The Conjugal Partnership of Gains

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This article was originally published on June 1, 2022 and has been updated to reflect recent legal developments.

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

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AT A GLANCE:

Article 74 of the Family Code provides that the property relationship between husband and wife shall be governed in the following order: (1) by marriage settlements executed before the marriage; (2) by the provisions of this Code; and (3) By the local custom.

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Under Article 106 of the Family Code, under the regime of conjugal partnership of gains, the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and, upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage settlements. 

 

The following shall be the exclusive property of each spouse:

 

1. That which is brought to the marriage as his or her own;
2. That which each acquires during the marriage by gratuitous title;
3. That which is acquired by right redemption, by barter or by exchange with property belonging to only one of the spouses; and 
4. That which is purchased with exclusive money of the wife or of the husband. (Article 109)

 

The spouses retain the ownership, possession, administration of his or her exclusive properties. Either spouse may, during the marriage, transfer the administration of his or her exclusive property to the other by means of a public instrument, which shall be recorded in the registry of property of the place is located. (Article 110)

 

A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her exclusive property, without the consent of the other spouse, and appear alone in court to litigate with regard to the same. (Article 111)

 

The alienation of any exclusive property of a spouse administered by the other automatically terminates the administration over such property and the proceeds of the alienation shall be turned over to the owner-spouse. (Article 112)

 

All property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. 

 

Properties Covered by the Conjugal Partnership

 

1. Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses;
2. Those obtained from the labor, industry, work or profession of either or both of the spouses;
3. The fruits, natural, industrial, or civil, due or received during the marriage from the common property, as well as the net fruits from the exclusive property of each spouse;
4. The share of either spouse in the hidden treasure which the law awards to the finder or owner of the property where the treasure is found;
5. Those acquired through occupation such as fishing or hunting;
6. Livestock existing upon the dissolution of the partnership in excess of the number of each kind brought to the marriage by either spouse; and
7. Those which are acquired by chance, such as winnings from gambling or betting. However, losses therefrom shall be borne exclusively by the loser-spouse. (Article 117)

 

Liability of the Conjugal Partnership 

 

The conjugal partnership shall be liable for:

 

1. The support of the spouse, their common children, and the 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 conjugal partnership of gains, or by both spouses or by one of them 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 benefited;
4. All taxes, liens, charges, and expenses, including major or minor repairs upon the conjugal partnership property;
5. All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse;
6. Expenses to enable either spouse to commence or complete a professional, vocational, 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; and
9. Expenses of litigation between the spouses unless the suit is found to groundless. 

 

If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties. (Article 121)

 

Dissolution of Conjugal Partnership 

 

The conjugal partnership 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 Articles 134 to 138. (Article 126)

 

Liquidation of the Conjugal Partnership Assets and Liabilities

 

Upon the dissolution of the conjugal partnership regime, the following procedure shall apply:

 

1. An inventory shall be prepared, listing separately all the properties of the conjugal partnership and the exclusive properties of each spouse. 
2. Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse shall be credited to the conjugal partnership as an asset thereof. 
3. Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value of his or her exclusive property, the ownership of which has been vested by law in the conjugal partnership. 
4. The debts and obligations of the conjugal partnership shall be paid out of the conjugal 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 paragraph (2) of Article 121. 
5. Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. 
6. Unless the owner had been indemnified from whatever source, the loss or deterioration of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any. 
7. The net remainder of the conjugal partnership properties shall constitute the profits, 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 or forfeiture of such share as provided in this Code. 
8. The presumptive legitimes of the common children shall be delivered upon the partition in accordance with Article 51. 
9. In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by the parties, 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 is no such majority, the court shall decide, taking into consideration the best interests of said children.

 

Related Articles:

• Without Ante- Nuptial Agreement, What Property Regime Will Govern the Assets of Future Spouses?
• WHAT ARE THE EXCLUSIVE PROPERTIES OF SPOUSES IN A CONJUGAL PARTNERSHIP?

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