116.
QUIAO vs QUIAO While one may not be deprived of his “vested right,” he may lose
FACTS:
Petitioner Brigido Quiao was married to respondent Rita Quiao in
1977 and had 4 children.
They had no separate properties prior to their marriage.
Rita filed a complaint against Brigido for legal separation for
cohabiting with another woman.
Subsequently, the RTC rendered a decision declaring the legal
separation of the parties pursuant to Article 55, thereby
awarding the custody of their three minor children in favor of
Rita, who is the innocent spouse.
The properties accrued by the spouses was divided equally
between them subject to the respective legitimes of their
children; however, Brigido’s share of the net profits earned by the
conjugal partnership shall be forfeited in favor of their children in
accordance to par. 9 of Article 129 of the Family Code.
A few months thereafter, Rita filed a motion for execution, which
was granted by the trial court.
By 2006, Brigido paid Rita with regards to the earlier decision;
the writ was partially executed.
After more than nine months, Brigido filed a motion for
clarification asking the RTC to define “Nets Profits Earned.”
In answer, the court held that the phrase denotes “the remainder
of the properties of the parties after deducting the separate
properties of each of the spouses and debts.”
Upon a motion for reconsideration, it initially set aside its
previous decision stating that net profit earned shall be
computed in accordance with par. 4 of Article 102 of the Family
Code.
However, it later reverted to its original Order, setting aside the
last ruling.
ISSUES:
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
over½of 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
HELD:
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.”
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 court’s 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
couple’s properties. And when the couple’s 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 separation½share 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 above-listed 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 party’s favor.