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What is the procedure after the dissolution of the absolute community regime?

(1) An inventory shall be prepared, listing separately all the properties of the absolute community and
the exclusive properties of each spouse.
(2) The debts and obligations of the absolute community shall be paid out of its assets. In case of
insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their
separate properties in accordance with the provisions of the second paragraph of Article 94 of
the Family Code.
(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each
of them.
(4) The net remainder of the properties of the absolute community shall constitute its net assets,
which shall be divided equally between husband and wife, unless a different proportion or division
was agreed upon in the marriage settlements, or unless there has been a voluntary waiver of such
share provided in the Family Code. For purpose of computing the net profits subject to forfeiture in
accordance with Articles 43, No. (2) and 63, No. (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 the market value at the time of its dissolution.
(5) The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51 of the Family Code.
(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal
dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the majority
of the common children choose to remain. Children below the age of seven years are deemed to
have chosen the mother, unless the court has decided otherwise. In case there in no such majority,
the court shall decide, taking into consideration the best interests of said children.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-8190

May 28, 1958

GONZALO GARCIA, plaintiff-appellant,


vs.
CONSOLACION MANZANO, defendant-appellee.
Fernandez and Benedicto and Primo L. Agsaoay for appellant.
Diokno and Sison and De Santos, Herrera and Delfino for appellee.

REYES, J.B.L., J.:


This is an action filed by husband Gonzalo Garcia against his wife Consolacion Manzano for the
judicial declaration of the separation of their conjugal partnership property (Civil Case No. 23099,
Court of First Instance of Manila).
Plaintiff Gonzalo Garcia alleged in his complaint that he and defendant are husband and wife but
they have been living separately from each other since 1948, all attempts at reconciliation between
them having failed; that plaintiff, a duly licensed doctor of veterinary science, used to be employed in
the slaughter-house of the City of Manila, while defendant, with plaintiff's knowledge and consent,
engaged in the business of slaughtering large cattle and selling the fresh meat in the city; that as a
result of their joint efforts, plaintiff and defendant acquired and accumulated real and personal
properties; that upon the separation of the spouses, the defendant assumed the complete
management and administration of the conjugal partnership property, has been enjoying said
property as well as its accessions and fruits to the exclusion and prejudice of plaintiff, and has even
fictitiously transferred or alienated a majority of said property in favor of third persons; that since
defendant assumed the management and administration of the conjugal partnership property, she
has neglected to file any income tax returns; at defendant has failed and refused to turn over and
deliver to plaintiff his rightful share and participation in the conjugal partnership property and its
fruits. Wherefore, plaintiff prayed that judgment be rendered ordering defendant to render a
complete accounting of the conjugal partnership property and its fruits, that judicial pronouncement
be made ordering the separation of the conjugal partnership property of the spouses, and that the
rightful share therein of each of them be adjudicated pursuant to law.
Upon receipt copy of the complaint and summons, defendant filed a motion to dismiss the complaint
on the ground of failure to state a cause of action because "it does not allege any of the grounds
recognized by Article 191 of the new Civil Code for decreeing a judicial separation of properties".
Plaintiff vigorously opposed the motion to dismiss, claiming that he is entitled to some relief, legal or
equitable, under the allegations of his complaint, and that Article 191 of the new Civil Code may also
be availed of by the husband where the administration of the conjugal partnership property has been
forcibly taken from him by his wife and she abuses the management thereof. Acting on the motion to
dismiss, the lower court held that plaintiff's complaint is not included under the provisions of Articles
190 and 191 of the new Civil Code providing for judicial separation of the conjugal partnership
property, and that the husband being the legal administrator of the partnership, he "continuo
consuficientes remedios legales para asegurar y reafirmar su autoridad en cuanto al manejo de log
bienes gan anciales dentro de la sociedad conyugal," and ordered the dismissal of the complaint
without prejudice. Plaintiff moved for reconsideration, which was denied. Hence, his present appeal.
We agree with the court below that the complaint does not establish a case for separation of
property. Consistent with its policy of discouraging a regime of separation and not in harmony with
the unity of the family and the mutual affection and help expected of the spouses, the Civil Codes
(both old and new) require that separation of property shall not prevail unless expressly stipulated in
marriage settlements before the union is solemnized or by formal judicial decree during the
existence of the marriage (Article 190, new Civil Code; Article 1432, old Code); and in the latter
case, it may only be ordered by the court for causes specified in Article 191 of the new Civil Code:

ART. 191. The husband or the wife way ask for the separation of property, and it shall be
decreed when the spouse of the petitioner; has been sentenced to a penalty which carries
with it civil interdiction, or has been declared absent, or when legal separation has been
granted.
In case of abuse of powers of administration of the conjugal partnership property of the
husband, or in case of abandonment by the husband, separation of property may also be
ordered by the court according to the provisions of articles 167 and 173, No. 3.
In all these cases, it is sufficient to present the final judgment which has been entered
against the guilty or absent spouse.
The husband and the wife may agree upon the dissolution of the conjugal partnership during
the marriage, subject to judicial approval. All the creditors of the husband and of the wife, as
well as of the conjugal partnership, shall be notified of any petition for judicial approval of the
voluntary dissolution of the conjugal partnership, so that any such creditors may appear at
the hearing to safeguard his interests. Upon approval of the petition for dissolution of the
conjugal partnership, the court shall take such measures as may protect the creditors and
other third persons.
After dissolution of the conjugal partnership, the provisions of Arts 214 and 215 shall apply.
The provisions of this Code concerning the effect of partition stated in Arts. 498 to 501 shall
be applicable.
This enumeration must be regarded as limitative, in view of the Code's restrictive policy. The
appellant recognizes that his case does not come within the purview of the first paragraph of the
Article quoted; but vigorously contends that the provisions of the second paragraph, like those of
Articles 167 and 178, should be interpreted as applicable, mutatis matandis, to the husband, even if
the letter of the statute refers to the wife exclusively.
ART. 167. In case of abuse of powers of administration of the conjugal partnership property
by the husband, the courts, on petition of the wife, may provide for a receivership, or
administration by the wife, or separation of property.
ART. 178. The separation in fact between husband and wife without judicial approval, shall
not affect the conjugal partnership, except that:
(1) In the spouse who leaves the conjugal home or refuses to live therein without just cause,
shall not have a right to be supported;
(2) When the consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be necessary;
(3) If the husband has abandoned the wife without just cause for at least one year, she may
petition the court for a receivership or administration by her of the conjugal partnership
property, or separation of property.

In support of his thesis, appellant argues that in case of mismanagement and maladministration by
the wife, the husband should be entitled to the same relief as the wife, otherwise there would be a
void in the law. This contention ignores the philosophy underlying the provisions in question. The
wife is granted a remedy against the mismanagement or maladministration of the husband because
by express provision of law, it is the husband who has the administration of the conjugal partnership.
ART. 165. The husband is the administrator of the conjugal partnership.
ART. 172. The wife cannot bind the conjugal partnership without the husband's consent,
except in cases provided by law.
In the system established by the Code the wife does not administer the conjugal partnership unless
with the consent of the husband, or by decree of court and under its supervision (Arts. 168, 196)
"with such limitations as they (the courts) may deem advisable" (Art. 197 in relation to Article 196).
Legally, therefore, the wife can not mismanage the conjugal partnership property or affairs, unless
the husband or the courts tolerate it. In the event of such maladministration by the wife (and
disregarding the case of judicial authorization to have the wife manage the partnership, since such a
case is not involved), the remedy of the husband does not lie in a judicial separation of property but
in revoking the power granted to the wife and resume the administration of the community property
and the conduct of the affairs of the conjugal partnership. He may enforce his right of possession
and control of the conjugal property against his wife (Perkins vs. Perkins, 57 Phil., 205) and seek
such ancillary remedies as may be required by the circumstances, even to the extent of annulling or
rescinding any unauthorized alienations or incumbrances, upon proper action filed for that purpose.
For this reason, the articles above quoted contemplate exclusively the remedies available to the wife
(who is not the legal administrator of the partnership) against the abuses of her husband because
normally only the latter can commit such abuses.
Appellant avers that even if separation of property is not available, the allegations of his complaint
entitle him to accounting and other relief. Unfortunately, the complaint not only expressly pleads the
nature of the action as one for separation of property, but its allegations clearly proceed on the
theory that the plaintiff is entitled to such separation. Thus, the averments regarding fictitious or
fraudulent transfers are incompatible with an action between wife and husband alone, for it is
elementary that the legality of sigh transfers can not be passed upon without giving the transferees
an opportunity to be heard. .
Everything considered, we believe that the action of the court a quo in dismissing the action in view
of the impropriety of the principal remedy sought, but without prejudice to proper proceedings, would
better suit the interests of equity and justice, facilitating the clarification and simplification of the
issues involved.
Wherefore, the judgment appealed from is affirmed, with costs against appellant. So ordered.
Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Endencia and Felix,
JJ., concur

SECOND DIVISION

LOREA DE UGALDE, G.R. No. 130623


Petitioner,
Present:
CARPIO, J.,
Acting Chairperson,
CARPIO MORALES,
AZCUNA,*
- versus - TINGA, and
VELASCO, JR., JJ.

JON DE YSASI, Promulgated:


Respondent. February 29, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 21 November
1996 Decision[2] and 2 September 1997 Resolution[3] of the Court of Appeals in
CA-G.R. CV No. 41121.
The Antecedent Facts
On 15 February 1951, Lorea de Ugalde (petitioner) and Jon de Ysasi (respondent)
got
married
before
Municipal
Judge Remigio Pea of Hinigaran, Negros Occidental. On 1 March 1951,[4] Rev.

Msgr. Flaviano Arriola solemnized their church wedding at the San Sebastian
Cathedral in Bacolod City. Petitioner and respondent did not execute any antenuptial agreement. They had a son named Jon de Ysasi III.
Petitioner and respondent separated sometime in April 1957. [5] On 26 May 1964,
respondent allegedly contracted another marriage with Victoria Eleanor Smith
(Smith) before Judge Lucio M. Tanco of Pasay City. Petitioner further alleged that
respondent and Smith had been acquiring and disposing of real and personal
properties to her prejudice as the lawful wife. Petitioner alleged that she had been
defrauded of rental income, profits, and fruits of their conjugal properties.
On 12 December 1984, petitioner filed a petition for dissolution of the conjugal
partnership of gains against respondent before the Regional Trial Court
of Negros Occidental,Bacolod City, Branch 48 (trial court). The case was docketed
as Special Proceedings No. 3330. In particular, petitioner asked for her conjugal
share in respondents inheritance as per the settlement of the estate of respondents
parents, Juan Ysasi[6] and Maria Aldecoa de Ysasi, who died on 17 November 1975
and 25 February 1979, respectively.[7]Petitioner also prayed for a monthly support
of P5,000 to be deducted from her share in the conjugal partnership; the
appointment of a receiver during the pendency of the litigation; the annulment of
all contracts, agreements, and documents signed and ratified by respondent with
third persons without her consent; and payment of appearance and attorneys fees.
Respondent countered that on 2 June 1961, he and petitioner entered into an
agreement which provided, among others, that their conjugal partnership of gains
shall be deemed dissolved as of 15 April 1957. Pursuant to the agreement, they
submitted an Amicable Settlement in Civil Case No. 4791 [8] then pending before
the Court of First Instance ofNegros Occidental (CFI). The Amicable Settlement
stipulates:
2. That the petitioner shall pay the respondent the sum of THIRTY THOUSAND
PESOS (P30,000.00) in full satisfaction of and/or consideration for and to cover
any and all money and/or property claims she has or may have against the
petitioner in the future, including but not limited to pensions, allowances,
alimony, support, share in the conjugal property (if any), inheritance, etc.;

3. That for and in consideration of the foregoing premises and the payment of
THIRTY THOUSAND pesos (P30,000.00), the receipt of which sum is hereby
acknowledged and confessed by and to the entire satisfaction of the respondent,
she hereby completely and absolutely transfer, convey, assign, set over, waive,
remise, release and forever quitclaim, unto petitioner, his successors and
administrators, any and all rights, claims and interests which the respondent has
or may hereafter have against the petitioner arising, directly or indirectly, from the
fact that the petitioner and respondent were married on March 1, 1951, including
but not limited to any and all money and/or property claims mentioned in the
paragraph immediately preceding;
4. That, except with reference to the custody of the boy, the parties herein hereby
waive any and all rights to question the validity and effectivity of the provisions
of this amicable settlement, as well as the right to raise these matters on appeal[.]
[9]

In its Order[10] dated 6 June 1961, the CFI approved the Amicable Settlement.
Respondent further alleged that petitioner already obtained a divorce from him
before the Supreme Court of Mexico. Petitioner then contracted a second marriage
with RichardGaloway (Galoway). After Galoways death, petitioner contracted a
third marriage with Frank Scholey. Respondent moved for the dismissal of the
petition for dissolution of the conjugal partnership of gains on the grounds
of estoppel, laches, and res judicata.
In his Supplemental Affirmative Defense, respondent alleged that the marriage
between him and petitioner was void because it was executed without the benefit
of a marriage license.
The Ruling of the Trial Court
On 22 November 1991, the trial court[11] rendered judgment as follows:
WHEREFORE, after collating the evidence, the evidence for the respondent is
preponderant to prove his affirmative and special defenses that the petition does
not state a sufficient cause of action. On these bases and under the doctrine
of res judicata, the petition is hereby DISMISSED. Without pronouncements as to
costs and attorneys fees.

SO ORDERED.[12]

The trial court ruled that the existence of a conjugal partnership of gains is
predicated on a valid marriage. Considering that the marriage between petitioner
and respondent was solemnized without a marriage license, the marriage was null
and void, and no community of property was formed between them. The trial court
further ruled that assuming that the marriage was valid, the action was barred
by res judicata. The trial court noted that petitioner and respondent entered into an
amicable settlement in Civil Case No. 4791. The amicable settlement was
approved by the CFI and petitioner may no longer repudiate it. Finally, the trial
court ruled that there was no proof to show that during their union, petitioner
and respondent acquired properties.
Petitioner appealed from the trial courts Decision before the Court of Appeals.

The Ruling of the Court of Appeals


On 21 November 1996, the Court of Appeals affirmed the trial courts Decision.
The Court of Appeals ruled that the absence of a marriage license is fatal and made
the marriage between petitioner and respondent a complete nullity. Hence, the trial
court did not err in finding that there was no conjugal partnership of gains between
petitioner and respondent. The Court of Appeals further ruled that the compromise
agreement is a valid contract between the parties Since the compromise agreement
was entered into freely, voluntarily, and with the full understanding of its
consequences, it is conclusive and binding on the parties. The Court of Appeals
also ruled that the action was barred by laches since it was filed by petitioner 23
years from the time the CFI approved the additional amicable settlement in Civil
Case No. 4791. The Court of Appeals sustained the trial courts
ruling that respondents right over the estate of his deceased parents was only
inchoate and there was no evidence that petitioner and respondent acquired any
property that could be considered conjugal.

Petitioner filed a motion for reconsideration. In its 2 September 1997 Resolution,


the Court of Appeals denied the motion for lack of merit.
Hence, the petition before this Court, raising the following assignment of errors:
The lower court erred in ruling that since the marriage of the plaintiff and
respondent was void due to the absence of a marriage license, no conjugal
partnership arose from their union.
The lower court erred in ruling that the amicable settlement in Civil Case No.
4791 bars all claims by the plaintiff under the principle of res judicata.
The lower court erred in ruling that respondents right to [the] estate of his
deceased parents was merely inchoate, thus, no property devolved to respondent
and no conjugal partnership was formed.
The lower court erred in ruling that the appellants petition did not sufficiently
state a cause of action.[13]

The Issue
The issue in this case is whether the Court of Appeals committed a reversible error
in affirming the trial courts Decision which dismissed the action for dissolution of
conjugal partnership of gains.
The Ruling of this Court
The petition is without merit.
Validity of Petitioner and Respondents Marriage
is the Subject of a Different Court Proceeding
Special Proceedings No. 3330 is an action for Dissolution of Conjugal Partnership
of Gains. In its 22 November 1991 Decision, the trial court ruled that the existence
of conjugal partnership of gains is predicated on a valid marriage. The trial court
then proceeded to rule on the validity of petitioner and respondents marriage. The
trial court ruled that it was shown by competent evidence that petitioner and
respondent failed to obtain a marriage license. Hence, the marriage between

petitioner and respondent was null and void, and no community of property was
formed between them.
The trial court exceeded its jurisdiction in ruling on the validity of petitioner and
respondents marriage, which was only raised by respondent as a defense to the
action for dissolution of the conjugal partnership of gains. The validity of
petitioner and respondents marriage was the subject of another action, Civil Case
No. 430 for Judicial Declaration of Absolute Nullity of Marriage before the
Regional Trial Court of Himamaylan, Negros Occidental, Branch 55. In a
Decision[14] dated 31 May 1995, Civil Case No. 430 was resolved, as follows:
In this jurisdiction it is required, except in certain cases, that the marriage license
must first be secured by the parties and shown to the judge before the latter can
competently solemnize the marriage. In this present case, none was ever
secured. Failure to comply with the formal and essential requirements of the law
renders the marriage void ab initio. Since void marriage can be assailed anytime
as the action on assailing it does not prescribe, the plaintiff is well within his right
to seek judicial relief.
WHEREFORE, premises considered[,] judgment is hereby rendered declaring the
marriage between JON A. DE YSASI and LOREA DE UGALDE as NULL and
VOID AB INITIO. The Local Civil Registrar for the Municipality of Hinigaran is
hereby directed to cancel the entry of marriage between JON A. DE YSASI and
LOREA DE UGALDE from the Marriage register and to render the same of no
force and effect.
Lastly, furnish copy of this decision the National Census and Statistics Office,
Manila, to make the necessary cancellation of the entry of marriage between the
plaintiff and the defendant.
SO ORDERED.[15]

No appeal or motion for reconsideration of the 31 May 1995 Decision in Civil


Case No. 430 has been filed by any of the parties, and a Certification of finality
was issued on 20 November 1995. Thus, the marriage between petitioner and
respondent was already judicially annulled as of 20 November 1995. The trial

court had no jurisdiction to annul again in Special Proceedings No. 3330 the
marriage of petitioner and respondent.
Conjugal Partnership of Gains Dissolved
in Civil Case No. 4791
The finality of the 6 June 1961 CFI Order in Civil Case No. 4791 resulted in the
dissolution of the petitioner and respondents conjugal partnership of gains.
Petitioner and respondent were married on 15 February 1951. The applicable law
at the time of their marriage was Republic Act No. 386, otherwise known as the
Civil Code of the Philippines (Civil Code) which took effect on 30 August 1950.
[16]
Pursuant to Article 119 of the Civil Code, the property regime of petitioner and
respondent was conjugal partnership of gains, thus:
Art. 119. The future spouses may in the marriage settlements agree upon absolute
or relative community of property, or upon complete separation of property, or
upon any other regime. 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.

Article 142 of the Civil Code defines conjugal partnership of gains, as follows:
Art. 142. By means of the conjugal partnership of gains the husband and wife
place in a common fund the fruits of their separate property and the 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.

Under Article 175 of the Civil Code, the judicial separation of property results in
the termination of the conjugal partnership of gains:
Art. 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article 191. (Emphasis supplied)

The finality of the 6 June 1961 Order in Civil Case No. 4791 approving the parties
separation of property resulted in the termination of the conjugal partnership of
gains in accordance with Article 175 of the Family Code. Hence, when the trial
court decided Special Proceedings No. 3330, the conjugal partnership between
petitioner and respondent was already dissolved.
Petitioner alleges that the CFI had no authority to approve the Compromise
Agreement because the case was for custody, and the creditors were not given
notice by the parties, as also required under Article 191 of the Civil
Code. Petitioner cannot repudiate the Compromise Agreement on this ground. A
judgment upon a compromise agreement has all the force and effect of any other
judgment, and conclusive only upon parties thereto and their privies, and not
binding on third persons who are not parties to it.[17]
The Amicable Settlement had become final as between petitioner and respondent
when it was approved by the CFI on 6 June 1961. The CFIs approval of the
Compromise Agreement on 6 June 1961 resulted in the dissolution of the conjugal
partnership of gains between petitioner and respondent on even date.
WHEREFORE, we DENY the petition. We AFFIRM the result of the 21
November 1996 Decision and of the 2 September 1997 Resolution of the Court of
Appeals in CA-G.R. CV No. 41121.
SO ORDERED.

ANTONIO T. CARPIO
Associate Justice
WE CONCUR:

CONCHITA CARPIO MORALES


Associate Justice

ADOLFO S. AZCUNA DANTE O. TINGA


Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR.


Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Acting Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

As replacement of Justice Leonardo A. Quisumbing who is on official leave per Administrative Circular No. 842007.
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[2]
Rollo, pp. 40-52. Penned by Associate Justice Fidel P. Purisima with Associate Justices Angelina SandovalGutierrez and Conrado M. Vasquez, Jr., concurring.
[3]
Id. at 54.
[4]
Not 1 March 1954 as stated in the Decision of the Court of Appeals. See Certificate of Marriage, records, p. 145.
[5]
De Ugalde alleged that de Ysasi drove her out of their home. On the other hand, de Ysasi alleged that
de Ugalde left their home.
[6]
Also referred to as Juan Isasi.
[7]
Records, pp. 154-160.
[8]
Action for custody of then minor Jon de Ysasi III and for support.
[9]
Records, pp. 235-236.
[10]
Id. at 237-239.
[11]
CA rollo, pp. 93-101. Through Judge Romeo J. Hibionada.
[12]
Id. at 101.
[13]
Rollo, p. 133.
[14]
Id. at 89-94. Penned by Executive Judge Jose Y. Aguirre, Jr.
[15]
Id. at 94.
[16]
See Lara, et al. v. Del Rosario, Jr., 94 Phil. 778 (1954).
[17]
See Philippine Journalists, Inc. v. NLRC, G.R. No. 166421, 5 September 2006, 501 SCRA 75.