VIRGILIO B.

AGUILAR
vs.
COURT OF APPEALS and SENEN B. AGUILAR

FACTS: This is a petition for review on certiorari seeking to reverse and set aside
the Decision of the Court of Appeals in declaring null and void the orders of 23 and
26 April, 1979, the judgment by default of 26 July 1979, and the order of 22 October
1979 of the then Court of First Instance of Rizal, and directing the trial court to set the
case for pre-trial conference.

Petitioner Virgilio and respondent Senen are brothers; Virgilio is the youngest of 7,
while Senen is the fifth. On 28 October 1969, the two brothers purchased a house and
lot in Parañaque where their father could spend and enjoy his remaining years in a
peaceful neighborhood. Initially, the brothers agreed that Virgilio's share in the co-
ownership was two-thirds while that of Senen was one-third. By virtue of a written
memorandum dated 23 February 1970, Virgilio and Senen agreed that henceforth
their interests in the house and lot should be equal, with Senen assuming the
remaining mortgage obligation of the original owners with the Social Security System
(SSS) in exchange for his possession and enjoyment of the house together with their
father.

After Maximiano Aguilar died in 1974, petitioner demanded from private respondent
that the latter vacate the house and that the property be sold and proceeds thereof
divided among them.

Because of the refusal of respondent to give in to petitioner's demands, the latter filed
on 12 January 1979 an action to compel the sale of the house and lot so that the they
could divide the proceeds between them.

Upon issues being joined, the case was set for pre-trial on 26 April 1979 with the
lawyers of both parties notified of the pre-trial, and served with the pre-trial order,
with private respondent executing a special power of attorney to his lawyer to appear
at the pre-trial and enter into any amicable settlement in his behalf. On 20 April 1979,
counsel for respondent, filed a motion to cancel pre-trial on the ground that he would
be accompanying his wife to Dumaguete City where she would be a principal sponsor
in a wedding.

On 23 April 1979, finding the reasons of counsel to be without merit, the trial court
denied the motion and directed that the pre-trial should continue as scheduled.

When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his
counsel appeared. Defendant did not appear; neither his counsel in whose favor he
executed a special power of attorney to represent him at the pre-trial. Consequently,
the trial court, on motion of plaintiff, declared defendant as in default and ordered
reception of plaintiff's evidence ex parte.

On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the
order of default and to defer reception of evidence. The trial court denied the motion
and plaintiff presented his evidence.
On 26 July 1979, rendering judgment by default against defendant, the trial court
found him and plaintiff to be co-owners of the house and lot, in equal shares on the
basis of their written agreement. However, it ruled that plaintiff has been deprived of
his participation in the property by defendant's continued enjoyment of the house and
lot, free of rent, despite demands for rentals and continued maneuvers of defendants,
to delay partition. The trial court also upheld the right of plaintiff as co-owner to
demand partition. Since plaintiff could not agree to the amount offered by defendant
for the former's share, the trial court held that this property should be sold to a third
person and the proceeds divided equally between the parties.

The trial court likewise ordered defendant to vacate the property and pay plaintiff
P1,200.00 as rentals 2 from January 1975 up to the date of decision plus interest from
the time the action was filed.

Defendant sought relief from the Court of Appeals praying that the following orders
and decision of the trial court be set aside: (a) the order of 23 April 1970 denying
defendants motion for postponement of the pre-trial set on 26 April 1979; (b) the
order of 26 April 1979 declaring him in default and authorizing plaintiff to present his
evidence ex-parte; (e) the default judgment of 26 July 1979; and, (d) the order dated
22 October 1979 denying his omnibus motion for new trial.

On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26
April 1979 as well as the assailed judgment rendered by default.Petitioner now comes
to us alleging that the Court of Appeals erred (1) in not holding that the motion of
defendant through counsel to cancel the pre-trial was dilatory in character and (2) in
remanding the case to the trial court for pre-trial and trial.

Issues: 1. Whether the trial court correctly declared respondent as in default

2. Allowing petitioner to present his evidence ex-parte; and

3. Whether the trial court correctly rendered the default judgment

We find merit in the petition.

As regards the first issue, the law is clear that the appearance of parties at the pre-trial
is mandatory. 3 A party who fails to appear at a pre-trial conference may be non-suited
or considered as in default. 4 In the case at bar, where private respondent and counsel
failed to appear at the scheduled pre-trial, the trial, court has authority to declare
respondent in default. 5

Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant
or denial thereof is within the sound discretion of the trial court, which should take
into account two factors in the grant or denial of motions for postponement, namely:
(a) the reason for the postponement and (b) the merits of the case of movant. 6

In the instant case, the trial court found the reason stated in the motion of counsel for
respondent to cancel the pre-trial to be without merit.
Moreover, the trial court denied the motion for postponement three (3) days before the
scheduled pre-trial. If indeed, counsel for respondent could not attend the pre-trial on
the scheduled date, respondent at least should have personally appeared in order not to
be declared as in default. But, since nobody appeared for him, the order of the trial
court declaring him as in default and directing the presentation of petitioner's
evidence ex parte was proper. 7

With regard to the merits of the judgment of the trial court by default, which
respondent appellate court did not touch upon in resolving the appeal, the Court holds
that on the basis of the pleadings of the parties and the evidence presented ex parte,
petitioner and respondents are co-owners of subject house and lot in equal shares;
either one of them may demand the sale of the house and lot at any time and the other
cannot object to such demand; thereafter the proceeds of the sale shall be divided
equally according to their respective interests.

In resolving the dispute, the trial court ordered respondent to vacate the property so
that it could be sold to third persons and the proceeds divided between them equally,
and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the sum of
P1,200.00 as monthly rental, conformably with their stipulated sharing reflected in
their written agreement.

Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in
the co-ownership, and that each co-owner may demand at any time partition of the
thing owned in common insofar as his share is concerned. Corollary to this rule, Art.
498 of the Code states that whenever the thing is essentially, indivisible and the co-
owners cannot agree that it be, allotted to one of them who shall indemnify the others,
it shall be sold and its proceeds accordingly distributed. This is resorted to (1) when
the right to partition the property is invoked by any of the co-owners but because of
the nature of the property it cannot be subdivided or its subdivision would prejudice
the interests of the co-owners, and (b) the co-owners are not in agreement as to who
among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners. In one case, 8 this Court upheld the order of the trial
court directing the holding of a public sale of the properties owned in common
pursuant to Art. 498 of the Civil Code.

However, being a co-owner respondent has the right to use the house and lot without
paying any compensation to petitioner, as he may use the property owned in common
long as it is in accordance with the purpose for which it is intended and in a manner
not injurious to the interest of the other co-owners. 9 Each co-owner of property held
pro indiviso exercises his rights over the whole property and may use and enjoy the
same with no other limitation than that he shall not injure the interests of his co-
owners, the reason being that until a division is made, the respective share of each
cannot be determined and every co-owner exercises, together with his co-participants
joint ownership over the pro indiviso property, in addition to his use and enjoyment of
the
same. 10

Since petitioner has decided to enforce his right in court to end the co-ownership of
the house and lot and respondent has not refuted the allegation that he has been
preventing the sale of the property by his continued occupancy of the premises, justice
and equity demand that respondent and his family vacate the property so that the sale
can be effected immediately. In fairness to petitioner, respondent should pay a rental
of P1,200.00 per month, with legal interest; from the time the trial court ordered him
to vacate, for the use and enjoyment of the other half of the property appertaining to
petitioner.

When petitioner filed an action to compel the sale of the property and the trial court
granted the petition and ordered the ejectment of respondent, the co-ownership was
deemed terminated and the right to enjoy the possession jointly also ceased.
Thereafter, the continued stay of respondent and his family in the house prejudiced
the interest of petitioner as the property should have been sold and the proceeds
divided equally between them. To this extent and from then on, respondent should be
held liable for monthly rentals until he and his family vacate.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of