a. Antenuptial Agreements or Marriage Settlements

General provisions

The property relations shall be governed by the ff. in the stated order:

• Property relation agreed and embodied in the marriage settlement;
• Provisions of the FC; and
• Local custom. (FC, Art. 74)

XPNs:

• For marriages contracted prior to the effectivity of the FC on August 3, 1988, the property relations are determined by the law applicable to the marriage and any valid marriage settlement (Art. 119 of the NCC; Arts. 75 and 256 of the FC). The provisions of the FC have retroactive effect insofar as they do not prejudice or impair vested or acquired rights (Art. 256 of the FC).
• If no judicial estate-settlement proceeding is instituted, the surviving spouse shall liquidate the community property or conjugal partnership property, either judicially or extra-judicially, within six months from the death of the deceased spouse, as required under Arts. 103 and 130 of the FC. A subsequent marriage contracted without compliance with those requirements is governed by a mandatory regime of complete separation of property. (Rabuya, 2009)

Q: Marriage being a contract, may the parties enter into stipulations which will govern their marriage?

A: The nature, consequences and incidents of marriage are governed by law and not subject to stipulation between the spouses. This, however, is not an absolute rule. The law allows the spouses to fix their property relations during the marriage through a device known as “marriage settlement” subject only to the condition that whatever settlement they may have must be within the limits provided by the Family Code.

Other prohibited transactions

• Sale of property between spouses; and
• Leases between spouses.

Marriage settlements — Family Code, Arts. 75–81

A marriage settlement, also called an antenuptial agreement, is an agreement by persons intending to marry that fixes the property regime for their present and future property during marriage. (Sempio-Diy, 1995)

Art. 75. Future spouses may choose absolute community of property, conjugal partnership of gains, complete separation of property, or another property regime. If there is no marriage settlement, or the chosen regime is void, absolute community of property applies.

Art. 76. A modification of a marriage settlement must be made before the marriage to be valid, subject to Articles 66, 67, 128, 135, and 136.

Art. 77. A marriage settlement or modification must:

• Be in writing;
• Be signed by the parties; and
• Be executed before the marriage.

To bind third persons, it must also be registered in the local civil registry where the marriage contract is recorded and in the proper registries of property. Notarization is not required for validity: Article 77 requires a writing, not a public instrument. (FC, Art. 77; Albano, 2013)

Its provisions must comply with law, morals, and public policy; otherwise, the agreement is void. (Paras, 2008)

Art. 78. Article 78 addresses a minor who may lawfully marry: the persons designated by Article 14 to consent to the marriage must be parties to the settlement, subject to Title IX. It originally applied to persons aged 18 to 20, when the age of majority was 21; after the age of majority was lowered to 18, it has no present application. Persons below 18 cannot marry.

Art. 79. If a party has been sentenced to civil interdiction or is subject to another disability, the guardian appointed by a competent court must be a party to the settlement for it to be valid.

Art. 80. Unless the settlement provides otherwise, Philippine law governs the spouses’ property relations regardless of where they marry or reside. This rule does not apply when both spouses are aliens. It also does not govern the extrinsic validity of a contract concerning property outside the Philippines if the contract was executed where the property is located, or of a contract executed in the Philippines concerning foreign property whose situs law requires different formalities.

Art. 81. If the contemplated marriage does not take place, stipulations made in consideration of that marriage—including donations between the prospective spouses in the settlement—are void. Stipulations that do not depend on the marriage remain valid.

Modification of the marriage settlement (FC, Art. 76)

For any modification in the MS to be valid:

• The requisites for a valid MS must be present;
• A modification made before the celebration of the marriage need not, as a general rule, have judicial approval;
• Subject to the provisions of Arts. 66, 67, 128, 135, and 136 of FC.

Effect on the ante-nuptial agreement in case the marriage is not celebrated (FC, Art. 81)

GR: Everything stipulated in the settlements or contracts in consideration of the marriage shall be rendered void.

XPN: Those stipulations not dependent upon, or are not made in consideration of, the marriage, subsist.

Those donations which are made before the celebration of the marriage, in consideration of the same, and in favor of one or both of the future spouses.

The formalities of the donation propter nuptias follows the same formalities as set forth in the law on donations. Remember: Donation of a real property must be in a public instrument in order to be valid.

NOTE: Donations of future property are governed by provisions on testamentary succession and formalities of wills.

Absolute Community of Property Regime – Family Code, arts. 84 and 88-104

Art. 84. If the future spouses agree upon a regime other than the absolute community of property, they cannot donate to each other in their marriage settlements more than one-fifth of their present property. Any excess shall be considered void.

Donations of future property shall be governed by the provisions on testamentary succession and the formalities of wills. (130a)

Art. 88. The absolute community of property between spouses shall commence at the precise moment that the marriage is celebrated. Any stipulation, express or implied, for the commencement of the community regime at any other time shall be void. (145a)

Art. 89. No waiver of rights, shares and effects of the absolute community of property during the marriage can be made except in case of judicial separation of property.

When the waiver takes place upon a judicial separation of property, or after the marriage has been dissolved or annulled, the same shall appear in a public instrument and shall be recorded as provided in Article 77. The creditors of the spouse who made such waiver may petition the court to rescind the waiver to the extent of the amount sufficient to cover the amount of their credits. (146a)

Art. 90. The provisions on co-ownership shall apply to the absolute community of property between the spouses in all matters not provided for in this Chapter. (n) Art. 91. Unless otherwise provided in this Chapter 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. (197a)

Art. 92. The following shall be excluded from the community property:

(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. (201a)

Art. 93. Property acquired during the marriage is presumed to belong to the community, unless it is proved that it is one of those excluded therefrom. (160) Art. 94. The absolute community of property shall be liable for:

(1) The support of the spouses, their common children, and 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 community, or by both spouses, or by one spouse 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 been benefited;

(4) All taxes, liens, charges and expenses, including major or minor repairs, upon the community property;

(5) All taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the family;

(6) Expenses to enable either spouse to commence or complete a professional or vocational course, 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;

(9) Antenuptial debts of either spouse other than those falling under paragraph (7) of this Article, the support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of the debtor-spouse, the payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon liquidation of the community; and

(10) Expenses of litigation between the spouses unless the suit is found to be groundless.

If the community property is insufficient to cover the foregoing liabilities, except those falling under paragraph (9), the spouses shall be solidarily liable for the unpaid balance with their separate properties. (161a, 162a, 163a, 202a-205a)

Art. 95. Whatever may be lost during the marriage in any game of chance, betting, sweepstakes, or any other kind of gambling, whether permitted or prohibited by law, shall be borne by the loser and shall not be charged to the community but any winnings therefrom shall form part of the community property. (164a)

Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (206a)

Art. 97. Either spouse may dispose by will of his or her interest in the community property. (n)

Art. 98. Neither spouse may donate any community property without the consent of the other. However, either spouse may, without the consent of the other, make moderate donations from the community property for charity or on occasions of family rejoicing or family distress. (n) Art. 99. The absolute community 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 Article 134 to 138. (175a)

Art. 100. The separation in fact between husband and wife shall not affect the regime of absolute community except that:

(1) The spouse who leaves the conjugal home or refuses to live therein, without just cause, shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is required by law, judicial authorization shall be obtained in a summary proceeding;

(3) 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. (178a)

Art. 101. If a spouse without just cause abandons the other or fails to comply with his or her obligations to the family, 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, subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to marital, parental or property relations.

A spouse is deemed to have abandoned the other when he or she has left the conjugal dwelling without intention of returning. The spouse who has left the conjugal dwelling for a period of three months or has failed within the same period to give any information as to his or her whereabouts shall be prima facie presumed to have no intention of returning to the conjugal dwelling. (178a)

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 is no such majority, the court shall decide, taking into consideration the best interests of said children. (n)

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. (n)

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)

Law that governs the conjugal partnership

The rules on the contract of partnership in all that is not in conflict with what is expressly determined in the FC or by the spouses in their marriage settlements. (FC, Art. 108)

DISSOLUTION OF CONJUGAL PARTNERSHIP OF GAINS