Balus v.

Balus

G.R. No. 168970, January 15, 2010

Petitioner Celestino and respondents Saturnino and Leonarda are the children of
the spouses Rufo and Sebastiana Balus. Sebastiana died on 6 September 1978. In
1979, Rufo mortgaged a parcel of land as security for a loan obtained from a bank.
When Rufo failed to pay the loan, the property was foreclosed and was subsequently
sold to the Bank as the sole bidder at a public auction held for that purpose. The same
was not redeemed within the period allowed by law. Hence, a new title was issued in
the name of the Bank. Rufo died on 6 July 1984. On 10 October, 1989, petitioner and
respondents executed an Extrajudicial Settlement of Estate adjudicating to each of the a
specific one-third portion of the subject property. Three years thereafter, respondents
bought the subject property from the Bank and a new title was issued in their name.
Meanwhile, petitioner continued possession of the subject lot. The respondents thus
filed a complaint for recovery of possession. However, petitioner alleged that
respondents’ act of buying back the property without notifying him inures to his benefit
as co-owner and that he is entitled to a one-third share of the property.

ISSUE: Whether or not the subject property forms part of the estate of petitioner and
respondents’ father

No. The court ruled that the subject property does not form part of the estate of Rufo
considering that ownership over the same was transferred to the bank prior to the death
of Rufo. Inheritance consists of existing property, as well as accrued property, and
transmissible rights and obligations at the time of death of the decedent. Thus, since
Rufo lost ownership over the subject property during his lifetime, the same no longer
forms part of his estate to which his heirs may lay claim at the time of his death.
Consequently, his children never inherited the property. The Court further ruled that
petitioner and respondents are not co-owners of the subject property and there is no
property to partition, as the disputed lot never formed part of the estate of their
deceased father.