Voluntary Transfer of Real Property Cases

Worcester VS Ocampo and Ocampo

GR L-8452; August 2, 1916
Johnson
Facts: On January 11, 1909 two parcels of land owned by Martin Ocampo were sold
pacto de retracto to Gervasio Ocampo y Reyes in which for the period of four years
from said date the vwndor being allowed the right to continue occupying the said
property by paying an annual rental of 150 pesos. This document was endorsed on
the back of the certicate of title 924 and 964 book 4 of the registry on February 1,
1910. On January 26, 1910 a writ of execution was issued by the CFI of Manila on
the same two parcels of land levied for the purpose of satisfying an execution of
judgment of 60,000 pesos. The notice of the levy was entered on the same day. By
another writ of execution issued March 26, 1910, all the right title and interest of
MAritn were levied and sold at the public auction with Dean Worcester as the
highest bidder subject to right of redemption. The sale was noted on Aprill 11, 1910.
The period of redemption having expired without the judgment of the debtor
exercising his right, the sheriff of Manila executed in favor of the purchaser an
absolute deed of sale of all the right, title and interest of Martin Ocampo. By virtue
of this document, Kincaid and Hartigan as attorneys for Worcester seek the
inscription of his right which if made will necessarily require the cancellation of
those certificate and the issuance of new ones in favor of Worcester. Joaquin
Jaramillo, from the register of deeds, is now at a loss how to proceed to register the
absolute deed of sale executed by the sheriff in favor of Worcester. Jaramillo also
calls the attention of the court htat the duplicates of the certs of title of said parcels
of land have not been presented in the office and the civil status of Worcester does
not appear in the deed. The court of land registration holds that the deed of sale
con pacto de retracto executed by Martin Ocampo in favor of Gervasio Ocampo
produced no effect as a deed of such transfer only constituted as a contract
between the parties. They also hold that the levy and sale made by the sheriff takes
precedence over the deed of sale con pacto de retracto. This was appealed by
Reyes stating that what Worcester bought was only the right to repurchase of
ocampo.
Issue: WON the land belongs to Reyes
Held: No. Section 50 of Act 496 state that when registered land is conveyed,
mortgaged, leased or otherwise dealt with, such conveyance, mortgage shall not
affect or convey the land until such conveyance, mortgage is recorded or filed or
entered in the office of the register of deeds. From said provision, this holds that
since the pacdo de retracto was not recorded, filed or entered in the office of the
register of deeds until after the plaintiff had secured his lien by attachment, the
Reyes acquired his land subject to the rights of Worcester. This being, it cannot be
enforced against the land until after the rights of the plaintiff are satisfied.
Notes: This is an appeal from an order made by the Honorables Charles H. Smith and Norberto Romualdez, then
judges of the Court of Land Registration, directing the cancellation of certain duplicates of certificates of title issued
under the Torrens system and directing the registration of a certain deed executed by the sheriff of the city of
Manila to the plaintiff herein. Said order was made upon the 2d day of September, 1912. Said order was based upon
the facts contained in a certain communication from Joaquin Jaramillo, then register of deeds, asking the judges of

the Court of Land Registration for instructions concerning the registration of a deed issued by the sheriff of the city
of Manila to Dean C. Worcester.

Sps. Vallido v. Sps Pono

G.R. No. 200173, April 15, 2013
Mendoza
Facts:
Martino Dandan (Martino) was the registered owner of a parcel of land in KANANGA,
LEYTE, 28,214 sq. meters (HOMESTEAD PATENT). In January 4, 1960, Martino, while
still living in Kananga,Leyte, sold a portion of the property, equivalent to 18,214 sq.
meters to respondent PURIFICACION CERNA (Purificacion). The Deed of Absolute
Sale was executed and Martino gave Purificacion the owner's copy of Original
Certificate of Title (OCT). Such was not registered in the Register of Deeds.
Purificacion sold such land to Marianito Pono and also delivired the OCT to him.
Marianito registered the portion he bought and paid its taxes, took possession, and
allowed his son Elmer Pono and Juliet Pono to construct a house thereon. Meanwhile,
Martino left Kananga, Leyte, and went to San Rafael III, Noveleta, Cavite, and resettled there. On June 14, 1990, he sold the whole subject property to his grandson,
petitioner Esmeraldo Vallido (Vallido), also a resident of Noveleta, Cavite.
Considering that Martino had delivered the OCT to Purificacion in 1960, he no longer
had any certificate of title to hand over to Esmeraldo. On May 7, 1997, Martino filed
a petition seeking for the issuance of a new owners duplicate copy of the OCT,
which he claimed was lost. He stated that he could not recall having delivered the
said owners duplicate copy to anybody to secure payment or performance of any
legal obligation. On June 8, 1998, the petition was granted by the RTC, Branch 12 of
Ormoc City. On September 17, 1999, Esmeraldo registered the deed of sale in the
Registry of Deeds and Transfer Certificate of Title was thereafter issued in the name
of the petitioners. Subsequently, the petitioners filed before the RTC a complaint for
quieting of title, recovery of possession of real property and damages against the
respondents. In their answer, they claimed that Marianito had given them
permission an provided a chronological transactions from Purificacion to Marianito.
RTC ruled in favor of petitioners (Vallido), saying that there was a double sale and
that the petitioners were in good faith. Consequently, because the property was
registered to the register of deeds, the petitioners had the better right. The CA
reversed the decision and ruled in favor of respondents. It wrote that where the land
sold was in the possession of a person other than the vendor, the purchaser must
go beyond the certificate of title and make inquiries concerning the rights of the
actual possessors. It further stated that mere registration of the sale was not
enough as good faith must concur with the registration. Thus, it ruled that the
petitioners failed to discharge the burden of proving that they were buyers and
registrants in good faith. Accordingly, the CA concluded that because the sale to
Purificacion took place in 1960, thirty (30) years prior to Esmeraldos acquisition in
1990, the respondents had a better right to the property.
Issue: Whether or not petitioners were buyers in good faith
Held: No. Burden of proving good faith is on the petitioners, which is not discharged
by presumption. Martino is the grandfather of Esmeraldo. The non-registration of
the deed of sale between Martino and Purificacion is immaterial as it is binding on

the petitioners who are privies. Based on the privity between petitioner Esmeraldo
and Martino, the petitioner as a second buyer is charged with constructive
knowledge of prior dispositions or encumbrances affecting the subject property. The
second buyer who has actual or constructive knowledge of the prior sale cannot be
a registrant in good faith. Although it is a recognized principle that a person dealing
on a registered land need not go beyond its certificate of title, it is also a firmly
settled rule that where there are circumstances which would put a party on guard
and prompt him to investigate or inspect the property being sold to him, such as the
presence of occupants/tenants thereon, it is expected from the purchaser of a
valued piece of land to inquire first into the status or nature of possession of the
occupants. An OCULAR INSPECTION of the premises involved is a safeguard that a
cautious and prudent purchaser usually takes. Should he find out that the land he
intends to buy is occupied by anybody else other than the seller who, as in this
case, is not in actual possession, it would then be incumbent upon the purchaser to
verify the extent of the occupants possessory rights. The failure of a prospective
buyer to take such precautionary steps would mean negligence on his part and
would preclude him from claiming or invoking the rights of a "purchaser in good
faith." It has been held that "the registration of a later sale must be done in good
faith to entitle the registrant to priority in ownership over the vendee in an earlier
sale. The following circumstances should have prompted petitioners from looking
into the title: First, Martino, as seller, did not have possession of the subject
property. Second, during the sale on July 4, 1990, Martino did not have the owners
duplicate copy of the title. Third, there were existing permanent improvements on
the land. Fourth, the respondents were in actual possession of the land. Where the
vendor is not in possession of the property, the prospective vendees are obligated
to investigate the rights of one in possession. As the petitioners cannot be
considered buyers in good faith, they cannot lean on the indefeasibility of their TCT
in view of the doctrine that the defense of indefeasibility of a torrens title does not
extend to transferees who take the certificate of title in bad faith.

De Leon v. Ong
G.R. No. 170405, Feb 2, 2010
Corona
Facts:
On March 10, 1993, petitioner RAYMUNDO S. DE LEON (petitioner)sold three parcels
of land with improvements situated in Antipolo, Rizal to respondent BENITA T. ONG
(respondent). As these properties were mortgaged to Real Savings and Loan
Association, Incorporated (RSLAI), petitioner and respondent executed a notarized
deed of absolute sale with assumption of mortgage, stating that the properties were
sold IN A MANNER ABSOLUTE AND IRREVOCABLE for a sum of P 1.1million.
Respondent gave petitioner P415,500 as partial payment. Petitioner, on the other
hand, handed the keys to the properties and wrote a letter informing RSLAI of the
sale and authorizing it to accept payment from respondent and release the
certificates of title. Thereafter, respondent undertook repairs and made
improvements on the properties. Respondent likewise informed RSLAI of her
agreement with petitioner for her to assume petitioners outstanding loan. RSLAI
required her to undergo credit investigation. Respondent learned that petitioner

again sold the same properties to one LEONA VILORIA after March 10, 1993 and
changed the locks, rendering the keys he gave her useless. Respondent thus
proceeded to RSLAI to inquire about the credit investigation. However, she was
informed that petitioner had already paid the amount due and had taken back the
certificates of title. On June 18, 1993, respondent filed a complaint for specific
performance, declaration of nullity of the second sale and damages against
petitioner and Viloria in the Regional Trial Court (RTC) of Antipolo, Rizal. She claimed
that since petitioner had previously sold the properties to her on March 10, 1993, he
no longer had the right to sell the same to Viloria. Thus, petitioner fraudulently
deprived her of the properties. Petitioner claimed that since the transaction was
subject to a condition (i.e., that RSLAI approve the assumption of mortgage), they
only entered into a contract to sell. But such condition had not manifested, pending
the credit evaluation. Consequently, the sale was not perfected and he could freely
dispose of the properties. Furthermore, he made a counter-claim for damages as
respondent filed the complaint allegedly with gross and evident bad faith. The RTC
ruled that as respondent is a real estate broker, she should have knowledge the the
contract was merely to sell pending the condition and that since such condition did
not arise, the sale was not perfected. In Aug. 27, 1999, the RTC dismissed due to
lack of cause of action. The case was elevated to the CA. The CA found that the
March 10, 2003 contract executed by the parties did not impose any condition on
the sale and held that the parties entered into a contract of sale. Consequently,
because petitioner no longer owned the properties when he sold them to Viloria, it
declared the second sale void. Moreover, it found petitioner liable for moral and
exemplary damages for fraudulently depriving respondent of the properties. In a
decision dated July 22, 2005, the CA upheld the sale to respondent and nullified the
sale to Viloria. Hence this decision
Issue: Whether or not the second sale was void
Held:
Yes. The court held that the contract was a sale and not a contract to sell. The deed
executed by the parties stated that petitioner sold the properties to respondent "in
a manner absolute and irrevocable" for a sum of P1.1 million. Nothing in said
instrument implied that petitioner reserved ownership of the properties until the full
payment of the purchase price. On the contrary, the terms and conditions of the
deed only affected the manner of payment, not the immediate transfer of ownership
(upon the execution of the notarized contract) from petitioner as seller to
respondent as buyer. The property was also properly delivered and transferred
ownership because petitioner executed a notarized deed of absolute sale in favor of
respondent, and not only did petitioner turn over the keys to the properties to
respondent, he also authorized RSLAI to receive payment from respondent and
release his certificates of title to her. Assuming however that it is indeed a sale
subject to a condition, such condition was prevented from being fulfilled by
petitioner taking away the certificate of title from the RSLAI and thus, there is
deemed to be a constructive fulfilment of the condition, therefore the condition is
consequently deemed already fulfilled. The respondent was a buyer in good faith
because a purchaser in good faith is one who buys the property of another without
notice that some other person has a right to, or an interest in, such property and
pays a full and fair price for the same at the time of such purchase, or before he has
notice of some other persons claim or interest in the property. The law requires, on

the part of the buyer, lack of notice of a defect in the title of the seller and payment
in full of the fair price at the time of the sale or prior to having notice of any defect
in the sellers title. In this case, respondent bought the property despite knowing of
such encumbrance and was not aware of any other defect in the seller's title. Thus,
the first sale shall invalidate the second sale and the property rightfully belongs to
respondents.