How are conjugal properties divided once the partnership is dissolved after annulment?

Only the profits are divided

The sentence that matters is step seven: the net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife. Everything before it exists to work out what that remainder is. A spouse who counts the house, the cars and the accounts and expects half of the total is starting from the wrong figure — under this regime what is shared is the gain the marriage produced, after each spouse's own capital has been taken back out of the pile.

The two adjustments people forget

Two steps move money between the columns before anything is divided. Amounts the partnership advanced to pay a spouse's personal debts are credited to the conjugal partnership as an asset thereof — that spouse effectively owes it back. And each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property, or for exclusive property whose ownership the law vested in the partnership. There is also a smaller rule: a movable of one spouse used for the family's benefit and lost or damaged, even by fortuitous event, is paid for from conjugal funds unless the owner was indemnified.

Debts, and the point where they outrun the assets

The partnership's debts are paid out of the conjugal assets, and if those assets fall short the spouses shall be solidarily liable for the unpaid balance with their separate properties. So an annulment does not cap your exposure at what the partnership owned. Where the marriage is annulled or declared void, the Code also provides in particular cases for forfeiture of a share of the net profits, which is why step seven is expressed as equal division unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. Whether that applies to you turns on the ground and the decree.

Children, the house, and the inventory that starts it

Two steps deal with the children. The presumptive legitimes of the common children are delivered upon the partition, and the conjugal dwelling and its lot are adjudicated, unless the parties agree otherwise, to the spouse with whom the majority of the common children choose to remain — with children under seven deemed to have chosen the mother unless the court decides otherwise. All of it rests on step one, the inventory listing the partnership's property separately from each spouse's exclusive property. Build that first, with acquisition dates and the source of the money for each item.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Brigido B. Quia vs. Rita C. Quiao, et al, G.R. No. 176556, July 4, 2012 — read the decision on LawPhil →
• Ceferino S. Cabreza, Jr., et al. vs. Amparo Robles Cabreza, G.R. No. 181962, January 16, 2012 — read the decision on LawPhil →
• Marietta N. Barrido vs. Leonardo V. Nonato, G.R. No. 176492, October 20, 2014 — read the decision on LawPhil →
• Amparo Robles Cabreza vs. Ceferino S. Cabreza Jr., et al, G.R. No. 171260, September 11, 2009 — read the decision on LawPhil →

Related provisions

• Family Code, Article 129 — How the Conjugal Partnership Is Liquidated