Marquez which the former confirmed The deed

DOUBLE SALE DIGEST

1. Rural bank of Cagayan Valley v CA
FACTS:
The Madrid brothers were the
registered owners of Lot A situated in Isabela.
Said lot was subdivided into several lots. Rizal
Madrid sold part of his share identified lot A-7
to Gamiao and Dayag by virtue of a Deed of

of sale was registered with the ORD of Isabela.

Subsequently, Marquez subdivided lot A-7 into
eight (8) lots. On the same date, Marquez and
his spouse, Mercedita Mariana, mortgaged 4
lots to the Consolidated Rural Bank, Inc. of
Cagayan Valley (hereafter, CRB) to secure a
loan. These deeds of real estate mortgage were
registered with the ORD.

Sale, to which his brothers offered no objection

as evidenced by their Joint Affidavit .The deed

As Marquez defaulted in the payment of his

of sale was not registered with the ORD of

loan, CRB caused the foreclosure of the

Isabela. However, Gamiao and Dayag declared

mortgages in its favor and the lots were sold to

the property in their names on a Tax

it as the highest bidder.

Declaration.
Gamiao and Dayag sold the subject southern

The Heirs-now respondents filed a case for

half of lot to Teodoro dela Cruz, and the

reconveyance and damages for the southern

northern half to Hernandez. Thereupon,

portion of Lot No. 7036-A (hereafter, the

Teodoro dela Cruz and Hernandez took

subject property) against Marquez and CRB.

possession of and cultivated the portions of the

property respectively sold to them (Later
Restituto Hernandez donated the northern half
to his daughter. The children of Teodoro dela
Cruz continued possession of the southern half
after their fathers death.)
In a Deed of Sale the Madrid brothers conveyed
all their rights and interests over lot A-7 to

The RTC handed down a decision in favor of

Marquez. The Heirs interposed an appeal with
the CA, which upheld the claim of the Heirs.
Hence, the instant CRB petition.

ISSUE:

WON Art. 1544 of the Civil Code (double

was first in possession; and, in the absence

sale) applicable in this case

thereof, to the person who presents the oldest

HELD:

title, provided there is good faith.

NO.The petition is denied, and the

decision as modified is affirmed. Like the lower
court, the appellate court resolved the present
controversy by applying the rule on double sale
provided in Article 1544 of the Civil Code. They,
however, arrived at different conclusions. The
RTC made CRB and the other defendants win,
while the Court of Appeals decided the case in
favor of the Heirs.
Article 1544 of the Civil Code reads, thus:

The provision is not applicable in the present

case. It contemplates a case of double or
multiple sales by a single vendor. 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

ART. 1544. If the same thing should have been

first purchaser in full dominion, the second

sold to different vendees, the ownership shall

purchaser cannot acquire any right.

be transferred to the person who may have first

taken possession thereof in good faith, if it
should be movable property.

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

Should it be immovable property, the

were Gamiao and Dayag whose right to the

ownership shall belong to the person acquiring

subject property originated from their

it who in good faith first recorded it in the

acquisition thereof from Rizal Madrid with the

Registry of Property.

conformity of all the other Madrid brothers. On

the other hand, the vendors in the other or

Should there be no inscription, the ownership

shall pertain to the person who in good faith

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

transfer legally. In this case, since the Madrid

favor of Gamiao and Dayag.

brothers were no longer the owners of the

53

subject property at the time of the sale to

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

Marquez, the latter did not acquire any right to

it.
NOTES:
In any event, assuming arguendo that Article
1544 applies to the present case, the claim of
Marquez still cannot prevail over the right of
the Heirs since according to the evidence he
was not a purchaser and registrant in good
faith.
In the instant case, 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.

principle, the Heirs, without a scintilla of

doubt, have a superior right to the subject
property.
Moreover, it is an established principle that no
one can give what one does not have.
Accordingly, one can sell only what one owns
or is authorized to sell, and the buyer can
acquire no more than what the seller can

2. Martinez v CA
Facts:
Private respondents Godofredo De la Paz and his
sister Manuela entered into an oral
contract with petitioner Rev. Fr. Dante Martinez for
the sale of a parcel of lot. After full
payment, private respondents executed two
documents, however, private respondents never
delivered the Deed of Sale.
Private respondents sold two lots to Spouses
Veneracion including the lot previously sold to

petitioner. Veneracion never took actual possession

of the lots, but all titles were given to him and
registered the same in his name.
Petitioner discovered that the lot had been sold to
the spouses Veneracion, so he demanded the
execution of the deed of sale from De la Paz and
informed Veneracion that he was the owner of the
property as he had previously purchased the same.
Veneracion brought an action for ejectment, while
petitioner caused a notice of lis pendens to be
recorded on the title. While the ejectment case was
pending, petitioner filed a complaint for annulment
of sale with damages against the Veneracions and
De la Pazes.
Issue: Whether or not private respondents
Veneracion are buyers in good faith.
Ruling:
NO. The requirement of the law, where title to the
property is recorded is two-fold:
acquisition in good faith and recording in good
faith. To be entitled to priority, the second
purchaser must not only prove prior recording of his
title but that he acted in good faith, i.e.,without
knowledge or notice of a prior sale to another. The
presence of good faith should be ascertained from
the circumstances surrounding the purchase of the
land.
This Court in several cases has ruled that a
purchaser who is aware of facts which should puta
reasonable man upon his guard cannot turn a blind
eye and later claim that he acted in good faith.
Private respondent Veneracion knew that there were
already occupants on the property as early as 1981.
The fact that there are persons, other than the
vendors, in actual possession of the disputed lot
should have put private respondents on inquiry as to
the nature of petitioners right over the property. But
he never talked to petitioner to verify the nature of
his right. He merely relied on the assurance of
private respondent Godofredo De la Paz, who was
not even the owner of the lot in question, that he
would take care of the matter. This does not meet
the standard of good faith. The deed of sale
executed by private respondents Godofredo and
Manuela De la Paz in favor of private respondents
spouses Reynaldo and Susan Veneracion is null and
void.
3. Fudot v. Cattleya Land. Inc.
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:
WON there is a double sale
HELD:
There is no double sale to speak of. Art. 1544 of
the Civil Code which provides the rule on
double sale, applies only to a situation where
the same property is validly sold to different
vendees. In this case, there is only one sale to
advert to, that between the spouses Tecson and
respondent.
In Remalante v. Tibe this Court ruled that the
Civil Law provision on double sale is not
applicable where there is only one valid sale,
the previous sale having been found to be
fraudulent. Likewise, in Espiritu and Apostol
v. Valerio, where the same parcel of land was
purportedly sold to two different parties, the

Court held that despite the fact that one deed of

sale was registered ahead of the other, Art.
1544 of the Civil Code will not apply where said
deed is found to be a forgery, the result of this
being that the right of the other vendee should
prevail.
Even assuming that there was double sale in
this case, petitioner would still not prevail. The
pertinent portion of Art. 1544 provides:
Art. 1544. x x x.
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.
x x x x.
In interpreting this provision, the Court
declared that the governing principle is primus
tempore, potior jure (first in time, stronger in
right). Knowledge gained by the first buyer of
the second sale cannot defeat the first buyers
rights, except where the second buyer registers
in good faith the second sale ahead of the first
as provided by the aforequoted provision of the
Civil Code. Such knowledge of the first buyer
does not bar him from availing of his rights
under the law, among them to register first his
purchase as against the second buyer.
However, 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. It is thus essential, to merit the
protection of Art. 1544, second paragraph, that
the second realty buyer must act in good faith
in registering his deed of sale.
4. Amancio v. CA
Case Doctrine: The general rule is that a
purchaser may be considered a purchaser in
good faith when he has examined the latest
certificate of title. An exception to this rule is
when there exist important facts that would
create suspicion in an otherwise reasonable
man to go beyond the present title and to
investigate those that preceded it. Thus, it
has been said that a person who
deliberately ignores a significant fact which
would create suspicion in an otherwise
reasonable man is not an innocent purchaser
for value.

Facts: The subject of the present controversy is

a parcel of land situated in Marikina covered by
Transfer Certificate of Title No. N-119631
and registered in the name of the plaintiffappellee RODEANNA REALTY
CORPORATION (Rodeanna Realty / RRC).
The land was previously owned by the
Sarmiento spouses by virtue of a deed of
absolute sale executed on July 17, 1972 and as
evidenced by a Transfer Certificate of Title No.
3700807. Upon acquisition of the land, the
Sarmiento spouses appointed PEDRO
OGSINER as their overseer. On August 15,
1972, the subject land was mortgaged by the
Sarmiento spouses to Carlos Moran Sison (Mr.
Sison) as a security for a loan obtained by the
Sarmiento spouses from Mr. Sison. Upon
failure of the Sarmiento spouses to pay the
loan, Mr. Sison initiated the extra-judicial
foreclosure sale of the mortgaged property,
and on October 20, 1977, the said property
was foreclosed through the Office of the
Sheriff of Rizal, which accordingly, issued a
certificate of sale in favor of Mr. Sison, and
which Mr. Sison caused to be annotated on the
title of Sarmiento spouses on January 31, 1978.
On August 25, 1982, JOSE PUZON (Mr. Puzon)
purchased the same property in an auction sale
for non-payment of taxes. After paying
P3,400.00, he was issued a certificate of sale
and caused it to be registered in the Registry of
Deeds of Marikina. No redemption having been
made by the Sarmiento spouses, a final bill of
sale was issued in his Mr. Puzons favor.
Thereafter, Mr. Puzon filed a petition for
consolidation of ownership and issuance of
new title over the subject property before the
Regional Trial Court of Pasig. The said petition
was granted by the court on August
03, 1984. Thereafter, Transfer Certificate of
Title No. 102902 was issued in the name
of Jose Puzon. On August 16, 1986, Mr. Puzon
sold the property in question to Rodeanna
Realty. By virtue of such sale, a transfer
certificate of title over the subject property was
issued in favor of Rodeanna Realty. Records
show that Mr. Puzon assured Rodeanna
Realty that he will take care of the
squatters in the subject property by filing an
ejectment case against them. However, Mr.
Puzon failed to comply with his promise. On
December 19, 1986, Rodeanna Realty filed

a complaint for recovery of possession with

damages against the Sarmiento spouses and
Pedro Ogsiner, the Sarmiento spouses
caretaker of the subject property who refused
to vacate the premises. In its complaint,
plaintiff-appellee alleged that the Sarmiento
spouses lost all the rights over the property
in question when a certificate of sale was
executed in favor of Mr. Sison for their failure
to pay the mortgage loan. The trial court ruled
in favor of plaintiff against all defendants and
ordered defendant Pedro Ogsiner and all
persons claiming rights under him to vacate the
premises and surrender peaceful possession to
the plaintiff to Rodeanna Realty. The Court
of Appeals affirmed the trial courts decision
Issue: Whether or not Rodeanna Realty
Corporation is entitled to ownership of subject
property as an innocent purchaser for value.
Held: No. Every person dealing with registered
land may safely rely on the correctness of the
certificate of title issued therefor and the
law will in no way oblige him to go behind
the certificate to determine the condition of
the property.44 Thus, the general rule is that a
purchaser may be considered a purchaser in
good faith when he has examined the latest
certificate of title.45 An exception to this rule
is when there exist important facts that would
create suspicion in an otherwise reasonable
man to go beyond the present title and to
investigate those that preceded it. Thus, it has
been said that a person who deliberately
ignores a significant fact which would create
suspicion in an otherwise reasonable man
is not an innocent purchaser for value.46 A
purchaser cannot close his eyes to facts which
should put a reasonable man upon his guard,
and then claim that he acted in good faith
under the belief that there was no defect in the
title of the vendor. One who purchases real
property which is in the actual possession
of another should, at least make some
inquiry concerning the right of those in
possession. The actual possession by other
than the vendor should, at least put the
purchaser upon inquiry. He can scarely, in the
absence of such inquiry, be regarded as a bona
fide purchaser as against such possessors.
The fact that private respondent RRC did not
investigate the Sarmiento spouses claim over
the subject land despite its knowledge that

Pedro Ogsiner, as their overseer, was in actual

possession thereof means that it was not an
innocent purchaser for value upon said land.
investigate
the
Sarmiento
spouses
claim over
the
Ogsiner,
possession
asfor
their
overseer,
wasland.
in actual
purchaser
value
upon said
5. Mercado v. Allied Bank
G.R. No. 171460
July 24, 2007
Facts: Perla executed a Special Power of
Attorney (SPA) in favor of her husband, Julian
D. Mercado (Julian) over several pieces of real
property registered under her name,
authorizing the latter to perform the following
acts: 1. To act in my behalf, to sell, alienate,
mortgage, lease and deal otherwise over the
different parcels of land described hereinafter x
x x 2. To sign for and in my behalf any act of
strict dominion or ownership any sale,
disposition, mortgage, lease or any other
transactions including quit-claims, waiver and
relinquishment of rights x x x 3. To exercise
any or all acts of strict dominion or ownership
over the above-mentioned properties, rights
and interest therein.
On the strength of the aforesaid SPA, Julian
obtained a loan from the respondent. Still
using the subject property as security, Julian
obtained an additional loan from the
respondent.
It appears, however, that there was no property
identified in the SPA and registered with the
Registry of Deeds. What was identified in the
SPA instead was the property different from
the one used as security for loan.
Julian defaulted on the payment of his loan
obligations. Thus, respondent initiated extrajudicial foreclosure proceedings over the
subject property which was subsequently sold
at public auction wherein the respondent was
declared as the highest bidder. Petitioners
initiated an action for the annulment of REM
constituted over the subject property on the
ground that the same was not covered by the
SPA and that the said SPA, at the time the loan
obligations were contracted, no longer had
force and effect since it was previously revoked
by Perla. In the absence of authority to do so,
the REM constituted by Julian over the subject
property was null and void; thus, petitioners
likewise prayed that the subsequent extrajudicial foreclosure proceedings and the
auction sale of the subject property be also
nullified.

Issues: (1) Whether or not there was a valid

mortgage constituted over subject property.
(2) Whether or not there was a valid
revovation of SPA.
(3) Construction of powers of attorney.
Rulings: (1) In the case at bar, it was Julian
who obtained the loan obligations from
respondent which he secured with the
mortgage of the subject property. The property
mortgaged was owned by his wife, Perla,
considered a third party to the loan obligations
between Julian and respondent. It was, thus, a
situation recognized by the last paragraph of
Article 2085 of the Civil Code that third
persons who are not parties to the principal
obligation may secure the latter by pledging or
mortgaging their own property. There is no
question therefore that Julian was vested with
the power to mortgage the pieces of property
identified in the SPA, however, the subject
property was not among those enumerated
therein. Julian was not conferred by Perla with
the authority to mortgage the subject property
under the terms of the SPA, the real estate
mortgages Julian executed over the said
property are therefore unenforceable.
(2) The said SPA was revoked by virtue of a
public instrument executed by Perla. To
address respondents assertion that the said
revocation was unenforceable against it as a
third party to the SPA and as one who relied on
the same in good faith, the rule is that an
agency is extinguished, among others, by its
revocation (Article 1999, New Civil Code of the
Philippines). The principal may revoke the
agency at will, and compel the agent to return
the document evidencing the agency. Such
revocation may be express or implied (Article
1920, supra).
(3) Rule of strict construction- where the terms
of the contract are clear as to leave no room for
interpretation, resort to circumstantial
evidence to ascertain the true intent of the
parties, is not countenanced. The law is that if
the terms of a contract are clear and leave no
doubt upon the intention of the contracting
parties, the literal meaning of its stipulation
shall control. The clear terms of the contract
should never be the subject matter of
interpretation. Equally relevant is the rule that
a power of attorney must be strictly construed
and pursued. The instrument will be held to

grant only those powers which are specified

therein, and the agent may neither go beyond
nor deviate from the power of attorney. Where
powers and duties are specified and defined in
an instrument, all such powers and duties are
limited and are confined to those which are
specified and defined, and all other powers and
duties are excluded.
Qualification of the rule- this is but in accord
with the disinclination of courts to enlarge the
authority granted beyond the powers expressly
given and those which incidentally flow or
derive therefrom as being usual and reasonably
necessary and proper for the performance of
such express powers.
6. Gabriel v. 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 do repurchase. In 1984, they
convinced petitioner Alejandro Gabriel to
purchase the lot from Soriano as a result, DBP
had to restructure the loan making Gabriel as
the mortgagor. In 1982 however, one lot was
sold to Zenaida Tan-Reyes by the spouses
Mabanta who in turn filed an intervention to
the case after not being a party in the instant
case. As a result, the petitioners filed for
damages, and specific performance which the
trial court ruled in their favor holding that the
sale between the spouses Mabanta and TanReyes null and void. On appeal, the CA
modified the trial courts decision holding that
the second sale was indeed valid.
ISSUE:
Whether or not the second sale in 1982 to TanReyes is valid.
HELD:
No. Article 1544 of the Civil Code provides that
should immovable property be sold to different
vendees, the ownership shall belong to the first
person in good faith to record it in the registry
of property. Unfortunately, the registration
made by Zenaida Tan-Reyes of her deed of sale
was not in good faith, and 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.
7. Sanchez v. Ramos
G.R. No. L-13442 December 20, 1919
FACTS: This is an action for the recovery of a
piece of land described in the second paragraph
of the complaint. This land is in the defendant's
possession and formerly belonged to Ciriaco
Fernandez. On July 1, 1910, Ciriaco Fernandez
sold it to the spouses Marcelino Gomez and
Narcisa Sanchez under pacto de retro for the
period of one year. This also was executed in a
public instrument. Marcelino Gomez and
Narcisa Sanchez never took material
possession of the land. The period for
repurchase elapsed without the vendor making
use of it. On July 3, 1912, Ciriaco Fernandez
again sold the same land, by means of a private
document, to Roque Ramos who immediately
took material possession thereof. By applying
article 1473 of the Civil Code, the trial court
declared preferable the sale executed to the
defendant and absolved him from the
complaint.
ISSUE:
Whether or not the defendant Ramos has a
better right of the sale executed to him by
Ciriaco Fernandez?
HELD:
NO. 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, 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, absolutely nothing, is
left to the vendor. From this moment the
vendor is a stranger to the thing sold like any
other who has never been its owner. As the
thing is considered delivered, the vendor has
no longer the obligation of even delivering it. If
he continues taking material possession of it, it
is simply on account of vendee's tolerance and,
in this sense, his possession is vendor's
possession. And if the latter should have to ask
him for the delivery of this material possession;

it would not be by virtue of the sale, because

this has been already consummated and has
produced all its effects, but by virtue of the
vendee's ownership, in the same way as said
vendee could require of another person
although same were not 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 mere detainer, and it would
be unjust to protect this detention against the
rights to the thing lawfully acquired by the first
vendee. The possession mentioned in 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.
8. Ten Forty Realty v. Cruz
FACTS:
Petitioner filed an ejectment complaint
against Marina Cruz(respondent) before the
MTC. Petitioner alleges that the land indispute
was purchased from Barbara Galino on
December 1996, andthat said land was again
sold to respondent on April 1998;
On the other hand, respondent answer with
counterclaim that never was there an occasion
when petitioner occupied a portion of the
premises. In addition, respondent alleges that
said land was a public land (respondent filed a
miscellaneous sales application with the
Community Environment and Natural
Resources Office) and the action for ejectment
cannot succeed where it appears that
respondent had been in possession of the
property prior to the petitioner;
On October 2000, MTC ordered respondent
to vacate the land and surrender to petitioner
possession thereof. On appeal, the RTC
reversed the decision. CA sustained the trial
courts decision.
ISSUE/S:
Whether or not petitioner should be declared
the rightful owner of the property.
HELD:

No. Respondent is the true owner of the land.1)

The action filed by the petitioner, which was an
action for unlawful detainer, is improper. As
the bare allegation of petitioners tolerance of
respondents occupation of the premises has
not been proven, the possession should be
deemed illegal from the beginning. Thus, the
CA correctly ruled that the ejectment case
should have been for forcible entry. However,
the action had already prescribed because the
complaint was filed on May 12, 1999 a month
after the last day forfiling;2) The subject
property had not been delivered to petitioner;
hence, it did not acquire possession either
materially or symbolically. As between the two
buyers, therefore, respondent was first in
actual possession of the property.
As regards the question of whether there was
good faith in the second buyer. Petitioner has
not proven that respondent was aware that her
mode of acquiring the property was defective at
the time she acquired it from Galino. At the
time, the property which was public land
had not been registered in the name of Galino;
thus, respondent relied on the tax declarations
thereon. As shown, the formers name
appeared on the tax declarations for the
property until its sale to the latter in 1998.
Galino was in fact occupying the realty when
respondent took over possession. Thus, there
was no circumstance that could have placed the
latter upon inquiry or required her to further
investigate petitioners right of ownership.
DOCTRINE/S:
Execution of Deed of Sale; Not sufficient as
delivery. Ownership is transferred not by
contract but by tradition or delivery. Nowhere
in the Civil Code is it provided that the
execution of a Deed of Sale is a conclusive
presumption of delivery of possession of a piece
of real estate. The execution of a public
instrument gives rise only to a prima facie
presumption of delivery. Such presumption is
destroyed when the delivery is not effected,
because of a legal impediment. Such
constructive or symbolic delivery, being merely
presumptive, was deemed negated by the
failure of the vendee to take actual possession
of the land sold. Disqualification from
Ownership of Alienable Public Land.
Private corporations are disqualified from
acquiring lands of the public domain, as

provided under Section 3 of Article XII of the

Constitution. While corporations cannot
acquire land of the public domain, they can
however acquire private land. However,
petitioner has not presented proof that, at the
time it purchased the property from Galino, the
property had ceased to be of the public domain
and was already private land. The established
rule is that alienable and disposable land of the
public domain held and occupied by a
possessor personally or through
predecessors-in-interest, openly, continuously,
and exclusively for 30 years is ipso jure
converted to private property by the mere lapse
of time.
RULING:
The Supreme Court DENIED the petition
9. Lichauco v. Berenguer
FACTS:
Crisanto Lichauco, on his own behalf, and his
brothers, Faustino, Zacarias, Galo, and his
sister, Timotea Lichauco, his co-heirs, applied
for the registration, in the new property
registry, of two rural estates situated in the
pueblo of Arayat, Province of Pampanga, one of
which, in the barrio of Batasan, has an area of
204 hectares, 33 ares, and 38.795 centares, and
the other, in the sitio of Panantaglay, barrio of
Calumpang, 120 hectares, 69 ares, and 58
centares. The boundaries and other particulars
relating to these lands are specified in the
application, which for the purpose of this
opinion, are taken to be true. virtual law library
With respect to both the said properties, the
applicants allege that they obtained them by
inheritance from their grandmother, Cornelia
Laochangco, and that the latter, in turn, had
acquired them from Macario Berenguer,
through purchase with an agreement that the
vendor should have the right to redeem them.
Jose Berenguer, the son of Macario Berenguer
and the administrator of his estate, opposed
the registration of the first of the
aforementioned properties, and acquiesced in
that of the second. The trial was had with
respect to the first tract of land above referred
to, documentary and oral evidence was
adduced by the parties,.
The applicants appealed from this judgment in
so far as it denied the registration of the first
parcel of land, and their bill of exception

having been filed with this court, with right to a

review of the evidence, they allege against the
said judgment the following assignments of
error: The evidence to be considered with
respect to the three preceding assignments of
error, are: First, on the part of the applicants,
the public instrument executed by Macario
Berenguer in favor of Cornelia Laochangco
(Exhibit C); second, on the part of the
opponent, the account current between
Cornelia Laochangco and Macario Berenguer
(Exhibit 5); and, third, the oral testimony
produced concerning this documentary
evidence.
ISSUE:
Whether or not there is a valid contract of
purchase and sale under pacto de retracto?
RULING:
But in the present case, unlike others heard by
this court, there is no proof that the sale with
right of repurchase, made by Berenguer in
favor of Laochangco is rather a mortgage to
secure a loan.
The account current between Berenguer and
Laochangco appears to be nothing but the
beginning of some business transaction in
sugar, which gave rise to the contract of
purchase and sale under pacto de retracto, and
the continuation of the same transactions
which maintained the contract beyond the
period fixed for the redemption.
It is sufficient for the purposes of the appeal to
find, as we hereby do find, that the right of
redemption has not lapsed-lapse which was the
ground for the application for registration that
was based on the consolidation of the
ownership of the two parcels of land, in the
vendee, from whom the applicants derive their
right. Nor had that right lapsed, with respect to
the Panantaglay land; but as this land was, with
the assent of the opponent, adjudicated in the
judgment appealed from , the adjudication by
such assent is effective.
NOTE: It appears that 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 Lichauco case, it was the
prescriptive right that had supervened. Or as
also suggested in that case, other facts and
circumstances exist which, in addition to his
deed of sale, the first vendee can be said to
have better right than the second purchaser.

10. Paragas v. Heirs of Dominador

Balacano
FACTS:
Gregorio Balacano, married to Lorenza, owned
2 parcels of land. He was already 81 years old,
very weak, could barely talk, and had been
battling w/ liver disease for over a month. On
his deathbed, barely a week before he died, he
allegedly signed a Deed of Absolute Sale over
the lots in favor of the Paragas Spouses,
accompanied by Atty. De Guzman who
proceeded to notarize the same, alleging that it
was a mere confirmation of a previous sale and
that Gregorio had already paid a P 50,000.00
deposit. The Paragas driver was also there to
take a picture of Gregorio signing the said deed,
w/ a ballpen in his hand. There was nothing to
show that the contents of the deed were
explained to Gregorio. Paragas then sold a
portion of the disputed lot to Catalino. The
grandson of Gregorio, Domingo, sought to
annul the sale and partition. There was no
sufficient evidence to support any prior
agreement or partial execution thereof.
ISSUE: W/N Balacano is incapacitated to enter
into a contract of sale
HELD: A person is not rendered incompetent
merely because of old age; however, when such
age has impaired the mental faculties as to
prevent a person from protecting his rights,
then he is undeniably incapacitated. He is
clearly at a disadvantage, and the courts must
be vigilant for his protection. In this case,
Gregorios consent was clearly absent hence
the sale was null and void. The dubious
circumstances raise serious doubts on his
capacity to render consent. Considering that
the Paragas Spouses are not owners of the said
properties, it only follows that the subsequent
sale thereof to Catalino who was not in good
faith is likewise void. Further, the lots
pertained to the conjugal partnership having
been inherited by Gregorio during his marriage
to Lorenza. It cannot thus be sold w/o the
latters consent.
11. San Lorenzo Development Corp. v.
CA

ISSUE:
Who between SLDC and Babasanta has a better
right over the two parcels of land?

Babasanta except upon full payment of the

purchase price.
Babasantas letter dated 22 May 1989 was quite
telling. He stated therein that despite his
repeated requests for the execution of the final
deed of sale in his favor so that he could effect
full payment of the price, Pacita Lu allegedly
refused to do so. In effect, Babasanta himself
recognized that ownership of the property
would not be transferred to him until such time
as he shall have effected full payment of the
price. Doubtlessly, the receipt signed by Pacita
Lu should legally be considered as a perfected
contract to sell.
The perfected contract to sell imposed upon
Babasanta the obligation to pay the balance of
the purchase price. There being an obligation
to pay the price, Babasanta should have made
the proper tender of payment and consignation
of the price in court as required by law.
Glaringly absent from the records is any
indication that Babasanta even attempted to
make the proper consignation of the amounts
due, thus, the obligation on the part of the
sellers to convey title never acquired obligatory
force.
There was no double sale in this case because
the contract in favor of Babasanta was a mere
contract to sell; hence, Art. 1544 is not
applicable. There was neither actual nor
constructive delivery as his title is based on a
mere receipt. Based on this alone, the right of
SLDC must be preferred.

RULING:
An analysis of the facts obtaining in this case,
as well as the evidence presented by the parties,
irresistibly leads to the conclusion that the
agreement between Babasanta and the Spouses
Lu is a contract to sell and not a contract of
sale.
The receipt signed by Pacita Lu merely states
that she accepted the sum of fifty thousand
pesos (P50,000.00) from Babasanta as partial
payment of 3.6 hectares of farm lot. While
there is no stipulation that the seller reserves
the ownership of the property until full
payment of the price which is a distinguishing
feature of a contract to sell, the subsequent acts
of the parties convince us that the Spouses Lu
never intended to transfer ownership to

12. Macarangdang v. Marinez

FACTS:
The Macadangdang spouses offered to buy the
subject property from Omalin forP380,000 on
installment basis.The Macadangdang spouses
made a downpayment of P5,000 and made
another P 175,000. Macadangdang took
possession of the house and when a total of
270,000 was paid, the parties agreed that the
balance of P110,000 was to be paid upon
delivery
of
the
TCT.
Omalin executed a deed of absolute sale in
favor of the Macadangdang spouses. However,
the latter did not pay the P110,000 balance
because Omalin failed to deliver the TCT. It
turned out that the property was mortgaged to

G.R. NO. 124242, January 21, 2005

FACTS:
On 20 August 1986, the Spouses Lu
purportedly sold the two parcels of land to
respondent Pablo Babasanta. The latter made a
downpayment of fifty thousand pesos
(P50,000.00) as evidenced by a memorandum
receipt issued by Pacita Lu of the same date.
Several other payments totaling two hundred
thousand pesos (P200,000.00) were made by
Babasanta. He demanded the execution of a
Final Deed of Sale in his favor so he may effect
full payment of the purchase price; however,
the spouses declined to push through with the
sale. They claimed that when he requested for
a discount and they refused, he rescinded the
agreement. Thus, Babasanta filed a case for
Specific Performance.
On the other hand, San Lorenzo Development
Corporation (SLDC) alleged that on 3 May
1989, the two parcels of land involved, namely
Lot 1764-A and 1764-B, had been sold to it in a
Deed of Absolute Sale with Mortgage. It alleged
that it was a buyer in good faith and for value
and therefore it had a better right over the
property in litigation.

private respondent spouses Ramon and Gloria

Martinez
(Martinez
spouses).
It appears that a certain Atty. Paterno Santos, a
broker, offered to mortgage the subject
property to the Martinez spouses for
P200,000. Atty. Santos was in possession of a
"clean"
TCT
No.
146553
ISSUE: W/N the Martinez owns the subject
property
HELD:
YES. The subject matter of the instant petition
involves registered land. Unlike the case of
unregistered land, in which an earlier
instrument, be it sale or mortgage, prevails
over a latter one, and the registration of any
one of them is immaterial, with respect to
registered land, the rule is different. Between
two transactions concerning the same parcel of
land, the registered transaction prevails over
the earlier unregistered right. The act of
registration operates to convey and affect the
registered land so that a bonafide purchaser of
such land acquires good title as against a prior
transferee, if such prior transfer was
unrecorded.
HYPERLINK
"http://www.lawphil.net/judjuris/juri2005/ja
n2005/gr_158682_2005.html"7
It is clear from the foregoing that the
registration of the deed is the effectual act
which binds the land insofar as third persons
are concerned. Prior registration of a lien
creates a preference as the act of registration is
the operative act that conveys and affects the
land.
Considering that the prior sale of the subject
property to the Macadangdang spouses was not
registered, it was the registered mortgage to the
spouses Martinez that was valid and effective.
The rule on prior registration is subject only to
one exception, that is, when a party has
knowledge of a prior existing interest which is
unregistered at the time he acquires a right to
the same land, his knowledge of that prior
unregistered interest has the effect of
registration as to him. The Martinez spouses
claimed they had never met the Macadangdang
spouses and were unaware that Omalin had
already
sold the
property
to
them
On this note, being innocent registered

mortgagees for value, the Martinez spouses

acquired a superior right over the property.

13. Premier Development Bank v. CA

FACTS: 2 different persons with exactly the
same name, i.e., Vicente T. Garaygay, each
claimed exclusive ownership of Lot 23 by virtue
of an owners duplicate certificate each had
possession of during the period material
covering said lot. One held TCT No. 9780,
supra, and the other, TCT No. 9780 (693),
supra. The technical description of the land
appearing in one copy corresponds exactly with
that in the other. The date June 14, 1944
appears on the face of both copies as a common
date of entry. One, however, contained certain
features, markings, and/or entries not found in
the other and vice versa.
On April 17, 1979, Garaygay of Cebu executed a
deed of sale concerning subject lot in favor of
his nephew Joselito. The sale notwithstanding,
the owners duplicate certificate remained for
some time in the sellers possession.
In another transaction, Garaygay of Rizal sold
to Yambao and Rodriguez the same property.
Buyers Yambao and Rodriquez would later sell
a portion of their undivided interests on the
land to Morales.
Then came the June 11, 1988 fire that gutted a
portion of the Quezon City hall and destroyed
in the process the original copy of TCT No.
9780 (693) on file with the Registry of Deeds of
Quezon City. Barely a month later, a certain
Engr. Hobre filed an application, signed by
Garaygay of Cebu, for the reconstitution of the
burned original on the basis of the latters
owners duplicate certificate. One Engr. Cortez
of the LRA did the follow-up on the
application. After due proceedings, the LRA
issued an order of reconstitution, by virtue of
which Garaygay of Cebu acquired a
reconstituted title.
Meanwhile, or on May 26, 1989, the deed of
sale executed by Garaygay of Cebu in favor of

his nephew Joselito was registered, paving the

issuance in the latters name. Thereafter, thru
the efforts of same Engr. Cortez, Lot 23 was
subdivided into three (3) lots. Joselito
posthaste sold the first lot to Toundjis who,
pursuant to a Contract to Sell undertook to pay
Joselito the P.5 Million balance of the P2.5
Million purchase price once she is placed in
possession of a fenced-off property. And, for
shares of stock, Joselito assigned the other two
(2) lots to Century Realty which, after securing
TCTs therefor, mortgaged the same to Premiere
Bank to secure a loan.
Clashing claims of ownership first came to a
head when, sometime in May 1990, Yambao
and his agents forcibly prevented Joselitos
hired hands from concrete-fencing the subject
property. The police and eventually the
National Bureau of Investigation (NBI) entered
into the picture.
In the meantime, Yambao, Rodriquez and
Morales as pro indiviso buyers of the subject
lot, caused the of their respective adverse
claims on Joselitos TCT They then filed with
the Regional Trial Court at Quezon City suit
against Joselito, Century Realty and Premiere
Bank for quieting of title and annulment of said
defendants fake titles with prayer for damages.
Eventually, the trial court rendered judgment
finding for the plaintiffs and against the
defendants, declaring Joselitos TCT No. 9780
(693) and all subsequent titles traceable to it
and transactions involving its derivatives as
null and void. The trial court further observed
dubious circumstances surrounding the
reconstitution of TCT 9780 (693), the more
disturbing of which is the admitted
participation of LRA personnel in the
reconstitution process.
In time, herein petitioners appealed to the CA,
which affirmed in toto the appealed decision of
the trial court.
Their motion for reconsideration having been
denied by the appellate court petitioners have
separately come to the Supreme Court. the
three (3) separate petitions were, upon private
respondents motion, ordered consolidated.

ISSUE:
WON the Court of Appeals erred in holding
Garaygay of Rizal, instead of Garaygay of Cebu,
as the real owner of Lot 23.
WON the same court erred in finding Garaygay
of Rizals owners copy, TCT No. 9780, instead
of the Garaygay of Cebus copy, TCT No. 9780
(693), as the authentic title covering Lot 23.
WON Toundjis and Premiere bank are buyers
in good faith
HELD: The instant petitions are DENIED and
the impugned Decision of the CA AFFIRMED.
Both defining documents, Exhibit 1[cebu]
and Exhibit B [rizal], appear to have been
issued by the appropriate Registry of Deeds
and as such would ordinarily enjoy the
guarantees flowing from the legal presumption
of regularity of issuance. But how and precisely
when the legal aberration occurred where two
(2) owners duplicate certificates ended up in
the hands of two (2) distinct persons, complete
strangers to each other, are questions which
the records do not provide clear answer. It may
not be idle to speculate, though, that fraud or
other improper manipulations had been
employed along the way, with likely the willing
assistance of land registry official/s, to secure
what for the nonce may be tagged as the other
title. Consistent with the presumption of
regularity of issuance, however, the
authenticity of one copy has to be recognized.
And necessarily, one of the two (2) outstanding
owners copies has to be struck down as
wrongly issued, if not plainly spurious, under
the governing Torrens system of land
registration
1. The categorical conclusion of the Court of
Appeals confirmatory of that of the trial court
is that Exhibit B is genuine and that
Garaygay of Rizal is a real person. On the other
hand, Exhibit 1 was adjudged spurious. These
factual determinations as a matter of long and
sound appellate practice must be accorded
great weight, and, as rule, should not be
disturbed on appeal, save for the most
compelling and cogent reasons.

The courts finding that Garaygay of Rizal is an

authentic person, once residing in and a
registered voter of Angono, Rizal has adequate
evidentiary support in his voters ID, the
COMELEC and barangay certifications
aforementioned and the testimony of an
occupant of Lot 23.
Moreover, facts and reasonable inferences
drawn therefrom point to Exhibit 1 as being
spurious, necessarily leaving Exhibit B as the
authentic duplicate copy. For starters, there is
the appearance and physical condition of the
owners copies in question which would help in
determining which is genuine and which is
sham. As aptly observed by the appellate court,
rationalizing its conclusion adverted to above,
Exhibit B has no defect, except for its partly
being torn. Respondents explanation for the
defective state of Exhibit B, as related to them
by Garaygay of Rizal, i.e., it was due to
exposure of the document to the elements
during the Japanese occupation, merited
approval from the trial court and the CA Both
courts, being in a better position to pass upon
the credibility of petitioners witness and
appreciate his testimony respecting the less
than usual appearance of Exhibit B, their
findings command the respect of this Court.
However, unlike Exhibit B, Exhibit 1
contained entries and other uncommon
markings or features which could not have
existed without human intervention. Although
any one of them may perhaps not be
appreciable in isolation, these features and/or
markings, taken together, indeed put the
integrity of Exhibit 1 under heavy cloud and
indeed cast doubt on its genuineness.
In the same token, the payment by Garaygay of
Cebu of land taxes on Lot 23 does not also
necessary detract from the spurious nature of
his title. After all, any one can pay real estate
taxes on a given property without being quizzed
by the local treasury whether or not the payor
owns the real property in question.
Other than paying taxes from 1949 to 1990,
however, Garaygay of Cebu and this holds

true for his nephew Joselito did not appear

before the current stand-off to have exercised
dominion over Lot 23. For one, it has not been
shown that Garaygay of Cebu was at any time
in possession of the property in question,
unlike his namesake from Rizal who managed
to place the property under the care of certain
individuals who built semi-permanent
structure-dwelling houses thereon without so
much of a protest from Garaygay of Cebu or his
nephew Joselito after the latter purportedly
bought the property. For another, neither
Garaygay of Cebu nor his nephew Joselito ever
instituted any action to eject or recover
possession from the occupants of Lot 23. This
passivity bespeaks strongly against their claim
of ownership. Not lost on this Court are
circumstances noted by the trial court which
negatively reflect on Garaygay of Cebus and his
nephews claim of ownership.
In short, it appears to the Court that without
doing anything, Vicente T. Garaygay of Cebu
has his title (Exh. 1) reconstituted. On the
other hand, without knowing anything,
JOSELITO obtained TCT 12183 in his name
and had the land subdivided and sold.These
circumstances demonstrate that neither
JOSELITO nor his uncle, Vicente T. Garaygay
of Cebu acted ante litem motam like the true
owners they claim to be in their respective
times.
Several questions confound the Courts
curiosity. Why were some LRA officials so
interested in the speedy reconstitution and in
the subdivision of the land in excess of their
bureaucratic duties? Where did Vicente T.
Garaygay of Cebu get his owners copy, Exh.
1? Why was JOSELITO so evasive about his
cousin in the LRA as shown in his
examination?
As the Court sees it, the Deed of Sale was a
simulated transaction because both JOSELITO
and his uncle admit this was a joint venture to
sell the property in question. However, the
facts suggest that the joint venture was not
limited to the two of them. The persons who
prepared and filed the application for
reconstitution, and those officers in the LRA
who followed it up and who thereafter

subdivided the land into three lots for easier

sale, those at the NBI who tried to persuade
Yambao and Morales to settle the dispute . . .
are apparently part of the joint venture or
stand to profit from it

14.Sigaya v. Maguya
FACTS: Dionisia Alorsabes owned a three
hectare land in Dao, Capiz. In 1934, she
sold a portion of the lot to Juanito
Fuentes while the remainder was
inherited by her children Paz Dela Cruz,
Rosela Dela Cruz, and Consorcia Arroja
(an adopted child), and a grandson,
Francisco Abas, in representation of his
deceased mother Margarita Dela Cruz.
These four heirs executed an ExtraJudicial Settlement with Sale dated
February 4, 1964 wherein Consorcia sold
her share with an area of 6,694 square
meters to spouses Balleriano Mayuga. On
April 1, 1977, Paz also sold her share to
Honorato de los Santos. Later, another
document entitled Extra-Judicial Partition
with Deed of Sale dated November 2,
1972 was uncovered wherein the heirs of
Dionisia purportedly adjudicated Lot
3603 among themselves and sold their
shares to Francisco. On January 9, 1978,
Francisco executed a Deed of Sale over
Lot 3603 in favor of Teodulfo Sigaya.
Thus, the title over Lot 3603 was
cancelled and a new one was issued
in the name of Teodulfo, predecessorin-interest of the petitioners herein.1 On
October 14, 1986, the petitioners, who
are the widow and children of Teodulfo,
filed Civil Case for recovery of possession
and praying that respondents be ordered
to vacate Lot 3603, and turn over the
same to petitioners; Petitioners argue
that: Teodulfo, their predecessor-ininterest, purchased the subject
property from Francisco, who was in
possession of the Original Certificate of
Title (OCT) No. RO-5841 (17205), in the
name of Dionisia and of the Extra-Judicial

Partition with Deed of Sale, relying on

these instruments and after inspecting
the land and seeing that nobody
occupied the same, Teodulfo bought the
land and had the title subsequently
issued in his name Petitioners, in their
Memorandum, further aver that: Teodulfo
is a purchaser in good faith having relied
on OCT No. RO-5841 (17205) in the name
of Dionisia and the Extra-Judicial Partition
with Deed of Sale which shows that
Francisco is the absolute owner of the lot;
four years had elapsed from the date
that the OCT was reconstituted and
the time Teodulfo bought the property
from Francisco and yet none of the
respondents had registered their right in
the property; the Extra-Judicial
Settlement of Lot 3603 of the
Cadastral Survey of Dao, Capiz with
Sale, on which respondents base their
claims, was never registered with the
Registry of Deeds; not having been
registered, this will not affect the right of
third persons who had no knowledge
thereof;
ISSUE: Whether a person dealing with
a registered land can safely rely on
the correctness of the Certificate of
Title issued therefor.
HELD: This Court has held that the
burden of proving the status of a
purchaser in good faith lies upon one
who asserts that status and this onus
probandi cannot be discharged my mere
invocation of the legal presumption of
good faith. In this case, the Court finds
that petitioners have failed to discharge
such burden.
A purchaser in good faith is one who buys
property without notice that some other
person has a right to or interest in
such property and pays its fair price
before he has notice of the adverse
claims and interest of another person
in the same property. The honesty of
intention which constitutes good faith
implies a freedom from knowledge of
circumstances which ought to put a

person on inquiry. Where there is nothing

in the certificate of title to indicate any
cloud or vice in the ownership of the
property, or any encumbrance thereon,
the purchaser is not required to explore
further than what the Torrens Title upon
its face indicates in quest for any hidden
defects or inchoate right that may
subsequently defeat his right thereto.34
However, this rule shall not apply
when the party has actual knowledge
of facts and circumstances that would
impel a reasonably cautious man to make
such inquiry or when the purchaser has
knowledge of a defect or the lack of
title in his vendor or of sufficient facts
to induce a reasonably prudent man
to inquire into the status of the title
of the property in litigation.35 In this
case, preponderance of evidence shows
that respondents had been in actual
possession of their respective portions
even prior to 1960. Rolly Daniel, which
the trial court considered as a credible
witness, testified that not only were
respondents in actual possession of their
respective portions prior to 1960, he
even accompanied Francisco and
Teodulfo to the different houses of
respondents sometime between 1976
to 1978 as Teodulfo was going to buy
the portion of Francisco. This Court
cannot give credence therefore to the
claim of petitioners that Teodulfo found
no occupants in the property. A purchaser
cannot simply close his eyes to facts
which should put a reasonable man on
his guard and then claim that he acted in
good faith under the belief that there was
no defect in the title of his vendor. His
mere refusal to believe that such defect
exists or his willful closing of his eyes to
the possibility of the existence of a
defect in his vendors title will not
make him an innocent purchaser for
value if it later develops that the title was
in fact defective, and it appears that he
would have notice of the defect had
he acted with that measure of
precaution which may reasonably be

required of a prudent man in a similar

situation.
(2)Petitioners also argue that the rule
on double sale of real property should
apply in this case, and since they are
the first to register the sale in good
faith, they are entitled to be awarded
ownership thereof. The Court disagrees.
Apart from the fact that Teodulfo is not a
purchaser in good faith, the law on
double sales as provided in Art. 1544 of
the Civil Code38 contemplates a situation
where a single vendor sold one and the
same immovable property to two or more
buyers. For the rule to apply, 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 it. The rule 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.39 In this case,
respondents derive their right over their
respective portions either through
inheritance or sale from Dionisia while
petitioners invoke their right from the
sale of the land from Francisco. Clearly,
the law on double sales does not apply
here.
15.Ulep v CA
FACTS:
Principal petitioners SAMUEL
ULEP, now deceased and substituted by
his heirs, and VALENTINA ULEP are
brother-and-sister. Together with their
siblings, namely, Atinedoro Ulep and
Rosita Ulep, they are children of the
late Valentin Ulep. During his lifetime,
the father Valentin Ulep owned a parcel
of land, identified as Lot 840 with an area
of 3,270 square meters, located at
Asingan, Pangasinan. Sometime in
1950, the older Ulep sold the one-half
(1/2) eastern portion of Lot 840,
comprising an area of 1,635 square
meters, to respondent Maxima Rodico,
while the remaining one-half (1/2)

western portion with the same area, to

his son Atinedoro Ulep married to Beatriz
Ulep, and to his other daughter Valentina
Ulep. On June 5, 1952, all the transferees
of Lot 840, namely, Maxima Rodico (for
the eastern portion) and Atinedoro Ulep
and Valentina Ulep (for the western
portion), were jointly issued in their
names Transfer Certificate of Title No.
12525. On June 18, 1971, Atinedoro Ulep,
his wife Beatriz and sister Valentina Ulep
sold the one-half (1/2) portion of the area
sold to them by their father to their
brother Samuel Ulep and the latters
wife, Susana Repogia-Ulep. The
document of sale was registered with the
Office of the Registry of Deeds of
Pangasinan on February 20, 1973.
Later, an area of 507.5 square meters of
the western portion of Lot 840 was sold
by the spouses Atinedoro Ulep and
Beatriz Ulep to respondent Warlito
Paringit and the latters spouse
Encarnacion Gante, who were then
issued TCT No. 12688 on September 23,
1975. Evidently, all the foregoing
transactions were done and effected
without an actual ground partition or
formal subdivision of Lot 840. In June
1977, respondent Iglesia ni Cristo (INC)
begun constructing its chapel on Lot
840. In the process, INC encroached
portions thereof allegedly pertaining to
petitioners and blocked their pathways.
This prompted Samuel Ulep and sister
Rosita Ulep to make inquiries with the
Office of the Register of Deeds and they
discovered from the records of said office
that a deed of sale bearing date
December 21, 1954, was purportedly
executed by their brother Atinedoro
Ulep his, wife Beatriz and their sister
Valentina Ulep in favor of INC over a
portion of 620 square meters, more or
less, of Lot 840, and that on the basis of
said deed, INC was issued TCT No. 12689
on September 23, 1975 over the portion
allegedly sold to it by the three. Samuel
was further shocked to find out that
on July 9, 1975, an affidavit of
subdivision was executed by

respondents INC, Maxima Rodico and

the spouses Warlito Paringit and
Encarnation Gante, on the basis of
which affidavit Lot 840 was subdivided
into four (4) lots.
Such was the state
of things when, on March 29, 1983, in the
Regional Trial Court at Pangasinan, the
spouses Samuel Ulep and Susana
Repogia-Ulep, the spouses Atinedoro
Ulep and Beatriz Ulep and their sister
Valentina Ulep, filed their complaint
for Quieting of Title, Reconveyance and
Declaration of Nullity of Title and
Subdivision Plan with Damages against
respondents INC, Maxima Rodico and
the spouses Warlito Paringit and
Encarnacion Gante.
In the same
complaint, the spouses Atinedoro Ulep
and Beatriz Ulep and their sister
Valentina Ulep denied having executed
a deed of sale in favor of INC over a
portion of 620 square meters of Lot 840,
claiming that their signatures appearing
on the deed were forged. At the most, so
they claimed, what they sold to INC was
only 100 square meters and not 620
square meters. Petitioners Samuel Ulep
and Valentina Ulep, along with the
spouses Atinedoro Ulep and Beatriz Ulep,
likewise averred that the subject lot was
subdivided without their knowledge and
consent. Eventually, RTC ruled against
INC. Dissatisfied, INC interposed an
appeal to CA. In so ruling, the Court of
Appeals explained: There is no
adequate evidentiary demonstration in
the record that the deed of sale
(dated December 21, 1954 executed by
Atinedoro Ulep, his wife
Beatriz and sister Valentina Ulep in favor
of INC over the 620 square-meter area of
the western portion of Lot 840) is void
and inefficacious on account of forgery.
ISSUE: WON there was a double sale
HELD: YES. As the Court sees it, the
present controversy is a classic case of
double sale. On December 21, 1954,
Atinedoro Ulep, his wife Beatriz Ulep and
sister Valentina Ulep sold the disputed

area (620 square-meter) of Lot 840 to

INC. Subsequently, on January 18, 1971,
a second sale was executed by the same
vendors in favor of spouses Samuel Ulep
and Susana Ulep. The Court is, therefore,
called upon to determine which of the
two groups of buyers has a better right to
the area in question. The law provides
that a double sale of immovable
transfers ownership to (1) the first
registrant in good faith; (2) then, the first
possessor in good faith; and (3) finally,
the buyer who in good faith presents the
oldest title.
Jurisprudence teaches that
the governing principle is primus
tempore, potior jure (first in time,
stronger in right). Knowledge gained by
the first buyer of the second sale cannot
defeat the first buyers rights except
where the second buyer registers in good
faith the second sale ahead of the first,
as provided by the aforequoted provision
of the Civil Code. Such knowledge of the
first buyer does not bar him from availing
of his rights under the law, among them
to register first his purchase as against
the second buyer. In converso,
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 Per records,
the sale of the disputed 620 squaremeter portion of Lot 840 to respondent
INC was made on December 21, 1954
and registered with the Registry of Deeds
of Pangasinan on January 5, 1955. In
fact, INC was issued a title over the same
portion on September 23, 1975. On the
other hand, the conveyance to the
spouses Samuel Ulep and Susana
Repogia-Ulep happened on January 18,
1971 and the spouses registered their
document of conveyance only on
February 22, 1973. Clearly, not only was
respondent INC the first buyer of the
disputed area. It was also the first to
register the sale in its favor long before
petitioners Samuels and Susanas
intrusion as second buyers. Although
Samuel and Susana thereafter registered

the sale made to them, they did so only

after 18 years from the time INC caused
the registration of its own document of
sale.
Registration means any entry made
in the books of the Registry which
records solemnly and permanently the
right of ownership and other real
rights. However, mere registration is not
sufficient. Good faith must concur with
registration, else registration becomes an
exercise in futility. In the instant case, the
registration made by respondent INC of
its deed of sale more than satisfies this
requirement. The same thing cannot be
said of petitioners Samuel Ulep and
Susana Ulep. Said petitioners, by their
own admission, were aware that there
existed an agreement between INC and
vendors Atinedoro Ulep, his wife Beatriz
and sister Valentina Ulep involving a
portion of 100 square meters of Lot 840.
Hence, proof of such knowledge
overcomes the presumption of good
faith. Petitioners allegation of forgery
relative to the deed of sale executed on
December 21, 1954 by the spouses
Atinedoro Ulep, his wife Beatriz and
sister Valentina Ulep over the 620
square-meter portion of Lot 840 cannot
be sustained. As a rule, forgery cannot be
presumed and must be proved by clear,
positive and convincing evidence, the
burden for which lies on the party
alleging it. The fact of forgery can
only be established by a comparison
between the alleged forged signature
and the authentic and genuine
signature of the person whose
signature is theorized to have been
forged. Here, petitioners claim of
forgery is unsupported by any
substantial evidence other than their own
self-serving testimonies. Petitioners
insist that the conveyance of only 100
square meters to INC was in fact
evidenced by a deed of sale
notarized by a certain Atty. Benjamin
Fernandez. However, they sorely failed
to produce in court the said alleged deed
of sale. They could have, at the very

least, presented Atty. Fernandez to prove

the existence of that deed, but they did
not. The only plausible conclusion is that
no such deed exists.
In a last-ditch
but futile attempt to persuade the
Court, petitioners alternatively pray
that INCs portion of 620 square
meters of Lot 840, assuming that INC
is entitled to it, should be taken from
the western portion of the same lot sold
to respondent spouses Warlito Paringit
and Encarnacion Gante, and not from
them. To petitioners, the share of the
spouses Warlito and Encarnacion should
accordingly be reduced from 507.5
square meters to only 197 square
meters. We note, however, that
petitioners never raised before the
trial court nor before the appellate
court the issue of Warlitos and
Encarnacions entitlement to 507.5
square meters. This issue was only posed
by petitioners in the instant petition
before this Court. It is certainly too late
for them to raise said issue for the
first time at this late stage of the
proceedings. Basic considerations of fair
play, justice and due process underlie
the rule. It would be unfair to the adverse
party who would have no opportunity
to present evidence in contra to the
new theory, which it could have done
had it been aware of it at the time of the
hearing before the trial court.
WHEREFORE, the petition is DENIED
and the assailed decision and
resolution of the Court of Appeals
AFFIRMED in toto. SO ORDERED.
16.Leoncio and Barrera v. CA
FACTS: Azalia Salome (Salome) owned
a house and lot located at No. 2641
Bonifacio St., Bangkal, Makati City.
Salome mortgaged the property to
Country Bankers Insurance and Surety
Company to secure a P10,000.00 loan.
On July 1, 1966, Salome sold the property
to Rosendo C. Palabasan. On April 19,
1989, Leoncio and Enriqueta Barrera
(spouses Barrera) filed with the Regional

Trial Court, Makati City, Branch 138, a

complaint against Palabasan for
reconveyance with damages. They
alleged that they had been in possession
of the property since 1962 by virtue of a
Deed of Sale with Assumption of
Mortgage which was not notarized; that
Salome executed a notarized Deed of
Sale with Assumption of Mortgage in
their favor on March 31, 1966; that,
pursuant to this notarized deed, they
settled Salome's obligations with the
Country Bankers Insurance and Surety
Company; that they tried to redeem
the property but were not able to do
so because Palabasan had done so and
the title to the property was released to
Palabasan; that in 1970, they signed a
blank document which was supposed to
become Palabasan's authority to sell the
land for them; that in 1975, they were
surprised to learn that the blank
document which they had signed turned
out to be a contract of lease wherein
they were the lessees and Palabasan was
the lessor of the property; and that
Palabasan registered the property in
his name and was able to secure
Transfer Certificate Palabasan asserted
that he bought the property from Salome
on June 30, 1966, after he had paid the
obligation of Salome with Country
Bankers Insurance and Surety Company;
that he had been issued Transfer
Certificate of Title No. 167387 in his
name after he had the deed of sale
registered; that the spouses Barrera were
in possession of the property as lessees
of Salome; and that a contract of lease
was executed by and between the
spouses Barrera and Palabasan in 1970.
On February 23, 1993, after trial, the
lower court rendered a decision declaring
Palabasan to have validly acquired title
to the property in question. The trial
court, ruling that the case is one of
double sale of an immovable, applied the
second paragraph of Article 1544 of the
Civil Code.
The spouses appealed. On October
25, 1995, the Court of Appeals

promulgated a decision affirming in toto

the decision of the trial court. The
appellate court, however, found Article
1544 of the Civil Code inapplicable to the
case as there was no sale between the
spouses Barrera and Salome because
Salome's testimony given in a previous
case12 to this effect was stricken off the
record since she died prior to crossexamination; the testimony of Cenon
Mateo, the common-law husband of
Salome showed that he was not aware of
the transaction entered into on March 31,
1966; and counsel for spouses Barrera
admitted that the sale transaction in
1962 did not materialize as the property
was mortgaged to Country Bankers
Insurance and Surety Company.
ISSUES: 1. Whether respondent
Palabasan is the owner of the property in
question? 2. Whether there was double
sale of an immovable property covered
by Article 1544 of the Civil Code.
HELD: 1. We find respondent
Palabasan to be the owner of the
property. An action for reconveyance of
a property is the sole remedy of a
landowner whose property has been
wrongfully or erroneously registered in
another's name after one year from the
date of the decree so long as the
property has not passed to an
innocent purchaser for value. The
action does not seek to reopen the
registration proceedings and set aside
the decree of registration but only
purports to show that the person who
secured the registration of the property
in controversy is not the real owner
thereof. Fraud may be a ground for
reconveyance. For an action for
reconveyance based on fraud to
prosper. It must be stressed that mere
allegations of fraud are not enough.
Intentional acts to deceive and deprive
another of his right, or in some manner,
injure him, must be specifically alleged
and proved. As to proof of title to
the property, respondent Palabasan

offered the following: Transfer Certificate

of Title No. 167387, Tax Declaration No.
03251, the Deed of Absolute Sale dated
June 30, 1966, executed by Salome in
favor of respondent Palabasan, the
Contract of Lease, with respondent
Palabasan as the lessor and petitioner
Leoncio Barrera as the lessee, and
the decision for the court of First
Instance, Pasig, Branch XIX in Civil
Case No. 38608, finding respondent
Palabasan to be the lawful owner of
the property covered by Transfer
Certificate of Title No. 167387. 2. Anent
the question of whether this case is one
of double sale, suffice it to say that there
is no sufficient proof on the sale between
Salome and petitioners. There is no
double sale
that would warrant the application of
Article 1544 of the Civil Code. the
evidence petitioners adduced to prove
the sale was the notarized deed executed
on March 31, 1966. However, a perusal of
the deed would show that the sale is
conditioned on the payment by the
petitioners of Salome's obligation with
the Country Bankers Insurance and
Surety Company under the contract of
mortgage. Petitioners submitted no
evidence to show that they complied
with the condition given. Hence, there
was no consummation of the contract
which would transfer ownership of the
property to the petitioners. The only sale
that materialized in this case was the
sale by Salome to respondent
Palabasan that was evidenced by a
deed of absolute sale that enabled
respondent Palabasan to redeem the
property from Country Bankers
Insurance and Surety Company and
consequently to secure Transfer
Certificate of Title No. 167387 in his favor
over the same property.

17. Aitken v Lao

FACTS:

A Chinaman named To Jan Co erected a store

building on a parcel of land belonging to
Apolonia Remigio, under an agreement
whereby one-half of the rents were to go to her
and one-half to To Jan Co. The owner of the
land, not having received the rents agreed
upon, instituted an action against To Jan Co
and one of the occupants of the building to
recover these rents;
Thereafter the house was purchased by the
judgment creditor, Apolonia Remigio, at the
sheriffs sale; she took possession forthwith;
The defendant is the administrator of the
estate of Apolonia Remigio deceased, and is
now in possession of the house and the land
upon which it stands;
Not long after the filing of the complaint, To
Jan Co executed an unregistered deed of sale of
the house in question to another Chinaman
named To Cun, reserving therein the right to
repurchase within ninety days; this right was
never exercised; To Cun (the second
Chinaman) never took possession under this
deed. To Cun (the second Chinaman) executed
an unregistered deed of sale of the house to the
plaintiff in this action, who, on June 9, 1915,
instituted these proceedings wherein he prays a
judgment for possession of the house, and for
an accounting of the rentals collected thereon
since the first day of September, 1908, alleging
that his one-half share of these rentals amounts
to P2,485.
The plaintiff herein seeks to recover the
possession of a certain house that was erected
on land belonging to a third person. The said
land belonged to Apolonia Remigio during her
lifetime but since her death it forms part of her
estate. The estate is administered by Julian La
O. Plaintiff further claims the sum of P2,485, as
being one half of the rentals obtained from the
building since September 1, 1908.
Plaintiff alleges that he is the owner of the said
building designated as numbers 15, 17, 19 and
21 Calle Salazar, district of Binondo, and that
he is entitled to collect rentals therefrom.
The defendant not only denies the plaintiffs
claim to the building and its rentals, but
maintains that the building belongs to said
party defendant.
ISSUE:
HELD: EXECUTION SALE; TITLE OF PURCHASE
AS AGAINST CLAIMANT UNDER PRIOR
UNRECORDED DEED OF SALE. A purchaser in

good faith at a sheriffs sale of all the right, title and

interest of a judgment debtor in a house, is entitled
to the property under the provisions of article 1473
of the Civil Code as against one who claims the
property by virtue of an unrecorded deed of sale
executed in his favor by the judgment debtor prior
to the date of the sheriffs sale, it appearing that the
purchaser at the sheriffs sale secured possession,
and that the claimant under the unrecorded deed of
sale never went into possession

18. Fabian v. Smith, Bell & Co.

FACTS: On the 28th of January 1901 Emiliano
Boncan was the owner of the real estate in
question in this case his title thereto being
recorded in the registry of property. On that
they he sold and conveyed the same by a public
documents to the plaintiffs. This deed was
never recorded in the registry of property. The
appellees, Smith, Bell & Co., having some years
thereafter obtained a judgment against
Emiliano Boncan, levied an execution issued on
said judgment upon the real estate in question,
which then stood upon the said record in the
name of said Boncan. The plaintiffs thereupon
brought this action to restrain the judgment
creditors from selling property under this
execution. Judgment was entered in the court
below in favor of the defendants, and the
plaintiffs have appealed
ISSUE: Whether the levy of an execution
against a judgment debtor upon real estate
which stands in his name in the registry of
property takes precedence or not of an
unrecorded deed of the same property made by
the judgment debtor prior to the levy in
question
HELD:
In accordance with the provisions of Mortgage
Law and the Civil Code, as they have thus
construed by this court, there can be no doubt
that the claim of the appellants is superior to
the claim of the appellees
These provisions of the Spanish law had not
been modified or repealed in the respect by the
Code of Civil Procedure. The section of that
code relating to attachment provide that when
real estate stands upon the records in name of
the defendant the attachment shall be made in
a certain way, and when it stands in the name
of the third person the attachment shall be

made in a certain way; but nothing is said in

any of these sections as to any priority secured
by the attachment. The provision which is
found in the statute law of a great many of the
States of America, to the effect that an
unrecorded deed shall be void as to subsequent
attaching or judgment creditors, nowhere
appears in this code. Article 1473 of the Civil
Code, which gives preference to that one of two
deeds which is first recorded, does not extend
to attachments or executions
19. Caram v. Laureta
FACTS: On June 25, 1959, Claro L. Laureta
filed in the Court of First Instance of Davao an
action for nullity, recovery of ownership and/or
reconveyance with damages and attorney's fees
against Marcos Mata, Codidi Mata, Fermin Z.
Caram Jr. and the Register of Deeds of Davao
City. On June 10, 1945, Marcos Mata conveyed
a large tract of agricultural land covered by
Original Certificate of Title No. 3019 in favor of
Claro Laureta, plaintiff, the respondent herein.
The deed of absolute sale in favor of the
plaintiff was not registered because it was not
acknowledged before a notary public or any
other authorized officer. At the time the sale
was executed, there was no authorized officer
before whom the sale could be acknowledged
inasmuch as the civil government in Tagum,
Davao was not as yet organized. However, the
defendant Marcos Mata delivered to Laureta
the peaceful and lawful possession of the
premises of the land together with the
pertinent papers thereof such as the Owner's
Duplicate Original Certificate of Title No. 3019,
sketch plan, tax declaration, tax receipts and
other papers related thereto. Since June 10,
1945, the plaintiff Laureta had been and is still
in continuous, adverse and notorious
occupation of said land, without being
molested, disturbed or stopped by any of the
defendants or their representatives. In fact,
Laureta had been paying realty taxes due
thereon and had introduced improvements
worth not less than P20,000.00 at the time of
the filing of the complaint. However, the said
property was sold to Fermin Caram, Jr., the
petitioner, by Marcos Mata on May 5, 1947.
And was able to declare the ODOCT in the
possession of Laureta null and void, after Mata

filed for an issuance of new ODOCT before the

RD of Davao on the ground of loss of the said
title. The Trial Court ruled infavor of Laureta,
stating that Caram, Jr. was not a purchaser in
good faith, and the Court of Appeals thenafter
affirmed the decision of the lower court.
PETITIONERS CONTENTION:
The petitioner assails the finding of the trial
court that the second sale of the property was
made through his representatives, Pedro Irespe
and Atty. Abelardo Aportadera. He argues that
Pedro Irespe was acting merely as broker or
intermediary with the specific task and duty to
pay Marcos Mata the sum of P1,000.00 for the
latter's property and to see to it that the
requisite deed of sale covering the purchase
was properly executed by Marcos Mata; that
the identity of the property to be bought and
the price of the purchase had already been
agreed upon by the parties; and that the other
alleged representative, Atty. Aportadera,
merely acted as a notary public in the execution
of the deed of sale. ISSUES: Whether petitioner
have acted in bad faith through his agents
action. RULING: In the case at bar, the court
found that the Attorneys Irespe and Aportadera
had knowledge of the circumstances, and knew
that Mata's certificate of title together with
other papers pertaining to the land was taken
by soldiers under the command of Col. Claro L.
Laureta. Added to this is the fact that at the
time of the second sale Laureta was already in
possession of the land. Irespe and Aportadera
should have investigated the nature of
Laureta's possession. If they failed to exercise
the ordinary care expected of a buyer of real
estate they must suffer the consequences. The
rule of caveat emptor requires the purchaser to
be aware of the supposed title of the vendor
and one who buys without checking the
vendor's title takes all the risks and losses
consequent to such failure. The principle that a
person dealing with the owner of the registered
land is not bound to go behind the certificate
and inquire into transactions the existence of
which is not there intimated 18 should not
apply in this case. It was of common knowledge
that at the time the soldiers of Laureta took the
documents from Mata, the civil government of
Tagum was not yet established and that there
were no officials to ratify contracts of sale and
make them registrable. Obviously, Aportadera

and Irespe knew that even if Mata previously

had sold the disputed property such sale could
not have been registered.cdrep There is no
doubt then that Irespe and Aportadera, acting
as agents of Caram, purchased the property of
Mata in bad faith. Applying the principle of
agency, Caram, as principal, should also be
deemed to have acted in bad faith. Article 1544
of the New Civil Code provides that: "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. (1973)". Since
Caram was a registrant in bad faith, the
situation is as if there was no registration at all
20. De leon v. Ong
Facts:
On March 10, 1993, Raymundo S. De Leon
(petitioner) sold 3 parcels of land to Benita T.
Ong(respondent). The said properties were
mortgaged to a financial institution; Real
Savings & Loan Association Inc. (RSLAI). The
parties then executed a notarized deed of
absolute sale with assumption of mortgage. As
indicated in the deed of mortgage, the parties
stipulated that the petitioner (de Leon) shall
execute a deed of assumption of mortgage in
favor of Ong (respondent)after full payment of
the P415,000. They also agreed that the
respondent (Ong) shall assume the mortgage.
The respondent then subsequently gave
petitioner P415,000 as partial payment. On the
other hand, de Leon handed the keys to Ong
and de Leon wrote a letter to inform RSLAI
that the mortgage will be assumed by Ong.
Thereafter, the respondent took repairs and
made improvements in the properties.
Subsequently, respondent learned that the
same properties were sold to a certain Viloria
after March 10, 1993 and changed the locks,

rendering the keys given to her useless.

Respondent proceeded to RSLAI but she was
informed that the mortgage has been fully paid
and that the titles have been given to the said
person. Respondent then filed a complaint for
specific performance and declaration of nullity
of the second sale and damages. The petitioner
contended that respondent does not have a
cause of action against him because the sale
was subject to a condition which requires the
approval of RSLAI of the mortgage. Petitioner
reiterated that they only entered into a contract
to sell. The RTC dismissed the case. On appeal,
the CA upheld the sale to respondent and
nullified the sale to Viloria. Petitioner moved
for reconsideration to the SC.
Issue:
Whether the parties entered into a contract of
sale or a contract to sell?
Held:
In a contract of sale, the seller conveys
ownership of the property to the buyer upon
the perfection of the contract. The nonpayment of the price is a negative resolutory
condition. Contract to sell is subject to a
positive suspensive condition. The buyer does
not acquire ownership of the property until he
fully pays the purchase price.In the present
case, the deed executed by the parties did not
show that the owner intends to reserve
ownership of the properties. The terms and
conditions affected only the manner of
payment and not the immediate transfer of
ownership. It was clear that the owner intended
a sale because he unqualifiedly delivered and
transferred ownership of the properties to the
respondent

21. SAN LORENZO DEVELOPMENT

CORPORATION VS. CA
FACTS:
On 20 August 1986, the Spouses Lu
purportedly sold the two parcels of land to
respondent Pablo Babasanta. The latter made a

downpayment of fifty thousand pesos

(P50,000.00) as evidenced by a memorandum
receipt issued by Pacita Lu of the same date.
Several other payments totaling two hundred
thousand pesos (P200,000.00) were made by
Babasanta. He demanded the execution of a
Final Deed of Sale in his favor so he may effect
full payment of the purchase price; however,
the spouses declined to push through with the
sale. They claimed that when he requested for a
discount and they refused, he rescinded the
agreement. Thus, Babasanta filed a case for
Specific Performance.
On the other hand, San Lorenzo
Development Corporation (SLDC) alleged that
on 3 May 1989, the two parcels of land
involved, namely Lot 1764-A and 1764-B, had
been sold to it in a Deed of Absolute Sale with
Mortgage. It alleged that it was a buyer in good
faith and for value and therefore it had a better
right over the property in litigation.
ISSUE:
Who between SLDC and Babasanta has
a better right over the two parcels of land?
RULING:
An analysis of the facts obtaining in this
case, as well as the evidence presented by the
parties, irresistibly leads to the conclusion that
the agreement between Babasanta and the
Spouses Lu is a contract to sell and not a
contract of sale.
The receipt signed by Pacita Lu merely
states that she accepted the sum of fifty
thousand pesos (P50,000.00) from Babasanta
as partial payment of 3.6 hectares of farm lot.
While there is no stipulation that the seller
reserves the ownership of the property until full
payment of the price which is a distinguishing
feature of a contract to sell, the subsequent acts
of the parties convince us that the Spouses Lu
never intended to transfer ownership to
Babasanta except upon full payment of the
purchase price.
Babasantas letter dated 22 May 1989
was quite telling. He stated therein that despite
his repeated requests for the execution of the
final deed of sale in his favor so that he could
effect full payment of the price, Pacita Lu
allegedly refused to do so. In effect, Babasanta
himself recognized that ownership of the
property would not be transferred to him until
such time as he shall have effected full payment

of the price. Doubtlessly, the receipt signed by

Pacita Lu should legally be considered as a
perfected contract to sell.
The perfected contract to sell imposed
upon Babasanta the obligation to pay the
balance of the purchase price. There being an
obligation to pay the price, Babasanta should
have made the proper tender of payment and
consignation of the price in court as required
by law. Glaringly absent from the records is
any indication that Babasanta even attempted
to make the proper consignation of the
amounts due, thus, the obligation on the part of
the sellers to convey title never acquired
obligatory force.
There was no double sale in this case
because the contract in favor of Babasanta was
a mere contract to sell; hence, Art. 1544 is not
applicable. There was neither actual nor
constructive delivery as his title is based on a
mere receipt. Based on this alone, the right of
SLDC must be preferred.