221 Quiao v Quiao the marriage all form the common mass of their properties.
all form the common mass of their properties. Only those enumerated under FC
G.R. No. 176556; July 4 2012
By: Calaguas
Topic: Absolute Community of Property
Petitioner: Brigido B. Quiao
Respondent: Rita C. Quiao, Kitchie C. Quiao, Lotis C. Quiao, Petchie C. Quiao, represented by
their mother Rita Quiao
Ponente: Reyes, J.
DOCTRINE:
The steps to dissolve the ACP regime are: (1) Inventory, listing, and determination of market
values at the time of the marriage of properties that are part of the absolute community and
those that are part of their separate properties; (2) Payment of the debts and obligations of
the absolute community from the community’s properties, if sufficient, or solidarily from the
separate properties of the spouses if needed; (3) delivery to each spouse of whatever is left
of their separate properties; and (4) Division between the spouses of the net assets of the
community properties, if any.
FACTS:
Respondent Rita C. Quiao and petitioner Brigido B. Quiao tied the marital knot on January 6,
1977. Rita filed a complaint for legal separation against herein Brigido, who was found to
have cohabited with another woman. Subsequently, the trial court rendered a decision
declaring the legal separation of Rita and Brigido. It ruled that the minor children shall remain
under the custody of the innocent spouse, and that their remaining properties shall be
divided equally, but Brigido’s share of the net profits earned by the conjugal partnership is
forfeited in favor of the common children.
Brigido filed a Motion for Clarification for the definition of net profits. The trial court held
that it denotes "the remainder of the properties of the parties after deducting the separate
properties of each of the spouse and the debts." Not satisfied with the Order, Brigido filed
this present petition.
ISSUE:
What does “net profits” refer to?
What are included (& excluded) in the ACP regime?
What are the steps in dissolving the ACP regime?
RULING:
Re: Definition of “net profits”
It is FC Article 102 (4) which provides for the definition of what “net profits” are. Accordingly,
“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. This definition applies to both the dissolution of the CPG regime as well as the
ACP regime.
Re: Inclusions (& exclusions) under the ACP regime
In ACP, the husband and the wife become joint owners of ALL the properties of the marriage.
The properties brought into the marriage by each spouse and those acquired by them during
Article 92 are excluded from this mass of properties.
Re: Dissolution of ACP regime
The applicable provision when ACP is to be dissolved is FC Article 102. When ACP is to be
dissolved, the common mass of properties is divided between the spouses, or their
respective heirs, equally or in the proportion the parties have established, irrespective of the
value each one may have originally owned. The steps are as follows –
First, an inventory and listing of what are properties considered as community properties,
and a separate inventory and listing of what are properties considered as exclusive property
of each of the spouses are prepared. Their market values at the time of marriage are also
determined.
Second, determine whether the community’s properties are sufficient to pay out the debts
and obligations of the absolute community. If after the exhaustion of the community’s
properties there are still debts and obligations to be paid out, then the separate properties of
the spouses are made solidarily liable for to pay the unpaid balance. But if the community’s
properties are sufficient to pay the debts and obligations of the absolute community,
payment of these shall be made by exhausting the community’s properties. Whatever is left
of the community’s properties, if any, shall be the net remainder (or net assets) of the
community’s properties.
Third, whatever is left of their separate properties afterwards, if any, are delivered to each of
them.
Fourth, the net assets of the community’s properties, if any, shall be divided between the
husband and wife either equally or in the proportion they have established. This is however
subject to possible forfeiture of the spouse’s share in the net profits, should there be an
offending spouse and delivery of presumptive legitimes of their common children, if any. For
purposes of forfeiture, net profit is computed by subtracting the market value of the
properties at the time of marriage from the net assets. Once computed, the share in the net
profit of the offending spouse is forfeited in favor of the common children of the spouses or
if there be none, the children of the guilty spouse by a previous marriage or in default of
children, the innocent spouse.
DISPOSITIVE:
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court, Branch 1 of
Butuan City is AFFIRMED. Acting on the Motion for Clarification dated July 7, 2006 in the
Regional Trial Court, the Order dated January 8, 2007 of the Regional Trial Court is hereby
CLARIFIED in accordance with the above discussions.
SO ORDERED.