ARTICLE 113

to
ARTICLE 120
Article 113

Property left or donated 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, without prejudice to the right of accretion when
proper.
Article 113 contemplates of two situations where the property is donated
to the spouses or inherited by them:

1. Donated to them or inherited by them with designation of shares;

and

2. Donated to them or inherited by them without designation of

shares.

In both cases, such property belongs to them exclusively without prejudice

to the right of accretion.
Accretion
 A right by virtue of which , when two or more persons are called to the
same inheritance, devise or legacy, the part assigned to the one who
renounced or cannot receive his share, or who died before the testator,
is added or incorporated to that of his co-heirs, co-devisees or co-
legatees. (Article 1015, NCC)

1. Accretion in case of donation.

2. Accretion in case of property left by will.
 ACCRETION IN CASE OF DONATION

General rule:
When a donation is made to several persons jointly, it is understood to
be in equal shares, and there shall be no right of accretion among
them, unless the donor has otherwise provided. (Article 753, NCC)

Exception:
Donations made to the husband and wife jointly, unless the donor has
otherwise provided. (Article 113, NCC)
 ACCRETION IN CASE OF PROPERTY LEFT BY WILL

Requisites:
1. The husband and wife should be called to the same inheritance,
or to the portion thereof, pro indiviso; and
2. That one of the spouses thus dies before the testator, or
renounces the inheritance, or be incapacitated to receive it.
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.
 Onerous donation
 a kind of donation where there are burdens and charges or future
services equal in value which is not greater than that of the thing
donated.

“If conjugal funds are used to pay the obligations attached to

an onerous donation, the donee-spouse shall reimburse the
conjugal partnership but the property remains to be his or her
exclusive property.”
Article 115

The 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.
 The nature of retirement benefits, pensions, annuities, gratuities, usufruct
and similar benefits shall depend upon how it was obtained and the
circumstances of the case.

Rule:
 If they are acquired by gratuitous title during marriage, they are
exclusive properties. (Article 9, par. 2, FC)

 If they are acquired by onerous title during marriage at the expense

of conjugal funds, they are conjugal properties. (Article 117, par. 1, FC)
Retirement Benefits

- These are payments for services provided after reaching the age of retirement or
upon withdrawal from one’s position or occupation and are separate and distinct from
the salaries received.

 Retirement benefits are not conjugal properties but belong to the beneficiary
designated by the deceased member. (Ferrer vs. GSIS (12 CA Rep. 361)

 Retirement benefits have been adjudged as gratuities or reward for lengthy and
faithful service of the recipient and should be treated as separate property of the
retiree-spouse. (Sarmiento vs. IAC, G.R. Nos. 75409, 75410, August 17, 1987)
Pension

 An amount given regularly to an official or employee of the Government out of

liberality and as an expression of its appreciation for past services.

 Pensions are in the nature of compensation for services previously rendered for
which full and adequate compensation was not received at the time of the
rendition of the services.

 Pension is gratuity only when it is granted for services previously rendered and
which at the time they were rendered gave rise to no legal obligation. (Pirovano
vs. De la Rama Steamship Co., 96 Phil. 335).
Annuity

 The aleatory contract of life annuity binds the debtor to pay an annual
pension or income during the life of one or more determinate persons in
consideration of a capital consisting of money or other property, whose
ownership is transferred to him at once with the burden of the income. (Art.
2021, NCC).

 He who constitutes an annuity by gratuitous title upon his property, may

provide at the time the annuity is established that the same shall not be
subject to execution or attachment on account of the obligations of the
recipient of the annuity. If the annuity was constituted in fraud of creditors,
the latter may ask for the execution or attachment of the property. (Art. 2026,
NCC).
Gratuity

 This is something voluntarily given in return for a favor or services; a bounty,

a tip (Pirovano vs. De la Rama Steamship Co.)

 That paid to the beneficiary for past services rendered purely out of the
generosity of the giver or grantor. (Peralta vs. Auditor General, 100 Phil.
1051; Mendoza vs. Dizon, 77 Phil. 533).
Usufructs

Usufruct gives a right to enjoy the property of another with the

obligation of preserving its form and substance, unless the title
constituting it or the law otherwise provides. (Art. 562, NCC).
Life Insurance Benefits

 If the beneficiary is somebody other than the insured or his estate, the
beneficiary is the owner of the insurance indemnity regardless of whether or
not the premiums were paid out of the insured’s separate property or the
conjugal funds. (Del Val vs. Del Val, 29 Phil. 534).

 However, if the insured made his estate as the beneficiary and the premiums
were paid by conjugal funds, the proceeds of the insurance constitute
conjugal property. (BPI vs. Posadas, 56 Phil. 215).
Social Security System

General Rule:
It is not the heirs of the employee who are to receive the benefits
or compensation.

Exception:
When the beneficiary is the estate, or when there is none
designated, or if the designation is void.
Article 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.
General Rule:
All properties acquired by the spouses, regardless of in whose name the
same is registered, during the marriage is presumed to belong to the
conjugal partnership.

Exception:
Proof that the property pertains exclusively to the husband or the wife.

Note: The presumption applies even if “the acquisition appears to have been
made, contracted, or registered in the name of one or both spouses.” (Balcodero
v. CA, 227 SCRA 303)
 Villanueva v. Court of Appeals
427 SCRA 439

The tax declarations are not sufficient proof to overcome the presumption
under Article 116 of the Family Code. All property acquired by the spouses
during the marriage, regardless in whose name the property is registered, is
presumed conjugal unless proved otherwise. The presumption is not rebutted
by the mere fact that the certificate of title of the property or the tax declaration
is in the name of one of the spouses only. Article 116 of the Family Code
expressly provides that the presumption remains even if the property is
“registered in the name of one or both of the spouses.”

Whether a property is conjugal or not is determined by law and not by the will of one of the
spouses. No unilateral declaration by one spouse can change the character of conjugal
property.
 The presumption applies only when there is a proof that the property
was acquired during the marriage. Proof of acquisition of the property during
the marriage is a condition sine qua non for the operation of the
presumption in favor of the conjugal partnership.
Article 117
The following are conjugal partnership property:

(1) Those acquired by onerous title during the marriage at the expense of common fund, whether the acquisition be for the partnership, or
for only one of the spouses;

(2) Those obtained from 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 and 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, the loses shall therefrom be borne
exclusively by the loser-spouse.
1. Property Acquired During Marriage by Onerous Title

Test in determining whether the property acquired during marriage is

conjugal or exclusive:
a) The manner of acquisition test (gratuitous or onerous)
b) If the acquisition is onerous, the source of fund test (conjugal
funds or exclusive money)
2. Property obtained from Labor, Industry, Work or Profession

 Daily wages
 Periodic salaries
 Honorarium or fees in the practice of profession
 Income from industrial, agricultural or commercial enterprise.

Rule:
If earned during marriage – conjugal property
If earned prior to the marriage – exclusive property
3. Fruits and Income of Separate Property

 The fruits of the conjugal partnership property due or received during the
marriage are also part of the conjugal partnership. With respect to the exclusive
property of either spouse, only the net fruits are part of the conjugal partnership.

 The fruits referred to includes the natural, industrial and civil fruits of the property.

 Includes interest income due during the marriage on a credit payable on

installment and belonging to one of the spouses.
4. Hidden Treasures

- Hidden treasures contemplates artifacts or objects which have

undergone transformation from their original raw state.

 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 is conjugal partnership property.
5. Properties Acquired Through Occupation

Occupation
- The mode of acquiring ownership or dominion by the seizure of the things
corporeal which have no owner and with the intention of acquiring them according to the
rules laid down by the law.

Requisites:
1. There must be a seizure;
2. The thing must be corporeal;
3. The intention to appropriate;
4. The thing must not be owned by anybody; and
5. The rules laid down by the law must be fulfilled.
6. Livestock

Livestock existing upon the dissolution of the partnership in excess of

the number of each kind brought to the marriage by either spouse shall
be conjugal.
7. Property Acquired by Chance

Any property acquired by chance belongs to the conjugal partnership.

However, loses therefrom shall be borne exclusively by the loser-spouse.
Article 118

Properties bought on installments paid partly from the exclusive funds of either or
both spouses and partly from the conjugal funds belong 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.
 When the property is bought on installment basis partly by the exclusive
fund of either or both spouses and partly by the conjugal funds, the ownership
is determined at the time when the title is vested.

o If the ownership is vested before the marriage, it is exclusive property of

the buyer-spouse.
o If the ownership is vested upon the buyer-spouse after the marriage
ceremony, it shall form part of the conjugal partnership property. In this
instance, the spouse who contracted the purchase shall have the right to
be reimbursed by the partnership.
Article 119

Whenever the amount or credit payable within a period of time belong

to one of the spouses, the sums which may be collected during the
marriage in partial payments or by installments on the principal shall be
the exclusive property of he spouses. However, interests falling due
during marriage on the principal shall belong to the conjugal partnership.
 In a situation where one of the spouses has in his favor a credit
payable in installments or, in any case, the credit which will be fully paid
during the marriage, all payments made on the principal during that
marriage shall belong exclusively to the spouse who owns the credit.
However, interest on the principal falling due during marriage shall belong
to the conjugal partnership.
Article 120
The ownership of improvements, whether for utility or adornment, made on the separate
property of the spouses at the expense of the partnership or through the acts or efforts of either
spouse or both spouses shall pertain to the conjugal partnership or to the original owner-
spouse, subject to the following rules:
When the cost of the improvement made by the conjugal partnership and any resulting
increase in value are more than the value of the property at the time of the improvement, the
entire property of one of the spouses shall belong to the conjugal partnership, subject to
reimbursement of the value of the property of the owner-spouse at the time of the
improvement; otherwise, said property shall be retained in ownership by the owner-spouse ,
likewise subject to reimbursement of the cost of the improvement.
In either case, the ownership of the entire property shall be vested upon the
reimbursement, which shall be made at the time of liquidation of the conjugal partnership.
 Article 120 applies in a situation where a property belonging
exclusively to one of spouses is the subject of an improvement during the
marriage at the expense of the conjugal partnership or through the acts of
efforts of either or both spouses.

 Determination of Ownership
 When Ownership is Vested
Determination of Ownership

(a) If the cost of the improvements and any resulting increase in value are more
than the value of the property at the time of the improvement, the entire
property shall belong to the conjugal partnership, subject to the
reimbursement of the value of the property of the owner-spouse at the time
of the improvement; or

(b) If the cost of the improvements and any resulting increase in value are less
than the value of the property at the time of the improvement, the entire
property shall belong to the owner of the property, subject to the
reimbursement of the cost of the improvement in favor of the conjugal
partnership
When Ownership is Vested

Ownership over the entire property shall be vested in favor of the

conjugal property or of the owner-spouse only upon reimbursement.
-END-