Article 493 of the Civil Code recognizes the absolute right of a co-owner to freely dispose of his pro indivisoshare as well as the fruits and other benefits arising from that share, independently of the other co-owners,

G.R. No. 191090               October 13, 2014

EXTRAORDINARY DEVELOPMENT CORPORATION, Petitioner,
vs.
HERMINIA F. SAMSON-BICO and ELY B. FLESTADO, Respondents.

"x x x.

EDC avers that said judicial admission should not bind it because it was an innocent purchaser in good faith.1âwphi1 

The Court of Appeals debunked this contention and correctly ruled, as follow:

In a contract of sale, it is essential that the seller isthe owner of the property he is selling. Under Article 1458 of the Civil Code, the principal obligation of a seller is to transfer the ownership of the property sold. Also, Article 1459 of the Civil Code provides that the thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. The execution by appellants Ballesteros of the Deed of Absolute Sale over the subject property which they do not exclusively own but is admittedly co-owned by them together with the [respondents], was valid only to the extent of the former’s undivided one-half share thereof, as they had no title or interest to transfer the other one-half portion which pertains to the [respondents] without the latter’s consent. It is an established principle that no one cangive what one does not have – nemo dat quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can transfer legally. Thus, since appellant EDC’s rights over the subject property originated from sellers-appellants Ballesteros, said corporation merely stepped into the shoes of its sellers and cannot have a better right than what its sellers have.Indeed, a spring cannot rise higher than its source.25 (Emphasis ours) Moreover, EDC was given an ample opportunity to be heard through counsel. The essence of due process is the right to be heard. Due process is satisfied when the parties are afforded a fair and reasonable opportunity to explain their respective sides of the controversy. Thus, when the party seeking due process was in fact given several opportunities to be heard and air his side, but it is by his own fault or choice he squanders these chances, then his cry for due process must fail.26

It is apparent that despite numerous resetting of the case for EDC, it failed to appear because of the absence of its counsel. On 3 October 2007, EDC was required by the court to securea new lawyer for the next hearing but during the two hearings that followed, no counsel appeared for EDC. It is of no moment that on some dates the resetting was on motion of the other parties to the case. The fact remains that EDC’s counsel failed to appear on 25 April, 25 June, 13 August, 5 November and 5 December 2007. Therefore, EDC was not deprived of its day in court and he cannot feign denial of due process.

Having established respondents’ co-ownership rights over the subject property, we find no error in the appellate court’s ruling sustaining the validity of the Deed of Absolute Sale but only with respect to the rights of the heirs of Juan over one-half of the property.

Article 493 of the Civil Code recognizes the absolute right of a co-owner to freely dispose of his pro indivisoshare as well as the fruits and other benefits arising from that share, independently of the other coowners,27 thus:

Art. 493. Each co-owner shall have the full ownership of his part 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.

In Spouses Del Campo v. Court of Appeals,28 we had the occasion to expound the rights of a co-owner vis-à-vis the vendee, thus:

x x x Would the sale by a co-owner of a physical portion of an undivided property held in common be valid? x x x

On the first issue, it seems plain to us that the trial court concluded that petitioners could not have acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per serender the sale a nullity. This much is evident under Article 493 of the Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et. al. which we find relevant, the Court, speaking through Mr. Justice Bocobo, held that:

…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 asit is legally possible to do so. "Quando res non valet ut ago, valeat quantum valere potest." (When a thing is of no force as I do it, it shall have as much force as it can have.)

Applying this principle to the instant case, there can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership. As a matter of fact, the deed of sale executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salome’s 4/16 undivided interest in said lot, which the latter could validly transfer in whole or in part even without the consent of the other co-owners. Salome’s right to sell part of her undivided interest in the co-owned property is absolute in accordance with the well-settled doctrine that a coowner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment. Since Salome’s clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the salecan be given effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything atall in case a physically segregated area of the co-owned lot is in fact sold to him. Since the coowner/vendor’s undivided interest could properly be the object of the contract of sale between the parties,what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common.29

We are also in full accord with the appellate court’s order for the heirs of Juan to return one-half of the purchase price to EDC. There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.30 Therefore, it is correct for the Court of Appeals to order the heirs of Juan to return the amount ofP1,487,400.00, representing one-half of the purchase price to prevent unjust enrichment at the expense of EDC. Lastly, and likewise correctly, the prayer for moral and exemplary damages and attorney’s fees being unsubstantiated had to be denied.

x x x."