Spouses Aquilino Gatmaitan & Lilia Ayton v. The Court of Appeals

Summary

This case involves a double sale of real property where competing claims arose over Lot No. 758 in Baliuag, Bulacan. The Gatmaitan spouses sold one-half portion to the Pascual spouses in 1970 through an unregistered deed, with the Pascual spouses taking actual possession. Subsequently, the Gatmaitan spouses sold the entire lot to the Dealino spouses in 1972, who registered the sale and obtained title. The Supreme Court applied Article 1544 of the Civil Code, ruling that the Dealino spouses were buyers in bad faith because they should have been put on notice by the Pascual spouses' actual possession of half the property, being neighbors in the same locality. The Court ordered reconveyance of the half-portion to the Pascual spouses, emphasizing that actual possession serves as constructive notice to subsequent purchasers and that registration cannot cure a purchase made in bad faith.