[G.R. No. L-30871. December 28, 1970.

AURORA P. DE LEON, Petitioner, v. HON. SERAFIN SALVADOR, and EUSEBIO BERNABE, ALBERTO A. VALINO,
Respondents.

Facts:
Eusebio Bernabes (judgment debtor) properties were garnished and sold in an auction sale to satisfy a
judgment in a civil case for damages, ordered by the court of Judge Fernando Cruz, in favor of Enrique De Leon. The highest
bidder for the total sum of P30,194.00 was Aurora de Leon, sister of judgment creditor and herein petitioner. Bernabe was given a redemption period of 1
year commencing from the time of the auction sale, however, instead of redeeming his properties, he filed a case to annul the auction sale on the
ground of gross inadequacy of price and for the ordering of a new auction sale. He claimed that his properties, taken together, can cost
around P400,000.00. However, Aurora before Judge Cruz court a motion with proper notice for consolidation of title and for the
court to order the sheriff to issue in her favor a final deed of sale over the subject parcels of land. Judge Cruz order granting
Auroras motion over Bernabes opposition. However, Bernabes motion for reconsideration urging Judge Cruz to hold in
abeyance Auroras motion for consolidation of title was denied by Judge Cruz, then he filed this action for certiorari,
impleading the sheriff, for the annulment and revocation of the questioned orders of Judge Cruz, on the ground of the latters
lack of jurisdiction to issue the same. As prayed for, the Court also issued a writ of preliminary injunction against the
enforcement of Judge Cruz orders, until the conflict between the parties could be finally resolved.

Issue:

Whether or not an auction sale be annulled on the ground of inadequacy of price?

Ruling:
NO.

The Supreme Court held that as to the alleged gross inadequacy of the price of P30,194.00 paid by Aurora when according to
Bernabe the properties could have been easily sold for a total price of P385,000.00, Bernabe has admitted that there was an
existing mortgage lien on the properties which necessarily affected their value. Suffice it to state on the basis of the record,
however, that the failure of Bernabe to timely sell the properties for their fair value through negotiated sales with third persons
either before or after the execution sale in order to be able to discharge his judgment debt or redeem the properties within the
redemption period. They cannot be cited in law or in equity to defeat the lawful claim of Aurora nor to give validity to the void
orders of Judge Salvadors court. The applicable rule on forced sales where the law gives the owner the right of redemption
was thus stated by the Court in Velasquez v. Coronel: "However, while in ordinary sales for reasons of equity a transaction
may be invalidated on the ground of inadequacy of price, or when such inadequacy shocks ones conscience as to justify the
courts to interfere, such does not follow when the law gives to the owner the right to redeem, as when a sale is made at public
auction, upon the theory that the lesser the price the easier it is for the owner to effect the redemption. And so it was aptly
said: When there is the right to redeem, inadequacy of price should not be material, because the judgment debtor may
reacquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the
price obtained at the auction sale."
 G.R. No. L-20046 March 27, 1968
ROMEO PAYLAGO and ROSARIO DIMAANDAL, petitioners,
vs.
INES PASTRANA JARABE and THE HONORABLE COURT OF APPEALS, respondents.

FACTS:

The entire lot involved in this suit was originally covered by Homestead Patent in the name of Anselmo Lacatan. After the
death of Anselmo Lacatan, rhe property was issued in the name his two sons and heirs, Vidal and Florentino Lacatan. Vidal
Lacata. Vidal Lacatan's heirs, namely, Maximo, Tomas and Lucia Lacatan, executed a deed of sale in favor of the spouses
Romeo Paylago and Rosario Dimaandal, plaintiffs-petitioners herein, over a portion of the entire lot. Moreover, Florentino
Lacatan died, leaving as his heirs his widow and three children, Felipe, Rosita and Florencia Lacatan. The said children of
Florentino Lacatan likewise executed a deed of sale) in favor of the same vendees over another portion of the same lot.

By virtue of the registration of the two deeds of, a new title covering the total area issued in favor of plaintiffs-petitioners, the
Paylago spouses. However, disclosed that a portion of the total area purchased by plaintiffs-petitioners was being occupied by
defendant-respondent. Hence, the action to recover possession and ownership of the said portion.

The trial court and the Court of Appeals found that a portion of land in question which the said portion of land was purchased
by Hilario Jarabe, late husband of defendant-respondent, from one Apolonio Lacatan, which sale is evidenced by an
unregistered deed of sale; that Apolonio Lacatan, in turn, bought the same in from Anselmo Lacatan, the original registered
owner; that the first deed of sale, also unregistered, executed by Anselmo Lacatan in favor of Apolonio Lacatan was lost
during the Japanese occupation; that the herein defendant-respondent has been in possession of the said portion
continuously, publicly, peacefully and adversely as owner thereof; and, that the herein plaintiffs-petitioners knew, nay, admitted
in a deed of lease, that defendant-respondent has been in possession of the premises. After trial, the lower court held
that plaintiffs-petitioners were not purchasers in good faith andrendered judgment in favor of defendant-respondent, declaring
the latter as owner of the land in question with the right to retain possession of the same. The decision was affirmed in toto by
the Court of Appeals.

ISSUE:

Who has a better right in case of double sale of real property, the registered buyer or the prior but unregistered purchaser?

RULING:

This Court has formulated in no uncertain terms the general principle governing the matter: as between two purchasers, the
one who has registered the sale in his favor, in good faith, has a preferred right over the other who has not registered his title,
even if the latter is in the actual possession of the immovable. Indeed, the foregoing principle finds concrete bases in the
pertinent provisions of the New Civil Code, Article 1544, providing that if the same immovable property should have been sold
to different vendees, "the ownership shall belong to the person acquiring it who in good faith first recorded it in the registry of
property." There is no question that the sales made in favor of plaintiffs-petitioners were registered while the alleged sale
executed in favor of defendant-respondent was not. Applying the foregoing principle of law to the instant case, it is now
contended by plaintiffs-petitioners that their certificate of title must prevail over defendant-respondent, and that the courts
below correspondingly committed error in deciding the case to the contrary.

But there is more than meets the eye in the case at bar. While plaintiffs-petitioners have a registered title, it cannot be
denied that their acquisition and subsequent registration were tainted with the vitiating element of bad faith. In case at the bar,
the plaintiffs-petitioners had knowledge that defendant-respondent purchased the same from Apolonio Lacatan, former should
have inquired and made an investigation as to the possible defects of the title of the Lacatan heirs over the entire lot sold to
them, granting that the latter's certificate of title was clear. This, they failed to do. They cannot now claim complete ignorance
of defendant-respondent's claim over the property. As was well stated in one case, "a purchaser who has knowledge of facts
which should put him upon inquiry and investigation as to possible defects of the title of the vendor and fails to make such
inquiry and investigation, cannot claim that he is a purchaser in good faith and has acquired a valid title thereto". Supreme
Court reiterated that they cannot just close their eyes and blindly stamp our approval on the argument of plaintiffs-petitioners
that they have the better right simply because their title is registered and as such is indefeasible.