Atty. Clemente D. Fajardo

August 21, 1995 Atty. Clemente D. Fajardo 5th Flr., Bankers Centre 6764 Ayala Ave., Makati, Metro Manila S i r : This refers to your letter dated August 9, 1995, requesting opinion on the query posed therein. As stated, spouses Lao Tan are legally married. Sometime in 1989, said spouses, together with their three (3) legitimate children, agreed to form Felvzar Realty, Inc., which was eventually registered with the SEC. In forming the said company, the spouses transferred a conjugal piece of land in exchange for shares of stocks of said corporation. Out of the total 165,000 shares generated as a result of the transfer, Mr. Lao Tan acquired 121,950 shares whereas Mrs. Tan acquired only 40,650 shares. Your query is, how shall the shares of either of the spouses be classified, conjugal or exclusive? Executive Order No. 209, as amended, otherwise known as the Family Code of the Philippines, provides: "ARTICLE 91. Unless otherwise provided in this Chapter or in the marriage settlement, the community property shall consists of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter ." (Emphasis supplied). "ARTICLE 93. Property acquired during the marriage is presumed to belong to the community , unless it is proved that it is one of those excluded therefrom" (Emphasis supplied). In the light of the foregoing and taking into consideration that the property used as payment for the issuance of the shares is a conjugal property, it is opined that the shares issued in consideration for the transfer of the property are deemed conjugal property, even if the stock certificates issued are in the respective names of the spouses. As such, the ownership thereof shall be governed by the law on " co-ownership " pursuant to Article 90 of the same Code which provides: "ARTICLE 90. The provisions on co-ownership shall apply to the absolute community of property between the spouses in all matters not provided for in this chapter." (Emphasis supplied). However, please be advised that the foregoing cited authorities do not restrain or preclude judicial interpretation and application of the law on the actual facts, should the issue raised herein be litigated in the proper court. (SGD.) PERFECTO R. YASAY, JR. Associate Commissioner