Facts:

The case involves Edilberto C. Abarquez and Helen C. Abarquez as petitioners, and the Hon. Court of Appeals and Mr. and Mrs. Leonardo Sagrado, Mr. and Mrs. Alberto Jumao-As, and Mr. and Mrs. Norberto Israel as respondents. The case was decided on September 2, 1992, concerning land in Cagayan de Oro City.

The property at the center of the dispute was originally owned by respondent Lita Ebarle, comprising 476 square meters of land (Lot No. 430-L-2-L-5). Ebarle sold this property to the respondents, Norberto and Felisa Israel, on January 15, 1972, under an installment basis with a down payment of ₱2,000. The Deed of Sale was executed on June 15, 1973, and notarized on July 9, 1975. Following the down payment, the Israels took possession of the property and constructed a house. Later, they allowed the Sagrado couple to occupy this home and granted permission for the Jumao-As couple to build another house on the same property.

On March 11, 1975, Ebarle sold a different parcel of land

...

Facts:

Parties Involved

• Petitioners

- Edilberto C. Abarquez and Helen C. Abarquez, who purchased a parcel of land that was later found to include a portion previously sold. - Lita Ebarle, the original owner and seller of the disputed lots. - Spouses Norberto and Felisa Israel, who acquired the 476-square-meter lot (Lot No. 430-L-2-L-5) on an installment basis from Lita Ebarle. - Spouses Leonardo and Lilia Sagrado, who occupied one of the houses built on the disputed lot. - Spouses Alberto and Teresita Jumao-as, who constructed another house on the property.

Description and History of the Property

• Land Description

- The disputed property is located in the Poblacion of Cagayan de Oro and comprises two distinct lots: - Detailed technical descriptions are provided in the original plan, with measurements and boundaries clearly delineated. - Sale to the Israels: - Sale to the Abarquezes: - Possession and Improvements - On December 18, 1975, petitioners’ counsel sent a demand letter to respondent spouses (Sagrado and Israel) to remove the houses constructed on the disputed property. - A controversy emerged as the respondents claimed ownership of the small lot, arguing it was sold separately by Lita Ebarle.

Pre-Litigation and Litigation Developments

• Court Proceedings

- On September 8, 1978, petitioners filed a complaint for quieting of titles and damages (Civil Case No. 5132) against spouses Sagrado, Jumao-as, and Israel. - The Israels intervened by filing an Answer alleging ownership and later joined with spouses Sagrado and Jumao-as in a Third-Party Complaint against Lita Ebarle. - On December 29, 1977, all parties submitted a partial stipulation acknowledging: - On March 13, 1978, a motion was filed by respondent Ebarle to include Engineer Romualdo Lagsa as a fourth-party for an erroneous technical description allegation. - Engineer Lagsa testified that he prepared both technical descriptions (for the small and the large lot) at the behest of Lita Ebarle and the petitioners, thereby confirming that the dispute regarding the small lot was known prior to the sale to petitioners. - On July 14, 1986, the trial court ruled in favor of the petitioners on the merit of ownership of the disputed land, while also allowing an option for the petitioners to buy the houses constructed by the respondents. - The decision provided for rental payments and awarded damages, yet the respondents protested the adverse effect on their interests.

Appeal and Certiorari

• Court of Appeals Decision (July 27, 1990)

- Reversed the trial court’s decision concerning the title of the disputed property, finding petitioners (Abarquezes) to be in bad faith. - Ordered cancellation of TCT No. T-19445 and subsequent reissuance excluding the small lot. - Imposed monetary awards including moral and exemplary damages against Lita Ebarle and obligations for the Israels. - Filed by the petitioners for review of the Court of Appeals decision, which was eventually dismissed for lack of merit.

Issue:

The Good Faith of the Purchaser

• Whether the petitioners (Abarquezes), though having registered their sale, acquired the property in good faith.
• Whether their awareness (or willful ignorance) of the existence of a prior sale to the Israels negated any presumption of good faith.

The Validity and Effect of Registration

• Whether the registration of the Deed of Sale by the petitioners, which included the small lot already sold to the Israels, conferred a valid title.
• The implications of registering an instrument in bad faith under the provisions of Article 1544 of the New Civil Code.

Comparative Rights in a Double Sale

• Whether the rights of the Israels, as the first possessors in good faith of the small lot, should prevail over the rights of the petitioners due to their subsequent registration in bad faith.
• How the principles laid down in precedent cases (e.g., Palaranca vs. Director of Lands, Cagaoan vs. Cagaoan, Fernandez vs. Mercader) apply to determine whose title should be upheld.

Consequences of Bad Faith Registration

• Whether a late or improper registration (after the petitioners had knowledge of the prior sale) can be deemed as a registration in bad faith.
• The legal remedy available when a purchaser refuses to acknowledge manifest defects in the title, particularly when such defects were within the purview of a reasonable inquiry.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)