PROPERTY RELATIONS

BETWEEN HUSBAND AND WIFE

BY: ATTY. JOSEPH RANDI C. TORREGOSA
ARTICLE 74
 Property relations between spouses shall be governed in the following
order:
i. Marriage settlement, which must be in writing (otherwise void)
executed before the marriage
ii. By the Family Code provisions
iii. By the local customs
 Kinds of property regimes in marriage:
i. Absolute community of property regime
ii. Conjugal partnership of gains
iii. Complete separation of property
iv. Any other regime - ”mixed-up” or combination of any of the
regime mentioned above. They may stipulate which property is to
be exclusive or common
v. Special co-ownership (Article 147 and Article 148)
 To prejudice third parties, the marriage settlements shall be registered
in the local civil registry where the marriage contract is recorded, as
well as in the proper registries of properties
 But while registration of the marriage settlement prejudices third party,
the creditor may still go after the common fund for advances (subject
to reimbursement) in case the debtor-spouse has no or insufficient
property with which to satisfy the obligation (Article 94 [9])
ARTICLE 80
 In the absence of a contrary stipulation in a marriage settlement, the property relations of
the spouses shall be governed by Philippine laws, regardless of the place of the
celebration of the marriage and their residence, except:
i. Where both spouses are aliens (Orion Bank vs. Shigekane Suzuki, G.R. No.205487, 12
November 2014)
ii. With respect to extrinsic validity of contracts affecting property not situated in the
Philippines and executed in the country where the property is located
iii. With respect to the extrinsic validity of contracts entered into in the Philippines but
affecting property situated in a foreign country whose laws require different formalities
for its extrinsic validity
ARTICLE 81
 What is the effect if the marriage does not take place?
 Everything stipulated in the settlement, including donation by
reason of marriage made therein, shall be void. But stipulations
that do not depend on the marriage shall be valid.
EXAMPLE:

 Stipulation on the marriage settlement providing for

support for common children.
RULES ON DONATION

DONATION BY REASON OF MARRIAGE

A) Made by a third party in favor of either or both of would-be spouses:
 Made in a separate Deed of Donation and governed by the rules on ordinary
donation
 Not governed by the “more than 1/5” limitation, but subject to rule on
“reservation for sustenance” and legitime
 Valid even in the absence of a marriage settlement
 Revocable by the donor in case marriage does not materialize/take place
B) Made between future spouses
i. Made in a marriage settlement:
 There must be a valid marriage settlement
 The marriage settlement must stipulate a property regime other than
absolute community of property.
Reason:
 it is useless to donate something if donor ends up to be a co-owner of
the property donated.
 Property donated must not be more than 1/5 of the
donor’s present property
Reason:
o To prevent undue influence

 If marriage does not take place, donation is revoked by

operation of law (Article 81)
 ii. Made in a separate Deed of Donation
 There must be a valid marriage settlement, stipulating a property
regime other than absolute community property.

Reason:
 in the absence of marriage settlement, absolute community governs
where donation is useless.
 The “more than 1/5” limitation does not apply.
Reason:
 the danger of undue interference is remote, since
donation made unilaterally in a separate document
where no negotiation is required unlike in marriage
settlement where parties negotiate.
 Ifthe marriage does not take place, donation is merely
revocable (Article 86)
 Article 86 – Instances where donation by reason of
marriage may be revoked:
A) If the marriage is not celebrated or judicially declared void
ab initio, except donations made in the marriage settlement,
which is void under Article 81
- prescriptive period is five (5) years from the time the right
of action accrues (the date of marriage was supposed to be
solemnized) pursuant to Article 1149 of the Civil Code
i. If a subsequent marriage is void pursuant to Article 40
in relation to Articles 52 & 53, the donation shall be
revoked by operation of law when done acted in bad
faith, in accordance with Article 50, in relation to
Article 43 (3)
- If done does not want to return the property donated,
the donor shall file an action to recover and his/her
right of action accrues from finality of the court
decision declaring nullity of the marriage, subject to
the following prescriptive periods:
(a) If the donation involves personal property – eight
(8) years (Article 1140, Civil Code)

(b) If real property is involved – thirty (30) years from

finality of judgment (Article 1141, Civil Code)
ii. Void marriage under Article 44, where both contracting
parties to a subsequent marriage acted in bad faith and
one of them previously obtained a declaration of
presumptive death of the missing spouse, the donation
is void by operation of law
iii. Marriages judicially declared void on the grounds other
than Article 40 or Article 44, the donation is revocable
at the motion of the donor under Article 86 (1).
 Here, good or bad faith of the donee is irrelevant, the
donation is always revocable upon finality of the decision
declaring marriage void.
iv. Donation by reason of marriage made between
spouses who are guilty of adultery/concubinage at the
time of the donation (Article 35 [4]) is void under
Article 739 (2) of the Civil Code.
 Similarly, donations made while they are living
together as husband and wife without a valid marriage is
also void under Article 87 of the Family Code.
v. Marriage void under Article 53 where the spouses
previously obtained declaration of nullity of their
previous marriage (Article 40) but failed to comply with
the requirement under Article 51 & 52, the donation by
reason of marriage is revocable as the parties both acted
in good faith. Prescriptive period is five (5) years from
finality of decision of nullity.
B) When the marriage takes place without the consent of
parents or guardian as required by law (Article 45 [1])
 the donation by reason of marriage is revocable,
five (5) years from the time the donor knew of the non-
consent, which knowledge must come on or before
celebration of marriage
 here, it is not required that the marriage must first be
declared annulled before revocation can be had
C) When the marriage is annulled and donee acted in
bad faith (Article 86 [3])
 there is irreconcilable conflict between Article 86
(3) and Article 50, in relation to Article 43 (3), which
provides that if the donee acted in bad faith and the
marriage is annulled, donation by reason of marriage is
revoked by operation of law
QUERY: Which provision should prevail?

 Article 43 (3) which declares the donation revoked by

operation of law is more consistent with the purpose of an
annulment, i.e., to penalize the guilty party (Dean Mel
Sta. Maria)
D) Upon legal separation and the donee being the guilty
spouse

 prescriptive period is five (5) years from finality of

the decree of legal separation
• NOTE:
 where the ground for legal separation is
adultery/concubinage, the donation by reason of marriage
is void, under Article 739 (1) of the Civil Code, which
provides that donation made between persons guilty of
concubinage/adultery is void
E) Upon happening of a resolutory condition and such
condition is complied with.
F) When donee has committed an act of ingratitude, under
Article 765 of the Civil Code as follows:
i. Commission of any offense against the person, the
honor or property of the donor, or of his wife or
children under parental authority
ii. Imputing to the donor any criminal offense, or any act
involving moral turpitude, even through he should
prove it, unless the crime/act is committed against the
donee, his wife/child under parental authority
iii. Refusal to support when the donee is morally
and legally bound to give support to the donor
DONATION BETWEEN SPOUSES DURING THE MARRIAGE
 RULES:
1. Void, regardless of property regime and regardless of the extent in
proportion to the value of present property (Article 87)
Exception:
 moderate gifts on occasion of family rejoicing. Moderate is case to case
basis, depending on the capacity of the donor.
2. The rule applies to donations between persons living together without a valid
marriage or under a common-law relationship (Article 87; Cirila Arcaba
vs. Erlinda Tabancura, G.R. No.146683, 22 November 2001)
3. The rule likewise applies to donation between persons in an adulterous
relationship (Article 739)
4. It also applies to indirect donation (Article 134, Civil Code)
Exception – donation to a common child for profession (Article 94 [8] and
Article 12, 18)
DONATIONS BY EITHER SPOUSE OF A COMMON PROPERTY TO A
THIRD PARTY (ARTICLE 98)
 RULES:
a) Requires consent of other spouse; otherwise void (Articles 96 and 124)
Exceptions - moderate donations:
i. for charity; or
ii. on occasions of family rejoicing or family distress
 Moderate nature is case to case depending on the capacity of donor
FORMALITIES REQUIRED FOR DONATION BY REASON OF
MARRIAGE:
 Donation by Reason of Marriage is governed by the rules on ordinary
donations. Thus:
(a) If it involves personal property:
- Oral (5,000 or below) (Article 748
- Written (exceeds 5,000)
(b) If real property is involved – must be in a public instrument
RULE ON CONTRACT OF SALE BETWEEN SPOUSES DURING
MARRIAGE:
 Article 1490 – The husband and the wife cannot sell property to each other,
except:
1. When a separation of property was agreed upon in the marriage
settlements; or
2. When there has been a judicial separation of property under Article 91
SYSTEM OF ABSOLUTE COMMUNITY

A) When does absolute community of property regime govern? (Article 75)

i. When the would-be spouses stipulate in the marriage settlement
that such regime shall govern their property relation
ii. When there is no marriage settlement, except where complete
separate is mandatory (Article 103 & 130)
iii. When the property regime agreed upon is void (as when the parties
stipulated that neither the absolute community of property regime nor the
local custom shall govern), except where complete separation of property
regime is mandatory under Article 103 & 130 of the Family Code (Failure
to liquidate when marriage is dissolved by death)
B) When does the ACP commence?

 At the precise moment the marriage is celebrated, and any contrary

stipulation is void
C)What composes the absolute community property?
 Unless otherwise provided in the Family Code or
stipulated as exclusive in the marriage settlement, all
properties owned by the spouses at the time of the
celebration of the marriage or acquired thereafter (Article
91).
D) What properties are excluded from the absolute community?

i. Properties stipulated by the spouses in their marriage settlement

to be exclusive (contractual exclusion)
ii.Those enumerated under Article 92 (statutory exclusion):
a. property acquired during the marriage by gratuitous title by
either spouse, and the fruits/income thereof, unless
expressly provided by donor/grantor that they should form
part of community of property:
 if the property was acquired by gratuitous title
before marriage, it forms part of the community property
(Article 91)
b. property for personal and exclusive use of either spouse, except
jewelry

 take note of the relative nature of personal and exclusive

property, based on value
 may be acquired before or after marriage
QUERY:

 What is the status of a piece of jewelry acquired by

gratuitous title during the marriage for the exclusive and
personal use of either spouse?
c. property acquired before the marriage by either
spouse who has legitimate descendants by a former
marriage, and the fruits/income of such property
(Sps. Atty. Erlando Abrenica and Joena
Abrenica vs. Law Firm of Abrenica, Tungol and
Tibayan, G.R. No.180752, 18 June 2012)
NOTE:
 For Article 92 (3) to apply, the spouse must have a
legitimate descendants by a former marriage, otherwise
the property acquired before the second or subsequent
marriage forms part of the absolute community property.
EXCEPTION:
 Where the previous marriage was dissolved by death and
the surviving spouse contracted a subsequent marriage
without liquidating the properties in the previous
marriage, the second or subsequent marriage shall
mandatorily be governed by complete separation of
property regime, and therefore, any property acquired by
the surviving spouse before the second or subsequent
marriage shall be exclusive to his/her (Article 103 and
Article 130).
E) What is the nature of property acquired using separate/exclusive
property?
 it shall form part of the community property (Dean Sta. Maria), because:
i. Article 92 is silent, unlike conjugal partnership of gains
ii. Property acquired during marriage is presumed to belong to the community,
unless proved otherwise
iii. The only exceptions are “contractual exclusions” and “statutory exclusions”
and no other.
F) What is the status of a property acquired during the marriage through sale,
disposition, exchange, or barter with an “exclusive property”?
 it will become common, since it is not among the “contractual” or “statutory”
exclusions
 Article 92 is silent, unlike conjugal partnership of gains
OPPOSITE VIEW:
 object bought using separate property, the proceeds obtained from the sale
of separate property or property received by way of exchange/barter with
separate properties will not necessarily make the object purchased, the
proceeds of the sale, or the object subject matter of barter/exchange as
absolute community, otherwise it would be easy to circumvent the law or
negate the purpose of any stipulation in the marriage settlement making
some properties exclusive.
REBUTTAL:
 this view has no support in the Family Code. Besides, there would be no
circumvention, since to keep them exclusive, then they shall be kept at
their original state. The moment the exclusive owner parts with it, the
proceeds or objects received in return is an entirely different property not
anymore protected under Article 92.
CHARGES UPON AND OBLIGATIONS OF THE ABSOLUTE
COMMUNITY OF PROPERTY (ARTICLE 94)

(1) The support of the spouses, their common children and

legitimate children of either spouse;
 Support for illegitimate children of either spouse shall be the
exclusive liability of the debtor-spouse;
(2) All debts and obligations contracted during the marriage by the
designated administrator-spouse for the benefit of the
community, or by both spouses, or by one spouse with the
consent of the other.
NOTE:
 If the debt or obligation is incurred by both spouses or by
one with the consent of the other, the debt or obligation is
always chargeable against the ACP. It does not matter if
no benefit inured to the family. Neither does it matter if
the debt or obligation was incurred in an isolated
transaction.
(

3) Debts and obligations contracted by either spouse without the

consent of the other to the extent that the family may have been
benefited
NOTE:
Article 94 (3) is subject to the following rules:
(a) Debt or obligation incurred in the exercise of an immoral
profession (Article 73)
(b) The rule on “isolated transaction” (Ayala Investment
and Development Corporation vs. Spouses Alfredo
and Encarnacion Ching, G.R. No.118305, 12 February
1998)
(4) All taxes, liens, charges and expenses, including major or minor repairs,
upon the community property
(5) All taxes and expenses for mere presentation made during marriage upon
the separate property of either spouse used by the family
(6) Expenses to enable either spouse to commence/complete a
professional/vocational course, or other activity for self-improvement
(7) Ante-nuptial debts of either spouse, insofar as they have redounded to the
benefit of the family
(8) The value of what is donated or promised by both spouses in favor of their
common legitimate children for their exclusive purpose of
commencing/completing a professional/vocational course or any activity
for self-improvement
(9) Expenses of litigation between the spouses unless the suit is found to be
groundless.
RULE IF THE PROPERTY OF THE ACP ARE NOT
SUFFICIENT TO SETTLE THE ACP DEBTS AND
OBLIGATIONS:

 The spouses are solidarily liable for the unpaid balance

with their respective separate properties (Article 94 (10).
DEBTS AND OBLIGATIONS CHARGEABLE AGAINST
THE EXCLUSIVE PROPERTY OF THE DEBTOR-
SPOUSE Article 94 (9):
(a) antenuptial debts of either spouse that do not redound to
the benefit of the family
(b) support of illegitimate children of either spouse
(c) Liabilities incurred by either spouse arising from crime
or quasi-delict (Sps. Roberto and Venus Buado vs.
Court of Appeals, G.R. No.145222, 24 April 2009).
(d) losses in games of chance incurred by either spouse.

 whatever gains form part of the absolute community

property
RULE IF DEBTOR-SPOUSE HAS NO OR HAS
INSUFFICIENT PROPERTY TO PAY HIS/HER EXCLUSIVE
DEBT UNDER ARTICLE 94 (9):
 While debts and obligations under Article 94 (9) are exclusive obligation
of debtor-spouse, in case of absence or insufficiency of exclusive
property of the debtor spouse, the payment shall be considered as
advances to be deducted from the share of the debtor-spouse upon
liquidation of the community. Hence, such obligations may be charged
against the ACP subject to reimbursement upon liquidation.
NOTE:
 the advance-reimbursement mechanism provided for under Article 94 (9)
applies only to the following:
(a) antenuptial debts not redounding to the benefit of the family;
 obligations incurred by one spouse during the marriage without the
consent of the other spouse not redounding to the benefit of family is not
covered.
(b) support of illegitimate children;
(c) liability arising from crime/quasi-delict.
(d)Support for legitimate ascendants, descendants, whether
legitimate or illegitimate (except common children and
legitimate child of either spouse), and brothers and
sisters, whether legitimate or illegitimate (Article 197)
Ownership, Administration, Enjoyment, and
Disposition of the Community Property (Art. 96)

RULE:
(A) Acts of administration
 Both spouses shall jointly administer/joint administration. But in case of
disagreement, the husband’s decision shall prevail, subject to the recourse of
the court by the wife for proper remedy, which must be availed of within five
years from the date of the contract implementing such decision (Article 96,
first paragraph)
 The wife’s cause of action is rescission on the ground that the transaction
entered into by the husband is prejudicial or caused injury to the ACP
(lesion)
 In the event one spouse is incapacitated or otherwise
unable to participate in the administration of the common
properties, the other spouse may assume sole power of
administration, but such power of administration does not
include the power of disposition or encumbrance (Article
96, first paragraph).
(B) Acts of ownership, disposition or encumbrance
 Any sale, encumbrance, alienation or disposition made by
one spouse without the consent of the other or without the
written authority of the court is void (Second paragraph
of Article 96; Spouses Antonio and Luzviminda
Guiang vs. Court of Appeals, G.R. No.125172, 26 June
1998; Manuel Fuentes and Letecia Fuentes vs.
Conrado Roca, et. al. G.R. No.178902, 21 April 2010).
 While the sale, encumbrance, alienation and disposition is
void, the transaction shall be construed as a continuing
offer on the part of the consenting spouse and the third
person, and may be perfected as a binding contract upon
the acceptance by the other spouse or authorization by the
court before the offer is withdrawn by either or both
offerors (Article 96, second paragraph)
 When the other spouse or the court eventually gives the
consent or authorization, the previous transaction is not
ratified since a void contract cannot be ratified. What
happens is that there will now be meeting of the minds
since the void transaction is a continuing offer, thereby
resulting in the perfection of the contract. The effect of
the eventual consent or court authority does not retroact
to the time of the initial transaction.
 The court approval is only required if the other spouse is unable to
participate in the acts of disposition or encumbrance, such as when
one spouse is absent, or separated in fact, or has abandoned the
other, or consent is withheld or cannot be obtained. Where such
spouse is incapacitated or incompetent, the required consent must
be obtained from the latter’s guardian appointed by the court (Uy
vs. Jardeleza, 346 SCRA 246; Jardeleza vs. Jardeleza, 347 SCRA
210; Thelma Manalo vs. Norma Fernandez and Edilberto
Camaisa, G.R. No. 147978, 23 January 2002).
 The entire transaction is void. The interest of either
spouse to the property belonging to the ACP is only
inchoate, which can only ripen upon liquidation. While
ACP is a special kind of co-ownership, Article 493 –
which allows any co-owner to sell or otherwise dispose of
his or her undivided share in the co-owned property –
does not apply.
EXCEPTIONS:
(A) Where the sale or disposition was made by either spouse
for hospitalization and medical expenses, and the other
spouse unreasonably withheld his/her consent, the sale is
valid insofar as the share of the consenting spouse. Hospital
and medical expenses for either or both spouses are
chargeable against the CPG (Estela Costuna vs. Laureana
Domondon, G.R. No.82753, 19 December 1989).
(b)Either spouse may dispose of his/her share/interest in the
community property if the disposition is in the nature of
a disposition mortis causa and made in a will, because it
is to take effect upon death, at which time the
community property will have been terminated. Hence,
the prohibition no longer applies (Articles 97 and 99(1).
(c) The court did not declare void the entire disposition of a
conjugal property despite absence of consent of one of
the spouses because of the subsequent death of the
consenting/disposing spouse. Applying justice and
equity, since the conjugal partnership was already
terminated upon the death, there is no need to
invalidate the share of the disposing deceased spouse
(Spouses Julieta and Fernando Carlos vs. Juan
Cruz Tolentino, G.R. No.234533, 27 June 2018)
Dissolution of Absolute Community Property
Regime

 The ACP is terminated or dissolved:

(a) By death of either spouse
(b) Upon legal separation
(c) Upon annulment or nullity of marriage
(d) By Judicial separation of property during marriage
Liquidation of the Absolute Community assets and
liabilities (Article 102)

PROCEDURE:
(1) Inventory of the common and separate properties
(2) Payment of all community debts and obligations. In case of insufficiency, each
spouse shall be solidarilly liable with their respective separate properties
 Whatever remains of the exclusive/separate properties shall be delivered to
each of the spouses-owner
 The net remainder of the properties of the absolute community shall constitute
its net assets, which shall be divided equally between spouses, unless a different
sharing scheme is agreed upon in the marriage settlement
CONCEPT OF NET PROFITS:
 For purpose of computing the “net profits” subject to
forfeiture in accordance with articles 43 (2) and 63 (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 at the time of dissolution.
 While what is forfeited is only the share of the guilty
spouse in the “net profits”, not the share in the capital
asset, nothing will be returned to the guilty party upon
liquidation (whether under ACP or CPG) where there is
no separate property which may be accounted for in the
guilty party’s favor (Brigido Quiao vs. Rita c. Quiao,
G.R. No. 176556, 4 July 2012).
(3) Delivery of presumptive legitimes to the common children upon partition
(4) Unless otherwise agreed upon in the partition of properties, the conjugal
dwelling and the lot shall be adjudicated to the spouse with whom the
majority of the common children choose to remain. Children below seven
(7) are deemed to have chosen the wife, unless the court shall decide. In
case there is no majority, the court shall decide taking into consideration
the best interest of the children.
NOTE:
 The rule on the disposition of the family dwelling under Article 102
applies only if the property regime that existed in the marriage
before its dissolution is either ACP or CPG.
 Thus, when the marriage is dissolved by judicial declaration of
nullity, the rule under Article 102 does not apply, since the property
regime that existed in a void marriage is neither ACP nor CPG, but
co-ownership under Articles 147 and 148.
 Under Article 496 of the Civil Code, the properties owned
in common, including the family home, may be
partitioned by agreement between the parties or by
judicial proceedings. It is not necessary to liquidate the
properties of the spouses in the same proceeding for
declaration of nullity of marriage
EXCEPTIONS:
(a) Marriage declared void under Article 40; and
(b) Marriage declared annulled under Article 45.
(Antonio Valdez vs. Regional Trial Court of Quezon City,
G.R. No.122749, 31 JULY 1996; Alain Diño vs. Ma.
Caridad Diño, G.R. No.178044, 19 January 2011; Salas vs.
Aguila, G.R. No.202370, 3 September 2003; Barrido vs.
Nonato, G.R. No.G.R. No.176492, 20 October 2014)
Article 103
 If marriage is terminated by death, the community of 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 it, either judicially or extrajudicially within one (1) year from death.
Effects if no liquidation is made within one (1) year from death
 Any disposition is void.

EXCEPTION:
 Where the sale does not affect the share adjudicated to the other heirs after
liquidation, the sale is valid affecting only the share of the selling co-owner
(Heirs of Protacio Go vs. Esther Servacio, G.R. No.157537, 7 September
2011; Rafael Uy vs. Estate of Vipa Fernandez, G.R. No.200612, 05 April
2017).
REASON:

 Under Article 493, every co-owner has the right to dispose of

his/her undivided share in the co-owned property without need
for consent of the other heirs. If a co-owner disposes of the
entire co-owned property without the consent of the other co-
owners, the sale is valid insofar as the share of the consenting
co-owner, and the buyer becomes a co-owner in place of the
consenting co-owner.
EFFECTS OF NON-LIQUIDATION ON THE
SUBSEQUENT MARRIAGE:
 If surviving spouse contracts subsequent marriage
without liquidation, the mandatory regime of complete
separation of property shall govern the property relation
of the subsequent marriage (Article 103). But the
second/subsequent marriage is valid.
NOTE:

 Compare the effect of non-liquidation under Article 103

and Article 53, in relation to Article 50 and 52, as to the
status of the subsequent marriage.