GR 160805; (November, 2006) (Digest)
G.R. No. 160805 ; November 24, 2006
SPOUSES ADIEL DE LA CENA and CARIDAD AREVALO DE LA CENA, Petitioners, vs. SPOUSES JOSE BRIONES and HERMINIA LLEDO BRIONES, Respondents.
FACTS
The case involves a portion of a lot in Daraga, Albay, registered under the petitioners, Spouses De la Cena. The lot was previously owned by the parents of petitioner Caridad. In 1977, the respondents, Spouses Briones, bought that specific portion from the Arevalos, paying a downpayment evidenced by a receipt, and later fully paying the purchase price. Unknown to the Brioneses, the entire lot was mortgaged. In 1979, the petitioners acquired the whole lot from the Arevalos, paid the mortgage balance to the bank, and obtained a Transfer Certificate of Title. They then demanded that the Brioneses vacate the contested portion.
The Brioneses refused, leading the De la Cenas to file an action for quieting of title and recovery of possession. The Regional Trial Court ruled for the petitioners, declaring the Brioneses’ claim invalid and ordering them to vacate upon reimbursement for improvements. The Court of Appeals reversed this decision, finding a perfected and consummated sale to the Brioneses and ruling the petitioners’ registration was in bad faith. The petitioners elevated the case to the Supreme Court via certiorari.
ISSUE
The core issues are: (1) Whether a perfected contract of sale existed between the Arevalos and the Brioneses; and (2) Assuming there was, whether the petitioners had knowledge of this prior sale before registering the property in their names.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the Court held that a contract of sale is perfected by mere consent upon a meeting of the minds on the object and the price. The acceptance of the downpayment by the Arevalos, as evidenced by the receipt, perfected the contract. The Court noted the petitioners did not appeal the trial court’s factual finding of a perfected sale, thus accepting it. Testimony further established full payment, consummating the sale.
On the second issue, the Court found the petitioners were buyers in bad faith. Petitioner Caridad, daughter of the Arevalos, had actual knowledge of the prior sale to the Brioneses. She was aware they had bought the house on the lot years earlier and was present during discussions about the land sale. Knowledge of a prior sale defeats a later buyer’s claim of good faith, even if the later buyer registers the property first. Since the petitioners registered their title with knowledge of the prior consummated sale, they cannot invoke the protection of the law on double sales. The Brioneses, as prior buyers in good faith, have a better right. The Court upheld the appellate court’s order for the segregation of the contested portion in favor of the Brioneses.