REM REV 2 Partition

Balus v. Balus G.R. NUMBER: 168970

DATE: January 15, 2010
PONENTE: Peralta, J.
PETITIONER/S: Celestino Balus RESPONDENT/S: Saturnino Balus and
Leonarda Balus Vda. De Calunod
DOCTRINE
Partition calls for the segregation and conveyance of a determinate portion of the property owned in
common. It seeks a severance of the individual interests of each co-owner, vesting in each of them a sole
estate in a specific property and giving each one a right to enjoy his estate without supervision or
interference from the other. In other words, the purpose of partition is to put an end to co-ownership.
FACTS
Herein Petitioner and Respondents are the children of the deceased Spouses Rufo and Sebastiana Balus. In 1979,
Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained from the Rural Bank of Maigo,
Lanao del Norte. Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was
subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. In 1981, a Certificate of
Sale was executed by the sheriff in favor of the Bank. The property was not redeemed within the period allowed by
law. More than 2 years after the auction, the sheriff executed a Definite Deed of Sale in the Bank's favor.
Thereafter, a new title was issued in the name of the Bank.

Petitioner and Respondents executed an Extrajudicial Settlement of Estate adjudicating to each of them a specific
1/3 portion of the subject property consisting of 10,246 sq.ms. The Settlement also contained provisions wherein
the parties admitted knowledge of the fact that their father mortgaged the subject property to the Bank and that they
intended to redeem the same at the soonest possible time. Three years after the execution of the Extrajudicial
Settlement, Respondents bought the subject property from the Bank an a Deed of Sale of Registered Land was
executed by the Bank in their favor. Subsequently, a Transfer Certificate of Title was issued in their name.
Meanwhile, Petitioner continued possession of the subject lot.

In 1995, Respondents filed a Complaint for Recovery of Possession and Damages against Petitioner, contending
that they had already informed Petitioner of the fact that they were the new owners of the disputed property, but the
latter still refused to surrender possession of the same to them. Respondents claimed that they had exhausted all
remedies for the amicable settlement of the case, but to no avail.

The RTC ordered the plaintiffs (herein Respondents) to execute a Deed of Sale in favor of the defendant (herein
Petitioner), the 1/3 share of the property in question, presently possessed by him, and described in the deed of
partition. The amount of ₱6,733.33 consigned by the defendant with the Clerk of Court as purchase price of the
one-third portion of the land in question. The RTC held that the right of Petitioner to purchase from the
Respondents his share in the disputed property was recognized by the provisions of the Extrajudicial Settlement of
Estate, which the parties had executed before the respondents bought the subject lot from the Bank.

The CA reversed and set aside the Decision of the RTC. It ordered Petitioner to immediately surrender possession
of the subject property to the Respondents. It ruled that when the parties did not redeem the subject property within
the redemption period and allowed the consolidation of ownership and the issuance of a new title in the name of the
Bank, their co-ownership was extinguished.
ISSUE/S
WON co-ownership among the parties over the subject property persisted/continued to exist (even after the transfer
of title to the Bank) by virtue of the parties’ agreement prior to the repurchase thereof (NO)
RULING
There is no dispute with respect to the fact that the the Bank acquired exclusive ownership of the contested lot
during the lifetime of Rufo.

The rights to a person's succession are transmitted from the moment of his death. In addition, the inheritance of a
person consists of the property and transmissible rights and obligations existing at the time of his death, as well as
those which have accrued thereto since the opening of the succession. In the present case, since Rufo lost
ownership of the subject property during his lifetime, it only follows that at the time of his death, the disputed parcel
of land no longer formed part of his estate to which his heirs may lay claim. Stated differently, the parties never
inherited the subject lot from their father. The parties were wrong in assuming that they became co-owners of the
subject lot. Thus, any issue arising from the supposed right of Petitioner as co-owner of the contested parcel of land
is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of the parties as
compulsory heirs of Rufo at any given point in time.

The foregoing notwithstanding, the SC finds a necessity for a complete determination of the issues raised in the
instant case to look into Petitioner's argument that the Extrajudicial Settlement is an independent contract which
gives him the right to enforce his right to claim a portion of the disputed lot bought by respondents.

It is true that under Art. 1315 of the Civil Code, contracts are perfected by mere consent; and from that moment, the
parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law. Article 1306 of the same Code
also provides that the contracting parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided these are not contrary to law, morals, good customs, public order or public policy.

In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate any express
stipulation for the parties to continue with their supposed co-ownership of the contested lot. On the contrary, a plain
reading of the provisions of the Settlement would not, in any way, support Petitioner's contention that it was his and
his sibling's intention to buy the subject property from the Bank and continue what they believed to be co-ownership
thereof.

For Petitioner to claim that the Extrajudicial Settlement is an agreement between him and his siblings to continue
what they thought was their ownership of the subject property, even after the same had been bought by the Bank,
is stretching the interpretation of the said Extrajudicial Settlement too far. In the first place, there is no co-ownership
to talk about and no property to partition, as the disputed lot never formed part of the estate of their deceased
father. Moreover, Petitioner's asseveration of his and respondents' intention of continuing with their supposed co-
ownership is negated by no less than his assertions that on several occasions he had the chance to purchase the
subject property back, but he refused to do so. In fact, he claims that after the Bank acquired the disputed lot, it
offered to re-sell the same to him but he ignored such offer. How then can petitioner now claim that it was also his
intention to purchase the subject property from the Bank, when he admitted that he refused the Bank's offer to re-
sell the subject property to him?

In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the execution thereof, the
parties were not yet aware that the subject property was already exclusively owned by the Bank. Nonetheless, the
lack of knowledge on the part of the parties that the mortgage was already foreclosed and title to the property was
already transferred to the Bank does not give them the right or the authority to unilaterally declare themselves as
co-owners of the disputed property; otherwise, the disposition of the case would be made to depend on the belief
and conviction of the party-litigants and not on the evidence adduced and the law and jurisprudence applicable
thereto.

Furthermore, Petitioner's contention that he and his siblings intended to continue their supposed co-ownership of
the subject property contradicts the provisions of the subject Settlement where they clearly manifested their
intention of having the subject property divided or partitioned by assigning to each of the parties a specific 1/3
portion of the same. Partition calls for the segregation and conveyance of a determinate portion of the property
owned in common. It seeks a severance of the individual interests of each co-owner, vesting in each of them a sole
estate in a specific property and giving each one a right to enjoy his estate without supervision or interference from
the other. In other words, the purpose of partition is to put an end to co-ownership, an objective which negates
petitioner's claims in the present case.

Instant petition is DENIED.

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