- Petitioner
- San Lorenzo Development Corporation
- Respondent
- Court of Appeals
- Citation
- G.R. No. 124242
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Tinga, J.
- Decided
- January 21, 2005
Summary
This case involved competing claims over two parcels of land in Sta. Rosa, Laguna. Pablo Babasanta claimed ownership based on a 1986 agreement with the Spouses Lu, making partial payments totaling P200,000.00. However, in 1989, the Spouses Lu sold the same property to San Lorenzo Development Corporation (SLDC) through a Deed of Absolute Sale with Mortgage. The Supreme Court distinguished between a contract to sell (Babasanta's situation) and a contract of sale, ruling that Babasanta's agreement was merely a contract to sell where ownership would only transfer upon full payment. Since Babasanta failed to pay the balance and never took possession, SLDC, as a good faith purchaser who took immediate possession, had superior rights. The Court applied Article 1544 of the Civil Code on double sales, emphasizing that SLDC's prior possession in good faith prevailed over Babasanta's unregistered and undelivered claim. The decision clarified important principles on contracts to sell versus contracts of sale, delivery requirements for ownership transfer, and protection of good faith purchasers in property transactions.