Case Digest (G.R. No. 124242)
Facts:
San Lorenzo Development Corporation v. Court of Appeals, Pablo S. Babasanta, Spouses Miguel Lu and Pacita Zavalla Lu, G.R. No. 124242, January 21, 2005, Supreme Court Second Division, Tinga, J., writing for the Court.The Spouses Miguel Lu and Pacita Zavalla Lu owned two adjacent parcels in Sta. Rosa, Laguna (TCT Nos. T-39022 and T-39023), totaling 3.1616 hectares. On August 20, 1986, Pablo S. Babasanta paid P50,000 and later additional sums, and the parties treated their transaction as a sale at P15.00 per square meter; disputes regarding further payments and execution of a final deed ensued. In June 1989 Babasanta sued the Spouses Lu in the Regional Trial Court (RTC), Branch 31, San Pedro, Laguna, for specific performance and damages, alleging the Spouses refused to execute the final deed despite his payments.
While Babasanta's case was pending, San Lorenzo Development Corporation (SLDC) alleged that it purchased the same lots: it entered an Option to Buy (11 Feb 1989), paid option money and later, on May 3, 1989, received from the Spouses an Absolute Deed of Sale with Mortgage after paying substantial portions of the agreed price. SLDC moved to intervene in the RTC case (motion allowed 21 March 1990) and filed a Complaint-in-Intervention claiming to be a buyer in good faith and first possessor; it also alleged the titles delivered to it were free from adverse claims and without any lis pendens at the time of sale.
The RTC (Decision dated July 30, 1993) found in favor of SLDC, holding SLDC acquired ownership as first good-faith possessor and ordering the Spouses Lu to pay Babasanta P200,000 plus interest and P50,000 attorneys’ fees; it directed cancellation of the lis pendens notices annotated on the titles. Both Babasanta and the Spouses Lu appealed to the Court of Appeals (CA). The CA (Decision dated October 4, 1995) reversed the RTC, holding Babasanta’s sale was valid and subsisting, ordering the Spouses to execute conveyance to Babasanta and for Babasanta to pay the outstanding balance of P260,000; it declared the sale to SLDC null as SLDC was a purchaser in bad faith and ordered return of SLDC’s payments with interest. The Spouses Lu later informed the CA they would no longer contest its decision.
SLDC then elevated the matter to this Court (hence the petition), assigning errors in the CA’s finding that SLDC was not a buyer in good faith, protesting the CA’s reliance on SLDC’s issuance of a P200,000 managers check and its registration after a notice of lis pendens, and contending the CA improperly reversed the RTC despite concurring wi...(Pro-only)
Issues:
- Was SLDC a buyer in good faith and therefore entitled to ownership by virtue of first possession and/or its sale and delivery prior to its knowledge of Babasanta’s claim?
- Did Babasanta acquire ownership of the land—i.e., was his agreement with the Spouses Lu a perfected sale effecting transfer of ownership—or merely a contract to sell such that Article 1544 and delivery/r...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)