G.R. No. 168970. January 15, 2010.

*
Maigo, Lanao del Norte (Bank). The said property was originally
  covered by Original Certificate of Title No. P-439(788) and more
CELESTINO BALUS, petitioner, vs. SATURNINO BALUS and particularly described as follows:
LEONARDA BALUS VDA. DE CALUNOD, respondents. “A parcel of land with all the improvements thereon, containing an
Civil Law; Property; Succession; Inheritance; What consists area of 3.0740 hectares, more or less, situated in the Barrio of Lagundang,
inheritance; The rights to a person’s succession are transmitted from the Bunawan, Iligan City, and bounded as follows: Bounded on the NE., along
moment of his death; The inheritance of a person consists of the property line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River;
and transmissible rights and obligations existing at the time of his death as along line 12-13 by Lot 4649, Csd-292; and along line 12-1, by Lot 4661,
well as those which have accrued thereto since the opening of the Csd-292. x x x” 2

succession.—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 Rufo failed to pay his loan. As a result, the mortgaged
property and transmissible rights and obligations existing at the time of his property was foreclosed and was subsequently sold to the Bank as
death, as well as those which have accrued thereto since the opening of the the sole bidder at a public auction held for that purpose. On
succession. In the present case, since Rufo lost ownership of the subject
November 20, 1981, a Certificate of Sale  was executed by the
3

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 sheriff in favor of the Bank. The property was not redeemed
heirs may lay claim. Stated differently, petitioner and respondents never within the period allowed by law. More than two years after the
inherited the subject lot from their father. auction, or on January 25, 1984, the sheriff executed a Definite
Same; Same; Partition; Co-ownership; The purpose of partition is Deed of Sale  in the Bank’s favor. Thereafter, a new title was
4

to put an end to co-ownership.—Petitioner’s contention that he and his issued in the name of the Bank.
siblings intended to continue their supposed co-ownership of the subject On October 10, 1989, herein petitioner and respondents
property contradicts the provisions of the subject Extrajudicial Settlement executed an Extrajudicial Settlement of Estate  adjudicating to
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where they clearly manifested their intention of having the subject property
each of them a specific one-third portion of the subject property
divided or partitioned by assigning to each of the petitioner and
respondents a specific 1/3 portion of the same. Partition calls for the consisting of 10,246 square meters. The Extrajudicial Settlement
segregation and conveyance of a determinate portion of the property also contained provisions wherein the parties admitted knowledge
owned in common. It seeks a severance of the individual interests of each of the fact that their father mortgaged
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 2 See Certificate of Sale and Definite Deed of Sale, Exhibits “A” and “B”,
in the present case. respectively, Records, pp. 74-75.
Same; Same; Same; Contracts; It is a cardinal rule in the 3 Exhibit “A,” Records, p. 74.
interpretation of contracts that the intention of the parties shall be ac- 4 Exhibit “B,” Id., at p. 75.
5 Exhibit “C”/”4,” Id., at p. 76.
_______________  
 
181
* THIRD DIVISION.
  the subject property to the Bank and that they intended to redeem
  the same at the soonest possible time.
179 Three years after the execution of the Extrajudicial
corded primordial consideration.—In the present case, however, Settlement, herein respondents bought the subject property from
there is nothing in the subject Extrajudicial Settlement to indicate any the Bank. On October 12, 1992, a Deed of Sale of Registered
express stipulation for petitioner and respondents to continue with their Land  was executed by the Bank in favor of respondents.
6

supposed co-ownership of the contested lot. On the contrary, a plain Subsequently, Transfer Certificate of Title (TCT) No. T-
reading of the provisions of the Extrajudicial Settlement would not, in any 39,484(a.f.)  was issued in the name of respondents. Meanwhile,
7

way, support petitioner’s contention that it was his and his sibling’s
petitioner continued possession of the subject lot.
intention to buy the subject property from the Bank and continue what they
believed to be co-ownership thereof. It is a cardinal rule in the On June 27, 1995, respondents filed a Complaint  for 8

interpretation of contracts that the intention of the parties shall be accorded Recovery of Possession and Damages against petitioner,
primordial consideration. It is the duty of the courts to place a practical and contending that they had already informed petitioner of the fact
realistic construction upon it, giving due consideration to the context in that they were the new owners of the disputed property, but the
which it is negotiated and the purpose which it is intended to serve. Such petitioner still refused to surrender possession of the same to them.
intention is determined from the express terms of their agreement, as well Respondents claimed that they had exhausted all remedies for the
as their contemporaneous and subsequent acts. Absurd and illogical amicable settlement of the case, but to no avail.
interpretations should also be avoided.
On February 7, 1997, the RTC rendered a Decision  disposing 9

PETITION for review on certiorari of a decision of the Court of

as follows:
Appeals. “WHEREFORE, judgment is hereby rendered, ordering the plaintiffs
The facts are stated in the opinion of the Court. to execute a Deed of Sale in favor of the defendant, the one-third share of
   Moises G. Dalisay, Jr. for petitioner. the property in question, presently possessed by him, and described in the
   Alfredo R. Busico for respondents. deed of partition, as follows:
 
  A one-third portion of Transfer Certificate of Title No. T-39,484
(a.f.), formerly Original Certificate of Title No. P-788, now in the
name of Saturnino Balus and Leonarda B. Vda. de Calunod,
PERALTA, J.: situated at Lagundang, Bunawan, Iligan City, bounded on the
North by Lot 5122; East by shares of Saturnino Balus and
  Leonarda Balus-Calunod; South by Lot 4649, Dodiongan River;
West by Lot 4661, consisting of 10,246 square meters, including
improvements thereon.
Assailed in the present petition for review on certiorari under
Rule 45 of the Rules of Court is the Decision  of the Court of
1
_______________
Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041
which set aside the February 7, 1997 Decision of the Regional 6 Exhibit “D,” Id., at p. 79.
Trial Court (RTC) of Lanao del Norte, Branch 4 in Civil Case No. 7 Exhibit “E,” Id., at p 80.
3263. 8 Records, pp. 1-6.
9 Id., at pp. 131-140.
The facts of the case are as follows:
 
_______________
 
182
and dismissing all other claims of the parties.
1 Penned by Associate Justice Arturo G. Tayag, with Associate Justices Rodrigo The amount of P6,733.33 consigned by the defendant with the Clerk
F. Lim, Jr. and Normandie B. Pizarro, concurring; CA Rollo, pp. 69-76.
of Court is hereby ordered delivered to the plaintiffs, as purchase price of
  the one-third portion of the land in question.
  Plaintiffs are ordered to pay the costs.
180 SO ORDERED.” 10

Herein petitioner and respondents are the children of the  

spouses Rufo and Sebastiana Balus. Sebastiana died on September The RTC held that the right of petitioner to purchase from the
6, 1978, while Rufo died on July 6, 1984. respondents his share in the disputed property was recognized by
On January 3, 1979, Rufo mortgaged a parcel of land, which the provisions of the Extrajudicial Settlement of Estate, which the
he owns, as security for a loan he obtained from the Rural Bank of
parties had executed before the respondents bought the subject lot heirs may lay claim. Stated differently, petitioner and respondents
from the Bank. never inherited the subject lot from their father.
Aggrieved by the Decision of the RTC, herein respondents Petitioner and respondents, therefore, were wrong in assuming
filed an appeal with the CA. that they became co-owners of the subject lot. Thus, any issue
On May 31, 2005, the CA promulgated the presently assailed arising from the supposed right of petitioner as co-owner of the
Decision, reversing and setting aside the Decision of the RTC and contested parcel of land is negated by the fact that, in the eyes of
ordering petitioner to immediately surrender possession of the the law, the disputed lot did not pass into the hands of petitioner
subject property to the respondents. The CA ruled that when and respondents as compulsory heirs of Rufo at any given point in
petitioner and respondents did not redeem the subject property time.
within the redemption period and allowed the consolidation of The foregoing notwithstanding, the Court finds a necessity for
ownership and the issuance of a new title in the name of the Bank, a complete determination of the issues raised in the instant case to
their co-ownership was extinguished. look into petitioner’s argument that the Extrajudicial Settlement is
Hence, the instant petition raising a sole issue, to wit: an independent contract which gives him the right to enforce his
WHETHER OR NOT CO-OWNERSHIP AMONG THE right to claim a portion of the disputed lot bought by respondents.
PETITIONER AND THE RESPONDENTS OVER THE PROPERTY It is true that under Article 1315 of the Civil Code of the
PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE Philippines, contracts are perfected by mere consent; and
TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF THE
PARTIES’ AGREEMENT PRIOR TO THE REPURCHASE THEREOF
_______________
BY THE RESPONDENTS; THUS, WARRANTING THE
PETITIONER’S ACT OF ENFORCING THE AGREEMENT BY
REIMBURSING THE RESPONDENTS OF HIS (PETITIONER’S) JUST 13 Exhibit “B,” Records, p. 75.
SHARE OF THE REPURCHASE PRICE. 11
14 Civil Code, Art. 777.
15 Civil Code, Art. 781.
 
_______________
 
185
10 Id., at pp. 139-140. from that moment, the parties are bound not only to the fulfillment
11 Rollo, p. 21.
  of what has been expressly stipulated but also to all the
  consequences which, according to their nature, may be in keeping
183 with good faith, usage and law.
The main issue raised by petitioner is whether co-ownership Article 1306 of the same Code also provides that the
by him and respondents over the subject property persisted even contracting parties may establish such stipulations, clauses, terms
after the lot was purchased by the Bank and title thereto and conditions as they may deem convenient, provided these are
transferred to its name, and even after it was eventually bought not contrary to law, morals, good customs, public order or public
back by the respondents from the Bank. policy.
Petitioner insists that despite respondents’ full knowledge of In the present case, however, there is nothing in the subject
the fact that the title over the disputed property was already in the Extrajudicial Settlement to indicate any express stipulation for
name of the Bank, they still proceeded to execute the subject petitioner and respondents to continue with their supposed co-
Extrajudicial Settlement, having in mind the intention of ownership of the contested lot.
purchasing back the property together with petitioner and of On the contrary, a plain reading of the provisions of the
continuing their co-ownership thereof. Extrajudicial Settlement would not, in any way, support
Petitioner posits that the subject Extrajudicial Settlement is, in petitioner’s contention that it was his and his sibling’s intention to
and by itself, a contract between him and respondents, because it buy the subject property from the Bank and continue what they
contains a provision whereby the parties agreed to continue their believed to be co-ownership thereof. It is a cardinal rule in the
co-ownership of the subject property by “redeeming” or interpretation of contracts that the intention of the parties shall be
“repurchasing” the same from the Bank. This agreement, accorded primordial consideration.  It is the duty of the courts to
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petitioner contends, is the law between the parties and, as such, place a practical and realistic construction upon it, giving due
binds the respondents. As a result, petitioner asserts that consideration to the context in which it is negotiated and the
respondents’ act of buying the disputed property from the Bank purpose which it is intended to serve.  Such intention is 17

without notifying him inures to his benefit as to give him the right determined from the express terms of their agreement, as well as
to claim his rightful portion of the property, comprising 1/3 their contemporaneous and subsequent acts.  Absurd and illogical
18

thereof, by reimbursing respondents the equivalent 1/3 of the sum interpretations should also be avoided. 19

they paid to the Bank.

The Court is not persuaded. _______________
Petitioner and respondents are arguing on the wrong premise
that, at the time of the execution of the Extrajudicial Settlement, 16 Aliño v. Heirs of Angelica A. Lorenzo, G.R. No. 159550, June 27, 2008, 556
SCRA 139, 148.
the subject property formed part of the estate of their deceased 17 TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419,
father to which they may lay claim as his heirs. February 13, 2008, 545 SCRA 215, 226.
At the outset, it bears to emphasize that there is no dispute 18 Tating v. Marcella, G.R. No. 155208, March 27, 2007, 519 SCRA 79, 87.
19 TSPIC Corporation v. TSPIC Employees Union (FFW), supra note 17.
with respect to the fact that the subject property was exclusively
 
owned by petitioner and respondents’ father, Rufo, at the time that
 
it was mortgaged in 1979. This was stipulated by the parties 186
during the hearing conducted by the trial court on October 28, For petitioner to claim that the Extrajudicial Settlement is an
1996.  Evidence shows that a Definite Deed of
12
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.
12 See TSN, October 28, 1996 p. 2.
In the first place, as earlier discussed, there is no co-ownership
 
to talk about and no property to partition, as the disputed lot never
 
184
formed part of the estate of their deceased father.
Sale  was issued in favor of the Bank on January 25, 1984, after
13 Moreover, petitioner’s asseveration of his and respondents’
the period of redemption expired. There is neither any dispute that intention of continuing with their supposed co-ownership is
a new title was issued in the Bank’s name before Rufo died on negated by no less than his assertions in the present petition that
July 6, 1984. Hence, there is no question that the Bank acquired on several occasions he had the chance to purchase the subject
exclusive ownership of the contested lot during the lifetime of property back, but he refused to do so. In fact, he claims that after
Rufo. the Bank acquired the disputed lot, it offered to re-sell the same to
The rights to a person’s succession are transmitted from the him but he ignored such offer. How then can petitioner now claim
moment of his death.  In addition, the inheritance of a person
14 that it was also his intention to purchase the subject property from
consists of the property and transmissible rights and obligations the Bank, when he admitted that he refused the Bank’s offer to re-
existing at the time of his death, as well as those which have sell the subject property to him?
accrued thereto since the opening of the succession.  In the present
15 In addition, it appears from the recitals in the Extrajudicial
case, since Rufo lost ownership of the subject property during his Settlement that, at the time of the execution thereof, the parties
lifetime, it only follows that at the time of his death, the disputed were not yet aware that the subject property was already
parcel of land no longer formed part of his estate to which his exclusively owned by the Bank. Nonetheless, the lack of
knowledge on the part of petitioner and respondents 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 Ex-
 
 
187
trajudicial Settlement where they clearly manifested their intention
of having the subject property divided or partitioned by assigning
to each of the petitioner and respondents 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
20

an end to co-ownership,  an objective which negates petitioner’s

21

claims in the present case.

WHEREFORE, the instant petition is DENIED. The assailed
Decision of the Court of Appeals, dated May 31, 2005 in CA-G.R.
CV No. 58041, is AFFIRMED.
SO ORDERED.
Corona (Chairperson), Velasco, Jr.,
Nachura and Mendoza, JJ., concur.
Petition denied, judgment affirmed.
Note.—Partition is premature when ownership of the lot is
still in dispute. (Figuracion-Gerilla vs. Vda. de Figuracion, 499
SCRA 484 [2006])
 
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