What shall govern the property relations between husband and wife?
Under Article 74 of the Family Code, the property relations between husband and wife shall be governed in the following order:
(1) By marriage settlements executed before the marriage;
(2) By the provisions of the Family Code; and
(3) By the local customs.
With regard to (1) above, a marriage settlement is an agreement between the parties which fixes the property relations during the marriage[1]. It shall be in writing, signed by the parties and executed before the celebration of the marriage.[2]
What are the various property regimes that that future spouses may agree upon?
Art. 75 of the Family Code provides that the future spouses may, in the marriage settlements agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. Note must be taken that, under the same provision of law, the system of absolute community of property shall govern:
(1) In the absence of marriage settlement; or
(2) When the regime agreed upon is void.
In general, what is the Absolute Community of Property about?
The Supreme Court (SC) gave an overview of this property regime in Quiao v. Quiao[3], to wit:
When a couple enters into a regime of absolute community, the husband and the wife becomes joint owners of all the properties of the marriage. Whatever property each spouse brings into the marriage, and those acquired during the marriage (except those excluded under Article 92 of the Family Code) form the common mass of the couple's properties. And when the couple's marriage or community is dissolved, that common mass is divided between the spouses, or their respective heirs, equally or in the proportion the parties have established, irrespective of the value each one may have originally owned.
In the regime of Absolute Community of Property, what properties are included and excluded in the community property?
A. Inclusions
The general rule is that 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, unless otherwise provided in:
a. the Family Code (see exclusions below); or
b. the marriage settlement.[4]
B. Exclusions
Art. 92 provides for the exclusions from the community property, i.e.:
(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;
(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.
In general, what is the Conjugal Partnership of Gains about?
Still in Quiao v. Quiao[5], the SC had the occasion to say that in the regime of conjugal partnership of gains, the husband and the wife place in common fund the fruits of their separate property and income from their work or industry, and divide equally, upon the dissolution of the marriage or of the partnership, the net gains or benefits obtained indiscriminately by either spouse during the marriage. From the foregoing provision, each of the couple has his and her own property and debts. The law does not intend to effect a mixture or merger of those debts or properties between the spouses. Rather, it establishes a complete separation of capitals.
In the regime of Conjugal Partnership of Gains, what properties are included and excluded in the conjugal property?
A. Inclusions
Art. 117 enumerates what are conjugal partnership properties, i.e.:
(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.
B. Exclusions
On the other hand, the exclusions are provided for in Art. 109. These properties shall be the exclusive properties 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 of 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.
What is the regime of Separation of Property about?
Under the regime of separation of property, each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without need of the consent of the other and to each spouse shall belong all earnings from his or her profession, business or industry and all fruits, natural, industrial or civil, due or received during the marriage from his or her separate property.[6]
Under Art. 144, separation of property may refer to present or future property or both. It may be total or partial. In the latter case, the property not agreed upon as separate shall pertain to the absolute community.
[1] See Art. 1, Family Code.
[2] Art. 77, Family Code.
[3] G.R. No 176556, July 4, 2012.
[4] Art. 91, Family Code.
[5] Supra, note 3.
[6] Art. 145, Family Code.