Co-owners Must Receive Written Notice of Property Sales to Trigger Redemption Rights

G.R. No. 109972, April 29, 1996

Imagine owning a piece of land with your siblings, inherited from your parents. One sibling secretly sells their share to an outsider. Do you have any recourse? This scenario highlights the importance of legal redemption, a right that allows co-owners to step into the shoes of a buyer when another co-owner sells their share. The case of Verdad v. Court of Appeals clarifies that co-owners are entitled to a written notice of the sale, ensuring they have a fair opportunity to exercise their right of redemption. This case underscores the importance of adhering to the formal requirements of the law to protect the interests of co-owners.

Legal Context

Legal redemption is the right of a co-owner to buy back the share of another co-owner that has been sold to a third party. This right is enshrined in Article 1620 of the Civil Code of the Philippines, which states:

“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.”

This provision aims to minimize the entry of outsiders into the co-ownership, preserving the harmony and stability among the original co-owners. Without this right, a co-owner could effectively force a partition of the property by selling to someone who would then demand their share.

A critical element is the requirement of written notice, as specified in Article 1623 of the Civil Code:

“The right of legal pre-emption 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.”

This written notice is not merely a formality; it is a mandatory requirement. Even if a co-owner has actual knowledge of the sale, the 30-day period to exercise the right of redemption only begins upon receipt of this written notice. This ensures that the co-owner is fully informed of the terms and conditions of the sale, allowing them to make an informed decision.

Imagine a scenario where three siblings, Anna, Ben, and Carla, co-own a piece of land. Anna decides to sell her share to David without formally notifying Ben and Carla. Even if Ben and Carla learn about the sale through other means, their 30-day period to redeem Anna’s share does not start until they receive a written notice from Anna or David about the sale.

Case Breakdown

The case of Verdad v. Court of Appeals revolves around a property dispute in Butuan City. Macaria Atega, who contracted two marriages during her lifetime, died intestate in 1956, leaving behind several heirs from both marriages. One of her heirs, Ramon Burdeos, had his share sold to Zosima Verdad. Socorro Rosales, the widow of another heir (David Rosales), sought to redeem the property, claiming her right as an heir of her husband, who inherited from Macaria.

Here’s a breakdown of the key events:

• 1956: Macaria Atega dies intestate, leaving her estate to her children and grandchildren.
• 1982: Heirs of Ramon Burdeos sell their interest in the property to Zosima Verdad.
• 1987: Socorro Rosales discovers the sale and attempts to redeem the property, tendering payment.
• 1987: When Zosima Verdad refuses the tender, Socorro Rosales files an action for legal redemption with preliminary injunction.
• 1990: The trial court rules that the right to redeem had lapsed.
• 1993: The Court of Appeals reverses the trial court, declaring Socorro Rosales entitled to redeem.

The Supreme Court upheld the Court of Appeals’ decision, emphasizing the importance of written notice. The Court stated:

“The written notice of sale is mandatory. This Court has long established the rule that 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.”

The Court dismissed the argument that Socorro Rosales, as a daughter-in-law, had no right to redeem. It clarified that her right stemmed from being an heir of her husband, David Rosales, who inherited a share in Macaria’s estate. Therefore, Socorro, as David’s heir, became a co-owner and possessed the right to redeem when another co-owner sold their share.

The Court further quoted the appellate court on the futility of making tender of payment when it said:

“In contrast, records clearly show that an amount was offered, as required in Sempio vs. Del Rosario, 44 Phil. 1 and Daza vs. Tomacruz, 58 Phil. 414, by the redemptioner-appellant during the barangay conciliation proceedings (Answer, par. 8) but was flatly rejected by the appellee, not on the ground that it was not the purchase price (though it appeared on the face of the deed of sale, Exh. ‘J-1’), nor that it was offered as partial payment thereof, but rather that it was ‘unconscionable’ based upon its ‘present value.’ (Answer, par. 8).”

Practical Implications

This ruling reinforces the need for strict compliance with the legal requirements for selling co-owned property. It clarifies that actual knowledge of the sale does not substitute for the mandatory written notice. This has significant implications for property owners, buyers, and legal professionals.

Key Lessons:

• Sellers of co-owned property must provide written notice to all co-owners. Failure to do so can invalidate the sale.
• Co-owners should promptly assert their right of redemption upon receiving written notice of the sale. The 30-day period is strictly enforced.
• Buyers of co-owned property should ensure that all co-owners have been properly notified. This protects their investment and avoids potential legal challenges.

For instance, if a group of friends jointly purchases a vacation home and one friend decides to sell their share, they must provide written notice to the other friends. Without this notice, the other friends retain the right to redeem the share, even if they were aware of the sale through other means.

Frequently Asked Questions

Q: What is legal redemption?

A: Legal redemption is the right of a co-owner to purchase the share of another co-owner that has been sold to a third party, stepping into the shoes of the buyer.

Q: What is the period to exercise the right of legal redemption?

A: The right of legal redemption must be exercised within 30 days from the date of written notice of the sale from the seller.

Q: Does actual knowledge of the sale substitute for written notice?

A: No. The Supreme Court has consistently held that written notice is mandatory, regardless of actual knowledge.

Q: What should the written notice contain?

A: The written notice should contain all the details of the sale, including the price, terms, and conditions.

Q: What happens if the seller does not provide written notice?

A: The co-owner’s right to redeem does not expire, and they can exercise it even after a significant period, as long as they have not received written notice.

Q: Can any heir exercise the right to redeem?

A: Yes, any heir who becomes a co-owner of the property can exercise the right to redeem.

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