Co-ownership and Prescription: Why Clear Repudiation is Key to Protecting Your Property Rights in the Philippines

TLDR: In Philippine law, simply claiming sole ownership of a co-owned property isn’t enough to extinguish the rights of other co-owners through prescription. This case highlights the critical importance of clear and unequivocal repudiation of co-ownership, communicated to all co-owners, for prescription to begin. It also underscores the right of legal redemption for co-owners when another co-owner sells their share to a third party without proper notice.

G.R. NO. 157954, March 24, 2006

INTRODUCTION

Imagine inheriting land with a sibling, only to discover years later that they’ve claimed sole ownership and sold the property without your knowledge. This scenario, unfortunately common in family property disputes in the Philippines, underscores the complexities of co-ownership and the legal concept of prescription. The Supreme Court case of Galvez v. Court of Appeals provides crucial insights into how co-ownership rights are protected and the stringent requirements for prescription to extinguish those rights. This case revolves around a parcel of land inherited by two co-owners, and the legal battle that ensued when one co-owner attempted to claim sole ownership, highlighting the importance of understanding co-ownership, repudiation, and the right of legal redemption in Philippine property law.

LEGAL CONTEXT: CO-OWNERSHIP, PRESCRIPTION, AND LEGAL REDEMPTION

Philippine law recognizes co-ownership when multiple individuals inherit property jointly. This legal framework is governed primarily by the Civil Code of the Philippines. A key principle in co-ownership is that, as stated in Article 494 of the Civil Code, “[a] prescription shall not run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership.” This means that simply possessing a co-owned property does not automatically lead to sole ownership through prescription.

Prescription, in legal terms, is a way to acquire or lose rights through the passage of time. In the context of co-ownership, a co-owner can acquire sole ownership through prescription, but only under specific and stringent conditions. This requires a clear and unequivocal repudiation of the co-ownership, meaning the co-owner must openly and definitively reject the rights of the other co-owners and claim exclusive ownership for themselves. This repudiation must be communicated clearly to the other co-owners.

The Supreme Court in Santos v. Santos laid out the conditions for prescription in co-ownership, stating that: “(1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law.” The burden of proving these elements rests heavily on the co-owner claiming prescription.

Furthermore, Philippine law grants co-owners the right of legal redemption. Article 1620 of the Civil Code states: “A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person.” This right allows a co-owner to step into the shoes of a third-party buyer, repurchase the share sold, and prevent strangers from entering the co-ownership. However, Article 1623 of the Civil Code mandates written notice to co-owners of the sale, triggering a 30-day period for them to exercise this right.

CASE BREAKDOWN: GALVEZ V. COURT OF APPEALS

The Galvez case began with the death of Timotea Galvez in 1965, who passed away intestate, meaning without a will. She was survived by her children Paz and Ulpiano. Ulpiano, however, predeceased Timotea, leaving behind his son Porfirio Galvez. Timotea owned a parcel of land in La Union. Upon her death, this land was inherited by Paz and Porfirio, the latter inheriting by right of representation as Ulpiano’s son, making them co-owners.

In 1970, Paz Galvez took a significant step without informing Porfirio. She executed an Affidavit of Self-Adjudication, falsely claiming to be the sole owner of the inherited property. Based on this affidavit, new tax declarations were issued solely in Paz’s name. Years later, in 1992, again without Porfirio’s knowledge or consent, Paz sold the entire property to Carlos Tam for a meager sum of P10,000. Tam, in turn, registered the land under his name and obtained Original Certificate of Title No. 0-2602 in 1994. Subsequently, Tam sold the property to Tycoon Properties, Inc., who secured Transfer Certificate of Title (TCT) No. T-40390.

Porfirio Galvez discovered these transactions in 1994 and promptly filed a legal action for Legal Redemption with Damages and Cancellation of Documents against Paz Galvez and Carlos Tam. Tycoon Properties, Inc. was later included as a defendant. The case went through the following stages:

1. Regional Trial Court (RTC): The RTC ruled in favor of Porfirio, declaring Paz’s Affidavit of Adjudication and the Deed of Absolute Sale to Carlos Tam void. The court ordered the cancellation of titles and the reconveyance of the property to Porfirio upon redemption of Paz’s half-share. The RTC also found Paz and Tam solidarily liable for damages.
2. Court of Appeals (CA): Paz Galvez, Carlos Tam, and Tycoon Properties appealed to the CA, but the appellate court affirmed the RTC’s decision in 2002.
3. Supreme Court (SC): The petitioners then elevated the case to the Supreme Court, arguing prescription, laches (unreasonable delay in asserting a right), and that Carlos Tam and Tycoon Properties were buyers in good faith.

The Supreme Court, however, sided with Porfirio Galvez and affirmed the lower courts’ decisions. The SC emphasized that Paz Galvez’s actions did not constitute a valid repudiation of co-ownership. According to the Court, “The execution of the affidavit of self-adjudication does not constitute such sufficient act of repudiation as contemplated under the law as to effectively exclude Porfirio Galvez from the property.” The Court reiterated the principle that for prescription to run against a co-owner, there must be a “clear repudiation of the co-ownership duly communicated to the other co-owners.”

Furthermore, the Supreme Court rejected the argument that Carlos Tam and Tycoon Properties were buyers in good faith. The Court noted that Tam failed to conduct due diligence and relied solely on Paz Galvez’s tax declarations. Crucially, Tam was already aware of Porfirio’s claim when he sold the property to Tycoon Properties, further negating any claim of good faith. The Court stated, “Suffice it to state that both the trial and appellate courts found otherwise as ‘Tam did not exert efforts to determine the previous ownership of the property in question’ and relied only on the tax declarations in the name of Paz Galvez.”

The Supreme Court upheld Porfirio’s right to legal redemption, emphasizing that no written notice of the sale to Carlos Tam was ever given to him by Paz Galvez, as required by law. This lack of notice preserved Porfirio’s right to redeem the property.

PRACTICAL IMPLICATIONS: PROTECTING YOUR CO-OWNERSHIP RIGHTS

The Galvez v. Court of Appeals case provides several crucial practical lessons for individuals involved in co-ownership of property, particularly inherited land:

• Clear Repudiation is Essential for Prescription: A co-owner cannot simply claim sole ownership and expect prescription to automatically set in. Actions like executing an affidavit of self-adjudication or obtaining tax declarations in one’s name alone are insufficient. Repudiation must be explicit, communicated to all co-owners, and supported by clear and convincing evidence of acts demonstrating exclusive ownership and denial of other co-owners’ rights.
• Importance of Due Diligence for Buyers: Prospective buyers of property, especially when dealing with individuals claiming sole ownership of potentially inherited land, must conduct thorough due diligence. Relying solely on tax declarations is insufficient. Checking the history of ownership, previous titles, and inquiring about other possible heirs or co-owners is crucial to avoid being deemed a buyer in bad faith.
• Legal Redemption as a Safeguard: Co-owners have a powerful tool in legal redemption to prevent unwanted third parties from acquiring a share in the co-owned property. However, this right is contingent on proper written notice of the sale. Co-owners should be vigilant and assert their redemption rights promptly upon learning of a sale to a third party.
• Proactive Communication and Documentation: Co-owners should maintain open communication with each other regarding the property. Any actions that could affect co-ownership, such as one co-owner wanting to manage or sell the property, should be discussed and documented to avoid future disputes.

Key Lessons from Galvez v. Court of Appeals:

• For prescription to run in co-ownership, clear and communicated repudiation is mandatory.
• An Affidavit of Self-Adjudication by one co-owner is not sufficient repudiation.
• Property buyers must conduct thorough due diligence beyond tax declarations.
• Co-owners have a right to legal redemption when another co-owner sells to a third party without notice.

FREQUENTLY ASKED QUESTIONS (FAQs)

Q1: What exactly is co-ownership in Philippine law?

A: Co-ownership exists when two or more people jointly own undivided property. This often happens when heirs inherit property together. Each co-owner has rights to the whole property, but their ownership is limited to their proportionate share until the property is formally divided.

Q2: How can a co-owner acquire sole ownership of a co-owned property?

A: A co-owner can acquire sole ownership through prescription, but this requires clear repudiation of the co-ownership, communicated to the other co-owners, and continuous, open, and exclusive possession for a specific period (usually 10 years for ordinary prescription with just title and good faith, or 30 years for extraordinary prescription without need of title or of good faith).

Q3: What constitutes ‘repudiation’ of co-ownership?

A: Repudiation is a clear and unequivocal act by a co-owner demonstrating they are claiming sole ownership and denying the rights of other co-owners. Examples include executing a deed of partition and obtaining separate titles, filing an action to quiet title against co-owners, or other overt acts of exclusive ownership communicated to co-owners.

Q4: Is simply declaring oneself as the sole owner in an affidavit enough for repudiation?

A: No. As highlighted in the Galvez case, an Affidavit of Self-Adjudication alone is generally not considered sufficient repudiation. It must be accompanied by clear communication to other co-owners and actions that unequivocally demonstrate exclusive ownership.

Q5: What is the right of legal redemption for co-owners?

A: Legal redemption is the right of a co-owner to buy back the share of another co-owner if that share is sold to a third party. This right must be exercised within 30 days of written notification of the sale by the selling co-owner.

Q6: What should I do if I suspect a co-owner is trying to claim sole ownership of our inherited property?

A: Act quickly. Gather evidence of co-ownership (like inheritance documents). Formally communicate with the co-owner asserting your rights. If necessary, seek legal advice immediately to protect your inheritance and potentially file a court action to enforce your co-ownership rights.

Q7: As a buyer, how can I ensure I am a ‘buyer in good faith’ when purchasing property?

A: Conduct thorough due diligence. Examine the title history beyond just the current tax declarations. Inquire about previous owners and potential heirs, especially for older properties. Physically inspect the property and its surroundings. If there are any red flags or uncertainties, seek legal advice before proceeding with the purchase.

ASG Law specializes in Real Estate and Property Law, and Inheritance Law. Contact us or email hello@asglawpartners.com to schedule a consultation.