Oesmer v Paraiso Dev Corp

GR No. 157493 Feb 5, 2007

RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO and
FERNANDO, ERNESTO, LEONORA,BIBIANO, JR., LIBRADO and
ENRIQUETA, all surnamed OESMER, Petitioners, vs.
PARAISODEVELOPMENT CORPORATION, Respondent.
Facts:
Petitioners together with Adolfo Oesmer and Jesus Oesmer, are
brothers and sisters, and the co-owners of undivided shares of two
parcels of agricultural and tenanted land which were acquired by right
of succession.
Respondent Paraiso Development Corporation is known to be engaged
in the real estate business.
This case originated when Ernesto Oesmer, one of the co-owners of the
subject land, met with the President of respondent corporation for the
purpose of
brokering the sale of petitioners properties
to respondent corporation. Pursuant to the said meeting, a Contract to
Sell was drafted whereby petitioners Ernesto and Enriqueta
subsequently signed the aforesaid Contract to Sell. A check in the
amount of P100,000.00, payable to Ernesto, was given as option
money. Sometime thereafter, Rizalino,Leonora, Bibiano, Jr., and Librado
also signed the said Contract to Sell. However, two of the brothers,
Adolfo and Jesus, did not sign the document.
Later on, petitioners informed the respondent, through a letter, of their
intention to rescind the Contract to Sell and to return the amount of
P100,000.00 given by respondent as option money. Respondent did not
respond to the aforesaid letter. Afterwards, herein petitioners, together
with Adolfo and Jesus, filed a Complaint for Declaration of Nullity or for
Annulment of Option Agreement or Contract to Sell with Damages
before the RTC.
The trial court held that the assailed Contract to Sell is valid and
binding only to the undivided proportionate share of Ernesto who
signed the document and received the check. Ernesto was ordered to
execute the Contract of Absolute Sale concerning his 1/8 share over
the subject two parcels of land in favor of respondent.

On appeal, the Court of Appeals modified the decision of RTC whereby

it declared that the Contract to Sell is valid and binding with respect to
the undivided proportionate share of the six signatories of the
document.
Issue: Whether or not the contract to sell binds the co-owners of
Ernesto.
Held: Yes. The contract to sell was valid and binding. In contrast to the
contention of the five co-owners who affixed their signatures in the
contract to sell that their signatures do not confer authority to Ernesto
as an agent to sell their shares, the Court held that they were selling
the same directly and in their own right. Hence, written authority is no
longer necessary since they were selling their shares in their own
capacity as owners.
In addition, the petitioners, being owners of their respective undivided
shares in the subject properties, can dispose of their shares even
without the consent of all the co-heirs. Article 493 of the Civil Code
provides that, 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. Consequently, even
without the consent of the two co-heirs, Adolfo and Jesus, the Contract
to Sell was valid and binding with respect to the 6/8 proportionate
shares of the petitioners.