ALEJANDRO GABRIEL and ALFREDO GABRIEL, petitioners, vs. SPOUSES PABLO MABANTA and ESCOLASTICA COLOBONG,

G.R. No. 142403 March 26, 2003

ALEJANDRO GABRIEL and ALFREDO GABRIEL, petitioners,

vs.

SPOUSES PABLO MABANTA and ESCOLASTICA COLOBONG, DEVELOPMENT BANK OF THE PHILIPPINES (Isabela Branch) and ZENAIDA TAN-REYES, respondents.

FACTS:

On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as collateral for a P14,000 loan. In 1980, they sold the lots to Susana Soriano with the right to repurchase the property within 2 years. They failed to do repurchase. In 1984, they convinced petitioner Alejandro Gabriel to purchase the lot from Soriano as a result, DBP had to restructure the loan making Gabriel as the mortgagor. In 1982 however, one lot was sold to Zenaida Tan-Reyes by the spouses Mabanta who in turn filed an intervention to the case after not being a party in the instant case. As a result, the petitioners filed for damages, and specific performance which the trial court ruled in their favor holding that the sale between the spouses Mabanta and Tan-Reyes null and void. On appeal, the CA modified the trial court’s decision holding that the second sale was indeed valid.

ISSUE:

Whether or not the second sale in 1982 to Tan-Reyes is valid.

HELD:

Article 1544 of the Civil Code provides that should immovable property be sold to different vendees, the ownership shall belong to the first person in good faith to record it in the registry of property. Unfortunately, the registration made by Zenaida Tan-Reyes of her deed of sale was not in good faith, and for this reason in accordance with the same Article 1544, the land shall pertain to the person who in good faith was first in possession. There is no question that it is the Gabriels who are in possession of the land.