GR 109410; (August, 1996) (Digest)
G.R. No. 109410 August 28, 1996
CLARA M. BALATBAT, petitioner, vs. COURT OF APPEALS and Spouses JOSE REPUYAN and AURORA REPUYAN, respondents.
FACTS
Aurelio Roque owned a 6/10 share of a property by virtue of a final partition decree. On April 1, 1980, he sold this share to spouses Jose and Aurora Repuyan via a Deed of Absolute Sale. The Repuyans paid a down payment, with the balance payable after partition and subdivision. They annotated an adverse claim on the title on July 21, 1980. Subsequently, Aurelio filed a complaint for rescission of the sale against the Repuyans for alleged non-payment of the balance. Meanwhile, in the partition case, the court ordered the sale of the entire property to effect partition. On February 4, 1982, Aurelio and his co-owners sold the entire property to Clara Balatbat. Balatbat obtained a writ of possession and later intervened in the rescission case. The trial court dismissed Aurelio’s complaint for rescission, a decision affirmed by the Court of Appeals. Balatbat then filed a separate action for quieting of title against the Repuyans, claiming her title was superior.
ISSUE
The primary issue is whether Balatbat, as a subsequent buyer of the entire property, acquired a title superior to the rights of the Repuyans, who were prior buyers of a specific undivided share and had annotated an adverse claim.
RULING
The Supreme Court denied Balatbat’s petition and upheld the rights of the Repuyans. The legal logic rests on the principle that a prior registrant in good faith has a superior right. The Repuyans’ adverse claim, duly annotated on the certificate of title, constituted constructive notice to the whole world of their interest in the 6/10 share. Balatbat, as a subsequent purchaser, was charged with knowledge of this encumbrance. Her claim of being a buyer in good faith fails because she purchased with full knowledge of the pending litigation (the rescission case) and the annotated claim. Furthermore, the sale to Balatbat involved the entire property, including shares not owned by Aurelio at that time (the 4/10 share belonging to his children), making it void with respect to those portions. The Court emphasized that the Repuyans’ right, stemming from a prior contract and fortified by registration of their claim, must prevail over Balatbat’s later-acquired title. The dismissal of the rescission case against the Repuyans further solidified the validity of their purchase, leaving no defect in their title for Balatbat to quiet.