G.R. No 176556               July 4, 2012 He is further ordered to reimburse [respondents] the sum of [₱]19,000.

00 as
attorney's fees and litigation expenses of [₱]5,000.00[.]
BRIGIDO B. QUIAO, Petitioner,
vs. SO ORDERED.5
RITA C. QUIAO, KITCHIE C. QUIAO, LOTIS C. QUIAO, PETCHIE C. QUIAO,
Neither party filed a motion for reconsideration and appeal within the period
represented by their mother RITA QUIAO,Respondents.
provided for under Section 17(a) and (b) of the Rule on Legal Separation. 6
Property Relations between husband and wife: After the effectivity of Family Code:
On December 12, 2005, the respondents filed a motion for execution 7 which the
Ponente: REYES, J.: trial court granted in its Order dated December 16, 2005, the dispositive portion of
which reads:
Thesis Statement:
"Wherefore, finding the motion to be well taken, the same is hereby granted. Let a
This case comes before us via Petition for Review on  Certiorari1 under Rule 45 of the
writ of execution be issued for the immediate enforcement of the Judgment.
Rules of Court. The petitioner seeks that we vacate and set aside the Order 2 dated
January 8, 2007 of the Regional Trial Court (RTC), Branch 1, Butuan City. In lieu of SO ORDERED."8
the said order, we are asked to issue a Resolution defining the net profits subject of
Subsequently, on February 10, 2006, the RTC issued a Writ of Execution 9 which
the forfeiture as a result of the decree of legal separation in accordance with the
reads as follows:
provision of Article 102(4) of the Family Code, or alternatively, in accordance with
the provisions of Article 176 of the Civil Code. NOW THEREFORE, that of the goods and chattels of the [petitioner] BRIGIDO B.
QUIAO you cause to be made the sums stated in the afore-quoted DECISION [sic],
Facts:
together with your lawful fees in the service of this Writ, all in the Philippine
On October 26, 2000, herein respondent Rita C. Quiao (Rita) filed a complaint for Currency.
legal separation against herein petitioner Brigido B. Quiao (Brigido). 3 Subsequently,
But if sufficient personal property cannot be found whereof to satisfy this execution
the RTC rendered a Decision 4 dated October 10, 2005, the dispositive portion of
and your lawful fees, then we command you that of the lands and buildings of the
which provides:
said [petitioner], you make the said sums in the manner required by law. You are
WHEREFORE, viewed from the foregoing considerations, judgment is hereby enjoined to strictly observed Section 9, Rule 39, Rule [sic] of the 1997 Rules of Civil
rendered declaring the legal separation of plaintiff Rita C. Quiao and defendant- Procedure.
respondent Brigido B. Quiao pursuant to Article 55.
You are hereby ordered to make a return of the said proceedings immediately after
As such, the herein parties shall be entitled to live separately from each other, but the judgment has been satisfied in part or in full in consonance with Section 14,
the marriage bond shall not be severed. Rule 39 of the 1997 Rules of Civil Procedure, as amended. 10
Except for Letecia C. Quiao who is of legal age, the three minor children, namely, On July 6, 2006, the writ was partially executed with the petitioner paying the
Kitchie, Lotis and Petchie, all surnamed Quiao shall remain under the custody of the respondents the amount of ₱46,870.00, representing the following payments:
plaintiff who is the innocent spouse.
(a) ₱22,870.00 – as petitioner's share of the payment of the conjugal share;
Further, except for the personal and real properties already foreclosed by the RCBC,
(b) ₱19,000.00 – as attorney's fees; and
all the remaining 8 properties … shall be divided equally between herein
[respondents] and [petitioner] subject to the respective legitimes of the children (c) ₱5,000.00 – as litigation expenses.11
and the payment of the unpaid conjugal liabilities of [₱]45,740.00.
On July 7, 2006, or after more than nine months from the promulgation of the
[Petitioner’s] share, however, of the net profits earned by the conjugal partnership Decision, the petitioner filed before the RTC a Motion for Clarification, 12 asking the
is forfeited in favor of the common children. RTC to define the term "Net Profits Earned."
To resolve the petitioner's Motion for Clarification, the RTC issued an Order 13 dated II
August 31, 2006, which held that the phrase "NET PROFIT EARNED" denotes "the
WHAT IS THE MEANING OF THE NET PROFITS EARNED BY THE CONJUGAL
remainder of the properties of the parties after deducting the separate properties
PARTNERSHIP FOR PURPOSES OF EFFECTING THE FORFEITURE AUTHORIZED UNDER
of each [of the] spouse and the debts." 14 The Order further held that after
ARTICLE 63 OF THE FAMILY CODE?
determining the remainder of the properties, it shall be forfeited in favor of the
common children because the offending spouse does not have any right to any III
share of the net profits earned, pursuant to Articles 63, No. (2) and 43, No. (2) of
the Family Code.15 The dispositive portion of the Order states: WHAT LAW GOVERNS THE PROPERTY RELATIONS BETWEEN THE HUSBAND AND
WIFE WHO GOT MARRIED IN 1977? CAN THE FAMILY CODE OF THE PHILIPPINES
WHEREFORE, there is no blatant disparity when the sheriff intends to forfeit all the BE GIVEN RETROACTIVE EFFECT FOR PURPOSES OF DETERMINING THE NET
remaining properties after deducting the payments of the debts for only separate PROFITS SUBJECT OF FORFEITURE AS A RESULT OF THE DECREE OF LEGAL
properties of the defendant-respondent shall be delivered to him which he has SEPARATION WITHOUT IMPAIRING VESTED RIGHTS ALREADY ACQUIRED UNDER
none. THE CIVIL CODE?
The Sheriff is herein directed to proceed with the execution of the Decision. IV
16
IT IS SO ORDERED. WHAT PROPERTIES SHALL BE INCLUDED IN THE FORFEITURE OF THE SHARE OF THE
GUILTY SPOUSE IN THE NET CONJUGAL PARTNERSHIP AS A RESULT OF THE
Not satisfied with the trial court's Order, the petitioner filed a Motion for
ISSUANCE OF THE DECREE OF LEGAL SEPARATION?
Reconsideration17 on September 8, 2006. Consequently, the RTC issued another
Order18 dated November 8, 2006, holding that although the Decision dated October
10, 2005 has become final and executory, it may still consider the Motion for
Clarification because the petitioner simply wanted to clarify the meaning of "net Ruling:
profit earned."19 Furthermore, the same Order held: 1. NO. It is governed by Art. 129 of the Family Code
ALL TOLD, the Court Order dated August 31, 2006 is hereby ordered set aside. NET 2. Clarified in ratio. Art. 102 (4) provides for definition of "net profits” for
PROFIT EARNED, which is subject of forfeiture in favor of [the] parties' common Absolute Community Regime and Conjugal Partnership of Gains
children, is ordered to be computed in accordance [with] par. 4 of Article 102 of the
Family Code.20 3. Family Code. The Family Code can be given retroactive effect. Vested rights can
be lost if there is due process and such deprivation is founded in law and
On November 21, 2006, the respondents filed a Motion for jurisprudence.
Reconsideration,21 praying for the correction and reversal of the Order dated
November 8, 2006. Thereafter, on January 8, 2007, 22 the trial court had changed its 4. Listed on Art. 129 of the Family Code
ruling again and granted the respondents' Motion for Reconsideration whereby the Ratio:
Order dated November 8, 2006 was set aside to reinstate the Order dated August
31, 2006. While the petitioner has raised a number of issues on the applicability of certain
laws, we are well-aware that the respondents have called our attention to the fact
Not satisfied with the trial court's Order, the petitioner filed on February 27, 2007 that the Decision dated October 10, 2005 has attained finality when the Motion for
this instant Petition for Review under Rule 45 of the Rules of Court. Clarification was filed.24 Thus, we are constrained to resolve first the issue of the
Issues: finality of the Decision dated October 10, 2005 and subsequently discuss the
matters that we can clarify
I
• The Decision dated October 10, 2005 has become final and executory at the
IS THE DISSOLUTION AND THE CONSEQUENT LIQUIDATION OF THE COMMON time the Motion for Clarification was filed on July 7, 2006.
PROPERTIES OF THE HUSBAND AND WIFE BY VIRTUE OF THE DECREE OF LEGAL
SEPARATION GOVERNED BY ARTICLE 125 (SIC) OF THE FAMILY CODE? Section 3, Rule 41 of the Rules of Court provides:
Section 3. Period of ordinary appeal. - The appeal shall be taken within fifteen (15) • Article 129 of the Family Code applies to the present case since the parties'
days from notice of the judgment or final order appealed from. Where a record on property relation is governed by the system of relative community or conjugal
appeal is required, the appellant shall file a notice of appeal and a record on appeal partnership of gains.
within thirty (30) days from notice of the judgment or final order.
The petitioner claims that the court a quo is wrong when it applied Article 129 of
The period of appeal shall be interrupted by a timely motion for new trial or the Family Code, instead of Article 102. He confusingly argues that Article 102
reconsideration. No motion for extension of time to file a motion for new trial or applies because there is no other provision under the Family Code which defines
reconsideration shall be allowed. net profits earned subject of forfeiture as a result of legal separation.
In Neypes v. Court of Appeals,25 we clarified that to standardize the appeal periods Offhand, the trial court's Decision dated October 10, 2005 held that Article 129(7)
provided in the Rules and to afford litigants fair opportunity to appeal their cases, of the Family Code applies in this case. We agree with the trial court's holding.
we held that "it would be practical to allow a fresh period of 15 days within which
First, let us determine what governs the couple's property relation. From the
to file the notice of appeal in the RTC, counted from receipt of the order dismissing
record, we can deduce that the petitioner and the respondent tied the marital knot
a motion for a new trial or motion for reconsideration." 26
on January 6, 1977. Since at the time of the exchange of marital vows, the
In the case at bar, the trial court rendered its Decision on October 10, 2005. The operative law was the Civil Code of the Philippines (R.A. No. 386) and since they
petitioner neither filed a motion for reconsideration nor a notice of appeal. On did not agree on a marriage settlement, the property relations between the
December 16, 2005, or after 67 days had lapsed, the trial court issued an order petitioner and the respondent is the system of relative community or conjugal
granting the respondent's motion for execution; and on February 10, 2006, or partnership of gains.55 Article 119 of the Civil Code provides:
after 123 days had lapsed, the trial court issued a writ of execution. Finally, when
Art. 119. The future spouses may in the marriage settlements agree upon absolute
the writ had already been partially executed, the petitioner, on July 7, 2006 or
or relative community of property, or upon complete separation of property, or
after 270 days had lapsed, filed his Motion for Clarification on the definition of the
upon any other regime. In the absence of marriage settlements, or when the same
"net profits earned." From the foregoing, the petitioner had clearly slept on his right
are void, the system of relative community or conjugal partnership of gains as
to question the RTC’s Decision dated October 10, 2005. For 270 days, the petitioner
established in this Code, shall govern the property relations between husband and
never raised a single issue until the decision had already been partially executed.
wife.
The petitioner argues that the decision he is questioning is a void judgment. Being
Thus, from the foregoing facts and law, it is clear that what governs the property
such, the petitioner's thesis is that it can still be disturbed even after 270 days had
relations of the petitioner and of the respondent is conjugal partnership of gains.
lapsed from the issuance of the decision to the filing of the motion for clarification.
And under this property relation, "the husband and the wife place in a common
"A judgment is null and void when the court which rendered it had no power to fund the fruits of their separate property and the income from their work or
grant the relief or no jurisdiction over the subject matter or over the parties or industry."56 The husband and wife also own in common all the property of the
both."30 In other words, a court, which does not have the power to decide a case or conjugal partnership of gains.57
that has no jurisdiction over the subject matter or the parties, will issue a void
Second, since at the time of the dissolution of the petitioner and the respondent's
judgment or a coram non judice.31
marriage the operative law is already the Family Code, the same applies in the
From the aforecited facts, the questioned October 10, 2005 judgment of the trial instant case and the applicable law in so far as the liquidation of the conjugal
court is clearly not void ab initio, since it was rendered within the ambit of the partnership assets and liabilities is concerned is Article 129 of the Family Code in
court's jurisdiction. He has already lost the chance to question the trial court's relation to Article 63(2) of the Family Code. The latter provision is applicable
decision, which has become immutable and unalterable. What we can only do is to because according to Article 256 of the Family Code "[t]his Code shall have
clarify the very question raised below and nothing more. retroactive effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other law." 58
For our convenience, the following matters cannot anymore be disturbed since the
October 10, 2005 judgment has already become immutable and unalterable(.) • Now, the petitioner asks: Was his vested right over half of the common
properties of the conjugal partnership violated when the trial court forfeited
them in favor of his children pursuant to Articles 63(2) and 129 of the Family In the present case, the petitioner was accorded his right to due process. First, he
Code? was well-aware that the respondent prayed in her complaint that all of the conjugal
properties be awarded to her. Second, when the Decision dated October 10, 2005
We respond in the negative.
was promulgated, the petitioner never questioned the trial court's ruling forfeiting
Indeed, the petitioner claims that his vested rights have been impaired, arguing: "As what the trial court termed as "net profits," pursuant to Article 129(7) of the Family
earlier adverted to, the petitioner acquired vested rights over half of the conjugal Code.67 Thus, the petitioner cannot claim being deprived of his right to due process.
properties, the same being owned in common by the spouses. If the provisions of
Furthermore, we take note that the alleged deprivation of the petitioner's "vested
the Family Code are to be given retroactive application to the point of authorizing
right" is one founded, not only in the provisions of the Family Code, but in Article
the forfeiture of the petitioner's share in the net remainder of the conjugal
176 of the Civil Code. This provision is like Articles 63 and 129 of the Family Code on
partnership properties, the same impairs his rights acquired prior to the effectivity
the forfeiture of the guilty spouse's share in the conjugal partnership profits. The
of the Family Code.” [P]ursuant to Article 143 of the Civil Code, which provides: "All
said provision says:
property of the conjugal partnership of gains is owned in common by the husband
and wife."60 Thus, since he is one of the owners of the properties covered by the Art. 176. In case of legal separation, the guilty spouse shall forfeit his or her share of the
conjugal partnership of gains, he has a vested right over half of the said properties, conjugal partnership profits, which shall be awarded to the children of both, and the children
even after the promulgation of the Family Code; and he insisted that no provision of the guilty spouse had by a prior marriage. However, if the conjugal partnership property
came mostly or entirely from the work or industry, or from the wages and salaries, or from the
under the Family Code may deprive him of this vested right by virtue of Article 256
fruits of the separate property of the guilty spouse, this forfeiture shall not apply.
of the Family Code which prohibits retroactive application of the Family Code when
it will prejudice a person's vested right. In case there are no children, the innocent spouse shall be entitled to all the net profits.

However, the petitioner's claim of vested right is not one which is written on From the foregoing, the petitioner's claim of a vested right has no basis considering
stone. In Go, Jr. v. Court of Appeals,61 we define and explained "vested right" in that even under Article 176 of the Civil Code, his share of the conjugal partnership
the following manner: profits may be forfeited if he is the guilty party in a legal separation case.

A vested right is one whose existence, effectivity and extent do not depend upon From the above discussions, Article 129 of the Family Code clearly applies to the
events foreign to the will of the holder, or to the exercise of which no obstacle present case since the parties' property relation is governed by the system of
exists, and which is immediate and perfect in itself and not dependent upon a relative community or conjugal partnership of gains and since the trial court's
contingency. Decision has attained finality and immutability.

To be vested, a right must have become a title—legal or equitable—to the present • The net profits of the conjugal partnership of gains are all the fruits of the
or future enjoyment of property. 62 (Citations omitted) separate properties of the spouses and the products of their labor and industry.

The concept of "vested right" is a consequence of the constitutional guaranty of The petitioner inquires from us the meaning of "net profits" earned by the conjugal
due process that expresses a present fixed interest which in right reason and partnership for purposes of effecting the forfeiture authorized under Article 63 of
natural justice is protected against arbitrary state action; it includes not only legal the Family Code. He insists that since there is no other provision under the Family
or equitable title to the enforcement of a demand but also exemptions from new Code, which defines "net profits" earned subject of forfeiture as a result of legal
obligations created after the right has become vested. Rights are considered vested separation, then Article 102 of the Family Code applies.
when the right to enjoyment is a present interest, absolute, unconditional, and First and foremost, we must distinguish between the applicable law as to the
perfect or fixed and irrefutable. 64 (Emphasis and underscoring supplied) [ABAKADA property relations between the parties and the applicable law as to the definition of
Guro Party List Officer Samson S. Alcantara, et al. v. The Hon. Executive Secretary "net profits." As earlier discussed, Article 129 of the Family Code applies as to the
Eduardo R. Ermita] property relations of the parties. In other words, the computation and the
From the foregoing, it is clear that while one may not be deprived of his "vested succession of events will follow the provisions under Article 129 of the said Code.
right," he may lose the same if there is due process and such deprivation is Moreover, as to the definition of "net profits," we cannot but refer to Article 102(4)
founded in law and jurisprudence. of the Family Code, since it expressly provides that for purposes of computing the
net profits subject to forfeiture under Article 43, No. (2) and Article 63, No. (2), benefits obtained indiscriminately by either spouse during the marriage." 76 From the
Article 102(4) applies. In this provision, net profits "shall be the increase in value foregoing provision, each of the couple has his and her own property and debts.
between the market value of the community property at the time of the celebration The law does not intend to effect a mixture or merger of those debts or properties
of the marriage and the market value at the time of its dissolution." 72 Thus, without between the spouses. Rather, it establishes a complete separation of capitals. 77
any iota of doubt, Article 102(4) applies to both the dissolution of the absolute
Considering that the couple's marriage has been dissolved under the Family Code,
community regime under Article 102 of the Family Code, and to the dissolution of
Article 129 of the same Code applies in the liquidation of the couple's properties in
the conjugal partnership regime under Article 129 of the Family Code.
the event that the conjugal partnership of gains is dissolved, to wit:
On Absolute Community Regime: Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure
When a couple enters into a regime of absolute community, the husband and the shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the conjugal
wife becomes joint owners of all the properties of the marriage. Whatever property
partnership and the exclusive properties of each spouse.
each spouse brings into the marriage, and those acquired during the marriage (2) Amounts advanced by the conjugal partnership in payment of personal debts and
(except those excluded under Article 92 of the Family Code) form the common mass obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.
of the couple's properties. And when the couple's marriage or community is (3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition
dissolved, that common mass is divided between the spouses, or their respective of property or for the value of his or her exclusive property, the ownership of which has been
heirs, equally or in the proportion the parties have established, irrespective of the vested by law in the conjugal partnership.
value each one may have originally owned. 73 (4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the
Under Article 102 of the Family Code, upon dissolution of marriage, an inventory is unpaid balance with their separate properties, in accordance with the provisions of paragraph
prepared, listing separately all the properties of the absolute community and the (2) of Article 121.
exclusive properties of each; then the debts and obligations of the absolute (5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered
community are paid out of the absolute community's assets and if the community's to each of them.
(6) Unless the owner had been indemnified from whatever source, the loss or deterioration of
properties are insufficient, the separate properties of each of the couple will be
movables used for the benefit of the family, belonging to either spouse, even due to fortuitous
solidarily liable for the unpaid balance. Whatever is left of the separate properties event, shall be paid to said spouse from the conjugal funds, if any.
will be delivered to each of them. The net remainder of the absolute community is (7) The net remainder of the conjugal partnership properties shall constitute the profits, which
its net assets, which shall be divided between the husband and the wife; and for shall be divided equally between husband and wife, unless a different proportion or division
purposes of computing the net profits subject to forfeiture, said profits shall be the was agreed upon in the marriage settlements or unless there has been a voluntary waiver or
increase in value between the market value of the community property at the time forfeiture of such share as provided in this Code.
of the celebration of the marriage and the market value at the time of its (8) The presumptive legitimes of the common children shall be delivered upon the partition in
accordance with Article 51.
dissolution.74
(9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated
On Conjugal Partnership Regime: shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom
the majority of the common children choose to remain. Children below the age of seven years
Before we go into our disquisition on the Conjugal Partnership Regime, we make it are deemed to have chosen the mother, unless the court has decided otherwise. In case there
clear that Article 102(4) of the Family Code applies in the instant case for purposes is no such majority, the court shall decide, taking into consideration the best interests of said
only of defining "net profit." As earlier explained, the definition of "net profits" in children.
Article 102(4) of the Family Code applies to both the absolute community regime In the normal course of events, the following are the steps in the liquidation of the
and conjugal partnership regime as provided for under Article 63, No. (2) of the properties of the spouses:
Family Code, relative to the provisions on Legal Separation. (a) An inventory of all the actual properties shall be made, separately listing the
Now, when a couple enters into a regime of conjugal partnership of gains under couple's conjugal properties and their separate properties. 78 In the instant case, the
Article 142 of the Civil Code, "the husband and the wife place in common fund the trial court found that the couple has no separate properties when they
fruits of their separate property and income from their work or industry, and divide married.79 Rather, the trial court identified the following 8 conjugal properties,
equally, upon the dissolution of the marriage or of the partnership, the net gains or
(b) Ordinarily, the benefit received by a spouse from the conjugal partnership
during the marriage is returned in equal amount to the assets of the conjugal
partnership;81 and if the community is enriched at the expense of the separate
properties of either spouse, a restitution of the value of such properties to their
respective owners shall be made.82
(c) Subsequently, the couple's conjugal partnership shall pay the debts of the
conjugal partnership; while the debts and obligation of each of the spouses shall be
paid from their respective separate properties. But if the conjugal partnership is not
sufficient to pay all its debts and obligations, the spouses with their separate
properties shall be solidarily liable.83
(d) Now, what remains of the separate or exclusive properties of the husband and
of the wife shall be returned to each of them. 84 In the instant case, since it was
already established by the trial court that the spouses have no separate
properties,85 there is nothing to return to any of them.  The listed properties above
are considered part of the conjugal partnership. Thus, ordinarily, what remains in
the above-listed properties should be divided equally between the spouses and/or
their respective heirs.86 However, since the trial court found the petitioner the guilty
party, his share from the net profits of the conjugal partnership is forfeited in favor
of the common children, pursuant to Article 63(2) of the Family Code. Again, lest we
be confused, like in the absolute community regime, nothing will be returned to the
guilty party in the conjugal partnership regime, because there is no separate
property which may be accounted for in the guilty party's favor.
In the discussions above, we have seen that in both instances, the petitioner is not
entitled to any property at all. Thus, we cannot but uphold the Decision dated
October 10, 2005 of the trial court. However, we must clarify, as we already did
above, the Order dated January 8, 2007.
WHEREFORE, the Decision dated October 10, 2005 of the Regional Trial Court,
Branch 1 of Butuan City is AFFIRMED. Acting on the Motion for Clarification dated
July 7, 2006 in the Regional Trial Court, the Order dated January 8, 2007 of the
Regional Trial Court is hereby CLARIFIED in accordance with the above discussions.
SO ORDERED.