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G.R. No. 151424: EAGLE REALTY CORPORATION vs REPUBLIC OF THE PHILIPPINES,

NATIONAL TREASURER OF THE PHILIPPINES, HEIRS OF CASIANO DE LEON and
MARIA SOCORRO DE LEON
July 04 2008 & July 31, 2009 (MFR) / Land Titles and Deeds

Eagle Realty, a company engaged in the real estate business, bought a parcel
of land from a certain Reyes in 1984 via a Deed of Sale. This Reyes acquired the
land from a certain Medina who earlier acquired the said land via surreptitiously
entering a false record in the records of the Land Registration Commission.
Eventually, the true owners of the said land, the de Leons, discovered that
another title was fraudulently issued to Medina over the same parcel of land. De
Leon was able to have the said title annulled as well as the TCT issued to Eagle
Realty by virtue of the Deed of Sale.

ISSUE: Whether or not Eagle Realty is an innocent purchaser.

HELD: No. Based on case law (Sunshine Finance vs IAC, Oct. 28, 1991 / 203 SCRA
210), a corporation engaged in the buying and selling of real estate is expected
to exercise a higher standard of care and diligence in ascertaining the status
and condition of the property subject of its business transaction. Similar to
investment and financing corporations, it cannot simply rely on an examination
of a Torrens certificate to determine what the subject property, looks like as its
condition is not apparent in the document.

Motion for Reconsideration (July 31, 2009)

Eagle Realty, not contented with the SC decision file a Motion for
Reconsideration. It averred that the Sunshine Finance case is not applicable
because the principle and jurisprudence laid down in that decision was
promulgated by the SC for the first time only in 1991. That prior to that, when
Eagle bought the land in 1984, such extra diligence was not required from
corporations engaged in real estate business.

ISSUE: Whether or not to apply the Sunshine Finance case in the case at abr.

HELD: Yes. The case law is not in the nature of a statute that cannot be
retroactively applied. Hence, the decision rendered by the SC in 2008 is merely
based on contemporaneous legislative intent that the interpreted law carried
into effect. The SC was following with consistency its construction. Further, the
ruling in the Sunshine Finance case should be applied to this latter case
otherwise it would be reduced to "a mere academic exercise with the result that
the doctrine laid down would be no more than a dictum, and would deprive
the holding in the case of any force."