QUIAO v. QUIAO G.R. No 176556, July 04, 2012- Forfeiture of the Share (Properties) of the Guilty Spouse in Legal Separation Cases

FACTS:

Rita C. Quiao (Rita) filed a complaint for legal separation against petitioner Brigido B. Quiao (Brigido). RTC rendered a decision declaring the legal separation thereby awarding the custody of their 3 minor children in favor of Rita and all remaining properties shall be divided equally between the spouses subject to the respective legitimes of the children and the payment of the unpaid conjugal liabilities.

Brigido’s share, however, of the net profits earned by the conjugal partnership is forfeited in favor of the common children because Brigido is the offending spouse.

Neither party filed a motion for reconsideration and appeal within the period. After more than nine months from the promulgation of the Decision, the petitioner filed before the RTC a Motion for Clarification, asking the RTC to define the term “Net Profits Earned.”

RTC held that the phrase “NET PROFIT EARNED” denotes “the remainder of the properties of the parties after deducting the separate properties of each [of the] spouse and the debts.” It further held that after determining the remainder of the properties, it shall be forfeited in favor of the common children because the offending spouse does not have any right to any share of the net profits earned, pursuant to Articles 63, No. (2) and 43, No. (2) of the Family Code.

The petitioner claims that the court a quo is wrong when it applied Article 129 of the Family Code, instead of Article 102. He argues that Article 102 applies because there is no other provision under the Family Code which defines net profits earned subject of forfeiture as a result of legal separation.

When a couple enters into a regime of absolute community, the husband and the wife become 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 this case, assuming arguendo that Art 102 is applicable, since it has been established that the spouses have no separate properties, what will be divided equally between them is simply the “net profits.” And since the legal separation decision states that the ½ share of Brigido in the net profits shall be awarded to the children, Brigido will still be left with nothing.

On the other hand, when a couple enters into a regime of conjugal partnership of gains under Article 142 of the Civil Code, “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 instant case, since it was already established by the trial court that the spouses have no separate properties, there is nothing to return to any of them. The listed properties above are considered part of the conjugal partnership. Thus, ordinarily, what remains in the above-listed properties should be divided equally between the spouses and/or their respective heirs. However, since the trial court found the petitioner the guilty party, his share from the net profits of the conjugal partnership is forfeited in favor of the common children, pursuant to Article 63(2) of the Family Code. Again, lest we be confused, like in the absolute community regime, nothing will be returned to the guilty party in the conjugal partnership regime, because there is no separate property which may be accounted for in the guilty party's favor.