CO-OWNERSHIP

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TITLE III. CO-OWNERSHIP

 

WHAT IS 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 special provisions, co-ownership shall be governed by the provisions of this Title.

Characteristics of co-ownership:

  1. Plurality of subjects or owners
  2. Unity of Object
  3. Recognition of ideal shares/physical whole divided into ideal shares
  4. Each share is definite in amount but is not physically segregated from the rest.
  5. Regarding the physical whole, each co-owner must respect each other in the common use, enjoyment, or preservation of the physical whole.
  6. Regarding the ideal share, each co-owner holds absolute control over the same.
  7. Not a juridical person
  8. Co-owner is in a sense a trustee for other co-owners.

WHAT GOVERNS CO-OWNERSHIP?

  1. Contract
  2. Special laws
  3. Provisions on co-ownership in the civil code

HOW DOES CO-OWNERSHIP DIFFER FROM PARTNERSHIP

CO-OWNERSHIP

PARTNERSHIP

 

1. No legal personality

has legal or juridical personality

 
     

2. created by contract or by other things

created by contract only (express/implied)

     

3. purpose-collective enjoyment

purpose is profit

 
     

4. agreement for it to exist for 10 years is valid. (if

there is no term limit set by the law

 

more than 10 years, the excess is void)

   
     

20 years is the maximum if imposed by the testator

   

or the donee of the common property.

   
     

5. as a rule, no mutual representation

as a rule, there is mutual representation

     

6. not dissolved by death or incapacity of co-owner

is dissolved by the death or incapacity of

 

partner

 
     

7. can dispose of his share without consent of others

cannot substitute another as partner in his

 

place without consent of the others.

 
     

8. profits must always depend on proportionate

profits may be stipulated upon

 

shares.

   

                                                     

HOW DOES CO-OWNERSHIP DIFFER FROM CONJUGAL PARTNERSHIP?

CO-OWNERSHIP

CONJUGAL PARTNERSHIP

1.      may arise by an ordinary contract

Arises only because of the marriage contract

2.      sex of the co-owners is immaterial

Male and female

3.      co-owners maybe two or more

Always two

4.      profits are proportional to respective

interests.

Profits are generally 50-50 unless a contrary stipulation is in a marriage settlement

5.      death of one does not dissolve the co-owneship

Death of either husband or wife dissolves the conjugal partnership

6.      generally all the co-owners administer

Generally, the husband is the administrator

7.      co-ownership is discouraged by law

Encouraged by law to provide for better family solidarity.

WHAT RULES GOVERN THE IDEAL SHARES OF CO-OWNERS?

Art. 485. The shares 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 co-ownership shall be presumed equal, unless the contrary is proved.

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.

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

            Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common.

WHAT RIGHT DOES A CO-OWNER HAVE IN THE USE OF THE PROPERTY OWNED IN COMMON? MAY ANY ONE OF THE CO-OWNERS CHANGE THE PURPOSE OF THE CO-OWNERSHIP?  

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 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.

WHO AMONG THE PARTNERS HAS THE RIGHT TO BRING AN ACTION FOR EJECTMENT?

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

WHAT IS THE SHARE OF THE CO-OWNERS IN THE BENEFITS AND CHARGES?

Art. 485. The shares 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 co-ownership shall be presumed equal, unless the contrary is proved.

  • IN PROPORTION TO THEIR RESPECTIVE INTERESTS
  • CONTRARY STIPULATION IS VOID

WHAT IS THE RIGHT OF THE CO-OWNERS WITH RESPECT TO THE EXPENSES OF PRESERVATION OF THE COMMON PROPERTY?

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. Any one of the latter may excempt 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.

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.

MAY A CO-OWNER IMPROVE OR EMBELLISH THE THING OWNED IN COMMON (ACTS OF ADMINISTRATION)?

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.

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 preceeding provisions shall apply only to the part owned in common.

HOW IS CO-OWNERSHIP EXTINGUISHED?

  1. Acquisition of the common property by one person.
  2. merger or consolidation in one co-owner of all the shares of the other co-owners
  3. destruction or lose of the common property
  4. prescription in favor of co-owner or a third person

WHAT IS PARTITION?

      

Article 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 co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

HOW IS PARTITION EFFECTED?

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.

  • EXTRAJUDICIAL (AGREEMENT OF THE PARTIES)
  • JUDICIAL PROCEEDINGS

DOES THE RIGHT OF THE CO-OWNERS TO DEMAND PARTITION PRESCRIBED?

Article 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 co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

MAY A CO-OWNER ACQUIRE PROPERTY OWNED IN COMMON THROUGH PRESCRIPTION?

Art. 494 (last paragraph) No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

WHAT ARE THE LIMITATIONS ON THE RIGHT OF THE CO-OWNERS TO DEMAND PARTITION?

Article 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 co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

Art. 495. Notwithstanding the provisions of the preceeding 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 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.

  1. Partition is prohibited by agreement of co-owners for a period not exceeding ten years.
  2. Partition is prohibited by donor/testator for a period not exceeding twenty years.
  3. Partition is prohibited by law, i.e. conjugal partnership, family home, party walls
  4. Property is essentially indivisible or physical partition would render property useless.

WHAT ARE THE RIGHTS OF THE CREDITORS OR ASSIGNEES OF THE CO-OWNERS IN CASE OF PARTITION?

Art. 497. The creditors or assignees of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence. But they cannot impugn any partition already executed, unless there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to maintain its validity.

WHAT ARE THE RIGHTS OF THIRD PERSONS IN CASE OF PARTITION?

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 co-ownership shall also remain in force, notwithstanding the partition.

WHAT ARE THE EFFECTS OR CONSEQUENCES OF 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.

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.

WHAT IS PERPENDICULAR CO-OWNERSHIP?

Art. 490. Whenever the different stories of a house belongs to different owners, if the titles of ownership do not specify the terms under which they should contribute to the necessary expenses and there exists no agreement on the subject, the following rules shall be observed:

  1. The main and party walls, the roof and the other things used in common, shall be preserved at the expense of all the owners in proportion to the value of the story belonging to each:
  2. Each owner shall bear the cost of maintening the floor of his story; the floor of the entrance, front door, common yard and sanitary works common to all, shall be maintained at the expense of all the owners prorate;
  3. The stairs from the entrance to the first story shall be maintained at the expense to the first story shall be maintained at the expense of all the owners pro rata, with the exception of the owner of the ground floor; the stairs from the first to the second story shall be preserved at the expense of all, except the owner of the ground floor and the owner of the first story; and so on successively.

SUMMARY OF CONSEQUENCES OF CO-OWENRSHIP?

  1. Each co-owner does not own a definite portion of the physical whole.
  2. Each co-owner cannot sell the entire thing. If one of them sells, sale is valid only as to his rightful share.
  3. Each co-owner can sell his ideal share, even without permission of others provided no personal rights are involved.
  4. Other co-owners do not have a say on who should buy the ideal share sold by a co-owner, subject only to their right of redemption.
  5. Each co-owner may bring an action for ejectment for the benefit of the co-ownership.
  6. Share of each co-owner in the fruits and charges is proportionate to his ideal share. Contrary agreement is void.
  7. Share is presumed equal unless contrary is proven.
  8. A larger share does not mean larger right to use property.
  9. Each co-owner may use property as long as he does not prejudice the interest of the co-ownership and does not prevent others from its use.