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SURVEY ON SC D E C I S I O N S:
THE EFFECT ON SALE OF PROPERTY OWNED IN COMMON

Mark Louie A Castañeda

There is co-ownership whenever the ownership of an undivided thing or right

belongs to different persons1. Right of common dominion which two or more
persons have over a spiritual, ideal part of a thing which is not physically divided,
unlike a partnership, co-ownership is not a juridical person, no mutual agency and
cannot be extinguished by the death of any co-owner.

Every co-owner must respect each other in the common use, enjoyment, or
preservation of the physical whole. Regarding the ideal share, each co-owner holds
almost absolute control over the same. He has a right to compel the others to share
in the necessary expenses of preservation2.

A sale is a contract where one party obligates himself to transfer the ownership
of and to deliver a determinate thing, while the other party obligates himself to pay
for a said thing a price certain in money or its equivalent.3A contract of sale, as a
consensual contract, it is perfected by mere consent.

If a co-owner and a prospective buyer agrees that the former will sell the property
owned in common to the latter, and buyer already paid a portion of the purchase
price, then the sale is perfected and the other co-owner will be greatly prejudiced.
In the case of Cabrera vs Ysaac4, Henry Ysaac one of the co-owner leased out
portions of the property to several lessees. Juan Cabrera, one of the lessees, leased a
95-square-meter portion of the land. Henry Ysaac needed the money and offered to
sell the 95-square-meter piece of land to Juan Cabrera. The latter already paid a
portion of the purchase price but when Henry went in the U.S. he becomes unable
to enforce the contract due to the refusal of Henry’s wife to accept the payment. The
issue is whether the contract of sale is valid.

The court held that the contract is a contract to sell and not a contract of sale
because it is subjected to the fulfillment of the suspensive condition, by mere

1
NEW CIVIL CODE, Art. 484.
2
NEW CIVIL CODE , Art. 488.
3
NEW CIVIL CODE , Art. 1458 .
4
Cabrera v. Ysaac G.R. No. 166790, (2014).
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completion of the payment of purchase price through installment basis will result to
the perfected contract of sale.

Assuming that full payment is made, what will be the right of a co-owner to the
other co-owner. The law provides that every co-owner has the absolute ownership
of his undivided and proindiviso share in the co-owned property. He has the right to
alienate, assign and mortgage it, even to the extent of substituting a third person in
its enjoyment provided that no personal rights will be affected5.

In the case of Torres, jr vs Velez6, Compromise agreement signed by the parties

wherein they agreed that Jesus, Mariano, and Vicente were jointly authorized to sell
the said properties and receive the proceeds thereof and distribute them to all the co-
owners. However, the agreement was later amended to exclude Jesus as an
authorized seller. Pursuant to their mandate, the petitioners inspected the property
and discovered that Lapinid was occupying a specific portion of the 3000 square
meters of Lot No. 4389 by virtue of a deed of sale executed by Jesus in favor of
Lapinid. The court ruled that a co-owner is an owner of the whole and over the
whole, he exercises the right of dominion, but he is at the same time the owner of a
portion which is truly abstract. Hence, his co-owners have no right to enjoin a co-
owner who intends to alienate or substitute his abstract portion or substitute a third
person in its enjoyment.

Then, every co-owner has a vested right over the property owned in common, but
what will be the effect in the contract of sale if contracted without their consent. In
the case of Philippine National Bank vs Garcia, the court held that even without his
co-owners' consent, a sale is not necessarily void in its entirety. The right of the
petitioner as a vendor is limited though only to the portion which may be allotted to
Jose Sr. in the event of a division and liquidation of the subject property7.

Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in the division
upon the termination of the co-ownership8.

The Court has also ruled in many cases that even if a co-owner sells the whole
property as his, the sale will affect only his own share but not those of the other co-

5
City of Mandaluyong v. Aguilar,403 Phil. 404, 424 (2001).
6
Torres, jr v. Velez GR 187987, (2014).
7
G.R. No. 182839.
8
NEW CIVIL CODE ,Art. 493.
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owners who did not consent to the sale9. This is because the sale or other disposition
of a co-owner affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the thing owned in common 10.
When one of the co-owner decides to sell his share over the common property, he
should demand a partition or liquidation of the undivided thing to determine his
proportionate share over the property owned in common.

Co-owner may validly sell his undivided share of the property owned in common
(If the part sold happens to be his allotted share after partition, in order for the
transaction to be valid). Now then if there has been no express partition as yet, but
the co-owner who sells points out to his buyers the boundaries of the part he was
selling, and the other co-owners make no objection, there is in effect already a partial
partition, and the sale of the definite portion can no longer be assailed11.

Unless all the co-owners have agreed to partition their property, none of them may
sell a definite portion of the property. The co-owner may only sell his or her
proportionate interest in the co-ownership. A contract of sale which purports to sell
a specific or definite portion of unpartitioned land or property is null and void ab
initio12.

A co-owner of undivided thing should determine first his proportionate share

through partition he may dispose or assign his co-owned thing. No co-owner shall
be obliged to remain in the co-ownership. Each co-owner may demand at any time
the partition of the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time,
not exceeding ten years, shall be valid. This term may be extended by a new
agreement.

It has been held that under a statute providing that during the pendency of any
partition suit any person claiming to be interested in the premises may appear and
assert his right, the right to intervene is given to all persons claiming an interest in
the land, whether under the common title sought to be partitioned or by title
independent thereof. But even under statutes allowing the adjudication of the rights
and interests of the parties to a bona fide partition suit, an action for partition cannot
be used as a substitute for the action of ejectment nor for the sole purpose of testing
a legal title13.

9
Tomas Claudio Memorial College, Inc. v. Court of Appeals, et al., 316 SCRA 502, 509 (1999).
10
Acabal v. Acabal, 494 Phil. 528, 553 (2005).
11
Pamplona v. Moreto, 185 Phil. 556, 564 (1980).
12
CABRERA v. HENRY YSAAC,G.R. no. 166790 (2014).
13
Ruling Case Law, vol. 20, p. 730, paragraph 12.
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Co-owners has the right to a voice in the division of the thing owned in common
and to object to any division made without their concurrence, considers them, in an
action for the partition of real estate, as subrogated to the rights of the vendors in the
portion of the property in their possession14.

In the Sale of co-owned properties, there is no common interest that may be

prejudiced, if one or more of the co-owners refuses to sell the co-owned property. If
there are disagreements and differences impossible of adjustment by the parties
themselves and respondents disagreed to the sale, they merely asserted their
individual ownership rights. There is no common interest in the apportionment of
the property not agreeable to any of the co-owners15.

Right is the same as that of individual owners which are not diminished by the
fact that the entire property is co-owned with others. That part which ideally belongs
to them, or their mental portion, may be disposed of as they please, independent of
the decision of their co-owners. So we rule in this case. The respondents cannot be
ordered to sell their portion of the co-owned properties16, each party is the sole judge
of what is good for him17.

What will be the effect if a co-owner decides to sell or dispose his property before
partition since the rest of the co-owners oppose to conduct a partition? As explained
in Spouses Del Campo v. Court of Appeals: We are not unaware of the principle that
a co-owner cannot rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should not signify that
the vendee does not acquire anything at all in case a physically segregated area of
the co-owned lot is in fact sold to him. Since the co-owner/vendor’s undivided
interest could properly be the object of the contract of sale between the parties,
what the vendee obtains by virtue of such a sale are the same rights as the vendor
had as co-owner, in an ideal share equivalent to the consideration given under their
transaction. In other words, the vendee steps into the shoes of the vendor as co-
owner and acquire a proportionate abstract share in the property held in
common18. No co-owner shall be obliged to remain in the co-ownership. Each co-
owner may demand at any time the partition of the thing owned in common,
insofar as his share is concerned19.

14
CODE OF CIVIL PROCEDURE ,Arts. 399, 400, 403, and 1051; sec. 762, ,Dancel vs. Dancel, 29 Phil., 25.
15
Rodriguez v. Court of First Instance of Rizal, G.R. No. L-3762 (1951).
16
Dela Cruz v. Nolasco ,G.R. No. 189420 (2014).
17
Rodriguez v. Court of First Instance of Rizal, G.R. No. L-3762 (1951).
18
Spouses Del Campo v. Court of Appeals , G.R. No. L-49219(1988).
19
NEW CIVIL CODE, Art. 494.
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However, in a recent case of Cabrera vs Ysaac which ruled that a sale of a

common property before partition is void ab initio and disposal of a property owned
in common requires the consent of other co-owners. We thought that no co-owner
shall force to remain in co-ownership and every one of them has a right to demand
partition which is expressly provided by our Civil Code.

In the words of Justice Loenen, “co-owner could enter into a contract to sell a
property. However, such contract is still subject to the suspensive condition of the
partition of the property, and that the other co-owners agree that the part subject of
the contract to sell vests in favor of the co-owner’s buyer. Hence, the co-owners’
consent is an important factor for the sale to ripen”. He further concluded that “a
contract of sale which purports to sell a specific or definite portion of unpartitioned
land is null and void ab initio”20.

Thus, the object in which the subject matter of the sale in that particular case is
definite and undetermined, consent of the other co-owner is necessary because their
shares are included in the transactions between the vendee and the vendor, and
partition is required to determine to what extent of the property is owned by vendor,
which will be considered as valid & consummated contract of sale and what part of
the property belongs to the rest of the co-owners which is will be considered as void.
A co-owner is not allowed to sell the shares, which does not belong to him.

What will happen if one of a co-owner died? Jurisprudence states that what must
be settled first is the action for partition. without partition is effected, each heir
cannot claim ownership over a definite portion of the inheritance. Without partition,
either by agreement between the parties of by judicial proceeding, a co-heir cannot
dispose of a specific portion of the estate. For where there are two or more heirs, the
whole estate such heirs. Upon the death of a person, each of his heirs becomes the
undivided owner of the whole estate left with respect to the part of portion which
might be adjudicated to him, a community of ownership being thus formed among
the co-owners of the estate or co-heirs while it remains undivided21.

In regards to the property belongs to the estate, what will be right of the heirs
before its partition? In the case of Quijano vs Amante, the disputed property
originally formed part of the estate of the late Bibiano Quijano and passed on to his
heirs by operation of law upon his death. Prior to the partition, the estate was owned
in common by the heirs, In a co-ownership, the undivided thing or right belong to
different persons, with each of them holding the property pro indiviso and exercising
her rights over the whole property. Each co-owner may use and enjoy the property
with no other limitation than that he shall not injure the interests of his co-owners.
20
CABRERA v. HENRY YSAAC,G.R. no. 166790 (2014).
21 Caravajal v. CA, G.R. No. L-44426 (1982).
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The underlying rationale is that until a division is actually made, the respective share
of each cannot be determined, and every co-owner exercises, together with his co-
participants, joint ownership of the proindiviso property, in addition to his use and
enjoyment of it22.

What will be the effect on the sale of property belongs to the estate? In the case
of Carnaval vs CA, Eliseo, one of the heir sold the disputed property to the
respondent Amante. The sale did not vest ownership of the disputed property in the
respondent but transferred only the seller’s pro indiviso share to him, consequently
making him, as the buyer, a co-owner of the disputed property until it is partitioned,
the respondent was vested with the right under Article 497 of the Civil Code to take
part in the partition of the estate and to challenge the partition undertaken without
his consent. The court ruled that the possession could very well be deemed illegal
from the beginning because the transfer of the pro indivisio was made prior to the
partition and without the consent of other heirs (co-owners)23.

What will happen to the conjugal partnership upon the death of a spouse? the
conjugal partnership was converted into an implied ordinary co-ownership between
the surviving spouse, on the one hand, and the heirs of the deceased, on the other.
This resulting ordinary co-ownership among the heirs is governed by Article 493 of
the Civil Code

What is the effect to the sale of property belongs conjugal partnership after the
death of a spouse? Sale of a property from the estate of his wife by the surviving
spouse shall be limited only to his proportionate share. Upon the death of a spouse,
the conjugal partnership was automatically dissolved and terminated pursuant to
Article 175(1) of the Civil Code, and the successional rights of his/her heirs vest, as
provided under Article 777 of the Civil Code, which states that the rights to the
succession are transmitted from the moment of the death of the decedent.

In the case of PNB vs Garcia, the conjugal partnership was converted into an
implied ordinary co-ownership upon the death of Ligaya. Jose Sr., the husband of
the deceased, constituted the mortgage over the entire subject property after the
death of Ligaya, but before the liquidation of the conjugal partnership. The court
ruled that, under Article 493 of the Civil Code, even if he had the right to freely
mortgage or even sell his undivided interest in the disputed property, he could not
dispose of or mortgage the entire property without his children’s consent. As
correctly emphasized by the trial court, Jose Sr.’s right in the subject property is
limited only to his share in the conjugal partnership as well as his share as an heir on
the other half of the estate which is his deceased spouse’s share. Accordingly, the

22
Cavajal v. CA, G.R. No. L-44426 (1982).
23
QUIJANO v. Amante, G.R. No. 164277(2014).
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mortgage contract is void insofar as it extends to the undivided shares of his children
(Nora, Jose Jr., Bobby, and Jimmy) because they did not give their consent to the
transaction.

Accordingly, the Amendment of Real Estate Mortgage constituted by Jose Sr.

over the entire property without his co-owners' consent is not necessarily void in its
entirety. The right of the petitioner bank as mortgagee is limited though only to the
portion which may be allotted to Jose Sr. in the event of a division and liquidation
of the subject property24.

Unlike, partners in the partnership, bank, and depositors, or Doctor, and patient.
Co-owners in a co-ownership does not have a fiduciary relationship with each other.
Death of a co-owner does not extinguish the co-ownership but by partition and
conveyance of their respective share. The existence of strained relationship between
them does not affect the existence of ownership. Co-ownership does not exist
through contract but by law (inheritance,marriage settlement,etc). Each one of them
does not have an obligation to act with candor between themselves, co-ownership is
a form of trust and co-owners are trustee with each other and one of them may
dispose of his share anytime without any interference the other co-partner, which the
latter cannot ask for damages.

-o0o-

24
Philippine National Bank vs Garcia, G.R. No. 182839 (2014).