G.R. No. 231395 - AFP Retirement and Separation Benefits System vs. Plastic King Industrial Corp.

Atty. Nilo J. Flaviano, representing himself and as attorney-in-fact of co-owners Johanna Flaviano, Carlito Flaviano, Nelia Flaviano, and Letecia Flaviano, owned a property Lot Y-2-C in General Santos City.
On August 8, 1995, they executed an Exclusive Contract to Sell the property authorizing Evelyn Te and Alan Fausto V. Posadas to find a buyer.
Evelyn offered the property to Plastic King Industrial Corporation, represented by Merlen Agabin.
The Flavianos, through Atty. Flaviano, transferred rights over Lot Y-2-C to Plastic King by a "Transfer of Rights" for PHP 500,000 and warranted peaceful possession and ownership.
On August 30, 1995, another Transfer of Rights was executed for the foreshore area.
A "Deed of Undertaking" was executed, obligating titling in favor of Plastic King within six months.
Memorandum of Agreement between Flaviano and Plastic King set the purchase price at PHP 15.2 million with a PHP 3 million downpayment.

The property was subdivided into three lots: Y-2-C-1, Y-2-C-2, Y-2-C-3 with Original Certificates of Title (OCTs) issued in the names of Flaviano family members, not Plastic King.
Plastic King demanded deed of conveyance, but Flaviano did not comply.

Negotiations between AFP-RSBS and Flavianos commenced, with DENR issuing new Sales Patents on December 9, 1996.
Contract to Sell and Amended Contract to Sell executed between AFP-RSBS and Flavianos totaling PHP 40,010,000.
Deed of Absolute Sale executed on March 4, 1997 conveying the lots to AFP-RSBS, warranting valid titles and peaceful possession.
AFP-RSBS asserts it checked the Register of Deeds: titles were clean before purchase.

Plastic King filed suit on March 12, 1997, for specific performance and injunction against Flavianos to restraint disposal, alleging property already sold to them.
Plastic King informed AFP-RSBS via phone calls and letter about the prior sale and notice of lis pendens on titles.
AFP-RSBS fully paid purchase price by February 28, 1997; new Transfer Certificates of Title (TCTs) were issued in AFP-RSBS's name on March 17, 1997.

Flavianos denied sale to Plastic King, alleging the "Transfer of Rights" was a forgery.
Claimed revocation of prior sale via a "Memorandum of Revocation" signed by Evelyn, claiming full refund.
Flavianos also filed a Third-Party Complaint against Evelyn, alleging she did not remit refunds to Plastic King.

Judge Carpio, who initially heard the case, inhibited himself due to personal connection.
Case was re-raffled and eventually decided by Judge Robillo.
Trial court ruled for Plastic King, ordering Flavianos to deliver possession and titles, cancelling AFP-RSBS titles as void, and ordering reimbursement to AFP-RSBS.
Court of Appeals affirmed the trial court decision.

Was Judge Carpio's voluntary inhibition proper and did it affect the validity of the judgment by Judge Robillo?
Was the revocation of the contract of sale executed through agent Evelyn Te valid?
Was AFP-RSBS an innocent purchaser in good faith and for value entitled to protection?
Was the cancellation of the Transfer Certificates of Title in AFP-RSBS's name proper?
Are Flavianos bound to deliver the lots and refund AFP-RSBS the purchase price?