CARBONELL v.

COURT OF APPEALS

NOTE: The latin maxim prius tempore, prius jure was discussed in J. Teehankee’s concurring opinion, not in the ponencia.

 Jose Poncio was the owner of a parcel of land with improvements situated in San Juan, Rizal. It was subject to a mortgage in favor of Republic Savings Bank
for the sum of P1,500.
o Rosario Carbonell (petitioner), cousin and neighbor of Poncio, lived in the lot adjacent to the subject lot.
o Both Rosario Carbonell and Emma Infante (respondent) offered to buy the subject lot from Jose.
 As the mortgage on the lot was about to be foreclosed, Jose approached Rosario and offered to sell the lot, excluding the house where he lived.
o Rosario proposed the price of P9.50/sq. m, which Jose accepted on the condition that Rosario will be assuming the P1,500 mortgage debt of Jose.
Upon the bank’s approval of the assumption of mortgage, Rosario paid the arrears of P247.26.
o Jose and Rosario then executed a memorandum in the Batanes dialect (“Contract for One Half Lot Which I Bought From Jose Poncio”) wherein
Rosario allowed Jose to occupy the lot for a year for free. Should he still be unable to find a new place, Rosario also allowed him to continue occupying
the lot upon payment of rent.
 Rosario then brought to Jose a formal deed of sale, together with P400.00 representing the balance of the purchase price in addition to the assumption of
Jose’s mortgage obligation. However, Jose notified him that he already sold the lot to Emma Infante. Rosario then sought to contact Emma, but the latter
refused to see her. Emma was later seen erecting a wall around the lot, with a gate.
 Rosario then presented an adverse claim over the subject lot with the Office of the Register of Deeds of Rizal.
o In his answer, Jose admitted that he agreed to sell to Emma the subject lot after the latter improved her offer. Jose executed a formal deed of sale with
Emma in the total sum of P3,554.00. Eventually, the mortgage on the lot was also discharged.
o As the adverse claim was filed before the sale in favor of Emma was registered, the TCT issued to Emma had an annotation of the said adverse claim.
Emma thereafter took immediate possession of the subject land.
 Rosario then filed a complaint against Jose and Emma, praying that she be declared the lawful owner of the land, that the subsequent sale to Emma be
declared void, and that Jose be ordered to execute a deed of conveyance in her favor.
o The respondents filed a MTD, alleging that Rosario’s claim is unenforceable since the alleged sale in her favor is not evidenced by a written document.
This was denied.
o Rosario presented the above-mentioned memorandum written in the Batanes dialect as evidence of the alleged sale in her favor. The Infantes objected
to such presentation of parol evidence of the sale.
 TRIAL COURT: Dismissed the complaint, holding that the memorandum presented by Rosario does not satisfy the requirements of the law.
o This was appealed to the SC, which held that the Statute of Frauds is applicable only to executory contracts and that Rosario is entitled to present parol
evidence of the sale. The case was then remanded to the trial court.
o Eventually, the trial court held that the sale to Emma was void. However, upon motion of Emma, a new trial was granted. Emma presented additional
evidence on the cost of improvements they introduced on the subject land. The trial court then reversed its earlier decision.
 CA: Initially reversed the trial court ruling, but upon MR, affirmed the said ruling.

Relevant Issue Ratio

W/N Rosario has a preferential YES
right over the parcel of land ART 1544 (NCC) is the applicable provision in this case. (See Notes).
  It is essential that the buyer of realty must act in good faith in registering his deed of sale to merit the
protection of the second paragraph of said Article 1544.
 While the first and third paragraphs of Art. 1544 accords preference to the one who first takes possession
in good faith, the second paragraph directs that ownership of immovable property should be
recognized in favor of one who in good faith first recorded his right.
 If there is no inscription, what is decisive is prior possession in good faith. If there is inscription, as in the
case at bar, prior registration in good faith is a pre-condition to superior title.

IN THE CASE: Rosario’s prior purchase of the land was made in good faith. On the other hand, there was bad
faith on Emma’s part.
 Good faith on Rosario’s part: When Rosario bought the lot from Jose, she was the only buyer as there
was no sale to Emma then. She also recorded her adverse claim 4 days prior to the registration of Emma’s
deed of sale.
 Bad faith on Emma’s part: There was previous knowledge of the prior sale to Rosario. Moreover, there
are circumstances which the CA failed to appreciate:
A) Emma’s refusal to see Rosario despite the latter’s intent to meet her.
B) Rosario was already in the possession of the mortgage passbook and Jose’s copy of the mortgage
contract at the time Jose sold the lot to Emma.
C) Emma should have inquired from Jose as to the absence of the mortgage passbook. Further, the bank
must have told Emma that Jose already sold the lot to Rosario.
D) Rosario registered her adverse claim four days before Emma registered her deed of sale.
E) As it was already established that both Emma and Rosario offered to buy the lot, it was logical to
presume that Emma was notified by Jose as to Rosario’s offer. This should have also put her on guard
and should have compelled her to inquire from Jose if he already sold the lot to Rosario.
W/N the existence of the prior sale YES
to Rosario was duly established  The terms of the memorandum tend to show that the sale of the property in favor of Rosario is already an
accomplished act. The said memorandum refers to a lot “sold by him to me”
 The trial judge himself recognized the fact of the prior sale to Rosario when he stated that "the
memorandum in question merely states that Poncio is allowed to stay in the property which he had sold to
the plaintiff.”
 There is also a sufficient description of the lot referred to in the said memorandum as the parcel of land
occupied by Jose and where he has improvements erected.
 The said private memorandum, although not registered, is an evidence of a contract of sale between
Rosario and Jose, as a sale is consensual and consummated by mere consent.
 While a sale of an immovable is ordered to be reduced to a public document (Art. 1358), that mandate
does not render an oral sale of a realty invalid. If such sale was wholly or partly executed or where even if
not yet, it is evidenced by a memorandum, then the oral sale becomes perfectly good, and becomes a
good cause of action not only to reduce it to the form of a public document, but even to enforce the
contract in its entirety.
W/N there was adequate YES.
consideration for the sale in  Jose agreed to sell the lot to Rosario at P9.50 per square meter, on condition that Carbonell should pay (a)
 Rosario’s favor the amount of P400.00 to Poncio and (b) the arrears in the amount of P247.26 to the bank; and should
assume his mortgage indebtedness.

CONCURRING OPINION – TEEHANKEE, J.

 Justice Teehankee said that both purchasers may be deemed to have been purchasers in good faith at the respective dates of their purchase.
 Carbonnel only protected her legal rights when she registered her adverse claim 4 days before Infante. Otherwise, subsequent registration of Infante’s deed
of sale would have obliterated her legal rights. Therefore, when Infante registered her deed of sale, the TCT issued carried the adverse claim of Carbonell as
the first buyer.
 Teehankee said that both these registrations were in good faith; hence, the first buyer who was also the first registrant is legally entitled to the property.
Carbonell’s registration being only one of adverse claim and not of a deed of sale did not matter, because it was valid and effective.
 The Latin maxim primus tempore, potior jure (first in time, stronger in right) was then cited.
 It was explained that knowledge gained by the first buyer of the second sale cannot defeat the first buyer’s rights, except only as provided by the Civil
Code, that is, where the second buyer first registers in good faith the second sale ahead of the first.
 Such knowledge of the first buyer does not bar her from availing of her rights under the law, among them, to register first her purchase as against the
second buyer.
 On the other hand, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such
knowledge taints his prior registration with bad faith.

DISSENTING OPINION – MUNOZ-PALMA, J.

Justice Munoz-Palma dissented on the ground that the earlier registration of Carbonell’s adverse claim was done in bad faith.

NOTES

Article 1544 - If the same thing should have been sold to different vendees, the ownership shall he transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the
person who presents the oldest title, provided there is good faith.
TANGLAO VS. PARUNGAO
Spring Homes Subdivision sold lots to Spouses Parungao (1st buyers). Spouses Parungao introduced improvements on lots but failed to pay the balance. Spring
Homes sold lots to Spouses Tanglao (2nd buyers), and TCTs were issued in their names. Spouses Tanglao forcibly took possession of the lots. The Court held that
Spouses Parungao (1st buyers) had a superior right because Spouses Tanglao (2nd buyers) are not purchasers in good faith. At time of 2nd sale, there were already
occupants and improvements on the lots. A buyer of real property in possession of persons other than the seller must be wary and should investigate the rights
of those in possession, for without such inquiry, the buyer can be hardly regarded as the buyer in good faith and cannot have any right over the property.
 1992: Spouses Lorenzo and Corazon Parungao (respondents) purchased 9 lots from Spring Homes Subdivision located at Barangay Culiat, Calamba City,
Laguna. They made a down payment of P536,000, leaving a balance of P828,450, exclusive of interest.
 They introduced improvements on the lots (a concrete perimeter fence with cyclone wires on top, a heavy steel gate, and two fish breeding
buildings, all at a cost of P945,000). They also elevated the ground level of the lots by filling them with earth and "adobe."
 Under the Contracts to Sell signed by Spouses Parungao, the balance of P828,450.00 was to be paid by them within one year from its execution; and
that should they apply for a loan as payment for the balance, they would continue to pay the monthly installment until their obligation is fully paid.
 They failed to pay the installments. They also failed to secure a loan because Spring Homes refused to deliver to them the Transfer Certificates
of Title (TCTs) covering the lots required in their application for a loan secured by a real estate mortgage.
 Apr. 11, 1997: Spring Homes executed two separate Deeds of Absolute Sale in favor of Spouses Mariano and Corazon Tanglao (petitioners). The
previous TCTs covering the lots were cancelled, and in lieu thereof, two new TCTs were issued in the names of Spouses Tanglao. The lots sold to them
were among those previously sold to Spouses Parungao.
 Spouses Tanglao took possession of the two lots they bought. They forcibly opened the steel gate and the doors of the buildings to enter the premises.
 July 15, 1999: Spouses Parungao filed with the Housing and Land Use Regulatory Board (HLURB) a complaint for annulment of deed of sale and/or
return of investment for the seven (7) lots and costs of improvements.
 The HLURB Board of Commissioners found that at the time of the sale of the two lots to Spouses Tanglao, the contracts between Spouses Parungao and
Spring Homes were still subsisting. Moreover, the fence and existing structures on the premises should have forewarned petitioners that there are
adverse claimants of the two lots.
 Eventually, Spouses Tanglao filed a petition for review with the CA. The CA ruled in favor of Spouses Parungao, holding that they have a superior right
over the

Issue Ratio
Who between Spouses Parungao (1st buyer)
the spouses
have a superior  In double sales of immovable property, the governing principle is prius tempore, prius
right over the jure (first in time, stronger in right).
lots?  Payongayong v. Court of Appeals: Under Article 1544, preferential rights shall be
accorded to: (1) The person acquiring it who in good faith first recorded it in the Registry
of Property; (2) In default thereof to the person who in good faith was first in possession;
(3) In default thereof, to the person who presents the oldest title, provided there is good
faith.
  In all of these cases, good faith is essential, being the basic premise of the
preferential rights granted to the person claiming ownership of the immovable.
 Occeña v. Esponilla: the Court, speaking through then Chief Justice Reynato S. Puno, laid
down the following rules in the application of Article 1544: (1) Knowledge by the first
buyer of the second sale cannot defeat the first buyer’s rights except when the second
buyer first registers in good faith the second sale; and (2) Knowledge gained by the
second buyer of the first sale defeats his rights even if he is first to register, since such
knowledge taints his registration with bad faith.
 Differently put, the act of registration by the second buyer must be coupled with
good faith, meaning, the registrant must have no knowledge of the defect or
lack of title of his vendor or must not have been aware of facts which should put
him upon such inquiry and investigation as might be necessary to acquaint him
with the defects in the title of his vendor.
 IN THIS CASE: Spouses Parungao are NOT purchasers in good faith.
 A purchaser in good faith or innocent purchaser for value is one who buys
property and pays a full and fair price for it at the time of the purchase or before
any notice of some other person’s claim on or interest in it. The burden of proving
the status of a purchaser in good faith lies upon him who asserts that status and it
is not sufficient to invoke the ordinary presumption of good faith, that is, that
everyone is presumed to have acted in good faith.
 The HLURB and the Court of Appeals found that at the time of the second sale,
there were already occupants and improvements on the two lots in question.
These facts should have put petitioners on their guard.
 Settled is the rule that a buyer of real property in possession of persons other
than the seller must be wary and should investigate the rights of those in
possession, for without such inquiry the buyer can hardly be regarded as a buyer
in good faith and cannot have any right over the property.
 As the petitioners Tanglao cannot be considered buyers in good faith, they cannot
rely upon the indefeasibility of their TCTs 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.
 Considering that respondents Parungao who, in good faith, were first in
possession of the subject lots, the Court ruled that the ownership thereof
pertains to them.
CHENG V GENATO
September 6, 1989 - Genato entered into an agreement with the Da Jose spouses over the two lands that Genato owned. They executed a contract
to sell for which the purchase price was 80 per sq m. The contract was in a public instrument and was duly annotated at the back of the two
certificates of the title on the same day.
October 4, 1989 - The Da Jose spouses, not having finished verifying the titles, asked for and was granted by Genato an extension of another thirty
days but, according to Genato, this was granted on the condition that a new set of documents is made seven days from Oct 4. This was denied by
the spouses.
Pending the extension and without due notice to the spouses, Genato executed an affidavit to annul the contract to sell.
October 24, 1989 - Cheng expressed interest in buying the lands. Genato showed him copies of his TCT and the annotations at the back of his
contract to sell with the spouses. He also showed Cheng the affidavit to annul the contract to sell which has not been annotated at the back of the
titles.
Cheng issued a check upon the assurance of Genato that the previous contract with the Da Jose spouses will be annulled for which Genato issued a
handwritten receipt.
It was only when the Da Jse spouses chanced upon Genato when they were in the Office of the Registry of Deeds that they discovered about the
affidavit.
They reminded Genato that the 30 day extension was still in effect and that they were willing and able to pay the balance of the agreed down
payment.
Genato decided to continue the contract with the spouses and told Cheng of his decision, returning the check.
Cheng demanded Genato that he comply with their agreement to sell the property to him stating that the contract to sell between him and Genato
was already perfected and threatening legal action
Cheng then filed a complaint for specific performance to compel Genato to execute a deed of sale to him.

Lower court: the receipt issued by Genato to Cheng unerringly meant a sale and not just a priority or an option to buy.

Issue Ratio
1.Was the Spouses’ contract to sell validly 1. There was no valid and effective rescission or resolution of the spouses’
rescinded or resolved? Contract to sell.

2. Was Cheng’s contract with Genato a In a Contract to Sell, the payment of the purchase price is a positive suspensive
contract of Sale which gives better rights and condition, the failure of which is not a breach, casual or serious, but a situation that
precluding the application of double dales prevents the obligation of the vendor to convey title from acquiring an obligatory
under 1544 NCC? force.It is one where the happening of the event gives rise to an obligation. Thus, for
its non-fulfillment there will be no contract to speak of, the obligor having failed to
perform the suspensive condition which enforces a juridical relation. In fact with this
circumstance, there can be no rescission of an obligation that is still non-existent, the
suspensive condition not having occurred as yet. Emphasis should be made that the
breach contemplated in Article 1191 of the New Civil Code is the obligors failure to
comply with an obligation already extant, not a failure of a condition to render
binding that obligation.
Obviously, the foregoing jurisprudence cannot be made to apply to the situation in
the instant case because no default can be ascribed to the Da Jose spouses since the
30-day extension period has not yet expired. The Da Jose spouses contention that no
further condition was agreed when they were granted the 30-days extension period
from October 7, 1989 in connection with clause 3 of their contract to sell dated
September 6, 1989 should be upheld for the following reason, to wit;

firstly, If this were not true, Genato could not have been persuaded to continue his
contract with them and later on agree to accept the full settlement of the purchase
price knowing fully well that he himself imposed such sine qua non condition in order
for the extension to be valid;

secondly, Genato could have immediately annotated his affidavit to annul the
contract to sell on his title when it was executed on October 13, 1989 and not only on
October 26, 1989 after Cheng reminded him of the annotation;

thirdly, Genato could have sent at least a notice of such fact, there being no
stipulation authorizing him for automatic rescission, so as to finally clear the
encumbrance of his titles and make it available to other would be buyers.

It likewise settles the holding of the trial court that Genato needed money urgently.
Even assuming in gratia argumenti that the Da Jose spouses defaulted, as claimed by
Genato, in their Contract to Sell, the execution by Genato of the affidavit to annul the
contract is not even called for. For with or without the aforesaid affidavit their non-
payment to complete the full downpayment of the purchase price ipso facto avoids
their contract to sell, it being subjected to a suspensive condition. When a contract is
subject to a suspensive condition, its birth or effectivity can take place only if and
when the event which constitutes the condition happens or is fulfilled. If the
suspensive condition does not take place, the parties would stand as if the conditional
obligation had never existed. Nevertheless, this being so Genato is not relieved from
the giving of a notice, verbal or written, to the Da Jose spouses for decision to rescind
their contract.
2. The contract between Genato and Cheng was a contract to sell and not a contract
of sale.
The court took notice of the inconsistencies of the admission made by Cheng and
rules that the contract was a contract to sell.
The court disagreed with the lower court’s analysis that 1544 cannot be applied to
this case because in order for the article to be applied the following circumstances
must occur:
1. Two or more sales transactions in the issue must pertain to exactly the same
subject matter and must be valid sales tracsactions
2. The two or more buyers at odds over the rightful ownership of the subject
matter must each represent conflicting interests
3. The two or more buyers at odds over the rightful ownership of the subject
matter must each have bought from the very same seller
The governing principle of 1544 should apply in the situation. Jrisprudence states that
the governing principle is primus tempore, portior jure (first in time, stronger in right)
For not only was the contract between herein respondents first in time; it was also
registered long before petitioners intrusion as a second buyer. This principle only
applies when the special rules provided in the aforcited article of Civil Code do not
apply or fit the specific circumstances mandated under said law or by jurisprudence
interpreting the article. The rule exacted by Article 1544 of the Civil Code for the
second buyer to be able to displace the first buyer are:

(1) that the second buyer must show that he acted in good faith (i.e. in ignorance of
the first sale and of the first buyers rights) from the time of acquisition until title is
transferred to him by registration or failing registration, by delivery of possession;
(2) the second buyer must show continuing good faith and innocence or lack of
 knowledge of the first sale until his contract ripens into full ownership through prior
registration as provided by law.

Thus, in the case at bar, the knowledge gained by the Da Jose spouses, as first buyers,
of the new agreement between Cheng and Genato will not defeat their rights as first
buyers except where Cheng, as second buyer, registers or annotates his transaction or
agreement on the title of the subject properties in good faith ahead of the Da Jose
spouses. Moreover, although the Da Jose spouses, as first buyers, knew of the second
transaction it will not bar them from availing of their rights granted by law, among
them, to register first their agreement as against the second buyer. In contrast,
knowledge gained by Cheng of the first transaction between the Da Jose spouses and
Genato defeats his rights even if he is first to register the second transaction, since
such knowledge taints his prior registration with bad faith.

RULING

WHEREFORE, …
WHEREFORE, premises considered, the instant petition for review is DENIED and the assailed decision is hereby AFFIRMED EN TOTO.
SEPARATE OPINIONS

NOTES
Agricultural and Home Extension v. CA
March 29, 1972: The spouses Andres Diaz and Josefa Mia sold to Bruno Gundran a parcel of land.
o The owner’s duplicate copy of the title was turned over to Gundran.
o However, he did not register the Deed of Absolute Sale because he said he was advised in the Office of the Register of Deeds of Pasig of the
existence of notices of lis pendens on the title.
 November 20, 1972: Gundran and petitioner entered into a Joint Venture Agreement for the improvement and subdivision of the land.
o This agreement was also not annotated on the title.
 August 30, 1976: The spouses Andres Diaz and Josefa Mia entered into another contract of sale of the same property with Librado Cabautan.
 September 3, 1976: The Court of First Instance of Rizal issued a new owner’s copy of the certificate of title to the Diaz spouses, who had alleged the loss
of their copy.
o The notices of lis pendens annotated on the TCT were canceled and the Deed of Sale in favor of private respondent Cabautan was recorded.
 March 14, 1977: Gundran instituted an action for reconveyance before the CFI of Pasay City.
Issue Ratio
WoN Yes, Cabatuan was a buyer in good faith.
respondent 1. A purchaser in good faith is defined as “one who buys the property of another without notice that some other person
was a buyer has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or
in good before he has notice of the claim or interest of some other person in the property.”
faith and 2. The original TCT had no annotation of any sale, lien, encumbrance or adverse claim in favor of Gundran or the
therefore petitioner.
had the  When the property sold is registered under the Torrens system, registration is the operative act to convey or
better right affect the land insofar as third persons are concerned. Thus, a person dealing with registered land is only
to the charged with notice of the burdens on the property which are noted on the register or certificate of title.
property? 3. The notice of lis pendens was only in relation to the CFI case for the issuance of a new copy of the certificate of title.
 These did not have the effect of establishing a lien or encumbrance on the property affected.
 Their only purpose was to give notice to third persons and to the whole world that any interest they might
acquire in the property pending litigation would be subject to the result of the suit.
 Cabautan took this risk and when the notices of lis pendens were canceled, Cabautan acquired the land free
of any liens or encumbrances and so could claim to be a purchaser in good faith and for value.
4. There is no proof to substantiate the claim that petitioner already took possession of the property so as to negate the
claim of good faith on the part of the respondent.

RULING
WHEREFORE, the petition is DENIED and the questioned decision AFFIRMED in toto, with costs against the petitioner. SO ORDERED.
PAYLAGO V JARABE
1. 1920, a homestead patent and an Original Title was issued to Anselmo Lacatan.
2. 1948, after the death of Anselmo Lacatan, TCT was issued in the name of his two sons and heirs, Vidal and Florentino Lacatan.
3. March 1953, Vidal Lacatan died, Vidal Lacatan's heirs sold their shares over the lot to spouses Romeo Paylago and Rosario Dimaandal (PLAINTIFF).
4. October 1953, Florentino Lacatan also died, his heirs also sold their shares over the lot to the PLAINTIFF
5. 1954, by virtue of the registration of the two deeds of sale, a new TCT was issued in favor of the PLAINTIFF.
6. A subsequent survey of the lot disclosed that one half hectare of the total area purchased by was being occupied by Jarabe (RESPONDENT).
7. Hence, the action to recover possession and ownership of the said portion.
8. RESPONDENT contends that lot was purchased by her late husband from Apolonio Lacatan, evidenced by an unregistered deed of sale that Apolonio
Lacatan, in turn, who bought the same in 1936 from Anselmo Lacatan, the original registered owner.
9. After trial, the lower court held that plaintiffs were not purchasers in good faith and rendered judgment in favor of defendant

Issue
Who has a better right in
case of double sale of real
property, the registered
buyer or the prior but
unregistered purchaser?
Ratio
REGISTERED BUYER. (EXCEPT WHEN NOT IN GOOD FAITH)
As between two purchasers, the one who has registered the sale in his favor, in good faith, has a preferred right over
the other who has not registered his title, even if the latter is in the actual possession of the immovable property.
Article 1544, providing that if the same immovable property should have been sold to different vendees, "the
ownership shall belong to the person acquiring it who in good faith first recorded it in the registry of property."

There is no question that the sales made in favor of plaintiffs-petitioners were registered while the alleged sale executed
in favor of defendant-respondent was not. Applying the foregoing principle of law to the instant case, it is now
contended by plaintiffs-petitioners that their certificate of title must prevail over defendant-respondent.

Both Courts below found that petitioners knew beforehand that the parcel of land in question was owned by
defendant-respondent coupled with their knowledge that defendant-respondent purchased the same from Apolonio
Lacatan, plaintiffs-petitioners should have inquired and made an investigation as to the possible defects of the title of
the Lacatan heirs over the entire lot sold to them granting that the latter's certificate of title was clear. This, they
failed to do. They cannot now claim complete ignorance of defendant-respondent's claim over the property.

a purchaser who has knowledge of facts which should put him upon inquiry and investigation as to possible defects of the
title of the vendor and fails to make such inquiry and investigation, cannot claim that he is a purchaser in good faith and
had acquired a valid title thereto - Sampilo v. Court of Appeals
 To be entitled to the priority, the second vendee must not only show prior recording of his deed of conveyance or
possession of the property sold, but must, above all, have acted in good faith, that is to say, without knowledge of the
existence of another alienation by his vendor to a stranger.

Short of this qualifying circumstance, the mantle of legal protection and the consequential guarantee of indefeasibility of
title to the registered property will not in any way shelter the recording purchaser against known and just claims of a
prior though unregistered buyer. Verily, it is now settled jurisprudence that knowledge of a prior transfer of a registered
property by a subsequent purchaser makes him a purchaser in bad faith and his knowledge of such transfer vitiates his
title acquired by virtue of the later instrument of conveyance which was registered in the Registry of Deeds

The registration of the later instrument creates no right as against the first purchaser.

RULING
WHEREFORE, …
The judgment of the lower court is Affirmed.
Rivera v. Ong
1. Lichauco Brother had offered for sale a certain old machinery and boilers which were deposited and exposed for sale in a yard at Tanduay,
in the city of Manila. The plaintiff, Marciano Rivera, alleges that upon January 8, 1912, he purchased some of this old material for the price
of P5.500, and received a receipt from Cresanto Lichauco showing that he had become such purchaser. These things consisted, according to
said receipt, of two complete steam-boilers, with chimneys; one steam motor (15 by 30 inches) complete; one pair of twin rice hullers
complete, and a feeding pump (donkey) for boilers.
2. Rivera, however, did not take possession of the property, which remained in the same place. It further appears that upon February 9, 1912,
the defendants, Ong Che, bought from Lichauco Brothers a lot of old iron, machinery, and junk for the sum of P1,100. This purchaser took
immediate possession of the materials purchased by him.
3. Later, when Marciano Rivera appeared to take possession of the things of which he supposed himself to the purchaser, under the receipt
given by Crisanto Lichauco, he found that many of the accessory and auxiliary parts of the boilers, motor, and rice mill were wanting; and
upon investigation it developed that these articles were held by the defendant, Ong Che, and were claimed by him as owner by virtue of the
purchase effected by him upon February 9, as stated above.
4. Court of First Instance of the city of Manila judgment was given in favor of the defendant (Ong) and the plaintiff has appealed.
5. The plaintiff thereupon instituted the present action to recover the articles in question alleging that he was the true owner thereof.

Issue Ratio
W/N CFI erred
in deciding in No. Ong has a better right than Rivera.
favor of Ong. 1. Ong is a purchaser in good faith.
a. Furthermore, he acquired possession by virtue of his purchase. He, therefore, undoubtedly has,
under article 1473 of the Civil Code, a better title than the first purchaser, who has never had
possession at all. The only doubt as to the application of that article to the present case arises from
the fact that there is some conflict in the testimony upon the question as to who was the original
owner. It is to be inferred from the testimony that the house of Lichauco consists of Faustino
Lichauco and Galo Lichauco, and it would seem that Crisanto Lichauco, who effected the sale of
Rivera, is not a member of that establishment.
i. Crisanto testified that the property sold by him to the plaintiff Rivera, including the articles
which are now in dispute, was the property of Galo Lichauco. There is grave doubt as to
correctness of this statement, however, as the same witness admits that the machinery sold
by him to Rivera had been taken out of an old mill owned by Lichauco Brothers in Dagupan;
and it is not made clear that Galo Lichauco had ever become its exclusive owner. F
 1. At any rate we find that, under the circumstances disclosed in this case, and even
conceding that property belong to Galo Lichauco, the house of Lichauco had authority
to sell it. In this view the case presented is that where two different agents of the same
owner successively negotiated sales to two different purchasers, and it is obvious that,
under the article of the Civil Code cited above, the second purchaser having acquired
possession first must be declared the true owner. In our view of the facts it was
merely a case where a mistake was made by the house of Lichauco in selling
something that had already been sold.
2. It was incumbent upon the plaintiff to prove title in himself, as against the defendant, by a preponderance of
the evidence; and he could not recover merely upon the weakness of the defendant’s title.
- court below held that the plaintiff had failed to prove title in himself and we see the no reason for
disturbing the judgment on this point.
- at the hearing the plaintiff himself did not appear as a witness.
- no steps were taken, prior to the trial to secure the attendance of either Galo Lichauco or Faustino
Lichauco, both of whom would have been most material witnesses for the plaintiff if his contention is
correct.
- plaintiff’s counsel asked for a continuance in order to call these witnesses. The court refused to grant
a continuance for such purpose. In this we think the court did not abuse its discretion, and its action
in this respect does not constitute reversible error. The plaintiff was appraised from the nature of
the issue raised that the question to be tried was that of ownership and he should have been ready
with the witnesses to prove it.

RULING

It results that the judgment of the lower court should be affirmed, with costs of this instance against the appellant. So ordered.
Consolidated Rural Bank vs. Court of Appeals and Heirs of Teodoro dela Cruz
● Original lot was subdivided into smaller lots by the Madrid Brothers.
● Rizal Madrid sold his share of the lot denominated as Lot 7036-A-7 to Aleja Gamiao and Felisa Dayag. There was no objection made by his brothers. The
deed of sale was not registered with the Register of Deeds of Isabela. However Gamiao and Dayag made a tax declaration for it in 1964.
● Gamiao and Dayag then sold the northern half to Restituto Hernandez and the southern half of the land to Teodoro de la Cruz. The two buyers took
possession of the land and cultivated it. Teodoro died in 1970, but the heirs remained in possession.
● The madrid brothers then sold all their rights on Lot 7036-A-7 to Pacifico Marquez in 1976. This deed of sale was registered with the Register of Deeds in
Isabela in 1983.
● Marquez subdivided the lot into 8 parcels. Then constituted mortgages on three of the said lots. He sold one of them to Calixto.
● WHY THEY’RE IN COURT: Claiming to be null and void the issuance of TCT Nos. T149375 to T149382; the foreclosure sale of Lot Nos. 7036A7A to
7036A7D; the mortgage to RBC; and the sale to Calixto, the Heirs-now respondents herein-represented by Edronel dela Cruz, filed a case for
reconveyance and damages the southern portion of Lot No. 7036A (hereafter, the subject property) against Marquez, Calixto, RBC and CRB in December
1986.

 They both want ownership of the land.

Trial Court: Ruled in favor of Marquez. Applying Article 1544 of the Civil Code, since Marquez had no knowledge of the possession and claim of the heirs of de la
Cruz, and he registered it first then he is the owner.

Court of Appeals: Reversed the Trial Court. Found that Marquez was not a purchaser in good faith and for value. Marquez admitted having knowledge that the
subject property was being taken by the heirs.

With regard to the mortgages: Anent the mortgagees RBC and CRB, the Court of Appeals found that they merely relied on the certificates of title of the
mortgaged properties. They did not ascertain the status and condition thereof according to standard banking practice. For failure to observe the ordinary
banking procedure, the Court of Appeals considered them to have acted in bad faith and on that basis declared null and void the mortgages made by Marquez in
their favor.

Argument of CRB: Petitioner CRB, in essence, alleges that the Court of Appeals committed serious error of law in
upholding the Heirs ownership claim over the subject property considering that there was no finding that they acted in good faith in taking possession thereof
nor was there proof that the first buyers, Gamiao and Dayag, ever took possession of the subject property. CRB also makes issue of the fact that the sale to
Gamiao and Dayag was confirmed a day ahead of the actual sale, clearly evincing bad faith, it adds. Further, CRB asserts Marquezs right over the property being
its registered owner.

Whether the mortgage in favor of CRB is valid?

 Issue Ratio
Whether the NO.
mortgage in favor of
CRB is valid? Article 1544 of the civil code is not applicable in the present case, because it applies to a case of double sale. By the time
Madrid brother sold to Marquez they were no longer owners, since it had already been sold to Gamiao and dayag.

“In the case at bar, the subject property was not transferred to several purchasers by a single vendor. In the first deed of sale,
the vendors were Gamiao and Dayag whose right to the subject property originated from their acquisition thereof from Rizal
Madrid with the conformity of all the other Madrid brothers in 1957, followed by their declaration of the property in its entirety
for taxation purposes in their names. On the other hand, the vendors in the other or later deed were the Madrid brothers but
at that time they were no longer the owners since they had long before disposed of the property in favor of Gamiao and
Dayag.”

The court explaining when Article 1544 applies:

“More specifically, it [Article 1544] covers a situation where a single vendor sold one and the same immovable property to two
or more buyers. According to a noted civil law author, it is necessary that the conveyance must have been made by a party who
has an existing right in the thing and the power to dispose of it. It cannot be invoked where the two different contracts of sale
are made by two different persons, one of them not being the owner of the property sold. And even if the sale was made by
the same person, if the second sale was made when such person was no
longer the owner of the property, because it had been acquired by the first purchaser in full dominion, the second purchaser
cannot acquire any right.”

The court then goes on to apply the principle of prior tempore to explain why the de la cruz Heirs have ownership :

“In a situation where not all the requisites are present which would warrant the application of Art. 1544, the principle of prior
tempore, potior jure or simply he who is first in time is preferred in right, should apply. The only essential requisite of this rule
is priority in time; in other words, the only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good
faith because at the time he bought the real property, there was still no sale to a second vendee. In the instant case, the sale to
the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale by the Madrid brothers to
Marquez. The Heirs also had possessed the subject property first in time.

Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject property.
 ARGUENDO that 1544 did apply:

The elements of 1544 to apply are:

(a) the first registrant in good faith;

(b) should there be no entry, the first in possession in good faith; and
(c) in the absence thereof, the buyer who presents the oldest title in good faith

There is no proof that Marquez was acting in good faith. “the actions of Marquez have not satisfied the requirement of good
faith from
the time of the purchase of the subject property to the time of registration. Found by the Court of Appeals, Marquez knew at
the time of the sale that the subject property was being claimed or taken by the Heirs. This was a detail which could indicate a
defect in the vendors title which he failed to inquire into. Marquez also admitted that he did not take possession of the
property and at the time he testified he did not even know who was in possession.

“One who purchases real property which is in actual possession of others should, at least, make some inquiry concerning the
rights of those in possession. The actual possession by people other than the vendor should, at least, put the purchaser upon
inquiry.”

Lastly with regard to the bank’s mortgages:

Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private
individuals in their dealings, even those involving registered lands. Hence, for merely relying on the certificates of title and for
its failure to ascertain the status of the mortgaged properties as is the standard procedure in its operations, we agree with the
Court of Appeals that CRB is a mortgagee in bad faith.

The court also found the heirs of de la cruz to be possessors in good faith:

As Article 526 of the Civil Code aptly provides, (H)e is deemed a possessor in good faith who is not aware that there exists in his
title or mode of
acquisition any flaw which invalidates it.
 They possessed the land for 18 years, before any sale was brought to their knowledge.
 They pay taxes. Why would someone pay taxes if he doesn’t own it.

DISPOSITIVE: WHEREFORE, the Petition is DENIED. The dispositive portion of the Court of Appeals Decision,
as modified by its Resolution dated 5 January 1998, is AFFIRMED. Costs against petitioner.

NOTES:

ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to
the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
CARUMBA v CA
• On April 12, 1955, spouses Amado Canuto and Nemesia Ibasco sold a parcel of unregistered land to the spouses Amado Carumba and Benita Canuto.
Immediately thereafter, Carumba took possession of the land — planting bananas, coffee beans, and other vegetables.
• The Deed of Sale of Unregistered Land with Covenants of Warranty was never registered in the Office of the Register of Deeds and the Notary, Mr. Vicente
Malaya, was not then an authorized notary public in the place.
• On January 21, 1957, a complaint for a sum of money was filed by Santiago Balbuena against Amado Canuto and Nemesia Ibasco and on April 15, 1967, a
decision was rendered in favor of the plaintiff and against the defendants.
• On October 1, 1958, the ex-officio Sheriff issued a “Definite Deed of Sale” of the property now in question in favor of Santiago Balbuena, which was
registered before the Office of theRegister of Deeds.

Issue Ratio

Whether or not NO
Balbuena’s title is - purchaser of unregistered land at a sheriff’s execution sale only steps into the shoes of the judgment
superior to that of debtor, and merely acquires the debtor’s interest in the property sold as of the time the property was
Carumba by virtue of Art levied upon.
- while only embodied in a provate document, the sale to Carumba, coupled with the fact that Carumba had
1544 on double sales
taken possession of the unregistered land sold, sufficed to vest ownership on the said buyer. Therefore,
when the levy was made by the Sheriff, the judgment debtor no longer had dominical interest nor any real
right over the land that could pass to the purchaser at the execution sale

RULING
WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instance affirmed. Costs against despondent Santiago
Balbuena.

SEPARATE OPINIONS

NOTES
DAGUPAN TRADING COMPANY vs. MACAM
 In 1955, Sammy Maron and his 7 siblings were pro-indiviso owners of a parcel of unregistered land in Pangasinan.
 While their application for registration of said land under Act No. 496 was pending, they executed, on June 19 and Sept. 21, 1955, 2 deeds of sale conveying the
property to Rustico Macam, who thereafter took possession thereof and proceeded to introduce substantial improvements therein.
 1 month later, on Oct. 14, 1955, the Original Certificate of Title covering the land was issued in the name of the Maron’s, free from all liens and encumbrances.
 On Aug. 4, 1956, there was a civil case filed and decided against Maron and in favor of Manila Trading and Supply Co. (Manila Trading) Levy was made upon
whatever interest he had in the Pangasinan property, and thereafter said interest was sold at public auction to the judgment creditor. The corresponding notice
of levy, certificate of sale and the Sheriff’s certificate of final sale in favor of Manila Trading were duly registered.
 On March 1, 1958, Manila Trading sold all its rights and title to the property to Dagupan Trading Company.
 On Sept. 4, 1958, Dagupan Trading instituted this action against Macam praying that it be declared owner of the 1/8 portion of the land, that a partition of the
whole property be made, that Macam be ordered to pay P500 a year as damages from 1958 until said portion is delivered plus attorney’s fees and costs.
 The trial court dismissed the complaint. CA affirmed.

Issue
Who has the better right as
between Dagupan Trading and
Rustico Macam to the 1/8 share of
Sammy Maron in the property?
Ratio
RUSTICO MACAM.
1. The Court said that in this case, the sale in favor of Macam was executed before the land was registered, while the
conflicting sale in favor of Dagupan Trading was executed after the same property had been registered.

2. The last paragraph of Section 35, Rule 39 of the Ruled of Court provides that upon the execution and delivery of the
final certificate of sale in favor of the purchaser of land sold in an execution sale, such purchaser “shall be
substituted to and acquire all the right, title, interest and claim of the judgment debtor to the property as of the
time of the levy.”

3. In this case, Sammy Maron no longer had interest or claim on the 1/8 portion of the property at the time of levy. His
interest had already been conveyed to Macam fully and retrievably. Consequently, subsequent levy made on the
property for the purpose of satisfying the judgment rendered against Sammy Maron in favor of Manila Trading was
void and of no effect.

RULING
IN VIEW OF ALL THE FOREGOING, the decision appealed from is affirmed, with costs.
HANOPOL v. PILAPIL
 Hanopol and Pilapil are in contention over the double sale of a piece of unregistered land in Leyte. Hanopol claims ownership of the land by virtue of a
series of purchases effected in 1938 by means of private instruments, executed by the former owners Sapio. He also invokes a 1958 decision rendered in
his favor by the CFI regarding a case where the Sapios pretended to be the owners, took possession of the land and ejected his tenants, wherein the CFI
declared him the exclusive owner of the land and ordered the Sapios to deliver possession thereof to him.
 Meanwhile, Pilapil asserts title to the property on the strength of a duly notarized deed of sale executed in his favor by the same owners on December 3,
1945, which deed of sale was registered in the Registry of Deeds of Leyte on August 20, 1948 under the provisions of Act No. 3344.
 Hanopol’s evidence consists of the private instruments and a copy of the decision in the reinvidicatory case. For Pilapil, it’s his notarized deed of sale
bearing annotation of its registration under Act No. 3344. The CFI decided in favor of Pilapil, based on the second paragraph of Article 1544 of the New
Civil Code. Hence this case.

Issue
W/N the judgment in the
reinvidicatory case against the
Siapos is binding upon Pilapil who is
their successor-in-interest
W/N the registration of the second YES.
deed of sale in favor of Pilapil affects
Hanopol’s right as the first vendee
Ratio
NO.
Pilapil derived his right to the land from the sale to him of the said property on December 3, 1945, long
before the filing of the complaint against the vendors in 1948. He was not made a party in the case against
the Siapos, and there was not even a claim that he had knowledge of said litigation.
Hanopol is arguing that the registration of Pilapil's notarized deed of sale in 1948 under Act No. 3344 "shall
be understood to be without prejudice to a third party with a better right". He is saying that since the land
was sold to him since 1938 while the land was sold to Pilapil in 1945, the 1st sale to him is a better right which
cannot be prejudiced by the registration in the 2nd sale.

The Court didn’t agree with this, saying that if this were true, then par. 2 of Article 1544 would have no
application at all except to lands or real estate registered under the Spanish Mortgage Law or the Land
Registration Act. The Court also disagreed that the mere fact of his having a previous title or deed of sale
constitutes the “better right” stated in Act No. 3344.

The "better right" referred to in Act No. 3344 is much more than the mere prior deed of sale in favor of the
first vendee. In the case of Lichauco v. Berenguer, it was the prescriptive right that had supervened. It could
also be other facts and circumstances in which, in addition to his deed of sale, the first vendee can be said to
have better right than the second purchaser.
 In the case at bar, there appears to be no clear evidence of Hanopol's possession of the land in
controversy. In fact, in his complaint against the Sapios, Hanopol alleged that the Siapos took possession of
the same land under claim of ownership in 1945 and continued and were in such possession at the time of
the filing of the complaint against them in 1948. Since the Siapos were in actual occupancy of the property
under claim of ownership, when they sold the said land to Pilapil on December 3, 1945, such possession was
transmitted to the latter, at least constructively. And with the execution of the notarial deed of sale, also
actually and physically.

RULING

WHEREFORE, finding no error in the decision appealed from, the same is hereby affirmed, with costs against the appellant. So ordered.

NOTES

Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in
good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents
the oldest title, provided there is good faith. (1473)
Espiritu and Apostol vs Valerio
Francisco Valerio filed an action to quiet title in the CFI against Esperanza Espiritu and her daughter Antonia Apostol, alleging that he was the
owner of a parcel of unregistered land approximately 8,573 sqm. having acquired the same from the former owner, Pelagia Vegilia, as evidenced by
a deed of sale executed by the latter in his favor in 1955, Exhibit A; that Espiritu and Apostol had been asserting adversary rights over said land and
disturbing his possession thereof.

Espiritu and Apostol denied the allegations and alleged that they were the owners of the land, having acquired it by inheritance from the late
Santiago Apostol, husband of Espiritu and father of Apostol; that Santiago bought the property from Mariano Vegilia in 1934, as evidenced by the
deed of sale Exhibit 2, who, in turn, had acquired it from his niece, Pelagia Vegilia, on 1932, by virtue of the deed of sale, Exhibit 1.

The CFI declared Valerio to be the owner of the land and enjoined Espiritu and Apostol from molesting him in his peaceful possession of the land.
The CA affirmed.

The present appeal depends entirely upon the validity of the Deed of Sale allegedly executed by Pelagia Vegilia in favor of Mariano Vegilia, and of
the Deed of Sale allegedly executed by Mariano in favor of Santiago Apostol. If both are valid, Espiritu and Apostol’s would have a better right than
Valerio in light of the provisions of Article 1544 NCC, as the Deed of Sale in favor of Valerio was only registered 11 days after Exhibits 1 and 2
(from where Espiritu and Apostol derive their rights) were registered.

Issue Ratio
W/N it is Valerio who has a YES. We find nothing in the findings of the CA that would justify a reversal. CA decision is quoted:
better right to the land in
question? Upon motion of Valerio, the Court ordered Espiritu and Apostol to produce, for examination and
inspection by Valerio, Exhibits 1 and 2. After examining said documents, Valerio filed a supplemental
complaint alleging that Exhibit 1 (Sale of Pelagia to Mariano) 'is fictitious and a falsification,' and that the
private document Exhibit 2 (Sale of Mariano to Santiago) is likewise null and void, being without line
necessary normal requisites, aside from being fictitious and the fact that the alleged vendor acquired no
right whatsoever in the land.

It would appear that this case concerns the sales of one parcel of land by the same vendor in favor of 2
different vendees. If these were the only issues in this case, there is no question that under Art 1544,
Exhibit '1' (Mariano to Santiago Apostol) would be considered to be effective as against Exhibit 'A'
(Pelagia to Valerio) it having been registered prior. But this is not the only question at issue.

Over and above the application of Art 1544 is the determination of whether or not Exhibits '1' and
'2' have been falsified. Having arrived at the conclusion that the two exhibits had been falsified, the CFI
adjudged the “ownership of the land in favor of Valerio and permanently enjoined Espiritu and Apostol to
abstain and desist from molesting Valerio from the peaceful enjoyment and possession of the parcel of
land”. The CFI decided the case based upon the testimony of Pelagia Vegilia denying that she sold to
Mariano and that of Mariano denying that he bought the land from Pelagia and sold it to Santiago. The
CFI found the ff. anomalies:

As regards Exhibit 1:

- it cannot be determined whose thumbmark is the one appearing on said Exh. '1' since it immediately
precedes the name Anselmo Vegilia but it is under the name Pelagia Vegilia.
- it is, apparent that the thumbmark appearing in Exh. '1' is different from the thumbmark appearing in
Exh. 'X'.
- it is also very clear' that the one who wrote the name Anselmo is the very one who wrote the name
Pelagia
- Anselmo Vegilia could not have written the name Anselmo Vegilia in Exh. '1' as that it has been certified
by the Notary Public that said Anselmo is physically incapable
- the' apparent difference of the ink used in writing the names of Pelagia and Anselmo from the ink
used by the other persona who signed in Exh. '1'
-the apparent fact that the names Pelagia and Anselmo must have been written in a much later date than
the other names appearing in said Exh. '1'.

As regards Exhibit 2:
-the denial of Mariano Vegilia as to his having purchased the land is enough to disregard it
-the fact that the names Mariano and Aviles appearing in said Exh. '2' must have been, written by only
one man.

RULING

Wherefore, the decision appealed from is hereby affirmed, with costs.

Quimson v Rosete

Sorry guys di ko masyadong gets ‘yung facts in Spanish even after using Google Translate and Spandict :’( I tried. Itama ninyo na lang kung alam ninyong may
mali
RELEVANT FACTS
1. This case involves a dispute over a parcel of land in Zambales conveyed to 2 different persons.
2. The property originally belonged to Dionisio Quimson (now deceased), who executed a deed of conveyance in favor of his daughter Tomasa on June 7,
1932. However, even after conveying the parcel of land to his daughter, he still continued to possess and enjoy the use of the property involved.
3. On May 3, 1935, he sold the parcel of land to Magno Agustin and Paulina Manzano with a right to repurchase within 6 years.
4. Two years later, on April 5, 1937, he sold the same property to Francisco Rosete, also with a pacto de retro for a term of 5 years.
5. After obtaining money from the sale between him and Rosete, he paid off the spouses using the money from his transaction with Rosete. Since then,
Rosete was the one possessing and enjoying the property.
6. Dionisio Quimson died on June 6, 1939.
7. On February 17, 1943, Tomasa Quimson and Francisco Rosete both went to the Registry of Deeds to have their deeds of sale over the same parcel of
land registered. However, it was Tomasa who arrived earlier.
8. Before the CFI, it was held that Quimson was the lawful owner. However, the CA reversed the judgment of the lower court. It held that Rosete is the lawful
owner. Quimson now comes to the court to have the CA decision set aside.

ISSUE

1. Who between Rosete and Quimson is the owner of the land?

1. Who The Court held that it is Quimson.

between
Rosete and
Quimson is  It was a valid sale from Dionisio to Tomasa Quimson evidenced by Exhibit A (Deed of conveyance). There was consideration
for such sale in the amount of P250 and it was acknowledged before a notary public.
the owner
of the land?  Articles 1462 and 1473 of the Civil Code provide:

ART. 1462. The thing sold shall be deemed delivered, when it is placed in the control and possession of the vendee.

When the sale is made by means of a public instrument, the execution thereof shall be equivalent to the delivery of the thing
which is the object of the contract, if from the said instrument the contrary does not appear or may not be clearly inferred.

ART. 1473. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be movable property.
 Should it be immovable property, the ownership shall belong to the person acquiring it who first recorded it in the registry.

Should there be no inscription, the ownership shall belong to the person who in good faith was first in the possession; and, in
the absence of this, to the person who presents the oldest title, provided there is good faith.

 Florendo vs Voz: When the sale is made through a public instrument, the execution is tantamount to conveyance of the subject
matter, unless the contrary clearly follows or be deduced from such instrument itself.

 Sanchez vs Ramos: The interpretation of Article 1473 is more in consonance with the principles of justice. The execution of a
public instrument is equivalent to the delivery of the realty sold (Art. 1462) and its possession by the vendee (Art. 438). The
sale is consummated and the ownership and the real right over the property is transferred to vendee.

 After that, the vendor is a stranger to the thing sold like any other who has never been its owner. As the thing is already
considered delivered, the vendor no longer has the obligation to deliver it.

 In other words, when Dionisio effected the second sale to Rosete, nothing was transmitted to the latter and even
when he took possession of the property, he did it as a mere detainer because the ownership was already legally
acquired by Tomasa Quimson by virtue of the duly executed public instrument conveying to her the property
involved.

RULING

Decision of the CA is affirmed.

SANCHEZ V. RAMOS
1. The original owner of the land is Ciriaco Fernandez
2. On July 1, 1910, Fernandez sold the subject parcel of land to Spouses Gomez and Sanchez (PETITIONERS) under a pacto de retro for the period of one
year (Pacto de Retro sale refers to the sale wherein the seller has the right to repurchase the subject matter or the property being sold)
a. This sale was executed in a public instrument
b. Gomez and Sanchez never took material possession of the land
3. Eventually, the period of repurchase elapsed without the vendor making the repurchase
4. Even though the sale was made, on July 3, 1912, Fernandez again sold the same land by means of a private document to Ramos (RESPONDENT) who
immediately took material possession of the subject land
5. In trial, the Trial Court applied Article 1473 and declared preferable the sale executed with Respondent Ramos and absolved him of the complaint. Hence
this petition.

Issue Ratio
W/N the Trial Court was NO. The Court does not agree with the decision of the Trial Court
correct in preferring the
sale executed to 1. The article used by the Trial Court is Art. 1473, to wit:
Respondent Ramos and
absolving him of the ART. 1473. If the same thing should have been sold to different vendees, the ownership shall be transferred to the
complaint person who may have first taken possession thereof in good faith, if it should be personal property.

Should it be real property, it shall belong to the purchaser who first recorded it in the registry of deeds.

Should it not be recorded, the property shall belong to the person who first took possession of it in good faith, or, in
default of possession, to the person who presents the oldest title, provided there is good faith.

In this case, not one of the documents of sale in this case having been recorded, preference must be decided in favor of the
vendee who first, took possession.

Possession referred to in this article, according to its letter, refers to the material possession and the symbolic possession.

NOTE:
It is said that the law, in the gradation of the causes of preference between several sales, fixes, first, possession and then
the date of
the title and, as a public instrument is a title, it is claimed that the inference is that the law has deliberately intended to
 place the symbolic possession, which the execution of the public document implies, after the material possession.

Also, the execution of a public instrument is equivalent to the

delivery of the realty sold (art. 1462, Civil Code) and its possession by the vendee (art. 438). Under these conditions the
sale is considered consummated and completely transfers to the vendee all of the vendor's rights of ownership including
his real right over the thing. The vendee by virtue of this sale has acquired everything and nothing is left to the vendor.

This means that after the sale of a realty by means of a public instrument, the vendor, who resells it to another, does not
transmit anything to the second vendee and if the latter, by virtue of this second sale, takes material possession of the thing,
he does it as a mere detainer

2. this Court believes that article 1473 (for determining who has better right when the same piece of land has been sold
several times by the same vendor) includes not only the material but also the symbolic possession, which is acquired by the
execution of a public instrument.

From the foregoing it follows that the plaintiff was the first to take possession of the land, and consequently the sale
executed to him is preferable.

RULING
Wherefore, the judgment appealed from is hereby reversed; the plaintiff is declared owner of the land in question; and the defendant is ordered to deliver the possession of the
land to the plaintiff. No special findings as to costs. So ordered

SEPARATE OPINIONS

Dissent: Street j.
In my judgment the possession referred to in article 1473 of the Civil Code is the actual, material and physical possession of the thing sold; and in applying that provision no account should ever be
taken of the symbolic possession which is supposed to be acquired by the purchaser, under article 1462 of the Civil Code, when the sale is proved by a public document.

The question as to who has the material possession of a parcel of real property can usually be ascertained by inspection or inquiry among persons living in the neighborhood, and although the
information thus obtained is less certain and absolute than that which would be revealed by the registration of title; nevertheless there is a presumption of ownership from the fact of possession,
and
a purchaser who, relying on the evidence supplied by his eyes, pays his money to one who is believed to be the true owner and takes the material possession from him, should be protected as
against any prior purchaser except the one who may have registered his title. This was without doubt the intention of the codifiers.

Also, if the codifiers had intended to create a preferential right based upon the fact that a contract of
sale is executed in the form of a public instrument, this would have been enumerated among the criteria expressed in article 1473, as giving the better right.
 Beatingo v. Gasis
1. Petitioner Dolorita Beatingo filed a Complaint for Annulment and Cancellation of Sale, Reconveyance, Delivery of Title and Damages against
respondent Lilia Bu Gasis.
2. Petitioner alleged that, on May 19, 1998, she bought a piece of land, denominated as Lot No. 7219 (hereafter referred to as the subject
property), from Flora G. Gasis (Flora). The subject property was registered in the name of Flora’s predecessor-in-interest. The sale was
evidenced by a notarized Deed of Absolute Sale.
3. On October 18, 1999, petitioner went to the Register of Deeds to have the sale registered. She, however, failed to obtain registration as she
could not produce the owners duplicate certificate of title. She, thus, filed a petition for the issuance of the owners duplicate certificate of title but
was opposed by respondent, claiming that she was in possession of the Original Certificate of Title (OCT) as she purchased the subject property
from Flora on January 27, 1999, as evidenced by a Deed of Sale.
4. This prompted petitioner to file the Complaint, insisting that she is the rightful owner of the subject property. She also maintained that
respondent had been keeping the OCT despite knowledge that petitioner is the rightful owner. She further accused respondent of inducing Flora
to violate the contract with her, which caused her damage, prejudice, mental anguish, and serious anxiety.
5. On the other hand, respondent claimed that she purchased the subject property from Flora without knowledge of the prior sale of the same
subject property to petitioner, which makes her an innocent purchaser for value. Respondent denied having induced Flora to violate her contract
with petitioner as she never knew the existence of the alleged first contract. Lastly, respondent declared that, upon payment of the purchase
price, she immediately occupied the subject property and enjoyed its produce.
6. The RTC decided in favor of respondent on the basis of the testimonial and documentary evidence.
7. The RTC considered the controversy as one of double sale and, in resolving the issues raised by the parties, it applied the rules laid down in
Article 1544 of the Civil Code.
8. As opposed to petitioners admission that she did not pay the purchase price in full and that she did not acquire possession of the subject
property because of the presence of tenants on it, the court gave more weight to respondent’s evidence showing that she immediately acquired
possession of the subject property and enjoyed its produce upon full payment of the purchase price.
9. Since the two sales that of petitioner and that of respondent were not registered with the Registry of Property, the RTC held that whoever was in
possession had the better right. Hence, it decided in favor of respondent.

Issue Ratio
Which purchaser has the  The present controversy is a clear case of double sale, where the seller
better right to the sold one property to different buyers, first to petitioner and later to
property? respondent.
 In determining who has a better right, the guidelines set forth in Article
Respondent Gasis has 1544 of the Civil Code apply. Article 1544 states:
the better right  Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
 Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry
of Property.

Should there be no inscription, the ownership shall pertain to the

person who in good faith was first in possession; and, in the
absence thereof, to the person who presents the oldest title,
provided there is good faith.
 Admittedly, the two sales were not registered with the Registry of Property.
Since there was no inscription, the next question is who, between petitioner
and respondent, first took possession of the subject property in good faith.
As aptly held by the trial court, it was respondent who took possession of
the subject property and, therefore, has a better right.
 Petitioner insists that, upon the execution of the public instrument (the
notarized deed of sale), she already acquired possession thereof, and thus,
considering that the execution thereof took place ahead of the actual
possession by respondent of the subject property, she has a better right.
 We do not agree.
 Indeed, the execution of a public instrument shall be equivalent to the
delivery of the thing that is the object of the contract.
 However, the Court has held that the execution of a public instrument gives
rise only to a prima facie presumption of delivery. It is deemed negated by
the failure of the vendee to take actual possession of the land sold.
 In this case, though the sale was evidenced by a notarized deed of sale,
petitioner admitted that she refused to make full payment on the
subject property and take actual possession thereof because of the
presence of tenants on the subject property.
 Clearly, petitioner had not taken possession of the subject property
or exercised acts of dominion over it despite her assertion that she
was the lawful owner thereof.
 Respondent, on the other hand, showed that she purchased the subject
property without knowledge that it had been earlier sold by Flora to
petitioner. She had reason to believe that there was no defect in her title
since the owners duplicate copy of the OCT was delivered to her by the
seller upon full payment of the purchase price.
 She then took possession of the subject property and exercised acts of
ownership by collecting rentals from the tenants who were occupying it.
  Hence, the RTC is correct in declaring that respondent has a better right to
the subject property.

RULING

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Resolutions dated June 27, 2007 and August
13, 2007 in CA-G.R. CEB-CV No. 01624 are AFFIRMED.

SO ORDERED.