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


Petitioner Celestino and respondents Saturnino and Leonarda are the children of the
spouses Rufo and Sebastiana Balus who 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 and 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.


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



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.

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.