Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=50137:gr-165888-2007&amp;catid=1496&amp;Itemid=566
Timestamp: 2019-04-26 04:00:23+00:00

Document:
G.R. No. 165888 - Sps. Brilly V. Bernardez etc. v. Hon. Court of Appeals, et al.
SPS. BRILLY V. BERNARDEZ and OLIVIA BALISI-BERNARDEZ, Petitioners, v. HON. COURT OF APPEALS and SPS. LEOPOLDO MAGTOTO and CLARITA MAGTOTO, Respondents.
For review on certiorari are both the Decision1 dated September 7, 2004 and the Resolution2 dated November 5, 2004 of the Court of Appeals in CA-G.R. CV No. 78642, which had affirmed the Decision3 dated October 15, 2002 of the Regional Trial Court (RTC) of Quezon City, Branch 80 in Civil Case No. Q-98-36074.
Aurea Paredes Vda. de Pascual and Araceli Felicia P. Sevilla are among the registered owners of a parcel of land covered by Transfer Certificate of Title (TCT) No. RT-18756 (224112) PR-26276 consisting of 746 square meters located at No. 315 Roosevelt Avenue, San Francisco Del Monte, Quezon City. On the said lot stands a four-door apartment.
Sometime in 1970, herein respondent spouses Leopoldo and Clarita Magtoto rented a unit of the apartment and used it as a grocery store. After several years, they also rented the adjoining unit as a junkshop.
However, in July 1990, Araceli, as co-owner and attorney-in-fact of the other co-owners, offered to sell the whole lot consisting of 746 square meters to herein petitioner spouses Brilly and Olivia Bernardez. At that time, the property was mortgaged in favor of Banco Filipino; but the mortgage was cancelled upon payment of P754,753.26 by the Bernardez spouses.
Meanwhile, the Magtoto spouses filed a complaint for injunction and damages against Aurea and Araceli for their alleged refusal to honor the first Conditional Deed of Sale disposing of the 154-square meter portion of the property. A notice of lis pendens was accordingly inscribed at the back of TCT No. RT-18756 (224112) PR-26276 in October 1990.
Thereafter, the Bernardez spouses paid P1,000,000.00 as down payment and the second Deed of Conditional Sale was annotated on TCT No. RT-18756 (224112) PR-26276.
In an interesting twist, the notice of lis pendens was meanwhile cancelled by virtue of an alleged court order, which the RTC later disclaimed. Upon discovery of the forgery, the trial court immediately ordered the re-annotation of the notice of lis pendens.
In the intervening time, the trial court dismissed the civil case filed by the Magtoto spouses.chanrobles virtual law library The latter appealed the said dismissal to the Court of Appeals.
Meanwhile, the Bernardez spouses and the vendors entered into a Memorandum of Agreement8 concerning the second Deed of Conditional Sale. Under the said agreement, the spouses made an additional payment of P2,300,000.00 in order to proceed with the sale.
4) Pending its full payment, the remaining balance aforementioned shall be annotated at the separate title of the appellants in compliance with the terms of the contract.
Consequently, a deed of conveyance was issued in favor of the Magtoto spouses. Forthwith, a separate title was issued in their name under TCT No. N-187873.
Undaunted, the Bernardez spouses filed a Complaint10 for specific performance with damages and annulment of title against the Magtoto spouses and the vendors. The case was dismissed for lack of merit, which dismissal the Court of Appeals affirmed in its assailed Decision and Resolution.
THE TRIAL COURT ERRED IN NOT REJECTING AS A FALSIFICATION THE SUPPOSED INSCRIPTION ON OCTOBER 10, 1990 OF THE LIS PENDENS APPEARING ON PAGE 5 OF THE CERTIFICATE OF TITLE IT BEING UTTERLY WAY OUT OF THE CHRONOLOGICAL ORDER OF THE ENTRIES THEREIN.
THE TRIAL COURT ERRED IN NOT APPRECIATING THE UNCONTROVERTED CLAIM OF PLAINTIFFS-APPELLANTS, BUTTRESSED BY THE OFFICIAL RECORDS, THAT THEY WERE NOT AWARE OF ANY ENCUMBRANCE, ADVERSE CLAIM OR LIEN ON THE PROPERTY AT THE TIME THEY BOUGHT IT.
The Bernardez spouses contend that the Court of Appeals erred in finding that they failed to prove their status as purchasers in good faith. They insist they had no knowledge of any prior claim on the disputed property. They also assert that the October 10, 1990 inscription of lis pendens on the subject title was fraudulent and that their registration in good faith precedes that of the Magtoto spouses.
The Magtoto spouses, on the other hand, counter that the alleged fraud involving the inscription of lis pendens was caused by the Bernardez spouses' own attempt to re-page the title. They also point out that the Bernardez spouses had not acquired ownership rights over the subject property as their covenant with the vendors was merely a contract to sell. They stress that the sale to them of the 154-square meter portion of the subject property took place five years ahead of the sale to the Bernardez spouses of the entire property. Finally, respondents aver that the Bernardez spouses failed to exercise due caution when they proceeded with the sale transaction despite knowledge of a pending litigation involving the property.
We shall now resolve the petition on the merits.
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Further, the said prior sale of the 154-square meter portion of the property to the Magtoto spouses was precisely the reason why the Bernardez spouses entered into a Memorandum of Agreement14 with the vendors in order to proceed with the sale. By their own admissions and undertakings, the Bernardez spouses are already estopped from claiming lack of knowledge of the prior sale. They cannot be said to have been in good faith in registering the subject property in their name. Hence, between the Bernardez spouses and the Magtoto spouses, we rule that the latter have a better right to the 154-square meter portion of the property, having first registered the same in good faith.
Thus, we find that the trial court and the Court of Appeals correctly dismissed for lack of merit the complaint filed by the Bernardez spouses.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated September 7, 2004 and Resolution dated November 5, 2004 of the Court of Appeals in CA-G.R. CV No. 78642, which had affirmed the Decision of the Regional Trial Court of Quezon City, Branch 80 in Civil Case No. Q-98-36074, are AFFIRMED. Costs against petitioners.
1 Rollo, pp. 35-51. Penned by Associate Justice Remedios A. Salazar-Fernando, with Presiding Justice Cancio C. Garcia (now a member of this Court) and Associate Justice Hakim S. Abdulwahid concurring.
3 Records, pp. 480-497. Penned by Judge Agustin S. Dizon.
12 San Lorenzo Development Corporation v. Court of Appeals, G.R. No. 124242, January 21, 2005, 449 SCRA 99, 115-116.

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