SALE BEFORE PARTITION OF A CO-OWNED PROPERTY

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Published — March 30, 2021

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

After reading this article about SALE BEFORE PARTITION OF A CO-OWNED PROPERTY, you may also read: MAY A CO-OWNER BE OBLIGED TO REMAIN IN THE CO-OWNERSHIP?

• A co-owner has an absolute ownership of his undivided share in the co-owned property

• No individual can claim title to a definite or concrete portion before partition of a co-owned property

• A co-owner can sell his or her share even before partition

May a co-owner sell a portion of a co-owned property he co-owns?

For a better understanding, let us take the case of Torres vs. Velez, G.R. No. 187987, November 26, 2014.

In this case, Vicente, Mariano, Velez, and Jesus are co-owners of several parcels of land including the disputed Lot No. 4389. Jesus filed a case in court for the division or partition of the several parcels of land. Eventually, a judgment was rendered by the court on the basis of a compromise agreement signed by the co-owners.  They agreed that Jesus, Mariano, and Vicente were jointly authorized to sell the said properties and receive its proceeds and distribute them to all the co-owners. However, the agreement was later amended to exclude Jesus as an authorized seller.

When Vicente, Mariano, and Velez inspected the property, they discovered that a person by the name of Lapinid was occupying a specific portion of Lot No. 4389. They found out that Jesus executed a deed of sale in favor of Lapinid. They believe that the sale of the said definite portion of a co-owned property without notice to the other co-owners is without force and effect. Further, according to them, since the portion sold was a definite and specific portion of a co-owned property, the entire deed of sale must be declared null and void.

The issue in this case was simplified by the Supreme Court, “May Jesus, a co-owner, validly sell a portion of the property he co-owns in favor of another person?”

The Supreme Court said:

Yes.

A co-owner has an absolute ownership of his undivided share in the co-owned property. He has right to alienate, assign, and mortgage it, even to the extent of substituting a third person in its enjoyment provided that no personal rights will be affected.

The law says:

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, 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.

Thus, in this case, Jesus can validly alienate his co-owned property in favor of Lapinid, free from any opposition of the other co-owners. Lapinid, as a transferee, validly obtained same rights of Jesus from the date of the execution of a valid sale. Absent any proof that the sale was not perfected, the validity of the sale still subsists. In essence, Lapinid steps into the shoes of Jesus as a co-owner of an ideal and proportionate share in the property held in common.

Is the sale between Jesus and Lapinid valid even when executed before the partition?

The Supreme Court said:

Yes.

Even assuming that Vicente, Mariano, and Velez are correct in saying that the sale was made before the partition, still, the sale is valid.

The Supreme Court had repeatedly ruled that no individual can claim a title to a definite or concrete portion before partition of co-owned property. Each co-owner possesses a right to sell or alienate his ideal share after partition. However, in case he disposes his share before partition, such disposition does not make the sale null and void. What will be effected on the sale is only his proportionate share, subject to the results of the partition. The co-owners who did not give their consent to the sale stand to be unaffected by the alienation.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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