DISSOLUTION OF ABSOLUTE COMMUNITY REGIME

CAUSES OF TERMINATION OF ABSOLUTE COMMUNITY

Article 99 of the Family Code

Upon termination of marriage - Upon the death of either spouse
- When the marriage is annulled
- When the marriage is declared void under Article 40

Prior to termination of marriage - When there is decree of legal separation

- In case of judicial separation of property during marriage
under Art. 134 to 138
Judicial Declaration of Nullity of Marriage as Cause of Dissolution
Mercado Fehr v. Fehr, GR 152716, October 23, 2003
For Article 147 to operate, the man and the woman:
(1) must be capacitated to marry each other;
(2) live exclusively with each other as husband and wife;
(3) their union is without the benefit of marriage or their marriage is void.
All these elements are present in the case at bar. It has not been shown that petitioner and
respondent suffered any impediment to marry each other. They lived exclusively with each other as
husband and wife when petitioner moved in with respondent in his residence and were later united
in marriage. Their marriage, however, was found to be void under Article 36 of the Family Code
because of respondents psychological incapacity to comply with essential marital obligations.
Articles 50 and 51 of the Family Code does not apply to void marriages and relate only to voidable
marriages and exceptionally to void marriages under Article 40 of the Family Code, i.e., the
declaration of nullity of a subsequent marriage contracted by a spouse of a prior void marriage
before the latter is judicially declared void.
Separation as a Cause for terminating the Absolute Community

Decree of legal separation results in termination and not mere separation

de facto.

Villanueva v. Chiong, GR. 159889, June 5, 2008

Petitioners’ contention that the lot belongs exclusively to Florentino because of his
separation in fact from his wife, Elisera, at the time of sale dissolved their property
relations, is bereft of merit. Respondents’ separation in fact neither affected the
conjugal nature of the lot nor prejudiced Elisera’s interest over it. Under Article 178 of
the Civil Code, the separation in fact between husband and wife without judicial
approval shall not affect the conjugal partnership. The lot retains its conjugal nature.
Judicial Separation of Property
Espinosa v. Omaña, 659 SCRA 1, October 12, 2011
The Court has ruled that extrajudicial dissolution of the conjugal partnership (or absolute
community) without judicial approval is void.

De-Ugalde v. De Ysasi, GR. 130623, February 29, 2008

Article 175 of the Civil Code (counterpart CPG provision of Article 99 of ACP in Family Code). The
compromise agreement in this case shall become effective only on June 9, 1981, the date when it
was approved by the trial court and not March 30,1981 when it was signed by the parties involved.
Under Article 134 of the Family Code: “in the absence of the express declaration in the marriage
settlements, the separation of the property between the spouses during the marriage shall not take
place save in virtue of a judicial order.” Hence, the separation of property is not effected by mere
execution of a contract or agreement of the parties but by the decree by the court approving the
same. Therefore, it becomes effective only upon the judicial approval, without which it is void.
Article 137 of this code explicitly provides that the conjugal partnership is dissolved only upon the
issuance of a decree of separation of property.
EFFECTS OF SEPARATION DE FACTO
In general

Separation de facto
• Spouses simply separate without the benefit of a decree of legal
separation.
• It does not affect the regimes of absolute community or
conjugal partnership of gains.
EFFECTS OF SEPARATION DE FACTO
In general

Judicial authorization may be obtained in a summary proceeding in the ff:

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

Abandonment
• Under the Code, a spouse is deemed to have abandoned the other when
he or she has left the conjugal dwelling without intention of returning.
• Partosa-Jo v. CA, GR. 82606, December 18,1992
Abandonment implies a departure by one spouse with the avowed intent never to return,
followed by prolonged absence without just cause, and without in the meantime providing
in the least for one's family although able to do so. There must be absolute cessation of
marital relations, duties and rights, with the intention of perpetual separation. This idea is
clearly expressed in the above provision.
EFFECTS OF SEPARATION DE FACTO
In Case of Abandonment

Abandonment
• If separation de facto is attended by abandonment, the following effects
are produced:
• the spouse who leaves the conjugal home or refuses to live therein, without just
cause, shall not have the right to be supported;
• the aggrieved spouse may petition the court for receivership, for judicial separation
of property or for authority to be the sole administrator of the absolute community
or of the conjugal partnership, subject to such precautionary conditions as the court
may impose; and
• the aggrieved spouse may petition for legal separation if the abandonment lasts for
more than one year.
LIQUIDATION OF THE ABSOLUTE COMMUNITY
ASSETS AND LIABILITIES
PROCEDURE IN THE LIQUIDATION OF ABSOLUTE COMMUNITY
1. Inventory list – AC assets and exclusive properties
2. Debts and obligations of AC
3. Remainder of exclusive properties
4. Net remainder of the properties of AC / Net Assets
5. Delivery of presumptive legitimes
6. Adjudication of conjugal dwelling
Illustration of Liquidation
Total ACP Husband Wife
Savings account 500,000.00 500,000.00
Time deposit 300,000.00 300,000.00
Investment stocks 420,000.00 420,000.00
Conjugal Dwelling 1,000,000.00 1,000,000.00
Total Assets 2,220,000.00 1,500,000.00 300,000.00 420,000.00
Debts and obligations - AC (300,000.00) (300,000.00)
Net Assets 1,920,000.00 1,200,000.00 300,000.00 420,000.00
Distribution:
Exclusive Properties (720,000.00) (300,000.00) (420,000.00)
Net remainder of ACP (200,000.00) 100,000.00 100,000.00
Net Assets after Distribution 1,200,000.00 1,000,000.00 100,000.00 100,000.00
Delivery of Presumptive Legitimes
Adjudication of Conjugal Dwelling
NET ASSETS VS NET PROFITS
• Article 102 of the Family 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.”
NET ASSETS VS NET PROFITS
• Forfeiture of Net Profits of Offending or Guilty Spouse in Favor of
Common Children/Children of Guilty Spouse by Previous
Marriage/Innocent Spouse
• Subsequent marriage in Article 41 is terminated
• Legal separation
• Annulment
• Judicial declaration of nullity of marriage if the ground is Article 40
NET ASSETS VS NET PROFITS
• Quiao v. Quiao, 675 SCRA 642 (2012)
• Net Assets – market value of all properties less debts and obligations of the
AC
• Net Profits – Net Assets of the AC less market value of the properties at the
time of marriage
• Since spouses have no separate properties, there is nothing to return to any
of them. What remains in the properties should be divided equally between
the spouses and the respective heirs. However, since the petitioner is the
guilty party, his share from the net profits of the conjugal partnership is
forfeited in favor of the common children. Hence, like in the AC regime,
nothing will be returned to the guilty party in the CP regime, because there is
no separate property which may be accounted for in the guilty party’s favor.
TERMINATION OF MARRIAGE BY DEATH
Mandatory Liquidation of the Absolute Community in Case of Death of Either Spouse
1. Same proceeding for the settlement of the estate
2. If no judicial settlement proceeding in no. 1, the law requires liquidation of the absolute
community, either judicially or extrajudicially within one year from death of the deceased spouse.
• If upon lapse of one-year period, no liquidation is made, any disposition or encumbrance is void
• If the surviving spouse contracts a subsequent marriage without compliance with the foregoing
requirements, the subsequent marriage shall be governed, mandatorily, by a regime of complete
separation of property.
TERMINATION OF MARRIAGE BY DEATH
Effect Upon Disposition or Encumbrance of Community Property
• The Law on Persons and Family Relations Book (2017), Rabuya
• Transaction not entirely void but shall be valid to the extent of what may be
allotted in the property involved, in the final partition, to the vendor or
mortgagor.
• The disposition of the interest in the community property is done after the
termination of the marriage and after the right of the vendor and/or
mortgagor to the inheritance has been transmitted and/or consolidated.
TERMINATION OF MARRIAGE BY DEATH
Mandatory Regime of Complete Separation
If there is no liquidation of the absolute community within one year from
the death of the deceased spouse and the surviving spouse contracts a
subsequent marriage, a mandatory regime of complete separation of
property shall govern the property relations of the subsequent marriage.