Section 6:

Liquidation of the Absolute Community

(The Family Code of the Philippines)

Assets and Liabilities

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

Article 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)

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