Abelardo Cruz (Deceased) Substituted By Heirs Consuelo C. Cruz v. Leodegaria Cabana

Summary

This landmark case involved double sale of real property where seller Leodegaria Cabana sold the same land first to Legaspi spouses in 1965/1968, then to Abelardo Cruz in 1968. The Supreme Court applied Article 1544 of the Civil Code, ruling that the Legaspi spouses had superior title as first buyers who registered their deed first, took possession, and acted in good faith. Cruz was deemed a purchaser in bad faith because he had actual knowledge of the prior sale when he registered his deed. The Court emphasized that good faith is essential for protection under Article 1544, stating that 'knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register.' The seller was ordered to reimburse Cruz's heirs P5,750.00, establishing important precedent on bad faith registration in double sale cases.