In the Philippines, selling property that involves co-ownership requires understanding specific legal principles. The Supreme Court, in Acabal v. Acabal, clarified that when a co-owner sells an entire property without the consent of the other co-owners, the sale is valid only to the extent of the selling co-owner’s share. This means the buyer becomes a co-owner with the remaining co-owners, rather than the sole owner of the entire property. The decision underscores the importance of consent in property transactions and highlights the remedies available to co-owners when their rights are infringed upon.

Unilateral Land Sale: Can One Co-owner’s Action Bind All?

This case revolves around a parcel of land in Negros Oriental originally owned by Villaner Acabal. Villaner later claimed that he was misled into signing a Deed of Absolute Sale, believing it to be a lease agreement with his godson-nephew, Leonardo Acabal. Leonardo subsequently sold the land to Ramon Nicolas. When Villaner sought to annul the sale, the dispute reached the Supreme Court, which had to determine the validity and extent of the sale, especially considering that Villaner’s children, as heirs of his deceased wife, also had rights to the property as co-owners.

Procedurally, the court addressed the argument that Villaner’s failure to deny the genuineness and due execution of the Deed of Absolute Sale meant he could not contest it. The Supreme Court clarified that failing to deny the document did not prevent Villaner from presenting evidence of fraud, mistake, or lack of consideration. The burden of proof, the Court emphasized, lay on Villaner to prove that he was deceived into executing the sale, a burden that required clear and convincing evidence, not mere preponderance. This principle underscores the importance of substantiating claims of fraud or undue influence in contractual disputes.

Building on this principle, the Court scrutinized Villaner’s claim that the transaction was a lease, finding his evidence insufficient. The Court noted that facts, not conjectures, decide cases. Furthermore, the Court examined the claim that the purchase price was inadequate. Absent concrete evidence of the property’s fair market value at the time of the sale, the Court could not conclude that the price was indeed inadequate. Even if the price were below market value, the Court stated, mere inadequacy is not enough to invalidate a sale unless it is grossly inadequate or shocking to the conscience.

The argument that the sale violated the Comprehensive Agrarian Reform Law (CARL) was also addressed. The Court pointed out that CARL covers private lands devoted to or suitable for agriculture. Since only a small portion of the land was actually used for agriculture, and even that portion was below the retention limit prescribed by CARL, there was no violation of the law. This ruling clarifies the scope and applicability of agrarian reform laws concerning land transactions. Moreover, even if the disposition had been contrary to law, the Court indicated that Villaner would have no remedy because he and Leonardo were in pari delicto, meaning both were equally at fault. In such cases, the law generally leaves the parties where it finds them.

Addressing the rights of Villaner’s children as co-owners, the Court confirmed that the property was indeed conjugal, acquired during Villaner’s marriage to Justiniana Lipajan. Upon Justiniana’s death, a regime of co-ownership arose between Villaner and his children. Villaner could sell his undivided share, but he could not alienate the shares of his co-owners without their consent. This principle of nemo dat qui non habet—one cannot give what one does not have—is fundamental to property law. As a result, the sale affected only Villaner’s share, making the buyer, Leonardo (and subsequently Ramon), a co-owner with the other heirs.

The Court also clarified that the appropriate remedy for co-owners in such cases is an action for partition under Rule 69 of the Revised Rules of Court, rather than an action for nullification of the sale or recovery of possession. This underscores that the buyers are legitimate proprietors and possessors in joint ownership of the common property. The ruling in Cruz v. Leis, which involved registered land, was distinguished from this case, as the property in question was unregistered, making Nicolas’s claim of good faith irrelevant.

The Supreme Court ultimately granted the petition, declaring the sale valid only insofar as five-ninths (5/9) of the subject property, representing Villaner’s share, was concerned. This decision highlights the interplay between contractual obligations, property rights, and agrarian reform laws, providing a comprehensive framework for understanding the legal implications of property sales involving co-ownership.

FAQs

What was the key issue in this case?	The central issue was whether a co-owner could validly sell an entire property without the consent of the other co-owners, and what the legal consequences of such a sale would be.
What does nemo dat qui non habet mean?	Nemo dat qui non habet is a legal principle meaning “one cannot give what one does not have.” In this context, it means a co-owner can only sell their share of a property, not the entire property without the consent of all co-owners.
What is the remedy for co-owners when their property is sold without consent?	The proper legal remedy is an action for partition under Rule 69 of the Revised Rules of Court. This allows the co-owners to divide the property according to their respective shares.
What is the significance of ‘in pari delicto’ in this case?	The principle of in pari delicto, meaning both parties are equally at fault, applies when both parties to a transaction are aware of its illegality. In such cases, neither party can seek legal remedy from the courts.
How did the Comprehensive Agrarian Reform Law (CARL) factor into the decision?	The Court determined that CARL was not violated because the majority of the land was unsuitable for agriculture, and the portion that was suitable was within the legal retention limits.
What happens to the buyer when a co-owner sells the entire property?	The buyer becomes a co-owner of the property, holding the same share that the selling co-owner had. The buyer steps into the shoes of the seller with respect to co-ownership.
What constitutes sufficient proof of fraud in a contract?	Allegations of fraud must be supported by clear and convincing evidence. A mere preponderance of evidence or conjectures are not sufficient to prove fraud.
What is the effect of not denying under oath the genuineness and due execution of the Deed of Absolute Sale?	The failure to deny the genuineness and due execution of an actionable document does not preclude a party from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration.
Why was the claim of good faith irrelevant?	Nicolas’s claim of having bought the land in good faith is irrelevant because the property in dispute is unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land.

The Acabal v. Acabal case clarifies important aspects of property law, especially concerning co-ownership and the limitations on a co-owner’s ability to sell property without the consent of all other co-owners. It reinforces the principle that one cannot transfer more rights than one possesses and underscores the remedies available to co-owners whose rights have been infringed upon.

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: Leonardo Acabal and Ramon Nicolas vs. Villaner Acabal, et al., G.R. No. 148376, March 31, 2005