EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE V.

FELIPE, petitioners,
vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA ALMOSARA, SOFIA ALDON, SALVADOR
ALDON, AND THE HONORABLE COURT OF APPEALS, respondents.
FACTS:
Maximo Aldon married Gimena Almosara in 1936. They bought several pieces of
land sometime between 1948 and 1950.
In 1951, Gimena Almosara sold the lots to the spouses Eduardo Felipe and
Hermogena V. Felipe. The sale was made without the consent of her husband,.
On April 26, 1976, the heirs of Maximo Aldon, namely his widow Gimena and their
children Sofia and Salvador Aldon filed a complaint that alleged that the plaintiffs
were the owners of Lots 1370, 1371 and 1415; that they had orally mortgaged the
same to the defendants; and an offer to redeem the mortgage had been refused so
they filed the complaint in order to recover the three parcels of land.
The trial court sustained the claim of the defendants and rendered judgment in
favor of Spouses Felipe as lawful owners.
The Court of Appeals set aside the decision of CFI declaring the parcels were
purchased by plaintiff Gimena Almosara and her late husband Maximo Aldon (the
lots having been purchased during the existence of the marriage, the same are
presumed conjugal) and inferentially, by force of law, could not, be disposed of by a
wife without her husbands consent. Hence this petition.
ISSUE: WON the sale made by Gimena is a defective contract but of what category?
HELD: It is a voidable contract. According to Art. 1390 of the Civil Code, among the
voidable contracts are [T]hose where one of the parties is incapable of giving
consent to the contract. (Par. 1.) In the instant case-Gimena had no capacity to
give consent to the contract of sale. The capacity to give consent belonged not
even to the husband alone but to both spouses.
The case of Sofia and Salvador Aldon is different. After the death of Maximo they
acquired the right to question the defective contract insofar as it deprived them of
their hereditary rights in their fathers share in the lands. The fathers share is onehalf (1/2) of the lands and their share is two-thirds (2/3) thereof, one-third (1/3)
pertaining to the widow.
The petitioners have been in possession of the lands since 1951. It was only in 1976
when the respondents filed action to recover the lands. In the meantime, Maximo
Aldon died.
As to the second question, the childrens cause of action accrued from the death of
their father in 1959 and they had thirty (30) years to institute it (Art. 1141, Civil
Code.) They filed action in 1976 which is well within the period.
WHEREFORE, the decision of the Court of Appeals is hereby modified. Judgment is
entered awarding to Sofia and Salvador Aldon their shares of the lands as stated in
the body of this decision; and the petitioners as possessors in bad faith shall make
an accounting of the fruits corresponding to the share aforementioned from 1959

and solidarity pay their value to Sofia and Salvador Aldon; costs against the
petitioners.

FABILLO v IAC
FACTS: Florencio Fabillo contracted the services of Atty. Murillo to revive a lost case
over his inheritance from his deceased sister Justinia. He sought to acquire the San
Salvador and Pugahanay Properties that his sister left behind against the latters
husband. They entered into a contract where a contingent fee in favor of Atty.
Murillo in case the case won was agreed upon. The fee was 40% of the value of
whatever benefit Florencio may derive from the suitsuch as if the properties were
sold, rented, or mortgaged. It was vague, however, regarding the fee in case
Florencio or his heirs decide to occupy the houseallowing Atty. Murillo the option
to occupy or lease 40% of the said house and lot. A compromise agreement was
entered into where Florencio acquired both properties. Atty. Murillo installed a
tenant in the Pugahanay Property; later on, Florencio claimed exclusive rights over
the properties invoking Art. 1491 of the CC. Florencio and Atty. Murillo both died and
were succeeded by their respective heirs.
ISSUE:
W/N contingent fees agreed upon are valid
HELD:
Contingent fees are not contemplated by the prohibition in Art. 1491 disallowing
lawyers to purchase properties of their clients under litigation. The said prohibition
applies only during the pendency of the litigation. Payment of the contingent fee is
made after the litigation, and is thus not covered by the prohibition. For as long as
there is no fraud or undue influence, or as long as the fees are not exorbitant, the
same as valid and enforceable. It is even recognized by the Canons of Professional
Ethics. However, considering that the contract is vague on the matter of division of
the shares if Florencio occupies the property; the ambiguity is to be construed
against Atty. Murillo being the one who drafted the contract and being a lawyer
more knowledgeable about the law. The Court thus invoking the time-honored
principle that a lawyer shall uphold the dignity of the legal profession, ordered only
a contingent fee of P3,000 as reasonable attorneys fees.

NAAWAN COMMUNITY RURAL BANK INC v CA

FACTS: Comayas offered to sell to the Lumo Spouses a house and lot. The property
was already registered under the Torrens System that time and they made
appropriate inquiries with the RD; they found out that it was mortgaged for P8,000,
paid Comayas to settle the mortgage, and the release of the adverse claim was
annotated in the title. Thereafter, they executed an Absolute Deed of Sale over the
subject property and registered the same. However, it turns out that it was already
previously sold to Naawan Community Rural Bank; it was then unregistered. The
Bank foreclosed on the property, purchased the same, and registered it under Act
3344. Thus, the Bank sought to eject the spouses. However, the latter countered
with an action for quieting of title.
ISSUE:
Who has a better title, Naawan or Lumo spouses?
HELD:
LUMO SPOUSES. Where a person claims to have superior property rights by virtue of
a sheriffs sale, the benefit of Art. 1544 applies favorably only if the property is
registered under the Torrens Systemnot under Act 3344. Registration under the
Torrens System is the operative act that gives validity to the transfer and creates
lien upon the land. The spouses acquired their titles under the Torrens System and
they acted in good faith by exercising due diligence; thus, they have a better right
to the said property.

GABRIEL VS. MABANTA

FACTS:
On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as
collateral for a P14,000 loan.In 1980, they sold the lots to Susana Soriano with the
right to repurchase the property within 2 years. They failed to dorepurchase. In
1984, they convinced petitioner Alejandro Gabriel to purchase the lot from Soriano.
DBP had torestructure the loan making Gabriel as the mortgagor. However, when
Gabriel, who was already cultivating the lots, wasready to pay the entire loan with
DBP, they found that spouses Benito and Pura Tan had paid it and that the
mortgagewas already cancelled.
It turned out that it was spouses Tans daughter, Zenaida Tan
-Reyes who bought one of the lotsfrom spouses Mabanta. As a result, the petitioners
filed for damages, and specific performance which the trial courtruled in their favor
holding that the sale between the spouses Mabanta and Tan-Reyes null and void.
Reyes claims thatshe is a purchaser in good faith, and sought refuge in her
certificate of title.
ISSUE:
Whether or not the second sale to Tan-Reyes is valid.
HELD:
The second sale to Tan-Reyes is not valid. In Art. 1544 of the Civil Code, Where it is
an immovable property that is the subject of a double sale, ownership shall be
transferred, (1) to 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; and(3) in default thereof, to the person who presents the oldest title,
provided there is good faith. The requirement of the law then is two-fold: acquisition
in good faith and registration in good faith. In the case at bar, certain pieces of
evidence, put together, would prove that respondent Reyes is not a buyer in good
faith. The records show that on spouses Mabanta offered to her for sale the disputed
lot. They told her it was mortgaged with respondent DBP and that she had to pay
the loan if she wanted to buy it. As to her claim that she is a The Supreme Court
consistently held that "in cases of double sale of immovables, what finds relevance
and materiality is not whether or not the second buyer was a buyer in good faith but
whether or not said second buyer registers such second sale in good faith, that is,
without knowledge of any defect in the title of the property sold." Mere registration
of title is not enough, good faith must concur with the registration. To be entitled to
priority, the second purchaser must not only establish prior recording of his deed,
but must have acted in good faith, without knowledge of the existence of another
alienation by the vendor to the other. For this reason in accordance with the same

Article 1544, the land shall pertain to the person who in good faith was first in
possession. There is no question that it is the Gabriels who are in possession of the
land.

Ten Forty Realty vs CruzFACTS

-Ten Forty Realty filed a complaint of ejectment against Marina Cruz who has
allegedly occupied the residential lot in Olongapo City, which they bought from
Barbara Galino, by virtue of a Deed of Absolute Sale. It appears that Barbara sold
the same lot to Marina who immediately occupied the land. Ten Forty is saying the
occupation by Marina was merely tolerated by them.-Marinas defense: (1) Ten
Forty, being a corporation, is not qualified to own the property which is a public
land.(2) Barbara Galino did not sell her property to Ten Forty but merely obtained a
loan. (3) Ten Forty never occupied the property before she did. Barbara Galino was
in possession at the time of the sale, and vacated the lot infavor of Marina. (4) She
was the one who caused the cancellation of the tax declaration in the name of
Barbara and a new one was issued in her name. (5) Ten Forty only obtained its tax
declaration 7 months after she did.-MTCC ruled in favor of Ten Forty and ordered
Marina to vacate.
RTC reversed. The RTC ruled as follows: 1) respondents entry into the property was
not by mere tolerance of petitioner, but by virtue of a Waiver and Transfer of
Possessory Rights and Deed of Sale in her favor; 2) the execution of the Deed of
Sale without actual transfer of the physical possession did not have the effect of
making petitioner the owner of the property, because there was no delivery of the
object of the sale as provided for in Article 1428 of the Civil Code; and 3) being a
corporation, petitioner was disqualified from acquiring the property, which was
public land.-CA affirmed: Case cannot be unlawful detainer because there has been
no prior contract between the parties. Neither can it be forcibly entry because there
is no showing that there was prior physical possession by the petitioner.
ISSUE: WON Marina may be validly ejected from the property
NO
RULING:
1. In a contract of sale, the buyer acquires the thing sold only upon its delivery. The
execution of a public instrument gives rise to a presumption of delivery, but this
presumption is destroyed when delivery is not effected because of a legal
impediment. Constructive delivery is deemed negated upon failure of vendee to
take actual possession of the land. Ten Forty was not able to take possession and
the SC found it highly unlikely that they allowed occupation of Marina by mere
tolerance.2.In cases of double sale, the person who first recorded it in the Registry
of Property shall be considered the lawful owner. In this case, however, petitioner
was unable to establish that the Deed was recorded in the Registry of Deeds of
Olongapo. An unverified notation on the Deed is not equivalent to a registration. In
the absence of this requirement, the law gives preferential right to the buyer who in

good faith is first in possession.3.To determine who is first in possession, the

following parameters have been established: a. Possession includes not only
material but also symbolic possession b. Possessors in good faith are not aware of
any flaw in their title or mode of acquisition c. Buyers of property that is in
possession of persons other than the seller must be wary they must

investigated. Good faith is always presumed. Burden of proof rests on the one
alleging bad faith. Property has not been delivered, hence Ten Forty did not acquire
possession either materially or symbolically. Petitioner has not proven that
respondent was aware of any defect to her title. At the time, the property had not
been registered which was why Marina relied on tax declarations. Galino was
actually occupying the property when respondent took possession. Thus, there was
no circumstance that could have required her to investigate further.4.Private
corporations are disqualified from acquiring lands of public domain. At the time of
the sale, there is no evidence that the property had already ceased to be of public
domain.

SPOUSES ISABELO and ERLINDA PAYONGAYONG, vs.

HON. COURT OF APPEALS,

May 28, 2004

G.R. No. 144576 Third Division

CARPIO MORALES, J.:

Facts: Eduardo Mendoz is the registered owner of a parcel of land in Caloocan. He mortgaged the land to
the Meralco Employees Savings and Loan Association (MESALA) to secure a loan. The mortgage was
duly annotated on the title. After 2 years, Mendoza executed a Deed of Sale with Assumption of Mortgage
over the parcel of land in favor of spouses Payongayong. It is stated in the deed that petitioners bound
themselves to assume payment of the balance of the mortgage indebtedness of Mendoza to MESALA.
Mendoza, without the knowledge of petitioners, mortgaged the same property to MESALA, again to
secure another loan. Second mortgage was annotated in Mendozas title. Mendoza executed a Deed of
Absolute Sale over still the same property in favor of respondent spouses Clemente and Rosalia
Salvador. Spouses Salvador had the lot registered in their name after ocular inspection and verification
from the Register of Deeds. Getting wind of the sale of the property to respondents, Payongayong filed for
annulment sale with damages against Mendoza and spouses Salvador. Trial Court ruled in favor of
Mendoza and Salvador. CA affirmed. Hence the petition.

Issue: Whether or not spouses Salvador are innocent purchasers for value

Held: Petition denied.

Where innocent third persons rely upon the correctness of a certificate of title and acquire rights
over the property, the court cannot just disregard such rights. Otherwise, public confidence in the
certificate of title, and ultimately, the Torrens system, would be impaired, for everyone dealing with
registered property would still have to inquire at every instance whether the title has been regularly or
irregularly issued.28
In respondents case, they did not only rely upon Mendozas title. Rosalia personally inspected
the property and verified with the Registry of Deeds of Quezon City if Mendoza was indeed the registered
owner. Given this factual backdrop, respondents did indeed purchase the property in good faith and
accordingly acquired valid and indefeasible title thereto.
The law is thus in respondents favor. Article 1544 of the Civil Code so provides:
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 the possession; and, in the absence thereof, to the person who presents the oldest title,
provided there is good faith.
There being double sale of an immovable property, as the above-quoted provision instructs,
ownership shall be transferred (1) to 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; and (3)
in default thereof, to the person who presents the oldest title, provided there is good faith.

RUDOLF LIETZ INC v CA

FACTS:
Buriol previously owned a parcel of unregistered land in Palawan. In 1986, he
entered into a lease agreement with Flaviano and Tiziana Turatello and Sani
(Italians) involving a hectare of his property. This agreement was for a period of 25
years, renewable for another 25 years. After the paying P10,000 downpayment,
Turatello and Sani took possession of the land. However, this agreement was only
reduced into writing in 1987. After 11 months, Buriol sold the same parcel of land (5
hec) to Rudolf Lietz Inc for P30,000. Later on, Rudolf Lietz Inc discovered that Buriol
owned only 4 hectares with one hectare covered by the lease; thus, only 3 hectares
were delivered to it. Rudolf Lietz Inc instituted a complaint for the annulment of the
lease against Buriol, Sani and the Turatellos before the RTC. RTC and CA ruled in
favor of Buriol, Sani and Turatellos.
ISSUE:
Whether the sale between Buriol and Rudolf Lietz Inc is a lump sum or unit price
sale

HELD: LUMP SUM SALE. The Deed of Absolute Sale shows that the parties agreed on
the purchase price on a predetermined area of 5 hectares within the specified
boundaries and not based on a particular rate per area. In accordance with Art.
1542, there shall be no reduction in the purchase price even if the area delivered to
Rudolf Lietz Inc is less than that states in the contract. In the instant case, the area
within the boundaries as stated in the contract shall control over the area agreed
upon in the contract.

SPOUSES SALERA, VS. SPOUSES RODAJE

G.R. No. 135900

August 17, 2007

FACTS: The Petitioner spouses Salera filed with the RTC of Leyte, a complaint for
quieting of title against spouses Rodaje, The Saleras alleged that they are the
absolute owners of a parcel of land situated in Leyte. They acquired the property
from the heirs of Brigido Tonacao as shown by a Deed of Absolute Sale; they had the
document registered in the RD.

When they asked the Provincial Assessor to declare the property under their names
for taxation purposes, they found that the Tax Declaration in the name of Brigido
was already cancelled and another one was issued in the names of the Rodajes.
Petitioners further alleged that they have been in possession of the property and
the house they built thereon because they had paid the purchase price even before
the execution of the deed of sale.

In their answer to the complaint, respondents Rodajes claimed that they are the
absolute owners of the same property. They acquired it from Catalino Tonacao, the
father of Brigido, in a Deed of Absolute Sale and the sale was registered in the RD
and a Tax Declaration was issued in their names. Since then, they have been
exercising their right of ownership over the property and the building constructed
thereon peacefully, publicly, adversely and continuously. Apart from being the first
registrants, they are buyers in good faith.

The RTC rendered a Decision declaring petitioners the rightful and legal owners of
the property.

On appeal, the CA reversed and set aside the trial courts Decision. Hence, this
petition for Review on Certiorari

ISSUE: Which of the two contracts of sale is valid.

HELD: THE ONE IN FAVOR OF PETITIONERS SPOUSES SALERA

The petition is GRANTED. The assailed Decision of the CA is REVERSED and the
Decision of the trial court is REINSTATED.

The Court of Appeals, in upholding the validity of the sale in favor of respondents,
relied on Article 1544 of the Civil Code on double sale, thus:

As between two purchasers, the one who registered the sale in his favor has a
preferred right over the other who has not registered his title, even if the latter is in
actual possession of the immovable property A fortiori the defendants-appellants
have a superior right over the contested property inasmuch as they have both

actual possession and prior registration of the conveyance. Dominium a

possessione cepisse dicitur. Right is said to have its beginning from possession.

xxx

Since the controversy involves two deeds of sale over the same property, Article
1544 properly applies thereto.Following the above-quoted provision, the court a quo
was not justified in according preferential rights to the plaintiffs-appellees, who had
registered the sale in their favor later, as against the defendants-appellants.

The Court of Appeals is wrong. Article 1544 of the Civil Code contemplates a case
of double sale or multiple sales by a single vendor. More specifically, it covers a
situation where a single vendor sold one and the same immovable property to two
or more buyers. 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. In the instant case, the property was sold by two different vendors to different
purchasers. The first sale was between Catalino and herein respondents, while the
second was between Brigidos heirs and herein petitioners.

Respondents claim that they have been in possession of the lot even before the
execution of the Deed of Absolute Sale on June 6, 1986. However, a perusal of the
records of the case shows that petitioners are the ones in prior possession of the
property.

Evidence submitted to the court, oral and documentary, established that

respondents knew beforehand that the property was declared in the name of Brigido
Tonacao for taxation purposes.Thus, respondents should have been wary in buying
the property. Any lot buyer is expected to be vigilant, exercising utmost care in
determining whether the seller is the true owner of the property and whether there
are other claimants. There is no indication from the record that respondents first
determined the status of the lot.

While tax declarations are not conclusive proofs of ownership, however, they are
good indicia of possession in the concept of owner, for no one in his right mind

would be paying taxes for a property that is not in his actual or at least constructive
possession. Hence, as between Brigido and Catalino, the former had better right to
the property. In other words, Catalino, not being the owner or possessor, could not
validly sell the lot to respondents.

The Court is convinced that respondents had knowledge that the disputed property
was previously sold to petitioners by Brigidos heirs. Obviously, aware that the sale
to petitioners was not registered, they purchased the property and have the sale
registered ahead of petitioners, who although in possession, failed to have their
contract of sale registered immediately in the Registry of Deeds.

CARMELITA FUDOT, Petitioner,

171008
vs.

G.R. No.
September 13, 2007

CATTLEYA LAND, INC., VELASCO, JR., JJ. Respondent.

Facts:
Sometime in July 1992, Cattleya Land, Inc. (hereinafter referred to as respondent)
asked someone to check, on its behalf, the titles of nine (9) lots, the subject land
included, which it intended to buy from the spouses Troadio and Asuncion Tecson.
Finding no defect on the titles, respondent purchased the nine lots through a Deed
of Conditional Sale on 6 November 1992. Subsequently, on 30 August 1993,
respondent and the Tecsons executed a Deed of Absolute Sale over the same
properties. The Deed of Conditional Sale and the Deed of Absolute Sale were
registered with the Register of Deeds on 06 November 1992 and 04 October 1993,
respectively. The Register of Deeds refused to actually annotate the deed of sale on
the titles because of the existing notice of attachment pending before the Regional
Trial Court of Bohol. The attachment was eventually cancelled by virtue of a
compromise agreement between the Tecsons and their attaching creditor which was
brokered by respondent. Titles to six (6) of the nine (9) lots were issued, but the
Register of Deeds refused to issue titles to the remaining three (3) lots , because the
titles covering the same were still unaccounted for.
Later, respondent learned that the Register of Deeds had already registered the
deed of sale in favor of petitioner and issued a new title herein.
The respondent filed its Complaintfor Quieting Of Title &/Or Recovery Of Ownership,
Cancellation Of Title With Damages before the Regional Trial Court of Tagbilaran City.

Issue:
Is the issuance of Deed of Sale valid?

Held:
On 31 October 2001, the trial court rendered its decision: (i) quieting the title or
ownership of the subject land in favor of respondent; (ii) declaring the deed of sale
between petitioner and spouses Tecson invalid; (iii) ordering the registration of the
subject land in favor of respondent; (iv) dismissing respondents claim for damages
against the Register of Deeds for insufficiency of evidence; (v) dismissing

Asuncions claim for damages against petitioner for lack of factual basis; and (vi)
dismissing petitioners counterclaim for lack of the required preponderance of
evidence.

SPOUSES TANGLAO vs. SPOUSES PARUNGAO

G.R. No. 166913

October 5, 2007

[KNOWLEDGE BY FIRST BUYER]

FACTS: Spouses Parungao, purchased from Spring Homes 7 Subdivision Lots in

Laguna. Respondents made a down payment, leaving a balance exclusive of
interest. Respondents introduced improvements on the lots. Under the terms of the
Contracts to Sell signed by respondents and Spring Homes, the balance of was to be
paid by them within one year from its execution. Respondents failed to pay the
installments.

Later, Spring Homes executed two separate Deeds of Absolute Sale in favor of
spouses Tanglao, petitioners, wherein the former sold to the latter two lots. It turned
out that the lots sold to them were among the lots previously sold to the spouses
Parungao.

In a letter, respondents demanded that Spring Homes deliver to them the corrected
Contracts to Sell, as well as the TCTs covering the lots they purchased.

Meanwhile, petitioners took possession of the two lots they bought. They forcibly
opened the steel gate as well as the doors of the buildings and entered the
premises.

When informed of these events, respondents demanded an explanation from Spring

Homes; it apologized and promised she would settle the matter with petitioners.
However, the controversy was not settled.

Respondent 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, plus interest and
damages. Impleaded as respondents were Spring Homes and petitioners. Despite
notice, Spring Homes did not appear during the hearings.

The HLURB Arbiter rendered a Decision ordering respondent Spring Homes to pay
complainants by way of refund of payments and damages.

Dissatisfied with the ruling, respondents filed a petition for review with the HLURB
Board of Commissioners. The HLURB Board of Commissioners reversed the Arbiters
Decision and granted the petition for review. Petitioners filed a motion for
reconsideration, but this was denied by the HLURB Board of Commissioners.
Petitioners then filed an appeal with the Office of the President, which dismissed
their appeal and affirmed the Decision of the HLURB Board of Commissioners.
Petitioners MR was also denied by the said Office.

Eventually, petitioners filed with the CA a petition for review.The CA rendered its
Decision dismissing the petition, hence this petition for Review on Certiorari

ISSUE: Who between the petitioners and respondents have the right of ownership
over the two lots in controversy.

HELD: SPOUSES PARUNGAO, the first buyer.

PETITION DENIED. The Decision of the CA is AFFIRMED in toto.

The ownership of immovable property sold to two different persons at different

times is governed by Article 1544 of the Civil Code,2 which provides:

Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have 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.

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.

In Occea v. Esponilla,5 this Court, speaking through then Associate Justice (now
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 buyers
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.

At the time of the second sale to petitioners by Spring Homes, 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 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 who, in good faith, were first in possession of the
subject lots, we rule that the ownership thereof pertains to them

Santos vs Lumbao
Facts:
1. Respondent spouses Lumbao filed an action for reconveyance with damages against petitioners. Petitioners are
survivors and legitimate heirs of Rita Santos who allegedly sold 2 parcels of land to respondents when she was alive
by virtue of a document called bilihan ng lupa, The repsondents even claimed that the execution of the document
was signed and witnessed by petitioners Virgilio and Tadeo.

2. After having acquired the subject property, respondents Spouses Lumbao took
actual possession and built a house which they occupied as exclusive owners up to
the present. The respondents Spouses Lumbao made several verbal demands upon
Rita, during her lifetime, and thereafter upon herein petitioners, to execute the
necessary documents to effect the issuance of a separate title in their favor.
3. Respondents Spouses Lumbao alleged that prior to her death, Rita informed
respondent Proserfina Lumbao she could not deliver the title to the subject property
because the entire property inherited by her and her co-heirs from Maria had not
yet been partitioned.
4. Finally, the respondents Lumbao claimed that petitioners, acting fraudulently and
in conspiracy with one another, executed a Deed of Extrajudicial
Settlement, adjudicating and partitioning among themselves and the other heirs,
the estate left by Maria, which included the lot already sold to them. Due to refusal
of petitioners to convey the said propert, the spouses filed the action.
5. The lower court (RTC) dismissed the complaint of ground of lack of cause of
action as the spouses allegedly did not comply with the required barangay
conciliation. The CA granted and ordered the petititoners to convey the land to the
spouses, hence this petition.
Issue: Whether or not the admissions made are admissible and binding
YES. As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon
him, but this is not an absolute and inflexible rule.
1. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence. And in spite
of the presence of judicial admissions in a partys pleading, the trial court is still given leeway to consider other
evidence presented.However, in the case at bar, petitioners had not adduced any other evidence to override the
admission made in their answer that Virgilio and Tadeo actually signed the [Bilihan ng Lupa. Hence, the general rule
that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case.
2. In the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon.
Moreover, in petitioners Answer and Amended Answer to the Complaint for Reconveyance with Damages, both
petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution of the
"Bilihan ng Lupa," dated 17 August 1979. However, in order to avoid their obligations in the said "Bilihan ng
Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed
that he could not remember the same as well as his appearance before the notary public due to the length of time that
had passed.

ERNESTO V. YU and ELSIE O. YU, Petitioners, vs.BALTAZAR PACLEB, Respondent.

NATURE OF THE CASE: This petition was filed to set aside the decision made by the
Court of Appeals in ruling that the respondent has the better right over the subject
property and is the true owner thereof.
FACTS: Respondent Baltazar Pacleb and his late first wife, Angelita Chan, are the
owners of parcel of land in Langcaan, Dasmarinas, Cavite covered by a transfer
certificate of title.
Sometime in September 1992, Ruperto Javier offered the said land to spouses Ernesto
and Elsie Yu. Javier claimed that he purchased the property from Rebecca Del Rosario
who bought it from spouses Baltazar Pacleb and Angelita Chan. Despite the alleged
sales being unregistered, the spouses Yu accepted the offer and made a down payment
and entered into an Agreement for the sale of the property. After giving the amount, the
spouses Yu discovered that a portion of the property was tenanted by Ramon Pacleb,
one of the respondent's sons. The petitioners then demanded the cancellation of their
agreement and the return of their initial payment.
Javier then made arrangements with Ramon to vacate the property and to pay Ramon
for his disturbance compensation. With that, Javier and the spouses YU proceeded to
enter into a Contract to Sell. But, Javier failed to comply with his obligations. So, on April
23, 1993, the petitioners filed with the RTC a Complaint for specific performance and
damages against Javier to compel Javier to deliver to them ownership and possession,
and the title to the property.
However, Javier did not appear in the proceedings and was declared in default,
so, the trial court rendered a decision in favor of the petitioners. The decision and its
Certificate of Finality were annotated in the title of the property.
On March 10, 1995, the petitioners and Ramon and his wife entered into an
agreement that the spouses will pay Ramon P500,000 in exchange for the waiver of his
tenancy rights over the land.
On October 12, 1995, the respondent filed a Complaint for annulment of deed of
sale and other documents arising from it claiming that the deed of sale supposedly
executed between him and his late first wife and Del Rosario was spurious and the
signatures were forged. He also moved for the summons to be served upon Del Rosario
via publication since her address cannot be found, but was denied. So, respondent
moved to dismiss the case which was granted by the trial court.
On November 23, 1995, the petitioners filed an action for forcible entry against
the respondent with the MTC. They contend that they had prior physical possession
over the property through their trustee Ramon Pacleb, until the respondent ousted them

in September 1995. The MTC and the RTC ruled in favor of the petitioners, but the
Court of Appeals set aside the decisions of the lower courts. The CA decided that it was
the respondent who had prior physical possession of the property which was shown by
his payment of real estate taxes thereon.
On May 29, 1996, respondent filed an instant case for removal of cloud from title
with damages alleging that the deed of sale between him and his late first wife could not
have been executed on the date appearing thereon. He claimed that he was residing in
the US at that time and that his late first wife died 20 years ago.
On May 28, 1997, while the case was still pending, the respondent died, hence,
he was substituted by his surviving spouse and some of his children.
On December 27, 2002, the respondent's case was dismissed and the
petitioners were held to be purchasers in good faith. The trial court also held that the
petitioners' action for specific performance against Javier was already final, and the trial
court also ordered the respondents' heirs and all other persons claiming under them to
surrender the possession of the property to the petitioners. Upon appeal by the
respondent, the CA reversed the trial court's decision. Hence, this petition.
ISSUE: WON the action for specific performance filed by the petitioners against Javier
is not merely an action in personam, but an action in rem, and is thus, conclusive and
binding upon respondent even if he was not a party thereto since it involves a question
of possession and ownership of real property.
HELD: The action for specific performance and damages filed by petitioners against
Javier to compel him to perform his obligations under their Contract to Sell is an action
in personam.
The purpose of the action is to compel Javier to accept the full payment of the purchase
price, and to execute a deed of absolute sale over the property in favor of the
petitioners. The obligations of Javier mentioned attach to Javier alone and do not
burden the property. Thus, the complaint filed by the petitioners is an action in
personam and is binding only upon the parties properly impleaded therein and duly
heard or given an opportunity to be heard. So, the action cannot bind the respondent
since he was not a party therein and considering the fact that his signature and that of
his late first wife were forged in the deed of sale. Hence, the petition is denied and the
Court affirms the ruling of the CA finding the respondent having a better right over the
property as the true owner thereof.

Cebu Winland Development Corp. vs Ong Siao HuaG.R. No. 17321!a" 21# 2$$%
Topic:
Where Real Estate is sold per unit or number and Prescription of the action.
&'C(S)
Cebu Winland Development Corporation is the owner and developer of acondominium project called the Cebu
Winland Tower Condominium. Ong Siao Hua isa buyer of two condominium units and four parking slots from
petitioner.While the Cebu Winland Tower Condominium was under construction! petitionero"ered to sell to
respondent condominium units at promotional prices. #s an addedincentive! petitioner o"ered a $% discount
provided $&% of the purchase price ispaid as down payment and the balance paid in '( e)ual monthly installments.
On *anuary +! ,--! respondent accepted the o"er of petitioner and bought twocondominium units designated as /nit
0os. '(& and '(&+! as well as four paringslots designated as slots -,! --! ,&, and ,&$ 1subject properties2.
The area per condominium unit as indicated in petitioner's price list is 155 square meters and the price per square
meter is P22, 3!."5.
The price for the paring slot is 3'(&! &&& each. 4espondent! therefore! paid 3'! '-5!+.&5 as down payment
and issued '( postdated checs in the amount of 3''$! ($&.6& per chec for the balance of the purchase price in the
total amount of 3! $+'!$5.,-.On October ,&! ,--+! possession of the subject properties was turned over
torespondent. #fter the purchase price was fully paid with the last chec dated *anuary $,! ,--6! respondent
re)uested petitioner for the condominium certi7catesof title evidencing ownership of the units. /pon e8amination of
the deed of absolute sale of /nit 0o. '(& and the identicaldocument for /nit 0o. '(&+! respondent was distressed to
7nd that the stated 9oorarea is only ,'6 s)uare meters contrary to the area indicated in the price list whichwas ,
s)uare meters.
Respondent caused a #eri$cation sur#e% of the saidcondominium units and disco#ered that the actual area is onl%
11& square meters per unit.
4espondent demanded from petitioner to refund the amount of 3'!&,(!,&.& representing e8cess payments for
the di"erence in the area! computedas follows: , s).m. ; ,,& < ( 8 ' units < -& s).m. 8 3''!$65.- <3'!&,
(!,&.&3etitioner refused to refund the said amount to respondent. Conse)uently! Ong SiaoHua 7led a
Complaint on #ugust 6! ,--5 in the 4egional O=ce of the Housing and>and /se 4egulatory ?oard 1H>/4?2 in Cebu
City! praying for the refund of 3'!&,(!,&.& plus interest! moral damages and attorney@s fees! including
thesuspension of petitioner@s license to sell.
The Housing and >and /se #rbiter dismissed the complaint and ruled thatrespondentAs action had already
prescribed pursuant to #rticle ,($ in relation to#rticles ,$- and ,(' of the Civil Code. Ong Siao Hua appealed
the decision to H>/4? and it a=rmed the #rbiterAs 7nding that the action had already prescribed and the same
decision was also rendered by the O=ce of the 3resident. On Bebruary ,(! '&&+! the Court of #ppeals rendered the
assailed Decision 7nding that respondent@s action has not prescribed. The C# reversed and set aside the assailed
Decision and 4esolution of the O=ce of the 3resident.
*SS+,S)
,.W0 Ong Siao HuaAs action has prescribed pursuant to #rticle ,($! in relation to #rticles ,$- and ,('.'.W0
the sale is one made with a statement of its area or at the rate of a certain price for a unit of measure and not for a
lump sum.
H,-D)
,.0O! the action has not prescribed. The resolution of the issue at bar necessitatesa scrutiny of the concept of
delivery in the conte8t of the >aw on Sales or as used in #rticle ,($ of the Civil Code. /nder the Civil Code!
the vendor is bound to transfer the ownership of and deliver the thing which is the object of the sale. /nder the Civil
Code! ownership does not pass by mere stipulation but only bydelivery. Eanresa e8plains!
t/e deliver" o0 t/e t/ing . . . signies t/attitle /as passed 0rom t/e seller to t/e bu"er.
#ccording to Tolentino! thepurpose of delivery is not only for the enjoyment of the thing but also a mode of
ac)uiring dominion and determines the transmission of ownership! the birth of the real right. The delivery under any
of the forms provided by #rticles ,(-6 to,& of the Civil Code
signies t/at t/e transmission o0 oners/ip 0romvendor to vendee /as taen pla4e
. #rticle ,(-6 contemplates what is nown as real or actual delivery! when thething sold is placed in the control and
possession of the vendee. #rticle ,(-5! onthe one hand! refers to symbolic delivery by the e8ecution of a
publicinstrument. Ft should be noted! however! that #rticle ,(-5 does not say that thee8ecution of the deed provides a
conclusive presumption of the delivery of possession. Ft con7nes itself to providing that the e8ecution thereof is
e)uivalentto delivery! which means that the presumption therein can be rebutted bymeans of clear and convincing

evidence. Thus! the presumptive delivery by thee8ecution of a public instrument can be negated by the failure of the
vendee totae actual possession of the land sold.
Deliver" as used in t/e -a on Sales re0ers to t/e 4on4urrent trans0ero0 to t/ings) 516 possession and 526
oners/ip.
This is the rationalebehind the jurisprudential doctrine that presumptive delivery
#ia
e8ecution of apublic instrument is negated by the reality that the vendee actually failed toobtain material possession
of the land subject of the sale.
27
*n t/e same vein#i0 t/e vendee is pla4ed in a4tual possession o0 t/e propert"# but b"agreement o0 t/e parties
oners/ip o0 t/e same is retained b" t/e
vendor until t/e vendee /as 0ull" paid t/e pri4e# t/e mere trans0er o0 t/e possession o0 t/e propert" sube4t o0 t/e
sale is not t/e deliver"4ontemplated in t/e -a on Sales or as used in 'rti4le 183 o0 t/e CivilCode.
Ft appears that respondent was already placed in possession of the subjectproperties. However! it is crystal clear that
the deeds of absolute sale were stillto be e8ecuted by the parties upon payment of the last installment. This
factshows that ownership of the said properties was withheld by petitioner. Bollowingcase law! it is evident that the
parties did not intend to immediately transferownership of the subject properties until full payment and the
e8ecution of thedeeds of absolute sale. Conse)uently! there is no delivery to spea of in thiscase since what
was transferred was possession only and not ownership of thesubject properties. The Court ruled that the transfer of
possession of the subject properties onOctober ,&! ,--+ to respondent cannot be considered as delivery within
thepurview of #rticle ,($ of the Civil Code. Ft follows that since there has been notransfer of ownership of the
subject properties since the deeds of absolute salehave not yet been e8ecuted by the parties! the action 7led by
respondent hasnot prescribed.'.GS. Ft is undisputed by the parties that the purchase price of the subjectproperties
was computed based on the price list prepared by petitioner! or 3''!$65.- per s)uare meter. Clearly! the parties
agreed on a sale at a rate of acertain price per unit of measure and not one for a lump sum. Hence! it is #rticle,$and not #rticle ,(' which is the applicable law. #ccordingly! respondent isentitled to the relief a"orded to him under
#rticle ,$-! that is! either aproportional reduction of the price or the rescission of the contract! at his
option.4espondent chose the former remedy since he prayed in his Complaint for therefund of the amount of 3'! &,
(!,&.& representing the proportional reductionof the price paid to petitioner.

ANTHONY ORDUNA ET. AL., VS EDUARDOFUENTEBELLA ET AL.,FACTS: During the lifetime of

Gabriel Sr., he sold byinstallment
a
parcel of
land to Orduna. The
sale
wasnot
reduced in writing. After his fathers death, Gabriel Jr. inherited subjectlot
and for
which he was
issued TCT. Since theGabriel
Sr.
Orduna sales transaction called forpayment of
the contract price in installments,Gabriel Jr. received payments
from the Orduas
andeven authorized them to enclose the subject lot witha fence.Gabriel Jr. sold the land to respondents,
whomsubsequently
registered the land
in their favor.Petitioners led an annulment
of
title, which therespondent
assailed. The RTC and CA found the purchaser-respondentsthesis
on prescription correct
stating in this regardthat Respondents TCT was issued
on
May
16, 2000 while petitioners led their complaint for annulmentonly on July 3, 2001. To the courts below, the
one-year prescriptive period to assail
the issuance of
acerticate
of title
had already
elapsed. ISSUE: WON the action to annul title has prescribed.HELD: NO. Having possession of the subject
lot,petitioners right to the reconveyance thereof, andthe annulment of the covering title, has notprescribed or
is not
time-barred.
This
is so for
anaction for
annulment
of
title or
reconveyance basedon fraud is imprescriptible where the suitor is inpossession of the property subject of
the acts,
[36]
theaction partaking as it does of a suit for quieting oftitle which is imprescriptible.
[37]
Such is
the
case
inthis
instance.
Petitioners
have possession of
subjectlots as owners having purchased the same fromGabriel, Sr. subject
only to the full payment
of theagreed price. The prescriptive period for the reconveyance offraudulently registered real
property is 10 years,reckoned from the date of
the issuance of
thecerticate of title, if the plainti is not inpossession, but
imprescriptible if
he is
in possessionof the property.
Thus, one who is in actualpossession of a piece of land claiming to be theowner thereof may wait until
his possession isdisturbed or his title is attacked before taking stepsto vindicate his right.
As
it
is, petitioners actionfor
reconveyance is
imprescriptible.(Note: As to enforceability of
sale not reduced in writing, the statute of frauds (1403) will not apply because the contract has been partially
executed.)

RUPERTA CANO VDA. DE VIRAY and JESUS CARLO GERARD VIRAY, Petitioners,
vs.
SPOUSES JOSE USI and AMELITA USI, Respondents.
Facts:
The case involves a lot originally owned by the Mendozas divided into seven parts, one part of which was sold to
the petitioner. On the other hand, there was also a subject agreement between the Mendozas and Spouses Usi,
Respondent wherein the subject lot was divided into 13 parts, some parts went to the Respondents. The conflict
arose as to whom originally belongs the subject land.
In lieu, Spouses Usi instituted complaints against Viray, among others is a Petition for accion
publiciana/reivindicatoria before the RTC. On the other hand, petitioners moved for the dismissal of the said
petition, on the ground of litis pendencia and res judicata. The RTC dismissed the petition for failure to establish
preponderant evidence to support their claim of title, possession and ownership over the subject lots. Hence, they
appealed before the CA. The CA reversed RTCs decision basing its ruling on the 2 notarized subject agreements.
Viray appealed but was denied. Hence, this.
Issue:
Whether or not the Court of Appeals erred in ruling that Respondents are the legal and valid owners of the subject
lot?

Ruling:
The court held that the petition is barred by res judicata defined as one that operates as bar by prior judgement
when there is a final judgement on merits rendered by a court with jurisdiction and the first and second action has
identical parties, subject matter or cause of action.
The better right to possess and right of ownership cannot be relitigated because of res judicata.