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Chapter 4 conjugal partnership of gains

- Oftentimes referred to as the CPG, it is one of the property relations


between the spouses, under which 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. In other words, the following are placed in a
common fund:
1. the proceeds, products, fruits and income from their separate
properties; and
2. those acquired by either or both spouses through their efforts or by
chance.

Section 2.

exclusive property of each spouse

What is the significance of having an exclusive property?


The spouses retain the ownership, possession, administration and
enjoyment of their exclusive properties. A spouse may also 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.
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 the
property is located. However, 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.
Article 109. The following shall be the exclusive property
A) That which is brought to the marriage as his or her own
B) That which each acquires during the marriage by gratuitous title
C) That which is acquired by right of redemption by barter or by
exchange with property belonging to only one of the spouses
D) That which is purchased with exclusive money of the wife or of the
husband

Spouses Laperal vs Spouses Katigbak


FACTS:

CFI Manila declared the property covered by TCT No.57626 as


separate or paraphernal property of Evelina Kalaw-Katigbak. The
spouses Laperal disagree with this finding reiterating that its
improvements and income are conjugal assets of the Spouses
Katigbak.
When the spouses Katigbak got married, neither of them brought
properties unto the marriage. Ramons occupation rendered him a
monthly income of P200.00. The property in question was
registered in the name of Evelina Kalaw-Katigbak married to Ramon
Katigbak. The latter declared that her mother was the one who
bought the property for her and had placed it only in her name as
the practice of her mother in buying properties and placing them
directly in the names of her children. The husband having no
interest with the property only signed the document for the purpose
of assisting his wife.
In August 1950, the Laperals filed a case and was granted by the
trial court against the Katigbaks in recovery of P14,000 and jewelry
amounting to P97,500 or in lieu thereof, to pay such amount. A
month after the decision was rendered, Evelina filed a complaint
against her husband for judicial separation of property and separate
administration which was granted by the court and was sought for
annulment by the Laperals.
ISSUE: WON the property in question constitutes the paraphernal
property of Evelina.
HELD:
All properties acquired during the marriage are presumed conjugal.
It is however not conclusive but merely rebuttable, unless it be
proved that the property belong exclusively to the husband and
wife. In the case at bar, the deed of the land is under the name of
the wife. At the time it was purchased, the property was of
substantial value and as admitted, the husband by himself could not
have afforded to buy considering the singular source of income.
Hence, the property covered by TCT 57626 is considered a
paraphernal property of the wife.

Villanueva vs. IAC


FACTS:
Modesto Aranas, husband of Victoria, inherited a land from his
father. Dorothea and Teodoro, Modestos illegitimate children,
borrowed money from private respondent Jesus Bernas, mortgaging

as collateral their fathers property. In the loan agreement, Aranas


described themselves as the absolute co-owners. Dorothea and
Teodoro failed to pay the loan resulting to extrajudicial foreclosure of
mortgage in 1977 and thereafter Bernas acquired the land as the
highest bidder. Aftewards, the Aranases executed a deed of
extrajudicial partition in 1978, in which they adjudicated the same
land unto themselves in equal share pro-indiviso. Bernas then
consolidated his ownership over the lot when the mortgagors failed
to redeem it withn the reglementary period, and had the title in the
name of Modesto cancelled and another TCT issued in his name.
In 1978, petitioner Consolacion Villanueva and Raymundo Aranas
filed a complaint against respondents spouses Jesus and Remedios
Bernas, for the cancellation of the TCT under the name of the
Bernases, and they be declared co-owners of the land. Petitioner
alleged that spouses Modesto and Victoria in 1987 and 1958
executed 2 separate wills: first bequeathing to Consolacion and
Raymundo and to Dorothea and Teodoro, in equal shares pro diviso,
all of said Victorias shares from the conjugal partnership property;
and second Modestos interests in his conjugal partnership with
Victoria as well as his separate properties bequeathed to Dorothea
and Teodoro. Trial court dismissed the complaint, declaring herein
respondents as the legal owners of the disputed property. IAC
likewise affirmed the lower courts decision.
ISSUE: WON Villanueva had a right over the land and the
improvements thereon made by Victoria who rendered the lot as
conjugal property.
HELD:
The land was not a conjugal partnership property of Victoria and
Modesto. It was Modestos exclusive property since he inherited it
from his parents. Moreover, since Victoria died ahead of Modesto,
Victoria did not inherit said lot from him and therefore had nothing
of the land to bequeath by will of otherwise to Consolacion.
Article 158 of the Civil Code says that improvements, whether for
utility or adornment made on the separate property of the spouses
through advancements from the partnership or through the industry
of either spouse belong to the conjugal partnership, and buildings
constructed at the expense of the partnership during the marriage
on land belonging to one of the spouses also pertain to the
partnership, but the value of the land shall be reimbursed to the
spouse who owns the same.
There was no proof presented by Villanueva. Such proof is needed
at the time of the making or construction of the improvements and
the source of the funds used thereof in order to determine the
character of the improvements as belonging to the conjugal
partnership or to one spouse separately. What is certain is that the
land on which the improvements stand was the exclusive property
of Modesto and that where the property is registered in the name of
one spouse only and there is no showing of when precisely the
property was acquired, the presumption is that is belongs

exclusively to said spouse. It is not therefore possible to declare the


improvements to be conjugal in character.
Furthermore, Bernas mode of acquisition of ownership over the
property appears in all respect to be regular, untainted by any
defect whatsoever. Bernas must therefore be deemed to have
acquired indefeasible and clear title to the lot which cannot be
defeated or negated by claims subsequently arising and of which he
had no knowledge or means of knowing prior to their assertion and
ventilation.
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 all be recorded in the registry of property of the place the property
is located (137a 168a 169a)
-

Each spouse is to retain ownership administration possession and


enjoyment of their exclusive properties
Administration includes entering into contract engaging in litigation
and collection of properties profits and income arising from separate
properties
The owner spouse can tranfer administration of property only to the
other spouse but also to any 3 rd person with out the consent of the
other spouse

Article 111. Either spouse may mortage encumber alienate or other


dispose of this or her exclusive property
-

Is no longer necessary as the age of marriage is also the age of


emancipation
If the owner spouse alienates his property the administration by the
other spouse over such property will cease and the proceedings will
go to the owner

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
- The
owner-spouse
cannot
revoke
a
judicially
approved
administration by the other spouse of his property by alienating it.
Thus to alienate the property he must get the consent of the
administrator-spouse or court approval.
Article 113. Property donated or left by will to the spouses jointly and with
designation of determinate shares shall pertain to the donee spouses 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

The donor may donate whatever he wishes to whomever he wants.


Thus he may donate a piece of property to both spouses jointly or
may specify how much of the property should go to the husband
and how much should go to the wife.
ACCRETION: addition of property to another property General rule: in a
joint donation one cannot accept independently of his co-donee unless it
is stipulated or unless it is between husband and wife.
- Ex. D donates land to H and W who are married. D donates 1/3 to W
and 2/3 to H. If W does not accept the donation it will be considered
added on to the share of the husband. However if it is a specific
designation such as H will get a car and W will get a horse, accretion
will not apply.
Art. 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.
Art. 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

BPI vs. Posadas


FACTS:
BPI, as administrator of the estate of deceased Adolphe Schuetze,
appealed to CFI Manila absolving defendant, Collector of Internal Revenue,
from the complaint filed against him in recovering the inheritance tax
amounting to P1209 paid by the plaintiff, Rosario Gelano Vda de Schuetze,
under protest, and sum of P20,150 representing the proceeds of the
insurance policy of the deceased.
Rosario and Adolphe were married in January 1914. The wife was actually
residing and living in Germany when Adolphe died in December 1927.
The latter while in Germany, executed a will in March 1926, pursuant with
its law wherein plaintiff was named his universal heir. The deceased
possessed not only real property situated in the Philippines but also
personal property consisting of shares of stocks in 19 domestic
corporations. Included in the personal property is a life insurance policy
issued at Manila on January 1913 for the sum of $10,000 by the Sun Life
Assurance Company of Canada, Manila Branch. In the insurance policy,
the estate of the deceased was named the beneficiary without any
qualification. Rosario is the sole and only heir of the deceased. BPI, as
administrator of the decedents estate and attorney in fact of the plaintiff,
having been demanded by Posadas to pay the inheritance tax, paid under
protest. Notwithstanding various demands made by plaintiff, Posadas
refused to refund such amount.
ISSUE: WON the plaintiff is entitled to the proceeds of the insurance.
HELD:

SC ruled that(1)the proceeds of a life-insurance policy payable to the


insured's estate, on which the premiums were paid by the conjugal
partnership, constitute community property, and belong one-half to the
husband and the other half to the wife, exclusively; (2)if the premiums
were paid partly with paraphernal and partly conjugal funds, the proceeds
are likewise in like proportion paraphernal in part and conjugal in part; and
(3)the proceeds of a life-insurance policy payable to the insured's estate
as the beneficiary, if delivered to the testamentary administrator of the
former as part of the assets of said estate under probate administration,
are subject to the inheritance tax according to the law on the matter, if
they belong to the assured exclusively, and it is immaterial that the
insured was domiciled in these Islands or outside.
Hence, the defendant was ordered to return to the plaintiff one-half of the
tax collected upon the amount of P20,150, being the proceeds of the
insurance policy on the life of the late Adolphe Oscar Schuetze, after
deducting the proportional part corresponding to the first premium.
Section 3.

Conjugal Partnership Property

Art. 116.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.
Wong vs. IAc
FACTS
Romario Henson married Katrina on January 1964. They had 3 children
however, even during the early years of their marriage, the spouses had
been most of the time living separately. During the marriage or on about
January 1971, the husband bought a parcel of land in Angeles from his
father using the money borrowed from an officemate. Sometime in June
1972, Katrina entered an agreement with Anita Chan where the latter
consigned the former pieces of jewelry valued at P321,830.95. Katrina
failed to return the same within the 20 day period thus Anita demanded
payment of their value. Katrina issued in September 1972, check of
P55,000 which was dishonored due to lack of funds. The spouses Anita
Chan and Ricky Wong filed action for collection of the sum of money
against Katrina and her husband Romarico. The reply with counterclaim
filed was only in behalf of Katrina. Trial court ruled in favor of the Wongs
then a writ of execution was thereafter issued upon the 4 lots in Angeles
City all in the name of Romarico Henson married to Katrina Henson. 2 of
the lots were sold at public auction to Juanito Santos and the other two
with Leonardo Joson. A month before such redemption, Romarico filed an
action for annulment of the decision including the writ and levy of
execution.
ISSUE: WON debt of the wife without the knowledge of the husband can
be satisfied through the conjugal property.

HELD:
The spouses had in fact been separated when the wife entered into the
business deal with Anita. The husband had nothing to do with the
business transactions of Katrina nor authorized her to enter into such.
The properties in Angeles were acquired during the marriage with unclear
proof where the husband obtained the money to repay the loan. Hence, it
is presumed to belong in the conjugal partnership in the absence of proof
that they are exclusive property of the husband and even though they had
been living separately. A wife may bind the conjugal partnership only
when she purchases things necessary for support of the family. The writ
of execution cannot be issued against Romarico and the execution of
judgments extends only over properties belonging to the judgment debtor.
The conjugal properties cannot answer for Katrinas obligations as she
exclusively incurred the latter without the consent of her husband nor
they did redound to the benefit of the family. There was also no evidence
submitted that the administration of the partnership had been transferred
to Katrina by Romarico before said obligations were incurred. In as much
as the decision was void only in so far as Romarico and the conjugal
properties concerned, Spouses Wong may still execute the debt against
Katrina, personally and exclusively.
Art. 117.

The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the expense of
the common fund, whether the acquisition be for the partnership, or for
only one of the spouses;
(2) Those obtained from the labor, industry, work or profession of either or
both of the spouses;
(3) The fruits, natural, industrial, or civil, due or received during the
marriage from the common property, as well as the net fruits from the
exclusive property of each spouse;
(4) The share of either spouse in the hidden treasure which the law
awards to the finder or owner of the property where the treasure is found;
(5) Those acquired through occupation such as fishing or hunting;
(6) Livestock existing upon the dissolution of the partnership in excess of
the number of each kind brought to the marriage by either spouse; and
(7) Those which are acquired by chance, such as winnings from gambling
or betting. However, losses therefrom shall be borne exclusively by the
loser-spouse. (153a, 154a, 155, 159)
Art. 118.
Property bought on installments paid partly from exclusive
funds of either or both spouses and partly from conjugal funds belongs to

the buyer or buyers if full ownership was vested before the marriage and
to the conjugal partnership if such ownership was vested during the
marriage. In either case, any amount advanced by the partnership or by
either or both spouses shall be reimbursed by the owner or owners upon
liquidation of the partnership. (n)