06 Co Ownership

PROPERTY REVIEWER Part 6 CO-OWNERSHIP A.
Definition
CO-OWNERSHIPright to common dominion which two or more persons have in a spiritual part (or ideal portion) or a thing which is not materially or physically divided. The manifestation of the private right of ownership, which instead of being exercised by the owner in an exclusive manner over the things subject to it, is exercised by two or more owners and the undivided thing or right to which it refers to is one and the same. It is not a real right distinct from ownership but is a mere form or manifestation of ownership. Relationship of co-owners and he may not do an act prejudicial to the interest of his co-owners. The legal effect of an agreement to preserve the property in coownership was to create an express trust among the heirs as co-owners of the properties. Art. 484. There is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. In default of contracts, or of special provisions, co-ownership shall be governed by the provisions of this Title. You will only know what portion belongs to you once there is a partition This applies to both immovables and movables. Labnotes Q: Is there an intangible movable? A: YES. These are property represented by shares of stock, credits, etc. (ex in Art 417: 1) obligations and actions whose objects are movables or demandable sums and 2) shares of stock or agricultural, commercial and industrial entities) Q: Is there an intangible immovable? A: YES. These are referred to in #10, Art 415. Contracts for public works and servitudes and other real rights are immovable property. These can be subject to co-ownership. (3) Each co-owner has absolute control over his ideal share, not over specific portions of the property Case Gatchalian v. CIR
B. Characteristics of Coownership
(1) plurality of owners, but only one real right of ownership (2) the recognition of ideal shares or aliquot portions, defined but not physically identified
Facts Fifteen individuals made contributions to purchase a sweepstakes ticket registered in the name of Jose Gatchalian and Co. The ticket won third prize. Gatchalian was then required to file the corresponding income tax return covering the prize. They failed to pay. CIR issued a warrant of distraint and levy, to avoid embarrassment the 15 paid under protest. This happened a second time for the balance. The 15 then demanded refund of the money paid under protest. CFI refused. Held If the plaintiff formed a partnership, they are liable for the payment of income tax; whereas if there was merely a community of property, they are 56
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exempt from such payment. According the facts, the plaintiffs organized a partnership of a civil nature because each of them put up money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they may win, as they did. Having organized and constituted a partnership of a civil nature, the said entity is then bound to pay the income tax. There is no merit the plaintiffs contention that the tax should be proprated among them and paid individually, resulting in their exemption from tax. (4) There is a mutual respect among coowners in regard to the use, enjoyment, and preservation of the property owned in common. Case Diversified Credit v. Rosado Facts A lot belonged to 13 co-owners including the Rosado. She signed a deed of sale together with the coowners in favor of Diversified Credit. However Rosados husband had built a house on the property without the property having been previously partitioned. Diversified then demanded they vacate or remove the house but the spouses refused alleging that it was a conjugal house (A.158CC) and that the building of the house made the 1/13th share of the wife community property as such making her signature in the deed of sale void insofar as the 1/13th is concerned. Held It is the basic principle in the law of co-ownership that no individual coowner can claim title to any definite portion of the land or thing owned in common until the partition thereof. Prior to that time, all that the co-owner has is an ideal, or abstract, quota or proportionate share in the entire thing owned in common by all the co-owners. It cannot be validly claimed that the house constructed was built on land belonging to her, and 158 cannot apply. Necessarily, the claim of conversion of the wifes share from paraphernal to conjugal must be rejected. Labnotes Q: What may be the subject matter of co-ownership? A: All things or property (including property rights) whether real or personal property, whether tangible or intangible may be the subject matter of co-ownership. Q: So if youre a co-owner, what do you own? A: You own an undivided spiritual/ideal portion. Before partition, you cannot say you own a specific portion. Therefore, you can validly sell only your ideal share. Q: The marriage questionin marriage, is there co-ownership? A: NO. Co-ownership has its own rules. You cant apply absolute partition: to partition means the dissolution of the regime. You cant partition extrajudicially. There has to be court approval to make it legal. The best example of a co-ownership provided by law is in case of couple living-in.
C. Differences between coownership and joint tenancy

Co-ownership Tenancy in Common, Ownership in Common, Codominium Civil law origin Joint Ownership Joint tenancy, Tenancy in common, Notion of all-for one, onefor-all Common Law/ Anglo-American origin 57
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Each co-owner owner of his ideal share Each joint owner, the surviving joint owners are subrogated in his rights by accretion (because his right to ownership is extinguished by his deathso if tig 1/3 sila, pag namatay ang isa, tig1/2 nalang ang natira. Joint owner must obtain the consent of all the rest to dispose of his share. The defense of one joint owner can be used as a defense by all joint owners. the ownership for more than 10 years is void. Creditors of a coowner can attach his shares in the co-owners and sold on execution Death or incapacity of a co-owner does not affect existence of a co-ownership A special authority is needed for such representation. A co-owner can freely dispose of his share without need to ask the consent of the other co-owners. Profits of a coowner depend on his proportionate share; profitsharing is invariable (Art. 485) not subject to stipulation
Each co-owner may dispose of his undivided share without the others consent. In case there is a co-owner who is a minor, minority as a defense against prescription is exclusive to him.
D.Differences between partnership and coownership

Ordinary Partnership With legal/juridical personality distinct from its members Created only by agreement or contract to that effect Purpose is to obtain profit Co-ownership No legal personality distinct from its members created by LAW FOCUS [Law, Fortuitous Event, Occupancy, Contract, Succession] Purpose is collective enjoyment and to maintain the unity and preservation of the things owned in common. As a rule, an agreement to keep
Creditors of individual partners cannot attach and sell on execution the shares of partners in the partnership Can be extinguished by the death or incapacity of one party There is mutual representation of the parties A partner cannot transfer his rights to a 3rd person without the consent of the others Distribution of profits can be stipulated upon (profit-sharing)
E. Sources of coownership
Labnotes The main sources of co-ownership are law and contracts. Succession, chance, and occupation are deemed subsumed in law. (1) Law (a) Cohabitation (i) Between man and woman capacitated to marry each other.
No term set limit set by law
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Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as hysband 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 anyproperty shal be deemed to have contributed jointly in the acquisition thereof if the formers efforts consisted in the care and maintenance of the family and the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired by the other party during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In the absence of descendants, such share shall belong to the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation. (ii) Between man and woman not capacitated to marry each other Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit. If one of the parties is validly married to another, his or her share in the coownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding Article. The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith. Case Mallilin v Castillo Facts According to Eustaquio, he and Elvira cohabited with each other (while their respective marriages to other partners were still subsisting). After they separated, Eustaquio filed petition for partition of co-ownership, relating to properties registered solely in the name of Elvira, but bought through the profits of a company they both organized. Elvira denied these allegations of Eustaquio. Held Art. 148 of the Family Code now provides for a limited co-ownership in cases where the parties in union are incapacitated to marry each other. [P]roperties acquired by them through their joint contribution of money, property or industry shall be owned by them in common in proportion to their 59
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contributions which, in the absence of proof to the contrary, is presumed to be equal.... Co-ownership is a form of trust and every co-owner is a trustee for the other. T he provisions of Art. 1452 and Art. 1453 of the Civil Code (on implied trust), then are no longer material since a trust relation already inheres in a coownership which is governed under Title III, Book II of the Civil Code. (b) Absolute community property Art. 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. (c) two or more persons purchase property and by common consent legal title is taken in the name of one of them for the benefit of all, an implied trust is created in favor of the others in proportion to each to interest of each. (Art. 1452) (d) Succession (i) Intestate successionw here there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debt of the deceased (1078) (ii) Testateif property is given to two or more heirs by the testator An instance is when a person A dies intestate and the properties are left undivided to several heirs, such heirs are coowners of the inheritance. If one of the heirs dies, his heirs will in turn be co-owners of the surviving heirs of A. Redemption done by one of the co-owners/heirs will benefit his other co-owner heirs despite the fact that they did not contribute to the redemption money. (e) Donation donation to several persons jointly, it is understood to be in equal shares no rights of accretion unless the donor otherwise provides but if donation is made to husband and wife jointly, there shall be a right of accretion, unless contrary so provide. (f) Chance commixtion in good faith Art. 472. If by the will of their owners two things of the same or different kinds are mixed, or if the mixture occurs by chance, and in the latter case the things are not separable without injury, each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused. Case Siari Valley Estates vs Lucasan (supra) Facts SVE sought to recover 200 heads of cattle that were driven or wandered from its pasture lands into the adjoining lands of Lucasan. Lucasan himself admitted such commixtion although he says that SVE had already retrieved its animals. Which cattle belong to the owner can no longer be determined. Lower court found for SVE. Held Lucasan willfully caused the commixtion such that under Art. 383 (now 473) he will be held to forfeit his 60
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own cattle. No actual evidence exists that the 823 missing cattle were taken by Lucasan, but in view of the proof that his men, on 2 occasions, drove away more than 30 heads, it may be presumed that the others must have also been driven away on subsequent or prior occasions. One who stole a part of the money must have also taken the larger sum lost by the offended party. Evidence: 1) An average increase of 30% per year should give Lucasan around 417 heads in 1951, yet in the same year, after selling 230 heads, he still had 400. 2) Lucasans original stock was entirely native, yet when 322 heads were rounded up for inspection, only 29 were found to be native. (g) Hidden treasure co-ownership between finder and owner finder who is not the owner found the treasure by chance not a trespasser Art. 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another, or tof the state of any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If things found be of interest to science of the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. (h) Easement of a party wall Art. 658. The easement of party wall shall be governed by the provisions of this Title, by the local ordinances and customs insofar as they do conflict with the same, and by the rules of coownership. (i) Occupation Harvesting and fishing Case Punsalan et al. v. Boon Liat et al. Facts 22 fishermen agreed to be the sole owners of 2 sacks of ambergris found in the belly of a whale and they agreed that none could sell without the consent of the others. Teck who knew of the existence of the ambergris proposed the seizure of contraband opium, which was actually the ambergris. The ambergris having been seized was loaded and brought to Zamboanga along with Ahmad, who was left in charge of the ambergris. Teck then proceeded to offer to purchase the ambergris to which Ahmad refused but was later on convinced as he was promised protection from his co-owners. Action for Replevin was then made (court said it is in fact an ordinary action for recovery of title to and possession of the ambergris) Held The sale was not valid. The ambergris was undivided common property of the plaintiffs and one of the defendants. This common ownership was acquired by occupancy. None of them had any right to sell said amber, there being an express agreement between the co-owners not to sell it without the consent of all. Sale having been made without the consent of all owners, the same shall have no effect except as to the portion pertaining to those who made them. The action for recovery pertaining to each co-owner, derived from the right of ownership inherent in the co-ownership can be 61
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exercised not only against strangers, but against the co-owners themselves when the latter performs with respect to the thing held in common acts for their exclusive benefit, or for exclusive ownership, or which are prejudicial to, and in violation of the right of the community. (j) Condominium law Sec. 6(c) of RA 4726 unless otherwise provided, common areas are held in common by the holders of the units in equal shares, one for each unit. (2) Contract (a) Two or more persons agree to create a co-ownership maximum of ten years (494, 2nd par), extendable by a new agreement. Example: When two parties agree to purchase a piece of land, each one paying a part of the purchase price, on the condition that they are to divide the land equally between them. Parties may also become coowners of a particular business when no partnership having a distinct juridical existence is formed between them. (b) Universal Partnership (i) Of all present properties Art. 1778. A partnership of all present property is that in which the partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith. Art. 1779. In a universal partnership of all present property, the property which belongs to each of the partners at the time of the constitution of the partnership, becomes the common property of all the partners, as well as all the profits which they may acquire herewith. A stipulation for the common enjoyment of any other profits may also be made; but the property which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such stipulation, except the fruits thereof. (ii) Of profits Art. 1780. A universal partnership of profits comprises all that the partners may acquire by their industry or work during the existence of the partnership. Movable or immovable property which each of the partners may possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership. (c) Associations and Societies, whose articles are kept secret wherein anyone of the members may contact in his own name with third persons (no juridical personality)
F. Rights of each coowner as to the thing owned in common.

[do not get confused. The rights are those in BOLD. 1-8. The mnemonic is: USE the COPs LP!: (1)Use thing; (2) Share benefits; (3)Ejectment suit; (4)Compel to contribute; (5)Object to alteration; (6)Protect against prejudice; (7)Exercise legal redemption; (8)ask for partition] (1) To use the thing according to its purpose intended (may be altered by agreement, express or implied; provided: 62
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Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other coowners from using it according to their rights. The purpose of the co-ownership may be changed by agreement, express or implied. Any express or implied agreement should govern in determining what the purpose for which the property is intended. Without such agreement, it is understood that the thing is intended for that use for which it is ordinarily adapted to or the use to which it has been previously devoted. Mere tolerance on the part of the co-owers cannot legalize the change in the use of a thing intended by the parties. Mere tolerance cannot be the basis of prscription. Use of one co-owner of the thing must not be in such a way as to prevent the other co-owners from making use of the property according to their own rights. - Co-owners may establish rules regarding their use of the property co-owned - The right of enjoyment is limited by a similar right of others. - There should be just and equitable distribution of uses among all co-owners Any act against the collective interest s an act against ownership and the remedies available to owners in general may by used by the co-owners. Case Pardell v. Bartolome
(a) without injury or prejudice to interest of coownership; and (b) without preventing the use of other coowners (Art. 486) Acts of the co-owner cannot devote the property co-owned to his exclusive use to the prejudice of the other co-owners. - If a co-owner occupies a building agreed upon by all the co-owned to his exclusive use to the prejudice of the other co-owners. - If a co-owner occupies a building agreed upon by all the co-owners to be leased, such co-owner ust pay rent in favor of all the coowners including him
Facts Vicenta and Matilde are sisters who inherited real properties from their mother. Ricardo and Vicenta Pardell claim that Gaspar and Matilde Bartolome had refused to divide the properties, acted as administrators w/o judicial authority and enjoyed properties through rent, fruits to the detriment of the Pardells. The sisters assented to partition of the properties. However it remains to be determined if Matilde, as co-owner of the Calle Escolta house was entitled to reside therein without paying Vicenta rent. Held The record shows no proof that Matilde occasioned any detriment to the interests of the community property. Each co-owner of realty held pro indiviso exercises his rights over the whole property may use and enjoy the same with no other limitation than that he shall not injure the interests of his coowners, for the reason that, until a division be made, the respective part of each holder can not be determined and 63
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every one of the coowners exercises together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same. (2) To share in the benefits in proportion to his interest, provided the charges are borne by each in the same proportion (Art. 485) Art. 485. The share of the co-owners, in the benefits as well as in the charges shall be proportional to their respective interests. Any stipulation in a contract to the contrary shall be void. The portions belonging to the coowners in the co-ownership shall be presumed equal, unless the contrary is proved. A contrary stipulation is void. Portions are presumed equal unless contrary is proved. Accretion added to any portion of land co-owned becomes part of the property in co-ownership and should be divided according to each coowners proportionate share. (3) Any one of the co-owner may bring an action in ejectment (Art. 487) Art. 487. Any one of the co-owners may bring an action in ejectment. Covers all kinds of actions for recovery of possession (forcible entry, unlawful detainer, accion publiciana, and acion reivindicatoria) A co-owner ma bring such action without necessity of bringin all the other co-owners as co-plaintiffs because the suit is deemed to be for the benefit of all. Action will not prosper if the action is for the benefit of himself only and not for the co-ownership. When the action is brought by one co-owner for the benefit of all, a favorable decision will benefit whem but an adverse decision will not affect them if they are not parties in the case or they did not give their consent to the action. If the defendant believes he will win the case, he should implead the other co-owners so that if he wins, the other co-owners wil also be barred from contesting his possession or ownership. This article also contemplates a case brought by a co-owner against another co-owner against another co-owner who takes exclusive possession and asserts ownership in himself alone. The effect of the action will be to obtain recognition of the co-ownership and the defendant will not be evicted from the whole property. (4) To compel other co-owner to contribute to expenses for preservation of the thing or right owned in common and to taxes (Art. 488) Art. 488. Each co-owner shall have a right to compel the other coowners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. Co-owners option not to contribute by waiving his undivided interest equal to amount of 64
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contribution (except if waiver is prejudicial to co-ownership) JBL Reyes waiver requires consent of other co-owners: such as dacion en pago. Necessary expenses taxes and expenses for the preservation of the thing which is not made would endanger the existence of the thing or reduce its value or productivity does not imply any improvement or increase. Does not include those that merely produce benefits for the owner, or merely for luxury, embellishment or pleasure. Useful expenses they increase the income of the thing owned in common for the benefit of all the co-owners. not covered as one of them cannot incur such expenses without the consent of the others and then charge them to pay their shares later. The community is not for purposes of profit but only for the preservation of the sources of income. New sources of income cannot be created at the expense of the coowners without their consent. (a) Remedy against defaulting coowneraction to compel him to contribute such share. He cannot be compelled to renounce his share as such option is at his own discretion. Co-owner has option not to contribute by waiving his undivided interst equal to amount of contribution (unless waiver is prejudicial to co-ownership) - His failure to pay his share does not amount to renunciation.
Renunciation must be express and unequivocal. Renunciation must refer to the portion of the value of the interest of the debtor equivalent to his share in the necessary expenses. The basis for the computation must be the value of interest in the property at the time of renunciation.
Comparison between the Old and New Civil Code Provisions on Renunciation OLD (Art. 389) Renunciatio n of share Refers to obligation to contribute in the future Renunciatio n of whole share Unilateral and absolute as consent of the other co-owners not needed Extremely unjust when the share is too small an amount as to the value of the interst in the property (According to Code Commission) NEW (ART. 488) Tantamount to cessation of rights or dacion en pago Refers to obligation to contribute in expenses already paid. Renunciation of the part of the undivided interst which is equivalent to his share in the necessary expenses. Consent of the other co-owners needed (according to Tolentino, as the code is silent on this) because they would have to shoulder the expenses themselves if he would not contribute. Would always result into prejudicial renunciation 65
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because there is a preexisting debt which should be paid by the other coowners to a third person. The provision is silent in case the one who paid for the necessary expenses is a third person. It appears that this third person, despite the consent of the other coowners to the renunciation, can still sue the renouncing co-owner if his consent was not obtained in the renunciation. What are the requisites before repairs for preservation, embellishment, or improvements may be made? Art. 489. Repairs for preservation may be made at the will of one of the coowners, but he must, if practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve or embellish the thing shall be decided upon by a majority as determined in Article 492. A co-owner alone can advance expenses for preservation of the property even without prior consent of others. He is entitled to be reimbursed for the amount he spent for necessary expenses. Will of one of the co-owners is sufficient authority to undertake expenses for preservation. He can proceed with the repairs for preservation despite opposition of the others. Consent of majority required only in case where the expenses are for the improvement or embellishment of the thing or for administration and better enjoyment of the thing. Consent of all is needed only in acts of ownership. Notice before undertaking repairs is required only when it is practicable. Effect of failure to notify coowners: (a) Failure to give notice even if it was practicavle to do so does not deprive the co-owner his right to be reimbursed the proportionate share of the other in the expenses. (b) The effect of such omission is that he is given the burden of proving the necessity of such repairs and the reasonableness of the expense. (c) He will not be fully reimbursed if the others can prove that had he notified them, they could have hired the services of another contractor who would charge less than the people whome he contracted or that they know of a store that sells the needed material at a cheaper price. The difference will be borne by him. (5) To oppose any act or alteration; remedy of other co-owner in case of alteration. Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benefits for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford adequate relief. Alteration The act by virtue of which a co-owner
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changes the thing from the state in which the others believe it should remain or Withdraws it form the use to which they are desired to be intended in opposition to the common agreement, if there is any, or in absence of a common agreement, to the tacit agreement of all the co-owners, and violating their will common, the resolutions of the majority of the co-owners shall be binding. There shall be no majority unless the reolution is approved by the co-owners who represent the controlling interest in the object of the co-ownership. Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the property owned in common, the court, at the instance of an interested party, shall order such measures as it may deem proper, including the appointment of an administrator. Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder is owned in common, the preceding provision shall apply only to the part owned in common. Administration and better enjoyment acts or decisions for the common benefit of all and not for the benefit of only one or some of them. Characteristics: (a) they refer to the enjoyment and preservation of the thing (b) they have transitory effects Comparison between Art. 491 and Art. 492: Acts of Acts of Alteration/Acts Administration of Ownership Relates to Also for the the use, better substance or enjoyment of the form of the property thing Effects are of Have a transitory more character permanent Consent of the result financial majority Consent of will be binding all is necessary Does not give Contrary to rise to a real the coright over the ownership thing owned in agreement common. 67
Acts of alteration requires the consent of ALL the co-owners if it changes the essence or nature of the thing (present article refers to this) because it is an act of ownership. Consent may be express or tacit (such as when a co-owner has knowledge of the act of alteration but does not object) Tacit consent does not include the liability to answer for any part of the expenses incurred in the alteration even if such is a useful expense. Alteration without consent is illegal and the one who did the alteration is punished by making him lose what he spent in case he may be made to demolish the work he has done plus damages or indemnity. Consent of all is needed in order to I pose a voluntary easement on the property they co-own. Acts of alteration that does not change the essence or nature of the thing requires only the agreement of the majority because it is merely an act of administration. - but if withholding of consent by any one of the co-owners is clearly prejudicial to the common interst, courts may afford adequate relief (Art. 491, CC) Art. 492. For the administration and better enjoyment of the thing owned in
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Effects of acts of alteration and remedies of non-consenting coowner : (a) Co-owner who made alterations may lose whaetever he has spent as he will not be reimbursed (b) He may be ordered to demolish or remove the alteration at his expense (c) He will be liable for damages and other losses (d) Co-ownership will benefit from the alteration if other co-owners decide to contribute to the expenses by reimbursing him (ratification) (e) If a house is built in a common lot, the co-owners are entitled to the proportionate share of the rent. Q: Can a mere majority of the coowners lease real property for any length of time? A: Old Civil Code rule: Lease for not more than 6 years is just an act of administration. Lease for more than 6 years is an act of ownership. New Civil Code rule: Lease becomes an act of ownership and ceases to be an act of administration if: (1) It is recorded in the Registry o Property; and (2) It is for more than 1 year Art. 1647. If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority: the husband with respect to the wifes paraphernal real estate, the father or guardian as to the property of the minor or ward, and the manager without special power. Registration makes the lease binding on third persons (Art. 1648, NCC) Special powers is the criterion for determining whether the act is legally one of strict ownership. Art. 1878. Special powers of attorney are necessary in the following cases: x x x (8) To lease any real property to another person for more than one year. (6) To protect against acts of majority which are prejudicial to minority (Art. 492, Par. 3) (a) Who may manage property? The co-owners themselves. Court cannot appoint an administrator to manage a property co-owned when the coowners want to handle the management. In this management, the majority of the of interest control and their decisions are binding upon the minority. Majority may only proceed to act without notice to the minority if the circumstances warrant urgency. (b) An administrator who may or may not be a coowner delegated by the coowners An administrator cannot, without the unanimous consent of all the co-owners, compromise on, donate, cede, alienate, mortgage, or encumber in any manner the common property. (Ex. Constitute an easement) (c) What is the majority? The majority is not the majority in number but rather pertains to the majority in interst or the financial majority. The majority required should be construed to be an absolute majority or more than one-half of the value of the thing. 68
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(d) What are acts seriously prejudicial? So serious and affects the interest of the co-owners in the community Such that will cause injuries enough to justify the intervention of the court Judicial intervention is improper for merely slight causes, or when one co-owner suffers an injury because of circumstances peculiar to himself alone. (e) Examples of Acts Prejudicial to the Minority: (1) When the resolution calls for a substantial change or alteration of the common property or of the use to which it has been dedicated by agreement or by its nature. (2) When the resolution goes beyond the limits of mere administration, or invades the proprietary rights of the co-owners, in violation of Art. 491 (prohibiting against acts of alteration) (3) When the majority leases, loans, or other contracts without security, exposing the thing to serious danger to the prejudice of the other coowners. (4) When the majority refuse to dismiss an administrator who is guilty of fraud or negligence in his management, or does not have the respectability, aptitude, and solvency required of persons holding such position. (5) When resolution, if carried out, would cause serious injury to the thing itself, such as an agreement not to borrow money under reasonable terms when it is necessary for urgent repairs for preservation, or for the payment of taxes. (f) Remedies of the minority. If the acts of the majority prejudice the minority, the latter may ask for injunction or at worse, a partition. Cases Lavadia v Cosme Facts 6 pious women (A, B, C, D, E, and F) bought jewelry for the Image of Our Lady of Guadalupe. D had initial custody, then E, then the various descendants of E, and finally C. When C wanted to make the Bishop of Lipa custodian, the plaintiffs (F and the heirs of A, B, and C) objected and designated F as the custodian thereof. TC: inasmuch as the plaintiffs are the owners of 4/6 parts pro indiviso of the jewels, and defendants (heirs of D and E), only 2/6, they have the right to determine who should be entrusted with the custody. F was awarded custody. Held Plaintiffs have such right. With the amount of individual contribution undetermined, the law presumes that all of them contributed proportionately. Having owned 4/6 shares as opposed to defendants 2/6, plaintiffs have the right to choose who must have custody. Simple majority rule. Melencio vs. Dy Tiao Lay Facts After the death of the owner of the land in question, his widow and three of his children executed a contract of lease 69
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of the land in favor of the predecessor in interest of Dy Tiao Lay. The term of the lease was for 20 years, extendible for a like period at the option of the lessee. It was further stipulated that at the termination of the original period of lease or its extension, the lessors might purchase all the buildings on the land at a price to be fixed by experts appointed by the parties, but if the lessors should fail to take a advantage of that privilege, the lease would continue for another and further 20 years. The lease contract was not signed by two of the co-heirs. In 1920, the heirs made an extrajudicial partition of the inheritance, and among others things, the land here in question fell to the share of plaintiffs herein. The coheirs that did not sign the lease contract brought this action to recover possession of the land leased to Dy Tiao Lay. They insisted that they had never any knowledge of the existence of such a contract of lease and that the contract was executed without their consent. Held Considering that, although as a rule the contract of lease constitutes an act of management, as this court has several times held, cases may yet arise, either owing to the nature of the subject matter, or to the period of duration, which may render it imperative to record the contract in the registry of property, in pursuance of the Mortgage Law, where the contract of lease may give rise to a real right in favor of the lessee, and it would then constitute such a sundering of the ownership as transcends mere management; in such cases it must of necessity be recognized that the part owners representing the greater portion of the property held in common have no power to lease said property for a longer period than six years without the consent of all the coowners, whose propriety rights, expressly recognized by the law, would by contracts of long duration be restricted or annulled; and as under article 1548 of the Civil Code such contracts cannot be entered into by the husband with respect to his wife's property, by the parent or guardian with respect to that of the child or ward, and by the manager in default of special power, since the contract of lease only produces personal obligations, and cannot without the consent of all persons interested or express authority from the owner, be extended to include stipulations which may alter its character, changing it into a contract of partial alienation of the property leased. Tolentino: The case was decided under the old civil code-if the lease of immovable property is not for more than 6 years, it constitutes an act of administration and the resolution of the majority of co-owners is sufficient.; while if it is for more than years it is an act of strict ownership and all the co-owners must consent. In the present codethe special power of attorney is required for leases of real property by an administrator in the following cases: 1)the lease cease to be an act of administration when it is to be recorded in the Registry of Property; 2) when the lease for any real property to another person is for more than one year. Tuason v Tuason Facts Angela, Nieves and Antonio Tuason coowned a parcel of land. They entered into a memorandum of agreement that no coowner shall sell, alienate or dispose of his ownership without fist giving preference to the other coowners. Angela asked that the contract be rescinded and the property be partitioned stating that the MoA is null and void. Held 70
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The MoA far from violating the legal provision that forbids a co-owner from being obliged to remain a party to the community, precisely has for its purpose and object the dissolution of the coownership and of the community by selling the parcel held in common and dividing the proceeds of the sale among the co-owners. The obligation imposed in the MoA to preserve the co-ownership until all lots shall have been sold is a mere incident to the main object of dissolving the co-ownership. By virtue of the MoA the parties practically entered into a contract of partnership at best and most expedient means of eventually dissolving the property. (7) To exercise legal redemption (Art. 1620, 1623) Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. Art. 1623. The right of legal preemption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of coowners excludes that of adjoining owners. The period of redemption starts to run from the WRITTEN notification. However, there is an exceptional case- when there is actual knowledge (Alonzo v. IAC) Q: Can redemption money be made equal or less than what was paid by third persons? A: Yes, it can be lower if the price of sale is grossly excessive, such as when the co-owner didnt want other co-owners to redeem. However, generally it is of the equal amount. Cases Mariano v CA Facts Francisco left his wife, Antonia and daughters Amparo and Grace a lot which was foreclosed. Amparo redeemed the property and a year later Antonia executed a deed of assignment of right of redemption to Amparo who in turn sold the entire property to Mariano. When Grace learned fo this she filed a complaint for recovery of possession of the land. Held Redemption of the property by a coowner does not vest in him sole ownership over said property but will inure to the benefit of all co-owners. Redemption is not a mode of termination of relationship. It would have been otherwise had Amparo purchased the property after the redemption period had lapsed and after the mortgage bank had consolidation its title, in which case there would not longer be any co-ownership to speak of. Reyes vs. Judge Concepcion Facts Marina Zaballero Reyes, Augusto Zaballero, Socorro Zaballero Francisco. Socorro Marquez Vda. De Zaballero, 71
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Eugenia Z. Luna, Elena Fronda Zaballero and Leonardo M. Zaballero are the proindiviso co-owners of the eight parcels of registered land located in the province of Cavite, with an aggregate area of about 96 hectares. Marina Zaballero Reyes, Augusto Zaballero, Socorro Zaballero Francisco received a written notice from defendants Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna, Leonardo M. Zaballero and Elena Fronda Zaballero that the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION had offered to buy the latter's share in the properties listed in the complaint. And the petitioners were requested to exercise their pre-emptive right to purchase defendants' and intervenor's shares; or to agree to a physical partition of the properties; or to sell their shares, jointly with the defendants and the intervenor, to the VOLCANO SECURITIES TRADERS AND AGRIBUSINESS CORPORATION or VOLCANO LAKEVIEW RESORTS, INC. Held In this jurisdiction, the legal provisions on co-ownership do not grant to any of the owners of a property held in common a pre-emptive right to purchase the pro-indiviso shares of his co-owners. Article 1620 contemplates of a situation where a co-owner has alienated his pro-indiviso shares to a stranger. By the very nature of the right of "legal redemption", a co-owner's light to redeem is invoked only after the shares of the other co-owners are sold to a third party or stranger to the coownership. But in the case at bar, at the time petitioners filed their complaint for injunction and damages against private respondents, no sale of the latter's proindiviso shares to a third party had yet been made. Thus, Article 1620 of the New Civil Code finds no application to the case at bar. There is likewise no merit to petitioners' contention that private respondents had acknowledged the preemptive right of petitioners to purchase their shares at a "reasonable price". Although it appears that private respondents had agreed to sell their pro-indiviso shares to petitioners, the offer was made at a fixed rate of P12.50 per square meter. It cannot be said that private respondents had agreed, without qualification, to sell their shares to petitioners. Hence, petitioners cannot insist on a right to purchase the shares at a price lower than the selling price of private respondents. Neither do petitioners have the legal right to enjoin private respondents from alienating their pro-indiviso shares to a third party. The law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. The law merely provides that the alienation or mortgage shall be limited only to the portion of the property which may be allotted to him upon termination of the co-ownership and, as earlier discussed, that the remaining co-owners have the right to redeem, within a specified period, the shares which may have been sold to the third party. [Articles 1620 and 1623] Additional Cases Halili v. CA Facts Guzman, an American citizen, died and left some real properties to his widow and son (both American citizens). The widow then assigned all his rights to her son over her share in the 6 parcels of land left by the husband. The son then sold them to Cataniag, a Filipino citizen. Halili, the owner of the adjoining lot questioned the constitutionality of the transfers of property and claimed ownership to the land based on right of 72
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legal redemption under Art. 1621. TC dismissed the complaint. CA affirmed Held Halili cannot exercise legal redemption over the property. The subject land is urban in character based on the clear findings of both the TC and CA. Halili has no right to invoke legal redemption under Art 1621 since such article presupposes that the land sought to be redeemed is rural. Under Art. 1621, both landsthat sought to be redeemed and the adjacent lot belonging to the person exercising the right of redemptionmust be rural. If one or both are urban, the right cannot be invoked. Francisco v Boiser Facts Francisco and three of her sisters are co-owners of land on which a commercial building stands. They sold 1/5 of their undivided share to their mother, thus making their mother a coowner. In 1986, without the knowledge of Francisco & co., the mother sold her share to Boiser. On 5 Aug 1992, Francisco received summons, with a copy of the complaint filed by Boiser, demanding her share in the rentals collected by Francisco from the buildings tenants. Francisco then informed her that she was exercising her right of redemption as co-owner. The lower courts ruled that the 30-day period for redemption has lapsed because as early as 30 May 1992, Francisco knew about the sale because, on that date, Boiser wrote Francisco a letter informing the latter about the sale, demanding the rentals, with a copy of the Deed of Sale between Franciscos mother and Boiser. Held The letter of 30 May 1992 cannot be considered sufficient as compliance with the notice requirement of Art. 1623. Art. 1623 requires that the written notification should come from the vendor or prospective vendor, not from any other person. The vendor of an undivided interest is in the best position to know who his co-owners are, who must be notified of the sale. It is the notification from the seller, which can remove all doubts as to the fact of the sale, its perfection, and its validity, for in a contract of sale, the seller is in the best position to confirm whether consent to the essential obligation of selling the property and transferring ownership thereof to the vendee has been given. Thus, sufficient compliance with Art. 1623 means that Franciscos mother is the one informing her of the sale, not Boiser. [NOTE: As the subject sale has already been established before the courts, it is no longer required that notice be given by the mother before Francisco can exercise her right. The receipt by Francisco of summons on 5 Aug 1992 constitutes actual knowledge on the basis of which Francisco may now exercise her right of redemption within 30 days from finality of this decision.]
Verdad v CA
Angel Burdeos
Macaria Atega
Canuto Rosales
Ramon (heirs) Verdad
JJ E A
David Socorro
Facts Macaria married Canuto after Angels death. After Macaria died intestate, David died intestate. In 1982, the heirs of Ramon sold to Verdad their interest on the disputed lot. On 30 Mar 1987, Socorro discovered the sale while she was on the City Treasurers Office. The 73
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following day, she sought to redeem the property. The trial court ruled that Socorros right to redeem the property had already lapsed, but CA reversed. On appeal to the SC, Verdad also contends that Socorro cannot redeem the property, not being a co-heir of Macaria. Held While Socorro is not an intestate heir of her parents-in-law, her right to the property is not because she rightfully can claim heirship in Macarias estate but that she is a legal heir of her husband, David Rosales, whose undivided interest over the property inherited from Macaria, passed on to his widow. The right of redemption was also timely exercised. No written notice of the sale was given by the Burdeos heirs (vendors) to the co-owners required under Art. 1623. The 30-day period of redemption had yet to commence when Socorro sought to exercise the right of redemption on 31 Mar 1987, or when the case was initiated before the trial court. The written notice of sale is mandatory. Notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy and status. Pilapil v CA Facts A parcel of land was co-owned by 4 siblings. Two of them sold their undivided share to the Pilapils. Subsequently, however, the two vendors sold the same ideal share to their relatives (one of the vendees a coowner, the other one is not). Held The validity of a title depends on the buyers knowledge, actual or constructive, of a prior sale. While there is no direct proof that Carmen & Maxima (second vendees) actually knew of the sale to the Pilapils (first vendees), they are deemed to have constructive knowledge thereof by virtue of their relationship to both Agaton & Vitaliana (vendors). A third person, within the meaning of Art. 1620 of the Civil Code (on the right of legal redemption of a co-owner) is anyone who is not a co-owner. Art. 1623, requiring the vendor of the property to give a written notice of sale to the other co-owners, had been rendered inutile by the fact that the Pilapil spouses took possession of the property immediately after the execution of the deed of sale in their favor and continue to possess the same. Since the fact of possession by the Pilapil spouses had not been questioned by any of the co-owners, the latter may be deemed to have knowledge of the sale. Labnotes Q: In Mariano v CA, if Amparo wanted to run it all by herself, what should she do? A: Definitely, she cannot participate in the foreclosure sale as buyer. She has two remedies: (1) She can buy back from the bank after one year. By then, the bank would have consolidated ownership. (2) She can ask other co-owners to waive their right of redemption or pay for it, but it. If they choose to waive it, it is a donation. Other co-owners will be coowners again subject to contribution. If they cant contribute, they are no longer considered co-owners. Q: What is the difference of legal redemption in Art. 1620 from that in 1088 74
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A: In Mariano v. CA, the Supreme Court stated that the difference lies in the subject matter of the undivided interest. In Art. 1620, the subject matter is the determinate and particular object whereas in Art. 1088, it is the undivided hereditary right to the universality or set of properties to be inherited. Q: In Reyes v. Judge Concepcion, if they were notified 30 days before the sale but didnt pre-empt, can they redeem later on, do you still apply the second paragraph? A: Sir said that right is alternative, if they didnt give advance notice, then redemption comes in. If they were given notice, there is no more redemption available. The option was lost. When you redeem, there is no need for consignation. It is not really an obligation. All you need is a tender of payment. A co-owner can always ask for a partition. There is no prescriptive period. Exceptions: (i) when there is a stipulation against it (not beyond 10 years) (ii) when condition of indivision is imposed by transferor (donor or testator) not exceed 20 years (Art. 494) (iii) when legal nature of community prevents partition (e.g. party wall) (iv)when partition is generally prohibited by law (v) when partition would render the thing unserviceable, or the thing in common is essentially indivisible no physical partition but thing maybe sold and co-owners shall divide the proceeds (495, 498) (vi)acquisitive prescription has set in facor of a stranger to coownership or in favor of coowner. Labnotes Q: All agree, can partition before the period lapses be shortened? A: YES, it is considered a novation by agreement, and a co-ownership is created by agreement. Cases Ramirez v. Ramirez
(8)
To
ask for partition (Art. 494) Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each coowner 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. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his coowners or co-heirs so long as he expressly or impliedly recognizes the coownership.
Facts Ramirez brought an action for partition of a parcel of land. Some defendants agreed while others objected on the theory that partition would work great harm and pre-judice to the co-owners. Matter was referred to a Commission. The CFI ruled for partition according to the plan submitted by petitioners. 75
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Held No evidence has been introduced, or sought to be introduced, in support of the allegation that a physical division of the property will cause inestimable damage to the interest of the coowners. Moreover, the same is predicated upon the assumption that a real estate suitable for commercial purposes such as the one herein sought to be partitioned is likely to suffer a proportionately great diminution in value when its area becomes too small. Aguilar v. CA Facts Virgilio and Senen are brso. They bought a house in Paranaque for their father. V's share was 2/3 and Senen 1/3. but by a subsequent memo, they agreed to equal ownership but S is to assume remaining mortgage obligation with SSS. V was disqualified from obtaining loan from SSS, the deed of sale and title was in S name. After the father's death V demanded S vacate the house, the house be sold and the proceeds be divided 2/3 for him and 1/3 for S, as well as monthly rentals for S' use of the house. S wants the equal division of proceeds and says being a co-owner, he was entittled to use and enjoyment thereof. Held Either one may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale shall be divided equally according to their respective interests. S, being a coowner, has the right use the house and lot without paying any compensation to petitioner, as he may use the property owned in common as long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the coowners.
G.Implications of coowners right over his ideal share.

No individual or co-owner can claim title to any definite part or portion of the thing co-owned. All the co-owner has is an ideal abstract, quota or proportionate share in the entire land or thing. All that he can sell or freely dispose is his undivided interest but he cannot sell or alienate a concrete, specific or definite part of the thing owned in common because his right over the thing is represented by a quota or ideal portion without any physical adjudication. Any co-owner by himself extinguish any real right existing on the thing, such as easements or martgages because in everything that is for the benefit of the community, each co-owner represents all the others. (1) Co-owner has the right (a) To share in the fruits and benefits (b) To alienate, mortgage, or encumber and dispose off his ideal share subject to other coowner right of legal redemption. (c) To substitute another person in the enjoyment of the thing. (Art. 493) (d) To renounce part of his interest to reimburse necessary expenses incurred by another co-owner (Art. 488) (2) Effect of transaction by each coowner (a) Limited to his share in the partition (b) Transferree does not acquire any specific portion of the whole property until partition 76
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(c) Creditors of co-owners may intervene in the partition to attack the same if prejudicial (Art. 499), except that creditors cannot ask for rescission even if not notified in the absence of fraud (Art. 497) ask for recission even if notified. Cases Carvajal v CA Facts Spouses Espique had 5 heirsMaria, Evairsto, Estefanio, and Tropinia. Curvajal is currently occupying the 2/5 of the whole lot. He purchased of his lot from Estefanio and the southern part was leased to him by Tropinia. The northern is being claimed by spouses Camarillo after they bought it from Evaristo. Spouses sought recovery of the land. CFI ordered Carvajal to surrender the property because unless there is a partition of the estate of the deceased, co-heir cannot validly claim title to a specific portion of the estate. Held Unless the partition is effected, each heir cannot claim ownership over the definite portion and cannot dispose. Upon death of a person, each of his heirs becomes the undivided owner of the whole estate. Each co-owner shall have full ownership of his part even fruits and benefits. He may alienate, assign, or mortgage it. Effect of alienation with respect to other coowners shall be limited to the portion allotted him during partition. He cannot alienate a specific part of the thing in common to the exclusion of other coowners because his right over the thing is represented by an ideal protion. Coowner cannot adjudicate to himself a definite portion owned in common until partition by agreement or by judicial decree. Before partition, co-heir can only sell his successional rights. Pamplona v Moreto Facts 6 years after the death of his wife and without the consent of the heirs of the wife plus even before the liquidation of the conjugal partnership, Flaviano Moreto sold 781 sq. m. of conjugal lot to the Pamplona spouses. The conjugal property consists of 3 adjacent lots totaling 2,346 sq. m. After Flaviano pointed ot the sold lot, the Pamplonas built their house and piggery on it. After the death of Flaviano, the heirs, insisting on their right to the property, demanded that the Pamplonas vacate the land. TC and CA favored the heirs. Held Flaviano had the perfect right to sell the lot. After the wifes death, he became entitled to of the entire property, with only belonging to the heirs. They hold the property as coowners. Since his share amounts to 1,173 sq. m., the area he sold (781 sq. m.) is within the limits o his share. There was partial partition of the property when Flaviano pointed to the lot he sold to the Pamplonas. Castro v Atienza Facts On Jan 24, 1956, brothers Tomas and Arsenio de Castro, Sr. leased to Gregorio Atienza a 26-hectare fishpond co-owned by them in Polo, Bulacan for 5 years. In Nov 1956, Atienza and Arsenio, Sr. agreed to set aside and annul the contract of lease through a written agreement signed by both of them. The reason was Arsenio, Sr. wanted to lease the fishpond to another person. However, the widow of Tomas, Feliza Cruz Vda. de Castro, refused to sign such agreement. There was an 77
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agreement that the rent of P2,500 paid by Atienza will be returned to him on Dec 30, 1956, but due to the lack of signature, he was still not paid. He instituted an action in the CFI. The latter ordered the payment of P2,500. CA affirmed. Held The consent of the widow of Tomas is not essential to the validity of the agreement of the cancellation of the lease between Arsenio and Atienza (despite the absence of express provision that the widows signature is a condition for validity). Art 493 of the NCC allows the alienation of the coowner of his part in the co-ownership. The effect of such alienation or mortgage shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership When Arsenio and Tomas entered into a contract of lease with Atienza, each of them leased their respective undivided interest owned in common. In case only the other leased his share to Atienza, there would result a partnership between the lessee Atienza and the owner of the other undivided share who did not lease. In short, a coowner can enter into a contract of lease insofar as to his interest. Therefore, he can also cancel such lease without the consent from the other co-owner. It is clear that Felisas signature is not needed to cancel the lease of Arsenios own undivided share, pursuant to his right granted by Art 493. Estoque v Pajimula Facts Lot No. 802 of the Cadastral survey of Rosario was originally owned by the late spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children, namely, Crispina Perez, Lorenzo Perez and Ricardo Perez. Crispina Perez Vda. de Aquitania sold her right and participation in Lot No. 802 consisting of 1/3 portion with an area of 640 square meters to Leonora Estoque. The next day, Crispinas coheirs executed a deed of extrajudicial settlement wherein they assigned all their right, interest and participation in Lot No. 802 to Crispina Perez. Crispina Perez and her children sold to Elena Pajimula, the remaining 2/3 western portion of Lot No. 802 with an area of 958 square meters. Held Estoque became the actual owner of the southeastern third of lot 802 on October 29, 1951. Wherefore, she never acquired an undivided interest in lot 802. And when eight years later Crispina Perez sold to the appellees Pajimula the western two-thirds of the same lot, appellant did not acquire a right to redeem the property thus sold, since their respective portions were distinct and separate and they never became co-owners. Diversified Credit v. Rosado (supra) Facts A lot belonged to 13 co-owners including the Rosado. She signed a deed of sale together with the coowners in favor of Diversified Credit. However Rosados husband had built a house on the property without the property having been previously partitioned. Diversified then demanded they vacate or remove the house but the sps refused alleging that it was a conjugal house (A.158CC) and that the building of the house made the 1/13th share of the wife community property as such making her signature in the deed of sale void insofar as the 1/13th is concerned. Held It is the basic principle in the law of co-ownership that no individual coowner can claim title to any definite 78
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portion of the land or thing owned in common until the partition thereof. Prior to that time, all that the co-owner has is an ideal, or abstract, quota or proportionate share in the entire thing owned in common by all the co-owners. It cannot be validly claimed that the house constructed was built on land belonging to her, and 158 cannot apply. Necessarily, the claim of conversion of the wifes share from paraphernal to conjugal must be rejected. PNB v CA Facts After the death of her husband, Rosa mortgaged the entire conjugal property to PNB. The title to this property was still under proceedings but it was subsequently awarded to the spouses a year after the mortgage. The mortgage to PNB was, however, not annotated. Meanwhile, she defaulted with her obligation to Manila Trading Co. (MTC) and her share (meaning of the property) was sold at public auction. Santiago Sambrano, and subsequently, the Malacas spouses acquired the rights to these shares (registered). Rosa similarly defaulted with PNB but the auction sale was not annotated on the title. The Court gave PNB a new title. The CA affirmed and ordered that the title to PNB and Reyes be annulled. Held After the death of her husband, the property is supposed to be under coownership of Rosa and her children. She is entitled therefore to only . By herself alone, she cannot mortgage the whole property. Assuming that the mortgage to PNB was valid, it would be so only with regard to the owned by Rosa. Under Art 493, any alienation or mortgage by a co-owner shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. But the failure of PNB to cause annotation of its mortgage within 1 yr from issuance of the title is fatal to its claim. Land registration proceedings are proceedings in rem and upon the expiration of the 1 year within which a petition to review the decree of registration may be filed, said decree and the title pursuant thereto amy no longer be changed, altered, or modified, much less set aside.
H.Rules on co-ownership not applicable to CPG or ACP

(a) CPG is governed by rules under the Family Code. (FC 105-133) (b) Void marriages and cohabitation of incapacitated persons are governed by Art. 50, Art. 147, and Art. 148 of the Family Code. Co-ownership May be created by an ordinary contract Sex of coowners is immaterial (kaya kahit bading) There may be 2 or more co-owners Profits are proportional to respective interests Death of a co-owner does not dissolve the Conjugal Partnership Created only by reason of marriage Parties thereto are on male and one female There are only 2 conjugal owners Profits are divided equally, unless there is a contrary stipulation in a marriage settlement Death of a spouse dissolves the CPG Encourage by 79
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co-ownership Generally co-owners administer Coownership is discouraged by law law for family solidarity. the second story shall be preserved at the expense of all, except the owner of the ground floor and the owner of the first story; and so on successively. (1) Concept of condominium Contemplates a multi-story building with several units. Partly co-ownership, partly under individual separate ownership Each unit belongs separately to one or more persons The land and the common areas are of common use by the different owners and are under co-ownership either as contemplated by the Civil Code or through a corporation. Exclusive interst in units plus undivided interst in common areas. Do not constitute a co-ownership as provided for in the Civil Code. When you buy a unit, you are buying the air space and the interior surfaces. External surfaces are common areas Beams and posts are common areas Easement, unless the master deed says otherwise, is an exclusive easement. Your interest in the common areas will depend on your interest in the condo Your ownership of the condo unit and the common areas go together like horse and carriage What are documents which are important in buying a condo unit? (i) deed of sale (ii) enabling or master deed (iii) declaration of restrictions Tells what each co-owner cannot do Examples are how payment be made, how 80
I. Special Rules on ownership of different stories of a house as differentiated from the provisions in the Condominium Law (Act No. 4726)1
Art. 490. Whenever the different stories of a house belong to different owners, if the titles of ownership do not specify the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject, the following rules shall be observed: (1) The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the owners in proportion to the value of the story belonging to each. (2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the entrance, front door, common yard and sanitary works common to all, shall be maintained at the expense of all the owners pro rata; (3) The stairs from the entrance to the first story shall be maintained at the expense of all the owners pro rata, with the exception of the owner of the ground floor; the stairs from the first to
1
please also refer to the material given during the sem regarding Q&As about the Condo Act
PROPERTY REVIEWER
to contribute to common area expenses, etc. Sec. 9 The owner of a project shall, prior to the conveyance of any condominium therein, register a declaration of restrictions relating to such project, which restrictions shall constitute a lien upon each condominium in the project and shall insure to and bind all condominium owners in the project. Such liens, unless otherwise provided, may be enforced by any condominium owner in the project or by the management body of such project. The Register of Deeds shall enter and annotate the declaration of restrictions upon the certificate of title covering the land included within the project, if the land is patented or register under the land included within the project, if the land is patented or registered under the Land Registration or Cadastral Acts. shall remain undivided, and there shall be no judicial partition thereof. (b) Who manages the condominium? (i) condominium corporation (preferred by law) co terminous with the existence of the condominium (ii) co-ownership (iii) association of owners (2) Essential requisites for Condominum (see discussion under Concept of Condominium) (3) Rights and Obligations of Condominium owner What are the incidents of a condominium grant? (a) The boundary of the unit grant (i) the interior surfaces of the perimeter walls, floors, ceilings, windows, and doors (ii) those which are not part of the unit bearing walls, columns, floors, roofs, foundations, and other common structural elements of the building; lobbies, stairways, hallways, and other areas of common use, elevator equipment and shafts, central heating, central refrigeration, and central airconditioning equipment, reservoirs, tanks, pumps, and other central services and faicilities, pipes, ducts, flues, chutes, conduits, wires and other utility installations, wherever located, except the outlets thereof when located within the unit. (b) Exclusive easement for the use of the air space encompassed by the boundaries of th unit (i) as it exists at any particular time
Is the interest in the common areas always a co-ownership? Is Art. 490 applicable if there is an owner per floor? NO. Condominium Act applies. How are taxes assessed? Separately assessed Sec. 25. Whenever real property has been divided into condominiums, each condominium separately owned shall be separately assessed, for purposes of real property taxation and other tax purposes to the owners thereof and the tax on each such condominium shall constitute a lien solely thereon. Can you ask for partition of the common areas? No. Lets see what the Condominium Law has to say: Sec.7. Except as provided in the following section, the common areas
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PROPERTY REVIEWER
(ii) as the unit may lawfully be altered or reconstructed from time to time (iii) such easement shall be auomatically terminated in any air space upon destruction of the unitas to render it untenable (c) Unless otherwise provided, the common areas are held in common by the holders of units, in equal shares, one for each unit (d) a non-exclusive easement for ingress, egress, and support through the common areas are subject to such easements (e) Each condominium unit owner shall have the exclusive right to paint, repaint, tile, wax, paper, or otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, windows, and doors, bounding his own unit (f) Each condominium owner shall have the exclusive right to mortgage, pledge, encumber his condominium and to have the same appraised independently of the other condominiums but any obligation incurred by such condominium owner is personal to him. (g) Each condominium owner has also the absolute right to sell or dispose of his condominium unless the master deed contains a requirement that the property be first offered to the condominium owners within a reasonable period of time before the same is offered to outside parties. Case Sunset View Condominium v Judge Campos Facts Petitioner Corporation filed for the collection of assessment and insurance premiums against private respondents. The latter aver that every purchaser of a condominium unit, regardless of whether or not he has fully paid the purchase price, is a "holder of a separate interest" mentioned in Section 2 of said Condominium Act" and is automatically a shareholder of the condominium corporation. Held Section 5 of the Condominium Act expressly provides that the shareholding in the Condominium Corporation will be conveyed only in a proper case. Not every purchaser of a condominium unit is a shareholder of the condominium corporation. The Condominium Act leaves to the Master Deed the determination of when the shareholding will be transferred to the purchaser of a unit, as clearly provided in the deed in this case. Ownership of a unit, therefore, is a condition sine qua non to being a shareholder in the condominium corporation. It follows that a purchaser of a unit who is not yet the owner thereof for not having fully paid the full purchase price, is not a shareholder By necessary implication, the "separate interest" in a condominium, which entitles the holder to become automatically a share holder in the condominium corporation, as provided in Section 2 of the Condominium Act, can be no other than ownership of a unit. This is so because nobody can be a shareholder unless he is the owner of a unit and when he ceases to be the owner, he also ceases automatically to be a shareholder. The private respondents, consequently, who have not fully paid the purchase price of their units and are not owners of their units nor members or shareholders of the petitioner condominium corporation. Labnotes 82
PROPERTY REVIEWER
Q: What is the purpose of the Condominium Act? A: It is a legal device to allow aliens to own real estate. (iii) Presumption is that possession of a co-owner is not adverse. While the prescription is that possession of a co-owner cannot take place when the acts of ownership exercised are vague and uncertain, such prescription arises and produces all its effects when the acts of ownership do not have any doubt as to the ouster of the rights of the other co-owners. (4) Partition or division Most natural way of extinguishing the co-ownership. A division between two or more persons of real or personal property which they own as co-partners, joins tenants or tenants in common, effected by the setting apart of such interests so that they may enjoy and possess it in severallity.
J.
Extinguishment of CoOwnership
(1) Total destruction of the thing Labnotes Q: Is there still co-ownership if the house is burned? A: Yes, as to the lot and debris (2) Merger of all the interest in one person (3) Acquisitive prescription (a) By a third person (b) By one co-owner against the other co-owners Requisites: (i) Unequivocal acts of repudiation of the rights of the other co-owners (acts amounting to ouster of other co-owners) Such act of repudiation is brought to the knowledge of such coowners Must be known to other co-owners and shown by clear and convincing evidence. It must not be merely turning them away but outright refusal to recognize them as coowners. The evidence thereon is clear and conclusive (ii) Open and adverse possession, not mere silent possession for the required period of extraordinary acquisitive prescription.
(a) Right to ask for partition at any
time except: (i) When there is a stipulation against it. (must not be over 10 years) (ii) When condition of indivision is imposed by transferor (donor or testator) must not exceed 20 years Art. 494 (iii) When the legal nature of community prevents partition. (e.g., party wall) (iv)When partition is generally prohibited by law e.g. ACP (v) When partition would render the thing unserviceable but the thing may be sold and the coowners divide the proceeds (Art. 494)
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PROPERTY REVIEWER
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each coowner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement ot keep the thing undivided for acertain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his coowners or co-heirs so long as he expressly or impliedly recognizes the coownership. Action for partition will fail if acquisitive prescription has set in. Labnotes Q: Can a co-owner become sole owner by acquisitive prescription? A: Generally, NO Because he is not in adverse possession. The exception is when the possession becomes adverse when he repudiates the coownership, which amounts to an ouster of the other co-owners. An ouster is not mere dispossession. Because the other co-owners might just be tolerating the exclusive possession of one co-owner. Q: By what kind of acquisitive prescription? A: Extraordinary. 30 years must lapse. Because the co-owner is in bad faith, knowing that there are suppose to be other co-owners who claim title to the property. (b) Effect of partition Art. 1091, 543, 1092-1093, 499-501 Art. 499. The partition of a thing owned in common shall not prejudice third persons, who shall retain the rights of mortgage, servitude or any other real rights belonging to them before the division was made. Personal rights pertaining to third persons against the co-ownership shall also remain in force, notwithstanding the partition. Partition shall not prejudice third persons Third persons are those who do not intervene in the partition Personal rights shall remain Art. 500. Upon partition, there shall be a mutual accounting for benefits received and reimbursements for expenses made. Likewise, each coowner shall pay for damages caused by reason of his negligence or fraud. Mutual accounting of benefits after partition Reimbursements Payment of damages due to negligence or fraud.
Art. 501. Every co-owner shall, after partition, be liable for defects of title and quality of the portion assigned to each of the other co-owners. Liability for defects of title and quality of portion assigned to each
Art. 543. Each one of the participants of a thing possessed in common shall be deemed to have exclusively possessed the part which may be allotted to him upon the division thereof, for the entire 84
PROPERTY REVIEWER
period during which the co-possession lasted. Interruption in the possession of the whole or a part of the thing possessed in common shall be to the prejudice of all the possessors. However, in case of civil interruption, the rules of court shall apply. Part allotted to a co-owner at partition will be deemed to be possessed by such co-owner from the time the co-ownership commenced. Obligation of warranty is proportionate to respective hereditary shares. Insolvency of one makes the others liable subject to reimbursement (joint liability).
(c) Right of Creditors of individual Co-owners Art. 497 Art. 497. The creditors or assignees of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence. But they cannot impugn any partition already executed, unless there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to maintain its validity. All creditors, whether secured or privileged, and those of any category under title of alienation, exchange, donation, assignment, or other obligation of a real or personal nature, must be considered to intervene in the partition of the common property. They must have become creditors during the co-ownership Co-owner debtors have the duty to notify the creditors of the partition Absence of notice makes partition not binding on them. They can contest such partition if they formulate a formal opposition thereto. Assignee a transferee of a part of the interest of the co-owner because if a sale or assignment is total, the assignee or the buyer should have been subrogated in the place of the vendor or assignor, who should be excluded 85
Art. 1091. A partition legally made confers upon each heir the exclusive ownership of the property adjudicated to him. Heir is exclusive heir of property adjudicated to him.
Art. 1092. After the partition has been made, the co-heirs shall be reciprocally bound to warrant the title to and the quality of, each property adjudicated. Co-owners reciprocally bound to each other for warranty of title and quality of part given to each (hidden defect) after partition.
Art. 1093. The reciprocal obligation of warranty referred to in the preceding article shall be proportionate to the respective hereditary shares of the coheirs, but if any of them should be insolvent, the other co-heirs shall be liable for his part in the same proportion, deducting the part corresponding to the one who should be indemnified. Those who pay for the insolvent heir shall have aright of action against him for reimbursement, should his financial condition improve.
PROPERTY REVIEWER
from the co-ownership, and the assignee or the buyer will intervene in his own right in partition. (d) Procedure for Partition (Rule 69, Rules of Court) Art. 496. Partition may be made by agreement between the parties or by judicial proceedings. Partition shall be governed by the Rules of Court insofar as they consistent with this Code. (1) Partition may be made: (a) Orally Valid and enforceable among the parties. Statute of frauds does not operate for partition is not a conveyance of property but merely a segregation and designation of that part of the property which belongs to the co-owners. (b) In writing Court will just confirm such written agreement. (2) Rules of Court does not preclude amicable settlement between parties. (3) Two principal issues in an action for partition: (a) plaintiff is indeed a coowner of the property An action for partition will not preosper as such form the moment an alleged coowner asserts an adverse title. If the community character of the property is proven, partition may be decreed. (b) how the property is to be divided between plaintiff and defendants. Commissioners may be appointed by the court composed of three competent and disinterested persons to make the partition. Art. 498. Whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed. If property is found to be incapable of being divided without great prejudice to the interest of each party, the court may order such property be assigned to one co-owner subject to the condition that he will pay the other coowners of the value of their interests as deemed by the commissioners. The sale may be made privately or publicly and third persons may become purchasers.
Art. 499. The partition of things owned in common shall not prejudice third persons, who shall retain the rights of mortgage, servitude, or any other rights belonging to them before the division was made. Personal rights pertaining to third persons against the co-ownership shall also remain in force, notwithstanding the partition. Art. 500. Upon partition, there shall be a mutual accounting for benefits received and reimbursements for 86
PROPERTY REVIEWER
expenses made. Likewise, each coowner shall pay for damages caused by reason of his negligence or fraud. Q: Who are third persons? A: All those who do not partake in the partition. Art. 501. Every co-owner shall, after partition, be liable for defects of title and quality of the portion assigned to each of the other co-owners. Chapter on partition after intestate succession (Arts. 1092-1096) Subsection 2 Effects of Partition Art. 1091 A partition legally made confers upon each heir the exclusive ownership of the property adjudicated to him. Art. 1092 After the partition has been made, the co-heirs shall be reciprocally bound to warrant the title to, and the qulity of, each property adjudicated. Art. 1093 The reciprocal obligation of warranty freffed to in the preceding article shall be proportionate to the respective hereditary shares of the coheirs, but if any one of them should be insolvent, the other co-heirs shall be liable for hise part in the same proportion, deducting the part corresponding to the one who should be indemnified. Those who pay for the insolvent heir shall have a right of action against him for reimbursement, should his financial condition improve. (1071) Art. 1094. An action to enforce the warranty among heirs mus be brought within ten years from the date the right of action accrues. (n) Art. 1095. If a credit should be assigned as collectible, the co-heirs shall not be liable for the subsequent insolvency of the debtor of the estate, but only for his insolvency at the time the partition is made. The warranty of the solvency of the debtor can only be enforced during the five years following the partition. Co-heirs do not warrant bead debts, if so known to, and accepted by, the distribute. But if such debts are not assigned to a co-heir, and should be collected, in whole or in part, the amount collected shall be distributed proportionately among the heirs. (1072a) Art. 1096. The obligation of warranty among co-heir shall cease in the following cases: (1) When the testator himself has made the partition, unless it appears, or it may be reasonably presumed that his intention was otherwise, but the legitime shall always remain unimpaired; (2) When it has been so expressly stipulated in the agreement of partition, unless there has been bad faith; When the eviction is due to a cause subsequent to the partition, or has been caused by the fault of the distribute of the property. Not in the outline
K. Legal Effects of CoOwnership

A co-ownership creates rights in favor of each one of the co-owners with respect to the property owned in common. All the bundle of rights in ownership are found in co-ownership also, with each co-owner having all such rights in conjunction with the other coowners. 87
PROPERTY REVIEWER
Roman Law: (a) Jus utendi right to use and enjoy property (including accessions) (b) Jus fruendi right to the fruits of the property (c) Jus abutendi right to consume the property (d) Jus disponendi right to dispose of the property, whether totally or partially, permanently or temporarily (e) Jus vindicandi right to recover property. (f) Jus possidendi Right to possess the property by virtue of ownership, which right is implied from above bundle of rights. Applied to co-ownership all the specific provisions mentioning in detail the rights of a co-owner with respect to the thing owned in common could be subsumed under one of these rights in ownership. The exercise of such rights however is limited by concomitant rights of each co-owner. Thus: Jus Fruendi rights of co-owner to the fruits is only in proportion to interest of the same. Jus abutendi most limited because of the prohibition against the alteration of the property Jus vindicandi most liberal: civil code provides that anyone of the coowners may exercise the same. Two senses which can view the rights of co-owners: (a) a right over the thing owned in common limited by concomitant right of the other co-owners (b) rights over his ideal share or his incivided interest over the same property. absolute owner who can deal with it like any full owner of an incorporeal property.
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06 Co Ownership

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06 Co Ownership

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PROPERTY REVIEWER Part 6 CO-OWNERSHIP A.

BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

C. Differences between coownership and joint tenancy

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D.Differences between partnership and coownership

No term set limit set by law

F. Rights of each coowner as to the thing owned in common.

BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

Ramon (heirs) Verdad

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BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

G.Implications of coowners right over his ideal share.

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H.Rules on co-ownership not applicable to CPG or ACP

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(a) Right to ask for partition at any

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BLOCKD2008 al.beth.kalin.may.miles.py special thanks to: anna.bodee.cha.etol.hardy.len.mia

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K. Legal Effects of CoOwnership

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