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San Lorenzo Dev. Corp. v. CA FACTS: Spouses Miguel and Pacita Lu owned 2 parces of land in Sta. Rosa, Laguna.

Spouses Lu purportedly sold these 2 parcels to Pablo Babasanta for the price of P510,000, with transfer of ownership upon full payment. Down payment of P50,000 and several other payments of P200,000 were made by Babasanta. Having received information that the Spouses Lu had sold the same to another,Babasanta wrote a letter to Pacita Lu to demand the cancel of the second sale and the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. In response, Pacita Lu wrote a letter to Babasanta wherein she acknowledged having agreed to sell the property to him at fifteen pesos (P15.00) per square meter. She, however, reminded Babasanta that when the balance of the purchase price became due, he requested for a reduction of the price to (P12.00) per square meter and when she refused, Babasanta backed out of the sale.The agreement truningsour, Spouses Lu sold the property to SLDC for P1,264,640. Pacita Lu returned the down payment of Babasanta, through Eugenio Oya. As for the other payments amounting to P200,000, Pacita Lu treated it as a loan to Babasanta, which was secured by an interbank managers check to show that she was willing and able to pay the obligation. As a result, Babasanta filed for Specific Performance and Damages. This prompted the second buyer, San Lorenzo Development Corporation (SLDC), to intervene. SLDC argued that it was a buyer in good faith, which acquired the property through a deed of absolute sale with mortgage. It further alleged that the title, to which it had to rely on, did not have any annotations as regards to the said sale. The RTC upheld the sale of the property to SLDC, and ordered the RD of Calamba to cancel the notice of lispendens annotated on the original title(Sec. 77). On appeal, the CA reversed the decision and ordered Spouses Lu to execute the deed of conveyance in favor of Babasanta, and for the latter to pay the remaining balance of P260,000. Consequently, SLDC raised the case to the SC. In his defense, Babasanta alleged that he had better right for SLDC was in bad faith. SLDC purportedly registered the land on July 30, 1989 after a lispendens was placed on the title on July 2, 1989. Hence,such registration did not confer SLDC any right. ISSUE: Who between the two buyers has a better right over the property? RULING: The SC held that SLDC had better right over the property. It stated that the contract between Spouses Lu and Babasanta was only a contract to sale (not of sale) because the agreement was to transfer ownership upon full payment of the purchase price. Being the case, Babasanta had no ownership over the land when Spouses Lu sold the same to SLDC. On the argument that SLDC was in bad faith because the landwas registered having an annotation of lispendens, it was held that the lispendens had no effect on SLDCs standing. It was held that SLDChad already acquired possession over the land in good faith, even before it was even registered in bad faith (Sec. 76)(?).