06 co ownership

8/3/2019 06 Co Ownership

http://slidepdf.com/reader/full/06-co-ownership 1/33

PROPERTY REVIEWER

Part 6CO-OWNERSHIP

A. Definition

CO-OWNERSHIP—right to commondominion which two or more personshave in a spiritual part (or ideal portion)or a thing which is not materially orphysically divided.

• The manifestation of the privateright of ownership, which instead of being exercised by the owner in anexclusive manner over the thingssubject to it, is exercised by two ormore owners and the undivided thingor right to which it refers to is one

and the same.• It is not a real right distinct fromownership but is a mere form ormanifestation of ownership.

• Relationship of co-owners and hemay not do an act prejudicial to theinterest of his co-owners.

• The legal effect of an agreementto preserve the property in co-ownership was to create an expresstrust among the heirs as co-ownersof the properties.

Art. 484. There is co-ownershipwhenever the ownership of an undividedthing or right belongs to differentpersons. In default of contracts, or of special provisions, co-ownership shall begoverned by the provisions of this Title.

B.Characteristics of Co-ownership

(1) plurality of owners, but only one realright of ownership

(2) the recognition of ideal shares oraliquot portions, defined but notphysically identified

• You will only know what portionbelongs to you once there is apartition

• This applies to both immovablesand movables.

Labnotes

Q: Is there an intangible movable?A: YES. These are property represented

by shares of stock, credits, etc. (ex inArt 417: 1) obligations and actionswhose objects are movables ordemandable sums and 2) shares of stock or agricultural, commercial andindustrial entities)

Q: Is there an intangible immovable?A: YES. These are referred to in #10,

Art 415. Contracts for public worksand servitudes and other real rightsare immovable property. These canbe subject to co-ownership.

(3) Each co-owner has absolute controlover his ideal share, not over specificportions of the property

Case

Gatchalian v. CIR

FactsFifteen individuals madecontributions to purchase a sweepstakesticket registered in the name of JoseGatchalian and Co. The ticket won thirdprize. Gatchalian was then required tofile the corresponding income tax returncovering the prize. They failed to pay.CIR issued a warrant of distraint andlevy, to avoid embarrassment the 15paid under protest. This happened asecond time for the balance. The 15then demanded refund of the money

paid under protest. CFI refused.

HeldIf the plaintiff formed a partnership,

they are liable for the payment of income tax; whereas if there was merelya community of property, they are

BLOCKD2008al.beth.kalin.may.miles.py

special thanks to: anna.bodee.cha.etol.hardy.len.mia

56



PROPERTY REVIEWER

exempt from such payment. Accordingthe facts, the plaintiffs organized apartnership of a civil nature becauseeach of them put up money to buy asweepstakes ticket for the sole purposeof dividing equally the prize which theymay win, as they did. Having organizedand constituted a partnership of a civilnature, the said entity is then bound topay the income tax. There is no meritthe plaintiff’s contention that the taxshould be proprated among them andpaid individually, resulting in theirexemption from tax.

(4) There is a mutual respect among co-owners in regard to the use,enjoyment, and preservation of the

property owned in common.

Case

Diversified Credit v. Rosado

FactsA lot belonged to 13 co-owners

including the Rosado. She signed adeed of sale together with the co-owners in favor of Diversified Credit.However Rosado’s husband had built ahouse on the property without theproperty having been previouslypartitioned. Diversified then demandedthey vacate or remove the house butthe spouses refused alleging that it wasa conjugal house (A.158CC) and that thebuilding of the house made the 1/13th

share of the wife community property assuch making her signature in the deedof sale void insofar as the 1/13th isconcerned.

HeldIt is the basic principle in the law of

co-ownership that no individual co-owner can claim title to any definiteportion of the land or thing owned incommon until the partition thereof.Prior to that time, all that the co-ownerhas is an ideal, or abstract, quota orproportionate share in the entire thing

owned in common by all the co-owners.It cannot be validly claimed that thehouse constructed was built on landbelonging to her, and 158 cannot apply.Necessarily, the claim of conversion of the wife’s share from paraphernal toconjugal must be rejected.

Labnotes

Q: What may be the subject matter of co-ownership?

A: All things or property (includingproperty rights) whether real orpersonal property, whether tangibleor intangible may be the subjectmatter of co-ownership.

Q: So if you’re a co-owner, what do

you own?A: You own an undivided spiritual/ideal

portion. Before partition, you cannotsay you own a specific portion.

Therefore, you can validly sell onlyyour ideal share.

Q: The marriage question…in marriage,is there co-ownership?

A: NO. Co-ownership has its own rules. You can’t apply absolute partition: topartition means the dissolution of theregime. You can’t partition extra-

judicially. There has to be courtapproval to make it legal. The bestexample of a co-ownership providedby law is in case of couple living-in.

C. Differences between co-ownership and jointtenancy

Co-ownership Joint Ownership

Tenancy in

Common,Ownership inCommon, Co-dominium

Joint tenancy,

Tenancy incommon, Notion of “all-for one, one-for-all”

Civil law origin Common Law/Anglo-Americanorigin



57



PROPERTY REVIEWER

Each co-ownerowner of his idealshare

Each joint owner,the surviving jointowners aresubrogated in hisrights by accretion

(because his rightto ownership isextinguished by hisdeath…so if tig 1/3sila, pag namatayang isa, tig1/2nalang ang natira.

Each co-ownermay dispose of hisundivided sharewithout the other’sconsent.

Joint owner mustobtain the consentof all the rest todispose of hisshare.

In case there is a

co-owner who is aminor, minority asa defense againstprescription isexclusive to him.

The defense of one

joint owner can beused as a defenseby all joint owners.

D.Differences betweenpartnership and co-ownership

Ordinary

Partnership

Co-ownership

With legal/juridicalpersonality distinctfrom its members

No legalpersonality distinctfrom its members

Created only byagreement orcontract to thateffect

created by “LAWFOCUS” [Law,Fortuitous Event,Occupancy,Contract,Succession]

Purpose is toobtain profit

Purpose iscollective

enjoyment and tomaintain the unityand preservation of the things owned incommon.

No term set limitset by law

As a rule, anagreement to keep

the ownership formore than 10 yearsis void.

Creditors of individual partners

cannot attach andsell on executionthe shares of partners in thepartnership

Creditors of a co-owner can attach

his shares in theco-owners and soldon execution

Can beextinguished bythe death orincapacity of oneparty

Death or incapacityof a co-owner doesnot affect existenceof a co-ownership

There is mutualrepresentation of the parties

A special authorityis needed for suchrepresentation.

A partner cannottransfer his rightsto a 3rd personwithout theconsent of theothers

A co-owner canfreely dispose of his share withoutneed to ask theconsent of theother co-owners.

Distribution of profits can bestipulated upon(profit-sharing)

Profits of a co-owner depend onhis proportionateshare; profit-sharing isinvariable (Art.

485) not subject tostipulation

E. Sources of co-ownership

Labnotes

The main sources of co-ownershipare law and contracts. Succession,chance, and occupation are deemedsubsumed in law.

(1) Law(a) Cohabitation

(i) Between man and womancapacitated to marry eachother.



58



PROPERTY REVIEWER

Art. 147. When a man and a womanwho are capacitated to marry eachother, live exclusively with each other ashysband and wife without the benefit of marriage or under a void marriage, their

wages and salaries shall be owned bythem in equal shares and the propertyacquired by both of them through theirwork or industry shall be governed bythe rules on co-ownership.

In the absence of proof to thecontrary, properties acquired while theylived together shall be presumed tohave been obtained by their jointefforts, work or industry, and shall beowned by them in equal shares. Forpurposes of this article, a party who didnot participate in the acquisition by the

other party of anyproperty shal bedeemed to have contributed jointly inthe acquisition thereof if the former’sefforts consisted in the care andmaintenance of the family and thehousehold.

Neither party can encumber ordispose by acts inter vivos of his or hershare in the property acquired by theother party during cohabitation andowned in common, without the consentof the other, until after the termination

of their cohabitation. When only one of the parties to a void marriage is in goodfaith, the share of the party in bad faithin the co-ownership shall be of theircommon children. In case of default of or waiver by any or all of the commonchildren or their descendants, eachvacant share shall belong to therespective surviving descendants. Inthe absence of descendants, such shareshall belong to the innocent party. In allcases, the forfeiture shall take placeupon termination of the cohabitation.

(ii) Between man and woman notcapacitated to marry eachother

Art. 148. In cases of cohabitation notfalling under the preceding Article, only

the properties acquired by both theparties through their actual jointcontribution of money, property, orindustry shall be owned by them incommon in proportion to their

respective contributions. In the absenceof proof to the contrary, theircontributions and corresponding sharesare presumed to be equal. The samerule and presumption shall apply to jointdeposits of money and evidences of credit.

If one of the parties is validly marriedto another, his or her share in the co-ownership shall accrue to the absolutecommunity or conjugal partnershipexisting in such valid marriage. If theparty who acted in bad faith is not

validly married to another, his or hershall be forfeited in the mannerprovided in the last paragraph of thepreceding Article. The foregoing ruleson forfeiture shall likewise apply even if both parties are in bad faith.

Case

Mallilin v CastilloFacts

According to Eustaquio, he and Elvira

cohabited with each other (while theirrespective marriages to other partnerswere still subsisting). After theyseparated, Eustaquio filed petition forpartition of co-ownership, relating toproperties registered solely in the nameof Elvira, but bought through the profitsof a company they both organized.Elvira denied these allegations of Eustaquio.

HeldArt. 148 of the Family Code now

provides for a limited co-ownership incases where the parties in union areincapacitated to marry each other.“[P]roperties acquired by them throughtheir joint contribution of money,property or industry shall be owned bythem in common in proportion to their



59



PROPERTY REVIEWER

contributions which, in the absence of proof to the contrary, is presumed to beequal....”

Co-ownership is a form of trust andevery co-owner is a trustee for theother. T he provisions of Art. 1452 andArt. 1453 of the Civil Code (on impliedtrust), then are no longer material sincea trust relation already inheres in a co-ownership which is governed under TitleIII, Book II of the Civil Code.

(b) Absolute community property

Art. 90. The provisions on co-ownershipshall apply to the absolute community of property between the spouses in allmatters not provided for in this Chapter.

(c) two or more persons purchaseproperty and by common consentlegal title is taken in the name of one of them for the benefit of all,an implied trust is created infavor of the others in proportionto each to interest of each. (Art.1452)

(d) Succession

(i) Intestate succession—w here

there are two or more heirs,the whole estate of thedecedent is, before itspartition, owned in commonby such heirs, subject to thepayment of debt of thedeceased (1078)

(ii) Testate—if property is givento two or more heirs by thetestator

An instance is when aperson A dies intestate and theproperties are left undivided toseveral heirs, such heirs are co-owners of the inheritance. If oneof the heirs dies, his heirs will inturn be co-owners of thesurviving heirs of A.

Redemption done by one of the co-owners/heirs will benefit

his other co-owner heirs despitethe fact that they did notcontribute to the redemptionmoney.

(e) Donation

• donation to several persons jointly, it is understood to be inequal shares

• no rights of accretion unless thedonor otherwise provides

• but if donation is made tohusband and wife jointly, thereshall be a right of accretion,unless contrary so provide.

(f) Chance – commixtion in goodfaith

Art. 472. If by the will of their ownerstwo things of the same or different kindsare mixed, or if the mixture occurs bychance, and in the latter case the thingsare not separable without injury, eachowner shall acquire a right proportionalto the part belonging to him, bearing inmind the value of the things mixed orconfused.

Case

Siari Valley Estates vs Lucasan(supra)

FactsSVE sought to recover 200 heads of

cattle that were driven or wanderedfrom its pasture lands into the adjoininglands of Lucasan. Lucasan himself admitted such commixtion although hesays that SVE had already retrieved itsanimals. Which cattle belong to the

owner can no longer be determined.Lower court found for SVE.

HeldLucasan willfully caused the

commixtion such that under Art. 383(now 473) he will be held to forfeit his



60



PROPERTY REVIEWER

own cattle. No actual evidence existsthat the 823 missing cattle were takenby Lucasan, but in view of the proof thathis men, on 2 occasions, drove awaymore than 30 heads, it may bepresumed that the others must havealso been driven away on subsequent orprior occasions. One who stole a part of the money must have also taken thelarger sum lost by the offended party.Evidence:1) An average increase of 30% per yearshould give Lucasan around 417 headsin 1951, yet in the same year, afterselling 230 heads, he still had 400.2) Lucasan’s original stock was entirelynative, yet when 322 heads wererounded up for inspection, only 29 were

found to be native.

(g) Hidden treasure – co-ownershipbetween finder and owner

• finder who is not theowner

• found the treasure bychance

• not a trespasser

Art. 438. Hidden treasure belongs tothe owner of the land, building, or other

property on which it is found.Nevertheless, when the discovery ismade on the property of another, or tof the state of any of its subdivisions, andby chance, one-half thereof shall beallowed to the finder. If the finder is atrespasser, he shall not be entitled toany share of the treasure.If things found be of interest to scienceof the arts, the State may acquire themat their just price, which shall be dividedin conformity with the rule stated.

(h) Easement of a party wall

Art. 658. The easement of party wallshall be governed by the provisions of this Title, by the local ordinances and

customs insofar as they do conflict withthe same, and by the rules of co-ownership.

(i) Occupation – Harvesting andfishing

Case

Punsalan et al. v. Boon Liat et al.

Facts22 fishermen agreed to be the sole

owners of 2 ½ sacks of ambergris foundin the belly of a whale and they agreedthat none could sell without the consentof the others. Teck who knew of theexistence of the ambergris proposed the

seizure of contraband opium, which wasactually the ambergris. The ambergrishaving been seized was loaded andbrought to Zamboanga along withAhmad, who was left in charge of theambergris. Teck then proceeded tooffer to purchase the ambergris to whichAhmad refused but was later onconvinced as he was promisedprotection from his co-owners. Actionfor Replevin was then made (court saidit is in fact an ordinary action forrecovery of title to and possession of theambergris)

Held The sale was not valid. The

ambergris was undivided commonproperty of the plaintiffs and one of thedefendants. This common ownershipwas acquired by occupancy. None of them had any right to sell said amber,there being an express agreementbetween the co-owners not to sell itwithout the consent of all. Sale having

been made without the consent of allowners, the same shall have no effectexcept as to the portion pertaining tothose who made them. The action forrecovery pertaining to each co-owner,derived from the right of ownershipinherent in the co-ownership can be



61



PROPERTY REVIEWER

exercised not only against strangers,but against the co-owners themselveswhen the latter performs with respect tothe thing held in common acts for theirexclusive benefit, or for exclusiveownership, or which are prejudicial to,and in violation of the right of thecommunity.

(j) Condominium law

Sec. 6(c) of RA 4726 – unlessotherwise provided, common areasare held in common by the holders of the units in equal shares, one foreach unit.

(2)Contract

(a) Two or more persons agree tocreate a co-ownership—maximum of ten years (494, 2nd

par), extendable by a newagreement.Example: When two partiesagree to purchase a piece of land, each one paying a part of the purchase price, on thecondition that they are to dividethe land equally between them.Parties may also become co-owners of a particular businesswhen no partnership having adistinct juridical existence isformed between them.

(b) Universal Partnership(i) Of all present properties

Art. 1778. A partnership of all presentproperty is that in which the partnerscontribute all the property whichactually belongs to them to a commonfund, with the intention of dividing the

same among themselves, as well as allthe profits which they may acquiretherewith.

Art. 1779. In a universal partnership of all present property, the property whichbelongs to each of the partners at the

time of the constitution of thepartnership, becomes the commonproperty of all the partners, as well asall the profits which they may acquireherewith.

A stipulation for the commonenjoyment of any other profits may alsobe made; but the property which thepartners may acquire subsequently byinheritance, legacy, or donation cannotbe included in such stipulation, exceptthe fruits thereof.

(ii) Of profits

Art. 1780. A universal partnership of profits comprises all that the partnersmay acquire by their industry or workduring the existence of the partnership.

Movable or immovable propertywhich each of the partners may possessat the time of the celebration of thecontract shall continue to pertainexclusively to each, only the usufructpassing to the partnership.

(c) Associations and Societies,whose articles are kept secretwherein anyone of the membersmay contact in his own name

with third persons (no juridicalpersonality)

F. Rights of each co-owner as to the thingowned in common.

[do not get confused. The rights arethose in BOLD. 1-8. The mnemonic is:USE the COP’s LP!: (1)Use thing; (2)Share benefits; (3)Ejectment suit;(4)Compel to contribute; (5)Object toalteration; (6)Protect against prejudice;(7)Exercise legal redemption; (8)ask forpartition]

(1) To use the thing according toits purpose intended (may bealtered by agreement, express orimplied; provided:



62



PROPERTY REVIEWER

Art. 486. Each co-owner may use thething owned in common, provided hedoes so in accordance with the purposefor which it is intended and in such a

way as not to injure the interest of theco-ownership or prevent the other co-owners from using it according to theirrights. The purpose of the co-ownershipmay be changed by agreement, expressor implied.

• Any express or impliedagreement should govern indetermining what the purpose forwhich the property is intended.

• Without such agreement, it is

understood that the thing isintended for that use for which itis ordinarily adapted to or the useto which it has been previouslydevoted.

• Mere tolerance on the part of theco-owers cannot legalize thechange in the use of a thingintended by the parties. Meretolerance cannot be the basis of prscription.

(a) without injury orprejudice to interest of co-ownership; and(b) withoutpreventing the use of other co-owners (Art. 486)

• Acts of theco-owner cannot devote the propertyco-owned to his exclusive use to theprejudice of the other co-owners.- If a co-owner occupies a building

agreed uponby all the co-owned to hisexclusive use to the prejudice of the other co-owners.

- If a co-owner occupies a buildingagreed upon by all the co-ownersto be leased, such co-owner ustpay rent in favor of all the co-owners including him

• Use of one co-owner of the thingmust not be in such a way as toprevent the other co-owners frommaking use of the propertyaccording to their own rights.

- Co-owners may establish rulesregarding their use of theproperty co-owned

- The right of enjoyment is limitedby a similar right of others.

- There should be just andequitable distribution of usesamong all co-owners

• Any act against the collectiveinterest s an act against ownershipand the remedies available toowners in general may by used bythe co-owners.

Case

Pardell v. Bartolome

FactsVicenta and Matilde are sisters who

inherited real properties from theirmother. Ricardo and Vicenta Pardellclaim that Gaspar and MatildeBartolome had refused to divide theproperties, acted as administrators w/o

judicial authority and enjoyed properties

through rent, fruits to the detriment of the Pardells. The sisters assented topartition of the properties. However itremains to be determined if Matilde, asco-owner of the Calle Escolta house wasentitled to reside therein without payingVicenta rent.

Held The record shows no proof that

Matilde occasioned any detriment to theinterests of the community property.Each co-owner of realty held pro indiviso

exercises his rights over the wholeproperty may use and enjoy the samewith no other limitation than that heshall not injure the interests of hiscoowners, for the reason that, until adivision be made, the respective part of each holder can not be determined and



63



PROPERTY REVIEWER

every one of the coowners exercisestogether with his other coparticipants,

joint ownership over the pro indivisoproperty, in addition to his use andenjoyment of the same.

(2) To share in the benefits inproportion to his interest,provided the charges are borneby each in the same proportion(Art. 485)

Art. 485. The share of the co-owners,in the benefits as well as in the chargesshall be proportional to their respectiveinterests. Any stipulation in a contractto the contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall bepresumed equal, unless the contrary isproved.

A contrary stipulation is void.Portions are presumed equal unlesscontrary is proved. Accretion added toany portion of land co-owned becomespart of the property in co-ownership andshould be divided according to each co-owners proportionate share.

(3) Any one of the co-owner maybring an action in ejectment(Art. 487)

Art. 487. Any one of the co-owners maybring an action in ejectment.

• Covers all kinds of actions forrecovery of possession (forcibleentry, unlawful detainer, accionpubliciana, and acion reivindicatoria)

• A co-owner ma bring such actionwithout necessity of bringin all theother co-owners as co-plaintiffsbecause the suit is deemed to be forthe benefit of all.

• Action will not prosper if theaction is for the benefit of himself only and not for the co-ownership.

• When the action is brought byone co-owner for the benefit of all, a

favorable decision will benefit whembut an adverse decision will notaffect them if they are not parties inthe case or they did not give theirconsent to the action.

• If the defendant believes he willwin the case, he should implead theother co-owners so that if he wins,the other co-owners wil also bebarred from contesting hispossession or ownership.

• This article also contemplates acase brought by a co-owner againstanother co-owner against anotherco-owner who takes exclusivepossession and asserts ownership inhimself alone. The effect of theaction will be to obtain recognition of the co-ownership and the defendantwill not be evicted from the wholeproperty.

(4)To compel other co-owner tocontribute to expenses forpreservation of the thing or right

owned in common and to taxes(Art. 488)

Art. 488. Each co-owner shall havea right to compel the other co-owners to contribute to the expensesof preservation of the thing or rightowned in common and to the taxes.Any one of the latter may exempthimself from this obligation byrenouncing so much of his undividedinterest as may be equivalent to his

share of the expenses and taxes. Nosuch waiver shall be made if it isprejudicial to the co-ownership.

• Co-owners’ option not tocontribute by waiving his undividedinterest equal to amount of



64



PROPERTY REVIEWER

contribution (except if waiver isprejudicial to co-ownership)

• JBL Reyes – waiver requiresconsent of other co-owners: such asdacion en pago.

Necessary expenses

• taxes and expenses for thepreservation of the thing which is notmade would endanger the existenceof the thing or reduce its value orproductivity

• does not imply any improvementor increase.

• Does not include those thatmerely produce benefits for theowner, or merely for luxury,embellishment or pleasure.

Useful expenses

• they increase the income of thething owned in common for thebenefit of all the co-owners.

• not covered as one of themcannot incur such expenses withoutthe consent of the others and thencharge them to pay their shareslater.

• The community is not forpurposes of profit but only for the

preservation of the sources of income.

• New sources of income cannot becreated at the expense of the co-owners without their consent.

(a) Remedy against defaulting co-owner—action to compel him tocontribute such share. He cannotbe compelled to renounce hisshare as such option is at his owndiscretion.

• Co-owner has option not tocontribute by waiving his undividedinterst equal to amount of contribution (unless waiver isprejudicial to co-ownership)- His failure to pay his share does

not amount to renunciation.

- Renunciation must be expressand unequivocal.

- Renunciation must refer to theportion of the value of theinterest of the debtor equivalentto his share in the necessaryexpenses.

- The basis for the computationmust be the value of interest inthe property at the time of renunciation.

Comparison between the Old and NewCivil Code Provisions on Renunciation

OLD (Art. 389) NEW (ART. 488)

• Renunciation of share

• Refers toobligation tocontribute inthe future

• Renunciation of wholeshare

• Unilateraland absolute asconsent of theother co-ownersnot needed

• Extremelyunjust when theshare is toosmall anamount as tothe value of theinterst in theproperty(According toCodeCommission)

• Tantamount tocessation of

rights or dacionen pago

• Refers toobligation tocontribute inexpensesalready paid.

• Renunciation of the part of theundivided interstwhich isequivalent to his

share in thenecessaryexpenses.

• Consent of theother co-ownersneeded(according to

Tolentino, as thecode is silent onthis) becausethey would haveto shoulder the

expensesthemselves if hewould notcontribute.

• Would alwaysresult intoprejudicialrenunciation



65



PROPERTY REVIEWER

because there isa preexistingdebt whichshould be paidby the other co-

owners to a thirdperson.

• The provision is silent in case theone who paid for the necessaryexpenses is a third person. Itappears that this third person,despite the consent of the other co-owners to the renunciation, can stillsue the renouncing co-owner if hisconsent was not obtained in therenunciation.

• What are the requisites beforerepairs for preservation,embellishment, or improvementsmay be made?

Art. 489. Repairs for preservation maybe made at the will of one of the co-owners, but he must, if practicable, firstnotify his co-owners of the necessity forsuch repairs. Expenses to improve orembellish the thing shall be decidedupon by a majority as determined inArticle 492.

• A co-owner alone can advanceexpenses for preservation of theproperty even without prior consentof others. He is entitled to bereimbursed for the amount he spentfor necessary expenses.

• Will of one of the co-owners issufficient authority to undertakeexpenses for preservation. He can

proceed with the repairs forpreservation despite opposition of the others.

• Consent of majority required onlyin case where the expenses are forthe improvement or embellishmentof the thing or for administration andbetter enjoyment of the thing.

• Consent of all is needed only inacts of ownership.

• Notice before undertaking repairsis required only when it is

practicable.

• Effect of failure to notify co-owners:

(a) Failure to give notice evenif it was practicavle to do so doesnot deprive the co-owner his rightto be reimbursed theproportionate share of the otherin the expenses.(b) The effect of suchomission is that he is given theburden of proving the necessityof such repairs and thereasonableness of the expense.(c) He will not be fullyreimbursed if the others canprove that had he notified them,they could have hired theservices of another contractorwho would charge less than thepeople whome he contracted orthat they know of a store thatsells the needed material at acheaper price. The difference willbe 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, makealterations in the thing owned incommon, even though benefits for allwould result therefrom. However, if thewithholding of the consent by one ormore of the co-owners is clearlyprejudicial to the common interest, the

courts may afford adequate relief.

• Alteration- The act by virtue of whicha co-owner



66



PROPERTY REVIEWER

• Effects of acts of alteration andremedies of non-consenting co-owner :(a) Co-owner who made alterations

may lose whaetever he has spentas he will not be reimbursed(b) He may be ordered to demolish

or remove the alteration at hisexpense

(c) He will be liable for damages andother losses

(d) Co-ownership will benefit fromthe alteration if other co-ownersdecide to contribute to theexpenses by reimbursing him(ratification)

(e) If a house is built in a common

lot, the co-owners are entitled tothe proportionate share of therent.

Q: Can a mere majority of the co-owners lease real property for anylength of time?

A: Old Civil Code rule:

• Lease for not more than 6 yearsis just an act of administration.

• Lease for more than 6 years is anact of ownership.

New Civil Code rule:• Lease becomes an act of ownership and ceases to be anact of administration if:

(1) It is recorded in theRegistry o Property; and(2) It is for more than 1 year

Art. 1647. If a lease is to be recorded inthe Registry of Property, the followingpersons cannot constitute the samewithout proper authority: the husbandwith respect to the wife’s paraphernalreal estate, the father or guardian as tothe property of the minor or ward, andthe manager without special power.

• Registration makes the leasebinding on third persons (Art. 1648,NCC) Special powers is the criterion

for determining whether the act islegally one of strict ownership.

Art. 1878. Special powers of attorneyare necessary in the following cases: x x

x(8) To lease any real property toanother person for more than one year.

(6) To protect against acts of majority which are prejudicial tominority (Art. 492, Par. 3)

(a) Who may manageproperty?

The co-owners themselves.Court cannot appoint anadministrator to manage aproperty co-owned when the co-

owners want to handle themanagement. In thismanagement, the majority of theof interest control and theirdecisions are binding upon theminority. Majority may onlyproceed to act without notice tothe minority if the circumstanceswarrant urgency.

(b) An administratorwho may or may not be a co-

owner delegated by the co-ownersAn administrator cannot,

without the unanimous consent of all the co-owners, compromiseon, donate, cede, alienate,mortgage, or encumber in anymanner the common property.(Ex. Constitute an easement)

(c) What is themajority?

The majority is not the

majority in number but ratherpertains to the majority in interstor the financial majority. Themajority required should beconstrued to be an absolutemajority or more than one-half of the value of the thing.



68



PROPERTY REVIEWER

(d) What are acts seriouslyprejudicial?

• So seriousand affects the interest of the

co-owners in the community• Such that willcause injuries enough to

justify the intervention of thecourt

• Judicialintervention is improper formerely slight causes, or whenone co-owner suffers an injurybecause of circumstancespeculiar to himself alone.

(e) Examples of Acts Prejudicial tothe Minority:

(1) When the resolution calls for a• substantial change oralteration of the commonproperty

• or of the use to which ithas been dedicated byagreement or by its nature.

(2) When the resolution

• goes beyond the limits of mere administration, or

• invades the proprietaryrights of the co-owners, in

violation of Art. 491(prohibiting against acts of alteration)(3) When the majority leases,loans, or other contractswithout security, exposing thething to serious danger to theprejudice of the other co-owners.(4) When the majority refuseto dismiss an administratorwho is guilty of fraud or

negligence in hismanagement, or does nothave the respectability,aptitude, and solvencyrequired of persons holdingsuch position.(5) When resolution, if carriedout, would cause serious

injury to the thing itself, suchas an agreement not toborrow money underreasonable terms when it isnecessary for urgent repairsfor preservation, or for thepayment of taxes.

(f) Remedies of the minority.If the acts of the majority

prejudice the minority, the lattermay ask for injunction or atworse, a partition.

Cases

Lavadia v Cosme

Facts

6 pious women (A, B, C, D, E, and F)bought jewelry for the Image of OurLady of Guadalupe. D had initialcustody, then E, then the variousdescendants of E, and finally C. When Cwanted to make the Bishop of Lipacustodian, the plaintiffs (F and the heirsof A, B, and C) objected and designatedF as the custodian thereof. TC:inasmuch as the plaintiffs are theowners of 4/6 parts pro indiviso of the

jewels, and defendants (heirs of D andE), only 2/6, they have the right todetermine who should be entrusted withthe custody. F was awarded custody.

HeldPlaintiffs have such right. With the

amount of individual contributionundetermined, the law presumes that allof them contributed proportionately.Having owned 4/6 shares as opposed todefendants’ 2/6, plaintiffs have the rightto choose who must have custody.Simple majority rule.

Melencio vs. Dy Tiao Lay

FactsAfter the death of the owner of the

land in question, his widow and three of his children executed a contract of lease



69



PROPERTY REVIEWER

The MoA far from violating the legalprovision that forbids a co-owner frombeing obliged to remain a party to thecommunity, precisely has for its purposeand object the dissolution of the co-ownership and of the community byselling the parcel held in common anddividing the proceeds of the sale amongthe co-owners. The obligation imposedin the MoA to preserve the co-ownershipuntil all lots shall have been sold is amere incident to the main object of dissolving the co-ownership. By virtueof the MoA the parties practicallyentered into a contract of partnership atbest 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 mayexercise the right of redemption in casethe shares of all the other co-owners orof any of them, are sold to a thirdperson. If the price of the alienation isgrossly excessive, the redemptionershall pay only a reasonable one.Should two or more co-owners desire toexercise the right of redemption, they

may only do so in proportion to theshare they may respectively have in thething owned in common.

Art. 1623. The right of legal pre-emption or redemption shall not beexercised except within thirty days fromthe notice in writing by the prospectivevendor, or by the vendor, as the casemay be. The deed of sale shall not berecorded in the Registry of Property,unless accompanied by an affidavit of the vendor that he has given writtennotice thereof to all possibleredemptioners.

• The right of redemption of co-owners excludes that of adjoiningowners.

• The period of redemption startsto run from the WRITTEN notification.However, there is an exceptionalcase- when there is actualknowledge (Alonzo v. IAC)

Q: Can redemption money be madeequal or less than what was paid bythird persons?

A: Yes, it can be lower if the price of sale is grossly excessive, such aswhen the co-owner didn’t want otherco-owners to redeem. However,generally it is of the equal amount.

Cases

Mariano v CA

FactsFrancisco left his wife, Antonia and

daughters Amparo and Grace a lotwhich was foreclosed. Amparoredeemed the property and a year laterAntonia executed a deed of assignmentof right of redemption to Amparo who inturn sold the entire property to Mariano.When Grace learned fo this she filed acomplaint for recovery of possession of the land.

HeldRedemption of the property by a co-owner does not vest in him soleownership over said property but willinure to the benefit of all co-owners.Redemption is not a mode of termination of relationship. It wouldhave been otherwise had Amparopurchased the property after theredemption period had lapsed and afterthe mortgage bank had consolidation itstitle, in which case there would notlonger be any co-ownership to speak of.

Reyes vs. Judge Concepcion

FactsMarina Zaballero Reyes, Augusto

Zaballero, Socorro Zaballero Francisco.Socorro Marquez Vda. De Zaballero,



71



PROPERTY REVIEWER

legal redemption under Art. 1621. TCdismissed the complaint. CA affirmed

HeldHalili cannot exercise legal

redemption over the property. Thesubject land is urban in character basedon the clear findings of both the TC andCA. Halili has no right to invoke legalredemption under Art 1621 since sucharticle presupposes that the land soughtto be redeemed is rural. Under Art.1621, both lands—that sought to beredeemed and the adjacent lotbelonging to the person exercising theright of redemption—must be rural. If one or both are urban, the right cannotbe invoked.

Francisco v BoiserFacts

Francisco and three of her sisters areco-owners of land on which acommercial building stands. They sold1/5 of their undivided share to theirmother, thus making their mother a co-owner. In 1986, without the knowledgeof Francisco & co., the mother sold hershare to Boiser. On 5 Aug 1992,Francisco received summons, with a

copy of the complaint filed by Boiser,demanding her share in the rentalscollected by Francisco from thebuilding’s tenants. Francisco theninformed her that she was exercisingher right of redemption as co-owner.

The lower courts ruled that the 30-dayperiod for redemption has lapsedbecause as early as 30 May 1992,Francisco knew about the sale because,on that date, Boiser wrote Francisco aletter informing the latter about thesale, demanding the rentals, with a copy

of the Deed of Sale between Francisco’smother and Boiser.

Held The letter of 30 May 1992 cannot be

considered sufficient as compliance withthe notice requirement of Art. 1623. Art.

1623 requires that the writtennotification should come from thevendor or prospective vendor, not fromany other person. The vendor of anundivided interest is in the best positionto know who his co-owners are, whomust be notified of the sale. It is thenotification from the seller, which canremove all doubts as to the fact of thesale, its perfection, and its validity, for ina contract of sale, the seller is in thebest position to confirm whetherconsent to the essential obligation of selling the property and transferringownership thereof to the vendee hasbeen given. Thus, sufficient compliancewith Art. 1623 means that Francisco’smother 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 themother before Francisco can exerciseher right. The receipt by Francisco of summons on 5 Aug 1992 constitutesactual knowledge on the basis of whichFrancisco may now exercise her right of redemption within 30 days from finality of this decision.]

Verdad v CA

Facts

Macaria married Canuto after Angel’sdeath. After Macaria died intestate,David died intestate. In 1982, the heirsof Ramon sold to Verdad their intereston the disputed lot. On 30 Mar 1987,Socorro discovered the sale while shewas on the City Treasurer’s Office. The



MacariaAtega

CanutoRosales

AngelBurdeos

J J RA

DavidSocorroF ERamon

(heirs)

Verdad

73



PROPERTY REVIEWER

A: In Mariano v. CA, the Supreme Courtstated that the difference lies in thesubject matter of the undividedinterest. In Art. 1620, the subjectmatter is the determinate andparticular object whereas in Art.1088, it is the undivided hereditaryright to the universality or set of properties to be inherited.

Q: In Reyes v. Judge Concepcion, if they were notified 30 days beforethe sale but didn’t pre-empt, canthey redeem later on, do you stillapply the second paragraph?

A: Sir said that right is alternative, if they didn’t give advance notice, thenredemption comes in. If they were

given notice, there is no moreredemption available. The optionwas lost.

When you redeem, there is noneed for consignation. It is not reallyan obligation. All you need is atender of payment.

(8) Toask for partition (Art. 494)

Art. 494. No co-owner shall be obliged

to remain in the co-ownership. Each co-owner may demand at any time thepartition of the thing owned in common,insofar as his share is concerned.

Nevertheless, an agreement to keepthe thing undivided for a certain periodof time, not exceeding ten years, shallbe valid. This term may be extended bya new agreement.

A donor or testator may prohibitpartition for a period which shall notexceed twenty years.

Neither shall there be any partitionwhen it is prohibited by law.No prescription shall run in favor of a

co-owner or co-heir against his co-owners or co-heirs so long as heexpressly or impliedly recognizes the co-ownership.

• A co-owner can always ask for apartition. There is no prescriptiveperiod.Exceptions:

(i) when there is a stipulationagainst it (not beyond 10 years)(ii) when condition of indivision is

imposed by transferor (donor ortestator) not exceed 20 years(Art. 494)

(iii) when legal nature of communityprevents partition (e.g. partywall)

(iv)when partition is generallyprohibited by law

(v) when partition would render thething unserviceable, or the thing

in common is essentiallyindivisible- no physical partition but thing

maybe sold and co-ownersshall divide the proceeds(495, 498)

(vi)acquisitive prescription has set infacor of a stranger to co-ownership or in favor of co-owner.

Labnotes

Q: All agree, can partition before theperiod lapses be shortened?A: YES, it is considered a novation by

agreement, and a co-ownership iscreated by agreement.

Cases

Ramirez v. Ramirez

FactsRamirez brought an action for

partition of a parcel of land. Somedefendants agreed while others

objected on the theory that partitionwould work great harm and pre-judice tothe co-owners. Matter was referred to aCommission. The CFI ruled for partitionaccording to the plan submitted bypetitioners.



75



PROPERTY REVIEWER

(c) Creditors of co-owners mayintervene in the partition toattack the same if prejudicial (Art.499), except that creditorscannot ask for rescission even if not notified in the absence of fraud (Art. 497) ask for recissioneven if notified.

Cases

Carvajal v CA

FactsSpouses Espique had 5 heirs—Maria,

Evairsto, Estefanio, and Tropinia.Curvajal is currently occupying the 2/5of the whole lot. He purchased ½ of his

lot from Estefanio and the southern partwas leased to him by Tropinia. Thenorthern ½ is being claimed by spousesCamarillo after they bought it fromEvaristo. Spouses sought recovery of the land. CFI ordered Carvajal tosurrender the property because unlessthere is a partition of the estate of thedeceased, co-heir cannot validly claimtitle to a specific portion of the estate.

HeldUnless the partition is effected, each

heir cannot claim ownership over thedefinite portion and cannot dispose.Upon death of a person, each of hisheirs becomes the undivided owner of the whole estate. Each co-owner shallhave full ownership of his part evenfruits and benefits. He may alienate,assign, or mortgage it. Effect of alienation with respect to other co-owners shall be limited to the portionallotted him during partition. He cannotalienate a specific part of the thing in

common to the exclusion of other co-owners because his right over the thingis represented by an ideal protion. Co-owner cannot adjudicate to himself adefinite portion owned in common untilpartition by agreement or by judicial

decree. Before partition, co-heir canonly sell his successional rights.

Pamplona v Moreto

Facts6 years after the death of his wife

and without the consent of the heirs of the wife plus even before the liquidationof the conjugal partnership, FlavianoMoreto sold 781 sq. m. of conjugal lot tothe Pamplona spouses. The conjugalproperty consists of 3 adjacent lotstotaling 2,346 sq. m. After Flavianopointed ot the sold lot, the Pamplonasbuilt their house and piggery on it. Afterthe death of Flaviano, the heirs, insistingon their right to the property, demanded

that the Pamplonas vacate the land. TCand CA favored the heirs.

HeldFlaviano had the perfect right to sell

the lot. After the wife’s death, hebecame entitled to ½ of the entireproperty, with only ½ belonging to theheirs. They hold the property as co-owners. Since his share amounts to1,173 sq. m., the area he sold (781 sq.m.) is within the limits o his share.

There was partial partition of theproperty when Flaviano pointed to thelot he sold to the Pamplonas.

Castro v Atienza

FactsOn Jan 24, 1956, brothers Tomas and

Arsenio de Castro, Sr. leased to GregorioAtienza a 26-hectare fishpond co-ownedby them in Polo, Bulacan for 5 years. InNov 1956, Atienza and Arsenio, Sr.agreed to set aside and annul the

contract of lease through a writtenagreement signed by both of them. Thereason was Arsenio, Sr. wanted to leasethe fishpond to another person.However, the widow of Tomas, FelizaCruz Vda. de Castro, refused to signsuch agreement. There was an



77



PROPERTY REVIEWER

agreement that the rent of P2,500 paidby Atienza will be returned to him onDec 30, 1956, but due to the lack of signature, he was still not paid. Heinstituted an action in the CFI. Thelatter ordered the payment of P2,500.CA affirmed.

Held The consent of the widow of Tomas

is not essential to the validity of theagreement of the cancellation of thelease between Arsenio and Atienza(despite the absence of expressprovision that the widow’s signature is acondition for validity). Art 493 of theNCC allows the alienation of the co-owner of his part in the co-ownership.

The effect of such alienation ormortgage shall be limited to the portionwhich may be allotted to him in thedivision upon the termination of the co-ownership

When Arsenio and Tomas enteredinto a contract of lease with Atienza,each of them leased their respectiveundivided ½ interest owned in common.In case only the other leased his ½share to Atienza, there would result apartnership between the lessee Atienzaand the owner of the other undivided ½share who did not lease. In short, a co-owner can enter into a contract of leaseinsofar as to his interest. Therefore, hecan also cancel such lease without theconsent from the other co-owner. It isclear that Felisa’s signature is not needed to cancel the lease of Arsenio’sown ½ undivided share, pursuant to hisright granted by Art 493.

Estoque v PajimulaFacts

Lot No. 802 of the Cadastral surveyof Rosario was originally owned by thelate spouses, Rosendo Perez andFortunata Bernal, who were survived byher children, namely, Crispina Perez,Lorenzo Perez and Ricardo Perez.

Crispina Perez Vda. de Aquitania

sold her right and participation in LotNo. 802 consisting of 1/3 portion with anarea of 640 square meters to LeonoraEstoque. The next day, Crispina’s co-heirs executed a deed of extrajudicialsettlement wherein they assigned alltheir right, interest and participation inLot No. 802 to Crispina Perez.

Crispina Perez and her children soldto Elena Pajimula, the remaining 2/3western portion of Lot No. 802 with anarea of 958 square meters.Held

Estoque became the actual owner of the southeastern third of lot 802 onOctober 29, 1951. Wherefore, she neveracquired an undivided interest in lot802. And when eight years later Crispina

Perez sold to the appellees Pajimula thewestern two-thirds of the same lot,appellant did not acquire a right toredeem the property thus sold, sincetheir respective portions were distinctand separate and they never becameco-owners.

Diversified Credit v. Rosado (supra)

FactsA lot belonged to 13 co-owners

including the Rosado. She signed adeed of sale together with the co-owners in favor of Diversified Credit.However Rosado’s husband had built ahouse on the property without theproperty having been previouslypartitioned. Diversified then demandedthey vacate or remove the house butthe sps refused alleging that it was aconjugal house (A.158CC) and that thebuilding of the house made the 1/13th

share of the wife community property assuch making her signature in the deed

of sale void insofar as the 1/13th isconcerned.

HeldIt is the basic principle in the law of

co-ownership that no individual co-owner can claim title to any definite



78



PROPERTY REVIEWER

portion of the land or thing owned incommon until the partition thereof.Prior to that time, all that the co-ownerhas is an ideal, or abstract, quota orproportionate share in the entire thingowned in common by all the co-owners.It cannot be validly claimed that thehouse constructed was built on landbelonging to her, and 158 cannot apply.Necessarily, the claim of conversion of the wife’s share from paraphernal toconjugal must be rejected.

PNB v CA

FactsAfter the death of her husband, Rosa

mortgaged the entire conjugal property

to PNB. The title to this property wasstill under proceedings but it wassubsequently awarded to the spouses ayear after the mortgage. The mortgageto PNB was, however, not annotated.Meanwhile, she defaulted with herobligation to Manila Trading Co. (MTC)and her share (meaning ½ of theproperty) was sold at public auction.Santiago Sambrano, and subsequently,the Malacas spouses acquired the rightsto these shares (registered). Rosasimilarly defaulted with PNB but theauction sale was not annotated on thetitle. The Court gave PNB a new title.

The CA affirmed and ordered that thetitle to PNB and Reyes be annulled.

HeldAfter the death of her husband, the

property is supposed to be under co-ownership of Rosa and her children. Sheis entitled therefore to only ½. Byherself alone, she cannot mortgage thewhole property. Assuming that the

mortgage to PNB was valid, it would beso only with regard to the ½ owned byRosa. Under Art 493, any alienation ormortgage by a co-owner shall be limitedto the portion which may be allotted tohim in the division upon the terminationof the co-ownership.

But the failure of PNB to causeannotation of its mortgage within 1 yrfrom issuance of the title is fatal to itsclaim. Land registration proceedingsare proceedings in rem and upon theexpiration of the 1 year within which apetition to review the decree of registration may be filed, said decreeand the title pursuant thereto amy nolonger be changed, altered, or modified,much less set aside.

H.Rules on co-ownership

not applicable to CPG orACP

(a) CPG is governed by rules under theFamily Code. (FC 105-133)

(b) Void marriages and cohabitation of incapacitated persons are governedby Art. 50, Art. 147, and Art. 148 of the Family Code.

Co-ownership ConjugalPartnership

• May becreated by anordinarycontract

• Sex of co-owners isimmaterial(kaya kahitbading…)

• There maybe 2 or moreco-owners

• Profits areproportional torespectiveinterests

• Death of aco-owner doesnot dissolve the

• Created only byreason of marriage

• Parties theretoare on male andone female

• There are only 2conjugal owners

• Profits aredivided equally,unless there is acontrary

stipulation in amarriagesettlement

• Death of aspouse dissolvesthe CPG

• Encourage by



79



PROPERTY REVIEWER

co-ownership

• Generallyco-ownersadminister

• Co-

ownership isdiscouraged bylaw

law for familysolidarity.

I. Special Rules onownership of differentstories of a house asdifferentiated from theprovisions in theCondominium Law (Act

No. 4726)1

Art. 490. Whenever the differentstories of a house belong to differentowners, if the titles of ownership do notspecify the terms under which theyshould contribute to the necessaryexpenses and there exists no agreementon the subject, the following rules shallbe observed:

(1) The main and party walls, theroof and the other things used in

common, shall be preserved at theexpense of all the owners in proportionto the value of the story belonging toeach.

(2) Each owner shall bear the cost of maintaining the floor of his story; thefloor of the entrance, front door,common yard and sanitary workscommon to all, shall be maintained atthe expense of all the owners pro rata;

(3) The stairs from the entrance tothe first story shall be maintained at theexpense of all the owners pro rata, with

the exception of the owner of theground floor; the stairs from the first to

1 please also refer to the material givenduring the sem regarding Q&As aboutthe Condo Act

the second story shall be preserved atthe expense of all, except the owner of the ground floor and the owner of thefirst story; and so on successively.

(1) Concept of condominium

• Contemplates a multi-storybuilding with several units.

• Partly co-ownership, partly underindividual separate ownership

• Each unit belongs separately toone or more persons

• The land and the common areasare of common use by the differentowners and are under co-ownershipeither as contemplated by the CivilCode or through a corporation.

• Exclusive interst in units plusundivided interst in common areas.

• Do not constitute a co-ownershipas provided for in the Civil Code.

• When you buy a unit, you arebuying the air space and the interiorsurfaces.

• External surfaces are commonareas

• Beams and posts are commonareas

• Easement, unless the masterdeed says otherwise, is an exclusiveeasement.

• Your interest in the commonareas will depend on your interest inthe condo

• Your ownership of the condo unitand the common areas “go togetherlike horse and carriage”

• What are documents which areimportant in buying a condo unit?

(i) deed of sale(ii) enabling or

master deed(iii) declaration of restrictions

• Tells whateach co-owner cannot do

• Examples arehow payment be made, how



80



PROPERTY REVIEWER

to contribute to common areaexpenses, etc.

Sec. 9 The owner of a project shall,prior to the conveyance of any

condominium therein, register adeclaration of restrictions relating tosuch project, which restrictions shallconstitute a lien upon eachcondominium in the project and shallinsure to and bind all condominiumowners in the project. Such liens, unlessotherwise provided, may be enforced byany condominium owner in the projector by the management body of suchproject. The Register of Deeds shallenter and annotate the declaration of restrictions upon the certificate of title

covering the land included within theproject, if the land is patented orregister under the land included withinthe project, if the land is patented orregistered under the Land Registrationor Cadastral Acts.

• Is the interest in the commonareas always a co-ownership?

• Is Art. 490 applicable if there isan owner per floor? NO.Condominium Act applies.

• How are taxes assessed?Separately assessed

Sec. 25. Whenever real property hasbeen divided into condominiums, eachcondominium separately owned shall beseparately assessed, for purposes of real property taxation and other taxpurposes to the owners thereof and thetax on each such condominium shallconstitute a lien solely thereon.

• Can you ask for partition of thecommon areas? No. Let’s see whatthe Condominium Law has to say:

Sec.7. Except as provided in thefollowing section, the common areas

shall remain undivided, and there shallbe no judicial partition thereof.

(b) Who manages the condominium?

(i) condominium corporation

(preferred by law) – coterminous with the existenceof 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 ownerWhat are the incidents of acondominium grant?(a) The boundary of the unit grant

(i) the interior surfaces of theperimeter walls, floors,ceilings, windows, and doors

(ii) those which are not part of the unit bearing walls,columns, floors, roofs,foundations, and othercommon structural elementsof the building; lobbies,stairways, hallways, and other

areas of common use,elevator equipment andshafts, central heating, centralrefrigeration, and central air-conditioning equipment,reservoirs, tanks, pumps, andother central services andfaicilities, pipes, ducts, flues,chutes, conduits, wires andother utility installations,wherever located, except theoutlets thereof when located

within the unit.(b) Exclusive easement for the use of the air space encompassed bythe boundaries of th unit(i) as it exists at any particulartime



81



PROPERTY REVIEWER

(ii) as the unit may lawfully bealtered or reconstructed fromtime to time

(iii)such easement shall beauomatically terminated inany air space upondestruction of the unitas torender it untenable

(c) Unless otherwise provided, thecommon areas are held incommon by the holders of units,in equal shares, one for each unit

(d) a non-exclusive easement foringress, egress, and supportthrough the common areas aresubject to such easements

(e) Each condominium unit ownershall have the exclusive right to

paint, repaint, tile, wax, paper, orotherwise refinish and decoratethe inner surfaces of the walls,ceilings, floors, windows, anddoors, bounding his own unit

(f) Each condominium owner shallhave the exclusive right tomortgage, pledge, encumber hiscondominium and to have thesame appraised independently of the other condominiums but anyobligation incurred by suchcondominium owner is personalto him.

(g) Each condominium owner hasalso the absolute right to sell ordispose of his condominiumunless the master deed containsa requirement that the propertybe first offered to thecondominium owners within areasonable period of time beforethe same is offered to outsideparties.

Case

Sunset View Condominium v JudgeCampos

Facts

Petitioner Corporation filed for thecollection of assessment and insurancepremiums against private respondents.

The latter aver that every purchaser of acondominium unit, regardless of whether or not he has fully paid thepurchase price, is a "holder of aseparate interest" mentioned in Section2 of said Condominium Act" and isautomatically a shareholder of thecondominium corporation.

HeldSection 5 of the Condominium Act

expressly provides that the shareholdingin the Condominium Corporation will beconveyed only in a proper case. Notevery purchaser of a condominium unit

is a shareholder of the condominiumcorporation. The Condominium Actleaves to the Master Deed thedetermination of when the shareholdingwill be transferred to the purchaser of aunit, as clearly provided in the deed inthis case. Ownership of a unit,therefore, is a condition sine qua non tobeing a shareholder in the condominiumcorporation. It follows that a purchaserof a unit who is not yet the ownerthereof for not having fully paid the fullpurchase price, is not a shareholder Bynecessary implication, the "separateinterest" in a condominium, whichentitles the holder to becomeautomatically a share holder in thecondominium corporation, as providedin Section 2 of the Condominium Act,can be no other than ownership of aunit. This is so because nobody can be ashareholder unless he is the owner of aunit and when he ceases to be theowner, he also ceases automatically tobe a shareholder. The private

respondents, consequently, who havenot fully paid the purchase price of theirunits and are not owners of their unitsnor members or shareholders of thepetitioner condominium corporation.

Labnotes



82



PROPERTY REVIEWER

Q: What is the purpose of theCondominium Act?

A: It is a legal device to allow aliens toown real estate.

J. Extinguishment of Co-Ownership

(1) Total destruction of the thing

Labnotes

Q: Is there still co-ownership if thehouse is burned?

A: Yes, as to the lot and debris

(2) Merger of all the interest in oneperson

(3) Acquisitive prescription(a) By a third person(b) By one co-owner against the

other co-ownersRequisites:(i) Unequivocal acts of

repudiation of the rights of theother co-owners (actsamounting to ouster of otherco-owners)

• Such act of repudiation is brought tothe knowledge of such co-owners

• Must be known toother co-owners andshown by clear andconvincing evidence. Itmust not be merelyturning them away butoutright refusal torecognize them as co-owners.

• The evidencethereon is clear and

conclusive

(ii) Open and adverse possession,not mere silent possession forthe required period of extraordinary acquisitiveprescription.

(iii)Presumption is thatpossession of a co-owner isnot adverse.

While the prescription isthat possession of a co-ownercannot take place when theacts of ownership exercisedare vague and uncertain, suchprescription arises andproduces all its effects whenthe acts of ownership do nothave any doubt as to theouster of the rights of theother co-owners.

(4)Partition or division

• Most natural way of extinguishingthe co-ownership.

• A division between two or morepersons of real or personal propertywhich they own as co-partners, joinstenants or tenants in common,effected by the setting apart of suchinterests so that they may enjoy andpossess it in severallity.

(a) Right to ask for partition at anytime except:

(i) When there is a stipulationagainst it. (must not be over

10 years)(ii) When condition of indivision is imposed bytransferor (donor or testator)must not exceed 20 years –Art. 494

(iii) When the legalnature of community preventspartition. (e.g., party wall)(iv)When partition is generallyprohibited by law e.g. ACP(v) When partition wouldrender the thingunserviceable but the thingmay be sold and the co-owners divide the proceeds(Art. 494)



83



PROPERTY REVIEWER

Art. 494. No co-owner shall be obligedto remain in the co-ownership. Each co-owner may demand at any time thepartition of the thing owned in common,insofar as his share is concerned.

Nevertheless, an agreement ot keepthe thing undivided for acertain periodof time, not exceeding ten years, shallbe valid. This term may be extended bya new agreement.

A donor testator may prohibitpartition for a period which shall notexceed twenty years.

Neither shall there be any partitionwhen it is prohibited by law.

No prescription shall run in favor of aco-owner or co-heir against his co-owners or co-heirs so long as heexpressly or impliedly recognizes the co-ownership.

• Action for partitionwill fail if acquisitive prescription hasset in.

Labnotes

Q: Can a co-owner become sole ownerby acquisitive prescription?

A: Generally, NO – Because he is not in

adverse possession. The exceptionis when the possession becomesadverse when he repudiates the co-ownership, which amounts to anouster of the other co-owners. Anouster is not mere dispossession.Because the other co-owners might

just be tolerating the exclusivepossession of one co-owner.

Q: By what kind of acquisitiveprescription?

A: Extraordinary. 30 years must

lapse. Because the co-owner is inbad faith, knowing that there aresuppose to be other co-owners whoclaim title to the property.

(b) Effect of partition – Art. 1091,543, 1092-1093, 499-501

Art. 499. The partition of a thingowned in common shall not prejudicethird persons, who shall retain the rightsof mortgage, servitude or any other real

rights belonging to them before thedivision was made. Personal rightspertaining to third persons against theco-ownership shall also remain in force,notwithstanding the partition.

• Partition shall notprejudice third persons

• Third persons arethose who do not intervene in thepartition

• Personal rights

shall remain

Art. 500. Upon partition, there shall bea mutual accounting for benefitsreceived and reimbursements forexpenses made. Likewise, each co-owner shall pay for damages caused byreason of his negligence or fraud.

• Mutual accounting of benefitsafter partition

• Reimbursements• Payment of damages due to

negligence or fraud.

Art. 501. Every co-owner shall, afterpartition, be liable for defects of titleand quality of the portion assigned toeach of the other co-owners.

• Liability for defects of title andquality of portion assigned to

each

Art. 543. Each one of the participantsof a thing possessed in common shall bedeemed to have exclusively possessedthe part which may be allotted to himupon the division thereof, for the entire



84



PROPERTY REVIEWER

period during which the co-possessionlasted. Interruption in the possession of the whole or a part of the thingpossessed in common shall be to theprejudice of all the possessors.

However, in case of civil interruption,the rules of court shall apply.

• Part allotted to a co-owner atpartition will be deemed to bepossessed by such co-owner fromthe time the co-ownershipcommenced.

Art. 1091. A partition legally madeconfers upon each heir the exclusive

ownership of the property adjudicated tohim.

• Heir is exclusive heir of propertyadjudicated to him.

Art. 1092. After the partition has beenmade, the co-heirs shall be reciprocallybound to warrant the title to and thequality of, each property adjudicated.

•

Co-owners reciprocally bound toeach other for warranty of titleand quality of part given to each(hidden defect) after partition.

Art. 1093. The reciprocal obligation of warranty referred to in the precedingarticle shall be proportionate to therespective hereditary shares of the co-heirs, but if any of them should beinsolvent, the other co-heirs shall beliable for his part in the same

proportion, deducting the partcorresponding to the one who should beindemnified.

Those who pay for the insolvent heirshall have aright of action against himfor reimbursement, should his financialcondition improve.

• Obligation of warranty isproportionate to respectivehereditary shares.

• Insolvency of one makes the

others liable subject toreimbursement ( joint liability ).

(c) Right of Creditors of individualCo-owners Art. 497

Art. 497. The creditors or assignees of the co-owners may take part in thedivision of the thing owned in commonand object to its being effected withouttheir concurrence. But they cannotimpugn any partition already executed,

unless there has been fraud, or in case itwas made notwithstanding a formalopposition presented to prevent it,without prejudice to the right of thedebtor or assignor to maintain itsvalidity.

• All creditors, whether secured orprivileged, and those of anycategory under title of alienation,exchange, donation, assignment,or other obligation of a real or

personal nature, must beconsidered to intervene in thepartition of the common property.

• They must have become creditorsduring the co-ownership

• Co-owner debtors have the dutyto notify the creditors of thepartition

• Absence of notice makes partitionnot binding on them.

• They can contest such partition if they formulate a formal

opposition thereto.Assignee – a transferee of a partof the interest of the co-ownerbecause if a sale or assignment istotal, the assignee or the buyershould have been subrogated inthe place of the vendor orassignor, who should be excluded



85



PROPERTY REVIEWER

from the co-ownership, and theassignee or the buyer willintervene in his own right inpartition.

(d) Procedure for Partition (Rule 69,Rules of Court)

Art. 496. Partition may be made byagreement between the parties or by

judicial proceedings. Partition shall begoverned by the Rules of Court insofaras they consistent with this Code.

(1) Partition may be made:(a) Orally

• Valid and

enforceable among theparties.

• Statute of fraudsdoes not operate forpartition is not aconveyance of propertybut merely a segregationand designation of thatpart of the property whichbelongs to the co-owners.

(b) In writing

•

Court will just confirm suchwritten agreement.(2) Rules of Court does not

preclude amicable settlementbetween parties.

(3) Two principal issues in anaction for partition:(a) plaintiff is indeed a co-

owner of the property

• An action for partition willnot preosper as such formthe moment an alleged co-owner asserts an adversetitle.

• If the community characterof the property is proven,partition may be decreed.

(b) how the property is to bedivided between plaintiff and defendants.

• Commissioners may

be appointed by the courtcomposed of threecompetent anddisinterested persons tomake the partition.

Art. 498. Whenever the thing isessentially indivisible and the co-ownerscannot agree that it be allotted to one of them who shall indemnify the others, itshall be sold and its proceedsdistributed.

• If property is found to beincapable of being dividedwithout great prejudice to theinterest of each party, thecourt may order such propertybe assigned to one co-ownersubject to the condition thathe will pay the other co-owners of the value of theirinterests as deemed by thecommissioners.

•

The sale may be madeprivately or publicly and thirdpersons may becomepurchasers.

Art. 499. The partition of things ownedin common shall not prejudice thirdpersons, who shall retain the rights of mortgage, servitude, or any other rightsbelonging to them before the divisionwas made. Personal rights pertaining tothird persons against the co-ownership

shall also remain in force,notwithstanding the partition.

Art. 500. Upon partition, there shall bea mutual accounting for benefitsreceived and reimbursements for



86



PROPERTY REVIEWER

expenses made. Likewise, each co-owner shall pay for damages caused byreason 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, afterpartition, be liable for defects of titleand quality of the portion assigned toeach of the other co-owners.

Chapter on partition after intestatesuccession (Arts. 1092-1096)

Subsection 2

Effects of Partition

Art. 1091 – A partition legally madeconfers upon each heir the exclusiveownership of the property adjudicated tohim.

Art. 1092 – After the partition has beenmade, the co-heirs shall be reciprocallybound to warrant the title to, and thequlity of, each property adjudicated.

Art. 1093 – The reciprocal obligation of warranty freffed to in the precedingarticle shall be proportionate to therespective hereditary shares of the co-heirs, but if any one of them should beinsolvent, the other co-heirs shall beliable for hise part in the sameproportion, deducting the partcorresponding to the one who should beindemnified.

Those who pay for the insolvent heirshall have a right of action against himfor reimbursement, should his financial

condition improve. (1071)

Art. 1094. An action to enforce thewarranty among heirs mus be broughtwithin ten years from the date the rightof action accrues. (n)

Art. 1095. If a credit should be assignedas collectible, the co-heirs shall not beliable for the subsequent insolvency of the debtor of the estate, but only for hisinsolvency at the time the partition is

made. The warranty of the solvency of thedebtor can only be enforced during thefive years following the partition.Co-heirs do not warrant bead debts, if soknown to, and accepted by, thedistribute. But if such debts are notassigned to a co-heir, and should becollected, in whole or in part, theamount collected shall be distributedproportionately among the heirs.(1072a)

Art. 1096. The obligation of warrantyamong co-heir shall cease in thefollowing cases:

(1) When the testator himself hasmade the partition, unless it appears, orit may be reasonably presumed that hisintention was otherwise, but thelegitime shall always remainunimpaired;

(2) When it has been so expresslystipulated in theagreement of partition, unless there has

been badfaith; When the eviction is due to acause subsequent to the partition, orhas been caused by the fault of thedistribute of the property.

Not in the outline

K. Legal Effects of Co-Ownership

A co-ownership creates rights in

favor of each one of the co-owners withrespect to the property owned incommon. All the bundle of rights inownership are found in co-ownershipalso, with each co-owner having all suchrights in conjunction with the other co-owners.



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 orpartially, permanently or temporarily

(e) Jus vindicandi – right to recoverproperty.

(f) Jus possidendi – Right to possess theproperty by virtue of ownership,which right is implied from abovebundle of rights.

Applied to co-ownership all the

specific provisions mentioning in detailthe rights of a co-owner with respect tothe thing owned in common could besubsumed under one of these rights inownership. The exercise of such rightshowever is limited by concomitant rightsof each co-owner. Thus:

Jus Fruendi – rights of co-owner to thefruits is only in proportion to interestof the same.

Jus abutendi – most limited because of the prohibition against the alterationof the property

Jus vindicandi – most liberal: civil codeprovides that anyone of the co-owners may exercise the same.

Two senses which can view the rights of co-owners:

(a) a right over the thing owned incommon – limited by concomitantright of the other co-owners(b) rights over his ideal share or hisincivided interest over the same

property. – absolute owner who candeal with it like any full owner of anincorporeal property.

88

06 co ownership

Documents