Dividing Properties after Annulment.

Someone asked me, "I have a friend who...

had his marriage annulled on the ground of psychological incapacity. The order granting the annulment required them to liquidate their asset. Does he have to give half of all his assets to his ex wife?

My answer is not necessarily.

In the case of Valdes v. RTC and reiterated in Dino v Dino (http://sc.judiciary.gov.ph/jurisprudence/2011/january2011/178044.html) "that in a void marriage, regardless of its cause, the property relations of the parties during the period of cohabitation is governed either by Article 147 or Article 148 of the Family Code. Article 147 of the Family Code applies to union of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void," not the dissolution of the absolute community of property. 

In absolute community of property, everything owned by the spouses are divided equally regardless of when acquired. In the regime of co-ownership under 147, only those properties and earnings acquired during their marriage shall be owned equally. Those owned before their marriage are not to be divided.

Article 147 of the Family Code provides:

Article 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership. 

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former’s efforts consisted in the care and maintenance of the family and of the household.

In the case of the friend, because they lived together as husband and wife, and they were capacitated to marry each other at the time they got married, and the only reason their marriage turned out to be void was the psychological incapacity of one of the parties, then Art 147 applies and only those properties they own in common are those acquired during their marriage by their joint efforts, work or industry.