A simpler way to divide conjugal

property
by Atty. Francesco Britanico | Nov 12, 2017 | Family Law, Marriage
Property
Conjugal Property

You can separate marriage property without going through the acrimonious
process of legal separation.
Legal separation can be a clumsy, acrimonious way to end marriage
relations. It falls short of actual divorce, and it is a problematic process
even as a way to divide conjugal properties between husband and
wife.
Because legal separation requires that one spouse (and only one, not
both) must be at fault for it to be granted, legal separation is punitive,
protracted, usually contested, and quite draconian in its
consequences.
But there is a simpler way for husband and wife to divide their
properties. The spouses can, without going through the bitter battle of
legal separation, just file a Petition for the division of their conjugal
property. And, especially if they file this Petition jointly, the court
process can go a lot more smoothly.
The effect of this judicial process is a complete separation of property.

What is conjugal property?

Let us first define conjugal property. What does conjugal property
include?
In the absence of a prenuptial agreement, Philippine law sets the
property relations between spouses. If the spouses choose no other
property regime before they marry, then theirs will be an absolute
community of property. [1]

Houses usually form part of conjugal property.

Under the absolute community of property, husband and wife become
joint owners of all the properties of the marriage. Whatever property
each spouse brought into the marriage, and all properties acquired
during the marriage (with some exceptions) form the common mass of
the conjugal property.
And, if the couple’s community of property is legally dissolved, this
common mass is divided between the spouses. It is divided equally or
in the proportion, the parties have established, irrespective of the
value each one may have originally owned.
 Clothes are excluded from marriage property as it is for the use of only one
spouse.
The only properties exempted from the absolute community are the
following:
1. Property acquired during the marriage by either spouse through inheritance, gift,
or donation, and the fruits as well as the income of that property, unless the giver
specified that the property 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.[1]

How is property divided under legal separation?

I’ve written on this before. It’s quite harsh. To summarize:
For legal separation to be granted, there must be one guilty spouse.
And the rule is that the guilty spouse has no right to the net profits of
the conjugal property. The guilty spouse’s share of the net profits is
forfeited in favor of the children or the innocent spouse.
 Shares form part of conjugal property.
The net profits of the conjugal property are defined as the increase
between the market value of that conjugal property at the time of the
marriage and its market value at the time of dissolution.
This is significant.
It means that, if the spouses had no assets when they married young,
and they built up their assets over the decades since, then the guilty
spouse will have no share in any of these assets because they are all
classified as forfeited net profits.

Net profits are awarded to the innocent spouse.

It makes the entire exercise a winner take all contest which
discourages compromise. For this reason, among others, legal
separation is often disputed, protracted, punitive, and quite draconian.
Nonetheless, legal separation is what people often think of when they
wish their property to part ways from the property of their spouse. But
there is another way, and that is through a judicial separation of
property.

How is legal separation different from judicial separation of

property?
The two are different remedies based on different parts of the Family
Code. [3]

Under legal separation, aside from the dissolution of the conjugal

property, the spouses become entitled to live separately from each
other and their obligation of mutual support ceases.

The law defines legal separation and judicial separation of property differently.
In contrast, judicial separation of property is concerned primarily with
splitting the conjugal property. The other marital obligations are
unaffected. In fact, under the judicial separation of property, the
spouses themselves are not necessarily separated; they may wish to
simply separate their property.

What are the grounds for judicial separation of property?

Judicial separation of property can be either voluntary or for sufficient
cause.
Voluntary separation of property involves both the spouses filing a
joint Petition to separate their common properties. This means that
they agreed to divide their property between them. Their common
agreement is ground enough for the separation. They then submit
their proposal to the Court for how to divide the property.
 Both spouses can file or one can file for sufficient cause.
On the other hand, in separation of property for sufficient cause, just
one of the spouses can file for judicial separation of property on the
basis on sufficient cause.
The following are sufficient cause for judicial separation of property:
(1) That the spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially declared an
absentee;
(3) That loss of parental authority of the spouse of petitioner has been
decreed by the court;
(4) That the spouse of the petitioner has abandoned the latter or failed
to comply with his or her obligations to the family as provided for in
Article 101;
(5) That the spouse granted the power of administration in the
marriage settlements has abused that power; and
(6) That at the time of the petition, the spouses have been separated
in fact for at least one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1), (2) and (3), the presentation
of the final judgment against the guilty or absent spouse is enough
basis to grant the petition.[4]
 One of the grounds is if the spouses have been separated for a year with
reconciliation unlikely.
As an aside, (6) is of significant interest because, as with voluntary
separation, it offers the spouses a de facto no-fault separation of
property.

What is the process in Court?

A sworn Petition, either jointly or singly, is filed with the Family Court. [5]

All creditors of the marriage, as well as the personal creditors of the

spouses, must be listed in the petition and notified that it was filed in
court. The court shall take measures to protect the creditors and other
persons with a pecuniary interest in the marital property. [6]

The absolute community or the conjugal partnership shall pay for the
support of the spouses and their children while the case is pending. [7]

The Petition will be heard by the Family Court.

If the Petition is voluntary (i.e. jointly filed by the spouses), it need not
even give the spouses’ reason for the separation of property because
the agreement of the spouses is enough. But if the reason given is
found to be against public policy, the court must reject the agreement. [8]

The Petition to separate the property may even propose exactly how
the properties are to be separated. If this proposal is not contrary to
law and public policy, it shall be granted by the court. The agreement
for the division of the community property must be equal unless a
different division has been agreed upon in the prenuptial agreement or
unless a waiver of this share is allowed by the court. [9]
 Get your files in order as you’ll need a complete inventory of property.
Once the separation of property has been decreed, the marriage
properties will be liquidated in accordance with the Family Code. The [10]

Family Code describes the process of liquidating the conjugal

properties thus:
(1) An inventory should be prepared, listing separately all the conjugal
properties of the marriage and the exclusive properties of each
spouse.
(2) The debts and obligations of the marriage shall be paid out of its
conjugal property. In case these assets are insufficient, the spouses
shall each be solidarily liable for the unpaid balance.
(3) Whatever remains of the exclusive properties of the spouses shall
then be delivered to each of them.
 After the common debts are paid, the property is then divided between the
spouses.
(4) The net remainder of the conjugal properties are its net assets.
These will 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.
[Involuntary forfeiture of the net profits by a guilty spouse is not
provided for under judicial separation of property. It is a specific
consequence only in cases of legal separation or of bigamous
marriages in bad faith.][11]

(5) The presumptive legitimes of the common children shall be

delivered upon partition. [M. Sta. Maria (2010) is of the opinion that
this is an optional provision which need not be complied with.]

The family house goes to the spouse with the custody of most of the minor
children.
(6) Unless otherwise agreed upon by the parties 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 in
no such majority, the court shall decide, taking into consideration the
best interests of said children.
The petition and the final judgment granting it shall both be recorded
in the proper local civil registries and registries of property.
[12]

What are the effects of judicial separation of property?

After dissolution of the absolute community or of the conjugal
partnership, the provisions on complete separation of property shall
apply.[13]
 Each spouse controls his own estate after the court proceedings.
This means that each spouse shall own, dispose of, possess,
administer and enjoy his or her own separate estate, without the need
for the consent of the other. 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. [14]

Both spouses shall bear the subsequent family expenses in proportion

to their income, or, in case of insufficiency or default thereof, to the
current market value of their separate properties.

However, expenses of the family shall be borne in proportion to their income

or the market value of their estate.
However, the liabilities of the spouses to creditors for family expenses
shall be solidary and the separation of property shall not prejudice the
rights previously acquired by creditors. [15]
 What does this separation of property mean for the
inheritance of their children?
By one interpretation of the Family Code, upon judicial separation of
property, the value of the mandatory inheritance (known as
the legitime) of all common children shall be delivered to them in cash,
property or sound securities unless the parties have already provided
for such matters by a court approved mutual agreement.

In some interpretations, presumptive legitimes are given to children as an

advance on their eventual inheritances.
The value of the presumptive legitimes is computed as of the date of
the final judgment of the trial court. The children, their guardian, or the
trustee of their property may ask for the enforcement of the judgment.
This delivery of the presumptive legitimes shall not prejudice the
ultimate successional rights of the children upon the death of either
parent. However, the value of the properties already received shall be
considered as advances on their legitime. [16]
 However, others believe that presumptive legitimes need not be given.
[Note however that Professor Melencio S. Sta. Maria, in his book
on Persons and Family Relations Law (2010), is of the opinion that
these provisions on legitime are optional and need not be complied
with.]

Can the marital property regime be revived after a judicial

separation of property?
What if, years later, the spouses want to join their property in common
again? Can they revive the dissolved property regime?
Yes. The spouses may file a motion in court for a decree reviving the
property regime that existed before the separation of property in any
of the following instances:
(1) When the civil interdiction terminates;
(2) When the absentee spouse reappears;
 The properties can be joined again when an absentee spouse reappears.
(3) When the court, being satisfied that the spouse granted the power
of administration in the marriage settlements will not again abuse that
power, authorizes the resumption of said administration;
(4) When the spouse who has left the conjugal home without a decree
of legal separation resumes common life with the other;
(5) When parental authority is judicially restored to the spouse
previously deprived thereof;
(6) When the spouses who have separated in fact for at least one
year, reconcile and resume common life;
 When spouses reconcile, they can revive their common property regime.
(7) When, after voluntary dissolution of the conjugal community has
been judicially decreed, the spouses jointly petition for the revival of
the former property regime.
If the separation of property was voluntary, it can only be granted
once. This means that if the spouses do decide to revive their marital
property regime, they afterwards will not be allowed to voluntarily
separate it again.[17]

For one reason or another, married couples may want to end their
community of property. But they can find this difficult to do because
Philippine law prohibits divorce, and because the conditions for legal
separation are so onerous. Judicial separation of property offers an
alternative for them to consider.

Atty. Francesco C. Britanico

References
[1] Article 75 of the Family Code of the Philippines
[2] Article 92
[3] Legal separation is found in Articles 55 to 67 while judicial
separation of property is found in Articles 134 to 141
[4] Article 135
[5] Article 136
[6] Article 136
[7] Article 137
[8] Sta. Maria, M.S., 2010. Persons and Family Relations Law. 5th ed.
Manila: Rex, p. 564
[9] Ibid.
[10] Articles 137, 102, and 129
[11] Articles 63 and 43(2)
[12] Article 139
[13] Article 138
[14] Article 145
[15] Articles 146 and 140
[16] Article 51
[17] Article 141