Property Provisions and Case Digest
Topic: Co-Ownership
Article 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. (392)
Implied Trust:Article 1452. If two or more
persons agree to purchase property and by
common consent the legal title is taken in the
name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in
proportion to the interest of each.
Partition: Article 1078. Where there are two or
more heirs, the whole estate of the decedent is,
before its partition, owned in common by such
heirs, subject to the payment of debts of the
deceased.
Article 1753. The law of the country to which the
goods are to be transported shall govern the
liability of the common carrier for their loss,
destruction or deterioration.
Article 573. Whenever the usufruct includes
things which, without being consumed, gradually
deteriorate through wear and tear, the
usufructuary shall have the right to make use
thereof in accordance with the purpose for which
they are intended, and shall not be obliged to
return them at the termination of the usufruct
except in their condition at that time; but he shall
be obliged to indemnify the owner for any
deterioration they may have suffered by reason of
his fraud or negligence.
Article 472. If by the will of their owners two
things of the same or different kinds are mixed, or
if the mixture occurs by chance, and in the latter
case the things are not separable without injury,
each owner shall acquire a right proportional to
the part belonging to him, bearing in mind the
value of the things mixed or confused. (381)
Article 348. The adopter may petition the court
for revocation of the adoption in any of these
cases:
(1) If the adopted person has attempted
against the life of the adopter;
(2) When the adopted minor has
abandoned the home of the adopter for
more than three years;
(3) When by other acts the adopted
person has definitely repudiated the
adoption.
Eastment of Party Wall - Article 658. The
easement of party wall shall be governed by the
provisions of this Title, by the local ordinances
and customs insofar as they do not conflict with
the same, and by the rules of co-ownership.
(571a)
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.
Article 1778. A partnership of all present
property is that in which the partners contribute
all the property which actually belongs to them to
a common fund, with the intention of dividing the
same among themselves, as well as all the profits
which they may acquire therewith.
Article 1780. A universal partnership of profits
comprises all that the partners may acquire by
their industry or work during the existence of the
partnership.
Article 1775. Associations and societies, whose
articles are kept secret among the members, and
wherein any one of the members may contract in
his own name with third persons, shall have no
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Property Provisions and Case Digest
Topic: Co-Ownership
juridical personality, and shall be governed by the
provisions relating to co-ownership.
FAMILY CODE:
Property Regime of Unions Without Marriage
Art. 147. When a man and a woman who are
capacitated to marry each other, live exclusively
with each other as husband and wife without the
benefit of marriage or under a void marriage, their
wages and salaries shall be owned by them in
equal shares and the property acquired by both of
them through their work or industry shall be
governed by the rules on co-ownership.
In the absence of proof to the contrary, properties
acquired while they lived together shall be
presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by
them in equal shares. For purposes of this Article,
a party who did not participate in the acquisition
by the other party of any property shall be
deemed to have contributed jointly in the
acquisition thereof if the former's efforts
consisted in the care and maintenance of the
family and of the household.
Neither party can encumber or dispose by acts
inter vivos of his or her share in the property
acquired during cohabitation and owned in
common, without the consent of the other, until
after the termination of their cohabitation.
When only one of the parties to a void marriage is
in good faith, the share of the party in bad faith in
the co-ownership shall be forfeited in favor of
their common children. In case of default of or
waiver by any or all of the common children or
their descendants, each vacant share shall belong
to the respective surviving descendants. In the
absence of descendants, such share shall belong to
the innocent party. In all cases, the forfeiture shall
take place upon termination of the cohabitation.
(144a)
Art. 148. In cases of cohabitation not falling under
the preceding Article, only the properties acquired
by both of the parties through their actual joint
contribution of money, property, or industry shall
be owned by them in common in proportion to
their respective contributions. In the absence of
proof to the contrary, their contributions and
corresponding shares are presumed to be equal.
The same rule and presumption shall apply to
joint deposits of money and evidences of credit.
If one of the parties is validly married to another,
his or her share in the co-ownership shall accrue
to the absolute community or conjugal
partnership existing in such valid marriage. If the
party who acted in bad faith is not validly married
to another, his or her shall be forfeited in the
manner provided in the last paragraph of the
preceding Article.
The foregoing rules on forfeiture shall likewise
apply even if both parties are in both faith.
Art. 90. The provisions on co-ownership shall
apply to the absolute community of property
between the spouses in all matters not provided
for in this Chapter.
CASES:
1. PARDEL VS BARTOLOME
FACTS: Appeal by bill of exceptions.
Spouses Miguel Ortiz and Calixta Felin died in
Vigan, Ilocos Sur, in 1875 and 1882, respectively.
Prior to her death, Calixta, executed, on August 17,
1876, a nuncupative will in Vigan, whereby she
made her four children, named Manuel, Francisca,
Vicenta, and Matilde, surnamed Ortiz y Felin, her
sole and universal heirs of all her property.
Manuel and Francisca were already deceased,
leaving Vicenta and Matilda as heirs.
In 1888, the defendants (Matilde and Gaspar),
without judicial authorization, nor friendly or
extrajudicial agreement, took upon themselves the
administration and enjoyment of the properties
left by Calixta and collected the rents, fruits, and
products thereof, to the serious detriment of
Vicentas interest. Despite repeated demands to
divide the properties and the fruits accruing
therefrom, Sps Gaspar and Matilde had been
delaying the partition and delivery of the said
properties by means of unkempt promises and
other excuses.
Vicenta filed a petition for partition with damages
in the RTC.
RTC decision: absolved Matilde from payment of
damages. It held that the revenues and the
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Property Provisions and Case Digest
Topic: Co-Ownership
expenses were compensated by the residence
enjoyed by the defendant party, that no losses or
damages were either caused or suffered, nor
likewise any other expense besides those
aforementioned,
Counsel for Matilde took an exception to the
judgment and moved for a new trial on the
grounds that the evidence presented did not
warrant the judgment rendered and that the latter
was contrary to law. That motion was denied by
the lower court. Thus, this petition.
ISSUE: WON a co-owner is required to pay for rent
in exclusively using the co-owned property.
RULING: Article 394 of the Civil Code prescribes:
Each co-owner may use the things owned in
common, provided he uses them in accordance
with their object and in such manner as not to
injure the interests of the community nor prevent
the co-owners from utilizing them according to
their rights.
Matilde Ortiz and her husband occupied the upper
story, designed for use as a dwelling, in the house
of joint ownership; but the record shows no proof
that, by so doing, the said Matilde occasioned any
detriment to the interests of the community
property, nor that she prevented her sister
Vicenta from utilizing the said upper story
according to her rights. It is to be noted that the
stores of the lower floor were rented and an
accounting of the rents was duly made to the
plaintiffs.
Each co-owner of realty held pro indiviso
exercises his rights over the whole property and
may use and enjoy the same with no other
limitation than that he shall not injure the
interests of his coowners, for the reason that, until
a division be made, the respective part of each
holder can not be determined and every one of the
coowners exercises together with his other
coparticipants, joint ownership over the pro
indiviso property, in addition to his use and
enjoyment of the same.
As the hereditary properties of the joint
ownership of the two sisters, Vicenta Ortiz,
plaintiff, and Matilde Ortiz, defendant, were
situated in the Province of Ilocos Sur, and were in
the care of the last named, assisted by her
husband, while the plaintiff Vicenta with her
husband was residing outside of the said province
the greater part of the time between 1885 and
1905, when she left these Islands for Spain, it is
not at all strange that delays and difficulties
should have attended the efforts made to collect
the rents and proceeds from the property held in
common and to obtain a partition of the latter,
especially during several years when, owing to the
insurrection, the country was in a turmoil; and for
this reason, aside from that founded on the right
of co-ownership of the defendants, who took upon
themselves the administration and care of the
property of joint tenancy for purposes of their
preservation and improvement, these latter are
not obliged to pay to the plaintiff Vicenta one-half
of the rents which might have been derived from
the upper story of the said house on Calle Escolta,
and, much less, because one of the living rooms
and the storeroom thereof were used for the
storage of some belongings and effects of common
ownership between the litigants. The defendant
Matilde, therefore, in occupying with her husband
the upper floor of the said house, did not injure
the interests of her coowner, her sister Vicenta,
nor did she prevent the latter from living therein,
but merely exercised a legitimate right pertaining
to her as a coowner of the property.
2. GATCHALIAN v. COMMISSIONER OF
INTERNAL REVENUE
FACTS:
On December 15, 1934, the plaintiffs, all 15
of them, each contributed in order to buy a
sweepstakes ticket worth Php 2.00.
That immediately thereafter but prior to
December 16, 1934, plaintiffs purchased, in the
ordinary course of business, from one of the duly
authorized agents of the National Charity
Sweepstakes Office one ticket bearing No. 178637
for the sum of two pesos (P2) and that the said
ticket was registered in the name of Jose
Gatchalian and Company.
The above-mentioned ticket bearing No.
178637 won one of the third prizes in the amount
of P50,000 and that the corresponding check
covering the above-mentioned prize of P50,000
was drawn by the National Charity Sweepstakes
Office in favor of Jose Gatchalian & Company
against the Philippine National Bank, which check
was cashed during the latter part of December,
1934 by Jose Gatchalian & Company
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Thereafter, Jose Gatchalian was required by
income tax examiner Alfredo David to file the
corresponding income tax return covering the
prize won by Jose Gatchalian & Company and that
on December 29, 1934
The defendant made an assessment against
Jose Gatchalian & Company requesting the
payment of the sum of P1,499.94 to the deputy
provincial treasurer of Pulilan, Bulacan. Tthe
plaintiffs requested exemption from the payment
of the income tax but it was rejected. The plaintiffs
paid in protest the tax assessment given to them.
ISSUE: Whether the plaintiffs formed a
partnership, thus not exempted from paying
income tax
HELD: Yes, the plaintiffs formed a partnership
The Supreme Court held that according to the
stipulated facts the plaintiffs organized a
partnership of a civil nature because each of them
put up money to buy a sweepstakes ticket for the
sole purpose of dividing equally the prize which
they may win, as they did in fact in the amount of
P50,000.
The partnership was not only formed, but
upon the organization thereof and the winning of
the prize, Jose Gatchalian personally appeared in
the office of the Philippine Charity Sweepstakes, in
his capacity as co-partner, as such collected the
prize, the office issued the check for P50,000 in
favor of Jose Gatchalian and company, and the said
partner. in the same capacity, collected the said
check.
Having organized and constituted a
partnership of a civil nature, the said entity is the
one bound to pay the income tax which the
defendant collected under the aforesaid section 10
(a) of Act No. 2833, as amended by section 2 of Act
No. 3761.
3. Siari Valley (Ranch/Cattle)
4. Punsalan vs. Boon
Liat Plaintiffs (21 men) and one of the defendants
named Ahamad, found a whale and quartered it.
They found a great quantity of ambergris in its
abdomen and placed it in three sacks (2 sacks
were full and the third is only half-full). The sacks
were taken to the house of Maharaja Butu and left
it to the care of Ahamad. All 22 persons made an
agreement that they were to be the sole owners of
the ambergris and that none of them could sell it
without the consent of the rest. Some went to
Zamboanga to sell the ambergris and eventually
sold a half sack. Meanwhile, Mr. Henry Teck
offered to purchase the ambergris remaining with
Ahamad, who refused to sell. Mr. Teck insisted
telling Ahamad not to be afraid of his companions
and that he would answer for whatever might
happen. With this promise of protection, Ahamad
agreed to sell the amber.
Defendants should deliver to the plaintiffs the
amber in question or in default thereof, to pay
them the value of the amber or P 60,000. There
was an agreement between the co-owners not to
sell the amber without the consent of all. Both
sales having been made without the consent of all
owners, the same have no effect, except as to the
portion pertaining to those who made them.
5. TWIN TOWERS CONDOMINIUM
CORPORATION v. CA, ALS MANAGEMENT &
DEVELOPMENT CORPORATION, ANTONIO
LITONJUA and SEC GR No. 123552 February 27,
2003
FACTS:
Twin Towers filed a complaint w/ SEC against ALS
and Litonjua
Allegation:
o Twin Towers non-stock corp
organized for the sole purpose of
for the sole purpose of holding
title to and managing the
common areas of Twin Towers
Condominium
o Membership in petitioner
corporation is compulsory and
limited to all registered owners
of units in the Condominium
o ALS registered owner of Unit
No. 4-A
o Litonjua, corporate president of
ALS, occupies it
o It collects from all its members
quarterly assessments and dues
as authorized by its Master Deed
and By-Laws
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Property Provisions and Case Digest
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o Records of account show that
ALS failed to pay assessments
and dues starting 1986 up to
the first quarter of 1988
Prayer: ALS and Litonjua be ordered to
pay solidarily the unpaid condominium
assessments and dues with interests and
penalties covering the four quarters of
1986 and 1987 and the first quarter of
1988.
ALS and Litonjua filed a joint Answer w/
Counterclaim
Assertion: No cause of action
o ALS and not Litonjua is the
registered owner of the Unit and
member of petitioner exonerates
Litonjua from any liability to
petitioner.
o While ALS is a juridical person
that cannot by itself physically
occupy the Unit, the natural
person who physically
occupies the Unit does not
assume the liability of ALS to
petitioner. Neither does the
agent who acts for the
corporation become
personally liable for the
corporations obligation
Claims damages:
o For preventing ALS, its agents
and guests from using the
parking space, swimming pool,
gym, and other facilities of the
Condominium
o Litonjua also claims damages for
including his name list of
delinquent unit owners which
was posted on petitioners
bulletin board
SECs Decision:
Twin Towers to pay Litonjua moral and
exemplary damages
ALS to pay the assessment and dues
However the SEC Hearing Officer did not
determine the exact amount to be paid by
ALS because petitioner failed to lay down
the basis for computing the unpaid
assessments and dues
Both parties filed their appeals to the SEC En Banc.
SEC En Bancs Decision: nullified the award of
damages and attorneys fees to Litonjua on the
ground that the SEC had no jurisdiction over
Litonjua
There is no intra-corporate
relationship between petitioner and
Litonjua who is not the registered
owner of the Unit and thus, not a
member of petitioner
Petitioner could not invoke the doctrine
of piercing the veil of ALS corporate
fiction since disregarding the corporate
entity is a function of the regular courts
It remanded the case to the Hearing
Officer to determine the value of the
services petitioner failed to render to
ALS because of the latters non-use of
the Condominium facilities, and the
value of these services could be
deducted from the unpaid assessments
and dues that ALS owes petitioner
Twin Towers appealed to the CA.
CAs Decision:
It found the petition defective for failure
to contain a sworn certification of
non-forum shopping
Affirmed the decision of the SEC en banc
that there is no ground to pierce the veil
of ALS corporate fiction
Sustained the claim of petitioner against
ALS for unpaid assessments and dues but
found that petitioner failed to
substantiate by preponderance of
evidence the basis for computing the
unpaid assessments and dues
Twin Towers is not expressly authorized
by its Master Deed and By-Laws to
prohibit delinquent members from using
the facilities of the Condominium
Interest and penalty charges - exorbitant
or grossly excessive
ISSUES/SC RULING:
1) W/N Petitioner can collect assessments and
dues despite its denial to ALS of the use of the
Condominium facilities pursuant to House Rule
26.3 YES!
ALS asserts that the denial by petitioner to ALS
and Litonjua of the use of the Condominium
facilities deprived petitioner of any right to
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Property Provisions and Case Digest
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demand from ALS payment of any condominium
assessments and dues. Stated another way, ALS
advances the argument that a contracting party
who is guilty of first breaching his obligation is
excused from such breach if the other party
retaliates by refusing to comply with his own
obligation.
This obviously is not the law. In reciprocal
obligations, when one party fulfills his
obligation, and the other does not, delay by the
other begins. Moreover, when one party does not
comply with his obligation, the other party does
not incur delay if he does not perform his own
reciprocal obligation because of the first partys
non-compliance.
Thus, before ALS incurred its arrearages,
petitioner allowed ALS to use the facilities.
However, ALS subsequently defaulted and thus
incurred delay. It was only then that petitioner
disallowed ALS and Litonjua from using the
facilities. Clearly, petitioners denial to ALS of
the Condominium facilities, after ALS had
defaulted, does not constitute a valid ground
on the part of ALS to refuse paying its
assessments and dues.
House Rule 26.3 is valid. It is expressly
empowered by the Condominium Act,
petitioners ByLaws and the Master Deed. The
Condominium Act clearly provides that the Master
Deed may expressly empower the management
body, petitioner in the instant case, to enforce all
provisions in the Master Deed and Declaration of
Restrictions. Pursuant to Section 9 (a) (1) and (3)
of the Condominium Act, the Master Deed
expressly authorizes petitioner to exercise all the
powers granted to the management body by the
Condominium Act, petitioners Articles of
Incorporation and By-Laws, the Master Deed, and
the Corporation Code.
Petitioners ByLaws expressly authorize
petitioners Board of Directors to promulgate
rules and regulations on the use and
enjoyment of the common areas. Moreover,
House Rule 26.3, which prohibits delinquent
members from using the common areas, is
necessary to ensure maintenance of the common
areas. Petitioners purpose in enacting House Rule
26.3 is to enforce effectively the provisions of the
Master Deed. House Rule 26.3 is well within the
powers of petitioner to adopt as the same is
reasonably necessary to attain the purpose for
which both petitioner and the Condominium
project were created.
Petitioner would be unable to carry out its
main purpose of maintaining the
Condominium common areas and facilities if
members refuse to pay their dues and yet
continue to use these areas and facilities. To
impose a temporary ban on the use of the
common areas and facilities until the
assessments and dues in arrears are paid is a
reasonable measure that petitioner may
undertake to compel the prompt payment of
assessments and dues.
2) W/N ALS can validly offset against its unpaid
assessments and dues the value of the services
withheld by petitioner NO!
ALS has no right to a reduction of its assessments
and dues to the extent of its non-use of the
Condominium facilities. ALS also cannot offset
damages against its assessments and dues
because ALS is not entitled to damages for
alleged injury arising from its own violation of
its contract. Such a breach of contract cannot
be the source of rights or the basis of a cause of
action. To recognize the validity of such claim
would be to legalize ALS breach of its contract.
Also, ALS claim for unrendered repair services
barred by estoppel was never raised before the
SEC Hearing Officer or the SEC en banc. The issue
on these alleged unrendered repairs, which
supposedly caused ALS Unit to deteriorate, was
raised for the first time on appeal. The Court of
Appeals did not pass upon the same. As this claim
was a separate cause of action, which should have
been raised in ALS Answer with Counterclaim,
ALS failure to raise this claim is deemed a waiver
of the claim.
3) W/N a remand of the case to the proper trial
court is necessary to determine the amounts
involved
While the SC sustained the ruling of the CA, it
ruled that this case can no longer be remanded to
the SEC Hearing Officer. Republic Act No. 8799
transferred SECs jurisdiction over cases involving
intra-corporate disputes to courts of general
jurisdiction or the appropriate regional trial
courts.
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Property Provisions and Case Digest
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Based on the Resolution issued by this Court in
AM No. 00-8-10-SC, the Court Administrator and
the Securities and Exchange Commission should
cause the transfer of the records of SEC-AC Nos.
377 and 378 to the proper regional trial court for
further reception of evidence and computation of
the correct amount of assessments and dues that
ALS shall pay to petitioner.

4) W/N the penalties prescribe din House Rule

26.2 are grossly excessive and exorbitant

House Rule 26.2 clearly provides for a 24%

interest and an 8% penalty, both running
annually, on the total amount due in case of failure
to pay.

To reiterate, the Condominium Act expressly

provides that the Master Deed may empower
the management body of the Condominium to
enforce the provisions of the declaration of
restrictions. The Master Deed authorizes
petitioner, as the management body, to
enforce the provisions of the Master Deed in
accordance with petitioners By-Laws. Thus,
petitioners Board of Directors is authorized to
determine the reasonableness of the penalties and
interests to be imposed against those who violate
the Master Deed. Petitioner has validly done this
by adopting the House Rules.

The Master Deed binds ALS since the Master Deed

is annotated on the condominium certificate of
title of ALS Unit. The Master Deed is ALS
contract with all Condominium members who
are all co-owners of the common areas and
facilities of the Condominium. Contracts have
the force of law between the parties and are to be
complied with in good faith. From the moment the
contract is perfected, the parties are bound to
comply with what is expressly stipulated as well
as with what is required by the nature of the
obligation in keeping with good faith, usage and
the law. Thus, when ALS purchased its Unit
from petitioner, ALS was bound by the terms
and conditions set forth in the contract,
including the stipulations in the House Rules of
petitioner, such as House Rule 26.2.

An award of attorneys fees and expenses of

litigation is proper under the instances provided
for in Article 2208 of the Civil Code.

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