This Supreme Court decision clarifies the rights and obligations of co-owners in property disputes, especially when one co-owner sells the entire property without the consent of the others. The Court emphasizes that such a sale is only valid to the extent of the selling co-owner’s share. It also reinforces the importance of good faith in acquiring property and the limitations of acquisitive prescription in co-ownership scenarios, providing essential guidance for property rights and transactions.

Selling Shared Land: When Does Good Faith Fail to Protect a Buyer?

The case revolves around a parcel of land originally owned by Leocadio Medrano. Upon his death, the land was inherited by his children from two marriages. One of the heirs, Sixto Medrano, without the knowledge or consent of his co-heirs, claimed sole ownership and sold a portion of the land to Tiburcio Balitaan. The other heirs, upon discovering the sale, sought to nullify the transaction. The legal battle reached the Supreme Court, focusing on whether Balitaan was a buyer in good faith and whether he had acquired ownership through prescription.

The Supreme Court emphasized the concept of acquisitive prescription, which allows a person to acquire ownership of property through continuous possession over a certain period. However, the Court distinguished between ordinary and extraordinary acquisitive prescription. Ordinary acquisitive prescription requires possession in good faith and with just title for ten years, while extraordinary acquisitive prescription requires uninterrupted adverse possession for thirty years. Good faith, in this context, means a reasonable belief that the seller had the right to transfer ownership.

The Court found that Tiburcio Balitaan was not a purchaser in good faith. Despite knowing that Sixto Medrano had siblings and co-heirs, Balitaan relied solely on Sixto’s affidavit claiming sole ownership. The Court stated:

A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.

Because Balitaan was not a buyer in good faith, he could not claim ownership through ordinary acquisitive prescription. Furthermore, the Court noted that the required thirty-year period for extraordinary acquisitive prescription had not been met either.

Building on this principle, the Court addressed the issue of co-ownership. The Court cited Salvador vs. Court of Appeals, explaining the responsibilities that exist between co-owners:

This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.

The Court found no clear and convincing evidence that Sixto Medrano had repudiated the co-ownership or ousted his co-heirs. The Court clarified that tax declarations alone are insufficient to prove title to land or to demonstrate a repudiation of co-ownership.

Furthermore, the Court dismissed the argument of laches, which is the failure to assert a right within a reasonable time. The Court explained that an action for partition, which is the division of common property, is generally imprescriptible, meaning it cannot be barred by the passage of time.

The Court then cited Article 493 of the Civil Code, which provides:

Art. 493.  Each co-owner shall have the full ownership of his part and the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved.  But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

The Supreme Court emphasized that a co-owner can only sell their undivided share in the property. As the Court explained, a sale of the entire property by one co-owner without the consent of the others is not null and void, but it only transfers the rights of the selling co-owner. Therefore, the buyer becomes a co-owner of the property.

The Court determined the specific share of Sixto Medrano based on the laws of intestate succession under the Old Civil Code, which was applicable at the time of Leocadio’s death in 1945. Because the 2,342 square-meter property was conjugal property of Leocadio and his first wife, Emiliana, and because both had died before the enactment of the New Civil Code, the property should have been divided into eight equal parts. Therefore, each heir was entitled to 292.75 square meters.

The Court considered the sale of 460 square meters to Mateo Castillo, noting that it should only affect the shares of the petitioners, not Sixto Medrano’s share, which had already been sold to Balitaan. Taking this subsequent sale into account, the Court adjusted the final undivided share of each of the seven other heirs to 227.04 square meters, leaving Sixto’s original share at 292.75 square meters. Thus, Balitaan’s heirs were only entitled to Sixto’s original share.

In summary, the Supreme Court reversed the Court of Appeals’ decision and reinstated the Regional Trial Court’s decision with modifications. The sale to Tiburcio Balitaan was declared valid only to the extent of Sixto Medrano’s 292.75 square meter undivided share. The Court ordered the partition of the land accordingly, ensuring that the rights of all co-owners were respected and protected under the law.

FAQs

What was the key issue in this case?	The main issue was whether a buyer of land from a co-owner, who misrepresented himself as the sole owner, could be considered a buyer in good faith and acquire ownership of the entire property through prescription.
What is acquisitive prescription?	Acquisitive prescription is a legal concept where a person can acquire ownership of property by possessing it continuously for a certain period. There are two types: ordinary (10 years with good faith and just title) and extraordinary (30 years of adverse possession).
What does it mean to be a ‘purchaser in good faith’?	A purchaser in good faith is someone who buys property believing that the seller has the right to sell it and without knowledge that someone else has a claim to the property. They must have acted with due diligence and not ignored any red flags.
Can a co-owner sell the entire property without the consent of other co-owners?	No, a co-owner can only sell their share of the property without the consent of the other co-owners. The sale is valid only to the extent of the selling co-owner’s interest in the property, and the buyer becomes a co-owner.
What is laches?	Laches is the failure to assert one’s rights within a reasonable time, which can prevent the party from later seeking relief. However, the right to demand partition of co-owned property is generally not barred by laches.
What happens when a co-owner sells more than their share?	The sale is valid only to the extent of the co-owner’s share, and the buyer becomes a co-owner with the other original co-owners. An action for partition is the appropriate remedy to divide the property.
How did the Old Civil Code affect the inheritance in this case?	Since Leocadio Medrano died before the New Civil Code took effect, the Old Civil Code determined the inheritance rights. The property was divided equally among all his children from both marriages.
What was the final ruling of the Supreme Court?	The Supreme Court ruled that the sale was valid only for Sixto Medrano’s share (292.75 square meters), not the entire property. The Court ordered the partition of the land based on the determined shares of each heir.

This case serves as a critical reminder of the importance of due diligence in property transactions, especially when dealing with unregistered land or co-owned properties. Buyers must thoroughly investigate the seller’s title and ownership rights to ensure a valid and secure transaction. The decision reinforces the principle that good faith is essential for acquiring property rights and protects the interests of co-owners against unauthorized sales.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Aguirre vs. Court of Appeals, G.R. No. 122249, January 29, 2004