Tanglao vs Parungao

FACTS:

In 1992 the respondent spouse Parungao purchased 7 parcels of land from Spring Homes Subdivision, on
the same year they introduce improvements like perimeter fence with gate and 2 fish breeding building
over their property. However, Sps. Parungao failed to pay their instalment.

1997 Spring Homes executed two separate Deeds of Absolute Sale in favor of spouses Mariano and
Corazon Tanglao, petitioners, wherein the former sold to the latter two lots and a TCT were issued in
the name of the petitioners. The lots being sold were the same lots being previously sold to
respondents.

The petitioner took possession of the property by forcibly open the gate and the door of the building.

1999 the respondent filed in Housing and Land Use Regulatory Board (HLURB)
The ruling was in favor. The respondent appealed to HLURB Board of Commissioners.

HLURB Board of Commissioners found that at the time of the sale of the two lots in question to
petitioners, the contracts between respondents and Spring Homes were still subsisting. And the
fence and existing structures erected on the premises should have forewarned petitioners that
there are adverse claimants of the two lots.

The petitioner appeal to CA but it was denied and held that there was perfected contract to sell
between respondents and Spring Homes asearly as 1992. As this contract was subsisting at the time
of the second sale, respondents have a superior right over the lots in question. The petitioner went to
SC.

ISSUE:
1. The pivotal question before us is whether petitioners, the second buyers, are purchasers in good
faith.

2. Who between the petitioners and respondents have the right of ownership over the two lots in
controversy

RULING:
1. No, petitioner was not a purchaser in good faith. A purchaser in good faith or innocent purchaser
for value is one who buys property and pays a full and fair price for it at the time of the purchase or
before any notice of some other person’s claim on or interest in it.

In this case it was found that at the time of the second sale to petitioners by Spring Homes, there
were already occupants and improvements on the two lots in question. These facts should have put
petitioners on their guard. Settled is the rule that a buyer of real property in possession of
persons other than the seller must be wary and should investigate the rights of those in
possession, for without such inquiry the buyer can hardly be regarded as a buyer in good faith
and cannot have any right over the property.

1.
The respondents has better preferential rights over the petitioner. In double sales of immovable
property, the governing principle is prius tempore, prius jure (first in time, stronger in right). In the
case of Payongayong v. Court of Appeals preferential right is accorded to
1) the person acquiring it who in goodfaith first recorded it in the Registry of Property, (2) indefault
thereof to the person who in good faith was first inpossession, and
(3) in default thereof, to the person whopresents the oldest title, provided there is good faith

In all cases in good faith is premise of the preferential right in order to grant the person claiming
ownership of the immovable. In this case Petitioner being in bad faith as found by the HLURB when
he purchased the lots, cannot apply Art. 1544 in his favour, thus he does not have a better preferential
right over the respondent.