The Supreme Court held that a co-owner can validly sell their undivided share in a co-owned property even before partition. This means the buyer steps into the shoes of the selling co-owner, acquiring the same rights. The sale is valid to the extent of the seller’s interest, but the other co-owners’ rights remain unaffected. This decision clarifies the extent to which a co-owner can dispose of their property rights without the consent of all other co-owners, providing more certainty in property transactions.

Selling Shared Land: Can One Owner Act Alone?

This case revolves around a dispute among co-owners of a parcel of land in Cebu. Vicente Torres, Jr., Mariano Velez, and Carlos Velez filed a complaint seeking to nullify a sale made by their co-owner, Jesus Velez, to Lorenzo Lapinid. The petitioners argued that Jesus sold a definite portion of the co-owned property without proper notice or consent from the other co-owners, rendering the sale invalid. The central legal question is whether a co-owner has the right to sell their share of the property independently, and what the legal consequences of such a sale are for the other co-owners and the buyer.

The facts reveal that the co-owners, including Jesus, were involved in a prior partition case regarding several parcels of land. A compromise agreement was reached, authorizing Jesus, Mariano, and Vicente to jointly sell the properties and distribute the proceeds. However, this agreement was later amended to exclude Jesus. Subsequently, Jesus sold a portion of the land to Lapinid, which the other co-owners contested. Jesus, on the other hand, claimed that he had the right to sell because he owned a majority share of the property. Lapinid maintained that he bought the land in good faith, relying on Jesus’s representations of ownership. The trial court dismissed the complaint, and the Court of Appeals affirmed the decision, leading to the Supreme Court review.

The Supreme Court emphasized that a co-owner has absolute ownership of their undivided share in the co-owned property. This right is enshrined in Article 493 of the Civil Code, which states:

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

Building on this principle, the Court affirmed that Jesus had the right to sell his share to Lapinid. The sale was valid to the extent of Jesus’s interest in the property, meaning Lapinid became a co-owner with the same rights Jesus previously held. The Court clarified that Lapinid stepped into the shoes of Jesus as a co-owner, acquiring a proportionate abstract share in the property. This right to alienate one’s share is a fundamental aspect of co-ownership under Philippine law.

Even if the sale involved a definite portion of the co-owned property before partition, the Court explained that the sale remains valid. While a co-owner cannot claim title to a specific portion before partition, disposing of their share before partition does not render the sale void. Instead, the sale affects only the seller’s proportionate share, subject to the results of the partition. The co-owners who did not consent to the sale remain unaffected by the alienation. This principle protects the rights of both the selling co-owner and the other co-owners.

The Supreme Court cited the case of Spouses Del Campo v. Court of Appeals to further illustrate this point:

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendor’s undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common.

The Court also referenced Lopez v. Vda. De Cuaycong, stating that even if an agreement purports to sell a concrete portion of a property, the sale is not void. The principle of “Quando res non valet ut ago, valeat quantum valere potest” (When a thing is of no force as I do it, it shall have as much force as it can have) applies, recognizing the binding force of the contract to the extent legally possible. This flexible approach ensures that transactions are upheld whenever feasible under the law.

The Court then addressed the petitioners’ argument that the 2001 compromise agreement, which required joint sale of the properties, invalidated the sale to Lapinid. The Court held that the compromise agreement could not defeat Lapinid’s already acquired right of ownership. Lapinid became a co-owner in 1997, and the subsequent compromise agreement, without his consent, could not affect his ideal and undivided share. The principle of “Nemo dat quod non habet” – “no one can give what he does not have” – applies, preventing the other co-owners from selling Lapinid’s share without his consent.

The argument that Lapinid should pay rental payments to the other co-owners was also rejected. As a co-owner, Lapinid has the right to use and enjoy the property owned in common, as long as he does so in accordance with its intended purpose and does not injure the interests of the co-ownership. The Civil Code clearly specifies these rights in Articles 486 and 493, ensuring that co-owners can exercise their rights without undue restrictions. To order Lapinid to pay rent would undermine these fundamental rights of co-ownership.

Finally, the Court upheld the denial of attorney’s fees and litigation expenses. Article 2208 of the New Civil Code specifies the instances in which attorney’s fees and litigation expenses may be awarded. While the petitioners argued that Jesus’s act of selling a definite portion to Lapinid forced them to litigate, the Court found that the petitioners should have considered that a co-owner has the right to sell their ideal share under the law. Since there was no clear showing of bad faith on Jesus’ part, the award of attorney’s fees was not justified.

FAQs

What was the key issue in this case?	The main issue was whether a co-owner could validly sell their share of a co-owned property without the consent of the other co-owners, and what the effect of such a sale would be.
Can a co-owner sell their share of the property?	Yes, a co-owner has the right to sell, alienate, assign, or mortgage their undivided share in the co-owned property, even without the consent of the other co-owners.
What happens when a co-owner sells their share?	The buyer steps into the shoes of the selling co-owner, acquiring the same rights and obligations that the seller had as a co-owner. The buyer becomes a co-owner with respect to the property.
Does the sale of a specific portion of the property before partition invalidate the sale?	No, the sale is still valid. However, it only affects the seller’s proportionate share, subject to the results of the partition. The buyer acquires the seller’s ideal share.
Can other co-owners disregard a sale made by one co-owner?	No, the sale is valid to the extent of the selling co-owner’s interest. The other co-owners cannot disregard the sale, but their rights to their respective shares remain unaffected.
Does a compromise agreement among some co-owners affect the rights of a buyer who purchased a share earlier?	No, a compromise agreement entered into without the consent of a buyer who already acquired a share cannot affect the buyer’s rights. The buyer’s rights are protected.
Can a co-owner who bought a share be compelled to pay rent to the other co-owners?	No, a co-owner has the right to use and enjoy the property owned in common, as long as it is used according to its intended purpose and does not injure the interests of the co-ownership.
When can attorney’s fees be awarded in cases like this?	Attorney’s fees can be awarded only in specific instances outlined in Article 2208 of the New Civil Code, such as when exemplary damages are awarded or when the defendant acted in bad faith.

This ruling provides clarity on the rights and responsibilities of co-owners in the Philippines, particularly concerning the sale or disposition of their shares. It underscores the importance of understanding the legal framework governing co-ownership to avoid disputes and ensure that transactions are conducted in accordance with the law. The decision balances the rights of individual co-owners to manage their property interests with the need to protect the interests of all co-owners.

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: Vicente Torres, Jr. vs. Lorenzo Lapinid, G.R. No. 187987, November 26, 2014