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In line with the 2021 Ruling in the case of Ulay versus Bustamante, the Supreme Court discussed the legal implications if a co-owner sold the entire property.
Article 491 of the Civil Code, provides that, a sale of the property owned in common amounts to an alteration thereof which requires the unanimous consent of the other co-owners, to wit:
Art 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even though benefits for all would result therefrom.
Nevertheless, a co-owner is allowed to alienate his or her part or pro-indiviso share in the co-ownership, with attendant limits as provided by Article 493 of the Civil Code, viz.:
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.
Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.
In the 1988 case of Bailon-Casilao v. Court of Appeals, the Court opined:
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. x x x This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common[,] x x x by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof x x x.
Thus, if a co-owner sold the entire property, the sale is valid only with respect to the portion owned by said co-owner. (Ulay, v. Bustamante, G.R. No. 231721, March 18, 2021)
Related article: EXISTENCE OF CO-OWNERSHIP
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