Mercado V CA

Mercado v.
Court of Appeals Petitioner, for his own benefit, borrowed

money from the SSS and mortgaged the subject
Facts: property to the SSS on June 5, 1967 without the
Plaintiff, Aurea Mercado used to work in the United States knowledge and consent of his co-owner, herein
and is a legitimate sister of Nilo Mercado. Before she left private respondent. Necessarily, private
for the US where she stayed up to 1984, she gave her respondent could not have helped in the payment
brother Nilo cash money to buy a property close to UP of the SSS loan nor could she have redeemed the
because she planned to teach in the said university when subject property from the SSS. This is against the
she comes back. She was not given any receipt for the pronouncement in Article 493 of the Civil Code
money handed to her brother. which says:
Art. 493. Each co-owner shall
In 1967, she was informed through letter from the have the full ownership of his part and of
Philippines coming from her mother and sister that her the fruits and benefits pertaining thereto,
brother Nilo had already purchased a property located at and he may therefore alienate, assign or
No. 181 Esteban Abada Street, Quezon City. She never mortgage it and even substitute another
saw the title of the property. person in its enjoyment, except when
personal rights are involved. But the
In 1972, Nilo went to visit Aurea in the US. Aurea asked effect of the alienation or mortgage,
Nilo about the purchase of the property. The latter assured with respect to the co-owners, shall be
her that he would give her a paper with respect to that limited to the portion which may be
property. In 1978, Nilo sent through their mother an allotted to him in the division upon the
affidavit wherein he admitted the existence of co-ownership termination of the co-ownership.
over the property
A co-owner has the right to alienate his
Aurea told Nilo to pay for the lot and insisted that the land pro-indiviso share in the co-owned property even
be partitioned because she committed the land as payment without the consent of the other co-owners but
to a contractor for her school building in Davao. cannot alienate the shares of their co-owners. No
one can give what he does not have.
Nilo Mercado:
57 y.o. UP LAW graduate and a businessman in
occupation. He decided to buy the subject property from In Bailon-Casilao vs. Court of Appeals, the Court
Sps. Vargas using money out of his personal savings and ruled that:
money borrowed from his mother, sister, and Aurea. The
Sps executed a Deed of Conditional Sale after he tendered since a co-owner is entitled to sell his undivided
the downpayment He applied for a housing loan with the share, a sale of the entire property by one-co-
SSS and upon its approval, a Deed of Absolute Sale was owner without the consent of the other co-owners
executed between him and the Sps. He paid the is not null and void. However, only the rights of the
amortization for the loan but the property was foreclosed co-owner-seller are transferred, thereby making
by SSS. He was able to redeem the property. the buyer a co-owner of the property.
ISSUES/ HELD:
Whether or not there was co-ownership between Nilo and Petitioner’s reliance on the ruling in Tan v. CA is
Aurea. Yes erroneous. The ruling in that case is based on a
Whether or not the co-ownersip was extinguished by the different set of facts.In Tan, the heirs/ the co-
fact that it was mortgaged, foreclosed and it was only owners) allowed the one year redemption period to
petitioner who caused the redemption of the property. No. expire without redeeming their parents' former
property and permitted the consolidation of
Ratio: ownership and the issuance of a new title, thereby
allowing the extinguishment of the co-ownership.
1. The affidavit executed by defendant was a high
quality evidence which contains admission against
interest on the part of petitioner. As a lawyer,
petitioner cannot pretend that the plain meaning of
his admission eluded his mind.
2. Private respondent did not know of the mortgage of

their co-owned property in favor of the SSS and
the expiry date of its period of redemption. In other
words, private respondent did not voluntary
relinquish at any period of time her pro-indiviso
share in the subject property.

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Mercado v.

Court of Appeals Petitioner, for his own benefit, borrowed

2. Private respondent did not know of the mortgage of

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