BALUS vs.
BALUS
Facts:
Petitioner and Respondents are children of Sps. Rufo and Sebastiana Balus. In 1978, Sebastiana died
while Rufo died in 1984. In 1979, Rufo mortgaged a parcel of land which he owns as a security for a loan
he obtained from Rural Bank. He failed to pay his loan; mortgaged property was foreclosed and was sold
to the Bank as the sole bidder at public auction. In 1981, Certificate of Sale was executed by the Sheriff
in favor of the Bank. Property was not redeemed within the period allowed by law. More than 2 years
after the auction (1984), Sheriff executed a Definite Deed of Sale in the Bank’s favor. Thereafter, new
title was issued in the name of the Bank. Petitioner and Respondents executed an extra judicial
settlement of Estate adjudicating to each of them specific 1/3 portion of the subject property. Contained
therein knowledge of mortgaged property and agreed to redeem them the soonest possible time. Three
(3) years after its execution, one of the Respondents bought back property from the Bank. Respondents
filed action for Recovery of Possession and Damages against the Petitioner who was in the possession
thereof claiming that they were the new owners of the disputed property. But Petitioner refused to
surrender possession of the same to them on the force of said extrajudicial settlement. All amicable
settlements were exhausted by the Respondents but to no avail.
Issue:
Whether the extrajudicial settlement of the Estate’s properties entered into by Petitioner and
Respondents was valid even after the transfer of title to the Bank?
Held:
Yes, insofar only as to that portion of Estate’s property not covered by mortgage where title thereof was
already transferred in the name of the Bank after the period of redemption. Hence, there is no question
that the Bank had acquired exclusive ownership of the contested lot during the lifetime of Rufo.
Moreover, the rights to a person’s succession are transmitted from the moment of his death.
In this case, Rufo lost ownership of 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 the heirs may claim.
Hence, the Petitioner and the Respondents were wrong in assuming that they became co-owners of the
subject lot as it did not pass into their hands as compulsory heirs of Rufo at any given point of time.
