ARTICLES 225-227 OF THE FAMILY CODE OF THE PHILIPPINES

FAMILY CODE OF THE PHILIPPINES

TITLE IX: PARENTAL AUTHORITY

Chapter 4. Effect of Parental Authority Upon the Property of the Children

Article 225. The father and the mother shall jointly exercise legal guardianship over the property of the unemancipated common child without the necessity of a court appointment. In case of disagreement, the father's decision shall prevail, unless there is a judicial order to the contrary.

Where the market value of the property or the annual income of the child exceeds P50,000, the parent concerned shall be required to furnish a bond in such amount as the court may determine, but not less than ten per centum (10%) of the value of the property or annual income, to guarantee the performance of the obligations prescribed for general guardians.

A verified petition for approval of the bond shall be filed in the proper court of the place where the child resides, or, if the child resides in a foreign country, in the proper court of the place where the property or any part thereof is situated.

The petition shall be docketed as a summary special proceeding in which all incidents and issues regarding the performance of the obligations referred to in the second paragraph of this Article shall be heard and resolved.

The ordinary rules on guardianship shall be merely suppletory except when the child is under substitute parental authority, or the guardian is a stranger, or a parent has remarried, in which case the ordinary rules on guardianship shall apply. (320a)

ü  The legal guardianship over the unemancipated child shall be jointly exercise by the father and the mother. They need not be appointed by the court but if there’s any disagreement father’s decision shall prevail.

ü  There’s no need for an appointment of the parents in order to become guardians of the properties of their minor children.

ü  If the value of the properties exceeds Php 50,000.00, there’s a need to post a bond by the parents.

ü  If the value is exactly Php 50,00.00 or even less, there’s no need to post a bond.

ü   The purpose of the bond is to secure the performance of the obligations of the guardians.

Article 226. The property of the unemancipated child earned or acquired with his work or industry or by onerous or gratuitous title shall belong to the child in ownership and shall be devoted exclusively to the latter's support and education, unless the title or transfer provides otherwise.

The right of the parents over the fruits and income of the child's property shall be limited primarily to the child's support and secondarily to the collective daily needs of the family. (321a, 323a)

Article 227. If the parents entrust the management or administration of any of their properties to an unemancipated child, the net proceeds of such property shall belong to the owner. The child shall be given a reasonable monthly allowance in an amount not less than that which the owner would have paid if the administrator were a stranger, unless the owner, grants the entire proceeds to the child. In any case, the proceeds thus give in whole or in part shall not be charged to the child's legitime. (322a)

Article 226	Article 227
As to Acquisition
Earned or acquired by the child through his work or industry by onerous or gratuitous title.	Property given by the parents to the child for the latter to administer or manage.
As to Ownership
Owned by the child.	Owned by the parents.
As to Who is the Usufructuary
Child is also the usufructuary, but the child’s use of the property shall be secondary to the collective needs of the family.	Parents are the usufructuary.
As to Administration
Property administered or managed by the parents.	Property administered or managed by the child.

G.R. No. 105562 September 27, 1993
CASE DIGEST:

LUZ PINEDA, MARILOU MONTENEGRO, VIRGINIA ALARCON, DINA LORENA AYO, CELIA CALUMBAG and LUCIA LONTOK, petitioners,

vs.

HON. COURT OF APPEALS and THE INSULAR LIFE ASSURANCE COMPANY, LIMITED, respondents.

Ponente: Justice DAVIDE, JR.

FACTS:

Ø  On 23 September 1983, Prime Marine Services, Inc. (PMSI), a crewing/manning outfit, procured Group PoIicy from respondent-appellant Insular Life Assurance Co., Ltd. to provide life insurance coverage to its sea-based employees enrolled under the plan.

Ø  On 17 February 1986, during the effectivity of the policy, six covered employees of the PMSI perished at sea when their vessel, M/V Nemos, a Greek cargo vessel, sunk somewhere in El Jadida, Morocco. They were survived by complainants-appellees, the beneficiaries under the policy.

Ø  Following the tragic demise of their loved ones, complainants-appellees sought to claim death benefits due them and, for this purpose, they approached the President and General Manager of PMSI, Capt. Roberto Nuval.

Ø  Capt. Nuval showed willingness to assist complainants-appellees to recover Overseas Workers Welfare Administration (OWWA) benefits from the POEA and to work for the increase of their PANDIMAN and other benefits arising from the deaths of their husbands/sons.

Ø  They were made to execute, with the exception of the spouses Alarcon, special powers of attorney authorizing Capt. Nuval to, among others, "follow up, ask, demand, collect and receive" for their benefit indemnities of sums of money due them relative to the sinking of M/V Nemos.

Ø  By virtue of these written powers of attorney, complainants-appellees were able to receive their respective death benefits.

Ø  Unknown to them, however, the PMSI, in its capacity as employer and policyholder of the life insurance of its deceased workers, filed with respondent-appellant formal claims for and in behalf of the beneficiaries, through its President, Capt. Nuval.

Ø  Among the documents submitted by Capt. Nuval for the processing of the claims were five special powers of attorney executed by complainants-appellees.

Ø   On the basis of these and other documents duly submitted, respondent-appellant drew against its account with the Bank of the Philippine Islands on 27 May 1986 six (6) checks, four for P200,00.00 each, one for P50,000.00 and another for P40,00.00, payable to the order of complainants-appellees.

Ø  These checks were released to the treasurer of PMSI upon instructions of Capt. Nuval over the phone to Mr. Mariano Urbano, Assistant Department Manager for Group Administration Department of respondent-appellant.

Ø  Capt. Nuval, upon receipt of these checks from the treasurer, who happened to be his son-in-law, endorsed and deposited them in his account with the Commercial Bank of Manila, now Boston Bank.

Ø  On 3 July 1989, after complainants-appellees learned that they were entitled, as beneficiaries, to life insurance benefits under a group policy with respondent-appellant, they sought to recover these benefits from Insular Life but the latter denied their claim on the ground that the liability to complainants-appellees was already extinguished upon delivery to and receipt by PMSI of the six (6) checks issued in their names.

Ø  On 20 June 1990, the Commission rendered its decision in favor of the complainants.

Ø  The Insular Life Assurance Company appealed stating that:

(a) Had no jurisdiction over the case considering that the claims exceeded P100,000

(b) Erred in holding that the powers of attorney relied upon by Insular Life were insufficient to convey absolute authority to Capt. Nuval to demand, receive and take delivery of the insurance proceeds pertaining to the petitioners

(c) Erred in not giving credit to the version of Insular Life that the power of attorney supposed to have been executed in favor of the Alarcons was missing, and

(d) Erred in holding that Insular Life was liable for violating Section 180 of the Insurance Code for having released to the surviving mothers the insurance proceeds pertaining to the beneficiaries who were still minors despite the failure of the former to obtain a court authorization or to post a bond.

Ø  The Court of Appeals eliminated the award to minor beneficiaries Dina Ayo and Lucia Lontok.

Ø  Hence, this petition for certiorari was filed by the beneficiary families.

ISSUE: Whether or not the minor beneficiaries’ award shall be eliminated

RULING: Yes. The Court ruled in favor of the petitioners. The Decision of the Court of Appeals was set aside and the Decision of the Insurance Commission was reinstated.

Nor can the Court agree with the opinion of the public respondent that since the shares of the minors in the insurance proceeds are less than P50,000.00, then under Article 225 of the Family Code their mothers could receive such shares without need of either court appointments as guardian or the posting of a bond.

It is of the view that said Article had repealed the third paragraph of Section 180 of the Insurance Code. 34 The pertinent portion of Article 225 of the Family Code reads as follows: “Art. 225. The father and the mother shall jointly exercise legal guardianship over the property of their unemancipated common child without the necessity of a court appointment. In case of disagreement, the father's decision shall prevail, unless there is judicial order to the contrary.”

Where the market value of the property or the annual income of the child exceeds P50,000, the parent concerned shall be required to furnish a bond in such amount as the court may determine, but not less than ten per centum (10%) of the value of the property or annual income, to guarantee the performance of the obligations prescribed for general guardians.

It is clear from the said Article that regardless of the value of the unemancipated common child's property, the father and mother ipso jure becomes the legal guardian of the child's property. However, if the market value of the property or the annual income of the child exceeds P50,000.00, a bond has to be posted by the parents concerned to guarantee the performance of the obligations of a general guardian.

It must, however, be noted that the second paragraph of Article 225 of the Family Code speaks of the "market value of the property or the annual income of the child," which means, therefore, the aggregate of the child's property or annual income; if this exceeds P50,000.00, a bond is required. There is no evidence that the share of each of the minors in the proceeds of the group policy in question is the minor's only property. Without such evidence, it would not be safe to conclude that, indeed, that is his only property.

References:

Judge Albano, Ed Vincent S. (2017). Family Code of the Philippines

https://www.lawphil.net/judjuris/juri1993/sep1993/gr_105562_1993.html