CO-OWNERSHIP

Art. 484. There is co-ownership whenever the ownership of an undivided thing or right
belongs to different persons.
In default of contracts, or of special provisions, co-ownership shall be governed by the
provisions of this Title

 Co-ownership: exists whenever an undivided thing or right belongs to different persons

o the right to dominion which two or more persons have in spiritual part (or ideal
portion) on a thing which is not physically divided
o relationship is fiduciary in character, co-owner is a trustee for the others
o not a juridical person (unlike a partnership) and has no distinct personality to sue
or to be sued
 Requisites:
o Plurality of owners
o The object of ownership must be a thing or right undivided
o Each co-owner’s rights must be limited only to his ideal share of the physical
whole
 Characteristics:
o Plurality: There are two or more co-owners
o Unity: There is a single object not materially or physically divided
o There is no mutual representation by co-owners
o Right to use included: Exists for common enjoyment of co-owners
o It has no distinct legal personality
o It is governed first by contract, by special legal provisions, by Title III.
 Sources of co-ownership
o Contract (A494(2), 1775)
o Law (Easement of party walls A658, ACP 88, 90, FC)
o Succession (Ex. Undivided property before partition)
o Testamentary diposition or donation inter vivos (testator or donor prohibits
partition of the property for a certain period 494(3)
o Fortuitous event/chance (Commixtion or confusion by accident (A472)
o Discovery of hidden treasure (A438))
o Occupancy (A712-720)
o Easement (658)
o Universal Partnership (A1778-1780)
o Associations (A1775)
o Condominium (RA 4726)
 Co-ownership v. Joint Ownership

Co-Ownership Joint Ownership

Tenancy in common
Each co-owner, together with the other (co-
owner or co-owners), is the owner of the
whole undivided thing or right but at the same
time of his own ideal part thereof
Joint tenancy
There is no abstract share
ownership by the co-owners, the rights of the
joint tenants being inseparable (as if they
are one);
 A tenant in common is permitted to dispose A joint tenant is not permitted to dispose of
his share/interest without consent of the his share or interest in the property without
others the consent of the others

The survivors are subrogated to the rights of
the deceased immediately upon the death of
the latter by virtue of their right of survivorship
or jus accrescendi;
This is not true in a co-ownership
If a joint tenant dies, his ownership dies
with him and instead of his heirs inheriting his
share
The disability (e.g., minority) of a joint tenant
inures to the benefit of the others for
purposes of prescription, and, therefore,
prescription will not run against the latter who
can invoke the disability as a defense

 Co-ownership v. Partnership

Co-ownership
May be created without formalities of contract
No juridical or legal personality
The purposes is the collective enjoyment of
the thing or right
A co-owner can dispose of his share
without the consent of the others with the
transferee automatically becoming a co-
owner
In co-ownership, there is generally no
mutual representation
The distribution of profits must be
proportional to the respective interests of the
co-owners,
A co-ownership is not dissolved by the death
or incapacity of a co-owner,
An agreement to keep the thing undivided for
a period of more than ten years (although it
may be extended by a new agreement) is
void,
Partnership
(except CPG) can be created only be
contract, express or implied
Juridical personality exists
It is to obtain profits
A partner, unless authorized,
cannot do so and substitute another as a
partner in his place;
a partner can generally bind the partnership
The distribution of profits is
subject to the stipulation of the partners;
Death dissolves a partnership
There may be agreement as to any definite
term without limit set by law.

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.

Rights of each co-owner:

(a) Proportionate share in benefits and charges; presumption of equality of shares

Art. 485. The share of the co-owners, in the benefits as well as in the charges,
shall be proportional to their respective interests. Any stipulation in a contract to
the contrary shall be void.
The portions belonging to the co-owners in the coownership shall be presumed
equal, unless the contrary is proved.

 RULE: The shall of co-owners shall be proportional to their interest in the property.
Presumption of equal interest, unless the contrary is proven

 RULE: Benefits and charges shall be proportionate to the interest in the property

 Any stipulation in the CONTRACT is void.

o Not other

(b) Limitations on co-owner’s rights

Art. 486. Each co-owner may use the thing owned in common, provided he does
so in accordance with the purpose for which it is intended and in such a way as
not to injure the interest of the co-ownership or prevent the other co-owners from
using it according to their rights. The purpose of the co-ownership may be
changed by agreement, express or implied.

 Use must be the for the purpose intended based on agreement of the parties
 Purpose may be changed by agreement.
o Mere tolerance cannot be invoked by a co-owner to legalize a change in the use
of thing owned in common
o It must agreed by ALL parties
 Other co-owners should not be prevented from using the property

(c) Right to bring action in ejectment

Art. 487. Anyone of the co-owners may bring an action in ejectment.

 Any one of the co-owners can bring a case (because the action is deemed instituted for
the benefit of all)
 Cruz v Catapang
 Abing v. Waeyan

(d) Expenses for preservation

Art. 488. Each co-owner shall have a right to compel the other co-owners to
contribute to the expenses of preservation of the thing or right owned in common
and to the taxes. Anyone of the latter may exempt himself from this obligation by
renouncing so much of his undivided interest as may be equivalent to his share of
 the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-
ownership.

 Article 488 refers only to necessary expenses (A546) such as those incurred for repair of
a building in a ruinous condition and preserve the rights of joint owners to mining claims.
Taxes are considered as necessary expenses.
 RENUNCIATION → the renunciation would redound to the benefit of whomever paid for
the preservation of the property to the extent of the defaulting coowner’s share
o The renunciation is in reality a case of dacion en pago involving expenses and
taxes already paid. Consent of the other co-owners is necessary. If the creditor
has not yet been paid, the “renunciation’’ cannot be made without his consent
(A1293) for this would be a case of novation by substitution of debtor

(e) Expenses to improve or embellish

Art. 489. Repairs for preservation may be made at the will of one of the co-owners, but he
must, if practicable, first notify his co-owners of the necessity for such repairs. Expenses
to improve or embellish the thing shall be decided upon by a majority as determined in
Article 492.

 Necessity for agreement

o A co-owner has the right to compel the other co-owners to contribute to the
expenses of preservation, maintenance, or necessary repairs of the thing or right
owned in common and to the taxes, even if incurred without the knowledge of the
other co-owners or prior notice to them, in view of the nature of the expenses
o Expenses to improve and embellish are not essential for preservation and can be
delayed, the consent is required under A492
(f) Alterations
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. However, if the withholding of the consent by one or more of the
co-owners is clearly prejudicial to the common interest, the courts may afford
adequate relief.
 Necessity of consent of other co-owners for alterations
o Alteration: contemplates change made by a co-owner in the thing own in
common which involves:
 Change of the thing from the state or essence in which the others believe
in should remain
 Withdrawal of the thing from the use to which they wish it to be intended
 Any other transformation which prejudices the condition or substance of
the thing or its enjoyment by others
o The unanimous consent of all the co-owners, not a mere majority (see Art. 492.),
is necessary even if the alteration would prove beneficial because alteration is an
act of ownership and not of mere administration.
 o The co-owner who makes such alteration without the express or implied consent
of the other co-owners acts in bad faith because he does so as if he were the
sole owner
o Punishment:
 Lose what he spent
 Be obliged to demolish the improvements done
 Be liable for loses and damages to the community property or the other
co-owners may have suffered.
(g) Administration
Art. 492. For the administration and better enjoyment of the thing owned in
common, the resolutions of the majority of the co-owners shall be binding
There shall be no majority unless the resolution is approved by the co-owners
who represent the controlling interest in the object of the co-ownership.
Should there be no majority, or should the resolution of the majority be seriously
prejudicial to those interested in the property owned in common, the court, at the
instance of an interested party, shall order such measures as it may deem proper,
including the appointment of an administrator.
Whenever a part of the thing belongs exclusively to one of the co-owners, and the
remainder is owned in common, the preceding provisions shall apply only to the
part owned in common.
 Rules for acts of administration and better enjoyment
o They contemplate acts or decisions for the common benefit of all the co-owners
and not for the benefit of only one or some of them
o While alteration is more or less permanent, acts of administration have transitory
effects (i.e., not of long duration which, of course, is a question of fact) and have
for their purpose the preservation, preparation and better enjoyment of the thing
and which do not affect its essence, nature or substance. Examples:
 Unregistered lease of one year or less (A1878(8))
 Appointment of an administrator to manage the property (Alcala v
Pabalan 1911)
 Engaging the services of a lawyer to preserve the ownership and
possession of the property (Gov’t v Wagner)
 Payment made in the ordinary course of management (A1878(1))
o GR: Majority decides
 XPN: If there is no majority or the resolution of the majority is seriously
prejudicial to the interests of the other co-owners, the court, at the
instance of an interested party, may take such measures as it may deem
proper, including the appointment of an administrator
 Seriously prejudicial:
 When the resolution calls for a substantial change of the thing or
of the use to which the property owned in common has been
intended in accordance with the previous agreement, or in the
absence of agreement, the nature of the thing
  When the resolution authorizes leases, loans, and other contracts
without the necessary security, thereby exposing the property to
serious danger to the prejudice of the minority co-owners
 When the resolution upholds the continued employment of an
administrator who is guilty of fraud or negligence, etc. in his
management
Purpose Rule for voting
488: Expenses of Preservation Anyone can compel
preservation and taxes Taxes payment
Prior notice
Renounce to the extent of
default  dacion en pago
(instead of paying in cash,
co-owner who refuses to
pay just assigns part of his
share)
Art 489 cf 492: Expenses Improve Anyone can initiate and
to improve or embellish Embellish non-paying co-owner may
(not necessary expenses) renounce ownership to
extent of deficit
When majority rules Majority  controlling
Controling interest: not interest
warm bodies
492 Administration Majority (if no majority, or
resolution is seriously
prejudicial then the parties
can ask for the intervention
of the Court including the
intervention of
administrators)
491 Alterations Unanimous All
486 Change of purpose Unanimous
.
(h) Alienation of co-owned property
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.
 A493 covers only the right to the ideal share (once cannot alienate what he does not
own). A co-owner may:
o Alienate
o Assign
o Mortgage
o Substitute another person in its enjoyment
  EXCEPT: When personal rights are involved and limited to the portion which may be
allotted to him in the division upon the termination of co-ownership
 Aspects of ownership
o Right to dispose (his particular share)
o Right to fruits
o Right to use/enjoy and substitute another to use/enjoy the property
o XPN: When personal rights are involved
o Right to demand partition insofar as his share in concerned

(i) Right of legal redemption

Art. 496. Partition may be made by agreement between the parties or by judicial
proceedings. Partition shall be governed by the Rules of Court insofar as they are
consistent with this Code.

 Partition has for its purpose the separation, division and assignment of the thing held in
common among those to whom it may belong.
 How effected
o Extrajudicially via agreement
o Judicially under Rule 69, ROC
 Creditors and assignees’ right cannot be prejudiced. They can participate
DURING the proceedings but not after. The assumption is that they are to
be NOTIFIED of the proceedings.
 Application of Statute of Frauds – NO
o It is not a sale/conveyance but simply a segregation and designation of the
property belonging to each co-owner. It is valid and enforceable although made
orally.
 Prescription
o No prescription can run against co-owner as long as he recognizes the
coownership.
o Since co-owner is owner of an ideal share, when co-owner disposes of the
property and property not yet subdivided, if he has not obtained consent of the
co-owners, the disposition is only valid as to the extent of his or her share. At the
end of the day, an actual physical segregation of the property is necessary.
o If object of co-ownership is indivisible or co-owners cannot agree, then it can be
assigned to one subject to indemnity OR sell the property and divide the shares.
Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner
may demand at any time the partition of the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty
years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or coheir against his co-owners or co-
heirs so long as he expressly or impliedly recognizes the co-ownership.

 Termination of co-ownership
o Consolidation or merger in only one of the co-owners of all the interest of the
others
o Destruction or loss of the property co-owned
o Acquisitive prescription in favor of third person or a co-owner who repudiates co-
ownership
o By the partition, judicial or extrajudicial (Art. 496.), of the respective undivided
shares of the co-owners
o By the termination of the period agreed upon or imposed by the donor or testator,
or of the period allowed by law (Art. 494, pars. 2, 3.)
o By the sale by the co-owners of the thing to a third person and the distribution of
its proceeds among them. (see Art. 498.)
 GR: No co-owner shall be obliged to remain in the co-ownership. XPNS:
o When the co-owners have agreed to keep the thing undivided for a certain
period of time, not exceeding ten years;
o When the partition is prohibited by the donor or testator for a certain period
not exceeding twenty years;
o When the partition is prohibited by law (Art. 494.)
 EX: ACP/CPG
o When partition would render the thing unserviceable for the use for which
it is intended (Art. 495.)
o Art 498 – when essentially indivisible
o When another co-owner has possessed the property as exclusive owner and for
a period sufficient to acquire it by prescription.
 Possession of co-owner similar to a trustee
o Each co-owner is a trustee for eachother.
o It has been held that the trustee may claim title by prescription founded on
adverse possession, where it appears that:
 He had performed unequivocal acts of repudiation of the co-ownership
amounting to an ouster of the cestui que trust or the other co-owners;
 Such positive acts of repudiation have been made known to the cestui
que trust or the other co-owners
 The evidence thereon is clear, complete and conclusive in order to
establish prescription without any shadow of doubt;
 His possession is open, continuous, exclusive, and notorious.
 GR: Prescription does not run in favor of or against a co-owner
o XPN: Repudiation of co-ownership. Example acts:
 Filing by a trustee of an action in court against the trustor to quiet title to
property, or for recovery of ownership thereof, held in possession by the
former, may constitute an act of repudiation of the trust reposed on him
by the latter
  The issuance of the certificate of title would constitute an open and clear
repudiation of any trust, and the lapse of more than 20 years, open and
adverse possession as owner would certainly suffice to vest title by
prescription
 There is clear repudiation of a trust when one who is an apparent
administrator of property causes the cancellation of the title thereto in the
name of the apparent beneficiaries and gets a new certificate of title in his
own name.
Art. 495. Notwithstanding the provisions of the preceding article, the co-owners cannot
demand a physical division of the thing owned in common, when to do so would render it
unserviceable for the use for which it is intended. But the co-ownership may be
terminated in accordance with Article 498.
Art. 498. Whenever the thing is essentially indivisible and the co-owners cannot agree
that it be allotted to one of them who shall indemnify the others, it shall be sold and its
proceeds distributed

 Where partition will render thing unserviceable

o Physical or material division is not allowed when the thing is indivisible – when to
do so could render the thing unserviceable. However, it does not prevent the
termination of co-ownership (assignment of the thing to one of them or sale of the
thing and distribution of the proceeds) under A498.
 Sale of thing co-owned to a third person
o Note that the sale shall be resorted to only when the right to partition the property
is invoked by any of the co-owners but because of the nature of the property it
cannot be divided without prejudice to the co-owners and the co-owners cannot
agree that the entire property be alloted or assigned to one of them upon
reimbursement of the shares of the other co-owners.
Art. 499. The partition of a thing owned in common shall not prejudice third persons who
shall retain the rights of mortgage, servitude, or any other real rights belonging to them
before the division was made. Personal rights pertaining to third persons against the
coownership shall also remain in force, notwithstanding the partition.
Art. 500. Upon partition, there shall be a mutual accounting for benefits received and
reimbursements for expenses made. Likewise, each co-owner shall pay for damages
caused by reason of his negligence or fraud. (n)
Art. 501. Every co-owner shall, after partition, be liable for defects of title and quality of
the portion assigned to each of the other co-owners.

 Right of third persons protected

o “Third persons,’’ as used in Article 499, refers to all those with real rights
(mortgage, servitude, or with personal rights against co-owners who has no
participation in the partition)
 Effect of Partition
o Obligation of Co-owners upon partition
  Mutual accounting for benefits received, for the fruits and other benefits of
the thing belong to all the co-owners (A485)
 Mutual reimbursements for expenses (i.e., necessary expenses, taxes,
and others in proper cases), for if they share in the benefits, they should
also share in the charges
 Indemnity for damages caused by reason of negligence or fraud, for
example, in the making of expenses or alterations, for it is logical and just;
 Reciprocal warranty for defects of title or quality of the portion assigned to
a co-owner (e.g., land alloted to a co-owner belongs to a third person or
property assigned is of inferior quality or has hidden defects), for it is also
justified by considerations of reason and justice.
 An action for partition  4 years
 Procedure for Partition  Rule 69