sales case digests double sales

7/18/2019 Sales Case Digests Double Sales

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Monday, October 4, 2010

VILLARTA V. CA (May 29, 1987)

FACTS:Respondent Rosalinda Cruz entrusted to petitioner Victoria Villarta seven pieces of jewelry on November

1968. n !ecember of t"e same year# Villarta e$c"an%es one jewelry to anot"er and issued a post&dated

c"ec' in favor of Cruz. Cruz deposited t"e c"ec' but it was dis"onored for lac' of funds.

(n estafa case was filed a%ainst Villarta but s"e ar%ued t"at s"e can only be civilly liable because even

t"ou%" t"e c"ec' bounced# s"e only %ave it for a pre&e$istin% obli%ation. )"e contends a person cannot

be imprisoned for non&payment of debt.

ISSUE:

*N t"e transaction is a +sale or return,

HELD:

-"e transaction is not a sale or return but a sale on approval or sale on acceptance.

*"en Cruz %ave t"e jewelry to Villarta on November# t"e clear intention is to ma'e t"e latter c"oose

w"ic" item s"e wanted to buy. -"ere was no meetin% of t"e minds yet at t"is point and "ence# it cannot

be considered as delivery.

f owners"ip over t"e jewelry was not transmitted on t"at date# t"en it could "ave been transmitted only in

!ecember 1968# t"e date w"en t"e c"ec' was issued. n w"ic" case# it was a /sale on approval/ since

owners"ip passed to t"e buyer. Vallarta# only w"en s"e si%nified "er approval or acceptance to t"e seller#

Cruz# and t"e price was a%reed upon.

t is still criminal fraud or deceit in t"e issuance of a c"ec' w"ic" is made punis"able under t"e Revised

0enal Code# and not t"e non&payment of t"e debt.



R)(R C(RN233# petitioner# vs.4NR(32 C5R- (002(3)# 7)2 0NC# 2( N(N-2 and R(NN(N-2# respondents.

.R. No. 3&:99;: 7anuary :6# 19;6

(C-)<

0etitioner Carbonell lives in an adjoinin% lot owned by Respondent 0oncio# latter=s lot ismort%a%ed in favor of Republic )avin%s an' for 01#>??.

0etitioner and anot"er Respondent @nfanteA offered to buy t"e land owned by 0oncio. *"ic"0oncio# in "is failure to pay t"e mort%a%ed a%reed for t"e petitioner to buy t"e land includin% "is"ouse for 09.>? per sBuare meter on t"e condition t"at from t"e purc"ase price would come t"emoney to be paid to t"e ban'.

ot" parties settled t"e arrears of t"e mort%a%ed amountin% 0:;.:6. 4owever# 0etitioner only

"ave 0:??.?? as per respondent=s information t"at "e only owes t"e same to t"e ban'.Respondent t"en wit"drew t"e deficit amount and was reimbursed by Carbonell t"e followin%day.

-"e parties e$ecuted a document stipulatin% t"at# 0oncio may still occupy t"e land sold by "imto t"e petitioner and if after a year# "e still can=t find a place to move# t"at "e s"all pay rent infavor of t"e petitioner.

)ubseBuently# 0oncio "ad told Carbonell t"at t"e former can no lon%er pursue wit" t"e sale for "e "ad %iven t"e land to nfante# to w"ic" "e cannot wit"draw even if "e %oes to jail. -"e said lotwas fenced by nfante.

(tty. 7ose arcia advised "er to present an adverse claim over t"e land in Buestion wit" t"effice of t"e Re%ister of !eeds of Rizal.

0oncio# admittedly sold t"e land to nfante w"en s"e improved "er offer.

*it" t"e information t"at t"e land was not yet re%istered# (tty. arcia in favor of t"e petitioner prepared an adverse claim over t"e property. *"ereby upon re%istration of t"e same by nfante#t"e said adverse claim was noted in t"e -ransfer Certificate of -itle.

0etitioner filed a second complaint# alle%in% t"at t"e sale between 0oncio and nfante bedeclared null and void. Respondent=s alle%ation was t"at# 0etitioner=s claim was unenforceablefor lac' of written document.

-rial Court ruled t"at t"e second sale was null and void. 4owever# after re&trial# -rial Courtreversed it=s decision rulin% t"at t"e claim of t"e respondents were %reater t"an t"at of t"epetitioner.

C( ruled in favor of petitioner# alle%in% t"at it "as a superior ri%"t over t"e respondent. (fter amotion for reconsideration C( reversed its decision.

))52<



*"et"er or not 0etitioner "ave t"e superior ri%"t over t"e property.

423!<

D2).

(rticle 1># New Civil Code# w"ic" is decisive of t"is case# recites<

f t"e same t"in% s"ould "ave been sold to different vendees# t"e owners"ip s"all be transferredto t"e person who may have first taken possession thereof in good faith, if it s"ould movable

property.

)"ould it be immovable property, t"e owners"ip s"all belon% to t"e person acBuirin% it who ingood faith first recorded it in t"e Re%istry of 0roperty.

Should there be no inscription, t"e owners"ip s"all pertain to t"e person who in good faith wasfirst in the possession; and# in t"e absence t"ereof# to t"e person w"o presents t"e oldest title#provided t"ere is %ood fait" @emp"asis suppliedA.

*"en Carbonell bou%"t t"e lot from 0oncio on 7anuary :;# 19>># s"e was t"e only buyer t"ereof and t"e title of 0oncio was still in "is name solely encumbered by ban' mort%a%e dulyannotated t"ereon. Carbonell was not aware E and s"e could not "ave been aware E of anysale of nfante as t"ere was no suc" sale to nfante t"en. 4ence# CarbonellFs prior purc"ase of t"e land was made in %ood fait". 4er %ood fait" subsisted and continued to e$ist w"en s"erecorded "er adverse claim four @A days prior to t"e re%istration of nfantesFs deed of sale.CarbonellFs %ood fait" did not cease after 0oncio told "er on 7anuary G1# 19>> of "is secondsale of t"e same lot to nfante. ecause of t"at information# Carbonell wanted an audience wit"nfante# w"ic" desire underscores CarbonellFs %ood fait". *it" an aristocratic disdain unwort"yof t"e %ood breedin% of a %ood C"ristian and %ood nei%"bor# nfante snubbed Carbonell li'e aleper and refused to see "er. )o Carbonell did t"e ne$t best t"in% to protect "er ri%"t E s"ere%istered "er adversed claim on ebruary 8# 19>>. 5nder t"e circumstances# t"is recordin% of

"er adverse claim s"ould be deemed to "ave been done in %ood fait" and s"ould emp"asizenfanteFs bad fait" w"en s"e re%istered "er deed of sale four @A days later on ebruary 1:#19>>



Consolidated Rural Bank (Cagayan Valley), Inc vs Court of Appeals

448 SCRA 347 January 17, 2005

Ponente: Tinga

Nature: Petition for review on certiorari of a eci!ion an re!o"ution of t#e Court

of A$$ea"!

acts:

T#e %ari &rot#er! were regi!tere owner! of 'ot (o) 703*+A in !a&e"a

$er TCT (o) T+8121) t wa! !u&ivie into !evera" "ot!)

1ST SA'- .Augu!t 15 1/57

Ria" %ari !o" $art of #i! !#are to aiao an ayag &y virtue of aee of !a"e, to w#ic# #i! &rot#er! oere no o&6ection) T#e ee of !a"e wa!

not regi!tere wit# t#e ice of t#e Regi!ter of ee!, #owever, aiao an

ayag ec"are t#e $ro$erty in t#eir nae! for taation $ur$o!e!)

aiao an ayag !o" t#e !out#ern $ortion of t#e "an to Teooro

e"a Cru, an t#e nort#ern $ortion wa! !o" to Re!tituto 9ernane) T#e!e

&uyer! too: $o!!e!!ion of an cu"tivate t#e $ortion! of t#e $ro$erty

re!$ective"y !o" to t#e)

2( SA'- .June 15 1/7*

T#e %ari &rot#er! conveye a"" t#eir rig#t! an intere!t! to Paci;co

%ar<ue) T#e ee of !a:e wa! regi!tere wit# t#e ice of t#e Regi!ter of

ee!) %ar<ue !u&ivie t#e "ot into 8) 'ot! 703*+A+7+A unti" 703*+A+7+

were ortgage to t#e Con!o"iate Rura" =an: to !ecure a "oan of

P100,000) Aitiona""y, %ar<ue ortgage 'ot (o) 703*+A+7+- to t#e Rura"

=an: of Cauayan to !ecure a "oan of P10,000) T#e!e ee! of rea" e!tate

ortgage were regi!tere wit# t#e ice of t#e Regi!ter of ee!)

%eanw#i"e, %ar<ue !o" 'ot (o) 703*+A+7+ to Roeo Ca"ito)

%ar<ue efau"te in t#e $ayent of #i! "oan an CR= cau!e t#e

forec"o!ure of t#e ortgage! an t#e "ot! were !o" to it a! t#e #ig#e!t&ier)

T#e #eir! of Teooro e"a Cru ;"e a ca!e for reconveyance an aage! a!

to t#e !out#ern $ortion of t#e "an, c"aiing to &e nu"" an voi t#e i!!uance of

TCT! to %ar<ue> t#e forec"o!ure !a"e in favour of CR=> to ortgage to R=C> an

t#e !a"e to Ca"ito) -vange"ine e" Ro!ario, !ucce!!or+in+intere!t of 9ernane,



;"e a Co$"aint in ntervention w#erein !#e c"aie t#e nort#ern $ortion of 'ot

(o) 703*+A+7)

%ar<ue argue t#at #e wa! a &uyer in goo fait# an for va"ue) 9e argue

a! we"" t#at &eing t#e ;r!t regi!trant, t#e !a"e in favour of #i u!t $revai" over

t#e !a"e to aiao an ayag w#ic# !#ou"n?t &e &ining u$on #i, t#at &eingunregi!tere) CR=, on t#e ot#er #an, in!i!te t#at t#ey were ortgagee! in goo

fait# an t#at t#ey #a t#e rig#t to re"y on t#e tit"e! of %ar<ue)

T#e RTC ru"e in favour of %ar<ue, ;ning not#ing to !#ow t#at %ar<ue

wa! aware of e"a Cru an e" Ro!ario?! c"ai of owner!#i$ an #o"ing t#at it

wa!, inee, %ar<ue, w#o ;r!t regi!tere)

T#e CA, #owever, rever!e t#e ru"ing of t#e RTC, #o"ing t#at %ar<ue

fai"e to $rove t#at #e wa! a $urc#a!er in goo fait# an noting t#at w#i"e

%ar<ue wa! t#e ;r!t regi!trant, t#ere wa! no !#owing t#at t#e regi!tration wa!

cou$"e wit# goo fait#) %ar<ue aitte #aving :now"ege t#at t#ere wa!i!$ute over !ai $ro$erty an t#at t#e 9eir! of e"a Cru were a"!o in $o!!e!!ion

of t#e "an)

A! to t#e ortgage!, t#e CA #e" t#at t#e &an:! ere"y re"ie on t#e

certi;cate! o tit"e an t#i! fai"ure to o&!erve i"igence in !tanar &an:ing

$roceure con!titute! &a fait# an on t#at &a!i!, t#e ortgage! were ec"are

nu"" an voi) CR= in!i!te t#at %ar<ue #a t#e rig#t over t#e !ai $ro$erty

&eing t#e ;r!t regi!tere owner!) 9ence, t#i! $etition)

Issue: @( %ar<ue, #aving regi!tere ;r!t, #a! &etter rig#t over t#e $ro$erty

!eld""Ratio:

(o)

But frst, important!! Applicability o 1544.

T#e RTC an t#e CA, a"&eit arriving at ierent conc"u!ion!, &ot# re"ie on

t#e (CC?! $rovi!ion on ou&"e !a"e .1544 to re!o"ve t#e ca!e) 9owever, t#e

Su$ree Court #e" t#at !uc# $rovi!ion i! not a$$"ica&"e in t#i! ca!e) 1544

conte$"ate! a ca!e of ou&"e !a"e &y a !ing"e venor) t i! nece!!ary t#at t#e

conveyance u!t #ave &een ae &y a $arty w#o #a! an ei!ting rig#t in t#e t#ing

an t#e $ower to i!$o!e of it) t cannot &e invo:e w#ere t#e two ierentcontract! of !a"e are ae &y two ierent $er!on!, one of t#e not &eing t#e

owner of t#e $ro$erty !o")

n t#e ca!e at &ar, t#e !u&6ect $ro$erty wa! not tran!ferre to !evera"

$urc#a!er! &y a !ing"e venor) n t#e ;r!t !a"e, t#e venor! were aiao an

ayag w#o!e rig#t to t#e $ro$erty originate fro t#eir ac<ui!ition t#ereof fro



Ria" %ari) n t#e !econ !a"e, t#e venor! were t#e %ari &rot#er! &ut at t#at

tie t#ey were no "onger t#e owner! !ince t#ey #a "ong i!$o!e of t#e $ro$erty)

n a !ituation w#ere not a"" t#e re<ui!ite! are $re!ent w#ic# wou" warrant

t#e a$$"ication of 1544, t#e $rinci$"e t#at #e w#o i! ;r!t in tie i! $referre in

rig#tB !#ou" a$$"y) n t#e in!tant ca!e, t#e !a"e &y aiao an ayag w#o ;r!t&oug#t it fro Ria" %ari wa! anterior to t#e !a"e to %ar<ue) T#e 9eir! of e"a

Cru an 9ernane a"!o #a $o!!e!!ion of t#e $ro$erty ;r!t) T#u!, a$$"ying t#e

$rinci$"e, t#e 9eir! #ave a !u$erior rig#t to t#e !u&6ect $ro$erty) %orover, !ince

t#e %ari &rot#er! were no "onger t#e owner! of t#e "ot at t#e tie of t#e !a"e to

%ar<ue, %ar<ue i not ac<uire any rig#t to it)

A!!uing argueno t#at 1544 a$$"ie!, t#e c"ai of %ar<ue !ti"" cannot

$revai" over t#e rig#t of t#e 9eir! !ince #e wa! not a $urc#a!er in goo fait#)

RICARDO CHENG vs RAMON GENATO and SPS. DA JOSE

G.R. NO. 12976! D"#"$%"& 29! 199'

FACTS:

• Ramon enato is t"e owner of two parcels of land located at 0aradise arms# )an 7ose del

onte# ulacan.

• )eptember 6# 1989< enato entered into an a%reement wit" t"e !a 7ose )pouses over said land.

-"e a%reement culminated in t"e e$ecution of a contract to sell %or w"ic" t"e purc"ase price was

08?.?? per sB.m. t was in a public instrument and contained t"e stipulation t"at< +after G? days#

after "avin% satisfactorily verified and confirmed t"e trut" and aut"enticity of documentsH vendee

s"all pay t"e vendor t"e full payment of t"e purc"ase price.,

• -"e !a 7ose )pouses as'ed for an e$tension of G? days w"en it failed to verify t"e said titles on

t"e condition t"at a new set of documents be made seven days after.

• 0endin% effectivity of said e$tension period# and wit"out due notice to )pouses !a 7ose# enato

e$ecuted an affidavit to annul t"e Contract to )ell. -"is was not annotated at t"e bac' of "is titles

ri%"t away.

• ctober :# 1989< Ricardo C"en% went to enato=s residence and e$pressed interest in buyin%

t"e subject properties. enato s"owed C"en% t"e copies of "is titles and t"e annotations at t"e

bac' t"ereof of "is contract to sell wit" t"e !a 7ose )pouses. 4e li'ewise s"owed C"en% t"e

affidavit to annul contract to sell.

• !espite t"ese# C"en% still issued a c"ec' for 0>?#??? upon t"e assurance t"at t"e previous

contract will be annulled.



• -"e !a 7ose )pouses met enato at t"e ffice of t"e Res%istry of !eeds by coincidence# and

were later s"oc'ed of enato=s decision to annul t"e contract and protested re%ardin% t"e matter.

-"ey reminded enato t"at t"e G? day e$tension period was still in effect and t"ey are willin% to

pay t"e downpayment.

• enato later continued wit" t"eir contract# informed C"en% of "i decision and returned to t"e

latter# t"e downpayment paid. C"en% "owever contended t"at t"eir contract to sell said property

"ad already been perfected.

ISSUES:

1. ()N *+" #,n*a#* *, s"-- %"*""n G"na*, and S/,0s"s Da J,s" as va-d- &"s#nd"d.2. ()N C+"n34s ,n #,n*&a#* *+ G"na*, as n,* 50s* a #,n*&a#* *, s"-- %0* , a #,nd*,na-

#,n*&a#* , sa-".

HELD:

1. N.

n a Contract to )ell# t"e payment of t"e purc"ase price is a positive suspensive condition# t"e failure of

w"ic" is not a breac"# casual or serious# but a situation t"at prevents t"e obli%ation of t"e vendor to

convey title from acBuirin% an obli%atory force. (rticle 1191 of t"e New Civil Code cannot be made to

apply to t"e situation in t"e instant case because no default can be ascribed to t"e !a 7ose spouses

since t"e G?&day e$tension period "as not yet e$pired.

-"e contention of t"e !a 7ose spouses t"at no furt"er condition was a%reed w"en t"ey were %ranted t"e

G?&day e$tension period from ctober ;# 1989 in connection wit" clause G of t"eir contract to sell s"ould

be up"eld. (lso# enato could "ave sent at least a notice of suc" fact# and t"ere bein% no stipulation

aut"orizin% "im for automatic rescission# so as to finally clear t"e encumbrance on "is titles and ma'e it

available to ot"er would be buyers# it bolstered t"at t"ere was no default on t"e part of t"e !a 7ose

)pouses. enato is not relieved from t"e %ivin% of a notice# verbal or written# to t"e !a 7ose spouses for

"is decision to rescind t"eir contract. n many cases.

:. - *() ( CN-R(C- - )233.

-"e Court ruled t"at if it was assumed t"at t"e receipt is to be treated as a conditional contract of sale# it

did not acBuire any obli%atory force since it was subject to suspensive condition t"at t"e earlier contract to

sell between enato and t"e !a 7ose spouses s"ould first be cancelled or rescinded E a condition never

met# as enato# to "is credit# upon realizin% "is error# redeemed "imself by respectin% and maintainin% "is

earlier contract wit" t"e !a 7ose spouses.

(rt.1> s"ould apply because for not only was t"e contract between "erein respondents first in time# it

was also re%istered lon% before petitionerFs intrusion as a second buyer @0R5) -20R2# 0R-R

75R2A. @)pouses made annotation on t"e title of enatoA. )ince C"en% was fully aware# or could "ave

been if "e "ad c"osen to inBuire# of t"e ri%"ts of t"e !a 7ose spouses under t"e Contract to )ell duly

annotated on t"e transfer certificates of titles of enato# it now becomes unnecessary to furt"er elaboratein detail t"e fact t"at "e is indeed in bad fait" in enterin% into suc" a%reement.

N< /Re%istration/# as defined by )oler and Castillo# means any entry made in t"e boo's of t"e re%istry# includin%

bot" re%istration in its ordinary and strict sense# and cancellation# annotation# and even mar%inal notes.n its strict

acceptation# it is t"e entry made in t"e re%istry w"ic" records solemnly and permanently t"e ri%"t of owners"ip and

ot"er real ri%"ts.



SAN LORENZO DEVELOPMENT CORPORATION, petitioner,

vs.

CORT O! APPEALS, PA"LO S# "A"ASANTA, SPS# MI$EL L and PACITA ZAVALLA L, respondents

$#R# No# 124242 %an&ary 21, 200'

!ACTS

• On 20 August 1986, the Spouses Lu purportedly sold two parcels o land to respondent !a"lo #a"asanta,

or the price o iteen pesos $!1%.00& per s'uare (eter. #a"asanta (ade a downpay(ent o $!%0,000.00&

as evidenced "y a (e(orandu( receipt issued "y !acita Lu o the sa(e date.

• #a"asanta wrote a letter to !acita Lu to de(and the e)ecution o a inal deed o sale in his avor so that

he could eect ull pay(ent o the purchase price. *n response, !acita Lu wrote a letter to #a"asanta

wherein she re(inded #a"asanta that when the "alance o the purchase price "eca(e due, he re'uested

or a reduction o the price and when she reused, #a"asanta "ac+ed out o the sale

• herein petitioner San Loreno -evelop(ent orporation $SL-& iled a Motion for Intervention. SL-

alleged that it had legal interest in the su"/ect (atter under litigation "ecause on ay 1989, the two

parcels o land involved had "een sold to it in a -eed o A"solute Sale with ortgage. *t alleged that it was

a "uyer in good aith and or value and thereore it had a "etter right over the property in litigation



• espondent #a"asanta, however, argued that SL- could not have ac'uired ownership o the property

"ecause it ailed to co(ply with the re'uire(ent o registration o the sale in good aith. 3e e(phasied

that at the ti(e SL- registered the sale in its avor on 0 4une 1990, there was already a notice o lis

pendens annotated on the titles o the property (ade as early as 2 4une 1989. 3ence, petitioner5s

registration o the sale did not coner upon it any right.

ISSE(

-id the registration o the sale ater the annotation o the notice o lis pendens o"literate the eects o delivery and

possession in good aith which ad(ittedly had occurred prior to SL-5s +nowledge o the transaction in avor o

#a"asanta

)ELD(NO

*t (ust "e stressed that as early as 11 7e"ruary 1989, the Spouses Lu e)ecuted the Option to Buy in

avor o SL- upon receiving !16,160.00 as option (oney ro( SL-. Ater SL- had paid (ore than

one hal o the agreed purchase price, the Spouses Lu su"se'uently e)ecuted on ay 1989 a Deed of

Absolute Sale in avor or SL-. At t*e t+e bot* deed- .ere e/ec&ted, SLDC *ad no no.ede o3

t*e r+or tran-act+on o3 t*e So&-e- L& .+t* "aba-anta# Si(ply stated, from the time of

execution of the first deed up to the moment of transfer and delivery of possession of the lands

to SLDC, it had acted in good faith and the subsequent annotation of lis pendens has no effect

at all on the consummated sale between SLDC and the Spouses Lu.

A purchaser in good aith is one who "uys property o another without notice that so(e other person has

a right to, or interest in, such property and pays a ull and air price or the sa(e at the ti(e o such

purchase, or before he has notice o the clai( or interest o so(e other person in the property.

e rule that SL- 'ualiies as a "uyer in good aith since there is no evidence e)tant in the records that it

had +nowledge o the prior transaction in avor o #a"asanta. At the ti(e o the sale o the property to

SL-, the vendors were still the registered owners o the property and were in act in possession o the

lands.

*n assailing +nowledge o the transaction "etween hi( and the Spouses Lu, #a"asanta apparently relies

on the principle o constructive notice incorporated in Section %2 o the !roperty egistration -ecree $!.-.

o. 1%29& which reads, thus:

Sec# '2# Con-tr&ct+5e not+ce &on re+-trat+on# – Every conveyance, mortae, lease, lien, attachment, order,

!udment, instrument or entry affectin reistered land shall, if reistered, filed, or entered in the office of the

"eister of Deeds for the province or city where the land to which it relates lies, be constructive notice to all

persons from the time of such reisterin, filin, or enterin#

• 3owever, the constructive notice operates as such "y the e)press wording o Section %2 ro( the ti(e o

the registration o the notice o lis pendens which in this case was eected only on 2 4une 1989, at which

ti(e the sale in avor o SL- had long "een consu((ated insoar as the o"ligation o the Spouses Lu to

transer ownership over the property to SL- is concerned.



G.R. No. 104482 January 22, 1996

BELINDA TAREDO, for herself and in representation of her brothers and sisters,

and TEOFILA CORPUZ TANEDO, representing her inor daughter VERNA

TANEDO, petitioners

!s.

THE COURT OF APPEALS, SPOUSES RICARDO M. TAREDO AND TERESITABARERA TAREDO, respondents

FACTS"

1. #$tober 20, 1962" %a&ardo 'a(edo e)e$uted a notari&ed deed of absolute sale

in fa!or of his eldest brother, Ri$ardo 'a(edo, and the latter*s +ife, 'eresita

arera -pri!ate respondents +hereby he $on!eyed for /1,00 one he$tare of

his future inheritan$e fro his parents.2. ebruary 28, 1980" pon the death of his father 3atias, %a&aro ade another

ada!it to rear the 1962 sale.5. January 15, 1981" %a&aro a$no+ledged therein his re$eipt of / 10,000.00 as

$onsideration for the sale.4. ebruary 1981" Ri$ardo learned that %a&aro sold the sae property to his

$hildren -petitioners through a deed of sale dated 7e$eber 29, 1980. #n June , 1982, Ri$ardo re$orded the 7eed of ale in their fa!or in the

Registry of 7eeds

/etitioners :led a $oplaint for res$ission -plus daages of the deeds of sale

e)e$uted by %a&aro in fa!or of Ri$ardo. 'hey $ontend that %olo 3atias desired that

+hate!er inheritan$e %a&aro +ould re$ei!e fro hi should be gi!en to his

-%a&aro*s $hildren.

Ri$ardo -pri!ate respondents ho+e!er presented in e!iden$e a ;7eed of Re!o$ation

of a 7eed of ale< +herein %a&aro re!oed the sale in fa!or of his $hildren for the

reason that it +as ;siulated or :$titious = +ithout any $onsideration +hatsoe!er.<

%>?>R#* @ARB#N" Ce e)e$uted a s+orn stateent in fa!or of his $hildren. ' he

also testi:ed that he sold the property to Ri$ardo, and that it +as a la+yer +ho

indu$ed hi to e)e$ute a deed of sale in fa!or of his $hildren after gi!ing hi :!e

pesos -/.00 to buy a ;drin<. %>#

'rial $ourt ruled in fa!or of %a&aro*s $hildren. Da ared 'D*s de$ision.

ISSUES"

1. Bs the sale of a future inheritan$e !alidE N#

2. Fas Ri$ardo*s registration of the deed of !alidE A



HELD" D rules in fa!or of Ri$ardo.

/ursuant to >rt 154, the $ontra$t ade in 1962 -sale of future inheritan$e is not

!alid and $annot be the sour$e of any right nor the $reator of any obligation

bet+een the parties. -;No $ontra$t ay be entered into upon a future inheritan$e

e)$ept in $ases e)pressly authori&ed by la+.

Co+e!er, >rti$le 144 go!erns the preferential rights of !endees in $ases of

ultiple sales. 'he property in Huestion is land, an io!able, and o+nership shall

belong to the buyer +ho in good faith registers it :rst in the registry of property.

'hus, although the deed of sale in fa!or of Ri$ardo +as later than the one in fa!or of

%a&aro*s $hildren, o+nership +ould !est +ith Ri$ardo be$ause of the undisputed fa$t

of registration. #n the other hand, petitioners ha!e not registered the sale to the

at all.

%a&aro*s $hildren $ontend that they +ere in possession of the property and that

Ri$ardo ne!er too possession thereof. >s bet+een t+o pur$hasers, the one +ho

registered the sale in his fa!or has a preferred right o!er the other +ho has not

registered his title, e!en if the latter is in a$tual possession of the io!able

property.

FCARA#RA, the petition is 7ANBA7 and the assailed 7e$ision of the Dourt of

>ppeals is >BR3A7.

II. SUJECT MATTER

2.L#*

a.8 ELINDA TAEDO! ,& +"&s"- and n &"/&"s"n*a*,n , +"& %&,*+"&s and ss*"&s! and TEOFILA CORPUTAEDO! &"/&"s"n*n3 +"& $n,& da03+*"& ;ERNA TAEDO vs. COURT OF APPEALS! SPOUSES RICARDOM. TAEDO AND TERESITA ARERA TAEDO

FACTS:

n ctober :?# 196:# 3azardo -aIedo e$ecuted a notarized deed of absolute sale in favor of "is eldest brot"er#

Ricardo -aIedo# and t"e latterFs wife# -eresita arera# private respondents "erein# w"ereby "e conveyed to t"e latterin consideration of 01#>??.??# /one "ectare of w"atever s"are s"all "ave over 3ot No. 191/# t"e said property bein%

"is /future in"eritance/ from "is parents. 5pon t"e deat" of "is fat"er# 3azaro e$ecuted an /(ffidavit of Conformity/ to

/re&affirm# respect# ac'nowled%e and validate t"e sale made in 196:./ n 7anuary 1G# 1981# 3azaro e$ecuted

anot"er notarized deed of sale in favor of Ricardo and -eresita# coverin% "is /undivided N2 -*23V2 @1J1:A of a

parcel of land 'nown as 3ot 191 /. 4e ac'nowled%ed "is receipt of 01?#??? as consideration. Ricardo learned t"at

3azaro sold t"e same property to "is c"ildren# petitioners "erein# t"rou%" anot"er deed of sale. n 7une ;# 198:#

private respondents recorded t"e !eed of )ale in t"eir favor in t"e Re%istry of !eeds and entry was made in t"e -C-.



0etitioners on 7uly 16# 198: filed a complaint for rescission @plus dama%esA of t"e deeds of sale e$ecuted by 3azaro

in favor of private respondents. 0etitioners claimed t"at t"eir fat"er# 3azaro# e$ecuted an /(bsolute !eed of )ale/

conveyin% to "is ten c"ildren "is allotted portion from t"e e$trajudicial partition e$ecuted by t"e "eirs of atias.

0etitioners also presented in evidence< @1A a private writin% purportedly prepared and si%ned by atias# statin% t"at it

was "is desire t"at w"atever in"eritance 3azaro would receive from "im s"ould be %iven to "is @3azaroFsA c"ildrenK @:A

a typewritten document si%ned by 3azaro w"erein "e confirmed t"at "e would voluntarily abide by t"e wis"es of "is

fat"erK and @GA a letter of 3azaro to "is dau%"ter# Carmela# statin% t"at "is s"are in t"e e$trajudicial settlement of t"eestate of "is fat"er was intended for "is c"ildren# petitioners "erein.

0rivate respondents# "owever presented in evidence a /!eed of Revocation of a !eed of )ale/# w"erein 3azaro

revo'ed t"e sale in favor of petitioners for t"e reason t"at it was /simulated or fictitious wit"out any consideration

w"atsoever/. )"ortly after t"e case a quo was filed# 3azaro e$ecuted a sworn statement w"ic" virtually repudiated

t"e contents of t"e !eed of Revocation of a !eed of )ale and t"e !eed of )ale in favor of private respondents.

4owever# 3azaro testified t"at "e sold t"e property to Ricardo# and t"at it was a lawyer w"o induced "im to e$ecute a

deed of sale in favor of "is c"ildren after %ivin% "im five pesos @0>.??A to buy a /drin'/.

TC< decided in favor of private respondents# "oldin% t"at petitioners failed /to adduce a proponderance of evidence to

support @t"eirA claim. CA< affirmed t"e decision of t"e -C# rulin% t"at t"e !eed of )ale dated 7anuary 1G# 1981 was

valid and t"at its re%istration in %ood fait" vested title in said respondents.

ISSUES:

. s t"e sale of a future in"eritance validL

. *as t"e subseBuent e$ecution on 7anuary 1G# 1981 @and re%istration wit" t"e Re%istry of 0ropertyA

of a deed of sale coverin% t"e same property to t"e same buyers validL

HELD:

-"e sale made in 196: involvin% future in"eritance is not really at issue "ere. n conte$t# t"e assailed !ecision

conceded /it may be le%ally correct t"at a contract of sale of anticipated future in"eritance is null and void./ ut to

remove all doubts# we "ereby cate%orically rule t"at# pursuant to (rticle 1G; of t"e Civil Code# /@nAo contract may be

entered into upon a future in"eritance e$cept in cases e$pressly aut"orized by law./ ConseBuently# said contract

made in 196: is not valid and cannot be t"e source of any ri%"t nor t"e creator of any obli%ation between t"e parties.

4ence# t"e /affidavit of conformity/ dated ebruary :8# 198?# insofar as it sou%"t to validate or ratify t"e 196: sale# is

also useless and# in t"e words of t"e respondent Court# /suffers from t"e same infirmity./ 2ven private respondents in

t"eir memorandum concede t"is.

http://www.lawphil.net/judjuris/juri1996/jan1996/gr_104482_1996.html#fnt4





4owever# t"e documents t"at are critical to t"e resolution of t"is case are< @aA t"e deed of sale of 7anuary 1G# 1981 in

favor of private respondents coverin% 3azaroFs undivided in"eritance of one&twelft" @1J1:A s"are in 3ot No. 191# w"ic"

was subseBuently re%istered on 7une ;# 198:K and @bA t"e deed of sale dated !ecember :9# 198? in favor of

petitioners coverin% t"e same property. -"ese two documents were e$ecuted after t"e deat" of atias @and "is

spouseA and after a deed of e$tra&judicial settlement of "is estate was e$ecuted# t"us vestin% in 3azaro actual titleover said property. n ot"er words# t"ese dispositions# t"ou%" conflictin%# were no lon%er infected wit" t"e infirmities of

t"e 196: sale.

-"e C( correctly identified t"e subject matter of t"e 7anuary 1G# 1981 sale to be t"e entire undivided 1J1: s"are of

3azaro in 3ot No. 191 and w"ic" is t"e same property disposed of on !ecember :9# 198? in favor of petitioners.

Critical in determinin% w"ic" of t"ese two deeds s"ould be %iven effect is t"e re%istration of t"e sale in favor of private

respondents wit" t"e re%ister of deeds on 7une ;# 198:.

(rticle 1> of t"e Civil Code %overns t"e preferential ri%"ts of vendees in cases of multiple sales. -"e property in

Buestion is land# an immovable# and followin% t"e above&Buoted law# owners"ip s"all belon% to t"e buyer w"o in %ood

fait" re%isters it first in t"e re%istry of property. -"us# alt"ou%" t"e deed of sale in favor of private respondents was

later t"an t"e one in favor of petitioners# owners"ip would vest in t"e former because of t"e undisputed fact of

re%istration. n t"e ot"er "and# petitioners "ave not re%istered t"e sale to t"em at all. 0etitioners contend t"at t"ey

were in possession of t"e property and t"at private respondents never too' possession t"ereof. (s between two

purc"asers# t"e one w"o re%istered t"e sale in "is favor "as a preferred ri%"t over t"e ot"er w"o "as not re%istered

"is title# even if t"e latter is in actual possession of t"e immovable property.

Republic of t"e 0"ilippines

SUPREME COURTanila

-4R! !V)N

G.R. N,. 17<= F"%&0a& 2! 21

RA>MUNDO S. DE LEON! 0etitioner#

vs.

ENITA T. ONG.

1

Respondent.

! 2 C ) N

CORONA! J.:

n arc" 1?# 199G# petitioner Raymundo ). de 3eon sold t"ree parcels of land: wit" improvements situated in

(ntipolo# Rizal to respondent enita -. n%. (s t"ese properties were mort%a%ed to Real )avin%s and 3oan

http://www.lawphil.net/judjuris/juri2010/feb2010/gr_170405_2010.html#fnt1







(ssociation# ncorporated @R)3(A# petitioner and respondent e$ecuted a notarized deed of absolute sale wit"

assumption of mort%a%eG statin%<

$ $$ $ $$ $ $$

-"at for and in consideration of t"e sum of N2 33N N2 45N!R2! -45)(N! 02)) @01.1 millionA#

0"ilippine currency# t"e receipt w"ereof is "ereby ac'nowled%ed from MR2)0N!2N- to t"e entire

satisfaction of M02--N2R# sad MPETITIONER d,"s +"&"% s"--! *&ans"& and #,nv" n a $ann"&a%s,-0*" and &&"v,#a%-"! 0n*, sad MRESPONDENT# "is "eirs and assi%ns t"at certain real estate to%et"er

wit" t"e buildin%s and ot"er improvements e$istin% t"ereon# situated in Marrio ayamot# (ntipolo# Rizal under

t"e followin% terms and conditions<

1. -"at upon full payment of Mrespondent of t"e amount of 5R 45N!R2! -22N -45)(N! V2

45N!R2! @01>#???A# Mpetitioner s"all e$ecute and si%n a deed of assumption of mort%a%e in favor of

Mrespondent wit"out any furt"er cost w"atsoeverK

:. -"at Mrespondent s"all assume payment of t"e outstandin% loan of )O 45N!R2! 24-D 5R

-45)(N! V2 45N!R2! 02)) @068#>??A wit" R2(3 )(VN) (N! 3(N# Cainta# RizalH

@emp"asis suppliedA

$ $$ $ $$ $ $$

0ursuant to t"is deed# respondent %ave petitioner 01>#>?? as partial payment. 0etitioner# on t"e ot"er "and#

"anded t"e 'eys to t"e properties and wrote a letter informin% R)3( of t"e sale and aut"orizin% it to accept

payment from respondent and release t"e certificates of title.

-"ereafter# respondent undertoo' repairs and made improvements on t"e properties.> Respondent li'ewise

informed R)3( of "er a%reement wit" petitioner for "er to assume petitioner=s outstandin% loan. R)3(

reBuired "er to under%o credit investi%ation.

)ubseBuently# respondent learned t"at petitioner a%ain sold t"e same properties to one 3eona Viloria after

arc" 1?# 199G and c"an%ed t"e loc's# renderin% t"e 'eys "e %ave "er useless. Respondent t"us proceeded

to R)3( to inBuire about t"e credit investi%ation. 4owever# s"e was informed t"at petitioner "ad already paid

t"e amount due and "ad ta'en bac' t"e certificates of title.

Respondent persistently contacted petitioner but "er efforts proved futile.

n 7une 18# 199G# respondent filed a complaint for specific performance# declaration of nullity of t"e second

sale and dama%es6 a%ainst petitioner and Viloria in t"e Re%ional -rial Court @R-CA of (ntipolo# Rizal# ranc"

;. )"e claimed t"at since petitioner "ad previously sold t"e properties to "er on arc" 1?# 199G# "e no lon%er

"ad t"e ri%"t to sell t"e same to Viloria. -"us# petitioner fraudulently deprived "er of t"e properties.

0etitioner# on t"e ot"er "and# insisted t"at respondent did not "ave a cause of action a%ainst "im and

conseBuently prayed for t"e dismissal of t"e complaint. 4e claimed t"at since t"e transaction was subject to a

condition @i.e.# t"at R)3( approve t"e assumption of mort%a%eA# t"ey only entered into a contract to sell.

nasmuc" as respondent did apply for a loan from R)3(# t"e condition did not arise. ConseBuently# t"e sale

was not perfected and "e could freely dispose of t"e properties. urt"ermore# "e made a counter&claim for

dama%es as respondent filed t"e complaint alle%edly wit" %ross and evident bad fait".












ecause respondent was a licensed real estate bro'er# t"e R-C concluded t"at s"e 'new t"at t"e validity of

t"e sale was subject to a condition. -"e perfection of a contract of sale depended on R)3(=s approval of t"e

assumption of mort%a%e. )ince R)3( did not allow respondent to assume petitioner=s obli%ation# t"e R-C "eld

t"at t"e sale was never perfected.

n a decision dated (u%ust :;# 1999#; t"e R-C dismissed t"e complaint for lac' of cause of action and ordered

respondent to pay petitioner 01??#??? moral dama%es# 0:?#??? attorney=s fees and t"e cost of suit.

(%%rieved# respondent appealed to t"e Court of (ppeals @C(A#8 assertin% t"at t"e court a quo erred in

dismissin% t"e complaint.

-"e C( found t"at t"e arc" 1?# :??G contract e$ecuted by t"e parties did not impose any condition on t"e

sale and "eld t"at t"e parties entered into a contract of sale. ConseBuently# because petitioner no lon%er

owned t"e properties w"en "e sold t"em to Viloria# it declared t"e second sale void. oreover# it found

petitioner liable for moral and e$emplary dama%es for fraudulently deprivin% respondent of t"e properties.

n a decision dated 7uly ::# :??>#9 t"e C( up"eld t"e sale to respondent and nullified t"e sale to Viloria. t

li'ewise ordered respondent to reimburse petitioner 0;1>#:>? @or t"e amount "e paid to R)3(A. 0etitioner# on

t"e ot"er "and# was ordered to deliver t"e certificates of titles to respondent and pay "er 0>?#??? moral

dama%es and01>#??? e$emplary dama%es.

0etitioner moved for reconsideration but it was denied in a resolution dated November 11# :??>.1? 4ence# t"is

petition#11 wit" t"e sole issue bein% w"et"er t"e parties entered into a contract of sale or a contract to sell.

0etitioner insists t"at "e entered into a contract to sell since t"e validity of t"e transaction was subject to a

suspensive condition# t"at is, t"e approval by R)3( of respondent=s assumption of mort%a%e. ecause R)3(

did not allow respondent to assume "is @petitioner=sA obli%ation# t"e condition never materialized. ConseBuently#

t"ere was no sale.

Respondent# on t"e ot"er "and# asserts t"at t"ey entered into a contract of sale as petitioner already conveyed

full owners"ip of t"e subject properties upon t"e e$ecution of t"e deed.

*e modify t"e decision of t"e C(.

C,n*&a#* , Sa-" ,& C,n*&a#* *, S"--?

-"e R-C and t"e C( "ad conflictin% interpretations of t"e arc" 1?# 199G deed. -"e R-C ruled t"at it was a

contract to sell w"ile t"e C( "eld t"at it was a contract of sale.

n a contract of sale# t"e seller conveys owners"ip of t"e property to t"e buyer upon t"e perfection of t"e

contract. )"ould t"e buyer default in t"e payment of t"e purc"ase price# t"e seller may eit"er sue for t"e

collection t"ereof or "ave t"e contract judicially resolved and set aside. -"e non&payment of t"e price ist"erefore a ne%ative resolutory condition.1:

n t"e ot"er "and# a contract to sell is subject to a positive suspensive condition. -"e buyer does not acBuire

owners"ip of t"e property until "e fully pays t"e purc"ase price. or t"is reason# if t"e buyer defaults in t"e

payment t"ereof# t"e seller can only sue for dama%es.1G

-"e deed e$ecuted by t"e parties @as previously BuotedA stated t"at petitioner sold t"e properties to respondent

/in a manner absolute and irrevocable/ for a sum of 01.1 million.1 *it" re%ard to t"e manner of payment# it

























reBuired respondent to pay 01>#>?? in cas" to petitioner upon t"e e$ecution of t"e deed# wit" t"e

balance1>payable directly to R)3( @on be"alf of petitionerA wit"in a reasonable time.16 Not"in% in said

instrument implied t"at petitioner reserved owners"ip of t"e properties until t"e full payment of t"e purc"ase

price.1; n t"e contrary# t"e terms and conditions of t"e deed only affected t"e manner of payment# not t"e

immediate transfer of owners"ip @upon t"e e$ecution of t"e notarized contractA from petitioner as seller to

respondent as buyer. t"erwise stated# t"e said terms and conditions pertained to t"e performance of t"e

contract# not t"e perfection t"ereof nor t"e transfer of owners"ip.

)ettled is t"e rule t"at t"e seller is obli%ed to transfer title over t"e properties and deliver t"e same to t"e

buyer.18n t"is re%ard# (rticle 198 of t"e Civil Code19 provides t"at# as a rule# t"e e$ecution of a notarized deed

of sale is eBuivalent to t"e delivery of a t"in% sold.

n t"is instance# petitioner e$ecuted a notarized deed of absolute sale in favor of respondent. oreover# not

only did petitioner turn over t"e 'eys to t"e properties to respondent# "e also aut"orized R)3( to receive

payment from respondent and release "is certificates of title to "er. -"e totality of petitioner=s acts clearly

indicates t"at "e "ad unBualifiedly delivered and transferred owners"ip of t"e properties to respondent. Clearly#

it was a contract of sale t"e parties entered into.

urt"ermore# even assumin% arguendo t"at t"e a%reement of t"e parties was subject to t"e condition t"atR)3( "ad to approve t"e assumption of mort%a%e# t"e said condition was considered fulfilled as petitioner

prevented its fulfillment by payin% "is outstandin% obli%ation and ta'in% bac' t"e certificates of title wit"out even

notifyin% respondent. n t"is connection# (rticle 1186 of t"e Civil Code provides<

(rticle 1186. -"e condition s"all be deemed fulfilled w"en t"e obli%or voluntarily prevents its fulfillment.

;,d Sa-" O& D,0%-" Sa-"?

0etitioner sold t"e same properties to two buyers# first to respondent and t"en to Viloria on two separate

occasions.:? 4owever# t"e second sale was not void for t"e sole reason t"at petitioner "ad previously sold t"e

same properties to respondent. n t"is account# t"e C( erred.

-"is case involves a d,0%-" sa-" as t"e disputed properties were sold validly on two separate occasions by

t"e same seller to t"e two different buyers in %ood fait".

(rticle 1> of t"e Civil Code provides<

(rticle 1>. f t"e same t"in% s"ould "ave been sold to different vendees# t"e owners"ip s"all be transferred

to t"e person w"o may "ave first ta'en possession t"ereof in %ood fait"# if it s"ould be movable property.

S+,0-d * %" $$,va%-" /&,/"&*! *+" ,n"&s+/ s+a-- %"-,n3 *, *+" /"&s,n a#@0&n3 * +, n 3,,da*+ &s* &"#,&d"d * n *+" R"3s*& , P&,/"&*.

S+,0-d *+"&" %" n, ns#&/*,n! *+" ,n"&s+/ s+a-- /"&*an *, *+" /"&s,n +, n 3,,d a*+ as &s* n*+" /,ss"ss,n and! n *+" a%s"n#" *+"&",! *, *+" /"&s,n +, /&"s"n*s *+" ,-d"s* **-"! /&,vd"d *+"&"s 3,,d a*+. @emp"asis suppliedA

















-"is provision clearly states t"at t"e rules on double or multiple sales apply only to purc"asers in %ood fait".

Needless to say# it disBualifies any purc"aser in bad fait".

( purc"aser in %ood fait" is one w"o buys t"e property of anot"er wit"out notice t"at some ot"er person "as a

ri%"t to# or an interest in# suc" property and pays a full and fair price for t"e same at t"e time of suc" purc"ase#

or before "e "as notice of some ot"er person=s claim or interest in t"e property.:1 -"e law reBuires# on t"e part

of t"e buyer# lac' of notice of a defect in t"e title of t"e seller and payment in full of t"e fair price at t"e time of

t"e sale or prior to "avin% notice of any defect in t"e seller=s title.

*as respondent a purc"aser in %ood fait"L Des.

Respondent purc"ased t"e properties# 'nowin% t"ey were encumbered only by t"e mort%a%e to R)3(.

(ccordin% to "er a%reement wit" petitioner# respondent "ad t"e obli%ation to assume t"e balance of petitioner=s

outstandin% obli%ation to R)3(. ConseBuently# respondent informed R)3( of t"e sale and of "er assumption

of petitioner=s obli%ation. 4owever# because petitioner surreptitiously paid "is outstandin% obli%ation and too'

bac' "er certificates of title# petitioner "imself rendered respondent=s obli%ation to assume petitioner=s

indebtedness to R)3( impossible to perform.

(rticle 1:66 of t"e Civil Code provides<

(rticle 1:66. -"e debtor in obli%ations to do s"all be released w"en t"e prestation become le%ally or p"ysically

impossible wit"out t"e fault of t"e obli%or.

)ince respondent=s obli%ation to assume petitioner=s outstandin% balance wit" R)3( became impossiblewit"out "er fault# s"e was released from t"e said obli%ation. oreover# because petitioner "imself willfully

prevented t"e condition vis&P&vis t"e payment of t"e remainder of t"e purc"ase price# t"e said condition is

considered fulfilled pursuant to (rticle 1186 of t"e Civil Code. or purposes# t"erefore# of determinin% w"et"er

respondent was a purc"aser in %ood fait"# s"e is deemed to "ave fully complied wit" t"e condition of t"e

payment of t"e remainder of t"e purc"ase price.

Respondent was not aware of any interest in or a claim on t"e properties ot"er t"an t"e mort%a%e to R)3(

w"ic" s"e undertoo' to assume. oreover# Viloria bou%"t t"e properties from petitioner after t"e latter sold

t"em to respondent. Respondent was t"erefore a purc"aser in %ood fait". 4ence# t"e rules on double sale are

applicable.

(rticle 1> of t"e Civil Code provides t"at w"en neit"er buyer re%istered t"e sale of t"e properties wit" t"e

re%istrar of deeds# t"e one w"o too' prior possession of t"e properties s"all be t"e lawful owner t"ereof.

n t"is instance# petitioner delivered t"e properties to respondent w"en "e e$ecuted t"e notarized deed :: and

"anded over to respondent t"e 'eys to t"e properties. or t"is reason# respondent too' actual possession and

e$ercised control t"ereof by ma'in% repairs and improvements t"ereon. Clearly# t"e sale was perfected and

consummated on arc" 1?# 199G. -"us# respondent became t"e lawful owner of t"e properties.








Nonet"eless# w"ile t"e condition as to t"e payment of t"e balance of t"e purc"ase price was deemed fulfilled#

respondent=s obli%ation to pay it subsisted. t"erwise# s"e would be unjustly enric"ed at t"e e$pense of

petitioner.

-"erefore# respondent must pay petitioner 068#>??# t"e amount stated in t"e deed. -"is is because t"e

provisions# terms and conditions of t"e contract constitute t"e law between t"e parties. oreover# t"e deed

itself provided t"at t"e assumption of mort%a%e /was wit"out any furt"er cost w"atsoever./ 0etitioner# on t"e

ot"er "and# must deliver t"e certificates of title to respondent. *e li'ewise affirm t"e award of dama%es.

(HEREFORE# t"e 7uly ::# :??> decision and November 11# :??> resolution of t"e Court of (ppeals in C(&

.R. CV No. >9;8 are "ereby AFFIRMED wit" MODIFICATION insofar as respondent enita -. n% is

ordered to pay petitioner Raymundo de 3eon 068#>?? representin% t"e balance of t"e purc"ase price as

provided in t"eir arc" 1?# 199G a%reement.

Costs a%ainst petitioner.

SO ORDERED.

De Leon vs. Benita T. Ong

GR No. 170405, Feb. 2, 2010

Absolute an !onitional "ales

Fa#ts$

On %a&#' 10, 1((), Ra*+uno ". De Leon -etitione& sol ) -a&#els o/ lan to Benita T.

Ong&es-onent. T'e sai -&o-e&ties e&e +o&tgage to a /inan#ial institution Real "avings Loan

Asso#iation 3n#. R"LA3. T'e -a&ties t'en ee#ute a nota&ie ee o/ absolute sale it'assu+-tion o/

+o&tgage. As ini#ate in t'e ee o/ +o&tgage, t'e -a&ties sti-ulate t'at t'e -etitione& e leon s'all

ee#ute a ee o/ assu+-tion o/ +o&tgage in /avo& o/ Ong &es-onenta/te& /ull -a*+ent o/ t'e

6415,000. T'e* also ag&ee t'at t'e &es-onent Ong s'all assu+e t'e+o&tgage. T'e &es-onent t'en

subseuentl* gave -etitione& 6415,000 as -a&tial -a*+ent. On t'eot'e& 'an, e leon 'ane t'e 8e*s to

Ong an e leon &ote a lette& to in/o&+ R"LA3 t'at t'e+o&tgage ill be assu+e b* Ong. T'e&ea/te&, t'e

&es-onent too8 &e-ai&s an +aei+-&ove+ents in t'e -&o-e&ties. "ubseuentl*, &es-onent lea&ne t'at

t'e sa+e -&o-e&ties e&esol to a #e&tain 9ilo&ia a/te& %a&#' 10, 1(() an #'ange t'e lo#8s, &ene&ing

t'e 8e*s given to'e& useless. Res-onent -&o#eee to R"LA3 but s'e as in/o&+e t'at t'e +o&tgage

'as been/ull* -ai an t'at t'e titles 'ave been given to t'e sai -e&son. Res-onent t'en /ile a

#o+-laint/o& s-e#i/i# -e&/o&+an#e an e#la&ation o/ nullit* o/ t'e se#on sale an a+ages. T'e

-etitione& #ontene t'at &es-onent oes not 'ave a #ause o/ a#tion against 'i+ be#ause t'e sale

assub:e#t to a #onition 'i#' &eui&es t'e a--&oval o/ R"LA3 o/ t'e +o&tgage. 6etitione& &eite&atet'at



t'e* onl* ente&e into a #ont&a#t to sell. T'e RT! is+isse t'e #ase. On a--eal, t'e !Au-'el t'e sale to

&es-onent an nulli/ie t'e sale to 9ilo&ia. 6etitione& +ove /o& &e#onsie&ation to t'e "!

.3ssue$ ;'et'e& t'e -a&ties ente&e into a #ont&a#t o/ sale o& a #ont&a#t to sell<

=el$3n a #ont&a#t o/ sale, t'e selle& #onve*s one&s'i- o/ t'e -&o-e&t* to t'e bu*e& u-on t'e -e&/e#tiono/ t'e

#ont&a#t. T'e non>-a*+ent o/ t'e -&i#e is a negative &esoluto&* #onition. !ont&a#t to sellis sub:e#t to a

-ositive sus-ensive #onition. T'e bu*e& oes not a#ui&e one&s'i- o/ t'e -&o-e&t* until 'e /ull* -a*s

t'e -u&#'ase -&i#e.3n t'e -&esent #ase, t'e ee ee#ute b* t'e -a&ties i not s'o t'at t'e one&

intens to&ese&ve one&s'i- o/ t'e -&o-e&ties. T'e te&+s an #onitions a//e#te onl* t'e +anne& o/

-a*+ent an not t'e i++eiate t&ans/e& o/ one&s'i-. 3t as #lea& t'at t'e one& intene a sale be#ause

'e unuali/iel* elive&e an t&ans/e&&e one&s'i- o/ t'e -&o-e&ties to t'e &es-onent

>gri$ultural and Coe A)tension 7e!elopent Group !s. D> IG.R. No. 92510.

epteber 5, 1992. irst 7i!ision, Dru& -J" 5 $on$urring a$ts" #n 29 3ar$h 192,

the spouses >ndres 7ia& and Josefa 3ia sold to runo Gundran a 19=he$tare par$el

of land in %as /i(as, Ri&al, $o!ered by 'D' 28416. 'he o+ner*s dupli$ate $opy of

the title +as turned o!er to Gundran. Co+e!er, he did not register the 7eed of

>bsolute ale be$ause he said he +as ad!ised in the #$e of the Register of 7eeds

of /asig of the e)isten$e of noti$es of lis pendens on the title. #n 20 No!eber

192, Gundran and >gri$ultural and Coe 7e!elopent Group ->C7G entered into

a Joint @enture >greeent for the ipro!eent and subdi!ision of the land. 'his

agreeent +as also not annotated on the title. #n 50 >ugust 196, the spouses

>ndres 7ia& and Josefa 3ia again entered into another $ontra$t of sale of the sae

property +ith %ibrado Dabautan. #n 5 epteber 196, by !irtue of an order of the

DB Ri&al, a ne+ o+ner*s $opy of the $erti:$ate of title +as issued to the 7ia&

spouses, +ho had alleged the loss of their $opy. #n that sae date, the noti$es of

lis pendens annotated on 'D' 28416 +ere $an$eled and the 7eed of ale in fa!or

of Dabautan +as re$orded. > ne+ 'D' =5580K'=12 +as thereupon issued in his

nae in lieu of the $an$eled 'D' 28416. #n 14 3ar$h 19, Gundran instituted an

a$tion for re$on!eyan$e before the DB /asay Dity L against %ibrado Dabautan and

Josefa 3ia seeing, aong others, the $an$ellation of 'D' 5580K'=12 and the

issuan$e of a ne+ $erti:$ate of title in his nae. #n 51 >ugust 19, >C7G,

represented by Ni$asio 7. an$he&, r. -later substituted by 3ilagros . u$u, :leda $oplaint in inter!ention +ith substantially the sae allegations and prayers as

that in Gundran*s $oplaint. Bn a de$ision dated 12 January 198, Gundran*s ales,

2005 - 1 Caysta$s -erne Guerrero $oplaint and petitioner*s $oplaint in

inter!ention +ere disissed for la$ of erit. o +as Dabautan*s $ounter$lais, for

insu$ien$y of e!iden$e. pon appeal, this de$ision +as ared by the Dourt of

>ppeals, +ith the odi:$ation that Josefa 3ia +as ordered to pay Gundran the su

of /90,000.00, +ith legal interest fro 5 epteber 196, plus the $osts of suit. 'he



upree Dourt denied the petition and ared in toto the Huestioned de$isionM

+ith $osts against >C7G. 1. >rti$le 144 nder >rti$le 144 of the Di!il Dode of the

/hilippines, it is pro!ided that ;Bf the sae thing should ha!e been sold to dierent

!endees, the o+nership shall be transferred to the person +ho ay ha!e :rst taen

possession thereof in good faith, if it should be o!able property. hould it be

io!able property, the o+nership shall belong to the person a$Huiring it +ho ingood faith :rst re$orded it in the Registry of /roperty. hould there be no ins$ription,

the o+nership shall pertain to the person +ho in good faith +as :rst in the

possessionM and, in the absen$e thereof, to the person +ho presents the oldest title,

pro!ided there is good faith. 2. /referential right of :rst to register 'he :rst sale to

Gundran +as not registered +hile the se$ond sale to Dabautan +as registered.

/referential rights are a$$orded to Dabautan, +ho had registered the sale in his

fa!or, as against >C7G*s $o!enturer +hose right to the sae property had not been

re$orded. 5. /ur$haser in good faith > pur$haser in good faith is de:ned as ;one

+ho buys the property of another +ithout noti$e that soe other person has a right

to or interest in su$h property and pays a full and fair pri$e for the sae at the tie

of su$h pur$hase or before he has noti$e of the $lai or interest of soe other

person in the property.< Bn the present $ase, an e)aination of 'D' 28416

dis$loses no annotation of any sale, lien, en$ubran$e or ad!erse $lai in fa!or of

Gundran or >C7D. 4. Registered property under 'orrens systeM /erson $harge +ith

noti$e of burdens noted on the register of title Fhen the property sold is registered

under the 'orrens syste, registration is the operati!e a$t to $on!ey or ae$t the

land insofar as third persons are $on$erned. 'hus, a person dealing +ith registered

land is only $harged +ith noti$e of the burdens on the property +hi$h are noted on

the register or $erti:$ate of title. . Noti$es of lis pendes not a lien or en$ubran$e,

erely noti$e of litigation of property subOe$t to the result of the suit Noti$es of lis

pendens in fa!or of other persons +ere earlier ins$ribed on the title did not ha!e theee$t of establishing a lien or en$ubran$e on the property ae$ted. 'heir only

purpose +as to gi!e noti$e to third persons and to the +hole +orld that any interest

they ight a$Huire in the property pending litigation +ould be subOe$t to the result

of the suit. 6. Dabautan a pur$haser in good faith and for !alue Dabautan too the

ris of a$Huiring the property e!en in the light of noti$e of lis pendens ins$ribed in

the title. igni:$antly, three days after the e)e$ution of the deed of sale in his fa!or,

the noti$es of lis pendens +ere $an$eled by !irtue of the orders of the DB Ri&al,

ran$h 25, dated 1 and 4 >pril 194. Dabautan therefore a$Huired the land free of

any liens or en$ubran$es and so $ould $lai to be a pur$haser in good faith and

for !alue. ales, 2005 - 16 Caysta$s -erne Guerrero . No e!iden$e of allegedpossession by >C7G >C7G insists that it +as already in possession of the disputed

property +hen Dabautan pur$hased it and that he $ould not ha!e not no+n of that

possession. u$h no+ledge should belie his $lai that he +as an inno$ent

pur$haser for !alue. Co+e!er, the $ourts belo+ found no e!iden$e of the alleged

possession, +hi$h the upree Dourt ust also reOe$t in deferen$e to this fa$tual

:nding. 8. Dasis !s. D> not appli$ableM 7ierent issues 'he issue in the present $ase

is +hether Dabautan is an inno$ent pur$haser for !alue and so entitled to the



priority granted under >rti$le 144 of the Di!il Dode. 'he Dasis $ase, on the other

hand, in!ol!ed the issues of +hether or not" 1 $ertiorari +as the proper reedy of

the petitioner" 2 the pre!ious petition for $ertiorari +hi$h originated fro the

Huieting of title $ase +as siilar to and, hen$e, a bar to the petition for $ertiorari

arising fro the for$ible entry $aseM and 5 the $ourt a Huo $oitted gra!e abuse

of dis$retion aounting to la$ or e)$ess of Ourisdi$tion in issuing the order +hi$hdissol!ed the restraining order issued in $onne$tion +ith the eOe$tent $ase. 'he

Dourt +as not $alled upon in that $ase to deterine +ho as bet+een the t+o

pur$hasers of the subOe$t property should be preferred. 9. A)$erpt used by >C7G a

narration of ba$ground fa$ts and not adopted as a do$trine by the upree Dourt

>C7G in!oes the ruling of the lo+er $ourt in that $ase to the ee$t that the

registration of the sale in fa!or of the se$ond pur$haser and the issuan$e of a ne+

$erti:$ate of title in his fa!or did not in any anner !est in hi any right of

possession and o+nership o!er the subOe$t property be$ause the seller, by reason

of their prior sale, had already lost +hate!er right or interest she ight ha!e had in

the property at the tie the se$ond sale +as ade. 'he e)$erpt +as in$luded in the

ponen$ia only as part of the narration of the ba$ground fa$ts and +as not thereby

adopted as a do$trine of the Dourt. Bt +as $onsidered only for the purpose of

as$ertaining if the $ourt belo+ had deterined the issue of the possession of the

subOe$t property pending resolution of the Huestion of o+nership. #b!iously, the

Dourt $ould not ha!e adopted that Huestionable ruling as it +ould $learly ilitate

against the pro!ision of >rti$le 144. 10. No one $an sell +hat he does not o+nM

>rti$le 144 either an e)$eption to the general rule or a reiteration of the general

rule insofar as inno$ent third parties are $on$erned Justi$e Adgardo %. /aras

obser!ed that ;No one $an sell +hat he does not o+n, but this is erely the general

rule. Bs >rt. 144 then an e)$eption to the general ruleE Bn a sense, yes, by reason

of publi$ $on!enien$e -ee >iten !. %ao, 56 /hil. 10M in still another sense, itreally reiterates the general rule in that insofar as inno$ent third persons are

$on$erned, the registered o+ner -in the $ase of real property is still the o+ner, +ith

po+er of disposition. 11. %anguage of >rti$le 144 $learM Dabautan deeed o+ner

'he language of >rti$le 144 is $lear and uneHui!o$al. Bn light of its andate and of

the fa$ts established in the present $ase, #+nership ust be re$ogni&ed in the

pri!ate respondent, +ho bought the property in good faith and, as an inno$ent

pur$haser for !alue, duly and proptly registered the sale in his fa!or. I6

SPOUSES JOSE USI and AMELITA USI, Respondents.

Facts:

'he $ase in!ol!es a lot originally o+ned by the 3endo&as di!ided into se!en parts, one

part of +hi$h +as sold to the petitioner. #n the other hand, there +as also a subOe$t

agreeent bet+een the 3endo&as and pouses si, Respondent +herein the subOe$t lot



+as di!ided into 15 parts, soe parts +ent to the Respondents. 'he $onPi$t arose as to

+ho originally belongs the subOe$t land.

Bn lieu, pouses si instituted $oplaints against @iray, aong others is a /etition fora$$ion publi$ianaKrei!indi$atoria before the R'D. #n the other hand, petitioners o!ed

for the disissal of the said petition, on the ground of litis penden$ia and res Oudi$ata.

'he R'D disissed the petition for failure to establish preponderant e!iden$e to support

their $lai of title, possession and o+nership o!er the subOe$t lots. Cen$e, they

appealed before the D>. 'he D> re!ersed R'D*s de$ision basing its ruling on the 2

notari&ed subOe$t agreeents. @iray appealed but +as denied, hen$e this.

Issu:

Fhether or not the Dourt of >ppeals erred in ruling that Respondents are the legal and

!alid o+ners of the subOe$t lotE

Ru!"n#:

'he $ourt held that the petition is barred by res Oudi$ata Q de:ned as one that operates

as bar by prior Oudgeent +hen there is a :nal Oudgeent on erits rendered by a

$ourt +ith Ourisdi$tion and the :rst and se$ond a$tion has identi$al parties, subOe$t

atter or $ause of a$tion.

'he better right to possess and right of o+nership $annot be relitigated be$ause of res

Oudi$ata

NAVERA V. CA (April 26, 1990)

FACTS:

3eocadio Navera owns a parcel of land in (lbay w"ic" was in"erited by "is > c"ildren. 4is G c"ildren

already "ave t"eir s"are of t"e in"eritance from t"e ot"er properties of 3eocadio. -"e subject land was

now owned by "is : dau%"ters. (n C- was issued in t"e name of 2lena Navera et.al @et.al refers to "is

sister 2duarda NaveraA



*"en 2lena died# "is s"are of t"e land was in"erited by "er "eirs (rsenio and eli$ Narez. -"e ot"er

portion was owned by 2duarda.

2duarda sold "er portion to "er nep"ew (rsenio and t"en one year after to ariano Navera. ot" sales

were made in a public instrument but bot" sales were also not re%istered in t"e Re%istry of 0roperty.

ISSUE:

*N t"e second sale of t"e property is valid.

HELD:

)ince t"e records s"ow t"at bot" sales were not recorded in t"e Re%istry of 0roperty# t"e law clearly vests

t"e owners"ip upon t"e person w"o in %ood fait" was first in possession of t"e disputed lot.

-"e possession viewed in t"e law includes not only t"e material but also t"e symbolic possession# w"ic"

is acBuired by t"e e$ecution of a public instrument. -"is means t"at after t"e sale of a realty by means ofa public instrument# t"e vendor# w"o resells it to anot"er# does not transmit anyt"in% to t"e second

vendee# and if t"e latter# by virtue of t"is second sale# ta'es material possession of t"e t"in%# "e does it as

mere detainer# and it would be unjust to protect t"is detention a%ainst t"e ri%"ts of t"e t"in% lawfully

acBuired by t"e first vendee.

n t"e case at bar# t"e prior sale of t"e land to respondent (rsenio Nares by means of a public instrument

is clearly tantamount to a delivery of t"e land resultin% in t"e material and symbolic possession t"ereof by

t"e latter.

Na!era !s. D> IG.R. No. %=6858. >pril 26, 1990. irst 7i!ision, 3edialdea -J" 4$on$ur a$ts" %eo$adio Na!era has $hildren, naely" Alena, 3ariano, asilio,

Aduarda and eli), all surnaed Na!era. 3ariano Na!era is the father of petitioner

Genaro Na!era -arried to Aa >ador. Alena Na!era, on the other hand has

three $hildren by >ntonio Nares. '+o of the are respondent >rsenio Nares and

eli) Nares. 'he other $hild, 7ionisia is already de$eased and has left $hildren.

/etitioner and respondents are ales, 2005 - 11 Caysta$s -erne Guerrero

therefore, :rst $ousins. Fay ba$ in 1916, %eo$adio Na!era donated to austo

3ustar in a pri!ate instruent a $ertain property in $onsideration of the arriage of

the forer*s son, 3ariano Na!era, to the daughter of austo 3ustar by the nae of

Restituta 3ustar. #n 19 July 192, #D' R#=14-N> +as issued in the nae of

;Alena Na!era, et al.<, $o!ering the land in dispute, naely %ot 1460, situated in the

3uni$ipality of Daalig, >lbay. oetie in 1924, Alena Na!era died. #n 14 3ay

194, Aduarda Na!era, by eans of a publi$ instruent, sold to her nephe+,

>rsenio Nares, all of her share in %ot 1460, +hi$h is titled in the nae of ;Alena

Na!era, et al.<. Aduarda Na!era*s share in the lot is 1K2 of the total area of %ot 1460

-'he other half allegedly o+ned by %ina Na!era, the de$eased other of the buyer,

+ho +as the adinistrator of said half. >rsenio Nares thus tae $are of the +hole



property. #n 26 June 1948, Aduarda Na!era sold for the se$ond tie a portion of

%ot 1460 to 3ariano Na!era -0 eters long and 9 eters +ide. #n 50 January

195, >rsenio Nares sold to /erpetua 7a$illo a portion of %ot 416 $ontaining an

area of ,26 sH. s. /erpetua 7a$illo thereafter donated the said property to

ran$is$o 7a$illo. #n 15 >ugust 19, 3ariano Na!era, sold to his brother=in=la+,

erapio 3ustar, the lot +hi$h he bought fro Aduarda Na!era. #n 11 ebruary196, a deed of sale +as suppleented by the follo+ing stipulation ;-b as to the

property under paragraph -2 thereof, the sae pertains to Dadastral %ot No. 1460,

$ontaining an area of 1=99=69 sHuare eters, ore or less, -in the said do$uent

there +as $leri$al error of the area, as pre!iously stated in the total area of 00=09=

16, +hi$h is hereto $orre$ted as 1=90=1 sHuare eters, as the total area sold.< #n

>pril 199, erapio 3ustar later sold to Genaro Na!era %ot 1460 +hi$h he bought

fro the latter*s father, 3ariano Na!era, $ontaining an area of 19,969 sH. s. ore

or less. #n 5 epteber 191, ran$is$o 7a$illo sold to Genaro Na!era the land

+hi$h the forer re$ei!ed by +ay of donation fro /erpetua 7a$illo. >ll of the

foregoing transfers of %ot 1460 +ere not annotated and ins$ribed in the #D'. INares

$oplaint Bn their $oplaint dated 14 3ar$h 191 :led +ith the then DB >lbay

-no+ R'DM Di!il Dase 459, >rsenio and eli) Nares, alleged inter alia" that they are

the absolute o+ners of the +hole of %ot 1460 $o!ered by #D' No. R#=14-N>, and

are entitled to the possession of the saeM that %ot 1460 is registered in the nae

of ;Alena Na!era, et al.<, the ;et al.< being Aduarda Na!eraM that they a$Huired the

property by inheritan$e fro their de$eased other Alena Na!eraM that a portion

thereof +hi$h had been adOudi$ated to Aduarda Na!era +as later sold to >rsenio

NaresM that soetie in >ugust, 19, 3ariano Na!era, +ithout any legal right

+hatsoe!er and under the pretense of o+nership sold the said property to his

brother=in=la+ erapio 3ustar, +ho in turn sold the sae to Genaro Na!era, son of

3ariano. 'hey also $laied that all the foregoing sales +ere sha and anipulatedtransa$tions and that 3ariano Na!era ne+ fully +ell that he had no right to sell the

property. 'hey aditted ho+e!er, that they sold a portion of the property $ontaining

6,26 sHuare eters to /erpetua 7a$illo, so that the reaining portion still belongs

to the. 'hey further $ontended that Genaro Na!era entered the land after the sale

to hi by 3ustar and too possession of the sae and a$Huired the produ$e thereof

sin$e 19 up to the present tieM and that they ha!e e)erted earnest eorts

to+ard a $oproise but Na!era instead $hallenged the to go to $ourt. INa!era*s

$ounter$lai Genaro Na!era and Aa >ador :led their ans+er +ith

$ounter$lai, denying Nares* $lais, and alleging inter alia" that %eo$adio Na!era is

the father of :!e $hildren, naely, Alena, 3ariano, Aduarda, asilio and eli)M thatafter dedu$ting 12,41 sHuare eters +hi$h %eo$adio Na!era donated to austo

3ustar in 1916, the reaining area of %ot 1460 +as di!ided in eHual shares aong

Alena, 3ariano and Aduarda, to the e)tent of 4,860 sHuare eters ea$hM that asilio

and eli) +ere gi!en their shares in other par$els of land. 'hey also subitted that

the ;et al.< appearing in the title of the property refers to austo 3ustar -12,41 sH.

s., Aduarda Na!era -4,860 sH. s., 3ariano Na!era -4,860 sH. s. and Alena

Na!era -4,860 sH. s.M that Aduarda Na!era sold 2,69 sH. s. of her share to



3ariano Na!era +hile the reaining 2,166 sH sH. s. of her share +as sold to

>rsenio NaresM that >rsenio*s property totalled ,026 sH. s. +hi$h he later sold to

/erpetua 7a$illo. 'hey further $ontended that they are presently in possession of

%ot 1460 and their possession ta$ed to that of their prede$essor=in=interest as early

as 1916M that the $oplaint states no $ause of a$tion and that if Nares had any, the

sae has long pres$ribed. IDourt*s ruling #n 28 ebruary 198, the trial $ourtrendered a de$ision de$laring Nares o+ners of the lot des$ribed in the #D' R#=

1480, e)$ept ,26 sH. s. +hi$h rightfully belongs to Genaro Na!era. ales, 2005

- 12 Caysta$s -erne Guerrero Not satis:ed +ith the de$ision of the trial $ourt,

Na!era appealed to the Dourt of >ppeals -D>=GR 65926=R. #n 16 7e$eber 1980,

the appellate $ourt rendered Oudgent aring in toto the de$ision of the trial

$ourt. Cen$e the petition for re!ie+ on $ertiorari. 'he upree Dourt denied the

petition but odi:ed the de$ision of the Dourt of >ppeals dated 16 7e$eber 1980

to the ee$t that as against Genaro Na!era and Aa >ador, >rsenio Nares and

eli) Nares are de$lared the rightful o+ners of the disputed %ot 1460, e)$ept +ith

respe$t to ,26 sHuare eters thereof +hi$h belongs to Genaro Na!era, +ithout

preOudi$e ho+e!er, to +hate!er rights and interests that the other $opulsory heirs

of Alena Na!era ay ha!e in the one=half portion of %ot 1460. 'he respe$ti!e rights

of respondents to %ot 1460 as bet+een thesel!es is a atter outside of the

$ontro!ersy and is therefore, beyond the Ourisdi$tion of the Dourt to pass upon. 1.

;At. al< refer only to AduardaM a$tual :nding of $ourts $on$lusi!e upon the upree

Dourt 'he +hole of %ot 1460 is titled in the nae of ;Alena Na!era, et al.<, the

phrase ;et al.< referring only to Aduarda, sister of Alena sin$e the other brothers of

Alena and Aduarda naely, 3ariano, asilio and eli) had re$ei!ed their shares

fro the other properties of their father %eo$adio Na!era. 'hese fa$tual :ndings are

$on$lusi!e upon the upree Dourt. 'hus, +hen Alena Na!era died soetie in

1924, her $opulsory heirs in$luding >rsenio Nares and eli) Nares a$Huired Alena*sshares in %ot 1460 by inheritan$e, +hi$h is 1K2of %ot 1460. >s to the other half of %ot

1460 o+ned by Aduarda Na!era, the latter sold the sae to t+o !endees, one in

fa!or of >rsenio Nares and the other in fa!or of 3ariano Na!era, Genaro Na!era*s

prede$essor=ininterest. 2. 7ouble aleM Aduarda Na!era had no e)isting right

anyore to $on!ey portion of property in a subseHuent sale to 3ariano Na!era #n

this atter of double sale, all the transfers or $on!eyan$es are not ins$ribed in the

#D' R#= 1480-N>. Bt +ould not be aiss to state that the sale of Aduarda Na!era

to >rsenio Nares, and the sale of Aduarda Na!era to 3ariano Na!era, the property

referred to in both sales is the !ery sae property $o!ered by re$onstituted title.

'he sale of Aduarda Na!era to >rsenio Nares $o!ered all her portion to the property,thus, she $ould not possibly sell on 26 June 1948, another portion of the sae

property to 3ariano Na!era. 'hus, the portion referred to in the sale to 3ariano

Na!era by Aduarda Na!era ay not be !alidly transferred by 3ariano Na!era to

erapio 3ustar. Bt lie+ise follo+ that erapio 3ustar ay not ee$ti!ely $on!ey the

sae to Genaro Na!era. Bt is irreissible to state that the alleged $on!eyan$e ade

by erapio 3ustar in fa!or of Genaro Na!era ha!e no legal ee$t +hatsoe!er, for

the siple reason that erapio 3ustar $ould not properly $on!ey the portion



referred to in the sale of 26 June 1948, by Aduarda Na!era in fa!or of 3ariano

Na!era. Bn the :rst pla$e, Aduarda Na!era has no e)isting right to $on!ey another

portion of the property be$ause she had already sold all her portion to >rsenio

Nares. 'hus at the tie Aduarda Na!era $on!eyed a portion of the property +hi$h

she already $on!eyed to appellee >rsenio Nares, she has no right on the property

and the po+er to dispose it. 3ariano Na!era therefore ne!er a$Huired that portionsubOe$t of the sale on 26 June 948. Ca!ing a$Huired that portion of the property

subOe$t of the sale on 26 June 1948 fro 3ariano Na!era, erapio 3ustar has

lie+ise no e)isting right and po+er to dispose of that portion of the property to

Genaro Na!era. 5. Na!era not possessors in good faithM no+ledge of Pa+ of title

>rti$le 26 of the Ne+ Di!il Dode pro!ides that a possessor in good faith is one +ho

is not a+are that there e)ists in his title or ode of a$Huisition any Pa+ +hi$h

in!alidates it and a possessor in bad faith is one +ho possesses in any $ase $ontrary

to the foregoing. ;A!ery possessor in good faith be$oes a possessor in bad faith

fro the oent he be$oes a+are that +hat he belie!ed to be true is not so.< Cis

possession is legally interrupted +hen he is suoned to trial a$$ording to >rti$le

1125 of the Ne+ Di!il Dode -'a$as !. 'abon, 5 /hil. 56.< 4. Don$lusions and

:nding of fa$ts by trial $ourt gi!en great +eight ales, 2005 - 15 Caysta$s

-erne Guerrero 'he $on$lusions and :ndings of fa$ts by the trial $ourt are entitled

to great +eight and +ill not be disturbed on appeal unless for strong and $ogent

reasons be$ause the trial $ourt is in a better position to e)aine real e!iden$e as

+ell as to obser!e the deeanor of +itnesses +hile testifying on the ease. -3a$ua

!s. Bnterediate >ppellate Dourt, No. %=0810, #$tober 26, 198, 1 DR> 29. .

>rti$le 144 of the Di!il Dode >rti$le 144 of the Di!il Dode pro!ides that ;Bf the

sae thing should ha!e been sold to dierent !endees, the o+nership shall be

transferred to the person +ho ay ha!e :rst taen possession thereof in good faith,

if it should be o!able property. hould it be io!able property, the o+nershipshall belong to the person a$Huiring it +ho in good faith :rst re$orded it in the

Registry of /roperty. hould there be no ins$ription, the o+nership shall pertain to

the person +ho in good faith +as :rst in the possessionM and, in the absen$e

thereof, to the person +ho presents the oldest title, pro!ided there is good faith.< 6.

ales not registeredM #+nership !ested upon :rst possessor in good faith 'he :rst

sale of Aduarda Na!era*s share in the said lot to >rsenio Nares +as ade in a publi$

instruent on 14 3ay 194. 'he se$ond sale of the sae property +as e)e$uted

also in a publi$ instruent in fa!or of 3ariano Na!era, +ho is the prede$essor in

interest of Genaro Na!era, on 26 June 1948, or ore than a year after the :rst sale.

in$e the re$ords sho+ that both sales +ere not re$orded in the Registry of/roperty, the la+ $learly !ests the o+nership upon the person +ho in good faith +as

:rst in possession of the disputed lot. . /ossession of !endor in$ludes not only the

aterial but also syboli$ possessionM @endor does not transit anything to se$ond

!endee 'he possession entioned in >rti$le 144 for deterining +ho has better

right +hen the sae pie$e of land has been sold se!eral ties by the sae !endor

in$ludes not only the aterial but also the syboli$ possession, +hi$h is a$Huired

by the e)e$ution of a publi$ instruent. 'his eans that after the sale of a realty by



eans of a publi$ instruent, the !endor, +ho resells it to another, does not

transit anything to the se$ond !endee, and if the latter, by !irtue of this se$ond

sale, taes aterial possession of the thing, he does it as ere detainer, and it

+ould be unOust to prote$t this detention against the rights of the thing la+fully

a$Huired by the :rst !endee -Suison !s. Rosete, 8 /hil. 19M an$he& !s. Raos,

40 /hil. 614M lorendo !s. o&, 20 /hil. 588. 8. Donstru$ti!e deli!ery in thee)e$ution of publi$ instruent 'he prior sale of the land to >rsenio Nares by eans

of a publi$ instruent is $learly tantaount to a deli!ery of the land resulting in the

aterial and syboli$ possession thereof by the latter. urther, a$tual e!iden$e

points to the prior a$tual possession by Nares before he +as e!i$ted fro the land

by Na!era and their prede$essors in 19 +hen the latter entered the disputed

property. No other e!iden$e e)ists on re$ord to sho+ the $ontrary. 9. /rior est in

tepore, potior est in Oure /rior est in tepore, potior est in Oure -he +ho is :rst in

tie is preferred in right. 'he priority of possession stands good in fa!or of Nares.

#+nership should therefore be re$ogni&ed in fa!or of the :rst !endee, >rsenio

Nares. 10. /res$ription ust be e)pressly relied upon in the pleadingsM #ne

asserting o+nership through ad!erse possession ust pro!e essential eleents of

a$Huisiti!e pres$ription Na!era alleged that they ha!e been in possession of the lot

for ore than 46 years. /res$ription, as a defense, ust be e)pressly relied upon in

the pleadings. Bt $annot be a!ailed of, unless it is spe$ially pleaded in the ans+erM

and it ust be pro!ed or established +ith the sae degree of $ertainty as any

essential allegation in the $i!il a$tion -Codges !s. alas, 65 /hil. 6M Dorpora$ion

de //. >ugustinus Re$ole$tos !s. Drisostoo, 52 /hil. 42. Bn the present $ase,

Na!era did not $lai a$Huisiti!e pres$ription in their ans+er in ales, 2005 - 14

Caysta$s -erne Guerrero the lo+er $ourt, and e!en if they did, it $annot be gi!en

Oudi$ial san$tion on ere allegations. 'he la+ reHuires one +ho asserts o+nership

by ad!erse possession to pro!e the presen$e of the essential eleents ofa$Huisiti!e pres$ription -3orales !s. DB, et al., No. %=228, 3ay 29, 1980, 9 DR>

82. 11. Nares e!i$ted, thus Na!era is in bad faithM 50=year reHuireent in ad!erse

possession not et -suit :led 191, 14 years after dispossession 'here is la$ of

su$ient proof to establish $learly and positi!ely Na!era*s $lai of a$Huisiti!e

pres$ription. 'he Dourt is ore in$lined to belie!e Nares* !ersion that he +as

e!i$ted fro the property by Na!era soetie in 19, thereby sho+ing the latter*s

bad faith in a$Huiring the possession of the property until 191 +hen the a$tion

against Na!era +as :led. 'hus, the ordinary a$Huisiti!e pres$ription of 10 years

$annot be $onsidered in fa!or of Na!era in the absen$e of good faith. Neither is

Na!era entitled to e)traordinary a$Huisiti!e pres$ription, in the absen$e of su$ientproof of $oplian$e +ith the thirty=year reHuireent of possession in $ase of bad

faith. 12. Na!era has no+ledge of right and interest of $ousins in disputed land 'he

la+ $learly states that ;possession has to be in the $on$ept of an o+ner, publi$,

pea$eful and uninterrupted< ->rti$le 1118, Di!il Dode. > reading of the deand

letter fro Nares dated 2 3ay 190, subitted in e!iden$e by Na!era, sho+s that

the dispute o!er %ot 1460 had been going on for a nuber of years aong the

and their failies. 7uring the tie +hen Na!era bought the land in 199 and the



follo+ing years thereafter +hen the latter possessed the property, they ha!e no+n

or should ha!e no+n of the rights and interests of their $ousins o!er the disputed

land. 15. Na!era*s prede$essor=in=interest did not de$lare thesel!es o+ner of land

for ta)ation purposes 3oreo!er, the ta) de$larations for the years 191 and 196

sho+ed that >rsenio and eli) Nares +ere the de$lared o+ners. Na!era*s

prede$essors in interest, naely, 3ariano Na!era and the subseHuent pur$hasers of the lot, had not bothered to de$lare the land in their o+n naes for purposes of

ta)ation during the tie that they +ere allegedly in possession of the land. Bt +as

only in the year 1966 +hen Genaro Na!era started to de$lare hiself o+ner of the

land for ta)ation purposes. 14. Nares not bound by alleged donation propter nuptias

in fa!or of 3ustarM No e!iden$e that donated property +as transferred to 3ariano

Na!era >rsenio and eli) Nares are not bound by their alleged no+ledge of the

pre!ious donation propter nuptias by their an$estor, %eo$adio Na!era in fa!or of

austo 3ustar. 'he donation propter nuptias ade by %eo$adio Na!era soetie in

#$tober 1916, should ha!e been at least re$orded in the registry of property or

ins$ribed in the #riginal Derti:$ate of 'itle or the donee shall ha!e titled the

property in his nae. 'he alleged donee austo 3ustar is not a party to the $ase nor

had he transferred the said donated property to the spouses 3ariano Na!era in a

publi$ instruent or $on!eyan$e. No+here in the e!iden$e on re$ord +ould sho+

that the said donated property +as e!er transferred to 3ariano Na!era, father of

Genaro Na!era. 1. no+ledge of alleged donation iaterialM #D' $lear +ithout

ention of any pre!ious donation of any portion of the land 'he no+ledge of Nares

$on$erning the alleged pre!ious donation is iaterial. 'he fa$ts are $lear that the

original $erti:$ate of title itself $o!ers the +hole of 26,99 sHuare eters of the

disputed %ot 1460 in the nae of ;Alena Na!era, et al.<, +ithout any ention of any

pre!ious donation of a portion of the said lot to the alleged donee.

NAA$AN COMMUNIT% RURAL BAN& INC., petitioner , vs. THE COURT OFAPPEALS and SPOUSES ALFREDO AND ANNABELLE LUMO, respondents.

'(.R. N). *+-/. Janua01 */, +22/3

Under the established principles of land registration, a person dealing

with registered land may generally rely on the correctness of a certicate

of title and the law will in no way oblige him to go beyond it to determine

the legal status of the property.

FACTS:

1. #n >pril 50, 1988, a $ertain Guillero Doayas oered to sell to pri!ate

respondent=spouses >lfredo and >nnabelle %uo, a house and lot easuring

lo$ated at /iniitan, Daaan=an, Dagayan de #ro Dity.+. Fanting to buy said house and lot, pri!ate respondents ade inHuiries at the

#$e of the Register of 7eeds of Dagayan de #ro Dity +here the property is



lo$ated and the ureau of %ands on the legal status of the !endor*s title . T41

5)und )ut t4at t4 60)60t1 7as 8)0t#a#d 5)0 P,222 t) a c0ta"n M0s.

(a!u6) and t4at t4 )7n09s c)61 )5 t4 C0t"cat )5 T"t! t) sa"d

60)60t1 7as "n 40 6)ssss")n.5. /ri!ate respondents dire$ted Guillero Doayas to redee the property fro

Galupo at their e)pense, gi!ing the aount of /10,000 to Doayas for thatpurpose.

4. #n 3ay 50, 1988, a 0!as )5 t4 ad;0s c!a"8 )5 (a!u6) 7as ann)tatd

)n TCT N). T<=*=>> 74"c4 c);0d t4 su?@ct 60)60t1 .. Bn the eantie, on 3ay 1, 1988, e!en before the release of Galupo*s ad!erse

$lai, 60";at 0s6)ndnts and (u"!!08) C)8a1as, cutd a dd )5

a?s)!ut sa!. 'he subOe$t property +as allegedly sold for /12,000 but the

deed of sale rePe$ted the aount of only /50,000 +hi$h +as the aount pri!ate

respondents +ere ready to pay at the tie of the e)e$ution of said deed, the

balan$e payable by installent.6. #n June 9, 1988, the deed of absolute sale +as registered and ins$ribed on 'D'

No. '=41499 and, on e!en date, 'D' No. '=0154 +as issued in fa!or of pri!aterespondents

. >fter obtaining their 'D', pri!ate respondents reHuested the issuan$e of a ne+

ta) de$laration $erti:$ate in their naes. H)7;0, t41 70 su060"sd t)

!a0n 50)8 t4 C"t1 Assss)09s Oc t4at t4 60)60t1 7as a!s)

dc!a0d 5)0 ta 6u06)ss "n t4 na8 )5 6t"t")n0 Naa7an C)88un"t1

Ru0a! Ban Inc. Re$ords in the Dity >ssessor*s #$e re!ealed that, for the lot

$o!ered by 'D' No. '=0154, >lfredo %uo*s 'K7 T 85524 bore the note" ;'his

lot is also de$lared in the nae of Naa+an Dounity Rural an Bn$. under 'K7

T 1210<. >pparently, on ebruary , 1985, (u"!!08) C)8a1as )?ta"nd a P*-,222

!)an 50)8 6t"t")n0 Ban us"n# t4 su?@ct 60)60t1 as scu0"t1. >t

the tie said $ontra$t of ortgage +as entered into, the subOe$t property

+as then an unregistered par$el of residential land, ta)=de$lared in the nae

of a $ertain ergio >. alibay +hile the residential one=storey house +as ta)=

de$lared in the nae of Doayas. alibay e)e$uted a spe$ial po+er of attorney authori&ing Doayas to borro+

oney and use the subOe$t lot as se$urity. But t4 Dd )5 Ra! Estat

M)0t#a# and t4 S6c"a! P)70 )5 Att)0n1 70 0c)0dd "n t4

0#"st0at")n ?)) )5 t4 P0);"nc )5 M"sa8"s O0"nta!, n)t "n t4

0#"st0at")n ?)) )5 Ca#a1an d O0) C"t1.

Bt appears that, +hen the registration +as ade, there +as only one Registerof 7eeds for the entire pro!in$e of 3isais #riental, in$luding Dagayan de

#ro Dity. Bt +as only in 198 +hen the #$e of the Register of 7eeds for

Dagayan de #ro Dity +as established separately fro the #$e of the

Register of 7eeds for the /ro!in$e of 3isais #riental or failure of Doayas to pay, the real estate ortgage +as fore$losed and

the subOe$t property sold at a publi$ au$tion to the ortgagee Naa+an

Dounity Rural an as the highest bidder in the aount of /16,051.5.



3ean+hile, on epteber , 1986, the period for redeption of the

fore$losed subOe$t property lapsed and the 3'DD 7eputy heri of Dagayan

de #ro Dity issued and deli!ered to petitioner ban the sheri*s deed of :nal

$on!eyan$e. 'his tie, the deed +as registered under >$t 5544 and

re$orded in the registration boo of the Register of 7eeds of Dagayan de #ro

Dity. y !irtue of said deed, petitioner an obtained a ta) de$laration for the

subOe$t house and lot.8. 'hereafter, petitioner an instituted an a$tion for eOe$tent against Doayas

before the 3'DD +hi$h de$ided in its fa!or. #n appeal, the Regional 'rial Dourt

ared the de$ision of the 3'DD in a de$ision dated >pril 15, 1988.9. #n January 2, 1989, the Regional 'rial Dourt issued an order for the issuan$e of

a +rit of e)e$ution of its Oudgent. 'he 3'DD, being the $ourt of origin,

proptly issued said +rit.10.Co+e!er, +hen t4 70"t 7as s0;d, t4 60)60t1 7as n) !)n#0 )ccu6"d

?1 C)8a1as ?ut 40"n 60";at 0s6)ndnts, t4 s6)uss Lu8)+ho had,

as earlier entioned, bought it fro Doayas on 3ay 1, 198811.>lared by the prospe$t of being eOe$ted fro their hoe, pri!ate respondents

:led an a$tion for u"t"n# )5 t"t!. >fter trial, the Regional 'rial Dourt rendered

a de$ision de$laring pri!ate respondents as pur$hasers for !alue and in good

faith, and $onseHuently de$laring the as the absolute o+ners and possessors

of the subOe$t house and lot.

ISSUE:

1. FCA'CAR #R N#' RAGB'R>'B#N # CARB* 7AA7 # BN>% D#N@A>NDA

BN 'CA /R#/AR RAGB'R # 7AA7 B 3#RA /ARB#R 'C>N 'CA '#RRAN

'B'%AE N#.2. FCA'CAR #R N#' /RB@>'A RA/#N7AN' D#%7 A D#NB7ARA7 >

AR BN G##7 >B'CE A.

HELD:

/etitioner ban $ontends that the earlier registration of the sheri*s deed of :nal

$on!eyan$e in the day boo under >$t 5544 should pre!ail o!er the later

registration of pri!ate respondents* deed of absolute sale under >$t 496, as

aended by the /roperty Registration 7e$ree, /7 129.

1. 'his $ontention has no leg to stand on.2. Bt has been held that, +here a person $lais to ha!e superior proprietary rights

o!er another on the ground that he deri!ed his title fro a sheri*s sale

registered in the Registry of /roperty, >rti$le 145 -no+ >rti$le 144 of the Di!il

Dode 7"!! a66!1 )n!1 "5 sa"d cut")n sa! )5 0a! stat "s 0#"st0d

und0 Act =>.5. nfortunately, t4 su?@ct 60)60t1 7as st"!! unt"t!d 74n "t 7as

acu"0d ?1 6t"t")n0 ?an ?1 ;"0tu )5 a na! dd )5 c)n;1anc. On



t4 )t40 4and, 74n 60";at 0s6)ndnts 6u0c4asd t4 sa8

60)60t1, "t 7as a!0ad1 c);0d ?1 t4 T)00ns S1st8.

/etitioner also relies on the $ase of Bautista vs. Fule+here the Dourt ruled that the

registration of an instruent in!ol!ing unregistered land in the Registry of 7eeds

$reates $onstru$ti!e noti$e and binds third person +ho ay subseHuently deal +iththe sae property.

4. Co+e!er, a $lose s$rutiny of the re$ords re!eals that, at the t"8 )5 t4

cut")n and d!";01 )5 t4 s40"9s dd )5 na! c)n;1anc )n

S6t8?0 -, *>, t4 d"s6utd 60)60t1 7as a!0ad1 c);0d ?1 t4

Land R#"st0at")n Act and O0"#"na! C0t"cat )5 T"t! N). 2<+2 pursuant

to 7e$ree No. N189415 +as lie+ise already entered in the registration boo of

the Register of 7eeds of Dagayan 7e #ro Dity as of >pril 1, 1984.. 'hus, fro >pril 1, 1984, the subOe$t property +as already under the operation

of the 'orrens yste. Und0 t4 sa"d s1st8, 0#"st0at")n "s t4

)60at"; act t4at #";s ;a!"d"t1 t) t4 t0ans50 )0 c0ats a !"n u6)nt4 !and.

6. 3oreo!er, the issuan$e of a $erti:$ate of title had the ee$t of relie!ing the land

of all $lais e)$ept those noted thereon.. Acc)0d"n#!1, 60";at 0s6)ndnts, "n da!"n# 7"t4 t4 su?@ct 0#"st0d

!and, 70 n)t 0u"0d ?1 !a7 t) #) ?1)nd t4 0#"st0 t) dt08"n

t4 !#a! c)nd"t")n )5 t4 60)60t1. T41 70 )n!1 c4a0#d 7"t4 n)t"c

)5 suc4 ?u0dns )n t4 60)60t1 as 70 n)td )n t4 0#"st0 )0 t4

c0t"cat )5 t"t!. T) 4a; 0u"0d t48 t) d) 8)0 7)u!d 4a; ?n

t) d5at t4 60"8a01 )?@ct )5 t4 T)00ns S1st8 74"c4 "s t) 8a t4

T)00ns T"t! "nd5as"?! and ;a!"d a#a"nst t4 74)! 7)0!d.

. 3ere registration of title in $ase of double sale is not enoughM good faith ust$on$ur +ith the registration.

/etitioner $ontends that the due and proper registration of the sheri*s deed of :nal

$on!eyan$e on 7e$eber 2, 1986 aounted to $onstru$ti!e noti$e to pri!ate

respondents. 'hus, +hen pri!ate respondents bought the subOe$t property on 3ay

1, 1988, they +ere deeed to ha!e pur$hased the said property +ith the

no+ledge that it +as already registered in the nae of petitioner ban.

1. T4 G60")0"t1 "n t"8 60"nc"6! ?"n# "n;)d ?1 6t"t")n0 ?an "s

8"s6!acd ?caus "ts 0#"st0at")n 0500d t) !and n)t 7"t4"n t4

T)00ns S1st8 but under >$t 5544.2. #n the other hand, +hen pri!ate respondents bought the subOe$t property, the

sae +as already registered under the 'orrens yste. Bt is a +ell=no+n rule in

this Ourisdi$tion that persons dealing +ith registered land ha!e the legal right to

rely on the fa$e of the 'orrens Derti:$ate of 'itle and to dispense +ith the need

to inHuire further, e)$ept +hen the party $on$erned has a$tual no+ledge of

fa$ts and $ir$ustan$es that +ould ipel a reasonably $autious an to ae

su$h inHuiry.



5. /ri!ate respondents e)er$ise the reHuired diligen$e in as$ertaining the legal

$ondition of the title to the subOe$t property so as to be $onsidered as inno$ent

pur$hasers for !alue and in good faith efore pri!ate respondents bought the subOe$t property fro Guillero

Doayas, inHuiries +ere ade +ith the Registry of 7eeds and the ureau of

%ands regarding the status of the !endor*s title. No liens or en$ubran$es+ere found to ha!e been annotated on the $erti:$ate of title. Neither +ere

pri!ate respondents a+are of any ad!erse $lai or lien on the property other

than the ad!erse $lai of a $ertain Gene!a Galupo to +ho Guillero

Doayas had ortgaged the subOe$t property. ut, as already entioned,

the $lai of Galupo +as e!entually settled and the ad!erse $lai pre!iously

annotated on the title $an$elled. 'hus, ha!ing ade the ne$essary inHuiries,

pri!ate respondents did not ha!e to go beyond the $erti:$ate of

title. #ther+ise, the e$a$y and $on$lusi!eness of the 'orrens Derti:$ate of

'itle +ould be rendered futile and nugatory.

Donsidering therefore that pri!ate respondents e)er$ised the diligen$e reHuired byla+ in as$ertaining the legal status of the 'orrens title of Guillero Doayas o!er

the subOe$t property and found no Pa+s therein, they should be $onsidered as

inno$ent pur$hasers for !alue and in good faith.

>$$ordingly, the appealed Oudgent of the appellate $ourt upholding pri!ate

respondents >lfredo and >nnabelle %uo as the true and rightful o+ners of the

disputed property is ared.

sales case digests double sales

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