Balatbat v. CA

G.R. No. 109410 (August 28, 1996)

Facts:

Petitioner Clara M. Balatbat filed a petition for review to contest the decision of the Court of Appeals, which affirmed a lower court's ruling regarding a property dispute involving a parcel of land covered by Transfer Certificate of Title No. 135671. The case originated from a partition complaint filed by Aurelio A. Roque against his deceased wife’s heirs, which resulted in a decision that divided the property among the heirs. Aurelio Roque later sold his 6/10 share of the property to spouses Jose and Aurora Repuyan on April 1, 1980, but the balance of the purchase price was to be paid after the property was partitioned and titled in the buyers' names.

Subsequently, Roque filed a complaint for rescission against the Repuyans due to their failure to pay the remaining balance. The trial court dismissed this complaint, affirming the validity of the sale to the Repuyans. Meanwhile, Clara Balatbat, who had acquired a portion of the property through a deed of sale executed on February 4, 1982, sought to intervene in the rescission case but failed to file her complaint in intervention.

In a later case, Balatbat filed a complaint for the delivery of the owner's duplicate copy of the title against the Repuyans, which was dismissed by the Regional Trial Court. The dismissal was appealed to the Court of Appeals, which modified the lower court's decision by deleting the awards for attorney's fees and costs of litigation.

Legal Issues:

1. Was the sale to the private respondents merely executory and not a consummated transaction?
2. Was there a double sale as contemplated under Article 1544 of the Civil Code?
3. Was the petitioner a buyer in good faith and for value?
4. Did the Court of Appeals err in considering evidence from the private respondents that was not formally offered?

Arguments:

• Petitioner’s Arguments:

  • The sale to the Repuyans was merely executory since the full payment had not been made and possession had not been delivered.
  • There was no double sale as the sale to the Repuyans was not valid due to the non-payment of the balance.
  • Clara Balatbat claimed to be a buyer in good faith and for value, asserting that she was unaware of any defects in the title.
  • The Court of Appeals erred in giving weight to evidence from the Repuyans that was not formally presented during the trial.

• Respondents’ Arguments:

  • The sale to the Repuyans was valid and enforceable, as the trial court had previously ruled in favor of the Repuyans in the rescission case.
  • The existence of a double sale was established, with the Repuyans having registered their claim first.
  • The Repuyans acted in good faith, having recorded their adverse claim before Balatbat filed her notice of lis pendens.
  • The evidence presented by the Repuyans was relevant and should be considered.

Court’s Decision and Legal Reasoning:

The Supreme Court dismissed the petition for lack of merit, affirming the findings of the lower courts. The Court held that the sale to the Repuyans was consummated despite the non-payment of the balance, as ownership had transferred upon the execution of the deed of sale. The Court emphasized that the obligation to pay the balance was contingent upon the partition and subdivision of the property, which did not negate the validity of the sale.

The Court also recognized the existence of a double sale under Article 1544 of the Civil Code, determining that the Repuyans had a superior right to the property because they had registered their claim first and had acted in good faith. The Court noted that Balatbat could not be considered a buyer in good faith, as she failed to investigate the status of the title before her purchase and was aware of the pending litigation.

The Court further clarified that the annotation of an adverse claim by the Repuyans served as notice to the public, and Balatbat's later notice of lis pendens did not confer her superior rights over the property. The decision reinforced the principle that a buyer must exercise due diligence in verifying the title of the property being purchased.

Significant Legal Principles Established:

1. A sale of property is considered consummated upon the execution of the deed of sale, even if the full purchase price has not been paid, unless there is a stipulation to the contrary.
2. In cases of double sale of immovable property, ownership is determined by who first recorded the sale in the Registry of Property, provided that the buyer acted in good faith.
3. A buyer cannot claim good faith if they fail to investigate the title and are aware of circumstances that should prompt inquiry into the vendor's title.