Chapter III System of Absolute Community of Property

What is Property?
In the context of marriage, property includes:
Real Property: Houses and Land Personal Property: Jewelries, gadgets, cars, clothing Financial Assets: ash, In!estments Future Interests: Pension funds, life insurance

SECTION 1. GENERAL PROVISIONS

WHEN IT COMMENCES:
At the precise moment that the marriage is cele"rated# $Art# %%&

Howe!er, if the marriage is cele"rated "efore the Family ode too' effect in $()%%&, the default property regime is the on*ugal Partnership of +ains#

When an Alien is married to a Filipino

In "oth a"solute community of property and con*ugal partnership of gains, an alien married to a Filipino cannot ha!e interest in the community or partnership property#

Cases: Matthews vs. Taylor, GR No. 164584, Muller vs. Muller, GR No. 149615

WAIVER O

RIGHTS

,ai!er of RI+H./ is not allowed $Art# %)&

Exceptions (# ,ith the marriage su"sisting, in case of a *udicial separation of property, which includes dissolution of a"solute community or con*ugal partnership as a result of legal separation# -# In case the marriage is dissol!ed $"y death of one of the spouses& or annulled#

Se!tio" #. WHAT CONSTIT$TES COMM$NIT% PROPERT%

All the properties owned "y the spouses at the time of the cele"ration of the marriage or ac0uired thereafter# $Art# )(& 1nder the A"solute ommunity of Property, spouses cannot exclude specific properties from the regime#

Wifes Salary

Wifes Labor

Husbands Salary

Husbands Labor

ABS L!"E C ##!$%"& P' PE'"&

WHAT IS E&CL$'E' (Arti!)e *#+

(# Properties ac0uired "y a gratuitous title, i#e donation, inheritance "y testate and intestate succession, including the fruits of such properties# Exce t!o": When it was expressly provided by the donor or testator that the property shall form part of the Absolute Community of Property;

,ife recei!es inheritance from father ,ife uses inheritance to "uy new car .he car is the wife3s separate property

W%FES SEPA'A"E P' PE'"&

-# Properties for personal use, e#g# clothes, "oo's, hygienic materials etc#

Exceptions: #!eces o$ %ewelry they form part of the absolute community of property

4# Properties ac0uired "efore the marriage For those with legitimate descendants with a former marriage $to protect rights of children "y a former marriage& Presumption All properties ac0uired during the marriage form part of the a"solute community of property, unless it "e pro!en that they are excluded# $Art#)4&

Se!tio" ,. CHARGES AN' O-LIGATIONS

(# /upport a# ommon children and legitimate children of either spouse# Illegitimate children of either spouse, go!erned "y $)& "# /pouses e!en if they are not li!ing together, except when a spouse lea!es the con*ugal home without a cause5
Case: &u'ulo"( vs. Ce')ra"o 51 #*+, -19

c# /pouses during the pendency of action for legal separation or for annulment5

-# 6e"ts and o"ligations contracted during marriage a# 7ither "y "oth spouses or one of them, with the consent of the other# "# reditors need not pro!e that the de"ts "enefited the family#

Cases: ./ 0!"a"ce Cor . vs. C/, 161 &CR/ 618 Mar'o"t Resort *otel vs. Gu!a"(, 168 &CR/ 2-2

4# 6e"ts contracted "y one spouse without consent of the other A"solute ommunity is lia"le only to the extent that the de"t "enefited the family# Reason: spouses are *oint administrators of community property, and one should not act without the consent of the other#

Case: G3Tractors +"c. vs. C/, 125 &CR/ 194

8# .ax, Liens, Repairs on ommunity Property a# .axes on property itself and it fruits, including any surcharges on real estate taxes# "# 9:inor repairs; are those for mere preser!ation of property# c# 9:a*or repairs; include those caused "y extraordinary e!ents or calamities#

<# .axes and 7xpenses for mere preser!ation of separate properties# a# Applies only to separate properties "y either spouse "eing used "y the family, not those that do not "enefit the family# "# 7xpenses limited to minor repairs $mere preser!ation&#

=# 7xpenses for professional, !ocational, or self>impro!ement course of spouses Intention of the law is to encourage the spouses to impro!e themsel!es for the "enefit not *ust of their family "ut of the whole nation as well# $Article ?I@, ()%A onstitution&

A# Ante>nuptial de"ts that "enefited the family a# If the ante>nuptial de"t did not "enefit the family, applica"le rule is $)&# "# e#g# loans incurred "y hus"and prior to marriage to purchase con*ugal home#

%# 6onations "y spouses to common legitimate children a# Beneficiaries should "e common legitimate children of spouses# "# 6onation should "e made "y "oth spouses5 otherwise, the a"solute community of property is not lia"le#

)# Ante>Cuptial de"ts not under $A&, support of illegitimate children, lia"ilities of either spouse arising from 0uasi>delict a# If the de"tor>spouse has no exclusi!e property or his or her property is insufficient, the payment of which shall "e deducted from the share of the de"tor>spouse upon li0uidation of the community#

"# 1nder Art# -D< of i!il ode, guilty spouse has no o"ligation to reim"urse to the a"solute community of property indemnities paid "y a"solute community property on account of a crime or 0uasi>delict committed "y guilty spouse#

/rt!cle 415. Indemnities that must be paid by either spouse on account of a crime or of a uasi!delict shall be paid from the common assets" without any obli#ation to ma$e reimbursement%

(D# 7xpenses of litigation "etween spouses unless the suit is found groundless
a# 7xpenses of these litigations are actions for support "y one spouse against the other or for support and custody of children, legal separation, and annulment of marriage# "# If the spouse who files the case loses, the A"solute ommunity of Property is not lia"le for the expenses incurred during litigation#

Case: Recto vs. *ar5e"

Art( )*( ,hate!er may "e lost during the marriage in any game of chance, "etting, sweepsta'es, or any other 'ind of gam"ling, whether permitted or prohi"ited "y law, shall "e "orne "y the loser and shall not "e charged to the community "ut any winnings therefrom shall form part of the community property# $(=8a& &he #ambler bears the losses" but the winnin#s shall #o to the absolute community of property%

Se!tio" .. OWNERSHIP/ A'MINISTRATIVE/ EN0O%MENT AN' 'ISPOSITION O THE COMM$NIT% PROPERT%

Administration of Property +Art(), Belongs to "oth spouses *ointly# If they disagree the hus"and3s decision pre!ails# .he wife can go to court for recourse within fi!e $<& years from the date of decision#

 6isposition or encum"rance must ha!e authority of the court or written consent of the other spouse# Exception: When the other spouse is incapacitated" or unable to participate 'e%#% when abroad(

Cases: Gu!a"( vs. C/, 491 &CR/ 2-4 Rav!"a vs. /)r!lle, GR No. 161-18

'ispositio" o1 Property (Art.*2+

7ither spouse may, through a will, dispose hisEher interest in the community property# .he will should refer only to hisEher own share in the community property#

'o"atio" o1 Property (Art.*3+

6onation of one spouse without the consent of the other is not allowed# Except: (& :oderate donations to charity due to family re*oicing or distress# -& :oderate gifts "y each spouse to the other due to family re*oicing#

Se!tio" 4. 'isso)5tio" o1 A6so)5te Co775"ity Re8i7e (Art.**+

.eath

Le/al Separation

Annulment or 0udicial declaration of nullity

1udicial separation of property

Cases: 6al5e7 vs. RTC, 461 &CR/ 441 8!9o vs 8!9o, GR No. 1-8144

'E

ACTO Separatio" (Art.199+

- does not affect the A"solute ommunity of Property Exceptions: (& /pouse who lea!es the con*ugal home without *ust cause shall not "e entitled to support# HeE/he, howe!er, is still re0uired to support the other spouse and the family# -& If consent is necessary, *udicial authoriFation instead of marital consent#

4& /upport for family will "e ta'en from the a"solute community property# 8& If a"solute community is insufficient, spouses shall "e solidarily lia"le# <& Judicial authority to administer or encum"er the separate property $including fruits and proceeds& of the spouse who left#

Case: &u'ulo"( vs. Ce')ra"o, 51 #*+, -19

I" !ase o1 A6a":o"7e"t (Art.191+

Present spouse may petition the court for: a& recei!ership5 "& *udicial separation of property5 or c& sole administration of the a"solute community $su"*ect to precautionary conditions&

Case: 8ela Cru7 vs. 8ela Cru7, 121 #h!l 244

/pouse is prima facie considered to ha!e a"andoned the other spouse and the family if: (# Left for a period of three $4& months, -# Failed to inform hisEher wherea"outs for a period of three$4& months#

Se!tio" ;. Li<5i:atio" o1 the A6so)5te Co775"ity

Process of li2uidation +Art(345(# In!entory of assets $a"solute community and exclusi!e properties of each spouse&# -# Payment of de"ts and o"ligations# 4# If o"ligation exceed the assets of a"solute community, nothing is di!ided# reditors can go after the separate properties of the spouses, which are solidarily lia"le for the deficiency# 8# Balance, or net remainder is di!ided e0ually#

<# If personal o"ligations of a spouse exceed hisEher separate property, creditor can go after the share of the spouse on the net reminder of the a"solute community property, without pre*udice to the pro!isions of law on forfeitures and deli!ery of presumpti!e legitimes# =# on*ugal dwelling or lot shall "e ad*udicated to the spouse with whom the ma*ority common children chose to remain#

A# hildren "elow se!en$A& years old are deemed to ha!e chosen the mother, unless the court has decided otherwise# $/antos !s A III 6i!ision&

Cases: Na)le vs. Na)le, 41 #h!l -12

Ter7i"atio" o1 7arria8e 6y :eath o1 o"e o1 the spo5ses (Art.19,+

3( When is li2uidation made a& during the *udicial settlement proceeding5 "& if none G the sur!i!ing spouse shall li0uidate either *udicially or extra>*udicially within six $=& months after the death of deceased spouse#

5( %f no li2uidation is made 6ithin six +,months Any disposition or encum"rance in!ol!ing the community property shall "e !oid#

7( %f there is a subse2uent marria/e 6ithout li2uidation re2uired by la6, a mandatory regime of complete separation of property shall go!ern the property relations of the su"se0uent marriage#

Case: ,e5es'a vs. +"testate Estate o$ C! r!a"o #e5rosa, 419 &CR/ 818

Li<5i:atio" o1 !o775"ity properties o1 t=o 7arria8es (Art.19.+

Procedures (# 6etermine the capital, fruits, and income of each community upon such proof as may "e considered according to the rules of e!idence#

-# In case of dou"t as to which community the existing properties "elong, get the proportion of: a& capital, and "& duration of each marriage#

Cases: :"as vs. %av!llo ;1924< v5a 5e 8el!7o vs. 8el!7o ;19-6<

Tha"> yo5?

Arti!)e 33
.he a"solute community of property "etween spouses shall commence at the precise moment that the marriage is cele"rated# Any stipulation, express or implied, for the commencement of the community regime at any other time shall "e !oid# $(8<a&

Arti!)e 3*
Co wai!er of rights, shares and effects of the a"solute community of property during the marriage can "e made except in case of *udicial separation of property#

Arti!)e *1
1nless otherwise pro!ided in this hapter or in the marriage settlements, the community property shall consist of all the property owned "y the spouses at the time of the cele"ration of the marriage or ac0uired thereafter# $()Aa&

Arti!)e *;
.he administration and en*oyment of the community property shall "elong to "oth spouses *ointly# In case of disagreement, the hus"andHs decision shall pre!ail, su"*ect to recourse to the court "y the wife for proper remedy, which must "e a!ailed of within fi!e years from the date of the contract implementing such decision# In the e!ent that one spouse is incapacitated or otherwise una"le to participate in the administration of the common properties, the other spouse may assume sole powers of administration# .hese powers do not include disposition or encum"rance without authority of the court or the written consent of the other spouse# In the a"sence of such authority or consent, the disposition or encum"rance shall "e !oid# Howe!er, the transaction shall "e construed as a continuing offer on the part of the consenting spouse and the third person, and may "e perfected as a "inding contract upon the acceptance "y the other spouse or authoriFation "y the court "efore the offer is withdrawn "y either or "oth offerors# $-D=a&

Arti!)e *3
Ceither spouse may donate any community property without the consent of the other# Howe!er, either spouse may, without the consent of the other, ma'e moderate donations from the community property for charity or on occasions of family re*oicing or family distress# $n&

Arti!)e 191
If a spouse without *ust cause a"andons the other or fails to comply with his or her o"ligations to the family, the aggrie!ed spouse may petition the court for recei!ership, for *udicial separation of property or for authority to "e the sole administrator of the a"solute community, su"*ect to such precautionary conditions as the court may impose# .he o"ligations to the family mentioned in the preceding paragraph refer to marital, parental or property relations# A spouse is deemed to ha!e a"andoned the other when her or she has left the con*ugal dwelling without intention of returning# .he spouse who has left the con*ugal dwelling for a period of three months or has failed within the same period to gi!e any information as to his or her wherea"outs shall "e prima facie presumed to ha!e no intention of returning to the con*ugal dwelling# $(A%a&

Arti!)e 19,
1pon the termination of the marriage "y death, the community property shall "e li0uidated in the same proceeding for the settlement of the estate of the deceased# If no *udicial settlement proceeding is instituted, the sur!i!ing spouse shall li0uidate the community property either *udicially or extra>*udicially within six months from the death of the deceased spouse# If upon the lapse of the six months period, no li0uidation is made, any disposition or encum"rance in!ol!ing the community property of the terminated marriage shall "e !oid# /hould the sur!i!ing spouse contract a su"se0uent marriage without compliance with the foregoing re0uirements, a mandatory regime of complete separation of property shall go!ern the property relations of the su"se0uent marriage# $n&

Arti!)e 19.
,hene!er the li0uidation of the community properties of two or more marriages contracted "y the same person "efore the effecti!ity of this ode is carried out simultaneously, the respecti!e capital, fruits and income of each community shall "e determined upon such proof as may "e considered according to the rules of e!idence# In case of dou"t as to which community the existing properties "elong, the same shall "e di!ided "etween the different communities in proportion to the capital and duration of each# $(%)a&

Whe" 'oes Co775"ity Property Matter?

ommunity property "ecomes an issue when:

.he marriage is dissol!ed Ine spouse dies Ine spouse wishes to dispose of some of the community property

Mo"ey )o=i"8 o5t o1 the Co775"ity

In general, property o"tained "y the couple with community funds "ecomes community property

Mo"ey )o=i"8 I"to the Co775"ity

Almost any money that a spouse earns during marriage is considered community property .his includes:
/alaries, wages, and other compensation 9,indfalls; /ale of community property Interest and rents from community property

Mo"ey )o=i"8 i"to the Co775"ity 1ro7 Co775"ity Property

In general, any funds flowing from community property into the community "ecome community funds
Rent /ale In!estment Proceeds Interest Appreciation

#arital Community

%$"E'ES" 'E$" .%8%.E$.S SALE

Separate Property

.here is a strong presumption that any property or funds o"tained during a marriage are community property Howe!er, some property is considered the separate property of one spouse or the other

Separate Property

/eparate Property Includes

Property held "y a spouse prior to marriage Property recei!ed as a gift or inheritance "y one spouse Rents, interests, or profits from any separate property

Separate Property

Cew property purchased with the proceeds of separate property is considered separate property .his concept is called tracin#
If the JJJ used to o"tain property came from the community, the new property is community property If the JJJ used to o"tain property came from one spouse3s separate property, the new property is that spouses separate property

,ife recei!es inheritance from father ,ife uses inheritance to "uy new car .he car is the wife3s separate property

W%FES SEPA'A"E P' PE'"&

Gi1ts @ I"ti7ate Perso"a) Property

Ine spouse may gi!e a gift to the other and that gift will "e separate property# .he intent to gi!e the property as a gift must "e o"!ious# /ome property is considered so intimate as to always "e considered separate property:
lothes Jewelry

MiAe: Property
It is not uncommon for a couple to use a mixture of community and separate funds to ma'e large purchases such as houses It is also not uncommon for one spouse to own a house prior to marriage and to ma'e payments on the house from community property following marriage or to use his or her la"or to impro!e the house during marriage Both of these situations create some of the most confusing issues in community property

P5r!hases o1 MiAe: Property

,hen property is purchased using "oth community and separate property, the property is proportioned

9344:444

#arital Community

9344:444

9344:444

Couple buys a 9744:444 house and uses 9344:444 from the 6ifes separate property: 9344:444 from the husbands separate property and 9344:444 from community property( "he house is 3;7 6ifes: 3;7 husbands and 3;7 Community property

%f the house appreciates to 9,44:444: the 6ife has 9544:444 in separate property: the husband has 9544:444 in separate property and the community has 9544:444 in property(

9544:444 9544:444 9544:444

#arital Community

Co775"ity EApe":it5res o" Separate Property

.wo common situations arise when one spouse owns separate property such as a house prior to marriage
.he community uses its la"or to impro!e the house .he community pays the mortgage on the house

Co775"ity La6or

,hen the community exerts its la"or on separate property, it creates a community interest for that !alue in the property
For example, if a wife owns a house and the hus"and "uilds a new dec' that causes the !alue of the house to increase "y J<D,DDD, the community now has a J<D,DDD interest in the house

Co775"ity Pays Mort8a8e

,hen the community pays mortgage on separate property owned "y one spouse, that spouse owes the community for that expenditure
For example, if the mortgage on the wife3s house is paid with her salary while the couple is married, she owes the community the !alue of all of those mortgage payments

The Ho5se

.he houses is the wife3s separate property, howe!er the community has an interest in the house from
.he mortgage paid during the marriage .he la"or that the hus"and did on the house

Separatio"

A married couple continues to accrue community property until they either di!orce or the marriage is defunct 6efunct is a legal term that means more than mere separation In general, the couple must ha!e no intention of getting "ac' together

'isso)5tio" o1 Marria8e

1pon dissolution of marriage, each spouse gets:

His or her separate property Ine half of all of the community property

.his does not mean that you split the house in half G it means that the court will "alance the distri"ution of property so that each gets K of the total !alue

'eath

ommunity property laws limit a spouse3s a"ility to dispose of property through a will at his or her death
His or her separate property Ine half of the community property

At death, a spouse may dispose of:

Co775"ity Property a": No"BMarrie: Co5p)es

:eretricious Relationships
Relationships must "e sta"le and marital li'e
6uration of the relationship oha"itation

Pooling of resources Intent of the parties Purpose of the relationship

Parties must 'now that they are not married

E<5ity

If a *udge finds that a meretricious relationship exists, she will use her e uitable powers to fairly distri"ute property "ased on community property principles