Butte vs. Manuel Uy and Sons, Inc.

A testamentary heir acquires an interest in the decedent's undivided co-owned property from the moment of the decedent's death, thereby becoming a co-owner entitled to exercise the right of legal redemption when another co-owner sells her share to a stranger. The 30-day period for legal redemption under Article 1623 of the Civil Code runs exclusively from written notice given by the vendor, not by the vendee, and the vendor's notice is the operative one for computing the period.

Jose V. Ramirez, during his lifetime, was a co-owner of a house and lot in Sta. Cruz, Manila, holding a one-sixth (1/6) undivided share under Transfer Certificate of Title No. 52789, together with four other co-owners, each holding 1/6. Upon Ramirez's death, Special Proceeding No. 15026 was instituted to settle his estate, and his last will and testament was admitted to probate, bequeathing one-third (1/3) of the free portion to Angela M. Butte. The estate proceedings remained pending due to creditors' claims exceeding the estate's assets, and the Bank of the Philippine Islands was appointed judicial administrator. The applicable law is found in Articles 1620 and 1623 of the Civil Code of the Philippines, governing the right of legal redemption among co-owners.

Jose V. Ramirez was a co-owner of a house and lot in Sta. Cruz, Manila, holding a one-sixth (1/6) undivided share under Transfer Certificate of Title No. 52789, along with Marie Garnier Vda. de Ramirez, Jose E. Ramirez, Rita de Ramirez, and Jose Ma. Ramirez, each also holding 1/6. On October 20, 1951, Jose V. Ramirez died, and Special Proceeding No. 15026 was instituted to settle his estate. His last will and testament, bequeathing his estate to his children and grandchildren and one-third (1/3) of the free portion to Angela M. Butte, was admitted to probate, but the estate proceedings remained pending because creditors' claims exceeded the estate's assets. The Bank of the Philippine Islands was appointed judicial administrator.

On December 9, 1958, Marie Garnier Vda. de Ramirez sold her undivided 1/6 share to Manuel Uy & Sons, Inc. for P500,000.00. After her attorney-in-fact, Mrs. Elsa R. Chambers, executed an affidavit stating that formal notices of the sale had been sent to all possible redemptioners, the deed of sale was registered, Transfer Certificate of Title No. 52789 was cancelled, and a new one was issued in the name of the vendee and the other co-owners.

On the same day, Manuel Uy & Sons, Inc. sent a letter to the Bank of the Philippine Islands as judicial administrator, informing it of the sale. The bank forwarded this letter to Butte's counsel, who received it on December 10, 1958; the letters were then delivered to Butte's son, Miguel Papa, who personally handed them to Butte on December 11 and 12, 1958. Separately, the vendor, through her attorney-in-fact Mrs. Chambers, wrote to the bank on December 11, 1958, confirming the vendee's letter regarding the sale of her 1/6 share for P500,000.00. The bank received this letter on December 15, 1958, endorsed it to Butte's counsel, who received it on December 16, 1958; Butte received the letter on December 19, 1958.

On January 15, 1959, Butte, through counsel, sent a letter and a Philippine National Bank cashier's check for P500,000.00 to Manuel Uy & Sons, Inc., offering to redeem the 1/6 share sold by Marie Garnier Vda. de Ramirez. The tender was refused, and Butte consigned the amount in court and filed the action for legal redemption. She alleged that the price was grossly excessive and prayed for conveyance of the property and for actual, moral, and exemplary damages. The trial court dismissed the complaint, holding that Butte had no right to redeem and that, if she had any, she exercised it beyond the statutory 30-day period. Both parties appealed directly to the Supreme Court.

• Right to Redeem as Heir: Butte argued that as testamentary heir of Jose V. Ramirez, she acquired an interest in his undivided 1/6 share from the moment of his death, making her a co-owner entitled to exercise the right of legal redemption when another co-owner sold her share to a stranger.
• Timeliness of Redemption: Butte argued that the 30-day period should be counted from the vendor's written notice, not the vendee's, and that her tender and consignation on January 15, 1959 was within the period computed from the vendor's notice received on December 16, 1958.
• Grossly Excessive Price: Butte alleged that the P500,000.00 price was grossly excessive and prayed that she be required to pay only a reasonable price.

• No Right to Redeem: Manuel Uy & Sons, Inc. argued that Butte's actual share in the estate had not been specifically determined and remained contingent, and that the liquidation of the estate might require the alienation of the decedent's undivided portion, in which event Butte would have no interest in the property.
• Redemption Beyond Period: The respondent argued that Butte exercised the right of redemption beyond the statutory 30-day period, counting the period from the notice given by the vendee.
• Counterclaim for Damages: The respondent filed a counterclaim for damages and attorney's fees, predicated on the assumption that Butte's action was clearly unfounded.

• Right of Heir to Redeem: Whether plaintiff-appellant, having been bequeathed 1/3 of the free portion of the estate of Jose V. Ramirez, can exercise the right of legal redemption over the 1/6 share sold by Marie Garnier Vda. de Ramirez despite the presence of the judicial administrator and pending the final distribution of her share in the testate proceedings.
• Timeliness of Redemption: Whether plaintiff-appellant exercised the right of legal redemption within the period prescribed by law.

• Right of Heir to Redeem: Yes. As testamentary heir, Butte acquired an interest in the decedent's undivided share from the moment of his death under Articles 776, 777, and 947 of the Civil Code, making her a co-owner entitled to exercise the right of legal redemption under Article 1620. The existence of a judicial administrator did not alter this right, as the redemption right vested in the heirs individually and did not form part of the decedent's estate.
• Timeliness of Redemption: Yes. The 30-day period under Article 1623 runs exclusively from written notice given by the vendor, not the vendee. The vendor's notice was received by Butte's counsel on December 16, 1958, and her tender and consignation on January 15, 1959 was within the 30-day period, computed by excluding December 16 and including January 15 pursuant to Article 13 of the Civil Code.

• Right of Heir to Redeem: The Court reasoned that the rights to the succession of a deceased person are transmitted to his heirs from the moment of his death, citing Articles 776, 777, and 947 of the Civil Code. Consequently, the heirs of Jose V. Ramirez acquired his undivided share in the Sta. Cruz property from the moment of his death and became co-owners together with the original surviving co-owners. A co-owner of an undivided share is necessarily a co-owner of the whole, and any one of the Ramirez heirs became entitled to exercise the right of legal redemption as soon as another co-owner sold her undivided share to a stranger. The Court rejected the argument that the right of redemption was contingent or that the judicial administrator's possession and administration rights included the right of legal redemption. The redemption right only came into existence when the sale to Uy & Sons, Inc. was perfected, eight years after Ramirez's death, and therefore formed no part of his estate. The right vested in the heirs originally, in their individual capacity, not derivatively from their decedent. The Court also rejected the argument that if the original share of Ramirez were sold by the administrator, the heirs would stand in law as never having acquired that share; this would only be true if the inheritance were repudiated or the heir's quality as such were voided. The purchaser of hereditary property derives title from the Ramirez heirs, represented by the administrator as their trustee or legal representative.

• Timeliness of Redemption: The Court held that the 30-day period is peremptory, as the policy of the law is not to leave the purchaser's title in uncertainty beyond the established period. The text of Article 1623 clearly prescribes that the thirty days are to be counted from notice in writing by the vendor. Under the old law (Civil Code of 1889, Article 1524), it was immaterial who gave the notice, but the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that method must be deemed exclusive. The reasons for requiring notice by the seller are that the seller is in the best position to know who are his co-owners, and notice by the seller removes all doubts as to the fact, perfection, and validity of the sale. The operative notice was that given by Mrs. Chambers, as attorney-in-fact of the vendor, dated December 11, 1958, received by the bank on December 15, 1958, and endorsed to Butte's counsel, who received it on December 16, 1958. The date of receipt by the Administrator Bank could not be counted as determining the start of the thirty days because the administrator was not a proper redemptioner. Butte's tender and consignation on January 15, 1959 was the last day of the thirty days, counted by excluding December 16, 1958 and including January 15, 1959, pursuant to Article 13 of the Civil Code. The Court also found no basis for the claim that the price was grossly excessive, as gross excess cannot be predicated on mere individual estimates of market price by a single realtor. The respondent's counterclaim for damages and attorney's fees became untenable because the redemption and consignation were properly made.

• Transmission of rights to succession at death — Under Articles 776, 777, and 947 of the Civil Code, the rights to the succession of a deceased person are transmitted to his heirs from the moment of his death, and the inheritance includes all property, rights, and obligations of the decedent that are not extinguished by death. The Court applied this principle to hold that the heirs of Jose V. Ramirez acquired his undivided share in the co-owned property from the moment of his death, making them co-owners entitled to exercise the right of legal redemption.

• Right of legal redemption (retracto de comuneros) — Under Article 1620 of the Civil Code, a co-owner of a thing may exercise the right of redemption when the shares of all the other co-owners or of any of them are sold to a third person. The Court held that a co-owner of an undivided share is necessarily a co-owner of the whole, and the right of redemption vested exclusively in consideration of the redemptioner's share, which the law nowhere takes into account. The right vests in the heirs individually, not derivatively from the decedent, when the sale to a stranger is perfected.

• Exclusive notice requirement for legal redemption — Under Article 1623 of the Civil Code, the 30-day period for legal redemption runs exclusively from written notice given by the vendor, not the vendee. The Court held that the Philippine legislature deliberately selected a particular method of giving notice, and that method must be deemed exclusive. The vendor's notice is operative because the seller is in the best position to know who are his co-owners, and notice by the seller removes all doubts as to the fact, perfection, and validity of the sale.

• "By law, the rights to the succession of a deceased persons are transmitted to his heirs from the moment of his death, and the right of succession includes all property rights and obligations that survive the decedent." — This passage articulates the fundamental rule of succession that underpins the Court's holding that Butte became a co-owner from the moment of Ramirez's death.

• "The redemption right vested in the heirs originally, in their individual capacity, they did not derivatively acquire it from their decedent, for when Jose V. Ramirez died, none of the other co-owners of the Sta. Cruz property had as yet sold his undivided share to a stranger." — This passage explains why the right of legal redemption did not form part of the decedent's estate and vested in the heirs individually, not through the judicial administrator.

• "The text of Article 1623 clearly and expressly prescribes that the thirty days for making the redemption are to be counted from notice in writing by the vendor." — This passage states the controlling rule for computing the redemption period, which was decisive in determining that Butte's redemption was timely.

• "The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The seller of an undivided interest is in the best position to know who are his co-owners that under the law must be notified of the sale." — This passage explains the policy rationale for the exclusive notice requirement under Article 1623, which the Court found to be deliberate legislative choice.

• Wampler vs. Lecompte, 150 Atl. 458 (affd. in 75 Law Ed. [U.S.] 275) — Cited to support the proposition that statutory provisions requiring notice by a particular person must be deemed exclusive, and that courts may assume a state of facts existed that warranted the legislature in so legislating.
• Payne vs. State, 12 S.W. [2d] 528 — Cited in support of the principle that when a statute prescribes a particular method of giving notice, that method must be deemed exclusive.

• Article 1620, Civil Code of the Philippines — Provides that a co-owner of a thing may exercise the right of redemption when the shares of all the other co-owners or of any of them are sold to a third person, and that if the price is grossly excessive, the redemptioner shall pay only a reasonable one. Applied to hold that Butte, as a co-owner, was entitled to redeem the share sold to a stranger.
• Article 1623, Civil Code of the Philippines — Provides that the right of legal redemption shall not be exercised except within thirty days from notice in writing by the respective vendor, and that the deed of sale shall not be registered unless accompanied by an affidavit of the vendor that he has given written notice to all possible redemptioners. Applied to hold that the 30-day period runs exclusively from the vendor's notice.
• Article 776, Civil Code of the Philippines — Provides that the inheritance includes all the property, rights, and obligations of a person which are not extinguished by his death. Applied to establish that the heirs acquired the decedent's rights from the moment of death.
• Article 777, Civil Code of the Philippines — Provides that the rights to the succession are transmitted from the moment of the death of the decedent. Applied to establish that Butte became a co-owner from the moment of Ramirez's death.
• Article 947, Civil Code of the Philippines — Provides that the legatee or devisee acquires a right to pure and simple legacies or devisees from the death of the testator. Applied to establish Butte's right as testamentary heir.
• Article 13, Civil Code of the Philippines — Provides the rule for computing periods, excluding the first day and including the last. Applied to compute the 30-day redemption period from December 16, 1958 to January 15, 1959.
• Article 42, Civil Code of the Philippines — Provides that death extinguishes civil personality and all further juridical capacity to acquire or transmit rights. Applied to explain why Ramirez could not acquire the right of redemption eight years after his death.
• Section 3, Rule 85, Rules of Court — Provides that the administrator has the right to possession of the real and personal estate of the deceased as needed for payment of debts and expenses of administration. Distinguished to show that such rights do not include the right of legal redemption.
• Section 2, Rule 88, Rules of Court — Provides that the administrator may bring or defend actions for the recovery or protection of the property or rights of the deceased. Distinguished to show that the administrator's powers do not include the right of legal redemption.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, and Dizon, JJ., concurred. Paredes and De Leon, JJ., took no part.