- Petitioner
- Bliss Development Corp./Home Guaranty Corporation
- Respondent
- Montano Diaz
- Citation
- G.R. No. 213233
- Court
- Supreme Court
- Division
- Third Division
- Decided
- August 5, 2015
Summary
This case involved a property rights dispute where Montano Diaz acquired transfer rights to purchase property from Bliss Development Corporation through a series of assignments, ultimately paying P600,000.00 to Domingo Tapay and P406,915.15 in amortizations to BDC, plus P700,000.00 in improvements. When Edgar Arreza successfully challenged the validity of the original transfer (proving forged signatures), Diaz sued for reimbursement. The Supreme Court ruled that while Diaz was not a good faith purchaser due to his failure to diligently trace the source of purchase rights, BDC acted in bad faith by accepting payments while knowing of conflicting claims. Under the unjust enrichment doctrine and Civil Code Article 453 (treating both bad faith parties as good faith), the Court ordered BDC to reimburse Diaz P1,106,915.58 for payments and improvements, and Tapay to return P600,000.00, but deleted damage awards since both parties acted in bad faith.
Intellegal Wiki · Key Holding
A buyer who fails to diligently inquire into the source of the seller's right is not a purchaser in good faith; where both parties acted in bad faith they are treated as if both acted in good faith (Article 453), and unjust enrichment governs the adjustment.
An editorially maintained summary of the rule this Supreme Court decision is cited for — not legal advice.