CASE DIGESTS – SALES
31. ROSARIO CARBONELL VS CA
RULING:
The buyer of realty must act in good faith in registering his deed of
sale to merit the protection of the second paragraph of Article 1544 of the New
Civil Code. Unlike the first and third paragraphs of said Article which accords
preference to the one who first takes possession in good faith of personal or
real property, the second paragraph directs that ownership of immovable
property should be recognized in favor of one "who in good faith recorded" his
right. Under the first and third paragraphs, good faith must characterize prior
possession. Under the second paragraph, good faith must characterize the act
of anterior registration. If there is no inscription, what is decisive is prior
possession in good faith. If there is inscription, prior registration in good faith
is a pre-condition to support title.
Where the first buyer was not aware - and could not have been aware
- of any sale to another person as there was no such sale, the buyer’s prior
purchase of the land was made in good faith. Her good faith subsisted and
continued to exist when she recorded her adverse claim four days prior to the
registration of the second buyer’s deed of sale. The first buyer’s good faith did
not cease after the seller told her of his second sale of the same lot to the
second buyer. By reason thereof, she has superior right to the land in question.
VALIDITY OF PRIVATE DOCUMENT EXECUTED THEREFOR. — A private
document is a valid contract of sale between the parties, since sale is a
consensual contract and is perfected by mere consent. Even an oral contract of
realty is valid between the parties and accords to the vendee the right to
compel the vendor to execute the proper public document. A private document
can be fully and partially performed to remove it from the operation of the
statute of frauds. Being a valid consensual contract, a private document can
effectively transfer the possession of the lot to the vendee by constitutum
possessorium (Art. 1500, New Civil Code); because thereunder the vendor
continues to retain physical possession of the lot as tenant of the vendee and
no longer as owner thereof.
32. DAGUPAN TRADING VS MACAM
RULING:
 SALES; CONFLICTING SALES; ONE SALE BEFORE REGISTRATION OF
LAND AND THE OTHER AN EXECUTION SALE AFTER REGISTRATION OF
LAND; LAW GOVERNING. — Where one of two conflicting sales of a
piece of land was executed before the land was registered, while the
other was an execution sale in favor of the judgment creditor of the
owner made after the same property had been registered, what should
determine the issue are the provisions of the last paragraph of Section
35, Rule 39 of the Rules of Court to the effect that, upon the execution
and delivery of the final certificate of sale in favor of the purchaser of
land sold in an execution sale, such purchaser "shall be substituted to
and acquire all the rights, title, interest and claim of the judgment
debtor to the property as of the time of the levy."
 Where for a considerable time prior to the levy on execution the
interest of the owner of the land levied upon had already been
conveyed to another who took possession thereof and introduced
improvements therein, the aforesaid levy is void. The prior sale, albeit
unregistered, cannot be deemed automatically cancelled upon the
subsequent issuance of the Torrens title over the land.
 It is our considered view that what should determine the issue are the
provisions of the last paragraph of Section 35, Rule 39 of the Rules of
Court, to the effect that upon the execution and delivery of the final
certificate of sale in favor of the purchaser of land sold in an execution
sale, such purchaser "shall be substituted to and acquire all the right,
title, interest and claim of the judgment debtor to the property as of
the time of the levy." Now We ask: What was the interest and claim of
Sammy Maron on the one-eight portion of the property inherited by
him and his co-heirs, at the time of the levy? The answer must
necessarily be that he had none, because for a considerable time prior
to the levy, his interest had already been conveyed to appellee, "fully
and irretrievably" — as the Court of Appeals held. Consequently,
subsequent levy made on the property for the purpose of satisfying
the judgment rendered against Sammy Maron in favor of the Manila
Trading Company was void and of no effect. (Buson v. Licauco 13 Phil.
357-358; Landig v. U. S. Commercial Company, 89 Phil. 638).
Needless to say, the unregistered sale and the consequent conveyance
of title and ownership in favor of appellee could not have been
cancelled and rendered of no effect upon the subsequent issuance of
the Torrens title over the entire parcel of land.
33. DAVID VS BANDIN
RULING:
Neither can it be claimed that the decree of registration vested ownership in
Juanita Martin. The appellate court, citing jurisprudence established by this Court, held
that the purpose of the Land Registration Act is not to create or vest title, but to
confirm and register title already vested and existing in the applicant for a title.34.
DOCTRINE OF INCONTROVERTIBILITY OF DECREE OF REGISTRATION AND
CONCLUSIVENESS OF TORRENS TITLE; APPLIES IN PURCHASES OF REGISTERED
PROPERTY FROM REGISTERED OWNER AFTER ISSUANCE OF DECREE; CASE AT BAR.
SALES; UNREGISTERED LAND; DEFENSE OF BUYER IN GOOD FAITH CANNOT
BE AVAILED IN PURCHASES OF UNREGISTERED LAND; CASE AT BAR. — As the record
shows, petitioners bought the property when it was still unregistered land. The defense
of having purchased the property in good faith may be availed of only where registered
land is involved and the buyer had relied in good faith on the clear title of the
registered owner. One who purchases an unregistered land does so at his peril. His
claim of having bought the land in good faith, i.e. without notice that some other
person has a right to, or interest in, the property, would not protect him if it turns out
that the seller does not actually own the property. This is what happened in the case at
bar.
The appellate court held that Jose Ramirez and his father Sotero Ramirez were
not purchasers in good faith, not having made diligent investigation of the true
ownership of the properties they bought, but relied merely on the tax declaration
shown to them by the seller, Rufino Miranda.
the issue of good faith or bad faith of the buyer is relevant only where the
subject of the sale is registered land and the purchaser is buying the same from the
registered owner, whose title to the land is clean. In such case, the purchaser who
relies on the clean title of the registered owner is protected if he is a purchaser in good
faith for value.
OLIVAREZ VS GONZALES
RULING:
 The first sale to Tumambini was unregistered, while the second was
in favor of the Olivareses was registered.
 However, the petition for consolidation of ownership did not include
the Olivareses. Thus, deprived of opportunity to be heard.
5. CARAM VS LAURETA
RULING
Bad faith is not based solely on the fact that a vendee had
knowledge of the defect or lack of title of his vendor.
One who purchases real estate with knowledge of a defect
or lack of title in his vendor can not claim that he has acquired title
thereto in good faith, as against the true owner of the land or of an
interest therein, and the same rule must be applied to one who has
knowledge of facts which should have put him upon such inquiry
and investigation as might be necessary to acquaint him with the
defects in the title of his vendor.
A possessor in good faith is one who is not aware that there
exists in his title or mode of acquisition any flaw which invalidates
it. Laureta was first in possession of the property. He is also a
possessor in good faith. It is true that Mata had alleged that the
deed of sale in favor of Laureta was procured by force. Such
defect, however, was cured when, after the lapse of four years
from the time the intimidation ceased, Marcos Mata lost both his
rights to file an action for annulment or to set up nullity of the
contract as a defense in an action to enforce the same.
6. CRUZ VS CABANA
RULING:
A purchaser who has knowledge of fact which would put him
upon inquiry and investigation as to possible defects of the title of the
vendor and fails to make such inquiry and investigation, cannot claim that
he is a purchaser in good faith. Knowledge of a prior transfer of a
registered property by a subsequent purchaser makes him a purchaser in
bad faith and his knowledge of such transfer vitiates his title acquired by
virtue of the latter instrument of conveyance which creates no right as
against the first purchaser
in the second place, the defendants-spouses registered the deed of
absolute sale ahead of plaintiff- appellant. Said spouses were not only able to
obtain the title because at that time, the owner's duplicate certificate was still with
the Philippine National Bank.
In the third place, defendants-spouses have been in possession all along
of the land in question. If immovable property is sold to different vendees, the
ownership shall belong to the person acquiring it who in good faith first recorded
it in the registry of property; and should there be no inscription, the ownership
shall pertain to the person who in good faith was first in the possession
7. VALDEZ VS CA
FACTS:
 Francisco Ante and Manuela Ante were registered owners of a parcel
of land in Quezon City. They executed a special power of attorney in
favor of their son, Antonio, to execute any document of conveyance
over the property and to receive payment therefor.
 Antonio offered to sell it to Eliseo Viernes, who was occupying the
same. However, Viernes declined. He then told Viernes that he will
sell it to the spouses Valdez.
 Antonio Ante and Valdez executed a deed of sale over the disputed
property. The latter demanded for the certificate of title, which
Antonio promised to deliver.
 The spouses started to fence the premises in the presence of Viernes,
as they learned that the property was already purchased by them.
 Ante failed to deliver the certificate of title, as it was used as collateral
to one Dr. Garma. Upon request, the title was entrusted to him, with
the spouses paying for the obligation.
 Upon attempting to register the sale, they learned that the property
was already assigned to the Vierneses. A certificate of title was issued
in their name on the basis of deed of assignment.
ISSUE: Who has a better right in the property?
RULING:
 The court ruled in favor of the Valdez spouses. Under ART 1544, the
first buyer who registers the sale in good faith is afforded with a
better right.
 The sale of the two parcels of land was made in 1980 and 1981,
respectively, but the same was not registered as the title was not in
the possession of Ante.
 In 1982, a deed of assignment was executed in favor of the Vierneses.
They filed for a petition for the issuance of a new COT on the ground
that it is lost.
  From the facts, it can be said that the sale was made prior to the
assignment and that petitioners were able to annotate their adverse
claim as the vendees before the second sale was registered.
 Viernes cannot contend that he is a buyer in good faith, as the
improvements on the lot was made in his presence, which he did not
object.
 The title was never lost, thus, both Ante and Viernes were in bad
faith.
8. NUGUID VS CA
FACTS:
 The deceased spouses Victorino and Crisanta de la Rosa were the
registered owners of a parcel of land in Orani, Bataan.
 They sold one-half of the property to Juliana Salazar.
 Petitioner spouses caused the registration of a document of sale and
partition, which reflected that the heirs of the Dela Rosa spouses
conveyed the entire parcel to them. A transfer of COT was issued in
their favor.
 Private respondents, the heirs of Julieta Salazar, allegedly discovered
the “forgery” as well as the COT of the petitioners, when they
attempted to have the title of their grandmother registered.
 On the other hand, petitioners Nuguid alleged that the property was
sold to them by Nicolas dela Rosa, uncle of the heirs, who had in his
possession the certificate of title. They also asserted that the
occupants of the property did not assert ownership over the same.
 The trial court dismissed the complaint which was reversed by the
CA.
ISSUE: Who has a better right over the property?
RULING:
 Insofar as the respondent heirs of Victorino dela Rosa are concerned,
they are not entitled to any portion of the property. Respondent
Marciana dela Rosa is bound by her signature appearing in the
evidence of the sale.
 Petitioners were able to establish that they are purchasers in good
faith, as an innocent purchaser for value is protected such that when
land has already passed to them, reconveyance cannot be made.
 The heirs of Julieta Salazar cannot claim the land as the sale made to
them was not registered. With this, the Nuguids cannot have known
of the prior sale as the same was not annotated on the title.
9. RADIOWEALTH FINANCE VS PALILEO
FACTS:
 In 1970, defendant spouses Castro sold to plaintiffs Manuelito
Palileo, a parcel of an unregistered coconut land in Surigao. The deed
was not registered. Since then, Palileo exercised acts of ownership
over the land through his mother.
 Subsequently, in 1976, a judgment was rendered against defendant
Castro to pay Radiowealth Finance Company. A writ of execution was
issued. The provincial sheriff levied upon and finally sold to
Radiowealth at a public auction the disputed property.
 Palileo filed for an action to quiet the title, which the court granted.
ISSUE: Who has a better right over the property?
RULING:
 A different set of rules apply in this case, as the land is
unregistered.
 Under act no 3344, the registration of instruments affecting
unregistered lands is without prejudice to a third party with a
better right.
 The mere registration of a sale in one’s favor does not give him a
right over the land if the vendor was not anymore the owner of
the land, having previously sold the same to somebody else even
if the earlier sale is unrecorded.
 1544 has no application to unregistered lands.
 The buyer at an execution sale merely steps into the shoes of the
judgment debtor, and merely acquires his rights and interests.
 Execution sale is null and void as the judgment debtor is no
longer the owner.
10. TANEDO VS CA
FACTS:
 In 1962, Lazaro Tanedo executed a deed of absolute sale in
favor of his oldest brother, Ricardo Tanedo, where he
conveyed one hectare of the share in the lot situated in
Gerona, Tarlac, the same being his future inheritance.
 He executed another affidavit confirming his sale in 1962.
 In 1981, Ricardo learned that the same property was sold to
his children, petitioners herein, through a deed of sale. (DEC
29, 1980) On 1982, they registered the sale in their favor in
the ROD and the entry was made in the COT.
 Petitioners filed a complaint for rescission of the deeds of sale
made by Lazaro to Ricardo. They claimed that their
grandfather, Matias, desired for them to inherit the property,
and that the sale was void because it involved future
inheritance.
 Lazaro revoked the deed of sale in favor of his children,
contending that it was obtained through fraud.
  The heirs learned of the subsequent sale as they were being ejected
ISSUE: Who has a better right to the property? from the land. They filed for annulment of sale and cancellations of
RULING: title, as the second buyers are in bad faith.
 The court ruled that the sale made to Ricardo and to his children, are  They alleged that Arnold told them that the occupants were
no longer infected with the infirmities of the sale made in 1962, squatters, and relied on this without investigation.
which involved a sale of future inheritance.
 The court ruled that Ricardo has a better right over the property. He ISSUE: Who has a better title on the land?
effectively registered the same on June 7, 1982, with the ROD. This is
in accordance under 1544 of the Civil Code. RULING:
 The one who first registers it acquires a better right, even if the first  In all cases of double sale of immovables, good faith is essential. The
buyers are in possession. defense of indefeasibility of Torrens title does not extend to a
transferee who takes it in bad faith.
 The spouses Oceana were not buyers in good faith, for there is
absence of freedom from knowledge of circumstances which ought to
put them on inquiry. At the trial, they admitted to having found
houses on the property, but merely relied on the word of Arnold. The
caretaker also informed them that the lost had been previously sold.
 Spouses should have investigated the nature of their possession.
11. OCEANA VS ESPONILLA  A buyer of real property in the possession of other persons other than
FACTS: the seller must be wary and should investigate the rights of those in
 The case involves a residential lot in Antique owned by the possession.
Tordesillas spouses. They had three children, namely, Harod, Angela
and Rosario, the latter survived by her two children. Arnold and Lilia.
 After their death, the lot was inherited by Harod, Angela and the
grandchildren. They executed a deed of pacto de retro sale in favor of
Alberta Morales, covering the southwestern portion of the lot.
 The deed also attested that the lot was Arnold and Lilia’s share in the
estate.
 Alberta possessed the lot, constructed a house and hired a caretaker.
Arnold borrowed the OCT from Alberta and undertook to return the
same.
 In 1966, Arnold and Angela, without the knowledge of Alberta,
executed deed of extrajudicial settlement declaring the two of them as
the only co-owners without acknowledging the previous sale to
Alberta.
 Angela died in 1983, thus, Arnold declared himself as the sole heir in
an affidavit.
 Alberta died, which was survived by her heirs. They asked for the
COT from Arnold who promised to deliver the same. He then caused
the registration of the land which he subdivided.
 One portion was sold to the Oceana spouses, which was previously
sold to Alberta.