Title
Abarquez vs. Court of Appeals
Case
G.R. No. 95843
Decision Date
Sep 2, 1992
A double sale dispute where the second buyer, aware of prior sale, registered title in bad faith; SC ruled for first buyer's ownership, canceling second buyer's title.
dispute
parcel of land
ruling
A

Case Digest (G.R. No. 95843)

Facts:

  • Parties and nature of the petition
  • Petitioners Edilberto C. Abarquez and Helen C. Abarquez filed a petition for certiorari with preliminary injunction/restraining order from a Court of Appeals decision dated July 27, 1990.
  • The Court of Appeals decision reversed the trial court’s decision and found petitioners spouses in bad faith, ordering the cancellation of petitioners TCT No. T-19445 and related reliefs.
  • Petitioners challenged the appellate decision and the Court of Appeals resolution dated October 10, 1990 denying petitioners’ Motion for Reconsideration.
  • Ownership, first sale, and possession by respondents (Israel spouses)
  • Respondent Lita Ebarle owned a parcel of land in the Poblacion of Cagayan de Oro with an area of 476 square meters, more or less, designated as Lot No. 430-L-2-L-5, with a technical description in the record.
  • On January 15, 1972, respondent Ebarle sold the 476-square-meter parcel to respondent spouses Norberto and Felisa Israel for P15,232.00 on an installment basis.
  • The sale was evidenced by installments with a down payment of P2,000.00 and monthly payments of P100.00 until full payment; however, the deed of sale was executed only on June 15, 1973 and was notarized only on July 9, 1975.
  • After paying the down payment of P2,000.00, respondent spouses Israel took possession of the property.
  • The Israels constructed a house and allowed respondents spouses Leonardo and Lilia Sagrado to occupy it.
  • In 1974, respondents spouses Israel also allowed respondents spouses Alberto and Teresita Jumao-as to construct another house on the property.
  • Second sale to petitioners and issuance of petitioners’ title (with overlapping portion)
  • On March 11, 1975, respondent Ebarle sold to petitioners spouses Edilberto and Helen Abarquez a parcel of land containing 862 square meters, more or less, designated as Lot No. 430-L-2-L-C (LRC) Psd-216208, for P17,240.00, evidenced by a deed of sale executed between them.
  • The deed of sale was registered on July 3, 1975, and TCT No. T-19445 was issued in petitioners’ name.
  • Petitioners’ parcel of land also included the 476-square-meter lot previously sold to the Israels (Lot No. 430-L-2-L-5).
  • Demand letter and refusal by occupants claiming ownership
  • On December 18, 1975, petitioners’ counsel sent a letter addressed to respondents spouses Sagrado and spouses Israel demanding removal of the two houses constructed on petitioners’ property.
  • Respondents refused, claiming that they were the owners of the parcel of land on which the houses stood, having bought the property from respondent Ebarle.
  • Civil action for quieting of titles and related pleadings
  • On September 8, 1978, petitioners filed with the then CFI of Misamis Oriental, 15th Judicial District, Branch VII, a complaint for quieting of titles and damages against respondents spouses Sagrado, Jumao-as, and Israel, docketed as Civil Case No. 5132.
  • On December 23, 1976, spouses Israel filed an Answer in Intervention, alleging ownership over the subject parcel.
  • On April 21, 1977, spouses Israel filed a Third-Party Complaint together with spouses Sagrado and Jumao-as against respondent Lita Ebarle, alleging she sold to petitioners a parcel already sold to spouses Israel.
  • Partial stipulation of facts (scope of dispute and admission of earlier sale)
  • On December 29, 1977, petitioners and respondents Sagrado, Jumao-as, Israel, and Ebarle executed a partial stipulation of facts.
  • The stipulation admitted:
1) identity of all parties; 2) that the land in controversy, designated as Lot No. 430-L-2-L-C (LRC) Psd. 216208, used to comprise two lots: Lot No. 430-L-2-L-5 and Lot No. 430-L-2-L-6; 3) that the land in controversy is now covered by TCT No. T-19445 in petitioners’ names; 4) that petitioners acquired Lot No. 430-L-2-L-C (LRC) Psd. 216208 from Ebarle on March 11, 1975 under a deed of absolute sale registered on July 3, 1975; 5) that Ebarle earlier sold on installments to the Israels on June 15, 1973 Lot No. 430-L-2-L-5 (476 sq. m.), which now forms part of Lot No. 430-L-2-L-C (LRC) Psd. 216208, and that the deed of sale in favor of the Israels was not registered.
  • The stipulation declared that the real controversy centered on the portion of Lot No. 430-L-2-L-C (LRC) Psd. 216208 that used to be designated as Lot No. 430-L-2-L-5 (476 sq. m.), where the houses and improvements of the defendants/third-party plaintiffs (Sagrado and Jumao-as) were found.
  • Technical descriptions, fourth-party practice, and dismissal of Ebarle
  • On March 13, 1978, respondent Ebarle filed a Motion for leave to file a Fourth-Party Complaint against Engineer Romualdo Lagsa, alleging erroneous inclusion of Lot No. 430-L-2-L-5 in the technical description of Lot No. 430-L-2-L-C (LRC) Psd. 216208.
  • The motion was granted on March 21, 1978.
  • Engineer Lagsa denied preparing an erroneous technical description.
  • Engineer Lagsa alleged that Ebarle commissioned him to prepare a technical description and plan covering the small lot and later commissioned him again to prepare the plan and technical description of the big lot, which necessarily included the small lot, without knowledge that Ebarle had already sold Lot No. 430-L-2-L-5 to the Israels, and without knowledge of Ebarle’s intention to sell the parcel to two different buyers.
  • On December 27, 1978, Ebarle was declared non-suited for failure to attend pre-trial; the trial court dismissed her complaint and her counterclaim.
  • Trial court judgment (July 14, 1986) and damages structure
  • After trial on the merits on July 14, 1986, the trial court ruled in favor of petitioners as plaintiffs.
  • The trial court declared petitioners spouses as the true and legal owners of the lot in question.
  • The trial court characterized defendants as possessors in good faith and granted an option to buy their houses, valuing the houses at P6,000.00 and P500.00 (with an apparent correction indicated in the dispositive portion for P5,000.00 for one defendant and P5,000.00 for another).
  • The trial court ordered payment of rental of P30.00 a month from 1976 to...(Subscriber-Only)

Issues:

  • Whether petitioners spouses acted in bad faith in the context of a double sale involving immovable property
  • Whether petitioners could claim preferential ownership rights under Article 1544 of the Civil Code when their registration and title covered the portion already sold to spouses Israel.
  • Whether petitioners’ knowledge of prior sale and possession by the Israels negated their good faith, rendering their registration ineffective to confer preferential rights.
  • Whether the Court of Appeals properly ordered cancellation of petitioners’ TCT No. T-19445 and issuance of a replacement title excluding the earlier-sold lot
  • Whether the appellate order to cancel petitioners’ title and issue a new title covering only th...(Subscriber-Only)

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)
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