Written Notice is Key: Upholding Co-owner’s Right to Redeem Property Shares

In Philippine law, co-ownership of property is common, especially within families inheriting land. When a co-owner sells their share to an outsider, the other co-owners have a legal right to redeem that share—essentially, to buy it back and prevent strangers from entering their shared property. However, this right hinges on proper written notification. This case underscores the crucial importance of formal written notice for triggering the legal redemption period and protecting the rights of co-owners. Without it, the right to redeem remains alive, ensuring fairness and preserving family property interests.

G.R. No. 108580, December 29, 1998: CLARITA P. HERMOSO AND VICTORIA P. HERMOSO, PETITIONERS, VS. COURT OF APPEALS, SPOUSES CEFERINO C. PALAGANAS, AZUCENA R. PALAGANAS AND DR. AMANDA C.PALAGANAS, RESPONDENTS.

INTRODUCTION

Imagine inheriting land with your siblings, a shared legacy meant to stay within the family. Then, without your knowledge, some siblings sell their portion to outsiders. This scenario isn’t just a family drama; it’s a legal issue deeply rooted in Philippine property law: the right of legal redemption. The case of Hermoso v. Court of Appeals revolves around this very right, highlighting what happens when co-owners are kept in the dark about the sale of shared property. At the heart of the dispute was whether the remaining co-owners were properly notified of the sale, and thus, whether their right to redeem was still valid.

LEGAL CONTEXT: CO-OWNERSHIP AND LEGAL REDEMPTION

Philippine law recognizes co-ownership, a situation where multiple individuals jointly own undivided property. This often arises from inheritance, where heirs become co-owners of the deceased’s estate until formal partition. A crucial aspect of co-ownership is the right of legal redemption, designed to minimize outside interference in co-owned properties. Articles 1623 and 1088 of the Civil Code are central to this right.

Article 1623 of the Civil Code explicitly states:

Art. 1623. 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 provision mandates that the 30-day period for redemption begins only after written notice of the sale is given to the co-owners. Similarly, Article 1088, specific to co-heirs, echoes this requirement:

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor.

The purpose of legal redemption is to allow co-owners to maintain control over their shared property and discourage the entry of strangers. This right is interpreted liberally in favor of the redemptioner, ensuring that co-owners are genuinely informed and have a fair chance to exercise their right.

CASE BREAKDOWN: HERMOSO VS. COURT OF APPEALS

The Hermoso family inherited land co-owned with Consolacion Hermoso Cruz. Emilio Hermoso’s heirs—Clarita, Victoria, Rogelio, Agustinito, and Danilo—became co-owners of a one-third portion. Agustinito and Danilo, needing money, secretly sold their undivided shares to the Palaganas spouses in 1980. Crucially, they did not provide Clarita and Victoria (the petitioners) with written notice of this sale.

Here’s a step-by-step look at how the case unfolded:

1. 1974: Heirs of Emilio Hermoso sign an ‘Agreement’ outlining a *scheme* for future partition, but Consolacion Hermoso Cruz, the 2/3 owner, is not a party.
2. 1980: Agustinito and Danilo Hermoso sell their *undivided shares* to the Palaganas spouses without written notice to Clarita and Victoria. The deed itself is titled “Deed of Absolute Sale Over Two Undivided Shares”.
3. 1984: Clarita and Victoria discover the sale and immediately attempt to redeem the shares, offering to pay the Palaganases.
4. RTC Decision (1990): The Regional Trial Court rules in favor of the Hermosos, stating the property was still under co-ownership and the right of redemption was valid because no written notice was given. The court emphasized that the 1974 ‘Agreement’ was not a partition.
5. CA Decision (1992): The Court of Appeals reverses the RTC, arguing that the 1974 ‘Agreement’ effectively partitioned the property, and the redemption period had lapsed since the petitioners allegedly knew of the sale earlier.
6. SC Decision (1998): The Supreme Court overturns the CA decision and reinstates the RTC ruling.

The Supreme Court sided with the Hermoso petitioners, emphasizing the lack of proper written notice and the continuing co-ownership. The Court highlighted several key points:

• No Valid Partition: The 1974 ‘Agreement’ was not a formal partition binding on all co-owners, especially since Consolacion Hermoso Cruz was not a party. The Court noted, “We agree with the trial court that this Agreement was merely a scheme as to how the land would be subdivided in the future among the heirs. The owner of two-thirds (2/3) of the property, Consolacion Hermoso, was not a party to the agreement.“
• Deed Acknowledged Undivided Shares: The Deed of Absolute Sale itself described the transaction as a sale of *undivided shares*, indicating no prior partition. The Court pointed out, “Ben Palaganas who prepared the deed of sale, knew and intended that the transaction was over ‘Two Undivided Shares’ of land.“
• Lack of Written Notice: The vendor-brothers never provided the required written notice to their co-owners, Clarita and Victoria. The Court stressed, “Article 1623 stresses the need for notice in writing…” and found that the vendors “deliberately hidden from the petitioners” the sale.
• Equity Favors Redemption: The Court considered the circumstances, including the Palaganases’ bad faith and the Hermosos’ consistent desire to keep the property within the family, stating, “Whether it is the vendees who will prevail as in the Alonzo doctrine, or the redemptioners as in this case, the righting of justice is the key to the resolution of the issues.“

PRACTICAL IMPLICATIONS: PROTECTING CO-OWNERSHIP RIGHTS

The Hermoso case serves as a critical reminder about legal redemption and co-ownership in the Philippines. It clarifies that:

• Written Notice is Mandatory: Verbal notice or mere knowledge of the sale is insufficient to start the redemption period. Co-owners selling their shares must provide formal written notice to all other co-owners.
• Agreements to Partition are Not Always Partitions: Informal agreements among some co-owners about future partition do not automatically dissolve co-ownership, especially without the consent of all co-owners.
• Deeds Reflect Intent: The language used in the deed of sale itself is significant. Describing shares as ‘undivided’ reinforces the existence of co-ownership.
• Equity and Justice Matter: Philippine courts consider not just the letter of the law but also the spirit of justice and fairness, especially when dealing with family property rights.

Key Lessons:

• For Co-owners Selling: Always provide written notice to all co-owners before selling your share to a third party to ensure a valid sale and avoid future legal challenges.
• For Co-owners Seeking Redemption: If you discover a co-owner has sold their share without written notice, act promptly to assert your right of redemption within 30 days of *actually receiving* written notice.
• For Buyers: When purchasing property shares from co-owners, ensure all other co-owners have received proper written notice of the sale to avoid redemption issues. Conduct thorough due diligence to determine if co-ownership exists and if redemption rights apply.

FREQUENTLY ASKED QUESTIONS (FAQs)

Q1: What is co-ownership?

A: Co-ownership exists when two or more people own undivided shares in the same property. This is common in inherited properties before formal division among heirs.

Q2: What is the right of legal redemption in co-ownership?

A: It’s the right of co-owners to buy back the share of another co-owner if they sell it to a third party (outsider). This prevents strangers from becoming co-owners.

Q3: How does a co-owner exercise the right of redemption?

A: By formally notifying the buyer and seller of their intent to redeem and offering to reimburse the sale price within 30 days of *written notice* of the sale.

Q4: What constitutes proper written notice for legal redemption?

A: A formal written communication from the seller to the co-owners informing them of the sale, the price, and the buyer’s details. This notice should be officially delivered and received.

Q5: Does verbal notice suffice for legal redemption?

A: No. Philippine law explicitly requires *written notice*. Verbal notice or mere awareness is not enough to start the redemption period.

Q6: What happens if written notice is not given?

A: The 30-day period for redemption does not begin. Co-owners can exercise their right of redemption even after the sale, as long as written notice was not properly given.

Q7: Can co-owners waive their right to legal redemption?

A: Yes, co-owners can waive their right, but this waiver should be clear, express, and usually in writing to avoid disputes.

Q8: Is consignation of the redemption price required to exercise the right?

A: Not initially. A valid offer to redeem (tender of payment) within the period is sufficient. Consignation (depositing the money with the court) may be necessary if the buyer refuses to accept the redemption offer.

Q9: What if there’s a dispute about whether co-ownership exists or if partition occurred?

A: Courts will examine the evidence, including titles, deeds, and agreements, to determine if co-ownership legally exists and if a valid partition has taken place.

Q10: What should I do if I am a co-owner and want to protect my rights?

A: If you are a co-owner, stay informed about any transactions involving the property. If a co-owner sells their share, ensure you receive formal written notice. If notice is lacking or you wish to redeem, seek legal advice immediately to protect your rights.

ASG Law specializes in Philippine Property Law and Inheritance Rights. Contact us or email hello@asglawpartners.com today to schedule a consultation and safeguard your property interests.