G.R. No. L-56550 October 1, 1990
MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z. FRANCISCO, petitioners, vs. THE HONORABLE ALFREDO B. CONCEPCION, Presiding Judge, CFI of Cavite, Tagaytay, Br. IV, SOCORRO MARQUEZ VDA. DE ZABALLERO, EUGENIA Z. LUNA, LEONARDO M. ZABALLERO, and ELENA FRONDA ZABALLERO, respondents.

FACTS

Petitioners, co-owners of eight parcels of registered land, filed a complaint for injunction and damages to prevent private respondents from selling their pro-indiviso shares to a third party, Volcano Securities Traders and Agri-Business Corporation. Petitioners invoked their preferential right to purchase under Article 1620 of the Civil Code, contending the offered price of P12.50 per square meter was excessive and proposing a price based on a valuation from pending expropriation cases. Private respondents, in their answer, sought partition and argued petitioners’ right of legal pre-emption had lapsed.
During pre-trial, the parties stipulated they were co-owners and that a third party offered to buy all shares at P12.50 per square meter. Petitioners maintained the properties were incapable of physical partition and insisted on their pre-emptive right at a lower price. The trial court, finding the parties agreed the properties should not be partitioned and could not agree on who should retain them, issued an order applying Article 498 of the Civil Code, which mandates the sale of an indivisible property when co-owners cannot agree on its allotment. The court ordered a public sale of the entire property.

ISSUE

Whether the trial court committed grave abuse of discretion in ordering the public sale of the co-owned properties under Article 498 of the Civil Code without conducting a full trial to determine the reasonable price for the petitioners’ exercise of their pre-emptive right.

RULING

No, the trial court did not commit grave abuse of discretion. The legal logic is anchored on the proper application of Article 498 of the Civil Code, which governs the termination of a co-ownership when the property is essentially indivisible and the co-owners cannot agree on its allotment to one of them. The Court found that the pre-trial stipulations and pleadings clearly established the factual predicates for applying Article 498: (1) the parties agreed the properties should not be partitioned, and (2) they could not agree on who among them should be allotted the entire property upon indemnifying the others. Once these conditions are met, the law provides the remedy of a public sale and distribution of proceeds; it does not require a prior determination of a “reasonable price” for a pre-emptive right under Article 1620. The petitioners’ claim of a pre-emptive right became moot upon the application of Article 498, which is a distinct legal provision for dissolving co-ownership. The trial court correctly determined that no further factual hearings were necessary, as the parties’ own admissions rendered the legal conditions for a sale under Article 498 extant. The order for a public sale was thus a proper exercise of judicial discretion to settle the impasse between the co-owners.