DISSOLUTION OF ABSOLUTE COMMUNITY REGIME

I. CAUSES OF TERMINATION OF ABSOLUTE COMMUNITY

Article 99
1. Upon termination of marriage - Upon the death of either spouse
- When the marriage is annulled
- When the marriage is declared void under
Article 40
2. Prior to termination of marriage - When there is decree of legal separation
- In case of judicial separation of property
during marriage under Art. 134 to 138

Judicial declaration of nullity of marriage as cause of dissolution

- Limited only to declaration of void marriage under Article 40
- General Rule: Regime of absolute community may only exist in a valid or at least voidable marriage, and does not
exist in a void marriage.
In a void marriage, the property relations of the parties during the period of cohabitation is
governed by the provisions of Article 147 or Article 148, as the case may be, of the Family Code.
- Exception: In the case of a void marriage under Article 40, i.e., where a spouse in a prior void marriage
contracts a subsequent marriage in the absence of a judicial declaration of nullity of the prior
marriage. The regime of absolute community exists in the subsequent void marriage.
This is to be inferred from the provisions of Article 50, which makes applicable to a marriage
judicially declared void under Article 40 of the provisions of Article 43 (2).

Separation as a cause for terminating the absolute community

Decree of legal separation results in termination and not mere separation de facto.

Extra-judicial dissolution of property regime

The Court has ruled that extrajudicial dissolution of the conjugal partnership (or absolute community) without judicial
approval is void. (Espinosa v. Omaña, 659 SCRA 1, October 12, 2011)

II. EFFECTS OF SEPARATION DE FACTO

In general
Separation de facto - spouses simply separate without the benefit of a decree of legal separation. It does not affect the
regimes of absolute community or conjugal partnership of gains.

However, judicial authorization may be obtained in a summary proceeding in the ff:

 When the consent of one spouse to any transaction of the other is required by law.
 In the absence of sufficient community property, the separate property of both spouses shall be solidarily liable for
the support of the family. The spouse present shall, upon proper petition in a summary proceeding, be given judicial
authority to administer or encumber any specific separate property of the other spouse and use the fruits or
proceeds thereof to satisfy the latter’s share.

In Case of Abandonment
Abandonment – under the Code, a spouse is deemed to have abandoned the other when he or she has left the conjugal
dwelling without intention of returning.

The spouse who has left the conjugal dwelling for a period of three months or has failed within the same period to give any
information as to his or her whereabouts shall be prima facie presumed to have no intention of returning to the conjugal
dwelling.

If separation de facto is attended by abandonment, the following effects are produced:

- the spouse who leaves the conjugal home or refuses to live therein, without just cause, shall not have the right to be
supported;
- the aggrieved spouse may petition the court for receivership, for judicial separation of property or for authority to be
the sole administrator of the absolute community or of the conjugal partnership, subject to such precautionary
conditions as the court may impose; and
- the aggrieved spouse may petition for legal separation if the abandonment lasts for more than one year.
 LIQUIDATION OF THE ABSOLUTE COMMUNITY ASSETS AND LIABILITIES

I. PROCEDURE IN THE LIQUIDATION OF ABSOLUTE COMMUNITY

1. Inventory list- properties of the absolute community and the exclusive properties of each spouse
2. Debts and obligations of AC- paid out of AC assets. In case of insufficiency, the spouses shall be solidarily
liable for the unpaid balance with their separate properties
3. Remainder of exclusive properties - delivered to each of them.
4. Net remainder of the properties of AC / Net Assets- 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
5. Presumptive legitimes of the common children - delivered upon partition, in accordance with Article 51.
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.

NET ASSETS VS NET PROFITS

Net Assets – market value of all properties less debts and obligations of the AC
Net Profits – Net Assets of the AC less market value of the properties at the time of marriage

Since spouses have no separate properties, there is nothing to return to any of them. What remains in the properties should
be divided equally between the spouses and the respective heirs. However, since the petitioner is the guilty party, his share
from the net profits of the conjugal partnership is forfeited in favor of the common children. Hence, like in the AC regime,
nothing will be returned to the guilty party in the CP regime, because there is no separate property which may be accounted
for in the guilty party’s favor. (Quiao v. Quiao, 675 SCRA 642 (2012))

Forfeiture of Net Profits of Offending or Guilty Spouse in Favor of Common Children/Children of Guilty Spouse
by Previous Marriage/Innocent Spouse
1. Subsequent marriage in Article 41 is terminated
2. Legal separation
3. Annulment
4. Judicial declaration of nullity of marriage if the ground is Article 40

II. TERMINATION OF MARRIAGE BY DEATH

Mandatory Liquidation of the Absolute Community in Case of Death of Either Spouse

1. Same proceeding for the settlement of the estate
2. If no judicial settlement proceeding in no. 1, the law requires liquidation of the absolute community, either judicially
or extrajudicially within one year from death of the deceased spouse
- If upon lapse of one-year period, no liquidation is made, any disposition or encumbrance is void
- If the surviving spouse contracts a subsequent marriage without compliance with the foregoing requirements, the
subsequent marriage shall be governed, mandatorily, by a regime of complete separation of property.

Effect Upon Disposition or Encumbrance of Community Property

Transaction not entirely void but shall be valid to the extent of what may be allotted in the property involved, in the final
partition, to the vendor or mortgagor. The disposition of the interest in the community property is done after the termination
of the marriage and after the right of the vendor and/or mortgagor to the inheritance has been transmitted and/or
consolidated. (The Law on Persons and Family Relations Book (2017), Rabuya)

Mandatory Regime of Complete Separation

If there is no liquidation of the absolute community within one year from the death of the deceased spouse and the surviving
spouse contracts a subsequent marriage, a mandatory regime of complete separation of property shall govern the property
relations of the subsequent marriage.
Note: Even if the absolute community of the previous marriage was subjected to liquidation by the surviving spouse within
the period required by Article 103, the property of the surviving spouse acquired prior to the celebration of the subsequent
marriage shall remain his exclusive property should the property regime of the subsequent marriage be that of absolute
community so long as the surviving spouse has legitimate descendants in the prior marriage.