FACTS:

The case involves the sale of a parcel of land in favor of respondent Edna C. See (Edna). Petitioners, the Leong family, challenge the Court of Appeals' decision affirming the trial court's decision granting Edna possession and ownership over the land. The Leong family used to own the property, but Florentino Leong (Florentino) transferred his right, title, and interest to Carmelita Leong (Carmelita) as stated in their marital settlement agreement. After their separation, Carmelita sold the land to Edna without Florentino's consent. Petitioners argue that the sale is null and void due to lack of Florentino's consent and the proviso in the property agreement that the land may not be alienated without Florentino first obtaining a clean title over another property. Edna claims to be a buyer in good faith and exercised due diligence in the purchase. The trial court ruled in favor of Edna, and the Court of Appeals affirmed this decision. Petitioners filed this petition for review to reverse the Court of Appeals' decision.

ISSUES:

1. Whether respondent Edna C. See is a buyer in good faith and for value.

2. Whether the respondent is an innocent purchaser in good faith and for value.

3. Whether the Family Code and Civil Code provisions on conjugal properties and prohibition against donations between spouses are applicable.

4. Whether the intercalated proviso in the marital settlement agreement violates the mutuality of contracts principle.

5. Whether Florentino and Carmelita were already American citizens at the time of the property's sale.

6. Whether the allegation of fraud has been substantiated.

7. Whether the respondent, as an innocent purchaser in good faith and for value with title in her name, has a better right to the property than the petitioner.

RULING:

1. The Court affirmed the ruling of the Court of Appeals that respondent Edna C. See is a buyer in good faith and for value.

2. Yes, the respondent is an innocent purchaser in good faith and for value.

3. The Family Code and Civil Code provisions on conjugal properties and prohibition against donations between spouses are not applicable.

4. The intercalated proviso in the marital settlement agreement violates the mutuality of contracts principle.

5. The issue of whether Florentino and Carmelita were already American citizens at the time of the property's sale is a factual question outside the ambit of a petition for review on certiorari.

6. The allegation of fraud has not been substantiated.

7. The respondent, as an innocent purchaser in good faith and for value with title in her name, has a better right to the property than the petitioner.

PRINCIPLES:

• Good faith is presumed, and the burden of proving bad faith falls on the one alleging it.

• The Torrens system allows for reliance on the face of the certificate of title and dispenses with the need for further inquiry.

• Section 44 of Presidential Decree No. 1529 recognizes the rights of innocent purchasers in good faith for value and protects them from encumbrances not noted on the certificate of title.

• An innocent purchaser for value refers to someone who buys the property without notice of another person's claim and pays a full and fair price.

• The protection of innocent purchasers in good faith for value is grounded on social interest and the concept of indefeasibility of titles.

• Factual findings of lower courts are generally conclusive and binding upon the higher court.

• Innocent purchaser in good faith and for value has a better right to the property.

• Family Code and Civil Code provisions on conjugal properties and prohibition against donations between spouses may not apply in certain situations.

• Intercalated provisions in contracts may violate the mutuality of contracts principle.

• Factual questions are outside the scope of a petition for review on certiorari.

• Allegation of fraud must be substantiated.

• The principle of indefeasibility of a Torrens title does not apply where fraud attended the issuance of the title.