Reyes v. Concepcion
REITERATIONFacts
The Antecedents: Petitioners filed a complaint for injunction and damages against private respondents, seeking to prevent the sale of their pro-indiviso shares in eight parcels of land located in Cavite. Petitioners claimed a preferential right to purchase these shares under Article 1620 of the Civil Code. The respondent trial judge denied their ex parte application for a writ of preliminary injunction, finding the registered notice of lis pendens sufficient protection. Procedural History: Private respondents filed an answer with counterclaim for partition. A motion for intervention was also filed. At pre-trial, parties stipulated facts, including co-ownership, expropriation proceedings affecting parts of the land, the valuation of the land at P95,132.00 per hectare based on evidence in expropriation cases, and a written notice from private respondents to petitioners regarding an offer from VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION to buy the private respondents' shares at P12.50 per square meter. Petitioners were given options to exercise their pre-emptive right, agree to physical partition, or sell their shares jointly to the third party. Petitioners asserted the properties were incapable of physical partition, the price was excessive, and they were willing to buy at P95,132.00 per hectare. Private respondents maintained the reasonable price was P12.50 per square meter and petitioners' pre-emptive right had lapsed. The trial judge issued a pre-trial order granting petitioners ten days to approve or disapprove a subdivision plan or submit an alternative. After petitioners' comment insisting on their pre-emptive right and the issue of reasonable value remaining contentious, private respondents moved to have petitioners specify their options under Article 498 of the Civil Code. The trial judge issued an order directing parties to signify agreement to allotting properties at P12.50 per square meter or finding a third party buyer with better terms. Private respondents expressed willingness to allot shares to Socorro Marquez Vda. de Zaballero at P12.50 per square meter. Petitioners filed a motion for clarification on the identity of the third party buyer, which was rejected as irrelevant. Petitioners then filed a "Compliance and Motion" reiterating the need to ascertain the third party's identity and their belief that no bona fide buyer existed, again insisting on their pre-emptive right at a reasonable price. The trial judge denied this motion, ruling petitioners had no pre-emptive right and ordered a public sale of the properties under Article 498 of the Civil Code. A motion for reconsideration was filed, and the public sale was reset. Without awaiting resolution, petitioners filed the present petition for certiorari. The Petition: Petitioners seek to annul the trial judge's order dated March 16, 1981, alleging grave abuse of discretion amounting to lack of jurisdiction in denying their claim of a pre-emptive right and ordering the public sale of the properties.
Issue(s)
Whether petitioners, as co-owners, possess a pre-emptive right to purchase the pro-indiviso shares of their co-owners. Whether the respondent trial judge committed grave abuse of discretion in denying petitioners' claim of a pre-emptive right and ordering the public sale of the subject properties.
Ruling
The petition is DISMISSED for lack of merit. The temporary restraining order issued by the Court is LIFTED.
Ratio Decidendi
On the issue of pre-emptive right: The Court held that the claim of a pre-emptive right to purchase the pro-indiviso shares of co-owners is without basis in Philippine law. Petitioners' reliance on Article 1620 of the Civil Code was misplaced, as this provision pertains to the right of legal redemption, which is invoked only after the shares of co-owners have been sold to a third party. In this case, no sale to a third party had occurred at the time the complaint was filed, rendering Article 1620 inapplicable. Furthermore, the Court clarified that Article 493 of the Civil Code grants each co-owner the full ownership of their part and the right to alienate it, with the effect of alienation limited to the portion allotted upon termination of the co-ownership, and does not grant a pre-emptive right to buy out co-owners. On the issue of the trial judge's order for public sale: The Court found no grave abuse of discretion in the respondent trial judge's order for a public sale of the subject properties pursuant to Article 498 of the New Civil Code. The private respondents' counterclaim for partition is a legally recognized right under Article 494 of the Civil Code, as no co-owner is obliged to remain in co-ownership. Although petitioners initially claimed the properties were incapable of physical partition, they later stubbornly insisted on exercising an alleged pre-emptive right. Consequently, private respondents invoked Article 498, which provides for the sale of an essentially indivisible thing when co-owners cannot agree on its allotment. The Court found that the legal requisites for Article 498 were present, as the parties could not agree on who would be allotted the properties, and thus, the order for public sale was a proper recourse to dissolve the co-ownership.
Main Doctrine
A co-owner does not possess a pre-emptive right to purchase the pro-indiviso shares of other co-owners. The right of legal redemption under Article 1620 of the Civil Code applies only after the shares of co-owners have been sold to a third party. In cases of indivisible property where co-owners cannot agree on allotment, a public sale under Article 498 of the Civil Code is the proper recourse.