Dividing Assets in Void Marriages: Co-Ownership vs. Conjugal Partnership

When a marriage is declared void, one of the most contentious issues that follows is how to divide the property the couple acquired while living together. Many assume that the rules on conjugal partnership of gains apply, but Philippine law provides a different framework. In Ocampo v. Ocampo (G.R. No. 198908, August 3, 2015), the Supreme Court settled this question: property acquired during a void marriage is governed by the rules on co-ownership, not conjugal partnership.

The Facts of the Case

Virginia and Deogracio Ocampo married on January 16, 1978. In 1990, Virginia filed a petition to declare their marriage void on the ground of psychological incapacity under Article 36 of the Family Code. The trial court granted the petition in 1993, declaring the marriage void from the beginning.

After the marriage was annulled, the court ordered the parties to submit an inventory of their properties for liquidation. When they failed to agree on a project of partition, the trial court ruled that the properties belonged to each party on a 50-50 sharing basis. Virginia appealed, arguing that Deogracio should be deprived of his share because of bad faith and psychological incapacity.

The Issue

The central question was whether the property relations of parties to a void marriage should be liquidated under the rules on conjugal partnership of gains or under the rules on co-ownership. A related issue was whether a party in bad faith should forfeit his share.

The Applicable Law

The Court explained that even though the couple married in 1978, the Family Code governs their property relations. Under Article 105 of the Family Code, the Code applies to conjugal partnerships established before its effectivity, without prejudice to vested rights.

However, the Court clarified that in a void marriage, the property relations during cohabitation are governed by Articles 147 or 148 of the Family Code, not by the rules on conjugal partnership. Article 147 applies when both parties are capacitated to marry and have no legal impediment, but their marriage is nonetheless void—as in this case.

The Ruling on Co-Ownership

Article 147 provides that when a man and a woman live exclusively as husband and wife under a void marriage, their wages and salaries are owned in equal shares. Property acquired through their work or industry is governed by the rules on co-ownership. In the absence of proof to the contrary, properties acquired while living together are presumed to have been obtained through joint efforts and owned in equal shares.

Significantly, the Court noted that a party who did not participate in the acquisition of property is deemed to have contributed jointly if that party's efforts consisted in the care and maintenance of the family and household. This means that a spouse who stayed home and managed the household is entitled to an equal share.

The Presumption of Conjugal Property

The Court applied the presumption under Article 116 of the Family Code: all properties acquired during the marriage are presumed conjugal unless proven otherwise. This presumption remains even if the property is registered in the name of only one spouse. The burden of proof falls on the party claiming that a property is not conjugal.

Virginia failed to rebut this presumption. She presented only testimonial evidence, which the Court found insufficient to prove that she acquired the properties through her sole efforts. The Court gave deference to the factual findings of the trial court, especially since the Court of Appeals affirmed them.

Practical Takeaways

• Co-ownership, not conjugal partnership, governs void marriages. When a marriage is void under Article 36, property acquired during cohabitation is divided under co-ownership rules, not the conjugal partnership regime.
• Equal shares are the default rule. Under Article 147, property acquired during cohabitation is presumed to be owned in equal shares by both parties.
• Household contributions count. A party who cared for the family and household is deemed to have contributed to the acquisition of property, even without direct financial participation.
• Documentary evidence matters. To overcome the presumption of joint acquisition, a party must present clear and convincing proof. Self-serving testimonial evidence is rarely sufficient.
• Registration is not decisive. The fact that a property is registered in the name of only one spouse does not overcome the presumption that it is owned in common.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.