STUDY GUIDE (Arts.

88-104, Family Code)

THE FAMILY CODE

OF THE PHILIPPINES
STUDY GUIDE : (Arts. 88-104)

CAVEAT: It will be to your best interest if you make sure that

you finish all reading assignments and/or directives in accordance
with the timeframe outlined in the course syllabus.

TITLE IV
PROPERTY RELATIONS
BETWEEN HUSBAND AND WIFE
CHAPTER 3
SYSTEM OF ABSOLUTE COMMUNITY
Section 1. General Provisions
(Arts. 88-90)

ART. 88.

The absolute community of property between

spouses shall commence at the precise moment that the

marriage is celebrated. Any stipulation, express or implied, for
the commencement of the community regime at any other time
shall be void. (145a)

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When the Regime Will Govern the Spouses Property Relationship. The
absolute community will govern the property relations of the spouses in the following
instances:

When it is agreed upon in the marriage settlement.

When the spouses did not execute a marriage settlement; or
When the regime agreed upon in the marriage settlement is void.

When System of Absolute Community Between the Spouses Begins.

It shall commence at the precise moment that the marriage is celebrated, which
means the particular time when the spouses make their personal declarations that
they take each other as husband and wife followed by the solemnizers
pronouncement that they are henceforth man and wife (Art. 3, par. 3, FC).
Thus, if the marriage will be solemnized at 7 oclock in the evening of February
14, 2015, the spouses system of absolute community will actually commence at
exactly 7 oclock in the evening of said day, and not at 7 oclock in the morning of the
same day.

Any agreement or stipulation between the spouses, express or implied, that

their absolute community regime shall commence at any other time is void.

ART. 89. No waiver of rights, interests, shares and effects of

the absolute community of property during the marriage can be
made except in case of judicial separation of property.
When the waiver takes place upon a judicial separation of
property, or after the marriage has been dissolved or annulled,
the same shall appear in a public instrument and shall be

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recorded as provided in Article 77. The creditors of the spouse

who made such waiver may petition the court to rescind the
waiver to the extent of the amount sufficient to cover the
amount of their credits. (146a)

ART. 90.

The provisions on co-ownership shall apply to the

absolute community of property between the spouses in all

matters not provided for in this Chapter. (n)

Special Type of Co-Ownership. The system of absolute community is a

special type of co-ownership because the spouses are co-owners of their communal
properties. The absolute community of the spouses shall be primarily governed by
the provisions of this Chapter 3 (System of Absolute Community), and suppletorily by
the provisions on co-ownership (Articles 484 to 501) under the Civil Code.
(Article 90, FC)

Prohibition on Waiver of Rights, Interest, Shares and Effects. Unlike an

ordinary co-ownership, no waiver of rights, interests, shares and effects of the
absolute community of property during the marriage can be made.

Rationale. This is so because the interest of the parties in the community

properties is merely inchoate or an expectancy prior to liquidation. In other words, the
right of each spouse in the net asset of the community property will vest only and will
be determined after the dissolution and liquidation of the community property.

Waiver Before the Marriage. There is no question that the waiver may be
done appropriately BEFORE the marriage in the marriage settlement. If done
DURING the subsistence of the marriage, the waiver if VOID.

Exception; When Waiver During Marriage is Valid. A waiver made after

the marriage is celebrated is nonetheless valid under the following instances:

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When a waiver takes place upon a judicial separation of property under

Articles 134 to 138.
The phrase upon a judicial separation in the second paragraph of
Article 89 covers the time period during and after judicial separation.
If the waiver is executed after the dissolution of the marriage caused for
instance by death of one spouse or annulment.

Both of the above instances necessarily result in the dissolution and

liquidation of the absolute community, in which case the interest of each spouse in
the net assets left of the community property is finally determined after settlement
of its debts and obligations.

If the waiver takes place without a judicial separation of property

decree, such waiver shall be VOID because it is contrary to law and public policy
pursuant to Article 6 of the Civil Code and because such waiver shall constitute an
act which is against a prohibitory law (Art. 89) as provided in Article 5 of the Civil
Code.

Requirements Where Waiver Allowed. Where the waiver is allowed under

any of the two (2) instances above-mentioned, it is required that the waiver must:
Appear in a public instrument;
Be recorded in the LCR where the marriage contract is recorded;
Be recorded in the proper registries of property.
Purpose of Requirements; Effect of Oral Waiver. If the waiver is
merely orally made and is not recorded, it will be valid as between the spouses,
BUT IT WILL NOT BIND THIRD PERSONS who may be prejudiced by such
waiver.

Creditors Right to Rescind Waiver. In any event, even if the

waiver is recorded, current creditors before the waiver with rights recognized by
law cannot be prejudiced by the waiver (Art. 6, NCC). Accordingly, Article 89 (par.

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2, last sentence) allows them to judicially rescind the waiver to the extent of their
credits. (The action is called accion pauliana.)
Example: Spouses H and W had their absolute community of property
worth P1,000,000.00 dissolved in accordance with law. Upon judicial separation of
property, H is entitled to get P500,000.00 as his share. H, however, owes C the
amount of P100,000. H decides to waive his entire share in the community property
in favor of W. C, the creditor of H, can seek the rescission of the waiver to the extent
of P100,000.00 to protect his interest. Hence, the waiver becomes valid only to the
extent of P400,000.00.

Section 2.
What Constitutes Community Property
(Arts. 91-93)

ART. 91.

Unless otherwise provided in this Chapter or in

the marriage settlements, the community property shall consist

of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter. (197a)

Community Property, What it Consists of. Except for those properties

expressly excluded by Article 92 of the Family Code, or by the spouses marriage
settlement, the law provides for two (2) kinds of properties that shall form part of the
absolute community of properties, to wit:

All properties owned by the spouses at the time of the celebration of the
marriage;

All properties acquired after the celebration of the marriage.

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Automatic Conversion to Community Property.

Upon the celebration of the

marriage, the present property of either spouse at the time of the marriage and the
future property acquired thereafter are automatically converted into the community
property without need of any juridical act for the purpose.

If the properties are titled properties, the titles should be registered in the
names of both spouses through the registration of their marriage settlement with the
proper registry of property. Otherwise, third persons acting in good faith relying on the
titles in the name of only one of the spouses shall not be prejudiced.
Stipulation to Exclude Properties from the Community Property.
As earlier discussed, the future spouses can adopt in their marriage settlement
absolute community as their property regime. Even so, they may validly agree to
exclude from the community property whatever properties they may have at the time
of the marriage, and include therein only the properties that they may acquire during
the marriage.

It is important to note, however, that in the absence of any contrary stipulation

between the spouses, the fruits and income from said excluded properties by
stipulation will still be considered part of the community property, since they will not fall
in any of the exclusions enumerated in Article 92.

ART. 92. The following shall be excluded from the

community property:
(1) Property acquired during the marriage by gratuitous title
by either spouse, and the fruits as well as the income thereof, if
any, unless it is expressly provided by the donor, testator or
grantor that they shall form part of the community property;
(2) Property for personal and exclusive use of either spouse.
However, jewelry shall form part of the community property;

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(3) Property acquired before the marriage by either spouse

who has legitimate descendants by a former marriage, and the
fruits as well as the income, if any, of such property. (201a)

Gratuitous Acquisitions During Marriage.

By gratuitous title means by donation, or testate or intestate succession. A

property may have been donated to one of the spouses by a third person during the
marriage. Or, such spouse may have inherited a property during the marriage from his
or her parents.

These gratuitous acquisitions are excluded unless the donor, testator or grantor
has expressly provided in the deed of donation, will or grant that they shall form part of
the community property.
Under Article 92 (1), the fruits and income of the property acquired by donation
or succession are also excluded.

Personal Properties for Exclusive Use.

These properties shall pertain to the

spouse who personally and exclusively uses them such as clothes, eyeglasses, shoes
and the like. However, pieces of jewelry though personally and exclusively used by
either spouse shall form part of the community property because they are generally of
great value.

Properties from Previous Marriage.

Property acquired before the marriage by

either spouse, including the fruits and income thereof are excluded, if said spouse has
legitimate descendants by a former marriage.

Purpose. The purpose of the law is to protect the legitime or interest of the
legitimate children in the previous marriage. If the properties in the first and second
marriage would be mixed, time might come when it can no longer be determined
which properties belong to the first and the second marriages. It would be prejudicial
to the children of the two (2) marriages.

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This rule does not, however, affect the rights of the children of
the second marriage to inherit their shares of the properties of their father or
mother acquired during his or her first marriage under the law on succession.

Legitimate Descendants. It must be noted that the law uses the word
descendants, not merely children. Hence, it would include grandchildren, greatgrandchildren and all other descendants. Likewise, the descendants must be
legitimate. The rule will not apply if the descendants are illegitimate.

Property Acquired DURING the Marriage. Properties acquired during the

marriage of the concerned spouse, even if he or she has legitimate descendants by a
former marriage, shall form part of the community property.

Relevantly,

If the previous marriage is terminated by death and there is no

liquidation of the property regime of the previous marriage and
thereafter the surviving spouse validly remarries, the subsequent
marriage shall be governed by the complete separation of property
regime in accordance with Article 103. Hence, the property owned
by the surviving spouse prior to his or her subsequent marriage shall
be separately owned by him or her during the subsequent marriage.

In the event, however, that there was liquidation of the properties of

the previous marriage terminated by death and the surviving spouse
remarries, the property regime that will govern the subsequent
marriage is the absolute community of property (if there was no
marriage settlement before the marriage, or if the same was void).
However, if the surviving spouse has legitimate descendants, the
properties owned by the surviving spouse acquired before the
marriage shall remain separate in accordance with Article 92 (3)
despite the fact that the absolute community of property regime
governs the subsequent marriage.

Nature of Acquired Properties Using Separate Properties. If a separate

property of either spouse is later on sold or exchanged for another property, will the

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proceeds of the sale or the property so acquired remain separate property or be now
part of the community property?

For properties excluded by agreement. If a property is excluded from the

community property by stipulation in the marriage settlement, in the absence of any
agreement, the alienation of such property converts the proceeds or the property
acquired in its place to community property. (The basis is Articles 91 and 93 of the
Family Code.)

Example. In the spouses marriage settlement providing for absolute

community to govern their property regime, it was stipulated that the
P5,000,000.00 won by the husband in the sweepstake prior to the
marriage shall remain separate property during the marriage. This
stipulation is valid (Art. 91). The husband subsequently used the
P5,000,000.00 to buy a house, which was used as the family home. The
house cannot be considered as his separate property, but as part of the
absolute community of property.

For properties excluded by law. If a property is excluded from the

community property by reason of the mandatory provisions of law, as in the case of
those excluded under Article 92 of the Family Code, it is submitted that the policy of
the law to stamp these properties with separate character should not be easily
defeated by the simple expedient of converting said properties into some new form.
(This is the view shared by Senator Tolentino, a famous civil law jurist, and embraced
by Rabuya in his commentaries. You can look into the commentaries of Sta. Maria in
his book, who has a different view on the matter. I defer more to the view espoused
by Senator Tolentino.)

Example. During the marriage, the wife inherited a BMW car worth
P6,000,000.00 from her father. This car, as well as the income and fruits
thereof, is exclusive property of the wife and does not form part of the
spouses community property (Art. 92[1]). If the wife is able to trade in
the BMW car with a Mercedez Benz car, the Mercedez Benz car will still
be considered her separate property.

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ART. 93. Property acquired during the marriage is

presumed to belong to the community, unless it is proved that it

is one of those excluded therefrom. (160a)

Presumption in Favor of Community Property. Unlike in conjugal

partnership of gains, in absolute community, all properties of the spouses are included
in the community property as a matter of rule, whether the property is acquired before
or after the marriage. This being the case, it is submitted that the presumption in favor
of the community must relate to all the properties of the spouses, and not only to those
acquired during the marriage.

Section 3.
Charges and Obligations of the
Absolute Community
(Arts. 94-95)

ART. 94. The absolute community of property shall be liable

for:
(1) The support of the spouses, their common children, and
legitimate children of either spouse; however, the support of
illegitimate children shall be governed by the provisions of this
Code on Support;
(2) All debts and obligations contracted during the marriage
by the designated administrator-spouse for the benefit of the

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community, or by both spouses, or by one spouse with the

consent of the other;
(3) Debts and obligations contracted by either spouse without
the consent of the other to the extent that the family may have
been benefited;
(4) All taxes, liens, charges and expenses, including major or
minor repairs, upon the community property;
(5) All taxes and expenses for mere preservation made during
marriage upon the separate property of either spouse used by the
family;
(6) Expenses to enable either spouse to commence or
complete a professional or vocational course, or other activity for
self-improvement;
(7) Antenuptial 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 the exclusive
purpose of commencing or completing a professional or
vocational course or other activity for self-improvement;
(9) Antenuptial debts of either spouse other than those falling
under paragraph (7) of this Article, the support of illegitimate
children of either spouse, and liabilities incurred by either spouse
by reason of a crime or a quasi-delict, in case of absence or
insufficiency of the exclusive property of the debtor-spouse, the
payment of which shall be considered advances to be deducted
from the share of the debtor-spouse upon liquidation of the
community; and

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(10)
Expenses of litigation between the spouses unless
the suit is found to be groundless.
If the community property is insufficient to cover the
foregoing liabilities, except those falling under paragraph (9), the
spouses shall be solidarily liable for the unpaid balance with their
separate properties. (161a, 162a, 163a, 202a-205a)

LIABILITIES OF THE ABSOLUTE COMMUNITY. Article 94 lists down the

charges and liabilities of the absolute community of property, which are similar more or
less to the charges and liabilities of the conjugal partnership. (Art. 121)

Support (Art. 94[1]). This comprises everything indispensable for the

sustenance, dwelling, clothing, medical attendance, education and transportation in
keeping with the financial capacity of the family (Art. 194, FC).

The community property is responsible for the support of the:

(a) Spouses;
(b) Common children of the spouses; and
(c) Legitimate children of either spouse by a previous marriage.

Support of Illegimate children (Art. 94[9]; Art. 197). The support of

illegitimate children of either spouse shall come from the exclusive or separate
property of the illegitimate parent-spouse.

If the concerned spouse has no separate property or the same is

insufficient, the absolute community, if financially capable, shall advance the
needed support.

The advances made shall, however, be deducted from the share of

the spouse obliged to give support upon the liquidation of the absolute
community.

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Support shall be given to the spouses even if they are not living together,
except when one spouse leaves the other without valid reason, in which case the
former is not entitled to support (Art. 101[1]).

Support shall be given to the spouses during the pendency of an action for
legal separation (Art. 61) or for annulment of marriage (Art. 49).

Debts and Obligations Contracted During the Marriage (Art. 94[2]) The
absolute community shall be liable for the following debts and obligations contracted
DURING the marriage:

Those contracted by the designated administrator-spouse for the

benefit of the community.
Those contracted by both spouses.
Those contracted by one spouse with the consent of the other.

If the debt is contracted by both spouses or by either spouse with the

consent of the other, the law conclusively presumes that such debt has
redounded to the benefit of the family. Hence, the creditor (in order to be able to
charge the debt incurred to the absolute community) no longer has the burden of
proving that the debt was contracted for the benefit of the community or of the family.

Debts Contracted by One Spouse Without the Consent of the Other.

If the debt is contracted DURING the marriage by the designated

administrator-spouse (Art. 94[2]) or by one spouse without the consent of the other
(Art. 94[3]), THE ABSOLUTE COMMUNITY SHALL BE LIABLE ONLY if it can be
proven that the debt redounded to the benefit of the family. Hence, the creditor (in
order to be able to charge the debt incurred to the absolute community) has the
burden of proving that the debt was contracted for the benefit of the family.

Carlos vs. Abelardo, G.R. No. 146504, April 9, 2002, 380 SCRA 361.
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Ante-Nuptial Debts of Either Spouse Benefiting the Family (Art. 94[7]).

General Rule: Debts incurred BEFORE the marriage by either spouse

must be paid ONLY by the separate property of said spouse.

Exception: If the indebtedness, however, redounded to the benefit of the

family, the absolute community shall be liable, BUT only to the extent of the benefits
received. Hence, if a creditor seeks to hold the absolute community liable for an antenuptial debt incurred by either spouse, he has the burden to prove that such debt has
redounded to the familys benefit.

Example: Before the marriage, the prospective husband

borrowed P5 million from a bank to buy a house for the family. After the
marriage, P2 million of the loan remained unpaid. The house became
part of the community property, and was used as a family home. Here,
the community property is liable to the extent of P2M.

Taxes and Expenses Incurred on the Property.

On Community Property (Art. 94[4]). All taxes such as license, realty
taxes, surcharges, and all expenses for repairs, whether minor or major, involving
community property are chargeable against the absolute community of property.

On Spouses Separate Property (Art. 94[5]). If an exclusive or

separate property of either spouse is used by the family, taxes and expenses
incurred during the marriage for mere preservation of such separate property shall be
chargeable to the absolute community of property.

Mere Preservation of Separate Property. It must be noted that

the taxes and expenses on the spouses separate property, for which the
community property may be held liable, are only those for mere preservation.
Mere preservation does not involve major repairs, but only minor ones. If the
property needs major repairs, although the separate property is used by
the family, it is the owner-spouse who should shoulder the expenses
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considering that he or she has the greatest interest to conserve it being the
owner thereof.

Minor repairs are those for mere preservation of the property, or

those caused by ordinary wear and tear.

Major

repairs are those caused by extraordinary events such as

storms, floods, earthquakes, fire, etc. affecting the substance and
not just the enjoyment of the property.

Expenses for Professional, Vocational, or Self Improvement Courses.

For Either of the Spouses (Art. 94[6]). Expenses to enable either
spouse to complete a professional or vocational course, or expenses incurred for other
activities aimed at self-improvement are chargeable to the absolute community.
The Family Code uses the term to commence or complete a
course, since a spouse might want not only to complete a course but to start a new
course (such as law or medicine) during the marriage.

The provision also includes self-improvement courses, such as

speech power lessons, cooking lessons for the wife, health-improvement courses, a
course in karate, or other self-defense course, etc.

The intention of the law is to encourage the spouses to improve

themselves for the benefit not only of their families, but of the nation as a whole.

For their Common Legitimate Children (Art. 94[8]). Donations by both

spouses to their common legitimate children for them to commence or finish a
professional or vocational course or other activity for self-improvement are chargeable
to the absolute community.

Requisites. To be chargeable agaist the community property, it is

Both spouses must have made the donation, or the promise to

donate.

required that:

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The donation or promise to donate must be made by both

spouses; otherwise, the absolute community is not liable.

If only one of the spouses donate, this may fall under the
prohibition under Article 87, making donations between
spouses, direct or indirect, void.

If the donation is made by one spouse without the consent of the

other in favor of a child of the former by a previous marriage,
the donation is valid, but the same is chargeable to the
separate property of the donor-spouse.

The recipients are the spouses common legitimate children.

If the recipient is a child from a previous marriage of the other

spouse, the absolute community is not liable.

The purpose is exclusively for commencement or completion of a

professional, vocational or other activity for self-improvement.

Liabilities by Reason of a Crime or Quasi-Delict.

The separate property of the erring spouse shall be liable to pay the
obligation or debt arising from crime or quasi-delict. However, in case of absence or
insufficiency of the exclusive property of the debtor-spouse, the absolute community of
property shall pay but such payments shall be considered as advances to be deducted
from the share of the debtor-spouse upon liquidation of the community.
Some examples of obligations arising from quasi-delict.

The proprietor of a building or structure is responsible for the damages

resulting from its total or partial collapse, if it should be due to the lack of
necessary repairs (Art. 2189, NCC).

The head of a family that lives in a building or part thereof is responsible

for damages caused by things thrown or falling from the same (Art. 2193,
NCC).

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Manufacturers and processors of foodstuffs, drinks, toilet articles and

similar goods shall be liable for death or injuries caused by any noxious
or harmful substances used, although no contractual relation exists
between them and the consumers (Art. 2187, NCC).

Expenses of Litigation.
Provided that the suit is between the husband and wife, and that the case
is not groundless, the absolute community of property may be liable for the expenses
of litigation.

Typical examples of such cases are for legal separation, annulment of

marriage, judicial separation of property, exclusive administration of the community
property, support and custody of children.

SOLIDARY LIABILITY OF THE SPOUSES.

Concept of Solidary Liability. Solidary obligations are those where several

creditors or debtors or both concur, and where each creditor has the right to demand
and each debtor is bound to perform, in its entirety, the prestation constituting the
object of the obligation.

Example: A and B owe C the amount of P100,000.00 due on February

15, 2015. If the liability of A and B is solidary, on maturity date, C can
compel B (only) to pay the entire P100,000.00 obligation. On the other
hand, if the liability is merely joint, C cannot collect from B more than his
proportionate share in the obligation which is P50,000.00.

When Community Property is Insufficient to Pay Charges. If the

community assets are not sufficient to pay the liabilities enumerated in Article 94, the
spouses shall be solidarily liable for the unpaid balance with their separate properties.

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This solidary liability shall not, however, include ante-nuptial debts not
redounding to the benefit of the family, the support of illegitimate children by either
spouse, and liabilities incurred by the spouse by reason of a crime or a quasi-delict
(Article 94, paragraph 9).

ART. 95.

Whatever may be lost during the marriage in any

game of chance, betting, sweepstakes, or any other kind of

gambling, whether permitted or prohibited by law, shall be borne
by the loser and shall not be charged to the community, but any
winnings therefrom shall form part of the community property.
(164a)

LOSSES AND WINNINGS IN GAMBLING.

Losses. In case of losses incurred by the gambler-spouse, he or she shall

answer the same with his or her exclusive properties. This is to discourage it as it
tends to dissipate the properties of the family.

Winnings. If the gambler-spouse, however, wins, the winnings would form

part of the absolute community of properties. The winnings are considered as
earnings or properties acquired during the marriage.

If, however, the winning ticket in a lottery or in the sweepstakes was given to a
spouse by a friend, it is believed that the ticket would be considered a donation under
Article 92 (1), and the winnings therefrom shall be considered separate property,
unless the donor of the ticket expressly provided that it shall form part of the
community property.

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Section 4.
Ownership, Administration, Enjoyment and
Disposition of the Community Property
(Arts. 96-98)

ART. 96. The administration and enjoyment of the

community property shall belong to both spouses jointly. In case

of disagreement, the husbands decision shall prevail, subject to
recourse to 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.
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the common
properties, the other spouse may assume sole powers of
administration. These powers do not include the powers of
disposition or encumbrance without authority of the court or the
written consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be
void.
However, 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. (206a)

JOINT ADMINISTRATION AND ENJOYMENT OF COMMUNITY PROPERTY.

The spouses, being co-owners of the community properties (except those

excluded in the marriage settlement and listed under Article 92), have the right of joint
administration and enjoyment thereof.

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Joint administration means that both spouses administer together, or

each spouse may administer with the consent of the other, expressly or impliedly.

Enjoyment includes ownership and possession.

In the event of disagreement between the spouses, the decision of the husband
prevails. However, if the wife is persistent, she may go to court.

For this purpose, she is given a period of five (5) years within which to
assail her husbands decision on their disagreement, reckoned from the date of the
questionable transaction entered into by the husband.

Third persons who deal with the husband cannot complain if the contract
is set aside by the court, for by dealing with the husband without the consent of the
wife, they are forewarned that the wife is given by law the right to question the
transaction in court.

The failure of the wife to go to court within the prescriptive period will
mean her conformity to the husbands decision.

ASSUMPTION OF SOLE POWERS OF ADMINISTRATION; LIMITATIONS.

While the general rule is joint administration by both spouses, there are instances
when one spouse may assume sole powers of administration, to wit:

When there is an agreement between the spouses that only one of them shall
administer the community property; and

When one spouse is incapacitated (due to causes like civil interdiction,

absence, etc.), or otherwise unable to participate in the co-administration of the
community property.

Even if a spouse is given the sole power to administer the community property,
the power DOES NOT INCLUDE the authority to dispose or encumber community
property without the written consent of the other spouse, or court authorization.

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If the administrator-spouse disposes of a community property without the

consent of the other spouse or without court authorization, and delivery has already
been effected in favor of the third person, the remedy of the non-consenting spouse is
an action for declaration of nullity of the contract entered into and for reconveyance.

Note that the five-year prescriptive period provided for in the first
paragraph of Article 96 does not apply in this case, since the transaction contemplated
in said paragraph is a valid transaction, although it has been the subject of
disagreement between the spouses.

RULES ON THE DISPOSITION OR

ENCUMBRANCE OF COMMUNITY PROPERTY.

Disposition or encumbrance of community property must be joint, i.e., both

spouses must consent or approve.

The consent of the other spouse to the encumbrance or disposition must be in

writing.

If the written consent of the other spouse cannot be obtained or is being

withheld, then the matter should be brought to court, and the court will give the
authority if the same is warranted by the circumstances.

If one spouse acts without the written consent of the other, or without court
authority, the disposition or encumbrance shall be void.

Homeowners Savings & Loan Bank vs. Dailo, G.R. No. 153802, March 11, 2005,
453 SCRA 283.

Even if the disposition or encumbrance is void (as it was done without the
consent of the other), it shall, however, 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 (whose consent was not sought) or
authorization by the court BEFORE the offer is withdrawn by either or both offerors.
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ART. 97.

Either spouse may dispose by will of his or her

interest in the community property. (n)

DISPOSITION BY WILL OF INTEREST IN COMMUNITY PROPERTY.

The spouses CANNOT dispose of their respective interest in the community
property by way of a disposition inter vivos (to take effect during the lifetime of the
spouse making the disposition or executing the waiver). Any such disposition of the
spouses respective shares or interest in the absolute community shall be void, since
a spouses right to one-half of the community assets does not vest until the liquidation
of the absolute community.
However, Article 97 expressly authorizes either spouse to dispose of his or her
interest in the community property, if the disposition is in the nature of a disposition
mortis cause, and subject to the limitations of the law on testamentary succession. In
this case, the disposition, if made in a will, will take effect only upon the death of the
testator spouse, at which time the community property is already terminated and
subject to liquidation.

Note that what is allowed to be disposed of by will is NOT specific property in

the absolute community (e.g., the husbands lot in Makati, or the wifes BMW car), but
only the interest therein. The reason is that until the liquidation of the absolute
community, it is not known what specific properties remain, and which ones shall be
adjudicated to the individual spouses.

ART. 98. Neither spouse may donate any community

property without the consent of the other. However, either

spouse may, without the consent of the other, make moderate
donations from the community property for charity or on
occasions of family rejoicing or family distress. (n)

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PROSCRIPTION AGAINST DONATION OF COMMUNAL PROPERTY. Neither

spouse may donate any communal property without the consent of the other spouse.
The obvious reason is that the donation will prejudice the other spouse who is a coowner of the property. Any such donation is VOID.

EXCEPTION. The law, however, allows either spouse, even without the
consent of the other spouse:

To make moderate donations for charity, or on occasions of family

rejoicing or family distress (Art. 97).

To give moderate gifts to each other on the occasion of any family

rejoicing (Art. 87).

What is moderate depends on the financial circumstances of the couple,

the value of the property donated, and their social position.

UNIONS WITHOUT WEDLOCK. The prohibition, like in Article 87, should

also apply to parties living together as husband and wife without a valid marriage.

Section 5.
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STUDY GUIDE (Arts. 88-104, Family Code)

Dissolution of Absolute Community Regime

(Arts. 99-101)

ART. 99. The absolute community terminates:

(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
(4) In case of judicial separation of property during the
marriage under Article 134 to 138. (175a)

GROUNDS FOR TERMINATION OF ABSOLUTE COMMUNITY. The

termination of the absolute community of property does not necessarily mean the
termination of the marriage. But the termination of a marriage simultaneously results
in the dissolution of the absolute community of property. After the dissolution comes
the liquidation and partition. Under Article 99, there are four (4) ways by which to
terminate or dissolve the absolute community of property.

Death of Either Spouse (Art. 103). Upon the death of either spouse the
absolute community ceases to exist. The community shall then be liquidated in the
proceeding for the settlement of the estate of the deceased. The surviving spouse
must liquidate the community property within one year from death of the deceased.
After the lapse of one year without any liquidation having been made, any disposition
or encumbrance involving community property of the terminated marriage shall be
void.

When There is a Decree of Legal Separation (Arts. 63 & 64). When a

decree of legal separation is issued by a competent court, the absolute community is
dissolved and liquidated. The offending spouse shall have no right to share in the net
profits earned by the absolute community as the same is forfeited in favor of the

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common children, or if none, the children of the guilty spouse by a previous marriage,
or in default of children, the innocent spouse.

When the Marriage is Annulled or Declared Void (Arts. 50-52). When a

marriage is annulled, it ceases to exist. When a marriage is declared void, it simply
means the marriage never existed at all. A decision to this effect in either case
terminates or dissolves the absolute community. Like in legal separation, the
offending spouse or the one who acted in bad faith loses his right over any share in
the net profit earned by the absolute community, the same being forfeited in favor of
the persons mentioned in Article 43 (2).
In Case of Judicial Separation of Property During the Marriage (Arts.
134-138). Separation of property is allowed to take place BEFORE the marriage in a
marriage settlement. During the marriage, it is not allowed and cannot take place
except by judicial order. And separation of property during the marriage by judicial
order may either be (a) for sufficient cause (Art. 135) or (b) voluntary that is, by
joint agreement of the spouses (Art. 136). Once the separation of property has been
declared, the absolute community shall be liquidated (Art. 137) and dissolved and after
its dissolution, the provisions on complete separation of property shall apply (Art. 138).
There is therefore a change of economic regime by judicial order.
ART. 100. The separation in fact between husband and wife
shall not affect the regime of absolute community except that:
(1) The spouse who leaves the conjugal home or refuses to live
therein, without just cause, shall not have the 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 obtained
in a summary proceeding;
(3) 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

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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
latters share. (178a)

SEPARATION DE FACTO DEFINED. The separation in fact between the

spouses or de facto separation is the cessation of cohabitation. The spouses no
longer live together as husband and wife under the same roof, but there is no decree
of legal separation obtained by either of them.

SEPARATION DE FACTO DISTINGUISHED FROM ABANDONMENT.

In de facto separation, while not living together, the spouses may still be
providing support to one another and also to the children. On the other hand,
abandonment involves not only separation de facto but implies an intention never to
return to the conjugal home and without providing for the needs and maintenance of
ones family.

Separation de facto is not a ground for legal separation.

On the other hand,

abandonment can give cause for legal separation under Article 55 of the Family
Code.

EFFECTS OF SEPARATION DE FACTO.

Inapplicability of Article 63. Since there is no decree of legal separation,
separation de facto does not produce the effects provided for in Article 63 of the
Family Code. Thus,
(a) The spouses retain their right of consortium;
(b) The absolute community of property remains and is not affected;
(c) The spouses continue to be legal heirs of each other in intestate
succession;
(d)There is neither a guilty spouse nor an innocent spouse for purposes of
determining forfeiture of shares after liquidation.

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CASE: Villanueva vs. CA and Retuya, G.R. No. 143286, April 14, 2004, 427
SCRA 439. The cohabitation of a spouse with another person, even for a long
period, does not sever the tie of a subsisting previous marriage. Hence, all property
acquired from the date of their marriage until the death of the wife are still presumed
community (conjugal) and cannot form part of any co-ownership with the paramour.

Deserter loses the right to be supported. The spouse who leaves the
conjugal home without just cause is not entitled to support. However, the deserting
spouses obligation to support the other spouse and the children is not extinguished.

Judicial authorization may be obtained in lieu of spouses consent.

When the consent of one spouse to any transaction of the other is required by law,
and the latter does not want to give such consent or is not available to give the
required consent, authorization may be obtained from the court in a summary
proceeding.

Solidary liability of the spouses. Although actually living separately, the

absolute community remains liable for the support of the family. If the community
property is insufficient, the separate properties of the spouses shall be solidarily liable
for the support of the family. (See Art. 70 and the last paragraph of Art. 94.)

Judicial authorization to administer or encumber separate property.

The spouse present may, upon proper petition in a summary proceeding, ask for
judicial authority to administer or encumber specific separate property of the other
spouse, and to use its fruits or proceeds to satisfy the share of the other spouse in the
support of the family.

ART. 101.

If a spouse without just cause abandons the

other or fails to comply with his or her obligations to the family,

the aggrieved spouse may petition the court for receivership, for
judicial separation of property or for authority to be the sole

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administrator for the absolute community, subject to such

precautionary conditions as the court may impose.
The obligations to the family mentioned in the preceding
paragraph refer to marital, parental or property relations.
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. (178a)

ABANDONMENT DEFINED. This is desertion of the conjugal dwelling without

intention of returning. There must be an absolute cessation of marital relations, duties
and rights with intention of perpetual separation. It must not only be physical
estrangement but also amounts to financial and moral desertion.

PRIMA FACIE PRESUMPTION OF ABANDONMENT. A spouse is prima facie

presumed to have abandoned the other spouse and the family, and to have no more
intention of returning to the conjugal dwelling if:

The spouse has left the conjugal dwelling for a period of no less than
three (3) months; OR

The spouse has failed within the same period of three (3) months to give
any information as to his or her whereabouts.

The presumption (being merely a disputable presumption) is rebuttable by the

presentation of clear, strong and convincing evidence that the absent spouse did not
intend to leave the present spouse and the family.

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LEGAL REMEDIES OF DESERTED SPOUSE. In case of an unjust

abandonment, or when one spouse fails to comply with his or her marital and parental
obligations as well as to his or her duties regarding the administration of the communal
properties the other spouse may petition the appropriate court for:

Receivership (Rule 59, Revised Rules of Court).

Judicial separation of property (Art. 134, par. 4).
Sole administration of the absolute community of property.

The grant of these remedies are subject to precautionary conditions as the

court may impose.
RELEVANCE TO OTHER PROVISIONS.
If it is shown that such failure to comply with the obligations of a family
constitutes a psychological incapacity to perform the essential marital obligations,
which existed at the time of the marriage, the marriage itself can be considered void
under Article 36 of the Family Code.

If the abandonment without just cause is for more than one year, another
remedy is the filing of a legal separation case under Article 55 (10).

Section 6.
Liquidation of the Absolute Community
Assets and Liabilities
(Arts. 102-104)

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STUDY GUIDE (Arts. 88-104, Family Code)

ART. 102.

Upon dissolution of the absolute community

regime, the following procedure shall apply:

(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.
(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 as
provided in this Code. For purposes 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.
(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

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STUDY GUIDE (Arts. 88-104, Family Code)

below the age of seven years are deemed to have chosen the
mother, unless the court has decided otherwise. In case there is
no such majority, the court shall decide, taking into
consideration the best interests of said children. (n)

LIQUIDATION PROCEDURE. Dissolution or termination of the absolute

community (upon the grouds enumerated in Article 99) comes first before the
liquidation. Upon termination, the following steps or procedure must be complied with:

Inventory. An inventory shall be prepared, listing separately the communal

properties from the exclusive properties of each spouse.

Payment of debts. The debts and obligations of the absolute community

shall be paid out of its assets, without prejudice to solidary liability of the spouses
separate properties in case of insufficiency of the communal assets (Art. 94, par. 2).

Delivery of exclusive properties. Whatever remains of the exclusive

properties of the spouses shall be delivered to each of them.

Partition of net assets. The net assets of the absolute community shall be
divided equally between the spouses, without prejudice to a contrary agreement in the
marriage settlements, or to a voluntary waiver of such share.

CASE: Abalos vs. Macatangay, G.R. No. 155043, September 30, 2004, SCRA.
The right of the husband or wife to one-half of the conjugal assets does not vest until
the dissolution and liquidation of the conjugal partnership, or after dissolution of the
marriage, when it is finally determined that, after settlement of conjugal obligations,
there are net assets left which can be divided between the spouses or their respective
heirs.

Delivery of the presumptive legitime. The presumptive legitimes of the

common children shall be delivered upon partition, in accordance with Article 51.

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Adjudication of conjugal dwelling and lot. The conjugal dwelling and lot
shall be adjudicated as follows:
(a) In accordance with the agreement of the parties, if any;
(b) If there is no such agreement, it shall be adjudicated to the spouse with
whom the majority of the common children choose to remain;
(c) Children below seven (7) years old are deemed to have chosen the
mother, unless the court decides otherwise.
(d) In case there is no such majority among the children, the court shall
decide the matter, taking into consideration the best interests of the
children.

DISTINCTION BETWEEN NET ASSETS AND NET PROFITS.

The net assets constitute the net remainder of the community or conjugal
property after payment of debts and obligations of the community or conjugal property
(Par. 2, Art. 102; Par. 7, Art. 129).

The net profits constitute 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 dissolution.

It must be understood that debts and obligations must have been paid
first and that there is still a remainder before any net profits could be considered.

RULE OF FORFEITURE.
Articles 43 (2) and 63 (2) refer to forfeiture of shares in the net profits, and not
of the capital of either spouse.
Articles 147 and 148 (unions without marriage) mention also of forfeitures when
a partner acted in bad faith. What is to be forfeited, however, is not net profits
because there is no conjugal partnership or community property in such unions. What
is forfeitable is the share of the errant partner in the co-ownership.

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ART. 103.

Upon the termination of the marriage by death,

the community 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 the community property either
judicially or extra-judicially within one year from the death of the
deceased spouse.
If upon the lapse of the said period, no
liquidation is made, any disposition or encumbrance involving
the community property of the terminated marriage shall be
void.
Should the surviving spouse contract a subsequent marriage
without compliance with the foregoing requirements, a
mandatory regime of complete separation of property shall
govern the property relations of the subsequent marriage. (n)

MANDATORY LIQUIDATION WHEN MARRIAGE TERMINATED BY DEATH. If

the absolute community is terminated by death of either spouse, the procedure in
Article 103 (not in Article 102) will be followed, to wit:

The community property shall be liquidated in the same proceeding for the
settlement of the estate of the deceased.

If the surviving spouse does not institute a judicial settlement of the estate of
the deceased spouse, the law requires the surviving spouse to liquidate (either
judicially or extra-judicially) the community property within ONE (1) YEAR from the
death of the deceased.

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If there are no debts to be paid, liquidation may be by extra-judicial

settlement under Rule 74 of the Revised Rules of Court, or by an
ordinary action for partition.

If there are debts to be paid, the surviving spouse has no choice but to file
a proceeding for the settlement of the estate of the deceased spouse,
and the community property will be liquidated in the same proceeding.

CONSEQUENCES OF FAILURE TO LIQUIDATE. The failure of the surviving

spouse to liquidate the community property within one (1) year, as above prescribed,
will result in the following consequences:

Any disposition or encumbrance of community property by the surviving

spouse is void.

If the surviving spouse contracts a subsequent marriage, a mandatory

regime of complete separation of property (Arts. 145-146) shall govern the property
relations of the subsequent marriage.
This is expressly made mandatory.

The reason for this is to protect the

children of the first marriage considering that their shares in the estate of
their deceased parent have not yet been adjudicated to them (there
being no settlement), and these shares might be mixed up with the
property of the second marriage if the rule of complete separation of
property is not provided.

ART. 104.

Whenever the liquidation of the community

properties of two or more marriages contracted by the same

person before the effectivity of this Code is carried out
simultaneously, the respective capital, fruits and income of each
community shall be determined upon such proof as may be
considered according to the rules of evidence. In case of doubt as
to which community the existing properties belong, the same

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shall be divided between the different communities in proportion

to the capital and duration of each. (189a)

SIMULTANEOUS LIQUIDATION OF COMMUNITY

PROPERTIES OF TWO OR MORE MARRIAGES.

A spouse who contracted two or more marriges before the effectivity of the
Code (August 3, 1988) might have lived these marriages without liquidation of the
community properties.

In the event of a simultaneous liquidation, the respective capital, fruits,

incomes of each community shall be segregated or determined to effect a fair and

just liquidation based upon such proofs as may be competent and admissible in
accordance with the rules of evidence.

In the absence of such competent and admissible proofs resulting in doubt or

failure of determination, the properties shall be divided between the different
communities on the basis of a double proportion that is, in proportion to the
capital, and duration of each community.

ILLUSTRATION OF DOUBLE PROPORTION.

Supposing A married B on January 1, 1970. B died on January 2, 1980. The

community lasted for 10 years. On May 1, 1980, A married C. On May 2, 1985, A died. The
second community lasted for 5 years.
B brought to the marriage P200,000.00, while C P100,000.00. At the time of the
simultaneous liquidation, the mass of the properties is P1,000,000.00
.
(a) On double proportion:
Community with B:
Community with C:

P200,000.00 x 10
P100,000.00 x 5
Amount

35

= P2,000,000.00
= P 500,000.00
= P2,500,000.00

STUDY GUIDE (Arts. 88-104, Family Code)

Community with B:

P2,000,000.00
P2,500,000.00

x P1,000,000.00

= P800,000.00

Community with C:

P 500,000.00
P2,500,000.00

x P1,000,000.00

= P200,000.00

(b) If the durations are the same:

Community with B:

P200,000.00
P300,000.00

x P1,000,000.00

= P666,666.67

Community with C:

P100,000.00
P300,000.00

x P1,000,000.00

= P333,333.33

APPLICABILITY OF THE ARTICLE. The article applies only to marriages

contracted before the effectivity of the Family Code. After the effectivity of the Code, it
is no longer possible to have unliquidated community properties of two or more
marriages because Art. 103 of the Family Code provides that if the surviving spouse
contracts a subsequent marriage without liquidating the dissolved community of the
terminated marriage, the regime of absolute separation of property shall automatically
apply to the property relations of the spouses in the subsequent marriage. Hence,
there is segregation of property from the start.

END OF THE TOPIC REMINDERS:

1. Study and master the principles under each topic.
2. Memorize the provisions required to be committed to memory.
3. When a case is required in this study guide to be read in its
original text

, be ready to recite the case or to prepare a

case digest thereof in class.

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STUDY GUIDE (Arts. 88-104, Family Code)

The discussions outlined in this study guide have been

collectively lifted from the references listed in your course
syllabus.

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