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G.R. No 176556, [July 04, 2012]
Rita C. Quiao (Rita) filed a complaint for legal separation
against petitioner Brigido B. Quiao (Brigido). RTC rendered a
decision declaring the legal separation thereby awarding the
custody of their 3 minor children in favor of Rita and all
remaining properties shall be divided equally between the
spouses subject to the respective legitimes of the children
and the payment of the unpaid conjugal liabilities.
Brigidos share, however, of the net profits earned by the
conjugal partnership is forfeited in favor of the common
children because Brigido is the offending spouse.
Neither party filed a motion for reconsideration and appeal
within the period 270 days later or after more than nine
months from the promulgation of the Decision, the
petitioner filed before the RTC a Motion for Clarification,
asking the RTC to define the term Net Profits Earned.
RTC held that the phrase NET PROFIT EARNED denotes
the remainder of the properties of the parties after
deducting the separate properties of each [of the] spouse
and the debts. It further held that after determining the
remainder of the properties, it shall be forfeited in favor of
the common children because the offending spouse does
not have any right to any share of the net profits earned,
pursuant to Articles 63, No. (2) and 43, No. (2) of the Family
The petitioner claims that the court a quo is wrong when it
applied Article 129 of the Family Code, instead of Article
102. He confusingly argues that Article 102 applies because
there is no other provision under the Family Code which

defines net profits earned subject of forfeiture as a result of

legal separation.
1. Whether Art 102 on dissolution of absolute community or
Art 129 on dissolution of conjugal partnership of gains is
applicable in this case. Art 129 will govern.
2. Whether the offending spouse acquired vested rights
overof the properties in the conjugal partnership NO.
3. Is the computation of net profits earned in the conjugal
partnership of gains the same with the computation of net
profits earned in the absolute community? NO.
1. First, since the spouses were married prior to the
promulgation of the current family code, the default rule is
that In the absence of marriage settlements, or when the
same are void, the system of relative community or conjugal
partnership of gains as established in this Code, shall govern
the property relations between husband and wife.
Second, since at the time of the dissolution of the spouses
marriage the operative law is already the Family Code, the
same applies in the instant case and the applicable law in so
far as the liquidation of the conjugal partnership assets and
liabilities is concerned is Article 129 of the Family Code in
relation to Article 63(2) of the Family Code.
2. The petitioner is saying that since the property relations
between the spouses is governed by the regime of Conjugal
Partnership of Gains under the Civil Code, the petitioner
acquired vested rights over half of the properties of the
Conjugal Partnership of Gains, pursuant to Article 143 of the
Civil Code, which provides: All property of the conjugal
partnership of gains is owned in common by the husband
and wife.

While one may not be deprived of his vested right, he may

lose the same if there is due process and such deprivation is
founded in law and jurisprudence.
In the present case, the petitioner was accorded his right to
due process. First, he was well-aware that the respondent
prayed in her complaint that all of the conjugal properties be
awarded to her. In fact, in his Answer, the petitioner prayed
that the trial court divide the community assets between the
petitioner and the respondent as circumstances and
evidence warrant after the accounting and inventory of all
the community properties of the parties. Second, when the
decision for legal separation was promulgated, the
petitioner never questioned the trial courts ruling forfeiting
what the trial court termed as net profits, pursuant to
Article 129(7) of the Family Code. Thus, the petitioner
cannot claim being deprived of his right to due process.
3. When a couple enters into a regime of absolute
community, the husband and the wife become joint owners
of all the properties of the marriage. Whatever property
each spouse brings into the marriage, and those acquired
during the marriage (except those excluded under Article 92
of the Family Code) form the common mass of the couples
properties. And when the couples marriage or community is
dissolved, that common mass 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.
In this case, assuming arguendo that Art 102 is applicable,
since it has been established that the spouses have no
separate properties, what will be divided equally between
them is simply the net profits. And since the legal
separationshare decision of Brigido states that the in the
net profits shall be awarded to the children, Brigido will still
be left with nothing.

On the other hand, when a couple enters into a regime of

conjugal partnership of gains under Article142 of the Civil
Code, the husband and the wife place in common fund the
fruits of their separate property and income from their work
or industry, and divide equally, upon the dissolution of the
marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the
marriage. From the foregoing provision, each of the couple
has his and her own property and debts. The law does not
intend to effect a mixture or merger of those debts or
properties between the spouses. Rather, it establishes a
complete separation of capitals.
In the instant case, since it was already established by the
trial court that the spouses have no separate properties,
there is nothing to return to any of them. The listed
properties above are considered part of the conjugal
partnership. Thus, ordinarily, what remains in the abovelisted properties should be divided equally between the
spouses and/or their respective heirs. However, since the
trial court found the petitioner the guilty party, his share
from the net profits of the conjugal partnership is forfeited in
favor of the common children, pursuant to Article 63(2) of
the Family Code. Again, lest we be confused, like in the
absolute community regime, nothing will be returned to the
guilty party in the conjugal partnership regime, because
there is no separate property which may be accounted for in
the guilty partys favor.
ART. 147-148, FCP: Property Regime of Unions
Without or Under A Void Marriage
Metrobank v. Pascual FACTS:
Respondent Nicholson Pascual and his ex-wife Florencia
Nevalga had their marriage declared void on the ground of
the formers psychological incapacity.Their conjugal property
was dissolved as ordered by the RTC, but the same was not
liquidated. Florencia later on field a Php 58 million loan from
Metrobank with spouses Oliveros, mortaging some
properties in order to secure the loan. One parcel of land

that belonged to the conjugal property of her previous

marriage was included in the mortgage. Among the
documents she submitted to procure the loan were the copy
of the said lots TCT and a waiver allegedly executed by
Nicholson in favor of Florencia. The said lot however was not
one of the properties covered by this waiver. Metrobank
ordered the foreclosure of the mortgaged properties due to
their (Florencia and spouses Oliveros) failure to pay the
loan, including the lot in question. Nicholson then filed an
action for declaring the mortgage null and void on the
ground that the lot is still a conjugal property which was
mortgaged without his consent. The RTC declared the
mortgage void, ruling that the lot is a conjugal property by
virtue of the provisions of Article 116 of the Family Code.
Furthermore, the RTC found that the waiver submitted by
Florencia was fatally defective in that the signature of
Nicholson in the said document is forged, and that the same
was executed before their marriage was declared void.
Additionally, the RTC found Metrobank to be a mortagee in
bad faith on the reason that it was negligent in checking the
validity of the documents, failing to see the true nature of
the said waiver. Metrobank moved for reconsideration but
was denied. The appeal by petitioner was also dismissed by
the CA for failing to overcome the presumption of a property
being part of the conjugal partnership under Article 116 of
the Family Code. With the presumption not being overcome,
the said disposition of the lot by Florencia is governed by
Article 124 of the same Code, which invalidates the
disposition of a conjugal property without the consent of the
other spouse. In this petition, Metrobank contends that the
RTC and CA erred in ruling that the said lot was part of the
conjugal property under Article 116, FCP due to the same
not purchased using conjugal funds. Another contention is
that the prior declaration of nullity of the marriage of
Florencia and Nicholson ipso facto dissolved their property
Whether the lot in question is part of the conjugal property,
and thus its disposition by Florencia is invalid.

YES, the lot in question is a conjugal property. While

Metrobank is correct in its contention that Article 116, FCP
does not apply, the Court finds Metrobanks argument that
Nicholson failed to prove that the said property was bought
using conjugal funds to be invalid. The governing law in this
case is Article 160 of the Civil Code, which governs the
presumption of a property acquired during the marriage to
be part of the conjugal partnership. There is no provision in
the law that states that for a property to be deemed
conjugal, the same should have also been bought using
conjugal funds. The fact that the property is acquired during
the marriage suffices, whether conjugal funds is used or not.
On the second contention by Metrobank, the same is still
wrong. It was established that the same property was
mortgaged two years after the dissolution of the conjugal
property, but the mortgage was before the liquidation of
their conjugal properties. In this scenario, the Court applied
Article 493 of the Civil Code which deals with the disposition
of conjugal property prior to its liquidation. It ruled that
Florencia had the right to mortgage the said property, but
Metrobanks right, as a mortgagee, is limited only to
Florencias share of the conjugal property. The mortgage on
one-half of the said lot is therefore invalid, as there was no
consent given by Nicholson. Furthermore, thewaiver
Nicholson allegedly executed in favor of Florencia was found
to be invalid, therefore giving additional basis to this ruling.
G.R. No. L-68873, March 31, 1989 Lucilda Dael v.
Intermediate Appellate Court, ET. Al.
FACTS: Cesario Cabutihan was married to Beinvenida
Durana, whom he had five children, upon the death of the
wife; Cesario contracted a second marriage with his former
wifes sister Victorina. Private respondents filed settlement
over the property of their deceased parents. Trial Court
rendered a decision holding that Victorina Durana had no
paraphernal properties brought to her marriage with
Cesario. That the copra business was formed during the first
marriage and Victorina used the same facilities, credit and
capital in managing the business, and the main source of

the income not only of Cesario and also of Victorina during

their respective lifetimes was the copra business. Hence, the
extent of the Estate of Victorina shall consist only of her
share in the inheritance of the Estate of Cesario Cabutihan.
Intermediate Appellate Court affirmed the decision of the
lower court.
ISSUE: Is the marital community of proprietary interest
continued to exist in the second marriage, even after the
Cesario-Beinvenida conjugal partnership has been dissolved
by the death of Bienvenida?
HOLDING: The first conjugal partnership was automatically
dissolved because of death of Bienvenida and it was
converted into an implied ordinary co-ownership. There
should be liquidation of properties before contracting
another marriage. Since there was none, the total mass of

the partnership property shall be divided between the

different partnerships in proportion to the duration of each
and to the property belonging to the respective spouses.
One-half (1/2) of the properties that pertain to the first
conjugal partnership belong to Cesario as his conjugal share
therein, while the other half shall be considered as inherited
by him and his five children as the heirs of Bienvenida. The
properties pertaining to the second partnership shall also be
equally divided, one-half (1/2) to belong to Cesario and the
other to Victorina as their respective shares in their conjugal
partnership properties. The share of Cesario should then be
divided among his heirs, namely, Victorina and his five (5)
children. To recapitulate, the estate of Victorina for
distribution to her heirs shall consist of her one-half (1/2)
share in the conjugal properties of the aforesaid second
marriage and her one-sixth (1/6) share in the