Text of the provision
Art. 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)
Family Code of the Philippines, Executive Order No. 209, approved July 6, 1987. The Code took effect on August 3, 1988 (Republic v. Orbecido III, G.R. No. 154380, October 5, 2005). Reproduced in full. The notation (n) indicates a new provision with no direct Civil Code antecedent.
What this article means
Article 102 is the step-by-step recipe for winding up the absolute community when it dissolves (by death, annulment, legal separation, or judicial separation of property under Article 99). The order is deliberate: inventory everything (1), pay the community's debts from community assets — and if short, from the spouses' separate property under Article 94 (2), return each spouse's exclusive property (3), then split the net remainder equally unless the settlements say otherwise (4).
Two more steps protect the children: their presumptive legitimes are delivered on partition per Article 51 (5), and the family home goes to the spouse the majority of the children choose to live with — with under-sevens deemed to choose the mother (6).
The net-profits rule
Paragraph (4) also defines "net profits" for the bad-faith forfeitures in Article 43(2) and Article 63(2): the increase in market value between the wedding and the dissolution. That valuation is what a guilty spouse forfeits.
Related provisions
- Article 103 — liquidation specifically when the marriage ends by death.
- Article 94 and Article 51 — the debt-liability and presumptive-legitime rules this invokes.
Cases interpreting this article
- Authorities on the Article 102 liquidation procedure and the family-home award will be added here as each is verified against primary sources.