Miguel Cordovero v. Jose Villaruz

Summary

This case involves the recovery of land following contract rescission and third-party claims. Spouses Cordero and Alcazar sold their hacienda to Januario Borromeo, whose son Marciano was later subrogated. Due to non-payment, the sale was rescinded by final judgment. However, defendant Jose Villaruz claimed ownership of the Camalignon parcel through an alleged exchange with Marciano Borromeo. The Supreme Court reversed the lower court's decision favoring Villaruz, holding that the unregistered exchange contract could not prejudice the plaintiffs' rights under the rescission judgment. The Court found insufficient evidence of plaintiffs' consent to the exchange and noted suspicious circumstances suggesting possible simulation. The decision establishes important principles regarding the effects of contract rescission on third parties and the necessity of proper registration to protect property rights against subsequent claimants.