Dear Atty. Gab,

Musta Atty! My siblings and I inherited a piece of land from our parents. We can’t agree on what to do with it, so one of them filed a case for partition in court. Now, I’ve received an offer to sell my share of the land, and I really need the money. My lawyer tells me that I can sell my share of the land even if there is a pending case in court. Is this true? What are the rules? I’m worried about getting into trouble or making things worse with my siblings. I’m really confused about my rights and obligations in this situation, and the process is confusing. Can you please give me some legal advice?

Thank you in advance for your help!

Sincerely,
Ricardo Cruz

Dear Ricardo,

Musta! I understand your concerns about selling your inherited property while it’s involved in a court case. Selling property under litigation is permitted, but there are crucial limitations. These ensure fairness and respect the court’s authority to resolve the dispute.

Navigating Property Sales During Legal Disputes

You’re right to be cautious about selling your share of the inherited land while the partition case is ongoing. Philippine law recognizes your right to dispose of your property, even if it’s subject to litigation. This stems from the fundamental right of ownership. However, this right is not absolute. There are conditions in place to protect the interests of other parties involved and the integrity of the judicial process.

If you proceed with the sale without informing the court or your siblings involved in the partition case, the sale is still valid but could be rescinded. Rescission is a legal remedy that cancels a contract, restoring all parties to their original positions as if the contract never existed. It is designed to address damages or injury caused by a contract to either contracting parties or third persons.

Under Article 1381(4) of the Civil Code, contracts entered into by a defendant involving things under litigation can be rescinded if made without the knowledge or approval of the other litigants or the court:

Art. 1381. The following contracts are rescissible:

x x x x

(4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority[.]

This means that if you sell your share of the land without informing your siblings and the court, they have the right to ask the court to cancel the sale. The purpose of this rule is to prevent bad faith and fraudulent acts that could undermine the court’s authority. As the Supreme Court has stated:

The rescission of a contract under Article 1381(4) of the Civil Code only requires the concurrence of the following: first, the defendant, during the pendency of the case, enters into a contract which refers to the thing subject of litigation; and second, the said contract was entered into without the knowledge and approval of the litigants or of a competent judicial authority. As long as the foregoing requisites concur, it becomes the duty of the court to order the rescission of the said contract.

This provision aims to ensure that parties to a case act in good faith and do not take actions that would render the court’s decision ineffective. While you are not absolutely prohibited from selling the property, doing so without the proper knowledge and approval can have legal consequences.

The Supreme Court clarified that a court determination of ownership is not necessary before a rescissory action can proceed:

[T]he right to ask for the rescission of a contract under Article 1381(4) of the Civil Code is not contingent upon the final determination of the ownership of the thing subject of litigation. The primordial purpose of Article 1381(4) of the Civil Code is to secure the possible effectivity of the impending judgment by a court with respect to the thing subject of litigation.

This means your siblings can pursue rescission even before the court decides who owns what share of the property. It also stresses the importance of transparency. If you do sell your share of the property, it’s not necessarily a dead end:

It should be stressed, though, that the defendant in such a case is not absolutely proscribed from entering into a contract which refer to things under litigation. If, for instance, a defendant enters into a contract which conveys the thing under litigation during the pendency of the case, the conveyance would be valid, there being no definite disposition yet coming from the court with respect to the thing subject of litigation. After all, notwithstanding that the subject thereof is a thing under litigation, such conveyance is but merely an exercise of ownership.

This means the sale is not automatically invalid. However, the lack of transparency gives your siblings grounds to potentially rescind the contract. Now, if the donation is already rescinded but there is still a question of ownership of said property then the court must still resolve this issue:

However, the RTC failed to realize that a definitive adjudication as to the ownership of Lot No. 4709 and half of Lot No. 4706 is essential in this case as it affects the authority of the RTC to direct the partition of the said parcels of land. Simply put, the RTC cannot properly direct the partition of Lot No. 4709 and half of Lot No. 4706 until and unless it determines that the said parcels of land indeed form part of the estate of Spouses Baylon.

With the legal grounds covered, here are my suggestions for moving forward.

Practical Advice for Your Situation

• Inform the Court and Your Siblings: Before proceeding with the sale, formally notify the court handling the partition case and your siblings about your intention to sell your share. This demonstrates good faith and reduces the risk of rescission.
• Seek Their Approval: Obtain the written consent of your siblings and, if possible, the court’s approval for the sale. While not always required, this can significantly strengthen the validity of the transaction.
• Disclose the Pending Litigation: Make sure the potential buyer is fully aware of the ongoing partition case and its potential impact on the property. Full disclosure protects you from future claims of misrepresentation.
• Document Everything: Keep detailed records of all communications, notices, and approvals related to the sale. This documentation can be crucial in defending against any legal challenges.
• Consider Mediation: Explore the possibility of mediating with your siblings to reach a mutually agreeable solution regarding the sale. A mediated agreement can prevent further disputes and legal complications.
• Consult with Your Lawyer: Before taking any action, consult closely with your lawyer. They can provide tailored advice based on the specific details of your case and ensure you comply with all legal requirements.

Selling property involved in a court case requires careful consideration of the legal implications and potential consequences. By being transparent, seeking approval, and documenting everything, you can minimize the risks and protect your interests while still exercising your right to dispose of your property.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.