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BRIGIDO B. QUIAO v. RITA C. QUIAO

FACTS:

This case involves a petition for review on certiorari filed by the petitioner, Brigido B. Quiao, seeking to set aside the order of the Regional Trial Court (RTC), Branch 1, Butuan City. The case originated from a complaint for legal separation filed by the respondent, Rita C. Quiao, against the petitioner. The RTC rendered a decision granting the legal separation and providing for the division of properties between the parties. The decision ordered the forfeiture of the petitioner's share of the net profits earned by the conjugal partnership in favor of the common children. The petitioner paid a part of the amount ordered, but later filed a motion for clarification as to the definition of "net profits earned." The RTC issued an order clarifying the meaning of the phrase and directing the execution of the decision. However, the RTC later changed its ruling and reinstated the order directing the forfeiture of the petitioner's share. Dissatisfied with this order, the petitioner filed a petition for review before the Supreme Court, raising several issues related to the dissolution and liquidation of properties in legal separation cases.

ISSUES:

  1. Whether the Decision dated October 10, 2005 has attained finality when the Motion for Clarification was filed.

  2. Whether the Decision dated October 10, 2005 is a void judgment.

  3. Whether the trial court applied the correct provision of the Family Code regarding the forfeiture of net profits in a legal separation case.

  4. Whether Article 129(7) or Article 102 of the Family Code should govern the property relations of the parties.

  5. Whether the petitioner's vested right over half of the conjugal properties was violated by the trial court's forfeiture in favor of the children.

  6. Whether the provisions of the Family Code retroactively apply to the petitioner's vested rights.

  7. What is the meaning of "net profits" earned by the conjugal partnership for purposes of forfeiture under Article 63 of the Family Code?

  8. Is the computation of "net profits" earned in the conjugal partnership of gains the same as the computation of "net profits" earned in the absolute community?

  9. Whether Article 102 of the Family Code or Article 129 of the Civil Code applies to the liquidation of the couple's properties in a legal separation.

  10. Whether the petitioner is entitled to a share in the net profits of the conjugal partnership of gains.

  11. Whether the conjugal properties should be divided equally between the spouses.

  12. Whether the petitioner is entitled to any property considering his guilt in the dissolution of the marriage.

RULING:

  1. The Decision dated October 10, 2005 has become final and executory at the time the Motion for Clarification was filed on July 7, 2006. The petitioner failed to file a motion for reconsideration or a notice of appeal within the prescribed period. The judgment became final and executory when the reglementary period to appeal lapsed and no appeal was perfected within such period.

  2. The questioned judgment is not a void judgment. A judgment is null and void when the court which rendered it had no power to grant the relief or no jurisdiction over the subject matter or over the parties or both. In this case, the trial court had jurisdiction over the case involving legal separation, as conferred by Republic Act No. 8369 and the Rule on Legal Separation. The trial court also acquired jurisdiction over the parties. Therefore, the judgment is not void.

  3. The trial court correctly applied Article 129(7) of the Family Code. The petitioner's argument that Article 102 should apply because there is no other provision that defines net profits subject to forfeiture in legal separation cases is confusing and unfounded. The trial court's decision, which found that Article 129(7) applies in this case, is affirmed.

  4. The property relations of the parties are governed by the system of relative community or conjugal partnership of gains. Since the parties did not agree on a marriage settlement and got married before the Family Code was enacted, the property relations between them are governed by the Civil Code. Article 119 of the Civil Code states that in the absence of marriage settlements, the system of relative community or conjugal partnership of gains shall govern the property relations between husband and wife. Therefore, Article 129(7) of the Family Code applies in this case.

  5. The Supreme Court responds in the negative. The petitioner's claim of vested right is not one that is fixed and protected against arbitrary state action. Due process was observed as the petitioner was given the opportunity to contest the forfeiture of conjugal properties. Moreover, the alleged deprivation of the petitioner's vested right is founded not only in the provisions of the Family Code but also in Article 176 of the Civil Code. Therefore, the petitioner cannot claim being deprived of his right to due process.

  6. The retroactive application of the Family Code does not violate the petitioner's vested rights. Article 256 of the Family Code prohibits retroactive application only if it would prejudice or impair vested or acquired rights in accordance with the Civil Code or other law. In this case, the forfeiture of the petitioner's share in the conjugal partnership properties is authorized under Article 176 of the Civil Code, which applies to legal separation cases. Hence, the retroactive application of the Family Code does not impair the petitioner's vested rights.

  7. The meaning of "net profits" earned by the conjugal partnership for purposes of forfeiture under Article 63 of the Family Code is 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, as provided in Article 102(4) of the Family Code.

  8. The computation of "net profits" earned in the conjugal partnership of gains is the same as the computation of "net profits" earned in the absolute community, as Article 102(4) applies to both the dissolution of the absolute community regime under Article 102 and the dissolution of the conjugal partnership regime under Article 129 of the Family Code.

  9. Article 129 of the Civil Code applies to the liquidation of the couple's properties in a legal separation.

  10. The petitioner is not entitled to a share in the net profits of the conjugal partnership of gains since both parties entered into marriage without bringing any property.

  11. The court ruled that the conjugal properties should be divided equally between the spouses and their respective heirs.

  12. The court held that since the petitioner was found guilty of the dissolution of the marriage, his share from the net profits of the conjugal partnership is forfeited in favor of the common children.

PRINCIPLES:

  • A judgment becomes final and executory when the reglementary period to appeal lapses and no appeal is perfected within such period.

  • A void judgment is one that is issued by a court that has no power to decide a case or has no jurisdiction over the subject matter or the parties.

  • Jurisdiction over the subject matter and the parties is essential in rendering a valid judgment.

  • Once a judgment is rendered within the court's jurisdiction, it cannot be disturbed or modified, even if there may be errors of fact or law, except through an appeal filed within the reglementary period.

  • Forfeiture of net profits in a legal separation case is governed by Article 129(7) of the Family Code.

  • In the absence of marriage settlements, the property relations between husband and wife are governed by the system of relative community or conjugal partnership of gains, as provided under the Civil Code.

  • Vested right is one that does not depend on events foreign to the will of the holder and is immediate and perfect in itself. It is protected against arbitrary state action and is a consequence of the constitutional guaranty of due process. (Go, Jr. v. Court of Appeals)

  • Retroactive application of laws, as provided in Article 256 of the Family Code, should not prejudice or impair vested or acquired rights in accordance with the Civil Code or other law.

  • The interest of each spouse in the conjugal assets is inchoate and does not ripen into title until it is finally determined that there are net assets left for distribution after settlement of conjugal obligations.

  • Final and executory decisions cannot be reviewed or reversed by the court.

  • The net profits of the conjugal partnership of gains include all the fruits of the separate properties of the spouses and the products of their labor and industry.

  • The applicable law for determining the property relations between spouses is Article 129 of the Family Code.

  • The net profits subject to forfeiture under Article 63 of the Family Code are computed as 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, as provided in Article 102(4) of the Family Code.

  • The computation of "net profits" earned in the conjugal partnership of gains is the same as the computation of "net profits" earned in the absolute community, as both are governed by Article 102(4) of the Family Code.

  • The net profits in the liquidation of the conjugal partnership of gains are to be divided equally between the husband and wife, as provided under Article 129(7) of the Civil Code.

  • The net profits are computed by subtracting the market value of the properties at the time of marriage from the net assets or net remainder of the properties at the time of their dissolution, as provided under Article 129 of the Civil Code.

  • In legal separation, the conjugal partnership of gains is dissolved, and the properties are liquidated in accordance with the procedure under Article 129 of the Civil Code.

  • In the absence of an agreement between the parties, the spouse with whom the majority of the common children choose to remain shall be adjudicated the conjugal properties.

  • Children below the age of seven are deemed to have chosen the mother, unless the court decides otherwise.

  • The division of conjugal properties should be done equally between the spouses and their respective heirs.

  • In case of the guilt of a spouse in the dissolution of the marriage, their share of the net profits of the conjugal partnership may be forfeited in favor of the common children.