed for the benefit of co-owners ! Any of the co-owners can bring an action for ejectment
o In suits to recover property = all co-owners are REAL PARTIES IN INTEREST o Only one is the INDISPENSIBLE PARTY
! Others not
! Complete relief can be accorded even without their participation Section 2. EXCLUSIVE PROPERTY OF EACH SPOUSE
Article 109 The following shall be the exclusive property of each spouse: 1. That which is brought to the marriage as his or her own
2. That which each acquires during the marriage by gratuitous title
3. That which is acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouses
4. That which is purchased with exclusive money of the wife or of the husband Properties Brought into the Marriage
• Partnership does not produce the merger of the properties of each spouse
• Can exercise all rights of dominion or of ownership over these exclusive properties • Properties cannot be encumbered, alienated nor disposed of by the other spouse without the
consent of the owner- spouse
• Clearly indicating property as separately owned without opposition = separate
• Purchased by spouse previous to marriage = property registered only after marriage in name of owner-spouse with other spouse as co-owner
o Exclusive property of spouse who bought it with own funds o Only creates a TRUST
o Restoration to real owner-spouse of subject property upon liquidation
• Exclusive properties brought into marriage = payment of personal debts not redounding to benefit of family, support of illegitimate children of owner spouse
• Insufficient to pay obligations of partnership at time of liquidation = spouses solidarily liable for unpaid balance with separate properties
Property Acquired by Gratuitous Title
• Anything received by each spouse from any source by way of an act of liberality of the giver, such as a donation or a gift, shall belong exclusively to the spouse-recipient and will not belong to the conjugal partnership property
o Moderate gifts given by one spouse to another during family occasions o Honorarium
• Honorarium – something given not as a matter of obligation but in appreciation for services rendered, a voluntary donation in consideration of services which admit no compensation in money
• If the property were acquired by lucrative (or gratuitous) title by way of succession, property = separate property regardless of whether it was acquired before or after marriage
• INCOME and FRUITS of property acquired by gratuitous title = conjugal Redemption, Barter and Exchange
• Redemption – property shall belong to the spouse who has the right to redeem regardless of whether or not he uses personal funds
• Conjugal funds used to effect redemption = spouse making the redemption through conjugal fund shall be liable to the conjugal partnership for the reimbursement of the amount used to redeem his or her exclusive property
• Whoever buys or procures something using own funds shall exclusively own what was purchased
• Right of redemption = not the same as the right of a successor in interest in cases of execution of judgment
o Two of parcels of land redeemed by husband’s wife using money given by father o Wife did not acquire the property on behalf of the husband but acquired it by right
of redemption as successor-in-interest • Absence of proof = form part of the CPG
• Property acquired by exchange by one spouse using exclusive property = remain SEPARATE property
• Barter is limited to goods
• Separate property used as part of purchase price of new property in addition to conjugal funds spent = CONJUGAL
Property purchased with exclusive money of either spouse
• Property is purchased using the exclusive money of one spouse but the title is taken in the spouses’ joint names, circumstances will determine:
o Gift from the spouse whose money was used to effect the purchase o Trust in favor of such spouse
Article 110 The spouses retain the ownership, possession, administration and enjoyment of their exclusive properties.
Either spouse may, during the marriage, transfer the administration of his or her exclusive property to the other by means of a public instrument, which shall be recorded in the registry of property of the place where the property is located.
Administration of Exclusive Properties
• Administration – entering into contracts regarding the use of the property, engaging in litigation, and the collection of fruits, profits, and income arising from the separate property • Even when there is a transfer of administration, owner-spouse may still donate, encumber, or
otherwise alienate the property
• May also transfer administration to a stranger, even without the consent of the other spouse • Naguit v. CA
o Exclusive property of the wife was sold upon execution finding her husband liable for his personal obligation
o Wife can file a separate action to annul the sale
o Third persons can file a proper action to vindicate their claims if their property was wrongfully sold to satisfy a judgment debt of another person
o Wife = third person
Article 111 A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her exclusive property, without the consent of the other spouse, and appear alone in court to litigate with
regard to the same.
Article 112 The alienation of any exclusive property of a spouse administered by the other automatically terminates the administration over such property and the proceeds of the alienation shall be turned over to the owner-spouse.
Applicability
• Not applicable anymore, age of majority lowered to 18
• Article 111 should merely state that “either” spouse may mortgage, encumber, alienate, or otherwise dispose of his or her exclusive property
Termination of Administration
• Any spouse who alienates his or her exclusive separate property will terminate the
administration of the other spouse over such property and the proceeds of the alienation shall be turned over to the owner- spouse
• Owner-spouse, who is a party to the summary proceeding, cannot revoke the judicially approved administration of the present spouse over his or her specific property by the mere expediency of alienating such property
• Wants to alienate such property, the owner-spouse must get: o Consent of the administrator-spouse or
o Approval of the court
• Restriction: solidary nature attached to the separate properties of the spouse will be better served and effected
• Administrator spouse or the court can ask or order portion of the proceeds be earmarked as payment of owner-spouse’s share in the solidary liability
Article 113 Property donated or left by will to the spouses, jointly and with designation of determinate shares, shall pertain to the donee-spouse as his or her own exclusive property, and in the absence of designation, share and share alike, with-out prejudice to the right of accretion when proper.
Article 114 If the donations are onerous, the amount of the charges shall be borne by the exclusive property of the donee-spouse, whenever they have been advanced by the conjugal partnership of gains. Property Donated or Left by Will to Spouses
• Donor or testator = may donate to spouses jointly, designate respective determinate share of each spouse, and in the absence, share and share alike
• Property of the donation will then be considered separate property of the spouses Accretion in Case of Donation
• Accretion is the incorporation or addition of property to another property • General rule in joint donation
o One could not accept independently of his co-donee o No right of accretion unless expressly so provided
• Each of them shall own such portions given as their respective separate properties
• If the wife does not accept her part of the donation, accretion will set in favor of the husband • Donor provides in the deed of donation that no right of accretion shall be available
o Only get original share
• No designation of determinate shares = same rule applies
• If the designation is not of determinate shares but of determinate properties (house, car) = accretion will NOT apply
Accretion in Case of Property Left by Will
• In case the property is left by will and for accretion to apply, it shall be necessary that the husband and the wife should be called to the same inheritance, or to the same portion thereof, pro indiviso (not divided); and that one of the spouses thus called dies before the testator or renounces the inheritance, or be incapacitated to receive it
• “One half each” “in equal shares”
o Do not exclude the right of accretion
o Do not mean that the inheritance is not pro indiviso
o Spouse to whom the portion goes by right of accretion takes it in the same proportion that he or she inherits
o Spouse to whom the inheritance accrues shall succeed to all the rights and obligations which the heir who renounced or could not receive it would have had • Husband and the wife were validly given a property in a will
o 1/4 of the property will go to the wife o 3/4 will go to the husband
o They shall own their respective shares separately
• Designation of proportionate sharing does not make the properties specific • Inheritance is still pro indiviso
• Testator gives to the husband and the wife the school buildings
o Buildings which are located in Manila shall go to the husband while the building in Cebu shall go to the wife
o Right of accretion will not apply because the inheritance is not pro indiviso Payment Using Conjugal Funds
• Donee-spouse shall reimburse the conjugal partnership but the property remains to be exclusive property
• Taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse shall be chargeable to the conjugal partnership of gains Article 115 Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits shall be
governed by the rules on gratuitous or onerous acquisitions as may be proper in each case. Nature of Pensions, Annuities, Gratuities
• Depend on how it was obtained and circumstances of the case • Gratuity – act of pure liberality
o Generally acquired by lucrative title like donation or gift • Annuity – not gratuity if recipient is entitled to it as a matter of right • Pensions
o Nature of compensation for services previously rendered for
o Full and adequate compensation was not received at the time of the rendition of the service
o Pay withheld to induce long continued and faithful service o Public benefit accrues in 2 ways
! Encouraging competent employees to remain in the service
! Retiring from the public service those who have become incapacitated from performing the duties as well as they might be performed by younger or more vigorous men
o Not considered donations or gratuities
• When there is no liberality on the part of the government, and the award is composed of mere accumulated savings or deductions from money earned during the marriage = PENSION = conjugal
• Partly by conjugal funds and partly by separate funds = proceeds of the insurance shall be owned by the conjugal partnership and the separate property proportionately in accordance with the amount of contribution
• Paid exclusively from separate funds = separate property
• Proceeds shall be considered conjugal with the proper reimbursement to the spouse who paid using separate property
• Retirement premiums totaling P9,700 are conjugal = no proof that the premiums were paid from the exclusive funds of the deceased spouse
• If a beneficiary is named in the life insurance policy, the proceeds of the same are paid to beneficiary
• Beneficiary of the retirement insurance can only claim the proceeds of retirement insurance if employee dies before retirement.
• If employee failed or overlooked to state the beneficiary of his retirement insurance, retirement benefits will accrue to his estate and will be given to his legal heirs in accordance with law, as in the case of a life insurance if no beneficiary is named in the insurance policy