Section 6.

Liquidation of the Absolute Community

Assets and Liabilities
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 provided in this 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.
(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.
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 six months from the death of the deceased spouse. If upon the lapse of the six
months 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.
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 shall be divided between the different
communities in proportion to the capital and duration of each. (189a)
What Is an Annulment of a Marriage?
Annulment of a marriage is a declaration by a court that the marriage was never legally valid in the first place. This
differs from a divorce because a divorce occurs when a legally valid marriage is terminated. Since the two are very
different conceptually, they can have very different results with respect to the property rights of the parties.
What Does It Mean If a Marriage Is Void?
If a marriage is void, theoretically, there has been no change in the legal status of the property of either spouse.
Annulments are usually (but not always) granted a very short time after the marriage, so it is often fairly easy for a
court to determine who owns what. In such a case, a court will do whatever is possible to restore the parties to the
positions they occupied before the marriage.
Does the Length of Time of the Marriage Affect the Division of Assets?
If a marriage is annulled after a longer period of time, things become more complicated, especially if there are
children involved. If a void marriage has gone on for some time, the couple has probably accumulated a significant
amount of property that they did not have before the marriage, and determining who is entitled to various pieces of
property can be difficult. If possible, a court will try to trace the property back to its original purpose, and determine
which spouse bought it. If this is not possible, a court will do whatever it can to divide the property fairly while
attempting to put the spouses in the position they occupied before the marriage, or as close to that position as
possible. This leaves a court with a great deal of discretion in the matter.
If a void marriage has gone on for a long time, a court might also award temporary alimony, and child support. If one
spouse depended on the other for financial support, and the marriage is annulled, temporary alimony might be
granted in order to restore that spouse to the position they occupied before the marriage. However, this alimony is
only temporary and will eventually be terminated. Child support is granted to prevent innocent third parties (the
children) from being punished for the illicit conduct of the spouses.
What is the system of absolute community?

This is one of the regimes or systems of property relations between the spouses and the default system in the
absence of a prenuptial agreement or when the agreed system is null and void. This system commences at the
precise moment that the marriage is celebrated, and any stipulation for the commencement of the community regime
at any other time is void.
In a nutshell, the husband and the wife are considered as co-owners of all properties they bring into the marriage
(those that they owned before the marriage), as well as the properties acquired during the marriage, except for
certain properties express excluded by law (listed below). The rules on co-ownership applies in all matters not
provided under the Family Code.
What constitutes community property?
Unless otherwise provided by law 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. Property
acquired during the marriage is PRESUMED to belong to the community, unless it is proved that it is one of those
excluded therefrom.
What properties are excluded from the community property?
(1) Property acquired during the marriage by gratuitous title (by donation and by testate/intestate succession) 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;
(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.
15. Can the spouses mutually agree to dissolve their conjugal partnership?
Yes. The husband and the wife may agree upon the dissolution of the conjugal partnership during marriage, subject
to judicial approval. All the creditors of the husband and of the wife, 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. (Article
191 of the New Civil Code of the Philippines)
However, the Parties may jointly file a verified petition with the court for the voluntary dissolution of the absolute
community or the conjugal partnership of gains, and for the separation of their common properties during their
marriage. (Article 136 of the Family Code of the Philippines)
Art. 136. The spouses may jointly file a verified petition with the court for the voluntary dissolution of the absolute
community or the conjugal partnership of gains, and for the separation of their common properties.
All creditors of the absolute community or of the conjugal partnership of gains, as well as the personal creditors of the
spouse, shall be listed in the petition and notified of the filing thereof. The court shall take measures to protect the
creditors and other persons with pecuniary interest. (191a)
Art.191.The husband or the wife may 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.
Art. 191. The husband or the wife may 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 by 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 178, No. 3.
In all these cases, it is sufficient to present the final judgment which has been entered against the guilty or absent
spouse. (1433a)
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 or 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 Articles 214 and 215 shall apply. The provisions of this
Code concerning the effect of partition stated in Articles 498 to 501 shall be applicable. (1433a)
Art. 214. Each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without
the consent of the other. All earnings from any profession, business or industry shall likewise belong to each spouse.
Art. 215. Each spouse shall proportionately bear the family expenses.

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