1. AGRIPINO MENDOZA vs. PRIMITIVO KALAW
It cannot affect the rights or interests of
FACTS:
Mendoza presented a petition for registration of a parcel of
land which has an area of 371.6 sqm. He alleged that he
purchased the land of Federico Canet, hence he is the owner in
fee simple of said land. Together with the petition is a plan
containing a technical description of the said land.
Kalaw, the oppositor, alleged that he was the owner and that
he acquired it from the said Federico Canet.
RTC ruled in favor of Mendoza and ordered it registered in the
latter’s name. Kalaw appealed.
Following facts seem to be proved by a large preponderance of
evidence:
1. Sept. 24, 1919; Canet sold under a conditional sale the
parcel of land to Kalaw.
2. Nov. 8, 1919; Canet made an absolute sale of said
parcel of land to Mendoza
3. Nov. 12, 1919; Mendoza took actual possession of
land
4. A representative of the oppositor claimed and
attempted to obtain possession of the lot but the
petitioner refused to deliver the possession
5. Nov. 17, 1919; Kalaw attempted to have his title
registered in the registry of deeds; denied for the
reason that there exist some defect in the description
of the property and that the title of the vendor had not
been register; RD made an anotacion preventive;
ISSUE:
Who has a better right between the two?
RULING:
Mendoza. The registration of the parcel of land in question in the
name of Mendoza was affirmed.
This is a case of a double sale. The first was a conditional sale
while the latter was an absolute sale. While the absolute sale to
the petitioner was subsequent to the conditional sale to Kalaw,
Mendoza obtained the actual possession of the property first.
Mendoza actually paid to his vendor the purchase price, while
the payment of Kalaw depended upon the performance of
certain conditions mentioned in the contract of sale.
In fact, it is hardly a case of two sales because a conditional sale,
before the performance of the condition, can hardly be said to
be a sale of property especially where the condition has not
been complied with. Hence, Art. 1473 can hardly be said to be
applicable.
Netiher can the anotacion preventive be said to have created
any advantage in Kalaw’s favor. A preventive precautionary
notice only protects the rights of the person securing it for a
period of thirty days.
persons who acquired an interest in the property theretofore.
2. NAAWAN COMMUNITY RURAL BANK, INC., vs.. CA AND SPS
ALFREDO AND ANNABELLE LUMO
FACTS:
Guillermo Comayas offered to sell to sps. Lumo a house and lot
located at Pinikitan, Camaman-an, Cagayan De Oro City. The
spouses made inquiries at the RD of CDO and the Bureau of
Lands on the status of the vendor’s title and they found out that
it was mortgaged for P8,000 to Mrs. Galupo. The owner’s copy
of the title was in Mrs. Galupo’s possession.
Sps. Lumo directed Comayas to redeem the property at their
expense, giving P10,000. A release of the adverse claim of
Galupo was annotated on the title which covered the property.
Before the release of the adverse claim, sps. Lumo and
Comayas executed a deed of absolute sale. The property was
sold for P125,000 but the deed of sale reflected the amount of
only P30,000, the amount the private respondents were ready
to pay at the time of the execution of said deed, the balance
payable by installment.
The deed was registered and a new title was issued in favor of
the spouses. Private respondents requested the issuance of a
new tax declaration in their names but they found out that the
property was also declared for tax purposes in the name of
NAAWAN. Records bore the note “this lot is also declared in the
name of Naawan” because Comayas obtained a P15,000 loan
from the bank using the property as security.
At the time said contract of mortgage was entered into, the
subject property was then an unregistered parcel of residential
land, tax-declared in the name of a certain Sergio A. Balibay
while the residential one-storey house was tax-declared in the
name of Comayas.
For failure of Comayas to pay, the real estate mortgage was
foreclosed and the subject property sold at a public auction to
the mortgagee Naawan. Sheriff’s certificate of sale was issued
and registered in the RD of Misamis.
April 1984 – property was registered by RD of CDO as OCT
July 1984 – TCT in the name of Comayas in the RD CDO
Sept 1986 – period of redemption lapsed; sheriff of CDO issued
and delivered to Nawaan the deed of final conveyance. The
deed was registered and recorded by the RD CDO. Naawan
instituted an action for ejectment against Comayas which was
decided in its favor. RTC affirmed.
When the writ of execution of judgment was issued, the
property was no longer occupied by Comayas but by sps Lumo
who bought it from Comayas.
Sps. Lumo filed an action for queting of title which was decided
by the RTC in their favor.
ISSUE:
WON the earlier registration of the sheriff’s deed of final
conveyance should prevail over the later registration of Sps.
Lumo’s deed of absolute sale
RULING:
No.
Where a person claims to have superior proprietary rights over
another on the ground that he derived his title from a sheriff’s
sale registered in the Registry of Property, Art. 1544 will apply
only if said execution sale is registered under Act. 496.
UNFORTUNATELY, the subject property was still untitled when it
was acquired by petitioner bank by virtue of a final deed of
conveyance. On the other hand, when the private respondents
purchased the same property, it was already covered by the
Torrens system.
At the time of the execution of the deed of final conveyance,
the disputed property was already covered by the Land
Registration Act and an OCT. The issuance of a certificate of title
has the effect of relieving the land of all claims except those
noted thereon. Sps. Lumo were not required to go beyond the
register to determine the legal condition of the property, but
only those noted on the register or the certificate of title. To
require them to do more would defeat the primary objective of
the Torrens System which Is to make the Torrens Title
indefeasible and valid against the whole world.
Also, even if the deed of final conveyance was duly recorded,
ownership of the land would still be on the Sps as purchasers in
good faith because they registered the sale first.
ISSUE ON WON SPS. LUMO ARE BUYERS IN GOOD FAITH
Persons dealing with registered land have the legal right to rely
on the face of the Torrens Certificate of Title and to dispense
with the need to inquire further, except when the party has
actual knowledge of facts and circumstances that would impel
a reasonably cautious man to make such inquiry.
SC ruled that Sps. Lumo exercised the required diligence in
ascertaining the legal condition of the title because before
buying the property, inquiries were made with the RD. No liens
or encumbrances were found to have been annotated on the
certificate of title. Neither were they aware of any adverse
claim other than the claim of Galupo but it was eventually
settled.
3. JESUS LIAO vs. CA, I.C. CRUZ CONSTRUCTION, INC and ARLE
DEVELOPMENT CORPORATION
FACTS:
Mapa filed a petition for reconstitution of documents and
issuance of certificates of title over certain parcels of land
covered by an OCT.
Mapa claims that the Director of Lands issued certificates of
sales to Salgado over the parcels of land in accordance with
Friar Lands Act. Salgado assigned the property to Mapa. After
hearing, the trial court granted the petition and ordered the RD
of Quezon City to issue a TCT in the name of Estrella Mapa and
the RD issued the same.
Unfortunately, the titles were in conflict with several existing
certificates of title, resulting in the filing of several actions with
the RTC for quieting of title. Meanwhile, Mapa assigned the
parcels of land in favor of Palmera Agricultural Realty
Development Corporation,, which is a family corporation
headed by Lourdes Angeles, Estralla Mapa’s daughter.
RE: GR NOS. 102961-62
IC Cruz Construction (ICC) filed a petition for annulment of the
order of the RTC. ICC alleged that the title encompassed
property which had been registered and titled in its name. Arle
Realty Development Corp (Arle) also filed a similar petition.
After consolidation of the two cases, in the preliminary
conference, Liao claimed that he purchased the parcels of land
from Palmera by virtue of a Deed of Omnibus Assignment. RTC
ruled in favor of ICC and Arle, declaring RTC order null and void
and the TCTs in issue cancelled. Liao’s MR was denied.
RE: GR. NO. 107525
Respondents Foronda, Dionisio, Pua and Pua Liok Bin filed a
complaint for annulment of title, reconveyance of property,
damages and injunction against Mapa, Angeles, Riosa, Palmos,
Palmera and Maristel Angeles. They allege that the lot ceased
to be part of Friar land when the Director of Lands executed
Deed of Sale to one Carlos Sarmiento, not to Vicente Salgado.
The title contained an encumbrance, which stated that the title
was under investigation by the Verification Committee of LRC.
The report stated that the TCT was fraudulently and irregularly
issued and recommended some courses of action.
NBI agent Ong recommended the prosectution of Estrella Mapa
and Lourdes Angeles for violation of Art. 172 of RPC.
RTC ruled in favor of the respondents. Declared null and void
the TCT in the name of Mapa.
RE: GR 108759
Ruiz, Gomez and Villapa field a complaint for annulment of title,
reconveyance, etc. against Mapa, Angeles, Riosa and Palmos.
RTC ruled in their favor.
Jesus P. Liao, as successor-in-interest of Palmera Agricultural
Realty Development, which was in turn the successor-in-
interest of Mapa filed a petition for annulment of judgment
with the CA. CA denied.
ISSUE:
WON CA erred in upholding the annulment order of the trail
court in LRC case authorizing the issuance of titles on the basis
of sales certificates and technical descriptions as reconstituted
by the LRC.
RULING:
DENIED.
A. Petitioner not owner of land
The sale certificates were void because the sales were not
approved by the Secretary of Agriculture and Natural
Resources, which is indispensable for the validity of the sale of
friar lands. In view of the invalidity of sales, there can be no valid
titles issued on the basis of such sales.
Assuming valid, the certificates of sale became stale ten years
from its issuance. They cannot be the source of documents for
issuance of title more than 70 years later. Mapa’s inaction for a
period of 56 years bars the petitioner from whatever rights he
could have acquired.
B. Double Sale
As between two purchasers, the one who registered the sale in
his favor has a preferred right over the other who has not
registered his title even if the latter is in actual possession.
A certificate is not conclusive evidence of title if the same land
had been registered and an earlier certificate for the same is in
existence.
C. Title not tantamount to ownership
Private respondents’ title must be respected. They have in their
favor the law that protects holders of title under the Torrens
system. Torrens certificate is evidence of an indefeasible title to
property in favor of the person whose name appears thereon.
CA correctly annulled the trial court’s order allowing
registration of the subject property in the name of Estrella
Mapa and her successors in interest.
4. SPOUSES NOEL AND JULIE ABRIGO vs. ROMANA DE VERA
FACTS:
Gloria Villafanie sold a house and lot located at Pangasinan to
Rosenda Tigno-Salazar and Rosita Cave-Go. The sale became a
subject of a suit for annulment of documents between
Villafania and Salazar & Go. RTC approved a compromise
agreement submitted by the parties. Villafania was given one
year to buy back the house and lot and failure to do so would
mean that the previous sale shall remain valid. Villafania failed
to buy back the house so the vendees declared the lot in their
name. Villafania obtained a free patent over the parcel of land
involved. It was later on cancelled by TCT.
Vendees later on sold the house and lot to Sps. Abrigo while
Villafania sold the same to Romana de Vera. De Vera registered
the sale and a tct was issued in her name. De Vera filed an
action for Forcible Entry against Sps which was dismissed.
Spouses filed a case for annulment of documents against
Villafania and RTC ruled in their favor. Both parties appealed to
the CA and the CA held that a void title cannot give rise to a valid
one hence dismissed the appeal of de Vera. CA also dismissed
the appeal of spouses for moral and exemplary damages and
atty’s fees. However, on reconsideration, CA ruled that de Vera
is a purchaser in good faith and for value.
ISSUE:
Who between the petitioner spouses and respondent has a
better right to the property.
RULING:
Otherwise stated, the law provides that a double sale of
immovables 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. In
the instant case, both Petitioners Abrigo and respondent
registered the sale of the property.
De Vera relies on the insight of Justice Paras:
“x x x If the land is registered under the Land Registration Act
(and has therefore a Torrens Title), and it is sold but the
subsequent sale is registered not under the Land Registration
Act but under Act 3344, as amended, such sale is not
considered REGISTERED, as the term is used under Art. 1544 x
x x.”
It is undisputed that Villafania had been issued a free patent
registered as OCT which was later cancelled in Villapana’s
name. as a consequence of the sale, TCT was subsequently
cancelled and another was issued to the respondent.
Soriano v. Heirs of Magali23 held that registration must be done
in the proper registry in order to
bind the land. Since the property in dispute in the present case
was already registered under the Torrens system, petitioners’
registration of the sale under Act 3344 was not effective for
purposes of Article 1544 of the Civil Code.
More recently, in Naawan Community Rural Bank v. Court of
Appeals, the Court upheld the right of a party who had
registered the sale of land under the Property Registration
Decree, as opposed to another who had registered a deed of
final conveyance under Act 3344. In that case, the “priority in
time” principle was not applied, because the land was already
covered by the Torrens system at the time the conveyance was
registered under Act 3344.
“Under Act No. 3344, registration of instruments affecting
unregistered lands is ‘without prejudice to a third party with a
better right.’
Petitioners cannot validly argue that they were fraudulently
misled into believing that the property was unregistered. A
Torrens title, once registered, serves as a notice to the whole
world. All persons must take notice, and no one can plead
ignorance of the registration.
Good Faith requirement
We have consistently held that Article 1544 requires the second
buyer to acquire the immovable in good faith and to register it
in good faith. Mere registration of title is not enough; good faith
must concur with the registration.
Jurisprudence teaches us that ‘(t)he governing principle is
primus tempore, potior jure (first in time, stronger in right).
Knowledge by the first buyer of the second sale cannot defeat
the first buyer’s rights except when the second buyer first
registers in good faith the second sale. Conversely, knowledge
gained by the second buyer of the first sale defeats his rights
even if he is first to register, since such knowledge taints his
registration with bad faith. As stated in the Santiago case,
registration by the first buyer under Act No. 3344 can have the
effect of constructive notice to the second buyer that can
defeat his right as such buyer. However, the cited cases are not
in point.
As can be gathered from the foregoing, constructive notice to
the second buyer through registration under Act 3344 does not
apply if the property is registered under the Torrens system, as
in this case.
Respondent in Good Faith
CA examined the facts and found that De Vera was in good
faith.
Gloria Villafania, [Respondent] De Vera’s vendor, appears to be
the registered owner. The subject land was, and still is,
registered in the name of Gloria Villafania. There is nothing in
her certificate of title and in the circumstances of the
transaction or sale which warrant [Respondent] De Vera in
supposing that she need[ed] to look beyond the title. She had
no notice of the earlier sale of the land to [petitioners]. She
ascertained and verified that her vendor was the sole owner
and in possession of the subject property by examining her
vendor’s title in the Registry of Deeds and actually going to the
premises.
5. RICARDO CHENG vs. RAMON GENATO AND ERNESTO DA JOSE
& SOCORRO DA JOSE
FACTS:
Genato is the owner of two parcels of land located at Paradise
Farms, Bulacan covered by TCTs. He entered into an agreement
with Sps. Da Jose over the said land. A contract to sell was
executed for which the purchase price was P80.00 per sqm and
it was duly annotated at the back of the two tcts.
Da Jose spouses, not having finished verifying the titles
mentioned in Clause 3 as afore-quoted, asked for and was
granted by respondent Genato an extension of another 30
days. However, the extension was granted on condition that a
new set of documents is made. Da Jose spouses denied.
Without notice to the spouses and pending the effectivity of
the extension period, Genato executed an affidavit to annul the
contract to sell. No annotation was made right away.
Cheng expressed interest in buying the properties. Genato
showed TcTs and the annotations and showed him the affidavit
to annul the contract to sell which is not annotated at the titles.
Cheng issued a check upon the assurance that the previous
contract will be annulled. Genato met the spouses at the office
of RC and fount out about the affidavit and reminded Genato
of the extension period. Genato decided to continue the
contract he had with the spouses.
Genito returned the 50k check but Cheng demanded
compliance with their agreement. Genato sent the check to
Cheng; the latter returned the said check reiterating that the
contract to sell had already been perfected.
Cheng executed an adverse claim. Spouses paid Genato the
complete down payment and delivered 3 postdated checks to
cover full payment of the balance.
After trial on the merits, the lower court ruled that the receipt
issued by Genato to Cheng unerringly meant a sale and not just
a priority or an option to buy. It also ruled that there was a valid
recission of the Contract to sell. Spouses and Genato appealed
and the decision was reversed in favor of the spouses.
ISSUE:
Who has a better right over the property?
RULING:
Petition of Cheng was denied.
In a Contract to Sell, the payment of the purchase price is a
positive suspensive condition, the failure of which is not a
breach, casual or serious, but a situation that prevents the
obligation of the vendor to convey title from acquiring an
obligatory force. For its non-fulfillment there will be no contract
to speak of, the obligor having failed to perform the suspensive
condition which enforces a juridical relation.
Obviously, the foregoing jurisprudence cannot be made to
apply to the situation in the instant case because no default can
be ascribed to the Da Jose spouses since the 30-day extension
period has not yet expired.
Even assuming in gratia argumenti that the Da Jose spouses
defaulted, as claimed by Genato, in their Contract to Sell, the
execution by Genato of the affidavit to annul the contract is not
even called for. For with or without the aforesaid affidavit their
non-payment to complete the full downpayment of the
purchase price ipso facto avoids their contract to sell, it being
subjected to a suspensive condition.
Nevertheless, this being so Genato is not relieved from the
giving of a notice, verbal or written, to the Da Jose spouses for
his decision to rescind their contract. Ricardo Cheng’s
contention that the Contract to Sell between Genato and the
Da Jose spouses was rescinded or resolved due to Genato’s
unilateral rescission finds no support in this case.
Cheng was inconsistent in characterizing the contract he
allegedly entered into. In his complaint, Cheng alleged that the
P50,000.00 down payment was earnest money. And next, his
testimony was offered to prove that the transaction between
him and Genato on October 24, 1989 was actually a perfected
contract to sell.” Both courts below correctly held that the
receipt which was the result of their agreement, is a contract to
sell. even if we are to assume that the receipt, Exh. “D,” is to be
treated as a conditional contract of sale, it did not acquire any
obligatory force since it was subject to the suspensive condition
that the earlier contract to sell between Genato and the Da Jose
spouses should first be cancelled or rescinded—a condition
never met.
Notwithstanding this contrary finding with the appellate court,
we are of the view that the governing principle of Article 1544,
Civil Code, should apply in this situation. Jurisprudence38
teaches us that the governing principle is PRIMUS TEMPORE,
PORTIOR JURE (first in time, stronger in right).
The knowledge gained by the Da Jose spouses, as first buyers,
of the new agreement between Cheng and Genato will not
defeat their rights as first buyers except where Cheng, as
second buyer, registers or annotates his transaction ahead of
the spouses. In contrast, knowledge gained by Cheng of the first
transaction defeats his rights.
Even before the receipt was issued to Cheng information of
such pre-existing agreement has been brought to his
knowledge which did not deter him from pursuing his
agreement with Genato.
6. AMANDO CARUMBA vs. CA and ANGELES BOAQUINA
FACTS:
Sps Amado Canuto and Nemesia Ibasco, by virtue of a Deed of
Sale of Unregistered Land with Covenants of Warranty sold a
parcel of land, partly residential and partly coconut land located
in CamSur, to sps Amado Carumba and Benita Canuto for the
sum of P350,00. The deed of sale was never registered in the
RD and the notary was not then an authorized notary public in
the place. Carumba is the brother-in-law of Canuto (the
vendor).
Balbuena filed a complaint against Canuto and Ibasco and a
decision was rendered in favor of the plaintiff and as against the
defendants. The ex-officio Sheriff, Justo V. Imperial, issued a
“definite deed of sale” of the property now in question in favor
of Balbuena, registered before the RD. the aforesaid property
was declared for taxation purposes in the name of Balbuena.
CFI declared Carumba to be the owner of a property after
finding that the latter had taken possession of the land; held
void the execution levy made by the sheriff and nullified the
sale in favor of Balbuena.
CA declared Balbuena’s title was superior to that of Carumba
under Art. 1544 of the CC, since the execution sale had been
properly registered in good faith and the sale to Carumba was
not recorded.
ISSUE:
WON Balbuena has a better right over the property than
Carumba.
RULING:
No.
While under Art. 1544 registration in good faith prevails over
possession in the event of a double sale by the vendor of the
same piece of land, said article cannot be applied even if
Balbuena was ignorant of the prior sale. The reason is that the
purchaser of unregistered land at a sheiff’s execution sale only
steps into the shoes of the judgment dbtor,, and merely
acquires the latter’s interest in the property sold as of the time
the property was levied upon.
While the time of levy does not clearly appear, it could not have
been made prior when the decision aginst the former owners
of the land was rendered in favor of Balbuena, but the deed of
sale in favor of Canuto had been executed two years before and
while only embodied in a private document, the same, coupled
with the fact that the buyer had taken possession of the
unregistered land sold, sufficed to vest ownership on the said
buyer. When the levy was made therefore, the judgment
debtor no longer had dominical interest nor any real right over
the land that could pass to the purchaser at the execution sale.
Hence, the latter must yield the land to Carumba. The rule is
different in case of lands covered by Torrens titles, where the
prior sale is neither recorded nor known to the execution
purchaser prior to the levy, but the land here in question is
admittedly not registered under Act No. 496.
7. RADIOWEALTH FINANCE COMPANY vs. MANUELITO S.
PALILEO
FACTS:
Defendant Sps. Enrique and Herminia Castro sold to plaintiff-
appellee Manuelito Palileo (private respondent), a parcel of
unregistered coconut land situated in Surigao del Norte. The
sale is evidenced by a notarized Deed of Absolute Sale however
it was not registered in the registry of property for unregistered
lands in the province. Palileo exercised acts of ownership over
the land through his mother as administratix or overseer. He
also has continuously paid the real estate taxes on said land
from 1971 until present (1991).
On 1976, a judgment was rendered against Castro to pay
Readiowealth Finance Company the sum of P22, 350.35 with
interest at the rate of 16% per annum from Nov. 2, 1975, and
further sum for atty’s fees and to pay the cocsts. A writ of
execution was issued upon the finality of the judgment.
Provincial Sheriff Eviota through provincial sheriff Risma, levied
upon and finally sold at public auction the subject land that
Castro had sold to Palielo. A certificate of sale was executed in
favor of Radiowealth by being the only bidder. After the period
of redemption has expired, a deed of final sale was also
executed by the same sheriff. Both the certificate and deed
were registered with the RD.
Palileo filed an action for queting of title and the court a quo
rendered a decision in his favor. On appeal, the decision was
affirmed. Radiowealth filed a petition for review.
ISSUE:
WON the rule provided in Art. 1544 is applicable to a parcel of
unregistered land purchased at a judicial sale. Who is the
rightful owner between two buyers (first – unrecorded; second
– purchased in an execution sale registered in RD)
RULING:
The finding of the Court of Appeals that the property in
question was already sold to private respondent by its previous
owner before the execution sale is evidenced by a deed of sale.
No substantive proof to support the petitioner’s allegation that
the document is fictitious or simulated.
What the sheriff levied upon and sold to petitioner is a parcel
of land that does not belong to Castro, the judgment debtor,
hence the execution is contrary to the directive contained in
the writ of execution which commanded that the lands and
buildings belonging to Castro be sold to satisfy the execution.
It must be stressed that this case deals with a parcel of
unregistered land hence the rule on first registrant does not
apply.
Under Act No. 3344, 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 any right over the land if the vendor was not
anymore the owner of the land even if the earlier sale was
unrecorded.
Carumba vs. CA: Art. 1544 has no application to land not
registered under Act. 496.
8. FERMIN CARAM vs. CLARO LAURETA
FACTS:
June 25, 1959 Claro Laureta filed an action of nullity, recovery
of ownership and/or reconveyance against Marcos Mata,
Codidi Mata, Fermin Caram and the RD of Davao.
On June 10, 1945, Marcos Mata conveyed a large tract of
agricultural land covered by OCT in favor of Claro Laureta. The
deed of absolute sale was not registered because it was not
acknowledged before a notry public or any other authorized
officer since the civil gov’t in Tagum was not as yet organized.
Mata delivered to Laureta the peaceful and lawfull possession
of the premises of the land together with the OCT, etc.
2 years after, the same land was sold by Mata to Caram. A deed
of sale was acknowledged before Atty. Abelardo. Matta filed a
petition for the issuance of a new Owner’s duplicate of OCT
alleging the loss of said title. The court directed the RD to issue
such and declare the lost title as null and void. the second sale
was registered with the RD and TCT was issued to Caram.
Mata filed his answer with a counterclaim saying that he signed
the absolute deed of sale with Laureta under duress, threat and
intimidation; plaintiff was a commanding officer. Defendants
Mata also admit the existence of a record regarding a
document signed by him in favor of Caram, but denies that he
signed the document knowing that he had signed a deed of sale
in favor of the plaintiff. He alleges that if ever his thumb mark
appeared in the document, his consent was obtained through
fraud and misrepresentation for he was an illiterate.
Caram filed his answer saying that he has no knowledge about
the previous encumbrances. RTC rendered a decision in favor
of Laureta.
Caram appealed saying that the CA erred in concluding that the
lawyers were the atty’s in fact of him for the purpose of buying
the property. (dami pa issue basta who has the better right
lang)
ISSUE:
WON Caram is a purchaser in GF
Who has a better right
RULING:
The first sale in favor of Laureta prevails over the sale in favor of
Caram.
The facts of record show that Mata, the vendor, and Caram, the
second vendee had never met. During the trial, Marcos Mata
testified that he knows Atty. Aportadera but did not know
Caram. Thus, the sale of the property could have only been
through Caram’s representatives, Irespe and Aportadera.
The petitioner contends that he cannot be considered to have
acted in bad faith because there is no direct proof showing that
Irespe and Aportadera, his alleged agents, had knowledge of
the first sale to Laureta. – no merit.
There is every reason to believe that Irespe and he had known
of the sale of the property in question to Laureta on the day
Mata and Irespe, accompanied by Leoning Mansaca, went to
the office of Atty. Aportadera for the sale of the same property
to Caram, Jr., represented by Irespe as attorney-in-fact.
Even if Irespe and Aportadera did not have actual knowledge of
the first sale, still, their actions have not satisfied the
requirement of good faith. 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 cannot claim that he has
acquired title thereto in good faith.
Both of them 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. 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,
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.
Since Caram was a registrant in bad faith, the situation is as if
there was no registration at all.
The question to be determined now is, who was first in
possession in good faith? Laureta was first in possession of the
property. He is also a possessor in good faith.
Another contention of the petitioner is that the contract is
voidable on the ground of froud. Being a voidable contract, the
action for annulment must be brought within 4 years from the
discovery of fraud.
The petitioner’s conclusion that the second deed of sale,
“Exhibit F”, is a voidable contract is not correct. In order that
fraud can be a ground for the annulment o f a contract, it must
be employed prior to or simultaneous to the consent or
creation of the contract. The fraud or dolo causante must be
that which determines or is the essential cause of the contract.
The second deed of sale in favor of Caram is not a voidable
contract, hence prescription of action shall not apply.
Moreover, Laureta has been in continuous possession of the
land since he bought it. A more important reason why Laureta’s
action could not have prescribed is that the second contract of
sale, having been registered in bad faith, is null and void. Any
action or defense for the declaration of the inexistence of a
contract does not prescribe.
ROSARIO CARBONELL vs. CA, JOSE PONCIO, EMMA INFANTE AND
RAMON INFANTE
Facts:
 Respondent Jose Poncio was the owner of the parcel of
land located in Rizal. (Area – more or less 195 sq. m.)
 The said lot was subject to mortgage in favor of the
Republic Savings Bank for the sum of P1,500.00.
 Carbonell and respondent Emma Infante offered to buy
the said lot from Poncio.
 Poncio offered to sell his lot to Carbonell excluding the
house on which he and his family stayed. Carbonell
accepted the offer and proposed the price of P9.50/sq.
m..
 Poncio accepted the price on the condition that from
the purchase price would come the money to be paid to
the bank.
 January 27, 1995: The parties executed a document in
the Batanes dialect which is translated as: CONTRACT
FOR ONE HALF LOT WHICH I (Poncio) BOUGHT FROM.
 Carbonell asked a lawyer to prepare the deed of sale
and delivered the document, together with the balance
of P400, to Jose Poncio. (Note: Carbonell already paid
P200 for the mortgage debt of Poncio + obligated
herself to pay the remaining installments.)
 However, when she went to Poncio, the latter informed
her that he could no longer proceed with the sale as the
lot was already sold to Emma Infante and that he could
not withdraw with the sale.
 Poncio admitted that on January 30, 1995, Mrs. Infante
improved her offer and he agreed to sell the land and
its improvements to her for P3,535.00.
 In a private memorandum agreement, Poncio bound to
sell to Infante the lot for the sum of P2,357.52, with
Infante still assuming the mortgage debt of P1,177.48.
(Note: The full amount of mortgage debt was already
paid by the Infantes)
 February 2, 1995: A deed of sale was executed between
Poncio and Infante.
 February 8, 1995: Knowing that the sale to Infante has
not been registered, Carbonell filed an adverse claim.
 February 12, 1995: The deed of sale was registered but
it has an annotation of the adverse claim of Carbonell.
 Thereafter, Emma Infante took possession of the lot,
built a house and introduced some improvements.
 In June 1995, Carbonell filed a complaint praying that
she be declared the lawful owner of the land, that the
subsequent sale to spouses Infante be declared null and
void, and that Jose Poncio be ordered to execute the
corresponding deed of conveyance of said land in her
favor
 RTC ruled that the sale to spouses Infante was null and
void. After re-trial, it reversed its ruling. CA ruled in
favor of Carbonell but after a MfR, it reversed its ruling
and ruled in favor of the Infantes.
Issue: WON Carbonell has a superior right over Emma Infante.
YES
Held:
Article 1544 provides that for double sale of an immovable
property, the ownership shall belong to the person who first
acquired it in good faith and recorded it in the Registry of
Property
Article 1544, New Civil Code, which is decisive of this case,
recites:
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 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.
The buyer must act in good faith in registering the deed of sale
It is essential that the buyer of realty must act in good faith in
registering his deed of sale to merit the protection of the
second paragraph of said Article 1544.
Unlike the first and third paragraphs of said Article 1544, which
accord 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 first recorded" his right. Under
the first and third paragraph, good faith must characterize the
act of anterior registration.
Rule when there is inscription or not
If there is no inscription, what is decisive is prior possession in
good faith. If there is inscription, as in the case at bar, prior
registration in good faith is a pre-condition to superior title.
Carbonell was in good faith when she bought the lot
When Carbonell bought the lot from Poncio on January 27,
1955, she was the only buyer thereof and the title of Poncio
was still in his name solely encumbered by bank mortgage duly
annotated thereon. Carbonell was not aware — and she could
not have been aware — of any sale of Infante as there was no
such sale to Infante then.
Hence, Carbonell'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 (4) days prior to the
registration of Infantes's deed of sale.
Carbonell’s good faith did not cease when she was informed by
Poncio about the sale to Emma Infante
After learning about the second sale, Carbonell tried to talk to
the Infantes but the latter refused.
(Exact words of the SC: With an aristocratic disdain unworthy
of the good breeding of a good Christian and good neighbor,
Infante snubbed Carbonell like a leper and refused to see her.)
So Carbonell did the next best thing to protect her right — she
registered her adversed claim on February 8, 1955. Under the
circumstances, this recording of her adverse claim should be
deemed to have been done in good faith and should emphasize
Infante's bad faith when she registered her deed of sale four (4)
days later on February 12, 1955.
The Infantes were in bad faith (5 indications of bad faith listed
below)
Bad faith arising from previous knowledge by Infante of the
prior sale to Carbonell is shown by the following facts:
1. Mrs. Infante refused to see Carbonell.
Her refusal to talk to Carbonell could only mean that she did
not want to listen to Carbonell's story that she (Carbonell) had
previously bought the lot from Poncio.
2. Carbonell was already in possession of mortgage passbook
and copy of the mortgage contract. (Not Poncio’s saving
deposit passbook.)
Infante naturally must have demanded from Poncio the
delivery to her of his mortgage passbook and mortgage
contract so that the fact of full payment of his bank mortgage
will be entered therein; and Poncio, as well as the bank, must
have inevitably informed her that said mortgage passbook
could not be given to her because it was already delivered to
Carbonell.
3. Emma Infante did not inquire why Poncio was no longer in
possession of the mortgage passbook and why it was in
Carbonell’s possession.
The fact that Poncio was no longer in possession of his
mortgage passbook and that the said mortgage passbook was
already in possession of Carbonell, should have compelled
Infante to inquire from Poncio why he was no longer in
possession of the mortgage passbook and from Carbonell why
she was in possession of the same.
4. Emma Infante registered the sale under her name after
Carbonell filed an adverse claim 4 days earlier.
Here she was again on notice of the prior sale to Carbonell. Such
registration of adverse claim is valid and effective.
5. Infante failed to inquire to Poncio WON he had already sold
the property to Carbonell especially that it can be shown that
he was aware of the offer made by Carbonell.
Poncio alleged in his answer that Mrs. Infante and Mrs.
Carbonell offered to buy the lot at P15/sq. m. which offers he
rejected as he believed that his lot is worth at least P20.00/sq.
m. It is therefore logical to presume that Infante was told by
Poncio and consequently knew of the offer of Carbonell which
fact likewise should have put her on her guard and should have
compelled her to inquire from Poncio whether or not he had
already sold the property to Carbonell
The existence of prior sale to Carbonell was duly established
From the terms of the memorandum, it tends to show that the
sale of the property in favor of Carbonell is already an
accomplished act. As found by the trial court, to repeat the said
memorandum states "that Poncio is allowed to stay in the
property which he had sold to the plaintiff ..., it tends to show
that the sale of the property in favor of the plaintiff is already
an accomplished act..."
There was an adequate consideration or price for the sale in
favor of Carbonell
Poncio agreed to sell the same to Carbonell at P9.50 per square
meter, on condition that Carbonell:
1. should pay (a) the amount of P400.00 to Poncio and the
arrears in the amount of P247.26 to the bank
2. should assume his mortgage indebtedness.
The bank president agreed to the said sale with assumption of
mortgage in favor of Carbonell an Carbonell accordingly paid
the arrears of P247.26.
It is evident therefore that there was ample consideration, and
not merely the sum of P200.00, for the sale of Poncio to
Carbonell of the lot in question.
The subject property was identified and described
The court has arrived at the conclusion that there is sufficient
description of the lot referred to in Exh. As none other than the
parcel of lot occupied by the defendant Poncio and where he
has his improvements erected. The Identity of the parcel of land
involved herein is sufficiently established by the contents of the
note Exh. 'A'.
ROMULO CORONEL VS. CA
FACTS:
This case is about a sale of land in Roosevelt Avenue, Quezon
City by the vendor Romulo Coronel to the vendees Conception
Alcaraz and her daughter Ramona Patricia Alcaraz with the
following conditions:
the title to the buyer, but since the title is still in the name effect
the transfer even though the buyers are able and willing to
immediately pay the purchase price. The agreement as well
could not have been a contract to sell because the seller or the
Coronel’s made no express reservation of ownership or the title
of the land.
On Feb. 6, 1985, the Contract of Sale between the Coronel’s
and the Alcaraz’ became obligatory.

The Coronel’s will immediately transfer the certificate of title in

their name upon receipt of the downpayment which is ₱50,000.

Upon the transfer in their names of the subject property, the

Coronel’s will execute the deed of absolute sale in favor of
Ramona and then Ramona shall immediately pay the Coronel’s
the whole balance of ₱1,190,000.

On January 15, 1985, Conception paid the downpayment of

₱50,000 and then on February 6, 1985, the property was now
registered under the name of Coronel’s. By Feb. 18, 1985, the
Coronel’s sold the property to Catalina B. Mabanag for
₱1,580,000 after she made a ₱300,000 downpayment. This is
the reason why the Coronel’s cancelled and rescind the
contract with the Alcaraz by depositing back the ₱50,000 to
Ramona’s bank account.

On Feb. 22, Conception filed a complaint for specific

performance against the Coronel’s. On April, the Coronel’s
executed a deed of absolute sale over the subject property to
Catalina after which on June Catalina was issued a new title
over the subject property.

ISSUE:

Whether or not the “Receipt of Down payment” embodied a

perfected contract of sale or just a mere contract to sell?

HELD:

CONTRACT OF SALE- contracting parties obligates himself to

transfer the ownership and to deliver a determinate thing and
the other to pay a price certain in money or its equivalent.

CONTRACT TO SELL- the prospective seller explicitly reserves

the transfer of the title to the prospective buyer, meaning the
seller does not yet agree or consent to transfer the ownership
of the property until the happening of a contingent event like
full payment of price.

SUPREME COURT RULING:

When the “Receipt of Down Payment” document was

prepared and signed by Romulo Coronel, the parties had
agreed to a conditional contract of sale the consummation of
the contract is subject only to the successful transfer of the
certificate of Title.

According to Supreme Court, the receipt of down payment

document manifests a clear intent of the Coronel’s to transfer