G.R. No. L-13953; July 26, 1960
Mons. Carlos Inquimboy, plaintiff-appellant, vs. Maria Concepcion Paez Vda. de Cruz, defendant-appellee.

FACTS

Plaintiff-appellant Carlos Inquimboy was the registered owner of a parcel of land in Bongabon, Nueva Ecija (T.C.T. No. 15600). On October 31, 1941, he sold this land, along with another parcel, to Cenon Albea for P4,000.00, payable in installments. On December 20, 1943, Albea sold the same land to Pedro Cruz. The deed of sale to Cruz was presented for registration on January 3, 1944, but registration was initially refused because the land was still registered in Inquimboy’s name, as Albea had not yet registered his own deed of sale. Albea’s sale from Inquimboy was subsequently registered on February 18, 1944, cancelling Inquimboy’s title and issuing T.C.T. No. 20142 to Albea. On February 23, 1944, Inquimboy filed a complaint against Albea (Civil Case No. 93-J) for rescission of their contract due to Albea’s failure to pay the balance of the purchase price. On May 26, 1944, Albea’s title (T.C.T. No. 20142) was cancelled and T.C.T. No. 20584 was issued to Pedro Cruz. The Supreme Court, in a final decision dated May 19, 1950 (G.R. No. L-1601), ordered Albea to reconvey the properties to Inquimboy unless he paid the balance within thirty days. On October 11, 1957, Inquimboy filed the present action against Maria Concepcion Paez Vda. de Cruz (surviving spouse of Pedro Cruz) seeking annulment of T.C.T. No. 20584 and issuance of a new title in his name. The lower court dismissed the complaint based on a stipulation of facts.

ISSUE

Whether Pedro Cruz was a buyer in good faith of the disputed land.

RULING

Yes, Pedro Cruz was a buyer in good faith. The Supreme Court affirmed the lower court’s decision dismissing the complaint.
The Court distinguished this case from prior rulings where a buyer from a non-registered owner was not considered in good faith. Here, although Albea was not yet the registered owner when he sold the land to Cruz on December 20, 1943, Albea subsequently acquired valid title on February 18, 1944 (T.C.T. No. 20142), which he later transferred to Cruz on May 26, 1944 (T.C.T. No. 20584). Under Article 1434 of the New Civil Code, when a seller who is not the owner later acquires title, such title passes by operation of law to the buyer.
Cruz was a purchaser in good faith because, at the time of the purchase from Albea, he had no knowledge—actual or imputable—of any other person’s claim to the property. Albea possessed the deed of conveyance from Inquimboy and Inquimboy’s certificate of title. Between Inquimboy and Albea, the land already belonged to Albea upon the execution of their deed (Section 50, Act 496). Albea’s title, when issued, was clean, with no annotated liens. Furthermore, although Inquimboy had filed a suit against Albea on February 23, 1944, he never filed a notice of lis pendens. Therefore, Cruz could not have known of the pending action and was not bound by its result (Section 79, Act 496). Having found Cruz to be a purchaser in good faith, the Court deemed it unnecessary to address the appellant’s other arguments.