GR 200009; (January, 2017) (Digest)
G.R. No. 200009 , January 23, 2017
Spring Homes Subdivision Co., Inc., Spouses Pedro L. Lumbres and Rebecca T. Roaring, Petitioners, vs. Spouses Pedro Tablada, Jr. and Zenaida Tablada, Respondents.
FACTS
Petitioners Spouses Lumbres entered into a Joint Venture Agreement with petitioner Spring Homes Subdivision Co., Inc. for land development, transferring titles to Spring Homes for convenience. On January 9, 1995, Spring Homes entered into a Contract to Sell with respondents Spouses Tablada for a subdivision lot. The Tabladas built a house, occupied the property, and later, on January 16, 1996, a Deed of Absolute Sale was executed in their favor upon full payment. However, the title remained with Spring Homes, which had mortgaged the property. Unaware of the sale, the Lumbres and Spring Homes entered into a Compromise Agreement in 1999, approved by the RTC, which conveyed the subject property to the Lumbres. Exercising rights under this agreement, the Lumbres demanded payment from the Tabladas and, upon non-payment, cancelled the Contract to Sell. They then executed a new Deed of Absolute Sale with Spring Homes in 2000, securing a new title in their name.
ISSUE
Whether the Spouses Tablada have a superior right over the subject property, warranting the nullification of the second sale to the Spouses Lumbres and the reconveyance of the title.
RULING
Yes. The Supreme Court affirmed the Court of Appeals’ decision, ruling in favor of the Spouses Tablada. The legal logic centers on the principles of double sale under Article 1544 of the Civil Code and the nature of the Compromise Agreement. The first sale to the Tabladas via the 1996 Deed of Absolute Sale was valid and consummated upon full payment, giving them an equitable title. The subsequent Compromise Agreement between the Lumbres and Spring Homes, while a judgment, could not prejudice the Tabladas who were not parties thereto and were purchasers in good faith. The Court found the Lumbres to be in bad faith when they caused the second sale in 2000 because they were aware of the Tabladas’ prior possession and claim. In a double sale scenario, the first buyer in good faith who takes possession in good faith has a superior right. Since the Tabladas were first in time, paid in full, and took possession, their right prevails. The second title obtained by the Lumbres, being tainted with bad faith, must be nullified, and reconveyance is the proper remedy to vest legal title upon the true owners, the Tabladas.