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QUIAO V.

QUIAO
Petitioner: Brigido B. Quiao
Respondents: Rita C. Quiao, Kitchie, Lotis, Petchie

On an MR filed by Rita, the trial court set aside the Court Order
dated Nov. 8, 2006 and reinstated the Court Order dated Aug.
31, 2006.

FACTS:
Rita and Brigido were married on January 6, 1977. The two did
not execute an antenuptial agreement with regard to their
property relations, thus their property relation is the Conjugal
Partnership of Gains pursuant to Art. 119 of the Civil Code.

ISSUES/RULING:
1. WON the Decision dated Oct. 10, 2005 has become final and
executor at the time the Motion for Clarification was filed?

On Oct. 26, 2000, Rita Quiao filed a complaint for legal


separation against Brigido Quiao before the RTC.
In a Decision dated Oct. 10, 2005, the RTC declared the legal
separation of Rita and Brigido. The RTC further ordered them to
divide the remaining properties equally subject to the unpaid
conjugal liabilities of P45,740. However, the RTC ordered that
Brigidos share was forfeited in favor of the common children.
He was likewise ordered to pay 19,000 as attorneys fees and
5,000 as litigation expenses.
On Dec. 12, 2005, respondents filed a motion for execution,
which the trial court granted.
On July 6, 2006, the writ was partially executed with the Brigido
paying the amount of 46,870. (conjugal share 22,870, attys
fees 19,000 and litigation expenses 5,000).
On July 7, 2006, Brigido filed a motion for clarification asking the
RTC to define the term Net Profits Earned. In an Order dated
August 31, 2006, the RTC defined Net Profits Earned as the
remainder of the properties of the parties after deducting the
separate properties of each of the spouse and the debts.
On Sep. 8, 2006, Brigido filed an MR before the RTC, who
issued another Order dated Nov. 8, 2006 holding that the Court
Order dated Aug. 31, 2006 (definition of net profits earned) is set
aside.

In Neypes v. CA, the Court allowed a fresh period of 15 days


within which to file the notice of appeal in the RTC counted from
the receipt of the order dismissing a motion for new trial or
reconsideration. Failure to avail of the fresh 15-day period
makes the decision or final order final and executor. Thus, at the
time he filed a motion for clarification, the RTC decision has
become final executor.
Petitioner: Such decision is a void judgment, which means no
judgment at all.
Void judgment occurs when the court which rendered it had no
power to grant the relief or jurisdiction of the subject matter or
parties.
RA 8369 grants RTC the original jurisdiction to hear and decide
cases re: marital status and property relations. It also has
jurisdiction over the parties since Rita is found to reside in
Tungao, Butuan City for more than 6 mos and Brigido filed his
Answer to the Complaint.
The Court held that the following matters cannot be disturbed
anymore:
- The finding that the petitioner is the offending spouse
- The grant of legal separation, etc
2. WON Art. 129 of the FC applies to the present case?
Petitioner: Article 102 should govern since it is the only
provisions which mentions net profit earned.

a. Since they are married before the effectivity of the FC and


that they did not execute any antenuptial agreement, the
Conjugal Partnership of Gains will govern their property
relations.
Husband and wife place in a common fund the fruits of their
separate property and the income from their work or industry.
b. Since the FC is already effective at the time of the dissolution
of marriage, FC applies in the liquidation of the conjugal
partnership.
Art. 176, Civil Code - In case of legal separation, the guilty
spouse shall forfeit his/her share of the conjugal partnership of
profits.
3. What is the meaning of the net profits earned by the conjugal
partnership for purposes of the forfeiture?
The Court referred to Art. 102(4) for the definition of net profits,
which shall be the increase in value between the market
value of the community property at the time of the
celebration of marriage and the market value at the time of
its dissolution.
Fair value according to IFRS 13 - fair value as the price that
would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the
measurement date (ie an exit price)
Absolute Community of Property
All the property of the spouse brings into the marriage and those
acquired during the marriage form the common mass of the
couples properties, except the following (Art. 92):
a. Property acquired by gratuitous title (e.g., donation or
inheritance)
b. Exclusive and personal property of either spouse (e.g.,
shirts)

c. Property acquired before the marriage of a spouse who


has legitimate descendant by a former marriage, plus the
fruits and the income of such property.
Process
1. An inventory isting of all community and exclusive
properties
2. Payment of debts and obligation of the absolute
community
a. If the absolute community properties are
insufficient, the exclusive properties shall be used
to pay the unpaid balance of the absolute
community. Note that they are solidarily liable.
3. The remainder, if any, is the net assets, which shall be
divided between husband and wife (equally unless a
different proportion was agreed upon before marriage).
Applying the foregoing to the instant case for discussion
purposes, the following will be the result:
1. The trial court found out that both spouses did not have
separate properties, thus the properties mentioned all
form part of the absolute community. The market value of
the properties should be ascertained at the time of
dissolution.
2. The debts and obligations of the absolute community
shall be paid using the absolute community.
3. The remainder constitutes the net assets. Such amount
shall be reduced by the market value of the absolute
community properties at the time of marriage. The
difference refers to the net profits.
4. Since nothing will be returned to them and neither has
exclusive properties, then what would be divided is the
net profits.
Conjugal Partnership of Gains
The spouses place in common fund the fruits of their separate
property and income from their work or industry and divide
equally upon dissolution. The law does not intend to effect a
mixture of debts and properties.

Process
1. An inventory listing of all conjugal and excusive
properties
2. Amounts paid by the conjugal property shall be
considered as an asset
3. The spouse shall be reimbursed by the conjugal property
for the acquisition of property paid using the exclusive
funds which has been vested by law in the conjugal
partnership.
4. Debts and obligations of the conjugal partnership shall be
paid using the conjugal properties
a. If the CPG are insufficient, the exclusive properties
shall be used to pay the unpaid balance of the
absolute community. Note that they are solidarily
liable.
5. Whatever remains from the exclusive properties shall be
delivered to the respective spouse.

6. The CPG shall pay for the loss/deterioration of the


exclusive properties used for the benefit of the family.
7. The net remainder shall be considered as net profits,
which shall be divided (equally unless a different
proportion was agreed upon before marriage).
8. The presumptive legitimes shall be delivered upon
partition.
9. The conjugal dwelling and lot shall be adjudicated to the
spouse with whom the majority of the common children
choose to remain, unless agreed otherwise.
Applying the foregoing to the case, the following will result:
1. The trial court found out that both spouses did not have
separate properties, thus the properties mentioned all
form part of the conjugal property.
2. The conjugal partnership shall pay the debts of the
conjugal partnership.
3. Since the spouses do not have separate properties, what
remains should be divided equally between the spouses.