G.R. No. 107624 - Villanueva vs. Court of Appeals

Petitioners Gamaliel C. Villanueva and Irene C. Villanueva were tenant-occupants of a unit in a three-door apartment building situated on a 403-square-meter parcel of land owned by respondents spouses Jose and Leonila Dela Cruz, located at Short Horn, Project 8, Quezon City.
Petitioners succeeded the previous tenant in 1985.

In February 1986, respondent Jose Dela Cruz offered to sell the parcel and the building to the petitioners.
Respondent Jose Dela Cruz gave Irene Villanueva a letter of authority dated February 12, 1986, to inspect the property.
The property was in arrears for realty taxes. Jose Dela Cruz requested Irene to advance payments to clear these arrears.
Irene Villanueva gave a total of P10,000.00 in two installments: P5,000.00 on July 15, 1986, and P5,000.00 on October 17, 1986. It was agreed this amount would form part of the sale price of P550,000.00.

Later, Jose Dela Cruz sought the petitioners’ consent to allow one Ben Sabio, a tenant of one of the units, to purchase half of the property where his unit pertained. Petitioners agreed, expecting to buy the remaining half for P265,000.00, considering the P10,000.00 advance.
The property was subdivided and two separate titles obtained by the Dela Cruz spouses.
Defendant Ben Sabio began paying for his half by installments.

On March 6, 1987, the Dela Cruz spouses executed a Deed of Assignment in favor of spouses Guido and Felicitas Pile for the half portion designated as Lot 3-A, allegedly as satisfaction of an indebtedness.
Transfer Certificate of Title No. 356040 was issued in the names of spouses Pile on the same date.

Petitioners learned of the assignment and protested before the barangay captain, asserting their prior agreement with the Dela Cruz spouses to purchase the property portion.
Failure of settlement led petitioners to file an action for specific performance against the private respondents.
The Regional Trial Court (RTC), Branch 83, Quezon City, dismissed petitioners’ action, ordering refund of P10,000.00 but denying claims for damages and attorney’s fees.
The Court of Appeals (CA) affirmed the RTC decision on October 23, 1992.
Petitioners filed a petition for review before the Supreme Court, raising multiple errors by the CA.

Whether there was a perfected contract of sale between petitioners and respondents spouses Dela Cruz under the circumstances.
Whether the Statute of Frauds applies in this case where partial execution is claimed.
Whether respondents spouses Pile, despite recording a deed of assignment, were in good faith purchasers in case of double sale, given petitioners’ prior possession and claimed rights.
Whether the CA erred in affirming the trial court’s decision dismissing petitioners’ action and refunding only the P10,000.00.