Lopez vs. Cuaycong et al.

A contract purporting to sell a specific, concrete portion of co-owned property prior to partition is not void; it is valid and binding as an alienation of the seller's abstract and undivided share in the community property, subject to the ultimate result of the partition.

The case stems from a dispute over the validity of a sale of a specific parcel of land (Lot 178-B) located within a larger hacienda owned in common by the widow of Cuaycong, her adult children, and three minor daughters. The widow and adult children sold this specific lot to Lopez Sugar Central Mill Co., Inc. (the Intervenor) without the participation of the minors and before the hacienda had been legally partitioned. The Intervenor subsequently built a distillery on the lot. Previous court actions had variously declared the sale void (partially or entirely) and ordered the removal of the buildings, prompting this specific resolution on a motion for reconsideration.

• A hacienda was co-owned by Magdalena Gonzaga Vda. de Cuaycong (widow), her adult children, and three minor daughters (Maria Cristina, Josefina, and Anita).
• The widow and her adult children executed a deed of sale (Exhibit D) transferring a specific, concrete portion of the hacienda, designated as Lot 178-B (10,832 square meters), to Lopez Sugar Central Mill Co., Inc.
• The three minor daughters did not consent to the sale and did not participate in the transaction.
• At the time of the sale, the hacienda had not yet been partitioned among the co-heirs.
• Lopez Sugar Central Mill Co., Inc. constructed a distillery building and other improvements on Lot 178-B.
• In a prior resolution (July 20, 1940), the Supreme Court had declared the sale void in its entirety because the sellers alienated a definite part of the property while only holding an abstract undivided share, and ordered the removal of the buildings.

• The Intervenor (Lopez Sugar Central) argued that the deed of sale should not be declared void in its entirety.
• They contended that the order to remove the buildings constructed on Lot 178-B should be reconsidered.
• They implicitly argued that they acquired valid rights from the consenting adult co-owners despite the lack of partition.

• N/A

• Procedural Issues:
  • N/A
• Substantive Issues:
  • Was the consent of the three minor daughters necessary for the validity of the sale executed by the other co-owners?
  • What rights did the Intervenor acquire from the sale of a specific portion of land prior to partition?
  • Should the distillery building and improvements constructed on Lot 178-B be removed by the Intervenor?

• Procedural:
  • N/A
• Substantive:
  • The Court ruled that the consent of the three minor daughters was not necessary for the validity of the sale regarding the shares of the sellers. Under Article 399 of the Civil Code, each co-owner has full ownership of their part and may alienate their undivided or ideal share.
  • The Court held that while the sale purported to transfer a concrete portion (Lot 178-B), which was technically improper before partition, the contract is not void. It is valid as a transfer of the sellers' abstract share equivalent in value to the 10,832 square meters sold. The Intervenor's right to the specific lot is subject to the outcome of the partition.
  • The Court cancelled the order to remove the buildings. Since the Intervenor is a valid co-owner (of an abstract share), they are considered a builder in good faith. If Lot 178-B is not adjudicated to the Intervenor in the partition, the rights regarding the improvements will be governed by Article 361 of the Civil Code (indemnification).

• Alienation of Co-owned Property — Under Article 399 of the Civil Code, a co-owner has the absolute right to alienate, assign, or mortgage their ideal, undivided share in the common property without the consent of the other co-owners. In this case, the Court applied this doctrine to validate the sale of a specific portion by treating it as a sale of the seller's abstract share.
• Quando res non valet ut ago, valeat quantum valere potest — A maxim meaning "When a thing is of no force as I do it, it shall have as much force as it can have." The Court invoked this to interpret the intention of the sellers to convey what they legally could (their abstract share) even though they purported to convey a specific portion.
• Builder in Good Faith — A principle protecting those who build on land believing they have a right to do so. The Court applied this to the Intervenor, ruling that as a co-owner awaiting partition, they built the distillery in good faith and cannot be compelled to remove it summarily.

• "Each co-owner may alienate his undivided or ideal share in the community."
• "The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so."
• "Quando res non valet ut ago, valeat quantum valere potest."

• Sentence of December 29, 1905 (Supreme Tribunal of Spain) — Cited to affirm that the alienation by a co-owner of a concrete part of the property does not imply the cessation of the community nor is it void; its effect is limited to the portion adjudicated in the subsequent partition.
• Teves de Jacosalem vs. Nicolas Rafols — Cited by Justice Moran in his concurrence as the precedent providing the doctrine analogous to the result of this case.

• Civil Code Article 392 — Defines co-ownership as existing whenever the ownership of a thing or right belongs undivided to different persons.
• Civil Code Article 399 — Provides that every co-owner has full ownership of their part and may alienate it, though the effect is limited to the share allotted in the division upon termination of co-ownership.
• Civil Code Article 348 — Defines the right of ownership; used to compare the absolute nature of sole ownership with co-ownership.
• Civil Code Article 400 — States that no co-owner is obliged to remain in the community and may demand partition at any time; applied to confirm the Intervenor's right to demand partition.
• Civil Code Article 361 — Governs the rights of a builder in good faith (right to indemnity or to buy the land); applied to the Intervenor regarding the improvements if the specific lot is not assigned to them in partition.
• Rules of Court, Rule 71, Section 4 — Directs commissioners on partition to set apart real property in a way most advantageous and equitable, having regard to improvements; cited to suggest that commissioners should likely assign Lot 178-B to the Intervenor.

• Moran, J. — Concurred in the result, specifically noting that the decision is analogous to the doctrine established in the case of Teves de Jacosalem vs. Nicolas Rafols.