G.R. No. 143826 - Aguilar-Reyes vs. Spouses Mijares

The dispute concerns Lot No. 4349-B-2, approximately 396 sq.m. in Balintawak, Quezon City, formerly under TCT No. 205445, registered under Spouses Vicente Reyes and Ignacia Aguilar-Reyes.
The lot and its apartments formed part of the spouses’ conjugal properties, acquired with conjugal funds from their garments business.
Vicente and Ignacia were married in 1960 but separated de facto since 1974.

On March 1, 1983, Vicente sold Lot No. 4349-B-2 to respondents Cipriano and Florentina Mijares for ₱40,000 (documented later as ₱110,000).
The original TCT was cancelled; TCT No. 306087 was issued in the Mijares names on April 19, 1983.
Vicente filed a petition for administration and guardianship claiming Ignacia died on March 22, 1982, and that he and their five minor children were the only heirs.
On September 29, 1983, the court appointed Vicente guardian of their minor children; on October 14, 1983, the court authorized Vicente to sell Ignacia’s estate.

Ignacia learned of the sale in 1984 and demanded through counsel the return of her one-half share.
She filed a complaint for annulment of sale on June 4, 1986, amended later to include Vicente Reyes as defendant.
Respondents claimed they purchased in good faith and cited court approval of the sale; Vicente claimed he sold only his share and denied misrepresenting Ignacia's death, alleging respondents’ counsel took advantage of his illiteracy.
On February 15, 1990, RTC declared the sale void with respect to Ignacia’s one-half share, ordering reimbursement of ₱55,000 to respondents and awarding ₱50,000 in moral and exemplary damages to Ignacia.
Ignacia moved for modification to annul the entire sale and for recovery of rentals; on May 31, 1990, RTC declared sale null and void ab initio in its entirety, ordering cancellation of TCT No. 306087 and issuance of new title in the names of Vicente and Ignacia.
On June 29, 1990, RTC corrected typographical errors regarding TCT number and confirmed prior rulings.

Both Ignacia and respondents appealed; Ignacia died during appeal and her heirs were substituted as petitioners.
The Court of Appeals reversed the RTC decisions on January 26, 2000, declaring the sale valid and lawful in favor of respondents as purchasers in good faith, and ordering Vicente to pay attorney’s fees and moral damages to respondents.
Petitioners filed the present petition for review, contesting respondents’ good faith and seeking annulment of the sale.

What is the legal status of the sale of Lot No. 4349-B-2 to respondents?
If annulable, should the sale be annulled entirely or only as to Ignacia’s conjugal share?
Are respondents purchasers in good faith under the circumstances?