6. Property Relations between the Spouses

7. Property Relations Between the Spouses

b. Donation Propter Nuptias c. Different Property Regimes i. Absolute Community of Property Regime ii. Conjugal Partnership of Gains Regime iii. Complete Separation of Property Regime or Judicial Separation of Property d. Rules Common to Both Absolute Community of Property and Conjugal Partnership of Gains e. Property Regime of Unions Without Marriage

RELATIVE INCAPACITY

• Spouses - A spouse may pursue a legitimate profession, vocation, or trade without the consent of the other spouse. This does not dispense with the written consent or court authority required to dispose of or encumber community or conjugal property. (Family Code, Arts. 73, 96, 124)

General Rule: The husband and the wife cannot sell property to each other. The contract is void. There is no transfer of ownership, thus the creditors may go after the property. (Modina v. CA, G.R. No. 109355, 1999)

Married woman as Guarantor (Art. 2049)

General rule: Either spouse may act as guarantor, but the guaranty does not, by itself, bind community or conjugal partnership property (Civil Code, Art. 2049).

Exceptions:

• Community or conjugal partnership property answers for the obligation only when it is chargeable to that property under the applicable Family Code rules, including those on consent and benefit to the family (Family Code, Arts. 94 and 121).
• Disposition or encumbrance of community or conjugal partnership property requires the other spouse’s written consent or court authority (Family Code, Arts. 96 and 124).

Updated: Encumbering conjugal property requires the other spouse’s written consent or court authority; otherwise, the transaction is void but may be accepted by the non-consenting spouse as a continuing offer (Commoner Lending Corporation v. Balandra, G.R. No. 247646, 29 March 2023).

Persons Disqualified to Be Lessees

• Husband and wife cannot sell property to each other except:
• If a separation of property was agreed upon in the marriage settlement; or
• If there has been a judicial separation of property under the Family Code (see Art. 135 for sufficient causes). (NCC, Art. 1490);
• Reasons for the disqualification:
• To prevent prejudice to creditors;
• To prevent the stronger spouse from influencing unduly the weaker spouse.

• Persons referred to under Art. 1491 of NCC are disqualified because of fiduciary relationships.

NOTE: While foreigners in general cannot buy rural or urban lands, they are not completely excluded by the Constitution from use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. However, if an alien is given not only a lease of, but also an option to buy a piece of land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his property (e.g., for fifty years), then it becomes clear that the arrangement is a virtual transfer of ownership. If this can be done, then the Constitutional ban against alien landholding in the Philippines, is indeed in grave peril. (Fullido v. Grilli, G.R. No. 215014, February 29, 2016)

Hence, foreigners may lease land from others. (NCC, Art. 1643)

Sale of Property Between Married Spouses

GR: Spouses cannot by compromise evade the prohibition on the sale of property to one another

XPN: When a separation of property has been agreed upon in the marriage settlements; When there has been a judicial separation of property.

Properties included in the absolute community

• All the property owned by the spouses:
• At the time of the celebration of the marriage; or
• Acquired thereafter;
• Property acquired during the marriage by gratuitous title, if expressly made to form part of the community property by the donor, testator or grantor; or
• Jewelry or properties with monetary value;
• Winnings in gambling.

Presumption of inclusion in the absolute community

In absence of evidence, property acquired during the marriage is presumed to belong to the community, unless it is proved otherwise. (FC, Art. 93)

The sale or encumbrance of a conjugal property requires the consent of both the husband and the wife. (Guiang v. CA, G.R. No. 125172, June 26, 1998) , including the portion of the conjugal property pertaining to the husband who contracted the sale. Neither would the conjugal partnership be liable for the loan on the ground that it redounded to the benefit of the family. (Homeowners Savings & Loan Bank v. Dailo, G.R. No. 153802, March 11, 2005)

My side note: Sometimes we are confused with the term conjugal property. The term alone is not a property regime between spouses. The property regime which mentions conjugal is the regime of Conjugal Partnership of Gains which is the default property regime prior to the effectivity of the Family Code (before August 3, 1988).

The term conjugal property generally refers to the property belonging to the married couple. This sometimes confuses us because the term conjugal property (referring to the property of the married couple) is used also under the regime of Absolute Community.

A wife, by affixing her signature to a deed of sale on the space provided for witnesses, is deemed to have given her implied consent to the contract of sale. The consent need not always be explicit or set forth in any particular document so long as it is shown by acts of the wife that such consent or approval was in fact given. (David v. Pelayo, G.R. No. 141323, June 8, 2005)

When the sale was entered into prior to the effectivity of the FC Art. 173, in relation to Art. 166 of the NCC will apply if there was a finding of lack of the wife's consent. Under said provisions, the sale would have been merely voidable, and not void.

The use of the jurat, instead of an acknowledgment, does not elevate the marital consent into the level of a public document but instead consigns it to the status of a private writing. Hence, the presumption of regularity does not apply, and the wife still needs to prove its genuineness and authenticity as required under the rules of evidence. The fact that the document contains a jurat, and not an acknowledgment, should not affect its genuineness or that of the related document of conveyance itself, the Deed of Absolute Sale. In this instance, a jurat suffices as the document only embodies the manifestation of the spouse's consent, a mere appendage to the main document. (Pan Pacific Industrial Sales Co., Inc. v. CA, G.R. No. 125283, February 10, 2006)

Updated: An unauthorized encumbrance of conjugal property may become binding when the other spouse accepts the continuing offer, as shown by partial payments and an undertaking to pay (Commoner Lending Corporation v. Balandra, G.R. No. 247646, 29 March 2023).

CHARGES UPON AND OBLIGATIONS OF THE ABSOLUTE COMMUNITY PROPERTY

Charges upon the ACP

• The support of:
• The spouses
• Their common children
• Legitimate children of either spouse; Note: Support of illegitimate children of either spouse is chargeable to exclusive property of the illegitimate parent. (FC, Art. 197) XPN: Support of illegitimate children of either spouse is chargeable to community in case absence or insufficiency of the exclusive property of the debtor-spouse which shall be considered advances to be deducted from the share of the debtor-spouse upon liquidation of the community. (FC, Arts. 94, second paragraph, and 197)
• All debts and obligations contracted during the marriage by:
• the designated administrator-spouse for the benefit of the community
• by both spouses
• by one spouse with the consent of the other;
• Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited;
• All taxes, liens, charges and expenses, including major or minor repairs, upon the community property;
• All taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the family;
• Expenses to enable either spouse to commence or complete a professional or vocational course, or other activity for self improvement;
• Ante-nuptial debts of either spouse insofar as they have redounded to the benefit of the family; NOTE: For ante-nuptial debts, those contracted by one spouse without the consent of the other during the marriage and those contracted by the administrator spouse, the burden of proof that such debts were contracted for the benefit of the community or of the family lies with the creditor-party litigant claiming as much. (Rabuya, 2009)
• 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;
• Payment, in case of absence or insufficiency of the exclusive property of the debtor spouse, of:
• Ante-nuptial debts of either spouse which did not redound to the benefit of the family;
• The support of illegitimate children of either spouse;
• Liabilities incurred by either spouse by reason of a crime or quasi-delict; NOTE: The payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon liquidation of the community.
• Expenses of litigation between the spouses. However, if suit is found to be groundless, it cannot be charged against the ACP. (FC, Art. 94)

Q: An individual, while single, purchases a house and lot in 1990 and borrows money in 1992 to repair it. In 1995, such individual is married while the debt is still being paid. After the marriage, is the debt still the responsibility of such individual? (2007 BAR)

A: YES. The debt remains the individual's obligation unless it is shown to have redounded to the benefit of the family. Only to that extent is the antenuptial debt chargeable to the absolute community of property. The stated facts do not establish that repairing the house benefited the family. (FC, Art. 94 (7))

There is no presumption that the obligations incurred by one of the spouses during the marriage are charged against their community of property. Before any obligation may be chargeable against the community of property, it must first be established that such obligation is among the charges against the same. (Wong, et al, v. IAC, G.R. No. 70082, August 19, 1991)

XPN:

• Agreement that only one of the spouses shall administer the community property;
• If one spouse is incapacitated or otherwise unable to participate in the administration of the common properties – capacitated or able spouse may assume sole powers of administration without the need of court approval or authorization;
• 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 sole administration;
• During the pendency of the legal separation case, the court may designate either of the spouses as sole administrator.

NOTE: But such powers do not include:

• Disposition;
• Alienation; or
• Encumbrance of the conjugal or community property.

"Court authorization" in the sale of conjugal properties

Court authorization is resorted to in cases where the spouse who does not give consent is incapacitated. If there is no showing that the spouse is incapacitated, court authorization cannot be sought. (Manalo v. Fernandez, G.R. No. 147928, January 23, 2002)

Disagreement in the administration of community property (FC, Art. 96)

In case of disagreement, the decision of the husband shall prevail but subject to recourse to the court by the wife for proper remedy.

NOTE: Prescriptive period for recourse is within 5 years from the date of the contract implementing such decision.

Updated: An unauthorized encumbrance of conjugal property may become binding if the non-consenting spouse accepts the continuing offer (Commoner Lending Corporation v. Balandra, G.R. No. 247646, 29 March 2023).

Sale or Disposition of Community Property

Alienation or encumbrance of community property must have the written consent of the other spouse or the authority of the court without which the disposition or encumbrance is 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. (FC, Arts. 96 and 124; Sps. Antonio and Luzviminda Guiang v. CA, et al., G.R. No. 125172, June 26, 1998)

The absence of consent of one of the spouses renders the entire sale null and void, including the sale of the portion of the conjugal property pertaining to the spouse who contracted the sale. For dispositions of absolute community or conjugal partnership property governed by FC, Arts. 96 and 124, the other spouse's written consent or court authority is required. However, even if the other spouse actively participated in negotiating for the sale of the property, that other spouse's written consent to the sale is required by law for its validity. Being aware of a transaction is not consent. (Jader-Manalo v. Camaisa, G.R. No. 147978, January 23, 2002)

Q: Marco and Gina were married in 1989. In 1999, Gina left Marco and lived with another man, leaving the two children of school age with Marco. When Marco needed money for their children’s education, he sold a parcel of land registered in his name, without Gina’s consent, which he purchased before his marriage. Is the sale by Marco valid, void, or voidable? Explain with legal basis. (2015 BAR)

A: The sale is VOID. The parties were married in 1989. In the absence of a marriage settlement, the parties shall be governed by ACP whereby all the properties owned by the spouses at the time of the celebration of the marriage as well as whatever they may acquire during the marriage shall form part of the absolute community. In ACP, neither spouse can sell or encumber property belonging to the ACP without the consent of the other. Any sale or encumbrance made by one spouse without the consent of the other shall be void although it is considered as a continuing offer on the part of the consenting spouse upon authority of the court or written consent of the other spouse.

Q: Does the prohibition cited above include lease by the husband over properties of the community of property without the consent of the wife?

A: YES. In the contract of lease, the lessor transferred his right of use in favor of the lessee. The lessor's right of use is impaired therein. He may even be ejected by the lessee if the lessor uses the leased realty. Therefore, the lease is a burden on the land. It is an encumbrance on the land. Moreover, lease is not only an encumbrance but also a qualified alienation, with the lessee becoming, for all intents and purposes, and subject to its terms, the owner of the thing affected by the lease. (Roxas v. CA, G.R. No. 92245, June 26, 1991)

Donation of a community property by a spouse

GR: A spouse cannot donate any community property without the consent of the other.

XPN: Moderate donations for charity or on occasion of family rejoicing or distress. (FC, Art. 98)

Liquidation of Property if either spouse contracted the marriage in Bad Faith

His or her share of the net profits of the community property or conjugal partnership property shall be forfeited in favor of the common children or if there be none, the children of the guilty spouse by previous marriage, or in default thereof, the innocent spouse.

Prohibition against the sale of property between spouses

GR: Spouses cannot sell property to each other.

XPNs:

• When a separation of property was agreed upon in the marriage settlement;
• When there has been a judicial separation of property under Articles 135 and 136 of the Family Code. (NCC, Art. 1490)

NOTE: The proscription against the sale of property between spouses under Art. 1490 of the New Civil Code applies even to common law relationships. In an earlier ruling, the Supreme Court nullified a sale made by a husband in favor of a concubine, after he had abandoned his family and left the conjugal home where his wife and children lived, and from whence they derived their support, for being contrary to morals and public policy. The sale was regarded by the court as subversive of the stability of the family, a basic social institution which public policy cherishes and protects. (Ching v. Goyanko, G.R. No. 165879, November 10, 2006)

LIQUIDATION OF THE ABSOLUTE COMMUNITY ASSETS AND LIABILITIES

Procedure in case of dissolution of ACP

• Inventory of all properties of the ACP, listing separately the communal properties from exclusive properties of each spouse;
• Payment of community debts; NOTE: First, pay out of the community assets. If not enough, husband and the wife are solidarily liable for the unpaid balance with their separate properties.
• Delivery to each spouse of his/her remaining exclusive properties;
• Equal division of net community assets Unless there is:
• An agreement for a different proportion; or
• A voluntary waiver of such share;
• Delivery of the presumptive legitimes of the common children; and
• Adjudication of conjugal dwelling and custody of common children. (FC, Art. 102)

Applicable procedure in the dissolution of the ACP in case the marriage is terminated by death

Community property shall be liquidated in the same proceeding for the settlement of the estate of the deceased.

If no judicial proceeding is instituted, the surviving spouse shall, judicially or extrajudicially, liquidate the community property within 1 year from the death of the deceased spouse. (FC, Art. 103)

Alienation of exclusive properties of either spouse

Either spouse may mortgage, encumber, alienate or otherwise dispose of his or her exclusive property. (FC, Art. 111 as amended by R.A. 10572)

Obligations Chargeable to Separate Property

• Support of illegitimate children;
• Liabilities incurred by reason of a crime or quasi- delict;
• Expenses of litigation between the spouses if found to be groundless;
• Debts contracted during the marriage by the administrator-spouse which does not benefit the community;
• Debts contracted during the marriage without the consent of the other which did not benefit the family;
• Ante-nuptial debts by either spouse which did not benefit the family;
• Taxes incurred on the separate property which is not used by the family;
• Expenses incurred during the marriage on a separate property if the property is not used by the family and not for its preservation.

Rules in determining ownership

• If full ownership was vested before the marriage – it shall belong to the buyer spouse;
• If full ownership was vested during the marriage – it shall belong to the conjugal partnership;

NOTE: In either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner/s upon liquidation of the partnership.

Q: Yamane asserts that the parcel of land, which was purchased at auction, belonged to the conjugal partnership of him and his late wife. In the title, his name appeared to be merely descriptive of the civil status of the registered owner, his late wife. The purchase took place prior to the advent of the Family Code. Is the property conjugal or paraphernal property of his late wife?

A: CONJUGAL. In this case, the provisions of the NCC would apply since the property was purchased before the FC took effect. Under Art. 160 of the NCC, all properties of the marriage are presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or the wife. In this case, there was no proof that the property had been acquired exclusively by Yamane's late wife. The mere registration of a property in the name of one spouse does not destroy its conjugal nature in the absence of strong, clear and convincing evidence that it was acquired using the exclusive funds of said spouse. (Spouses Go v. Yamane, G.R. No. 160762, May 3, 2006)

Q: Dolores seeks to recover a parcel of land, alleging that she and her husband acquired such during their marriage, that it formed part of their conjugal properties and that he sold it without her consent. She presents their marriage contract and the initial tax declaration over the property as pieces of evidence. Will her action prosper?

A: RECOVERY IS NOT WARRANTED because rule is all properties of the marriage are presumed to be conjugal in nature. However, for this presumption to apply, the party who invokes it must first prove that it was acquired during the marriage. Here, Dolores' evidence consisted of her marriage contract and the initial tax declaration over the property. She did not identify when she and her husband first occupied and possessed the land.

Neither did she present any witness to prove that they first occupied the property during their marriage and that they both worked on the land. (Pintiano-Anno v. Anno, G.R. No. 163743, January 27, 2006)

The presumption of conjugality of the properties of the husband and wife applies only when there is proof that the property was acquired during the marriage. If there is no showing as to when the properties alleged to be conjugal were acquired, the presumption does not apply (Francisco v. CA, G.R. No. 102330, November 25, 1998). Proof of acquisition during the coverture is a condition sine qua non to the operation of the presumption in favor of the conjugal partnership. (Pintiano-Anno, v. Anno, et al., G.R. No. 163743, January 27, 2006)

Requisites:

• All the responsibilities of the partnership have already been covered; and
• The spouse who is bound has no exclusive properties or the same are insufficient.

Charges:

• Personal debts of either spouse contracted before the marriage which did not redound to the benefit of the family;
• Support of the illegitimate children of either spouse;
• Fines and indemnities arising from delicts and quasi- delicts.

If levy was made on the conjugal property by reason of the husband being a guarantor, the levy is improper. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal partnership except as they redounded to the benefit of the family. (FC, Art. 122)

Q: If one of the spouses committed the crime of slander and was held liable for damages in a damage suit, is it chargeable against the conjugal partnership?

A: Not as an ordinary charge against the conjugal partnership. However, the indemnity may be paid from partnership assets after the partnership’s responsibilities have been covered, if the liable spouse has no exclusive property or it is insufficient. The amount paid shall be charged to that spouse upon liquidation. (FC, Art. 122; Go v. Yamane, G.R. No. 160762, May 3, 2006)

Q. Venancio is married to Lilia since 1973. During their union, they acquired three (3) parcels of land in Malolos, Bulacan. The properties were mortgaged to Philippine National Bank on August 25, 1994 to secure a loan worth P1,100,000.00, and was increased to P3,000,000.00. According to PNB, the spouses duly consented with the loan. When the Reyes Spouses failed to pay the loan obligations, Philippine National Bank foreclosed the mortgaged real properties. The auction sale happened and PNB emerged as the highest bidder and a certificate of sale was issued in its favor. Venancio claimed that his wife undertook the loan and the mortgage without his consent and his signature was falsified on the promissory notes and the mortgage.

• What is the status of the real estate mortgage?
• Can the conjugal partnership be held liable for the loan contracted unilaterally by Lilia?

A.

• The real estate mortgage over a conjugal property is void if the non-contracting spouse did not give consent. Any disposition or encumbrance of a conjugal property by one spouse must be consented to by the other; otherwise, it is void.
• YES, to the extent that the loan benefited the family. They are jointly and solidarily liable with each other with their separate properties if their conjugal partnership is insufficient to fully pay for the loan. What the lower courts declared void was the real estate mortgage attached to the conjugal property of the Reyes Spouses. Since the real estate mortgage was an encumbrance attached to a conjugal property without the consent of the other spouse, it is void and legally inexistent. Although petitioner cannot foreclose the mortgage over the conjugal property in question, it can recover the loan amount from the conjugal partnership to the extent the family benefited from it. (FC, Art. 121(3); Philippine National Bank v. Venancio C. Reyes, JR., G.R. No. 212483, July 24, 2017, as penned by J. Leonen)

Updated: An unauthorized encumbrance of conjugal property is a continuing offer that may become binding if the non-consenting spouse accepts it (Commoner Lending Corporation v. Balandra, G.R. No. 247646, 29 March 2023).

ADMINISTRATION OF THE CONJUGAL PARTNERSHIP OF GAINS (ART. 124)

GR: The right to administer the conjugal partnership belongs to both spouses jointly.

XPN:

• If one spouse is incapacitated or otherwise unable to participate in the administration of the common properties – capacitated or able spouse may assume sole powers of administration.
• 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 sole administration.
• During the pendency of a legal separation case, the court may designate either of the spouse as sole administrator.

But such powers do not include:

• Disposition;
• Alienation; or
• Encumbrance of the conjugal or community property.

NOTE: The sale of conjugal property without the consent of the husband is void. If one spouse is incapacitated or otherwise unable to assume sole powers of administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority or written consent of the other spouse. (Aggabao v. Parulan, G.R. No. 165803, September 1, 2010)

Updated: An unauthorized encumbrance of conjugal property may become binding if the non-consenting spouse accepts the continuing offer (Commoner Lending Corporation v. Balandra, G.R. No. 247646, 29 March 2023).

LIQUIDATION OF THE CONJUGAL PARTNERSHIP ASSETS AND LIABILITIES

• Inventory of all the properties;
• Restitution of advances made to each of the spouses;
• Reimbursement for use of exclusive funds;
• Debts and obligations of the CP are paid;
• Delivery of exclusive properties;
• Payment of losses and deterioration of movables belonging to each of the spouses, unless the owner had been indemnified from whatever source;
• Division of the net conjugal partnership;
• Delivery of the common children’s presumptive legitimes;
• Adjudication of conjugal dwelling and custody of common children. (FC, Art. 129)

Co-ownership under Art. 147

When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules of co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. A party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly to the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household.

Situation covered under Art. 147 of the FC

• Common-law or live-in relationship; and NOTE: it is required that the parties be capacitated to marry each other and are living exclusively with each other as husband and wife. What is missing only is marriage. (Pineda, 2011)
• Relationships under a void marriage. (Ibid.) NOTE: the spouses are married to one another, but the marriage is void due to reasons like absence of the required marriage license. They can repeat the whole process of getting married. (Ibid.)

Q: Can the spouses, whose marriage has been declared null and void but who are still cohabiting, donate their share in the property acquired during cohabitation, without the consent of the other?

A: NO, while they are still cohabiting. It is true that Art. 147 provides that the property acquired during the cohabitation shall be governed by the rules on co-ownership, and pursuant to Art. 493 of NCC in a co-ownership: "Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved; but the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.”

However, Art. 493 of the NCC must yield to Art. 147 of the FC, which expressly mandates that: "Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation.”

Given the above express prohibition of a party to the cohabitation to encumber or alienate by acts inter vivos, even his or her share in the property acquired during the cohabitation and owned in common, without the consent of the other party until after the termination thereof under Art. 147, then the donation of any property acquired during the cohabitation by one party without the consent of the other can only be but void. The rules on ordinary co- ownership cannot apply to vest validity on the undivided share of the disposing party. The donation is simply void. (Perez v. Perez-Senerpida, G.R. No. 233365, 24 Mar. 2021)

After cohabitation ends, a disposition of a co-owner’s share is governed by the applicable co-ownership rules under Art. 493 of the NCC.

Presumption of Equal Sharing, Not Applicable

Presumption of Equal Sharing Upon Proof of Actual Joint Contribution

Properties acquired through their actual contribution of money, property or industry shall become their common property in proportion to their respective contributions. The fact of contribution must be proved. (Pineda, 2011, citing Agapay v. Palang, G.R. No. 116668, 28 July 1997) Absent proof to the contrary, their contributions and corresponding shares are presumed equal once actual joint contribution is established. (Family Code, Art. 148)

Liability of the Parties for Expenses

Both Arts. 147 and 148 are silent on the liability of the parties for expenses. To achieve legal consistency, since wages and salaries in Art. 147 are owned in common and to be divided equally upon dissolution of the union, it is submitted that expenses should be shouldered on a fifty-fifty basis, unless otherwise agreed upon. But liability for expenses incurred in the preservation of their common property should be proportionate to their respective actual contributions, governed as they are by co-ownership rules. (Pineda, 2011)

Anent Art. 148, unless otherwise agreed upon, the liability for expenses should be on proportionate basis, depending upon the earnings of each, considering that it is more equitable that they own their salaries and wages exclusively. Expenses for the preservation of common properties shall also be proportionate to their respective contributions. In the absence of proof to the contrary, the expenses should be shouldered equally. (Ibid.)

Retroactive application of Art. 148 of the Family Code

Although the adulterous co-habitation of the parties or the acquisition of the property occurred before the effectivity of the FC on 03 Aug. 1988, Art. 148 applies because the said provision was intended precisely to fill up the hiatus in Art. 144 of the NCC.

Before Art. 148 of the FC was enacted, there was no provision governing property relations of couples living in a state of adultery or concubinage. (Atienza v. De Castro, G.R. No. 169698, 29 Nov. 2006)

Q: Romeo and Juliet lived together as husband and wife without the benefit of marriage. During their cohabitation, they acquired a house. When they broke up, they executed an agreement where he agreed to leave the house provided Juliet will pay his entire share in their properties. She failed to do so but she also ignored his demand for her to vacate. Romeo sued her for ejectment which the court granted. Was the court correct in granting the same?

A: NO. Under Art. 147 of the FC, the property is co- owned by the parties. In the absence of proof to the contrary, any property acquired by common-law spouses during their cohabitation is presumed to have been obtained thru their joint efforts and is owned by them in equal shares. Their property relationship in such a case is essentially governed by the rules on co-ownership. Thus, Romeo cannot seek the ejectment of Juliet therefrom. As a co- owner, she is as much entitled to enjoy its possession and ownership as him. (Abing v. Waeyan, G.R. No. 146294, 31 July 2006)

Q: Bert and Joe, both male and single, lived together as common-law spouses and agreed to raise a son of Bert’s living brother as their child without legally adopting him. Bert worked while Joe took care of their home and the boy. In their 20 years of cohabitation, they were able to acquire real estate assets registered in their names as co-owners. Unfortunately, Bert died of cardiac arrest, leaving no will. Bert was survived by his biological siblings, Joe and the boy.

a. Can Art. 147 on co-ownership apply to Bert and Joe, whereby all properties they acquired will be presumed to have been acquired by their joint industry and shall be owned by them in equal shares?

A: NO. Art. 147 of the FC cannot apply to Bert and Joe because the law only applies to a man and a woman who are capacitated to marry each other who live together as husband and wife without the benefit of marriage or under a void marriage. In the case of Bert and Joe, they are both men, so the law does not apply.

b. If Bert and Joe had decided in the early years of their cohabitation to jointly adopt the boy, would they have been legally allowed to do so? Explain with legal basis.

A: NO. Joint adoption is allowed between husband and wife, even if Bert and Joe are cohabiting with each other, they are not vested with the right to jointly adopt under the FC or even under the Domestic Adoption Act. (Sec. 7, R.A. No. 8552

Q: Benjamin is married to Azucena. While Azucena is out of country, Benjamin developed a romantic relationship with Sally, but her father was against this. In order to appease her father, Sally convinced Benjamin to sign a purported marriage contract. Eventually, their relationship ended a few years later. Benjamin asked the court for the partition of the properties he acquired with Sally in accordance with Art. 148 of the FC, for his appointment as administrator of the properties during the pendency of the case. Among the 44 properties which were the subject of the partition, 7 were enumerated by Benjamin while Sally named 37 properties in her answer. Is Benjamin’s contention correct?

A: YES. The property relations of Benjamin and Sally are governed by Art. 148 of the FC. They cohabitated without the benefit of marriage. Thus, only the properties acquired by them through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. The 37 properties claimed by Sally are not conjugal properties of Benjamin and Sally; whether any of them is co-owned under Art. 148 of the FC depends on proof of their actual joint contribution of money, property, or industry to its acquisition. As regards the seven remaining properties, only one of them is registered in the names of the parties as spouses. The other four were registered in the name of either one of them with the description “married to” and the last two were named to Sally as an individual. The words “married to” preceding the name of a spouse are merely descriptive of the civil status of the registered owner, which do not prove co-ownership. Without proof of actual contribution from either or both spouses, there can be no co- ownership under Art. 148 of the FC. (Go-Bangayan v. Bangayan, Jr., G.R. No. 201061, 03 July 2013)