Case Digest: CORINTHIAN REALTY, INC. v. HON. COURT OF APPEALS, et al.

CORINTHIAN REALTY, INC. v. HON. COURT OF APPEALS, et al.

394 SCRA 260 (2002)

A co-owner who sells the entire property without obtaining the consent of the other co-owners does not render the sale null and void. The sale will affect only his own share but not those of the other co-owners who did not consent to the sale.

A parcel of land situated in Las Pinas is co-owned by Emilio Martin and Matilde Martin (Martins) together with private respondent Delfin Guinto (Delfin), Teofilo Guinto, Prudencio Guinto and Margarita Guinto (Guintos) and the heirs of Spouses Tomas de Leon and Francisca Medina (Heirs of de Leon). The Martins and Guintos entered into a Deed of Conditional Sale with Corinthian Realty Inc. (Corinthian). However, Delfin and the Heirs of de Leon did not affix their signature in the said instrument although their names appeared therein. Before the execution of the Deed of Conditional Sale, Corinthian paid several amounts to Martins and Guintos. Corinthian however failed to pay the balance of the purchase price within ninety (90) days, as stipulated.

The action for specific performance was filed by Corinthian against the Martins and Guintos for not executing a Deed of Absolute Sale. The Regional Trial Court of Makati (RTC) dismissed the complaint concluding that it was Corinthian who violated the deed. The Court of Appeals affirmed the RTC decision. Hence, the filing of this petition.

ISSUE:

1. Whether or not the Court of Appeals erred in holding that the Deed of Conditional Sale was entered into with the co-owners individually
2. Whether or not the Court of Appeals erred in holding that the payment of the purchase price is a suspensive condition to the execution of the Deed of Absolute Sale, hence Petitioner Corinthian cannot file an action for specific performance

HELD:

First Issue: Deed of Conditional Sale was entered into Individually

A co-owner has the right to sell his undivided share. If he sells the entire property without obtaining the consent of the other co-owners, the sale is not null and void. Only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property. The transferee gets only what his transferor would have been entitled to after partition. Even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. This is because under Article 493 of the New Civil Code, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common.

This Court does not find any mistake on the part of the appellate court. Indeed, only the pro-indiviso shares in the property of the co-owners – signatories Martins and Guintos to the deed were affected by the deed. That Petitioner Corinthian paid specific amounts of money to the co-owners-private respondents-signatories Martins and Guintos to the deed and even had said -deed notarized inspite of the absence of the signatures of private respondent Delfin and Heirs bars the claim of petitioner Corinthian that it dealt with the co-owners of the property collectively.

Second Issue: Payment of the Purchase Price as a Suspensive Condition

Corinthian‘s contention that its obligation to pay the balance of the purchase price within 90 days was not a condition precedent to the execution by private respondent Martins and Guintos of the Deed of Absolute Sale is bereft of merit. The deed could not be any clearer on the matter – Petitioner Corinthian‘s compliance with its obligation to pay the balance of the purchase price was a condition precedent to the execution by private respondent Martins and Guintos of an absolute sale. Since it failed to comply with such obligation, the obligation of private respondent Martins and Guintos to execute a deed of absolute sale had not arisen. Furthermore, where one of the parties to a contract does not perform the undertaking which he is bound by its terms, he is not entitled to insist upon the performance of the other party.