Four brothers owned a company that engaged in the import and marketing of food products. The company also used land that belonged to the brothers. When one of the brothers retired from the activity, he sold the other brothers his rights in the land, signed an irrevocable power of attorney and even reported the transaction to the Tax Authority, but the transaction was not recorded. Shortly thereafter, the brother died and his widow transferred some of the land under her name. About 20 years later, the brother's successors recorded a cautionary note about a mortgage obligation in favor of a creditor.
The Supreme Court held that the creditor has no rights in the land and the cautionary note need be deleted since the brothers own the land. The Marché Ouvert rule in regulated land set that the purchaser against consideration of real estate who relied in good faith on registration will prevail even if relied on a false registration. In order for the purchaser to be protected under the "Marché Ouvert", its transaction must be completed by a recording of the rights. Here, the later party to the transaction was a professional creditor who received a mortgage on the assets as part of its business activity while it chose to turn a blind eye to the status of the registration. That party was not interested in making inquiries regarding the identity of those holding the land nor the owners of the properties who run the assets, although it could have done so by a simple inquiry and although it was aware that the owner with whom he entered into the agreement is jointly registered with others. Because it had the tools to deepen the examinations regarding the status of the rights it is not sufficient to rely solely on the registration and in any case the Marché Ouvert protection is afforded only when the transaction ends with recording of the rights.