Cases Set 6

[G.R. No. 103577. October 7, 1996.
]
ROMULO A. CORONEL v COURT OF APPEALS
The petition before us has its roots in a complaint for specific performance to compel herein petitioners
(except the last named, Catalina Balais Mabanag) to consummate the sale of a parcel of land with its
improvements located along Roosevelt Avenue in Quezon City entered into by the parties sometime in
January 1985 for the price of P1,240,000.00
The undisputed facts of the case were summarized by respondent court in this wise:
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On January 19, 1985, defendants-appellants Romulo Coronel, Et. Al. (hereinafter referred to as Coronels)
executed a document entitled "Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona Patricia
Alcaraz (hereinafter referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT

P1,240,000.00 Total amount
50,000.00 Down payment
P1,190,000.00 Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by TCT No. 119627 of the Registry of Deeds of
Quezon City, in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased father, Constancio P. Coronel, the
transfer certificate of title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately execute the deed of absolute sale of
said property and Miss Ramona Patricia Alcaraz shall immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1. Ramona will make a down payment of Fifty Thousand (P50,000.00) Pesos upon execution of the
document aforestated;
2. The Coronels will cause the transfer in their names of the title of the property registered in the name of
their deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down payment.
3. Upon the transfer in their names of the subject property, the Coronels will execute the deed of absolute
sale in favor of Ramona and the latter will pay the former the whole balance of One Million One Hundred
Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafter referred to as
Concepcion), mother of Ramona, paid the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B",
Exh. "2").
On February 6, 1985, the property originally registered in the name of the Coronels father was transferred
in their names under TCT No. 327043 (Exh. "D" ; Exh. "4")
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenor-appellant
Catalina B. Mabanag (hereinafter referred to as Catalina) for One Million Five Hundred Eighty Thousand
(P1,580,000.00) Pesos after the latter has paid Three Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3" ;
Exh. "6-C")
For this reason, Coronels canceled and rescinded the contract (Exh. "A") with Ramona by depositing the
down payment paid by Concepcion in the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, Et Al., filed a complaint for specific performance against the Coronels
and caused the annotation of a notice of lis pendens at the back of TCT No. 327403 (Exh. "E" ; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the same property
with the Registry of Deeds of Quezon City (Exh. "F" ; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property in favor of
Catalina (Exh. "G" ; Exh. "7").
On June 5, 1985, a new title over the subject property was issued in the name of Catalina under TCT No.
351582 (Exh. "H" ; Exh. "8").
(Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the parties agreed to
submit the case for decision solely on the basis of documentary exhibits. Thus, plaintiffs therein (now private
respondents) proffered their documentary evidence accordingly marked as Exhibits "A" through "J", inclusive
of their corresponding submarkings. Adopting these same exhibits as their own, then defendants (now
petitioners) accordingly offered and marked them as Exhibits "1" through "10", likewise inclusive of their
corresponding submarkings. Upon motion of the parties, the trial court gave them thirty (30) days within
which to simultaneously submit their respective memoranda, and an additional 15 days within which to
submit their corresponding comment or reply thereto, after which, the case would be deemed submitted for
resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who was then
temporarily detailed to preside over Branch 82 of the RTC of Quezon City. On March 1, 1989, judgment was
handed down by Judge Roura from his regular bench at Macabebe, Pampanga for the Quezon City branch,
disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered ordering defendant to execute in favor
of plaintiffs a deed of absolute sale covering that parcel of land embraced in and covered by Transfer
Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of Deeds for Quezon City, together with
all the improvements existing thereon free from all liens and encumbrances, and once accomplished, to
immediately deliver the said document of sale to plaintiffs and upon receipt thereof, the plaintiffs are
ordered to pay defendants the whole balance of the purchase price amounting to P1,190,000.00 in cash.
Transfer Certificate of Title No. 331582 of the Registry of Deeds for Quezon City in the name of intervenor is
hereby canceled and declared to be without force and effect. Defendants and intervenor and all other
persons claiming under them are hereby ordered to vacate the subject property and deliver possession
thereof to plaintiffs. Plaintiffs claim for damages and attorneys fees, as well as the counterclaims of
defendants and intervenors are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioners before the new presiding judge of the Quezon City RTC
but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and to render anew decision by the
undersigned Presiding Judge should be denied for the following reasons: (1) The instant case became
submitted for decision as of April 14, 1988 when the parties terminated the presentation of their respective
documentary evidence and when the Presiding Judge at that time was Judge Reynaldo Roura. The fact that
they were allowed to file memoranda at some future date did not change the fact that the hearing of the
case was terminated before Judge Roura and therefore the same should be submitted to him for decision;
(2) When the defendants and intervenor did not object to the authority of Judge Reynaldo Roura to decide
the case prior to the rendition of the decision, when they met for the first time before the undersigned
Presiding Judge at the hearing of a pending incident in Civil Case No. Q-46145 on November 11, 1988, they
were deemed to have acquiesced thereto and they are now estopped from questioning said authority of
Judge Roura after they received the decision in question which happens to be adverse to them; (3) While it
is true that Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of the Court, he was in all
respects the Presiding Judge with full authority to act on any pending incident submitted before this Court
during his incumbency. When he returned to his Official Station at Macabebe, Pampanga, he did not lose his
authority to decide or resolve such cases submitted to him for decision or resolution because he continued
as Judge of the Regional Trial Court and is of co-equal rank with the undersigned Presiding Judge. The
standing rule and supported by jurisprudence is that a Judge to whom a case is submitted for decision has
the authority to decide the case notwithstanding his transfer to another branch or region of the same court
(Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989 rendered in the
instant case, resolution of which now pertains to the undersigned Presiding Judge, after a meticulous
examination of the documentary evidence presented by the parties, she is convinced that the Decision of
March 1, 1989 is supported by evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or to Annul Decision and Render Anew
Decision by the Incumbent Presiding Judge" dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals (Buena,
Gonzaga-Reyes, Abad Santos (P), JJ.,) rendered its decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private respondents Reply
Memorandum, was filed on September 15, 1993. The case was, however, re-raffled to undersigned ponente
only on August 28, 1996, due to the voluntary inhibition of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of respondent court in the
affirmance of the trial courts decision, we definitely find the instant petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in the case at bar
is the precise determination of the legal significance of the document entitled "Receipt of Down Payment"
which was offered in evidence by both parties. There is no dispute as to the fact that said document
embodied the binding contract between Ramona Patricia Alcaraz on the one hand, and the heirs of
Constancio P. Coronel on the other, pertaining to a particular house and lot covered by TCT No. 119627, as
defined in Article 1305 of the Civil Code of the Philippines which reads as follows:
Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service.
While, it is the position of private respondents that the "Receipt of Down Payment" embodied a perfected
contract of sale, which perforce, they seek to enforce by means of an action for specific performance,
petitioners on their part insist that what the document signified was a mere executory contract to sell,
subject to certain suspensive conditions, and because of the absence of Ramona P. Alcaraz, who left for the
United States of America, said contract could not possibly ripen into a contract of absolute sale.
Plainly, such variance in the contending parties contentions is brought about by the way each interprets the
terms and/or conditions set forth in said private instrument. Withal, based on whatever relevant and
admissible evidence may be available on record, this Court, as were the courts below, is now called upon to
adjudge what the real intent of the parties was at the time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership
of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its
equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The essential
elements of a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because the first
essential element is lacking. In a contract to sell, the prospective seller explicitly reserves the transfer of
title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer
ownership of the property subject of the contract to sell until the happening of an event, which for present
purposes we shall take as the full payment of the purchase price. What the seller agrees or obliges himself
to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is
delivered to him. In other words the full payment of the purchase price partakes of a suspensive condition,
the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by
the prospective seller without further remedies by the prospective buyer. In Roque v. Lapuz (96 SCRA 741
[1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the respondent was a contract to sell where the
ownership or title is retained by the seller and is not to pass until the full payment of the price, such
payment being a positive suspensive condition and failure of which is not a breach, casual or serious, but
simply an event that prevented the obligation of the vendor to convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment of the purchase
price, the prospective sellers obligation to sell the subject property by entering into a contract of sale with
the prospective buyer becomes demandable as provided in Article 1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the
promissor if the promise is supported by a consideration distinct from the price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds
himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed
upon, that is, full payment of the purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional contract of sale
where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a
suspensive condition, because in a conditional contract of sale, the first element of consent is present,
although it is conditioned upon the happening of a contingent event which may or may not occur. If the
suspensive condition is not fulfilled, the perfection of the contract of sale is completely abated (cf. Homesite
and Housing Corp. v. Court of Appeals, 133 SCRA 777 [1984]). However, if the suspensive condition is
fulfilled, the contract of sale is thereby perfected, such that if there had already been previous delivery of
the property subject of the sale to the buyer, ownership thereto automatically transfers to the buyer by
operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment of the
purchase price, ownership will not automatically transfer to the buyer although the property may have been
previously delivered to him. The prospective seller still has to convey title to the prospective buyer by
entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale specially in cases
where the subject property is sold by the owner not to the party the seller contracted with, but to a third
person, as in the case at bench. In a contract to sell, there being no previous sale of the property, a third
person buying such property despite the fulfillment of the suspensive condition such as the full payment of
the purchase price, for instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot
seek the relief of reconveyance of the property. There is no double sale in such case. Title to the property
will transfer to the buyer after registration because there is no defect in the owner-sellers title per se, but
the latter, of course, may be sued for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the sale becomes
absolute and this will definitely affect the sellers title thereto. In fact, if there had been previous delivery of
the subject property, the sellers ownership or title to the property is automatically transferred to the buyer
such that, the seller will no longer have any title to transfer to any third person. Applying Article 1544 of the
Civil Code, such second buyer of the property who may have had actual or constructive knowledge of such
defect in the sellers title, or at least was charged with the obligation to discover such defect, cannot be a
registrant in good faith. Such second buyer cannot defeat the first buyers title. In case a title is issued to
the second buyer, the first buyer may seek reconveyance of the property subject of the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real nature of the
contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given their natural and
ordinary meaning unless a technical meaning was intended (Tan v. Court of Appeals, 212 SCRA 586 [1992]).
Thus, when petitioners declared in the said "Receipt of Down Payment" that they
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos
purchase price of our inherited house and lot, covered by TCT No. 1199627 of the Registry of Deeds of
Quezon City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the natural and ordinary idea
conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more manifest that there was
a clear intent on the part of petitioners to transfer title to the buyer, but since the transfer certificate of title
was still in the name of petitioners father, they could not fully effect such transfer although the buyer was
then willing and able to immediately pay the purchase price. Therefore, petitioners-sellers undertook upon
receipt of the down payment from private respondent Ramona P. Alcaraz, to cause the issuance of a new
certificate of title in their names from that of their father, after which, they promised to present said title,
now in their names, to the latter and to execute the deed of absolute sale whereupon, the latter shall, in
turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no express
reservation of ownership or title to the subject parcel of land. Furthermore, the circumstance which
prevented the parties from entering into an absolute contract of sale pertained to the sellers themselves (the
certificate of title was not in their names) and not the full payment of the purchase price. Under the
established facts and circumstances of the case, the Court may safely presume that, had the certificate of
title been in the names of petitioners-sellers at that time, there would have been no reason why an absolute
contract of sale could not have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to sell the
property to private respondent upon the fulfillment of the suspensive condition. On the contrary, having
already agreed to sell the subject property, they undertook to have the certificate of title changed to their
names and immediately thereafter, to execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after compliance by the buyer
with certain terms and conditions, promised to sell the property to the latter. What may be perceived from
the respective undertakings of the parties to the contract is that petitioners had already agreed to sell the
house and lot they inherited from their father, completely willing to transfer full ownership of the subject
house and lot to the buyer if the documents were then in order. It just so happened, however, that the
transfer certificate of title was then still in the name of their father. It was more expedient to first effect the
change in the certificate of title so as to bear their names. That is why they undertook to cause the issuance
of a new transfer of the certificate of title in their names upon receipt of the down payment in the amount of
P50,000.00. As soon as the new certificate of title is issued in their names, petitioners were committed to
immediately execute the deed of absolute sale. Only then will the obligation of the buyer to pay the
remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into so as to protect the
seller against a buyer who intends to buy the property in installment by withholding ownership over the
property until the buyer effects full payment therefor, in the contract entered into in the case at bar, the
sellers were the ones who were unable to enter into a contract of absolute sale by reason of the fact that the
certificate of title to the property was still in the name of their father. It was the sellers in this case who, as
it were, had the impediment which prevented, so to speak, the execution of a contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the said "Receipt of
Down Payment" was prepared and signed by petitioners Romulo A. Coronel, Et Al., the parties had agreed to
a conditional contract of sale, consummation of which is subject only to the successful transfer of the
certificate of title from the name of petitioners father, Constancio P. Coronel to their names.
The Court significantly notes that this suspensive condition was, in fact, fulfilled on February 6, 1985 (Exh.
"D" ; Exh. "4"). Thus, on said date, the conditional contract of sale between petitioners and private
respondent Ramona P. Alcaraz became obligatory, the only act required for the consummation thereof being
the delivery of the property by means of the execution of the deed of absolute sale in a public instrument,
which petitioners unequivocally committed themselves to do as evidenced by the "Receipt of Down
Payment."
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Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the case at bench.
Thus,
Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts.
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitutes the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title in petitioners
names was fulfilled on February 6, 1985, the respective obligations of the parties under the contract of sale
became mutually demandable, that is, Petitioners, as sellers, were obliged to present the transfer certificate
of title already in their names to private respondent Ramona P. Alcaraz, the buyer, and to immediately
execute the deed of absolute sale, while the buyer on her part, was obliged to forthwith pay the balance of
the purchase price amounting to P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners conclusively
admitted that:
3. The petitioners-sellers Coronel bound themselves "to effect the transfer in our names from our deceased
father Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the downpayment
above-stated." The sale was still subject to this suspensive condition. (Emphasis supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a suspensive condition.
Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first transferring the title to the property
under their names, there could be no perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they have set their own trap for themselves, for Article 1186 of the Civil Code expressly
provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more controlling these mere hypothetical
arguments is the fact that the condition herein referred to was actually and indisputably fulfilled on February
6. 1985, when a new title was issued in the names of petitioners as evidenced by TCT No. 327403 (Exh
"D" ; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document denominated as
"Receipt of Down Payment" (Exh. "A" ; Exh "1"), the parties entered into a contract of sale subject only to
the suspensive condition that the sellers shall effect the issuance of new certificate of title from that of their
fathers name to their names and that, on February 6, 1985, this condition was fulfilled (Exh. "D" ; Exh "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides
Art. 1187. The effects of conditional obligation to give, once the condition has been fulfilled, shall retroact to
the day of the constitution of the obligation . . .
In obligations to do or not to do, the courts shall determine, in each case, the retroactive effect of the
condition that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale became mutually due
and demandable as of the time of fulfillment or occurrence of the suspensive condition on February 6, 1985.
As of that point in time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because they were then
not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as follows:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the
extent and value of the inheritance of a person are transmitted through his death to another or others by his
will or by operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent Constancio P. Coronel are
compulsory heirs who were called to succession by operation of law. Thus, at the point their father drew his
last breath, petitioners stepped into his shoes insofar as the subject property is concerned, such that any
rights or obligations pertaining thereto became binding and enforceable upon them. It is expressly provided
that rights to the succession are transmitted from the moment of death of the decedent (Article 777, Civil
Code; Cuison v. Villanueva, 90 Phil. 850 [1952]).
Be it also noted that petitioners claim that succession may not be declared unless the creditors have been
paid is rendered moot by the fact that they were able to effect the transfer of the title to the property from
the decedents name to their names on February 6. 1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter into an
agreement at that time and they cannot be allowed to now take a posture contrary to that which they took
when they entered into the agreement with private respondent Ramona P. Alcaraz. The Civil Code expressly
states that:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time of sale, petitioners
cannot claim now that they were not yet the absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between them and
Ramona P. Alcaraz, the latter breached her reciprocal obligation when she rendered impossible the
consummation thereof by going to the United States of America, without leaving her address, telephone
number, and Special Power of Attorney (Paragraphs 14 and 15, Answer with Compulsory Counterclaim to the
Amended Complaint, p. 2; Rollo, p. 43), for which reason, so petitioners conclude, they were correct in
unilaterally rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in the instant case.
We note that these supposed grounds for petitioners rescission, are mere allegations found only in their
responsive pleadings, which by express provision of the rules, are deemed controverted even if no reply is
filed by the plaintiffs (Sec. 11, Rule 6, Revised Rules of Court). The records are absolutely bereft of any
supporting evidence to substantiate petitioners allegations. We have stressed time and again that
allegations must be proven by sufficient evidence (Ng Cho Cio v. Ng Diong, 110 Phil. 882 [1961]; Recaro v.
Embisan, 2 SCRA 598 [1961]). Mere allegation is not an evidence (Lagasca v. De Vera, 79 Phil. 376
[19471]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on February 6, 1985,
we cannot justify petitioners-sellers act of unilaterally and extrajudicially rescinding the contract of sale,
there being no express stipulation authorizing the sellers to extrajudicially rescind the contract of sale. (cf
Dignos v. CA, 158 SCRA 375 [1988]; Taguba v. Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz because although
the evidence on record shows that the sale was in the name of Ramona P. Alcaraz as the buyer, the sellers
had been dealing with Concepcion D. Alcaraz, Ramonas mother, who had acted for and in behalf of her
daughter, if not also in her own behalf. Indeed, the down payment was made by Concepcion D. Alcaraz with
her own personal check (Exh. "B" ; Exh. "2") for and in behalf of Ramona P. Alcaraz. There is no evidence
showing that petitioners ever questioned Concepcions authority to represent Ramona P. Alcaraz when they
accepted her personal check. Neither did they raise any objection as regards payment being effected by a
third person. Accordingly, as far as petitioners are concerned, the physical absence of Ramona P. Alcaraz is
not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her obligation to pay the
full purchase price is concerned. Petitioners who are precluded from setting up the defense of the physical
absence of Ramona P. Alcaraz as above-explained offered no proof whatsoever to show that they actually
presented the new transfer certificate of title in their names and signified their willingness and readiness to
execute the deed of absolute sale in accordance with their agreement. Ramonas corresponding obligation to
pay the balance of the purchase price in the amount of P1,190,000.00 (as buyer) never became due and
demandable and, therefore, she cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligations may be
considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.
x
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply
in a proper manner with what is incumbent upon him. From the moment one of the parties fulfill his
obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between petitioners and
respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave rise to a case of
double sale where Article 1544 of the Civil Code will apply, to wit:
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 if 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 record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of the second
contract of sale was registered with the Registry of Deeds of Quezon City giving rise to the issuance of a new
certificate of title in the name of Catalina B. Mabanag on June 5, 1985. Thus, the second paragraph of Article
1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the first buyer, the
exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the first buyer, and
(b) should there be no inscription by either of the two buyers, when the second buyer, in good faith,
acquires possession of the property ahead of the first buyer. Unless, the second buyer satisfies these
requirements, title or ownership will not transfer to him to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a distinguished member of
the Court, Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first
buyer of the second sale cannot defeat the first buyers rights except when the second buyer first registers
in good faith the second sale (Olivares v. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the
second buyer of the first sale defeats his rights even if he is first to register, since knowledge taints his
registration with bad faith (see also Astorga v. Court of Appeals, G.R. No. 58530, 26 December 1984). In
Cruz v. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it was held that it is 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 (citing Carbonell v. Court of Appeals, 69 SCRA 99, Crisostomo v. CA, G.R. No. 95843, 02
September 1992).
(J. Vitug, Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).
Petitioners point out that the notice of lis pendens in the case at bar was annotated on the title of the
subject property only on February 22, 1985, whereas, the second sale between petitioners Coronels and
petitioner Mabanag was supposedly perfected prior thereto or on February 18, 1985. The idea conveyed is
that at the time petitioner Mabanag, the second buyer, bought the property under a clean title, she was
unaware of any adverse claim or previous sale, for which reason she is a buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not the second buyer was a
buyer in good faith but whether or not said second buyer registers such second sale in good faith, that is,
without knowledge of any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good faith, registered
the sale entered into on February 18, 1985 because as early as February 22, 1985, a notice of lis pendens
had been annotated on the transfer certificate of title in the names of petitioners, whereas petitioner
Mabanag registered the said sale sometime in April, 1985. At the time of registration, therefore, petitioner
Mabanag knew that the same property had already been previously sold to private respondents, or, at least,
she was charged with knowledge that a previous buyer is claiming title to the same property. Petitioner
Mabanag cannot close her eyes to the defect in petitioners title to the property at the time of the
registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers the sale after he has acquired knowledge that there was a previous
sale of the same property to a third party or that another person claims said property in a previous sale, the
registration will constitute a registration in bad faith and will not confer upon him any right. (Salvoro v.
Tanega, 87 SCRA 349 [1981];citing Palarca v. Director of Land, 43 Phil. 146; Cagaoan v. Cagaoan, 43 Phil.
554; Fernandez v. Mercader, 43 Phil. 581.)
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfected on
February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on February 18, 1985, was
correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an agency between Ramona as principal and
Concepcion, her mother, as agent insofar as the subject contract of sale is concerned, the issue of whether
or not Concepcion was also acting in her own behalf as a co-buyer is not squarely raised in the instant
petition, nor in such assumption disputed between mother and daughter. Thus, We will not touch this issue
and no longer disturb the lower courts ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the appealed judgment
AFFIRMED.
SO ORDERED.
[G.R. No. 16420. October 12, 1921. ]

AGRIPINO MENDOZA v PRIMITIVO KALAW
SYLLABUS
1. LAND REGISTRATION, FACTS OF THIS CASE. C sold a parcel of land to K under "pacto de retro." About
two weeks later C sold the same parcel of land, by an absolute deed of sale, to M, who, four days thereafter,
took possession of said land and enclosed it with a fence. A representative of K then tried to obtain
possession of the land from M but the latter refused to deliver It. Then K tried to have his "pacto de retro"
registered in the registry of deeds; but, for some valid reasons, the register of deeds declined to register the
same and only made a "preventative precautionary notice" (anotacion preventiva) of Ks "pacto de retro."
Later, M applied for the registration of said parcel of land under the Torrens system, and K opposed the
came upon the ground that he was the owner thereof by virtue of his "pacto de retro." Held: M was entitled
to have said land registered in his name. He has a better title to said land than K because he (M) had
acquired it by an absolute deed of sale and had taken possession thereof prior to K.
2. ID.; EFFECT OF AN "ANOTACION PREVENTIVA." The preventative precautionary notice obtained by K
created no advantage in his favor, for the reason that such a notice on the records of the registry of deeds
only protects the rights of the person securing it for a period of thirty days. (Par. 2, art. 17, Mortgage Law;
see also cases cited in the opinion.)
DECISION
JOHNSON, J. :
From the record it appears that on the 26th day of November, 1919, the petitioner presented a petition in
the Court of First Instance of the City of Manila for the registration, under the Torrens system, of a piece or
parcel of land, particularly described;n paragraph A of the petition. The said lot is alleged to have an area of
371.6 square meters. The petitioner alleged that he was the owner in fee simple of said parcel of land for
the reason that he had purchased the same of Federico Caet on the 8th day of November, 1919.
Accompanying the petition, there was united a plan (marked Exhibit A) containing a technical description of
the metes and bounds of said parcel of land.
To the registration of said parcel of land the oppositor, Primitivo Kalaw, presented his opposition, alleging
that he was the owner of the same and that he had acquired it from the said Federico Caet.
Upon the issue thus presented by the petition and opposition, the Honorable James A. Ostrand, on the 23d
day of January, 1920, in a carefully prepared opinion, reached the conclusion that the petitioner was the
owner in fee simple of said parcel of land, and ordered it registered in his name in accordance with the
provisions of the Land Registration Act. From that decree the oppositor appealed to this court.
From an examination of the record the following facts seem to be proved by a large preponderance of the
evidence:
(1) That on the 24th day of September, 1919, the said Federico Caet sold, under a conditional sale, the
parcel of land in question to the appellant (Exhibit 1);
(2) That on the 8th day of November, 1919, the said Federico Caet made an absolute sale of said parcel of
land to the petitioner Agripino Mendoza (Exhibit B);
(3) That on the 12th day of November, 1919, Agripino Mendoza entered upon, and took actual possession of,
said parcel of land, enclosed it with a fence, and began to clean the same;
(4) That after the petitioner had fenced and cleaned said lot, as above indicated, a representative of the
oppositor claimed and attempted to obtain possession of said lot, but the petitioner, who was then in
possession, refused to deliver the possession, upon the ground that he was the owner;
(5) That on the 17th day of November (18th day of November), 1919, the oppositor attempted to have his
title registered in the registry of deeds of the City of Manila, but such registration was denied by the register
of deeds for the reason that there existed some defect in the description of the property, and for the reason
that the title of the vendor had not theretofore been registered. The register of deeds, however, did make an
"anotacion preventiva."
It will be noted from the foregoing that Federico Caet made two sales of the same property one to the
oppositor and the other to the petitioner. The first was but a conditional sale while the latter was an absolute
sale. It will also be noted that while the absolute sale to the petitioner was subsequent to the conditional
sale to the oppositor, the former obtained the actual possession of the property first. It will further be noted
from a reading of Exhibits 1 and B that the petitioner actually paid to his vendor the purchase price of the
property in question, while the payment by the oppositor depended upon the performance of certain
conditions mentioned in the contract of sale.
While we have stated that there were two sales of the parcel of land in question, that is hardly the fact,
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 performed or complied with That being true, article
1473 of the Civil Code can hardly be said to be applicable.
Neither can the "anotacion preventiva" obtained by the oppositor be said to have created any advantage in
his favor, for the reason that a preventative precautionary notice on the records of the registry of deeds only
protects the rights of the person securing it for a period of thirty days. (Par. 2, art. 17, Mortgage Law.) A
preventative precautionary notice only protects the interests and rights of the person who secures it against
those who acquire an interest in the property subsequent thereto, and then, only for a period of thirty days.
It cannot affect the rights or interests of persons who acquired an interest in the property theretofore.
(Veguillas v. Jaucian, 25 Phil., 315; Samson v. Garcia and Ycalina, 34 Phil., 805.) In the present case the
petitioner had acquired an absolute deed to the land in question, and had actually entered into the
possession of the same, before the preventative precautionary notice was noted in the office of the registry
of deeds. Therefore, under the provisions of the Mortgage Law above cited, it could in no way affect the
rights or interests of persons, acquired theretofore.
For all of the foregoing reasons, we are fully persuaded that the judgment ordering the registration of the
parcel of land in question in the name of the petitioner should be and is hereby affirmed, with costs. So
ordered.
[G.R. No. 120191. October 10, 1997.]

LORETO ADALIN v COURT OF APPEALS
Before us is a petition for review seeking the reversal of the Decision 1 of the Court of Appeals 2 and in lieu
thereof, the reinstatement of the Decision 3 of the Regional Trial Court 4 in an action for specific
performance filed by private respondents Faustino L. Yu and Antonio T. Lim against the Kado siblings,
namely, private respondents Elena K. Palanca, Eduarda K. Vargas, Mercedes K. Caballero, Isabel K. Villamor,
Jose Kado, Maria K. Calonzo, Teofila Kado and Nestor Kado, and their respective spouses.
In essence, the petition poses a challenge against the respondent appellate courts legal conclusion that the
transaction entered into by private respondents Yu and Lim with private respondents Kado siblings, is one of
an absolute sale and not merely a conditional sale as denominated in the document signed by said parties.
As such, there is no dispute as to the following facts:
jgc:chanroble s.com.ph
". . . [F]rom the welter of evidence and the record, it has been established that Elena Kado Palanca, and her
brothers and sisters, namely, Eduarda K. Vargas, Mercedes K. Caballero, Isabel K. Villamor, Jose Kado, Maria
K. Calonzo, Teofila Kado and Nextor Kado, hereinafter referred to, for brevitys sake, as the AppelleesVendors, were the owners of a parcel of land, with an area of 1,343 square meters, with a five-door, one
storey commercial building constructed thereon, fronting the Imperial Hotel, located along Magallanes
Street, Cotabato City, described in and covered by Transfer Certificate of Title No. T-12963 of the Registry of
Deeds of Cotabato City . . . . One of the five (5) doors was leased to Loreto Adalin, hereinafter referred to as
the Appellee Adalin, two (2) doors were leased to Carlos Calingasan and Demetrio Adaya respectively, and
two (2) doors were leased to Magno Adalin, all of whom are hereinafter referred to, for brevitys sake, as the
Appellees-Vendees. The Appellees-Vendees and Appellee Adalin paid a monthly rental of P1,500.00 for each
door. The Appellees-Vendors commissioned Ester Bautista to look for and negotiate with prospective buyers
for the sale of their property for the price of P3,000,000.00. Sometime in August, 1987, Ester Bautista
offered the property, for sale, to the Appellants and the latter agreed to buy the property. A conference was
held in the office of the Appellant Faustino Yu, at the Imperial Hotel, where he was the President-Manager,
with both Appellants, the Appellee Adalin, the Appellees-Vendors Elena Palanca and Teofilo Kado, in their
behalf and in behalf of the Appellees-Vendors, in attendance, to discuss the terms and conditions of the sale.
The Appellants and Appellee Adalin, the Appellees-Vendors agreed that the Appellants will each buy two (2)
doors while Appellee Adalin will buy the fifth door which he was leasing from the Appellees-Vendors, all for
the price of P2,600,000.00. During the conference, the Appellants inquired from the Appellee-Vendor Elena
Palanca whether the Appellees-Vendees were interested to buy the property but the Appellee-Vendor Elena
Palanca replied that the property had been offered to the Appellees-Vendees for sale but that the latter were
not interested to buy the same. The conferees then agreed to meet, on September 2, 1987, in the house of
the Appellee-Vendor Palanca, with Atty. Bayani Calonzo, her brother-in-law, in attendance, to finalize the
sale. However, unknown to the Appellants, the Appellee-Vendor Elena Palanca, in her behalf and in behalf of
the other Appellees-Vendors, sent, on September 2, 1987, separate letters to each of the Appellees-Vendees
informing them that someone was interested to buy the property and requested them to vacate the property
within thirty (30) days unless all of you could buy the property at the same price . . . During the conference
in the house of the Appellee-Vendor Elena Palanca, on September 2, 1987, the Appellants, the Appellee
Adalin and the Appellees-Vendors Elena Palanca and Teofilo Kado in their behalf and in behalf of the other
Appellees-Vendors, Atty. Bayani Calonzo, the husband of the Appellee Maria Kado, Atty. Eugenio Soyao, the
counsel of the Appellants and the Appellee-Vendee Magno Adalin who attended in his behalf and in behalf of
the Appellees-Vendees, were present. When asked by the appellants if the Appellees-Vendees were
interested to by the property, the Appellee-Vendee Magno Adalin forthrightly replied that the AppelleesVendees were not interested to buy the property because they cannot afford the purchase price thereof.
However, he claimed that the Appellees Vendees were entitled to P50,000.00 each as disturbance money, in
consideration for their vacating the property, to be borne by the Appellees-Vendors. The Appellants, the
Appellee Adalin and the Appellees-Vendors forthwith agreed that each Appellant will buy two (2) doors while
the fifth door leased by Appellee Adalin will be purchased by him, all for the purchase price of P2,600,000.00
and that the Appellants and Appellee Adalin will pay, P300,000.00 as downpayment for the property, the
balance to be payable upon the eviction of the Appellees-Vendees from the property and the execution of a
Deed of Absolute Sale. Atty. Bayani Calonzo forthwith assured the Appellants that he could secure the
eviction of the Appellees-Vendees from the property within a month because the latter were his close friends
and compadres. Atty. Bayani Calonzo then gave Atty. Eugenio Soyao, the counsel of the Appellants, the gosignal to prepare the deed for the signatures of the parties. On September 8, 1987, the Appellants and
Appellee Adalin, as buyers of the property, and the Appellees-Vendors, met in the office of the Appellant
Faustino Yu at the Imperial Hotel and executed the Deed of Conditional Sale prepared by Atty. Eugenio
Soyao . . . The Appellants and Appellee Adalin each contributed P100,000.00 and gave the total amount of
P300,000.00 to the Appellee-Vendor Elena Palanca as the downpayment for the property. The AppelleesVendors Elena Palanca and Eduarda Vargas signed an Acknowledgment Receipt for the downpayment . . . in
their behalf and in behalf of the other Appellees-Vendors. In the meantime, the Appellants deferred
registration of the deed until after the eviction of the Appellees-Vendees from the property and the payment
of the balance of the purchase price of the property to the Appellees-Vendors as agreed upon under the
Deed of Conditional Sale.
In the interim, on October 14, 1987, the Appellees-Vendors, through the Appellee-Vendor Elena Palanca,
wrote, conformably with the terms of the Deed of Conditional Sale . . . a letter complaint against the
Appellees-Vendees with the Barangay Captain for unlawful detainer . . . The case was docketed as Barangay
Case No. 7,052-87 . . . On October 16, 1987, the Appellee-Vendee Magno Adalin wrote a letter to the
Appellees-Vendors, through the Appellee-Vendor Elena Palanca, informing them that he had decided to
purchase the two doors he was leasing for the purchase price of P600,000.00 per door and was ready to
tender the amount by the end of the month . . . The Appellee-Vendee Demetrio Adaya and the AppelleeVendee Carlos Calingasan likewise wrote separate letters to the Appellees-Vendors informing the latter of
their decision to purchase the premises occupied by them respectively for the amount of P600,000.00 each .
. . Inspite of the prior sale of the property to the Appellants and Appellee Adalin, the Appellees-Vendors
decided to back out from said sale to the Appellants and to sell the property to the Appellees-Vendees and to
return the downpayments of the Appellants for the property in the total amount of P200,000.00 with
interests thereon. The Appellees-Vendees procured TCBT Check No. 195031 in the amount of P101,416.66
payable to the Appellant Faustino Yu and TCBT Check No. 195032 in the amount of P101,416.66 payable to
the Appellant Antonio Lim and transmitted the same to the Appellants with a covering letter . . . The
Appellants were flabbergasted. Both the Appellants refused to receive the said letter and checks and
insisted, instead, that the Appellees-Vendors comply with the Deed of Conditional Sale . . . On November
16, 1987, the Appellants, through their counsel, wrote a letter to the Appellees-Vendors, copies of which
were furnished the Appellees-Vendees, inquiring if the appropriate action has been undertaken towards the
eviction of the Appellees-Vendees . . . The Appellees-Vendors ignored the said letter. Instead, the AppelleesVendors signed, in December, 1987, a Deed of Sale of Registered Land under which they sold the said
property to the Appellees-Vendees, including the Appellee Adalin for the price of only P1,000,000.00 . . .
much lower than the price of the Appellant under the Deed of Conditional Sale . . . Although it appears that
the deed was notarized by Atty. Bayani Calonzo, however, the deed does not bear any number in the notarial
register of the lawyer. In the same month, the Appellees-Vendors signed another Deed of Sale of Registered
Land under which they sold to the Appellees-Vendees including Appellee Adalin the aforesaid property for
the considerably increased price of P3,000,000.00 . . . The deed was notarized by Atty. Bayani Calonzo.
Interestingly, both deeds were not filed with the Register of Deeds of Cotabato City. Not content with the
two (2) Deeds of Sale of Registered Land . . . the Appellees-Vendors, signed a third Deed of Sale of
Registered Land which appears dated February 5, 1988 under which they purportedly sold to the AppelleesVendees, including Appellee Adalin, the aforesaid property for the much reduced price of only
P860,000.00 . . . However, the aforesaid deed was not immediately filed with the Register of Deeds of
Cotabato City. On February 26, 1988, the Appellees-Vendors, through Atty. Bayani Calonzo, filed a Petition
against the Appellants for the consignation of their downpayment of P200,000.00, with the Regional Trial
Court of General Santos City entitled Maria K. Calonzo. Et. Al. versus Faustino Yu, Special Civil Case No.
259. . .
Undaunted, the Appellants filed a complaint with the Barangay Captain for Breach of Contract against the
Appellees-Vendors entitled Faustino Yu, Et. Al. versus Elena K. Palanca, Et Al., Barangay Case No. 9,014-88.
The Barangay Captain issued, on April 7, 1988, summons to the Appellees-Vendors for them to appear for a
conference on April 22, 1988 at 9:00 oclock in the morning . . . Invitations were also sent to the AppelleesVendees . . . During the conference attended by Appellee-Vendees, the Appellants, if only to accommodate
the Appellee-Vendee Magno Adalin and settle the case amicably, agreed to buy only one door each so that
the Appellee-Vendee Magno Adalin could purchase the two doors he was occupying. However, the AppelleeVendee Magno Adalin adamantly refused, claiming that he was already the owner of the two (2) doors.
When the Appellant Antonio Lim asked the Appellee-Vendee Magno Adalin to show the Deed of Sale for the
two doors, the latter insouciantly walked out. Atty. Bayani Calonzo likewise stated that there was no need to
show the deed of sale. No settlement was forged and, on May 16, 1988, the Barangay Captain issued the
Certification to File Action . . .
chanroblesvirtuallawlibrary
On May 5, 1988, the Appellants filed their complaint for Specific Performance against the Appellees-Vendors
and Appellee Adalin in the Court a quo.
On June 14, 1988, the Appellants caused the annotation of a Notice of Lis Pendens at the dorsal portion of
Transfer Certificate of Title No. 12963 under the names of the Appellees-Vendors . . . On October 25, 1988,
the Appellees-Vendees filed a Motion for Intervention as Plaintiffs-Intervenors appending thereto a copy of
the Deed of Sale of Registered Land signed by the Appellees-Vendors . . . On October 27, 1988, the
Appellees-Vendees filed the Deed of Sale of Registered Land . . . with the Register of Deeds on the basis of
which Transfer Certificate of Title No. 24791 over the property was issued under their names . . .. On the
same day, the Appellees-Vendees filed in the Court a quo a Motion To Admit Complaint-In-Intervention . . .
Attached to the Complaint-In-Intervention was the Deed of Sale of Registered Land signed by the
Appellees-Vendees . . . The Appellants were shocked to learn that the Appellees-Vendors had signed the said
deed. As a counter-move, the Appellants filed a motion for leave to amend Complaint and, on November 11,
1988, filed their Amended Complaint impleading the Appellees-Vendees as additional Defendants . . .
x
The Appellees-Vendors suffered a rebuff when, on January 10, 1989, the Regional Trial Court of General
Santos City issued an Order dismissing the Petition of the Appellees-Vendors for consignation . . . In the
meantime, on November 30, 1989, Appellee Adalin died and was substituted, per order of the Court a quo,
on January 5, 1990, by his heirs, namely, Anita, Anelita, Loreto, Jr., Teresita, Wilfredo, Lilibeth, Nelson,
Helen and Jocel, all surnamed Adalin, as Appellees-Vendees . . .
After trial, the Court a quo rendered judgment in favor of the Appellees-Vendees . . ." 5
In the opinion of the court a quo, petitioners became the owners of the parcel of land in question with the
five-door, one storey commercial building standing thereon, when they purchased the same following the
offer and the 30-day option extended to them by private respondent Elena Palanca, in behalf of the other
Kado siblings, in her letter to them dated September 2, 1987. The trial court disregarded the fact that the
Kado siblings had already finished transacting with private respondents Faustino Yu and Antonio Lim and had
in fact entered into a conditional sale with them respecting the same property. The trial court brushed aside
this fact as it reasoned that:
jgc:chanrobles.com .ph
". . . In conditional deed of sale, ownership is only transferred after the purchase price is fully paid or the
fulfillment of the condition and the execution of a definite or absolute deed of sale are made. . .
In this case, it is clear from the provision of the Deed of Conditional Sale . . . that the balance of the price of
P2,300,000.00 shall be paid only after all the defendants-vendees shall have vacated and surrendered the
premises to the defendants-vendors. However, the tenants did not leave the premises. In fact they opted to
buy the property. Moreover, at that time, the property was legally leased to the defendants-vendees. . .
x
Clearly therefore, the condition set forth in the said Deed of Conditional Sale between the plaintiffs and the
defendants-vendors was not fulfilled. Since the condition was not fulfilled, there was no transfer of
ownership of the property from the defendants-vendors to the plaintiffs. . .
. . .[In] the letters of Elena Palanca to the defendants-vendees dated September 2, 1987 . . . [t]hey were
given the option or preferential right to purchase the property.
x
When the defendants-vendors accepted defendants-vendees option to buy, the former returned the initial
payment of P200,000.00 to the plaintiffs . . . but they refused to accept the same. This refusal however did
not diminish the effect of the acceptance of the option to buy, which in fact led to the execution of the said
Deed of Sale of Registered Land . . . and the subsequent issuance of the Transfer Certificate of Title No. T24791 of the Registry of Deeds for the City of Cotabato in the names of the defendants-vendees . . .
. . . [T]he defendants-vendors acted in bad faith when, while during the effectivity of the period of the
option to buy [that] they gave to the defendants-vendees, they executed a Deed of Conditional Sale . . . in
favor of the plaintiffs. This was only six (6) days from date of the option. . ." 6
The trial court also ruled that the conditional sale of the subject property to private respondents Faustino Yu
and Antonio Lim and the sale of the same property to petitioners, did not involve a double sale as to warrant
the application of Article 1544 of the Civil Code. The court a quo ratiocinated in this manner:
". . . [T]he plaintiffs assert that this case is one of double sale and should be governed by Article 1544 of the
Civil Code. The first sale, plaintiffs claim, is that under the Deed of Conditional Sale . . . in their favor and
the second sale is that ultimately covered by the Deed of Sale of Registered Land for P860,000.00 . . . in
favor of the defendants-vendees. As already pointed out by the court, the execution of the Deed of
Conditional Sale did not transfer ownership of the property to the plaintiffs, hence, there can be no double
sale. As held in the case of Mendoza v. Kalaw, 42 Phil. 236, Article 1544 does not apply to situations where
one sale was subject to a condition which was not complied with. This is because a conditional sale, before
the performance of the condition, can hardly be said to be a sale of property, specially where the condition
has not been performed or complied with." 7
Pursuant to the above ruminations of the court a quo, it ordered the following in the dispositive portion of its
decision:
"WHEREFORE, the court hereby orders the dismissal of plaintiffs complaint against the defendants-vendees
for lack of merit, and hereby further sustains the validity of Transfer Certificate of Title No. T-24791 issued in
their names (defendants-vendees) by the Registry of Deeds for the City of Cotabato.
The defendants-vendors are hereby jointly and severally ordered to pay moral damages of P500,000.00 to
each of the plaintiffs, P100,000.00 exemplary damages to each of the plaintiffs and P50,000.00 as and for
attorneys fees.
Defendants-vendors are hereby further ordered to return the P200,000.00 initial payment received by them
with legal interest from date of receipt thereof up to November 3, 1987.
Defendants-vendees counterclaim is hereby ordered dismissed.
With cost against the defendants-vendors
SO ORDERED." 8
Private respondents Faustino Yu and Antonio Lim wasted no time in appealing from the above decision of the
court a quo. They were vindicated when the respondent Court of Appeals rendered its decision in their favor.
The respondent appellate court reversed the trial court as it ruled, thus:
". . . We find, and so declare, that the Deed of Conditional Sale . . . executed by the Appellees-Vendors in
favor of the Appellants was an absolute deed of sale and not a conditional sale.
x
In ascertaining the nature of a contract and the intention of the parties thereto, it behooves the trier of facts
to look into the context of the contract in its entirety and not merely specific words or phrases therein,
standing alone, as well as the contemporaneous and subsequent acts of the parties. It bears stressing that
the title of the contract is not conclusive of its nature. . .
Although a contract may be denominated a Deed of Conditional Sale, or Agreement to Sell, the same may
be, in reality a deed of absolute sale or a contract of sale . . .
Under Article 1458 of the New Civil Code, a sale may be absolute or conditional. A contract may be
conditional when the ownership of the thing sold is retained until the fulfillment of a positive suspensive
condition, generally the payment of the purchase price, the breach of which condition will prevent the onset
of the obligation to deliver title . . . A sale of immovables is absolute where the contract does not contain
any provision that title to the property sold is reserved to the Vendors or that the Vendor is entitled to
unilaterally rescind the same.
x
The Court a quo . . . resolutely subscribed to the view that the . . . deed is conditional, its efficacy
dependent upon a suspensive condition that of the payment by the Appellants of the balance of the
purchase price of the property, after the Appellees- Vendees shall have been evicted from the property or
shall have voluntarily vacated the same and the Deed of Absolute Sale shall have been executed in favor of
the Appellants; and, since the condition was not fulfilled, the sale never became effective . . . Even a cursory
reading of the deed will readily show absence of any stipulation in said deed that the title to the property
was reserved to the Appellees-Vendors until the balance of the purchase price was paid nor giving them the
right to unilaterally rescind the contract if the Appellants failed to pay the said amount upon the eviction of
the Appellees-Vendees. Inscrutably then, the deed is a perfected deed of absolute sale, not a conditional
one. . . .
x
There may not have been delivery of the property to the Appellants either symbolically or physically and
more, the Appellees-Vendors may have deferred their obligation of delivering physical possession of the
property to the Appellees only after the Appellees-Vendees shall have vacated the property, however, the
right of retention of the Appellees-Vendors of title to or ownership over the property cannot thereby be
inferred therefrom . . .
In fine, the non-payment of the balance of the purchase price of the property and the consequent eviction of
the Appellees-Vendees therefrom were not conditions which suspended the efficacy of the Deed of
Conditional Sale. Rather, the same, if due to the fault of the Appellants, merely accorded the AppelleesVendors the option to rescind the already existing and effective sale.
The Appellants and the Appellees-Vendors, having entered into, under the Deed of Conditional Sale . . . an
absolute sale, the Appellants thus had every right to demand that the Appellees-Vendors performed their
prestation under the deed, to wit the eviction of the Appellees-Vendees from the property so that the
Appellants may then pay the balance of the purchase price of the property.
x
The Court a quo and the Appellees, however, posit that the Deed of Conditional Sale . . . had not been
consummated and title to and ownership over the property had not been transferred to the Appellants
because there had been neither constructive nor actual delivery of the property to the Appellants . . .
We do not agree. The evidence in the record shows that the Appellants and the Appellees-Vendors met in
the house of Appellee Elena Palanca on September 2, 1987. The Appellees-Vendees were represented by the
Appellee-Vendee, Retired Col. Magno Adalin. The latter did not object to the sale of the property to the
Appellants but merely insisted that each of the Appellees-Vendees be given P50,000.00 as disturbance fee
by the Appellees-Vendors to which the latter acquiesced because Atty. Bayani Calonzo forthwith gave Atty.
Eugenio Soyao, the go-signal to prepare the Deed of Conditional Sale for the signatures thereof by the
parties on September 8, 1987. The Appellees-Vendors, on September 2, 1987, wrote letters to the
Appellees-Vendees giving them the option to match the price offered by the Appellants. The AppelleesVendees maintained a resounding silence to the letter-offer of the Appellees-Vendors. It was only, on
October 16, 1987, that the Appellees-Vendees, after the execution by the Appellants and the AppelleesVendors of the Deed of Conditional Sale, that the Appellees-Vendees finally decided to themselves,
purchase the property. The Appellees are estopped from claiming that the property had not been delivered
to the Appellants. The Appellants cannot use their gross bad faith as a shield to frustrate the enforcement,
by the Appellants, of the Deed of Conditional Sale. . .
chanroble s.com : virtual lawlibrary
The Appellees-Vendors cannot invoke the refusal of the Appellees-Vendees to vacate the property and the
latters decision to themselves purchase the property as a valid justification to renege on and turn their
backs against their obligation to deliver or cause the eviction of the Appellees-Vendees from and deliver
physical possession or the property to the Appellants. For, if We gave our approbation to the stance of the
Appellees, then We would thereby be sanctioning the performance by the Appellees-Vendors of their
obligations under the deed subject to the will and caprices of the Appellees-Vendees, which we cannot
do . . .
It would be the zenith of inequity for the Appellees-Vendors to invoke the occupation by the AppelleesVendees, as of the property, as a justification to ignore their obligation to have the Appellees-Vendees
evicted from the property and for them to give P50,000.00 disturbance fee for each of the AppelleesVendees and a justification for the latter to hold on to the possession of the property.
x
Assuming, gratia arguendi, for the nonce, that there had been no consummation of the Deed of Conditional
Sale . . . by reason of the non-delivery to the Appellants of the property, it does not thereby mean that the
Deed of Sale of Registered Land . . . executed by the Appellees should be given preference. Apropos to
this, We give our approbation to the plaint of the Appellants that the Court a quo erred in not applying the
second and third paragraphs of Article 1544 . . .
For, the evidence in the record shows that, although the Appellees-Vendees managed to cause the
registration of the Deed of Sale of Registered Land . . . on October 27, 1988 and procure Transfer Certificate
of Title No. 24791 under their names, on said date, and that they were, as of said date, in physical
possession of the property, however, the evidence in the record shows that the Appellees-Vendees were in
gross evident bad faith. At the time the Appellees executed the Deed of Sale of Registered Land in
December 1987 . . . they were aware that the Appellees-Vendors and the Appellants had executed their
Deed of Conditional Sale as early as September 8, 1987. . . . In the light of the foregoing, We arrive at the
ineluctable conclusion that preference must be accorded the Deed of Conditional Sale executed by the
Appellants and the Appellees-Vendors." 9
Accordingly, the respondent Court of Appeals rendered another judgment in the case and ordered the
following:
"1. The Deed of Conditional Sale, Exhibit A is hereby declared valid;

2. The Deeds of Sale of Registered Land, Exhibits E, F and G and Transfer Certificate of Title No. 24791
are hereby declared null and void;
3. The Appellees-Vendees except the heirs of Loreto Adalin are hereby ordered to vacate the property within
thirty (30) days from the finality of this Decision;
4. The Appellees-Vendors are hereby ordered to execute, in favor of the Appellants, a Deed of Absolute
Sale covering four (4) doors of the property (which includes the area of the property on which said four
doors are constructed) except the door purchased by the Appellee-Vendee Loreto Adalin, free of any liens or
encumbrances;
5. The Appellants are hereby ordered to remit to the Appellees-Vendors the balance of the purchase price of
the four (4) doors in the amount of P1,880,000.00;
6. The Appellees-Vendors are hereby ordered to refund to the Appellees-Vendees the amount of
P840,000.00 which they paid for the properly under the Deed of Conditional Sale of Registered Land,
Exhibit G, without interest considering that they also acted in bad faith;
7. The Appellee-Vendee Magno Adalin is hereby ordered to pay the amount of P3,000.00 a month, and each
of the Appellees-Vendees, except the Appellee Adalin, the amount of P1,500.00 to the Appellants, from
November, 1987, up to the time the property is vacated and delivered to the Appellants, as reasonable
compensation for the occupancy of the property, with interest thereon at the rate of 6% per annum;
8. The Appellees-Vendors are hereby ordered to pay, jointly and severally, to each of the Appellants the
amount of P100,000.00 by way of moral damages, P20,000.00 by way of exemplary damages and
P20,000.00 by way of attorneys fees:
9. The counterclaims of the Appellees are dismissed.

With costs against the Appellees.
SO ORDERED." 10
Unable to agree with the above decision of the respondent appellate court, petitioners seek reversal thereof
on the basis on the following grounds:
"1. The Unconsummated Conditional Contract of Sale in favor of the herein respondent VENDEES is Inferior
to and Cannot Prevail Over the Consummated Absolute Contracts of Sale in favor of the herein petitioners.
2. The Deeds of Sale in favor of the herein Petitioners as well as Transfer Certificate of Title No. 24791 in
their names are Perfectly Valid Documents.
3. The herein Petitioners may not be Legally and Rightfully Ordered to Vacate the Litigated Property or Pay
Reasonable Compensation for the Occupancy Thereof .

4. The herein Petitioners may not be Held Liable to Pay the Costs." 11
"5. The Court of Appeals erred in holding that the Deed of Conditional Sale is in reality an absolute deed of
sale.
6. The Court of Appeals erred in relying totally and exclusively on the evidence presented by respondents
and in disregarding the evidence, for Petitioners.
7. The Court of Appeals erred in holding that herein petitioners are guilty of bad faith and that Article 1544
of the Civil Code is applicable." 12
The petition lacks merit.
The grounds relied upon by petitioners are essentially a splitting of the various aspects of the one pivotal
issue that holds the key to the resolution of this controversy: the true nature of the sale transaction entered
into by the Kado siblings with private respondents Faustino Yu and Antonio Lim. Our task put simply,
amounts to a declaration of what kind of contract had been entered into by said parties and of what their
respective rights and obligations are thereunder.
It is not disputed that in August; 1987, Elena K. Palanca, in behalf of the Kado siblings, commissioned Ester
Bautista to look for buyers for their property fronting the Imperial Hotel in Cotabato City. Bautista logically
offered said property to the owners of the Imperial Hotel which may be expected to grab the offer and take
advantage of the proximity of the property to the hotel site. True enough, private respondent Faustino Yu,
the President-General Manager of Imperial Hotel, agreed to buy said property.
Thus during that same month of August, 1987, a conference was held in the office of private respondent Yu
at the Imperial Hotel. Present there were private respondent Yu, Loreto Adalin who was one of the tenants
of the five-door, one-storey building standing on the subject property, and Elena Palanca and Teofilo Kado in
their own behalf as sellers and in behalf of the other tenants of said building. During the conference, private
respondents Yu and Lim categorically asked Palanca whether the other tenants were interested to buy the
property, but Palanca also categorically answered that the other tenants were not interested to buy the
same. Consequently, they agreed to meet at the house of Palanca on September 2, 1987 to finalize the sale.
On September 2, 1987, Loreto Adalin; Yu and Lim and their legal counsel; Palanca and Kado and their legal
counsel; and one other tenant, Magno Adalin, met at Palancas house. Magno Adalin was there in his own
behalf as tenant of two of the five doors of the one-storey building standing on the subject property and in
behalf of the tenants of the two other doors, namely. Carlos Calingasan and Demetrio Adaya. Again, private
respondents Yu and Lim asked Palanca and Magno Adalin whether the other tenants were interested to buy
the subject property, and Magno Adalin unequivocally answered that he and the other tenants were not so
interested mainly because they could not afford it. However, Magno Adalin asserted that he and the other
tenants were each entitled to a disturbance fee of P50,000.00 as consideration for their vacating the subject
property.
During said meeting, Palanca and Kado, as sellers, and Loreto Adalin and private respondents Yu and Lim, as
buyers, agreed that the latter will pay P300,000.00 as downpayment for the property and that as soon as
the former secures the eviction of the tenants, they will be paid the balance of P2,300,000.00.
Pursuant to the above terms and conditions, a Deed of Conditional Sale was drafted by the counsel of
private respondents Yu and Lim. On September 8, 1987, at the Imperial Hotel office of private respondent
Yu, Palanca and Eduarda Vargas, representing the sellers, and Loreto Adalin and private respondents Yu and
Lim signed the Deed of Conditional Sale. They also agreed to defer the registration of the deed until after
the sellers have secured the eviction of the tenants from the subject property.
The tenants, however, refused to vacate the subject property. Being under obligation to secure the eviction
of the tenants, in accordance with the terms and conditions of the Deed of Conditional Sale, Elena Palanca
filed with the Barangay Captain a letter complaint for unlawful detainer against the said tenants.
chanroble svirtuallawlibrary:red
Undisputedly, Palanca, in behalf of the Kado siblings who had already committed to sell the property to
private respondents Yu and Lim and Loreto Adalin, understood her obligation to eject the tenants on the
subject property. Having gone to the extent of filing an ejectment case before the Barangay Captain, Palanca
clearly showed an intelligent appreciation of the nature of the transaction that she had entered into: that
she, in behalf of the Kado siblings, had already sold the subject property to private respondents Yu and Lim
and Loreto Adalin, and that only the payment of the balance of the purchase price was subject to the
condition that she would successfully secure the eviction of their tenants. In the sense that the payment of
the balance of the purchase price was subject to a condition, the sale transaction was not yet completed,
and both sellers and buyers have their respective obligations yet to be fulfilled: the former, the ejectment of
their tenants; and the latter, the payment of the balance of the purchase price. In this sense, the Deed of
Conditional Sale may be an accurate denomination of the transaction. But the sale was conditional only
inasmuch as there remained yet to be fulfilled, the obligation of the sellers to eject their tenants and the
obligation of the buyers to pay the balance of the purchase price. The choice of who to sell the property to,
however, had already been made by the sellers and is thus no longer subject to any condition nor open to
any change. In that sense, therefore, the sale made by Palanca to private respondents was definitive and
absolute.
Nothing in the acts of the sellers and buyers before, during or after the said transaction justifies the radical
change of posture of Palanca who, in order to provide a legal basis for her later acceptance of the tenants
offer to buy the same property, in effect claimed that the sale, being conditional, was dependent on the
sellers not changing their minds about selling the property to private respondents Yu and Lim. The tenants,
for their part, defended Palancas subsequent dealing with them by asserting their option rights under
Palancas letter of September 2, 1987 and harking on the non-fulfillment of the condition that their
ejectment be secured first.
Two days after Palanca filed an ejectment case before the Barangay Captain against the tenants of the
subject property, Magno Adalin, Demetrio Adaya and Carlos Calingasan wrote letters to Palanca informing
the Kado siblings that they have decided to purchase the doors that they were leasing for the purchase price
of P600,000.00 per door. Almost instantly, Palanca, in behalf of the Kado siblings, accepted the offer of the
said tenants and returned the downpayments of private respondents Yu and Lim. Of course, the latter
refused to accept the reimbursements.
Certainly, we cannot countenance the double dealing perpetrated by Palanca in behalf of the Kado siblings.
No amount of legal rationalizing can sanction the arbitrary breach of contract that Palanca committed in
accepting the offer of Magno Adalin, Adaya and Calingasan to purchase a property already earlier sold to
private respondents Yu and Lim.
Petitioners claim that they were given a 30-day option to purchase the subject property as contained in the
September 2, 1987 letter of Palanca. In the first place, such option is not valid for utter lack of
consideration. 13 Secondly, private respondents twice asked Palanca and the tenants concerned as to
whether or not the latter were interested to buy the subject property, and twice, too, the answer given to
private respondents was that the said tenants were not interested to buy the subject property because they
could not afford it. Clearly, said tenants and Palanca, who represented the former in the initial negotiations
with private respondents, are estopped from denying their earlier statement to the effect that the said
tenants Magno Adalin, Adaya and Calingasan had no intention of buying the four doors that they were
leasing from the Kado siblings. More significantly, the subsequent sale of the subject property by Palanca to
the said tenants, smacks of gross bad faith, considering that Palanca and the said tenants were in full
awareness of the August and September negotiations between Bautista and Palanca, on the one hand, and
Loreto Adalin, Faustino Yu and Antonio Lim, on the other, for the sale of the one-storey building. It cannot be
denied, thus, that Palanca and the said tenants entered into the subsequent or second sale notwithstanding
their full knowledge of the subsistence of the earlier sale over the same property to private respondents Yu
and Lim. It goes without saying, thus, that though the second sale to the said tenants was registered, such
prior registration cannot erase the gross bad faith that characterized such second sale, and consequently,
there is no legal basis to rule that such second sale prevails over the first sale of the said property to private
respondents Yu and Lim.
We agree, thus, with the ruminations of the respondent Court of Appeals that:
"The Appellees-Vendors cannot invoke the refusal of the Appellees-Vendees to vacate the property and the
latters decision to themselves purchase the property as a valid justification to renege on and turn their
backs against their obligation to deliver or cause the eviction of the Appellees-Vendees from and deliver
physical possession o the property to the Appellants. For, if We gave our approbation to the stance of the
Appellees, then We would thereby be sanctioning the performance by the Appellees-Vendors of their
obligations under the deed subject to the will and caprices of the Appellees-Vendees, which we cannot
do . . .
It would be the zenith of inequity for the Appellees-Vendors to invoke the occupation by the AppelleesVendees, as of the property, as a justification to ignore their obligation to have the Appellees-Vendees
evicted from the property and for them to give P50,000.00 disturbance fee for each of the AppelleesVendees and a justification for the latter to hold on to the possession of the property.
x
Assuming, gratia arguendi, for the nonce, that there had been no consummation of the Deed of Conditional
Sale . . . by reason of the non-delivery to the Appellants of the property, it does not thereby mean that the
Deed of Sale of Registered Land . . . executed by the Appellees should be given preference. Apropos to
this, We give our approbation to the plaint of the Appellants that the Court a quo erred in not applying the
second and third paragraphs of Article 1544 . . .
For, the evidence in the record shows that, although the Appellees-Vendees managed to cause the
registration of the Deed of Sale of Registered Land . . . on October 27, 1988 and procure Transfer Certificate
of Title No. 24791 under their names, on said date, and that they were, as of said date, in physical
possession of the property, however, the evidence in the record shows that the Appellees-Vendees were in
gross evident bad faith. At the time the Appellees executed the Deed of Sale of Registered Land in
December 1987 . . . they were aware that the Appellees-Vendors and the Appellants had executed their
Deed of Conditional Sale as early as September 8, 1987 . . . In the light of the foregoing, We arrive at the
ineluctable conclusion that preference must be accorded the Deed of Conditional Sale executed by the
Appellants and the Appellees-Vendors." 14
WHEREFORE, the instant petition is HEREBY DISMISSED.
[G.R. No. L-18018. December 26, 1963.]

ESPERANZA ESPIRITU v FRANCISCO VALERIO
SYLLABUS
1. SALES; SAME LAND SOLD TO TWO DIFFERENT VENDEES; VENDEE FIRST REGISTERING SALE HAS
BETTER RIGHT UNDER ART. 1544, CIVIL CODE. Where the owner of a parcel of unregistered land sold it
to two different parties, assuming that both sales are valid the vendee whose deed of sale was first
registered under the provisions of Act 3344 would have a better right.
2. ID.; ID.; ART. 1544, CIVIL CODE, NOT APPLICABLE WHERE ONE DEED OF SALE IS FALSIFIED. Where
the same parcel of land was sold to two different parties, it is 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.
DECISION
DIZON, J.:
Appeal taken by Esperanza Espiritu and her daughter, Antonia Apostol, from the decision of the Court of
Appeals affirming the one rendered by the Court of First Instance of Pangasinan in Civil Case No. 13293
declaring appellee, Francisco Valerio, to be the owner of the land described in his complaint and enjoining
defendants from molesting him in the peaceful possession thereof.
On September 15, 1955 Valerio filed an action to quiet title in the above mentioned Court against
appellants, alleging in his complaint that he was the owner of a parcel of unregistered land containing an
area of approximately 8,573 square meters situated in Barrio Olo, Municipality of Mangatarem, Pangasinan,
and more particularly described in paragraph two thereof, having acquired the same from the former owner,
Pelagia Vegilia, as evidenced by a deed of sale executed by the latter in his favor on January 31, 1955
(Exhibit A); that appellants had been asserting adversary rights over said land and disturbing his possession
thereof.
Appellants answer denied the material allegations of the complaint and alleged, as affirmative defense, that
they were the owners of the land in question, having acquired it by inheritance from the late Santiago
Apostol, husband and father of appellants Espiritu and Apostol, respectively; that said deceased bought the
property from Mariano Vegilia on June 3, 1934, as evidenced by the deed of sale Exhibit 2, who, in turn, had
acquired it from his niece, Pelagia Vegilia, on May 26, 1932, by virtue of the deed of sale Exhibit 1.
The present appeal depends entirely upon the validity of the Deed of Sale Exhibit 1 allegedly executed by
Pelagia Vegilia in favor of Mariano Vegilia, and of the Deed of Sale Exhibit 2 allegedly executed by the latter
in favor of Santiago Apostol. If both are valid, appellants contention that they have a better right than that
claimed by appellee would seem to be meritorious in the light of the facts of the case and the provisions of
Article 1544 of the New Civil Code, it not being disputed that the Deed of Sale in favor of appellee was
registered under the provisions of Act 3344 on June 16, 1955, while Exhibits 1 and 2 were similarly
registered eleven days before.
Regarding the genuineness of the questioned documents, however, the Court of Appeals found as follows:
"Upon motion of plaintiff, the Court ordered the defendants to produce, for examination and inspection by
plaintiff, the two documents referred to. The plaintiff, after examining and inspecting said documents, filed,
on June 22, 1956, a supplemental complaint alleging that the document dated May 26, 1932, is fictitious
and a falsification, and that the private document of June 3, 1934 is likewise null and void, being without
the necessary formal requisites, aside to its being fictitious and the fact that the alleged vendor acquired no
right whatsoever in the land.
"In view of these conflicting claims of the plaintiff and the defendants, the trial court correctly stated,
apparently, this case concerns the sales of one parcel of land by the same vendor but in favor of two
different vendees. If these were the only issues in this case, there is no question that under Art 1544 of the
New Civil Code, Exhibit 1 would be considered to be effective as against Exhibit A, it having been
registered prior to Exhibit A. But this is not the only question at issue. Over and above the application of Art
1544 of the New Civil Code is the determination of whether or not Exhibits 1 and 2 have been falsified.
Having arrived at the conclusion that the two exhibits just mentioned had been falsified, the trial court
rendered decision on July 25, 1956, adjudging ownership of the land described in the complaint in favor of
the plaintiff and hereby permanently and definitely enjoins the defendants to abstain and desist from
disturbing and molesting the plaintiff from the peaceful enjoyment and possession of the parcel of land
described in the complaint or in any way to interfere personally or by agents in the said peaceful possession
by the plaintiff of the land in litigation; the defendants are hereby further ordered to pay the costs of this
suit."
"It is principally contended by defendants-appellants that the trial court erred in deciding the case in favor of
the plaintiff- appellee and against defendants-appellants, based upon the testimony of Pelagia Vegilia and
Mariano Vegilia; the first, emphatically denying that she sold the land in question to Mariano Vegilia, and
that she appeared before Notary Public Lino Abad Pine before whom the Escritura de Compraventa Definita,
Exhibit 1, was allegedly ratified; and the second, denying that he bought the said land from Pelagia Vegilia,
and that he sold the same to Santiago Apostol as recited in Pecivo, Exhibit 2. In giving credence to the
testimony of the aforementioned two witnesses, the trial court said: An examination of Exh.1 reveals the
glaring fact that it cannot be determined whose thumbmark is the one appearing on said Exh.1 for the
simple reason that it immediately precedes the name Anselmo Vegilia but it is under the name Pelagia
Vegilia. Ordinarily, this thumbmark would be considered as the thumbmark of Anselmo Vegilia and not of
Pelagia Vegilia. While the Judge presiding this Court does not claim any knowledge of finger print, it is,
however, apparent that the thumbmark appearing in Exh.1 is different from the thumbmark appearing in
Exh.X. Furthermore, it is also very clear that the one who wrote the name Anselmo Vegilia is the very one
who wrote the name Pelagia Vegilia; and from said Exh.1 it is apparent also that Anselmo Vegilia could not
have written the name Anselmo Vegilia in Exh.1 for the simple reason that it has been certified by the
Notary Public that said Anselmo Vegilia is physically incapable (inutil physicamente), and the other factor
which leads this Court to believe that Exh.1 has been falsified is the apparent difference of the ink used in
writing the names of Pelagia Vegilia and Anselmo Vegilia from the ink used by the other persons who signed
in Exh.1 and the apparent fact that the names Pelagia Vegilia and Anselmo Vegilia must have been written
in a much later date than the other names appearing in said Exh.1. With respect to Exh.2, the denial of
Mariano Vegilia as to his having purchased the land in question from Pelagia Vegilia is enough for this Court
to disregard Exh.2. But this Court further takes into account the fact that the names Mariano Vegilia and
Jose B. Aviles appearing in said Exh.2 must have been written by only one man."
Assuming that the above findings of the Court of Appeals are reviewable, we find nothing in the record
sufficient to justify their reversal.
WHEREFORE, the decision appealed from is hereby affirmed, with costs.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Regala and
Makalintal, JJ., concur.
[G.R. No. 104482. January 22, 1996.]
BELINDA TAEDO v COURT OF APPEALS

SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; SALE; MAY NOT BE ENTERED UPON FUTURE INHERITANCE; EXCEPT IN
CASES EXPRESSLY AUTHORIZED BY LAW. Pursuant to Article 1347 of the Civil Code," (n)o contract may
be entered into upon a future inheritance except in cases expressly authorized by law." Consequently, said
contract made in 1962 conveying one hectare of his future inheritance is not valid and cannot be the source
of any right nor the creator of any obligation between the parties. Hence, the "affidavit of conformity" dated
February 28, 1980, insofar as it sought to validate or ratify the 1962 sale, is also useless and, in the words
of the respondent Court, "suffers from the same infirmity." Even private respondents in their memorandum
concede this.
2. ID.; ID.; ID.; RULE ON PREFERENTIAL RIGHT OF VENDEES IN CASE OF DOUBLE SALE. Petitioners
contend that they were in possession of the property and that private respondents never took possession
thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over
the other who has not registered his title, even if the latter is in actual possession of the immovable
property.
3. REMEDIAL LAW; EVIDENCE; CREDIBILITY; FINDINGS OF FACT OF EXISTENCE OF GOOD FAITH,
GENERALLY UPHELD ON APPEAL. There are indeed many conflicting documents and testimonies as well as
arguments over their probative value and significance. Suffice it to say, however, that all the above
contentions involve questions of fact, appreciation of evidence and credibility of witnesses, which are not
proper in this review. It is well-settled that the Supreme Court is not a trier of facts. In petitions for review
under Rule 45 of the Revised Rules of Court, only questions of law may be raised and passed upon. Absent
any whimsical or capricious exercise of judgment, and unless the lack of any basis for the conclusions made
by the lower courts be amply demonstrated, the Supreme Court will not disturb their findings. At most, it
appears that petitioners have shown that their evidence was not believed by both the trial and the appellate
courts, and that the said courts tended to give more credence to the evidence presented by the private
respondents. But this in itself is not a reason for setting aside such findings. We are far from convinced that
both courts gravely abused their respective authorities and judicial prerogatives.
DECISION
PANGANIBAN, J.:
Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in
ownership? What is the probative value of the lower courts finding of good faith in registration of such sales
in the registry of property? These are the main questions raised in this Petition for review on certiorariunder
Rule 45 of the Rules of Court to set aside and reverse the Decision 1 of the Court of Appeals 2 in CA-G.R. CV
NO. 24987 promulgated on September 26, 1991 affirming the decision of the Regional Trial Court, Branch
63, Third Judicial Region, Tarlac, Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration
thereof, promulgated on May 27, 1992.
chanroble svirtual|awlibrary
By the Courts Resolution on October 25, 1995, this case (along with several others) was transferred from
the First to the Third Division and after due deliberation, the Court assigned it to the undersigned ponente
for the writing of this Decision.
The Facts
On October 20, 1962, Lazardo Taedo executed a notarized deed of absolute sale in favor of his eldest
brother, Ricardo Taedo, and the latters wife, Teresita Barera, private respondents herein, whereby he
conveyed to the latter in consideration of P1,500.00, "one hectare of whatever share I shall have over Lot
No. 191 of the cadastral survey of Gerona, Province of Tarlac and covered by Title T-1389 of the Register of
Deeds of Tarlac", the said property being his "future inheritance" from his parents (Exh. 1) Upon the death
of his father Matias, Lazaro executed an "Affidavit of Conformity" dated February 28, 1980 (Exh. 3) to "reaffirm respect, acknowledge and validate the sale I made in 1962." On January 13, 1981, Lazaro executed
another notarized deed of sale in favor of private respondents covering his "undivided ONE TWELVE (1/12)
of a parcel of land known as Lot 191 . . ." (Exh. 4). He acknowledged therein his receipt of P10,000.00 as
consideration therefor. In February 1981, Ricardo learned that Lazaro sold the same property to his children,
petitioners herein, through a deed of sale dated December 29, 1980 (Exh. E). On June 7, 1982, private
respondents recorded the Deed of Sale (Exh 4) in their favor in the Registry of Deeds and the corresponding
entry was made in Transfer Certificate of Title No. 166451 (Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by
Lazaro in favor of private respondents covering the property inherited by Lazaro from his father.
chanroble svirtuallawlibrary
Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of Sale" dated December 29, 1980
(Exh. E), conveying to his ten children his allotted portion under the extrajudicial partition executed by the
heirs of Matias, which deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (l) a private writing purportedly prepared and signed by Matias dated
December 28, 1978, stating that it was his desire that whatever inheritance Lazaro would receive from him
should be given to his (Lazaros) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed
by Lazaro in the presence of two witnesses, wherein he confirmed that he would voluntarily abide by the
wishes of his father Matias, to give to his (Lazaros) children all the property he would inherit from the latter
(Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his daughter Carmela stating that his share in
the extrajudicial settlement of the estate of his father was intended for his children, petitioners herein (Exh.
C).
Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale" dated March
12, 1981 (Exh. 6), wherein Lazaro revoked the sale in favor of petitioners for the reason that it was
"simulated or fictitious without any consideration whatsoever" .
chanroblesvirtual|awlibrary
Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually
repudiated the contents of the Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4)
in favor of private respondents. However, Lazaro testified that he sold the property to Ricardo, and that it
was a lawyer who induced him to execute a deed of sale in favor of his children after giving him five pesos
(P5.00) to buy a "drink" (TSN September 18, 1985, pp. 204-205).
The trial court decided in favor of private respondents, holding that petitioners failed "to adduce a
preponderance of evidence to support (their) claim." On appeal, the Court of Appeals affirmed the decision
of the trial court, ruling that the Deed of Sale dated January 13, 1981 (Exh. 9) was valid and that its
registration in good faith vested title in said respondents.
The Issues
Petitioners raised the following "errors" in the respondent Court, which they also now allege in the instant
Petition:
"I. The trial Court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer) is
merely voidable or annullable and not void ab initio pursuant to paragraph 2 of Article 1347 of the New Civil
Code involving as it does a future inheritance.
"II. The trial court erred in holding that defendants- appellees acted in good faith in registering the deed of
sale of January 13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of the land
in question passed on to defendants-appellees.
"III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence of
plaintiffs-appellants which clearly established by preponderance of evidence that they are indeed the
legitimate and lawful owners of the property in question.
"IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the established
facts are illogical and off-tangent."
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?

2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a
deed of sale covering the same property to the same buyers valid?
3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good faith
in registering the said subsequent deed of sale and (b) in "failing to consider petitioners evidence" ? Are the
conclusions of the respondent Court "illogical and off-tangent" ?
The Courts Ruling
At the outset, let it be clear that the "errors" which are reviewable by this Court in this petition for review
on certiorari are only those allegedly committed by the respondent Court of Appeals and not directly those
of the trial court, which is not a party here. The "assignment of errors" in the petition quoted above are
therefore totally misplaced, and for that reason, the petition should be dismissed. But in order to give the
parties substantial justice we have decided to delve into the issues as above re-stated. The errors attributed
by petitioners to the latter (trial) court will be discussed only insofar as they are relevant to the appellate
courts assailed Decision and Resolution.
The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed
Decision conceded "it may be legally correct that a contract of sale of anticipated future inheritance is null
and void." 3
But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code," (n)o
contract may be entered into upon a future inheritance except in cases expressly authorized by law."
Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator
of any obligation between the parties.

Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the
1962 sale, is also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even
private respondents in their memorandum 4 concede this.
However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January
13, 1981 in favor of private respondents covering Lazaros undivided inheritance of one-twelfth (1/12) share
in Lot No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of sale dated
December 29, 1980 in favor of petitioners covering the same property. These two documents were executed
after the death of Matias (and his spouse) and after a deed of extra-judicial settlement of his (Matias)
estate was executed, thus vesting in Lazaro actual title over said property. In other words, these
dispositions, though conflicting, were no longer infected with the infirmities of the 1962 sale.
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Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No. 191,
citing as authority the trial courts decision. As earlier pointed out, what is on review in these proceedings by
this Court is the Court of Appeals decision - which correctly identified the subject matter of the January 13,
1981 sale to be the entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the same property
disposed of on December 29, 1980 in favor of petitioners.
Critical in determining which of these two deeds should be given effect is the registration of the sale in favor
of private respondents with the register of deeds on June 7, 1982.
Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as
follows:
"Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good
faith."
The property in question is land, an immovable, and following the above-quoted law, ownership shall belong
to the buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in
favor of private respondents was later than the one in favor of petitioners, ownership would vest in the
former because of the undisputed fact of registration. On the other hand, petitioners have not registered the
sale to them at all.
Petitioners contend that they were in possession of the property and that private respondents never took
possession thereof. As between two purchasers, the one who registered the sale in his favor has a preferred
right over the other who has not registered his title, even if the latter is in actual possession of the
immovable property. 5
As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it was
done in bad faith. On this issue, the respondent Court rule:
"Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in bad
faith when they registered the Deed of Sale in their favor as appellee Ricardo already knew of the execution
of the deed of sale in favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Taedo to the
effect that defendant Ricardo Taedo called her up on January 4 or 5, 1981 to tell her that he was already
the owner of the land in question but the contract of sale between our father and us were (sic) already
consummated (pp. 9-10, tsn, January 6, 1984). This testimony is obviously self-serving, and because it was
a telephone conversation, the deed of sale dated December 29, 1980 was not shown; Belinda merely told
her uncle that there was already a document showing that plaintiffs are the owners (p. 80). Ricardo Taedo
controverted this and testified that he learned for the first time of the deed of sale executed by Lazaro in
favor of his children about a month or sometime in February 1981 (p. 111, tsn, Nov. 28, 1984). . . ." 6
The respondent Court, reviewing the trial courts findings, refused to overturn the latters assessment of the
testimonial evidence, as follows:
"We are not prepared to set aside the finding of the lower court upholding Ricardo Taedos testimony, as it
involves a matter of credibility of witnesses which the trial judge, who presided at the hearing, was in a
better position to resolve." (Court of Appeals Decision, p. 6.)
In this connection, we note the tenacious allegations made by petitioners, both in their basic petition and in
their memorandum, as follows:
1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo "by fraud and deceit and
with foreknowledge" that the property in question had already been sold to petitioners, made Lazaro
execute the deed of January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was paid
at the time of the execution of the deed of sale, contrary to the written acknowledgment, thus showing bad
faith;
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3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of
petitioners "was tainted with fraud or deceit."
4. There is allegedly enough evidence to show that private respondents "took undue advantage over the
weakness and unschooled and pitiful situation of Lazaro Taedo. . ." and that respondent Ricardo Taedo
"exercised moral ascendancy over his younger brother he being the eldest brother and who reached fourth
year college of law and at one time a former Vice-Governor of Tarlac, while his younger brother only attained
first year high school . . ." ;
5. The respondent Court erred in not giving credence to petitioners evidence, especially Lazaro Taedos
Sinumpaang Salaysay dated July 27, 1982 stating that Ricardo Taedo deceived the former in executing the
deed of sale in favor of private respondents.
To be sure, there are indeed many conflicting documents and testimonies as well as arguments over their
probative value and significance. Suffice it to say, however, that all the above contentions involve questions
of fact, appreciation of evidence and credibility of witnesses, which are not proper in this review. It is wellsettled that the Supreme Court is not a trier of facts. In petitions for review under Rule 45 of the Revised
Rules of Court, only questions of law may be raised and passed upon. Absent any whimsical or capricious
exercise of judgment, and unless the lack of any basis for the conclusions made by the lower courts be
amply demonstrated, the Supreme Court will not disturb their findings. At most, it appears that petitioners
have shown that their evidence was not believed by both the trial and the appellate courts, and that the said
courts tended to give more credence to the evidence presented by private respondents. But this in itself is
not a reason for setting aside such findings. We are far from convinced that both courts gravely abused their
respective authorities and judicial prerogatives.
As held in the recent case of Chua Tiong Tay v. Court of Appeals and Goldrock Construction and
Development Corp. 7 :
"The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals,
are final and conclusive and may not be reviewed on appeal. Among the exceptional circumstances where a
reassessment of facts found by the lower courts is allowed are when the conclusion is a finding grounded
entirely on speculation, surmises or conjectures; when the inference made is manifestly absurd, mistaken or
impossible; when there is grave abuse of discretion in the appreciation of facts; when the judgment is
premised on a misapprehension of facts; when the findings went beyond the issues of the case and the
same are contrary to the admissions of both appellant and appellee. After a careful study of the case at
bench, we find none of the above grounds present to justify the re-evaluation of the findings of fact made by
the courts below."
In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. v. Hon.
Court of Appeals, Et. Al. 8 is equally applicable to the present case:
"We see no valid reason to discard the factual conclusions of the appellate court. . . . (I)t is not the function
of this Court to assess and evaluate all over again the evidence, testimonial and documentary, adduced by
the parties, particularly where, such as here, the findings of both the trial court and the appellate court on
the matter coincide." (Emphasis supplied)
WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. No
Costs.
SO ORDERED.
[G.R. No. 56232. June 22, 1984.]

ABELARDO CRUZ v LEODEGARIA CABANA
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; SALES; DOUBLE SALE OF REAL PROPERTY; OWNERSHIP OF
PROPERTY ACQUIRED BY VENDEE WHO FIRST REGISTERS SALE IN GOOD FAITH. As the Court held in
Carbonell v. Court of Appeals, 69 SCRA 99 (1976), "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 Article 1544 of the
Civil Code." As the writer stressed in his concurring opinion therein, "The governing principle here is prius
tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale
cannot defeat the first buyers right except only as provided by the Civil Code and that is where the second
buyer first registers in good faith the second sale ahead of the first. Such knowledge of the first buyer does
not bar her from availing of her rights under the law, among them to register first her purchase as against
the second buyer. But 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. This is the price exacted by Article 1544 of the Civil Code of the second buyer being able to displace
the first buyer; that before the second buyer can obtain priority over the first, he must show that he acted in
good faith throughout (i.e. in ignorance of the first sale and of the first buyers rights) from the time of
acquisition until the title is transferred to him by registration or failing registration, by delivery of possession.
The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until
his contract ripens into full ownership through prior registration as provided by law."
2. ID.; ID.; ID.; ID.; ID.; KNOWLEDGE OF PRIOR SALE TAINTS SECOND PURCHASERS PRIOR
REGISTRATION WITH BAD FAITH; CASE AT BAR. When petitioner Cruz succeeded in registering the later
sale in his favor, he knew and was informed of the prior sale in favor of respondents-spouses. Respondents
appellate court correctly held that such "knowledge of a prior transfer of a registered property by a
subsequent purchasers makes him a purchaser in bad faith and his knowledge of such transfer vitiates his
title acquired by virtue of the latter instruments of conveyance with creates no right as against the first
purchaser."
DECISION
TEEHANKEE, J.:
The Court affirms the questioned decision of the now defunct Court of Appeals which affirmed that of the
Court of First Instance of Quezon Province, but directs that the seller, respondent Leodegaria Cabana who
sold the property in question twice, first to her co-respondents Teofilo Legaspi and Iluminada Cabana and
later to petitioner Abelardo Cruz (now deceased), should reimburse to petitioners heirs the amounts of
P2,352.50, which the late petitioner Abelardo Cruz paid to the Philippine National Bank to discharge the
mortgage obligation of said respondent Leodegaria Cabana in favor of said bank, and of P3,397.50,
representing the amount paid by said Abelardo Cruz to her as consideration of the sale with pacto de retro
of the subject property.
This is a simple case of double sale of real property. Respondent appellate court in its decision of August 13,
1980 stated the background facts and resolved the issue in favor of defendants-appellees, first buyersrespondents herein, and against plaintiff-appellant Abelardo Cruz, petitioner herein (substituted by his
heirs), as follows:
"Defendants evidence shows that on October 21, 1968, defendant Leodegaria Cabaa sold the land in
question to defendants-spouses Teofilio Legaspi and Iluminada Cabaa (Exh. 1). The said defendantsspouses attempted to register the deed of sale but said registration was not accomplished because they
could not present the owners duplicate of title which was at that time in the possession of the PNB as
mortgage.
"Likewise, when plaintiff tried to register the deed of sale executed by Leodegaria Cabaa on September 3,
1970, said plaintiff was informed that the owner thereof had sold the land to defendants-spouses on October
21, 1968. Plaintiff was able to register the land in his name on February 9, 1971 (Exh. A). With the
admission of both parties that the land in question was sold to two persons, the main issue to be resolved in
this appeal is as to who of said vendees has a better title to said land.
"There is no dispute that the land in question was sold with right of repurchase on June 1, 1965 to
defendants-spouses Teofilo Legaspi and Iluminada Cabaa (Exh. 1). The said document `Bilihang Muling
Mabibili stipulated that the land can be repurchased by the vendor within one year from December 31, 1966
(see par. 5, Exh. 1). Said land was not repurchased and in the meantime, however, said defendants-spouses
took possession of the land.
"Upon request of Leodegaria Cabaa, the title of the land was lent to her in order to mortgage the property
to the Philippine National Bank. Said title was, forthwith, deposited with the PNB. On October 21, 1968,
defendant Leodegaria Cabaa sold the land by way of absolute sale to the defendants-spouses (Exh. 2).
However, on November 29, 1968 defendant sold the same property to herein plaintiff and the latter was able
to register it in his name.
"The transaction in question is governed by Article 1544 of the Civil Code. True it is that the plaintiff was
able to register the sale in his name but was he in good faith in doing so?
"While the title was registered in plaintiff-appellants name on February 9, 1971 (Exh. A), it appears that he
knew of the sale of the land to defendants-spouses Legaspi as he was informed in the Office of the Register
of Deeds of Quezon. It appears that the defendants-spouses registered their document of sale on May 13,
1965 under Primary Entry No. 210113 of the Register of Deeds (Exh. 2).
"Under the foregoing circumstances, the right of ownership and title to the land must be resolved in favor of
the defendants-spouses Legaspi on three counts. First, the plaintiff-appellant was not in good faith in
registering the title in his name. Consistent is the jurisprudence in this jurisdiction that in order that the
provisions of Article 1544 of the new Civil Code may be invoked, it is necessary that the conveyance must
have been made by a party who has an existing right in the thing and the power to dispose of it (10
Manresa 170, 171). It cannot be set up by a second purchaser who comes into possession of the property
that has already been acquired by the first purchaser in full dominion (Bautista v. Sison, 39 Phil. 615), this
notwithstanding that the second purchaser records his title in the public registry, if the registration be done
in bad faith, the philosophy underlying this rule being that the public records cannot be covered into
instruments of fraud and oppression by one who secures an inscription therein in bad faith (Chupinghong v.
Borreros, 7 CA Rep. 699).
"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 (Reylago v. Jarabe,
L-20046, March 27, 1968, 22 SCRA 1247).
"In the second place, the defendants-spouses registered the deed of absolute sale ahead of plaintiffappellant. Said spouses were not only able to obtain the title because at that time, the owners 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 (Soriano, Et. Al. v. The Heirs of Domingo
Magali, Et Al., L-15133, July 31, 1963, 8 SCRA 489). Priority of possession stands good in favor of herein
defendants-spouses (Evangelista v. Abad, [CA] 36 O.G. 2913; Sanchez v. Ramos, 40 Phil. 614; Quimson v.
Rosete, 87 Phil. 159)."
The Court finds that in this case of double sale of real property, respondent appellate court, on the basis of
the undisputed facts, correctly applied the provisions of Article 1544 of the Civil Code that
"Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
"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
faith."
There is no question that respondents-spouses Teofilo Legaspi and Iluminada Cabana were the first buyers,
first on June 1, 1965 under a sale with right of repurchase and later on October 21, 1968 under a deed of
absolute sale and that they had taken possession of the land sold to them; that petitioner was the second
buyer under a deed of sale dated November 29, 1968, which to all indications, contrary to the text, was a
sale with right of repurchase for ninety (90) days. 1 There is no question either that respondents Legaspi
spouses were the first and the only ones to be in possession of the subject property.
Said respondents spouses were likewise the first to register the sale with right of repurchase in their favor
on May 13, 1965 under Primary Entry No. 210113 of the Register of Deeds. They could not register the
absolute deed of sale in their favor and obtain the corresponding transfer certificate of title because at that
time the sellers duplicate certificate was still with the bank. But there is no question, and the lower courts
so found conclusively as a matter of fact, that when petitioner Cruz succeeded in registering the later sale in
his favor, he knew and he was informed of the prior sale in favor of respondents-spouses. Respondent
appellate court correctly held that such "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."
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As the Court held in Carbonell v. Court of Appeals 2 "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 [the above quoted]
Article 1544." As the writer stressed in his concurring opinion therein," (T)he governing principle here is
prius 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 only as provided by the Civil Code and that is where
the second buyer first registers in good faith the second sale ahead of the first. Such knowledge of the first
buyer does not bar her from availing of her rights under the law, among them, to register first her purchase
as against the second buyer. But 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. This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to
displace the first buyer; that before the second buyer can obtain priority over the first, he must show that he
acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyers rights) from the
time of acquisition until the title is transferred to him by registration or failing registration, by delivery of
possession. The second buyer must show continuing good faith and innocence or lack of knowledge of the
first sale until his contract ripens into full ownership through prior registration as provided by law."
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Petitioners prayer for alternative relief for reimbursement of the amount of P2,352.50 paid by him to the
bank to discharge the existing mortgage on the property and of the amount of P3,397.50 representing the
price of the second sale are well taken insofar as the seller Leodegaria Cabana is concerned. These amounts
have been received by the said seller Leodegaria Cabana on account of a void second sale and must be duly
reimbursed by her to petitioners heirs, but the Legaspi spouses cannot be held liable therefor since they had
nothing to do with the said second sale nor did they receive any benefit therefrom. Petitioners claim for
reimbursement of the amount of P102.58 as real estate taxes paid on the property is not well taken because
the respondents Legaspi spouses had been paying the real estate taxes on the same property since June 1,
1969. 4
ACCORDINGLY, the appealed judgment of respondent appellate court, upholding respondents-spouses Teofilo
Legaspi and Iluminada Cabana as the true and rightful owners of the property in litigation and ordering the
issuance of a new title with the cancellation as null and void of Title No. T-99140 obtained by petitioner
Abelardo C. Cruz, is hereby affirmed in toto. In accordance with the partial grant of petitioners prayer for
alternative relief as stated in the preceding paragraph hereof, the Court hereby orders and sentences
respondent Leodegaria Cabana to reimburse and pay to petitioners heirs the total sum of P5,750.00.
Melencio-Herrera, Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.
[G.R. No. L-56838. April 26, 1990.]

GENARO NAVERA v COURT OF APPEALS
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF TRIAL COURT; CONCLUSIVE WITH THE SUPREME
COURT. As found by the trial court and respondent appellate court, the property in dispute, namely, the
whole of Lot 1460 is titled in the name of "Elena Navera, Et. Al.", the phrase "et al." referring only to
Eduarda, sister of Elena since the other brothers of Elena and Eduarda namely, Mariano, Basilio and Felix
had received their shares from the other properties of their father Leocadio Navera. These factual findings
are conclusive upon Us. Thus, when Elena Navera died sometime in 1924, her compulsory heirs including
respondents Arsenio Nares and Felix Nares acquired Elenas shares in Lot 1460 by inheritance, which is onehalf of Lot 1460. As to the other half of Lot 1460 owned by Eduarda Navera, the latter sold the same to two
vendees, one in favor of respondent Arsenio Nares and the other in favor of Mariano Navera, petitioners
predecessor-in-interest. The conclusions and findings of facts by the trial court are entitled to great weight
and will not be disturbed on appeal unless for strong and cogent reasons because the trial court is in a
better position to examine real evidence as well as to observe the demeanor of witnesses while testifying on
the ease. (Macua v. Intermediate Appellate Court, No. L-70810, October 26, 1987, 155 SCRA 29).
2. ID.; CIVIL PROCEDURE; PRESCRIPTION; AS A DEFENSE, MUST BE PLEADED IN THE ANSWER.
Prescription as a defense, must be expressly relied upon in the pleadings. It cannot be availed of, unless it is
specially pleaded in the answer; and it must be proved or established with the same degree of certainty as
any essential allegation in the civil action (Hodges v. Salas, 63 Phil. 567; Corporacion de PP. Augustinus
Recolectos v. Crisostomo, 32 Phil. 427). In the instant case, Petitioners, who were the defendants in the
lower court, did not claim acquisitive prescription in their answer, and even if they did, it cannot be given
judicial sanction on mere allegations. The law requires one who asserts ownership by adverse possession to
prove the presence of the essential elements of acquisitive prescription (Morales v. CFI, Et Al., No. L-52278,
May 29, 1980, 97 SCRA 872).
3. CIVIL LAW; SPECIAL CONTRACTS; DOUBLE SALES; OWNERSHIP SHALL PERTAIN TO THE PERSON WHO
IN GOOD FAITH WAS FIRST IN POSSESSION IN THE ABSENCE OF RECORDING IN THE REGISTRY OF
PROPERTY. In the instant case, the first sale of Eduarda Naveras share in the said lot to Arsenio Nares
was made in a public instrument on May 14, 1947. The second sale of the same property was executed also
in a public instrument in favor of Mariano Navera, who is the predecessor in interest of petitioner Genaro
Navera, on June 26, 1948, or more than a year after the first sale. Since the records show that both sales
were not recorded in the Registry of Property, the law clearly vests the ownership upon the person who in
good faith was first in possession of the disputed lot. The possession mentioned in Article 1544 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. 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 of the thing lawfully acquired by the first vendee (Quimson v.
Rosete, 87 Phil. 159; Sanchez v. Ramos, 40 Phil. 614; Florendo v. Foz, 20 Phil. 388). In the case at bar, the
prior sale of the land to respondent Arsenio Nares by means of a public instrument is clearly tantamount to
a delivery of the land resulting in the material and symbolic possession thereof by the latter. Verily, factual
evidence points to the prior actual possession by respondent Nares before he was evicted from the land by
petitioners and their predecessors in 1957 when the latter entered the disputed property. No other evidence
exists on record to show the contrary. Based on the foregoing, it is correct to conclude that the priority of
possession stands good in favor of respondents. It is well-settled in our jurisprudence that prior est in
tempore, potior est in jure (he who is first in time is preferred in right). Ownership should therefore be
recognized in favor of the first vendee, respondent Arsenio Nares.
4. ID.; ACQUISITIVE PRESCRIPTION; NOT ESTABLISHED IN CASE AT BAR. We are of the opinion that
there is lack of sufficient proof to establish clearly and positively petitioners claim of acquisitive prescription.
In fact, We are more inclined to believe respondents version that respondent Arsenio Nares was evicted
from the property by petitioner sometime in 1957, thereby showing the latters bad faith in acquiring the
possession of the property until 1971 when the action against petitioner was filed. Thus, the ordinary
acquisitive prescription of ten years cannot be considered in favor of petitioner in the absence of good faith.
Neither is the petitioner entitled to extraordinary acquisitive prescription, in the absence of sufficient proof of
compliance with the thirty-year requirement of possession in case of bad faith.
5. ID.; POSSESSION; MUST BE IN THE CONCEPT OF AN OWNER, PUBLIC PEACEFUL AND UNINTERRUPTED.
The law clearly states that "possession has to be in the concept of an owner, public, peaceful and
uninterrupted" (Article 1118, Civil Code). The actuations of petitioners, however, show the contrary. A
reading of the demand letter from respondents dated May 27, 1970, submitted in evidence by petitioners,
shows that the dispute over Lot 1460 had been going on for a number of years among petitioners,
respondents and their families. This goes to show that during the time when the petitioners bought the land
in 1959 and the following years thereafter when the latter possessed the property, they have known or
should have known of the rights and interests of their cousins, respondents herein, over the disputed land.
Moreover, the tax declarations for the years 1951 and 1965 showed that the respondents Arsenio Nares and
Felix Nares were the declared owners (p. 34 and 113, Records). In other words, petitioners predecessors in
interest, namely, Mariano Navera and the subsequent purchasers of the lot, had not bothered to declare the
land in their own names for purposes of taxation during the time that they were allegedly in possession of
the land. It was only in the year 1966 when petitioner Genaro Navera started to declare himself owner of
the land for taxation purposes.
6. ID.; DONATION PROPTER NUPTIALS, MUST BE RECORDED IN THE REGISTRY OF PROPERTY OR

INSCRIBED IN THE ORIGINAL CERTIFICATE OF TITLE. The respondent appellate court affirmed the
findings of the lower court on this matter, as follows, to wit: "After a careful perusal and thorough review of
the whole evidence on record, we cannot find any basis therein for upholding the claim of appellants,
articulated in their appellants brief. It is apropos to state that the donation propter nuptias made by
Leocadio Navera sometime in October, 1916, should have been et least recorded in the registry of property
or inscribed in the Original Certificate of Title or the donee shall have titled the property in his name. As the
trial court correctly noted that the alleged donee Fausto Mustar is not a party to the case nor had he
transferred the said donated property to the spouses Mariano Navera in a public instrument or conveyance.
Nowhere in the evidence on record would show that the said donated property was ever transferred to
Mariano Navera, father of defendant-appellant Genaro Navera." (p. 24, Rollo). No important reasons exist to
compel Us to ignore the findings of the respondent appellate court. Besides, the knowledge of private
respondents concerning the alleged previous donation is immaterial. The facts are clear that the original
certificate of title itself covers the whole of 26,995 square meters of the disputed Lot 1460 in the name of
"Elena Navera, Et. Al.", without any mention of any previous donation of a portion of the said lot to the
alleged donee.
DECISION
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals in CA-G.R. No. 63926-R
affirming in toto the decision of the Court of First Instance of Albay (now Regional Trial Court) in Civil Case
No. 4359 entitled "Arsenio Nares and Felix Nares v. Genaro Navera and Emma Amador," which declared the
private respondents Arsenio Nares and Felix Nares owners of the land in dispute.
The antecedent facts of this case are as follows:
Leocadio Navera has five (5) children, namely: Elena, Mariano, Basilio, Eduarda and Felix, all surnamed
Navera. Mariano Navera is the father of petitioner Genaro Navera. Elena Navera, on the other hand has
three children by Antonio Nares. Two of them are respondent Arsenio Nares and Felix Nares. The other child,
Dionisia is already deceased and has left children. Petitioner and respondents are therefore, first cousins.
Way back in 1916, Leocadio Navera donated to Fausto Mustar in a private instrument a certain property in
consideration of the marriage of the formers son, Mariano Navera, to the daughter of Fausto Mustar by the
name of Restituta Mustar. The said property donated is described as follows:
"The land that I am giving to my compadres (Cablaye) is located in Caguiba, Camalig, Albay, Philippines,
and the boundaries and area are the following: North, property of Angel Navera, and measures 98 meters
on this side and the visible boundary is a row of Pasao; East, property of Josefa Moratalla and measures 150
meters on this side with row of Pasao and bani, on the South, property belong to me and measures 63
meters on this side and the visible mark is shoulder of the mountain: on the west, my own property and
measures 108 meters on this side with row of Pasao with a dita tree." (p. 110, Records)
On July 19, 1927, Original Certificate of Title No. RO-154(NA) was issued in the name of "Elena Navera, Et.
Al.", covering the land in dispute, namely Lot 1460, situated in the Municipality of Camalig, Albay,
particularly described as follows:
"A parcel of land (Lot No. 1460 of the Cadastral Survey of Camalig), with all the improvements thereon;
bounded on the SE, along lines 1-2, by Lot 1459; on the SW along lines 2-3-4-5-6-7-8, by creek; on the NE,
along line 8-9, by Lot 1474; and on the E, along line 9-1, by Lot 1441, containing an area of TWENTY SIX
THOUSAND NINE HUNDRED NINETY FIVE (26,995) square meters more or less; . . .." (pp. 30-31, Records)
Sometime in 1924, Elena Navera died.
On May 14, 1947, Eduarda Navera, by means of a public instrument, sold to her nephew, respondent
Arsenio Nares, all of her share in Lot 1460, which is titled in the name of "Elena Navera, Et. Al.." Eduarda
Naveras share in the aforementioned lot is one-half (1/2) of the total area of Lot 1460. The deed of sale
which the latter executed in favor of respondent Arsenio Nares particularly describes the lot subject of the
sale, as follows:
"A portion from the tax No. 28081, of one (1) half belong to EDUARDA NAVERA; and the other one (1) half
to own by the deceased Lina Navera, only is sold by this present deed of sale, the one to belong to Eduarda
Navera. But the other half being owned by Lina Navera, is the very deceased mother of the buyer of this
deed of absolute sale. Although the other half to belong to Lina Navera but the present administrator is also
name[d] the present buyer. And by this reason, the whole lot is now under care of Arsenio Nares. The
boundaries of the portion to belong to Eduarda Navera, to sell the said purchaser are: on the North by
Mariano Navera; on the East by Roman Marga, on the South by Enrico Obligado and on the West by Felix
Samson." (pp. 32-33, Records)
On June 26, 1948, Eduarda Navera sold for the second time a portion of Lot 1460 to Mariano Navera. The
property sold is described as follows:
"A portion of 50 meters long, 59 meters wide, the length has a terminus consisting of stone set by the
Bureau of Lands from the West and straight to the East, reaching the goal of a tree namely Ditadita, and
from that point down the South reaching the point with the symbol of a Gomian tree and from Gomian for
North Direction reaching Anonang with a dimension of 48 meters and from Anonang tree curving to the
point of a goal set by the Bureau of Lands and from that point at ends North direction to the last is again a
stone placed by the Bureau of Lands, 12 m. This portion is taken from land tax No. R-124. Title No.
_______________ and Lot No. __________________. The declaration has the value of P280.00. The
boundaries of the portion to be sold are: North, by Igmedio Navera; on the east by Mariano Navera; on
the south by Arsenio Nares, and on the west, by Januario Nolasco, Arsenio Nares had also same bought a
portion from the whole lot." (p. 111, Records)
On January 30, 1953, respondent Arsenio Nares sold to Perpetua Dacillo a portion of Lot No. 4167
containing an area of five thousand seven hundred twenty six (5,726) square meters (p. 112, Records).
Perpetua Dacillo thereafter donated the said property to Francisco Dacillo.
On August 13, 1955, Mariano Navera, sold to his brother-in-law, Serapio Mustar, the lot which he bought
from Eduarda Navera, particularly described as follows:
"A certain parcel of land situated in the barrio of Tiniguiban, Caguiba, Camalig, Albay, Philippines, containing
an area of (00-09-16) square meters more or less. Bounded on the North by Igmedio Navera. This property
is declared for taxation purposes under Tax No. R-124. Visible boundaries consist of mojon and other trees.
Assessed at P280.00." (pp. 105-106, Records)
On February 11, 1956, the foregoing deed of sale was supplemented by the following stipulation:
"(b) As to the property under paragraph (2) thereof, the same pertains to Cadastral Lot No. 1460, containing
an area of 1-99-69 square meters, more or less, (in the said document there was clerical error of the area,
as previously stated in the total area of 00-09-16, which is hereto corrected as 1-90-71 square meters, as
the total area sold)." (p. 107, Records)
On April 7, 1959, Serapio Mustar later sold to petitioner Genaro Navera Lot 1460 which he bought from the
latters father, Mariano Navera, containing an area of nineteen thousand nine hundred sixty nine (19,969)
square meters more or less (p. 160, Records).
On September 3, 1971, Francisco Dacillo sold to petitioner Genaro Navera the land which the former
received by way of donation from Perpetua Dacillo. The lot sold is specifically described as follows:
"A parcel of land (Lot No. 1460, Camalig, Cad. Survey), Albay, with all the improvements thereon. Bounded
on the N., by Genaro Navera; on the E., by Roman Morga; on the S., by Cipriano Morga and on the W. by
Heirs of Felix Samson . . . containing an area of seven thousand and twenty six hundred (7,026) square
meters." (p. 101, Records)
All of the foregoing transfers of Lot 1460 were not annotated and inscribed in the Original Certificate of
Title.
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In their complaint dated March 14, 1971 filed with the then Court of First Instance of Albay (now Regional
Trial Court), respondents Arsenio Nares and Felix Nares, alleged inter alia: that they are the absolute owners
of the whole of Lot 1460 covered by Original Certificate of Title No. RO-154(NA), and are entitled to the
possession of the same; that Lot 1460 is registered in the name of "Elena Navera, Et. Al.", the "et al." being
Eduarda Navera; that the respondents acquired the above described property by inheritance from their
deceased mother Elena Navera; that a portion thereof which had been adjudicated to Eduarda Navera was
later sold to respondent Arsenio Nares; that sometime in August, 1955, Mariano Navera, without any legal
right whatsoever and under the pretense of ownership sold the said property to his brother-in-law Serapio
Mustar, who in turn sold the same to Genaro Navera, son of Mariano. Plaintiffs, respondents herein, also
claimed that all the foregoing sales were sham and manipulated transactions and that Mariano Navera knew
fully well that he had no right to sell the property. Respondents admitted however, that they sold a portion
of the property containing 6,726 square meters to Perpetua Dacillo, so that the remaining portion still
belongs to them. They further contended that petitioner Genaro Navera entered the land after the sale to
him by Mustar and took possession of the same and acquired the produce thereof since 1957 up to the
present time; and that respondents have exerted earnest efforts toward a compromise but petitioners
instead challenged them to go to court.
Petitioners Genaro Navera and Emma Amador filed their answer with counterclaim, denying all the
respondents claims, and alleging inter alia: that Leocadio Navera is the father of five children, namely,
Elena, Mariano, Eduarda, Basilio and Felix; that after deducting 12,415 square meters which Leocadio
Navera donated to Fausto Mustar in 1916, the remaining area of Lot 1460 was divided in equal shares
among Elena, Mariano and Eduarda, to the extent of 4,860 square meters each; that Basilio and Felix were
given their shares in other parcels of land. Petitioners also submitted that the "et al." appearing in the title
of the property refers to Fausto Mustar-12,415 square meters, Eduarda Navera-4,860 square meters,
Mariano Navera-4,860 square meters and Elena Navera-4,860 square meters; that Eduarda Navera sold
2,695 square meters of her share to Mariano Navera while the remaining 2,166 square meters of her share
was sold to Arsenio Nares; that Arsenios property totalled 7,026 sq. meters which he later sold to Perpetua
Dacillo. Petitioners further contended that they are presently in possession of Lot 1460 and their possession
tacked to that of their predecessor-in-interest as early as 1916; that the complaint states no cause of action
and that if the respondents had any, the same has long prescribed.
During the pre-trial on December 14, 1973, the parties agreed on the following matters: identity of the land,
the identity of the parties, that 5,726 sq. meters of the said Lot 1460 had already been sold to Perpetua
Dacillo and; that the defendants are in possession of the land in question.
On February 28, 1978, the trial court rendered a decision, the dispositive portion of which states:
"PREMISES CONSIDERED, judgment is hereby rendered:
1. Declaring the plaintiff[s] owner[s] of the lot described in the Original Certificate of Title RO-15480, except
5,726 square meters which rightfully belongs to defendant Genaro Navera.
"SO ORDERED." (p. 47, Rollo)
Not satisfied with the decision of the trial court, the petitioner appealed to the Court of Appeals. On
December 16,1980, the respondent appellate court rendered judgment affirming in toto the decision of the
trial court.
Hence, the instant petition was filed, praying for a reversal of the above-mentioned decision, with the
petitioner assigning the following errors:
"1. That the Honorable Court of Appeals failed to appreciate acquisitive prescription in favor of defendants
(now petitioners). (p 10, Rollo)
"2. That the Honorable Lower Court failed to apply the rule of law that actual knowledge is equivalent to, if
not serve the purpose of registration. (p. 12, Rollo)
"3. That the Honorable Court of Appeals erred in finding defendants-appellants (now petitioners) to be in
bad faith instead of the plaintiff-appellees (now private respondents)." (p. 13, Rollo)
In their first assigned error, petitioners-spouses Genaro Navera and Emma Amador allege that the evidence
on record, particularly Exhibit 12 and 12-A, clearly show their possession of the disputed property, the whole
of Lot 1460, for more than forty-six (46) years which is tantamount to their ownership of the same by
prescription, be it ordinary or extraordinary prescription; that respondents Arsenio Nares and Felix Nares
should not have been declared owners of Lot 1460 since they have lost whatever rights they have on the
land due to the possession thereof by petitioners; and that the sale by Eduarda Navera of her property to
Arsenio Nares was not recorded or annotated in the title just like the sale by Eduardo Navera of the same lot
to Mariano Navera.
As found by the trial court and respondent appellate court, the property in dispute, namely, the whole of Lot
1460 is titled in the name of "Elena Navera, Et. Al.", the phrase "et al." referring only to Eduarda, sister of
Elena since the other brothers of Elena and Eduarda namely, Mariano, Basilio and Felix had received their
shares from the other properties of their father Leocadio Navera. These factual findings are conclusive upon
Us. Thus, when Elena Navera died sometime in 1924, her compulsory heirs including respondents Arsenio
Nares and Felix Nares acquired Elenas shares in Lot 1460 by inheritance, which is one-half of Lot 1460. As
to the other half of Lot 1460 owned by Eduarda Navera, the latter sold the same to two vendees, one in
favor of respondent Arsenio Nares and the other in favor of Mariano Navera, petitioners predecessor-ininterest.
On this matter of double sale, the appellate court upheld the findings of the trial court, as follows, to wit:
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"As correctly noted by the trial court, all the transfers or conveyances are not inscribed in the Original
Certificate of Title No. RO-15480(NA) (Exhibit A). It would not be amiss to state that the sa[l]e of Eduarda
Navera to Arsenio Nares, and the sale of Eduarda Navera to Mariano Navera, which as above-mentioned, the
property referred to in both sales is the very same property covered by reconstituted title Exhibit A. The
sale of Eduarda Navera to appellee Arsenio Nares covered all her portion to the property, thus, she could not
possibly sell on June 26, 1948, another portion of the same property to Mariano Navera. Thus, the portion
referred to in the sale to Mariano Navera by Eduarda Navera may not be validly transferred by Mariano
Navera to Serapio Mustar. It likewise follow that Serapio Mustar may not effectively convey the same to
Genaro Navera . . . It is irremissible to state that the alleged conveyance made by Serapio Mustar in favor of
appellant Genaro Navera have no legal effect whatsoever, for the simple reason that Serapio Mustar could
not properly convey the portion referred to in the sale of June 26, 1948, by Eduarda Navera in favor of
Mariano Navera. In the first place, Eduarda Navera has no existing right to convey another portion of the
property because she had already sold all her portion to appellee Arsenio Nares. Thus at the time Eduarda
Navera conveyed a portion of the property which she already conveyed to appellee Arsenio Nares, she has
no right on the property and the power to dispose it. It clearly appears, therefore, that Mariano Navera
never acquired that portion subject of the sale on June 26,1948. Having acquired that portion of the
property subject of the sale on June 26, 1948 from Mariano Navera, Serapio Mustar has likewise no existing
right and power to dispose of that portion of the property to appellant Genaro Navera.
"Contrary to the appellants claim that they are possessors in good faith, Article 526 of the New Civil Code
provides that 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 and a possessor in bad faith is one who possesses in any case
contrary to the foregoing. And our Supreme Court said "every possessor in good faith becomes a possessor
in bad faith from the moment he becomes aware that what he believed to be true is not so." His possession
is legally interrupted when he is summoned to trial according to Article 1123 of the New Civil Code. (Tacas v.
Tabon, 53 Phil. 356)" (pp. 25-26, Rollo).

We agree with the aforequoted findings and conclusions of the lower court which were affirmed on appeal by
the Court of Appeals. The conclusions and findings of facts by the trial court are entitled to great weight and
will not be disturbed on appeal unless for strong and cogent reasons because the trial court is in a better
position to examine real evidence as well as to observe the demeanor of witnesses while testifying on the
ease. (Macua v. Intermediate Appellate Court, No. L-70810, October 26, 1987, 155 SCRA 29).
Clearly applicable herein is Article 1544 of the Civil Code which provides:
"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.
faith." (Emphasis ours)
In the instant case, the first sale of Eduarda Naveras share in the said lot to Arsenio Nares was made in a
public instrument on May 14, 1947. The second sale of the same property was executed also in a public
instrument in favor of Mariano Navera, who is the predecessor in interest of petitioner Genaro Navera, on
June 26, 1948, or more than a year after the first sale. Since the records show that both sales were not
recorded in the Registry of Property, the law clearly vests the ownership upon the person who in good faith
was first in possession of the disputed lot.
The possession mentioned in Article 1544 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. 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 of the thing
lawfully acquired by the first vendee (Quimson v. Rosete, 87 Phil. 159; Sanchez v. Ramos, 40 Phil. 614;
Florendo v. Foz, 20 Phil. 388). In the case at bar, the prior sale of the land to respondent Arsenio Nares by
means of a public instrument is clearly tantamount to a delivery of the land resulting in the material and
symbolic possession thereof by the latter. Verily, factual evidence points to the prior actual possession by
respondent Nares before he was evicted from the land by petitioners and their predecessors in 1957 when
the latter entered the disputed property. No other evidence exists on record to show the contrary.
Based on the foregoing, it is correct to conclude that the priority of possession stands good in favor of
respondents. It is well-settled in our jurisprudence that prior est in tempore, potior est in jure (he who is
first in time is preferred in right). Ownership should therefore be recognized in favor of the first vendee,
respondent Arsenio Nares.
Petitioners further submit that they have been in possession of the whole lot for more than 46 years, that
this can be gleaned from the letter sent by respondent Nares, wherein the latter admitted that it was the
petitioner Navera who continuously gathered the produce of the land for 46 years; that such possession for
a considerable length of time entitled them to ownership by prescription whether ordinary or
extraordinary.
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This contention is devoid of merit. Prescription as a defense, must be expressly relied upon in the pleadings.
It cannot be availed of, unless it is specially pleaded in the answer; and it must be proved or established
with the same degree of certainty as any essential allegation in the civil action (Hodges v. Salas, 63 Phil.
567; Corporacion de PP. Augustinus Recolectos v. Crisostomo, 32 Phil. 427). In the instant case, Petitioners,
who were the defendants in the lower court, did not claim acquisitive prescription in their answer, and even
if they did, it cannot be given judicial sanction on mere allegations. The law requires one who asserts
ownership by adverse possession to prove the presence of the essential elements of acquisitive prescription
(Morales v. CFI, Et Al., No. L-52278, May 29, 1980, 97 SCRA 872).
After a careful examination of the records, We are of the opinion that there is lack of sufficient proof to
establish clearly and positively petitioners claim of acquisitive prescription. In fact, We are more inclined to
believe respondents version that respondent Arsenio Nares was evicted from the property by petitioner
sometime in 1957, thereby showing the latters bad faith in acquiring the possession of the property until
1971 when the action against petitioner was filed. Thus, the ordinary acquisitive prescription of ten years
cannot be considered in favor of petitioner in the absence of good faith. Neither is the petitioner entitled to
extraordinary acquisitive prescription, in the absence of sufficient proof of compliance with the thirty-year
requirement of possession in case of bad faith.
Moreover, the law clearly states that "possession has to be in the concept of an owner, public, peaceful and
uninterrupted" (Article 1118, Civil Code). The actuations of petitioners, however, show the contrary. A
reading of the demand letter from respondents dated May 27, 1970, submitted in evidence by petitioners,
shows that the dispute over Lot 1460 had been going on for a number of years among petitioners,
respondents and their families. This goes to show that during the time when the petitioners bought the land
in 1959 and the following years thereafter when the latter possessed the property, they have known or
should have known of the rights and interests of their cousins, respondents herein, over the disputed land.
Moreover, the tax declarations for the years 1951 and 1965 showed that the respondents Arsenio Nares and
Felix Nares were the declared owners (p. 34 and 113, Records). In other words, petitioners predecessors in
interest, namely, Mariano Navera and the subsequent purchasers of the lot, had not bothered to declare the
land in their own names for purposes of taxation during the time that they were allegedly in possession of
the land. It was only in the year 1966 when petitioner Genaro Navera started to declare himself owner of
the land for taxation purposes (p. 126, Records).
In their second assignment of error, petitioners contend that private respondents are bound by their
knowledge of the previous donation propter nuptias by their ancestor, Leocadio Navera in favor of Fausto
Mustar. This contention has no merit.
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The respondent appellate court affirmed the findings of the lower court on this matter, as follows, to wit:
"After a careful perusal and thorough review of the whole evidence on record, we cannot find any basis
therein for upholding the claim of appellants, articulated in their appellants brief. It is apropos to state that
the donation propter nuptias made by Leocadio Navera sometime in October, 1916, should have been et
least recorded in the registry of property or inscribed in the Original Certificate of Title or the donee shall
have titled the property in his name. As the trial court correctly noted that the alleged donee Fausto Mustar
is not a party to the case nor had he transferred the said donated property to the spouses Mariano Navera in
a public instrument or conveyance. Nowhere in the evidence on record would show that the said donated
property was ever transferred to Mariano Navera, father of defendant-appellant Genaro Navera." (p. 24,
Rollo)
No important reasons exist to compel Us to ignore the findings of the respondent appellate court. Besides,
the knowledge of private respondents concerning the alleged previous donation is immaterial. The facts are
clear that the original certificate of title itself covers the whole of 26,995 square meters of the disputed Lot
1460 in the name of "Elena Navera, Et. Al.", without any mention of any previous donation of a portion of
the said lot to the alleged donee.
Petitioners third assigned error was already treated and resolved in the foregoing discussions.
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ACCORDINGLY, the petition is DENIED but the decision of the Court of Appeals dated December 16, 1980 is
hereby MODIFIED to the effect that as against the petitioners Genaro Navera and Emma Amador, the
respondents Arsenio Nares and Felix Nares are declared the rightful owners of the disputed Lot 1460, except
with respect to 5,726 square meters thereof which belongs to petitioner Genaro Navera, without prejudice
however, to whatever rights and interests that the other compulsory heirs of Elena Navera may have in the
one-half portion of Lot 1460. The respective rights of respondents to Lot 1460 as between themselves is a
matter outside of this controversy and is therefore, beyond the jurisdiction of this Court to pass upon.
SO ORDERED.
[G.R. No. 92310. September 3, 1992.]

AGRICULTURAL AND HOME EXTENSION DEVELOPMENT GROUP v COURT OF APPEALS
SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; SALE; RULE IN CASE OF DOUBLE SALE; APPLICATION IN CASE AT
BAR. Under Article 1544 of the Civil Code of the Philippines: 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. It is not disputed that the first sale to Gundran was not registered while the second sale
to Cabautan was registered. Following the above-quoted provision, the courts below were justified in
according preferential rights to the private respondent, who had registered the sale in his favor, as against
the petitioners co-venturer whose right to the same property had not been recorded.
2. ID.; ID.; ID.; PURCHASER IN GOOD FAITH; DEFINED. A purchaser in good faith is defined as "one who
buys the property of another without notice that some other person has a right to or interest in such
property and pays a full and fair price for the same at the time of such purchase or before he has notice of
the claim or interest of some other person in the property."
3. ID.; ID.; ID.; ID.; SALE OF PROPERTY REGISTERED UNDER THE TORRENS SYSTEM; EFFECT OF NOTICE
OF LIS PENDENS ANNOTATED ON THE CERTIFICATE. The petitioner claims, however, that Cabautan was a
purchaser in bad faith because he was fully aware of the notices of lis pendens at the back of TCT No.
287416 and of the earlier sale of the land to Gundran. An examination of TCT No. 287416 discloses no
annotation of any sale, lien, encumbrance or adverse claim in favor of Gundran or the petitioner. Well-settled
is the rule that when the property sold is registered under the Torrens system, registration is the operative
act to convey or affect the land insofar as third persons are concerned. Thus, a person dealing with
registered land is only charged with notice of the burdens on the property which are noted on the register or
certificate of title. While it is true that notices of lis pendens in favor of other persons were earlier inscribed
on the title, these did not have the effect of establishing a lien or encumbrance on the property affected.
Their only purpose was to give notice to third persons and to the whole world that any interest they might
acquire in the property pending litigation would be subject to the result of the suit.
DECISION
CRUZ, J.:
We are asked again to determine who as between two successive purchasers of the same land should be
recognized as its owner. The answer is simple enough. But we must first, as usual, plow through some
alleged complications.
The pertinent background facts are as follows:
On March 29, 1972, the spouses Andres Diaz and Josefa Mia sold to Bruno Gundran a 19-hectare parcel of
land in Las Pias, Rizal, covered by TCT No. 287416. The owners duplicate copy of the title was turned over
to Gundran. However, he did not register the Deed of Absolute Sale because he said he was advised in the
Office of the Register of Deeds of Pasig of the existence of notices of lis pendens on the title.
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On November 20, 1972, Gundran and the herein petitioner, Agricultural and Home Development Group,
entered into a Joint Venture Agreement for the improvement and subdivision of the land. This agreement
was also not annotated on the title.
On August 30, 1976, the spouses Andres Diaz and Josefa Mia again entered into another contract of sale of
the same property with Librado Cabautan, the herein private Respondent.
On September 3, 1976, by virtue of an order of the Court of First Instance of Rizal, a new owners copy of
the certificate of title was issued to the Diaz spouses, who had alleged the loss of their copy. On that same
date, the notices of lis pendens annotated on TCT No. 287416 were canceled and the Deed of Sale in favor
of private respondent Cabautan was recorded. A new TCT No. S-33850/T-172 was thereupon issued in his
name in lieu of the canceled TCT No. 287416.
On March 14, 1977, Gundran instituted an action for reconveyance before the Court of First Instance of
Pasay City * against Librado Cabautan and Josefa Mia seeking, among others, the cancellation of TCT No.
33850/T-172 and the issuance of a new certificate of title in his name.
On August 31, 1977, the petitioner, represented by Nicasio D. Sanchez, Sr., filed a complaint in intervention
with substantially the same allegations and prayers as that in Gundrans complaint.
In a decision dated January 12, 1987, 1 Gundrans complaint and petitioners complaint in intervention were
dismissed for lack of merit. So was the private respondents counterclaims, for insufficiency of evidence.
Upon appeal, this decision was affirmed by the respondent Court of Appeals, with the modification that
Josefa Mia was ordered to pay Gundran the sum of P90,000.00, with legal interest from September 3, 1976,
plus the costs of suit. 2
Under Article 1544 of the Civil Code of the Philippines:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first
faith.
It is not disputed that the first sale to Gundran was not registered while the second sale to Cabautan was
registered.
Following the above-quoted provision, the courts below were justified in according preferential rights to the
private respondent, who had registered the sale in his favor, as against the petitioners co-venturer whose
right to the same property had not been recorded.
The petitioner claims, however, that Cabautan was a purchaser in bad faith because he was fully aware of
the notices of lis pendens at the back of TCT No. 287416 and of the earlier sale of the land to Gundran.
A purchaser in good faith is defined as "one who buys the property of another without notice that some
other person has a right to or interest in such property and pays a full and fair price for the same at the time
of such purchase or before he has notice of the claim or interest of some other person in the property." 3
An examination of TCT No. 287416 discloses no annotation of any sale, lien, encumbrance or adverse claim
in favor of Gundran or the petitioner. Well-settled is the rule that when the property sold is registered under
the Torrens system, registration is the operative act to convey or affect the land insofar as third persons are
concerned. 4 Thus, a person dealing with registered land is only charged with notice of the burdens on the
property which are noted on the register or certificate of title. 5
While it is true that notices of lis pendens in favor of other persons were earlier inscribed on the title, these
did not have the effect of establishing a lien or encumbrance on the property affected. Their only purpose
was to give notice to third persons and to the whole world that any interest they might acquire in the
property pending litigation would be subject to the result of the suit.
Cabautan took this risk. Significantly, three days after the execution of the deed of sale in his favor, the
notices of lis pendens were canceled by virtue of the orders of the Court of First Instance of Rizal, Branch
23, dated April 1, 1974, and April 4, 1974. Cabautan therefore acquired the land free of any liens or
encumbrances and so could claim to be a purchaser in good faith and for value.
The petitioner insists that it was already in possession of the disputed property when Cabautan purchased it
and that he could not have not known of that possession. Such knowledge should belie his claim that he was
an innocent purchaser for value. However, the courts below found no evidence of the alleged possession,
which we must also reject in deference to this factual finding.
chanroble s virtual lawlibrary
The petitioners reliance on Casis v. Court of Appeals 6 is misplaced.

The issue at bar is whether private respondent Cabautan is an innocent purchaser for value and so entitled
to the priority granted under Article 1544 of the Civil Code. The Casis case, on the other hand, involved the
issues of whether or not: 1) certiorari was the proper remedy of the petitioner: 2) the previous petition
for certiorari which originated from the quieting of title case was similar to and, hence, a bar to the petition
for certiorari arising from the forcible entry case; and 3) the court a quo committed grave abuse of
discretion amounting to lack or excess of jurisdiction in issuing the order which dissolved the restraining
order issued in connection with the ejectment case. The Court was not called upon in that case to determine
who as between the two purchasers of the subject property should be preferred.
The petitioner invokes the ruling of the lower court in that case to the effect that the registration of the sale
in favor of the second purchaser and the issuance of a new certificate of title in his favor did not in any
manner vest in him any right of possession and ownership over the subject property because the seller, by
reason of their prior sale, had already lost whatever right or interest she might have had in the property at
the time the second sale was made.
This excerpt was included in the ponencia only as part of the narration of the background facts and was not
thereby adopted as a doctrine of the Court. It was considered only for the purpose of ascertaining if the
court below had determined the issue of the possession of the subject property pending resolution of the
question of ownership. Obviously, the Court could not have adopted that questionable ruling as it would
clearly militate against the provision of Article 1544.
chanrobles.com :cralaw:re d
Worthy of note at this juncture is the observation of Justice Edgardo L. Paras, to wit:
True, no one can sell what he does not own, but this is merely the general rule. Is Art. 1544 then an
exception to the general rule? In a sense, yes, by reason of public convenience (See Aitken v. Lao, 36 Phil.
510); in still another sense, it really reiterates the general rule in that insofar as innocent third persons are
concerned, the registered owner (in the case of real property) is still the owner, with power of disposition. 7
The language of Article 1544 is clear and unequivocal. In light of its mandate and of the facts established in
this case, we hold that ownership must be recognized in the private respondent, who bought the property in
good faith and, as an innocent purchaser for value, duly and promptly registered the sale in his favor.
WHEREFORE, the petition is DENIED and the questioned decision AFFIRMED in toto, with costs against the
petitioner.
SO ORDERED.
[G.R. No. 109410. August 28, 1996.]

CLARA M. BALATBAT v COURT OF APPEALS
SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; SALES; TRANSFER OF OWNERSHIP; CONSUMMATED UPON ACTUAL OR
CONSTRUCTIVE DELIVERY THEREOF. Devoid of any stipulation that "ownership in the thing shall not pass
to the purchaser until he has fully paid the price," ownership in the thing shall pass from the vendor to the
vendee upon actual or constructive delivery of the thing sold even if the purchase price has not yet been
fully paid. The failure of the buyer to make good the price does not, in law, cause the ownership to revest to
the seller unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the
New Civil Code. Non-payment only creates a right to demand the fulfillment of the obligation or to rescind
the contract.
2. ID.; ID.; ID.; ID.; WHEN THE SALE IS MADE THROUGH A PUBLIC INSTRUMENT, THE EXECUTION
THEREOF SHALL BE EQUIVALENT TO THE DELIVERY OF THE THING WHICH IS THE OBJECT OF THE
CONTRACT. With respect to the non-delivery of the possession of the subject property to the private
respondent, suffice it to say that ownership of the thing sold is acquired only from the time of delivery
thereof, either actual or constructive. Article 1498 of the Civil Code provides that when the sale is made
through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is
the object of the contract, if from the deed the contrary does not appear or cannot be inferred. The
execution of the public instrument, without actual delivery of the thing, transfers the ownership from the
vendor to the vendee, who may thereafter exercise the rights of an owner over the same. In the instant
case, vendor Roque delivered the owners certificate of title to herein private Respondent. It is not necessary
that vendee be physically present at every square inch of the land bought by him, possession of the public
instrument of the land is sufficient to accord him the rights of ownership. Thus, delivery of a parcel of land
may be done by placing the vendee in control and possession of the land (real) or by embodying the sale in
a public instrument (constructive). The provision of Article 1358 on the necessity of a public document is
only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of
sale of a parcel of land that this be embodied in a public instrument.
3. ID.; ID.; ID.; PERFECTED BY MERE CONSENT OF THE PARTIES. A contract of sale being consensual, it
is perfected by the mere consent of the parties. Delivery of the thing bought or payment of the price is not
necessary for the perfection of the contract; and failure of the vendee to pay the price after the execution of
the contract does not make the sale null and void for lack of consideration but results at most in default on
the part of the vendee, for which the vendor may exercise his legal remedies.
4. ID.; ID.; ID.; RULE IN CASE OF DOUBLE SALE OF AN IMMOVABLE PROPERTY. Article 1544 of the Civil
Code provides that in case of double sale of an immovable property, ownership shall be transferred (1) to
the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof,
to the person who in good faith was first in possession; and (3) in default thereof, to the person who
presents the oldest title, provided there is good faith. This is an instance of a instance of a double sale of an
immovable property hence, the ownership shall vests in the person acquiring it who in good faith first
recorded it in the Registry of Property. Evidently, private respondents Repuyans caused the annotation of an
adverse claim on the title of the subject property denominated as Entry No. 5627/T-135671 on July 21,
1980. The annotation of the adverse claim on TCT No. 135671 in the Registry of Property is sufficient
compliance as mandated by law and serves notice to the whole world.
5. ID.; ID.; ID.; IT IS INCUMBENT UPON THE VENDEE TO ASK FOR THE DELIVERY OF THE OWNERS
DUPLICATE COPY OF THE TITLE IN ORDER TO INQUIRE OR DISCOVER A FLAW THEREOF. It is incumbent
upon the vendee of the property to ask for the delivery of the owners duplicate copy of the title from the
vendor. A purchaser of a valued piece of property cannot just close his eyes to facts which should put a
reasonable man upon his guard and then claim that he acted in good faith and under the belief that there
were no defect in the title of the 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 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. Good faith, or the want of it is not a visible, tangible fact that can be
seen or touched, but rather a state or condition of mind which can only be judged of by actual or fancied
tokens or signs. In fine, petitioner had nobody to blame but herself in dealing with the disputed property for
failure to inquire or discover a flaw in the title to the property, thus, it is axiomatic that culpa lata dolo
aequiparatur gross negligence is equivalent to intentional wrong.
DECISION
TORRES, JR., J.:
Petitioner Clara M. Balatbat instituted this petition for review pursuant to Rule 45 of the Revised Rules of
Court seeking to set aside the decision dated August 12, 1992 of the respondent Court of Appeals in CA-G.R.
CV No. 29994 entitled "Alejandro Balatbat and Clara Balatbat, plaintiffs-appellants versus Jose Repuyan and
Aurora Repuyan, defendants-appellees", the dispositive portion of which reads: 1
"WHEREFORE, the judgment appealed from is affirmed with the modification that the awards of P10,000.00
for attorneys fees and P5,000.00 as costs of litigation are deleted.
SO ORDERED."
The records show the following factual antecedents:
It appears that on June 15, 1977, Aurelio A. Roque filed a complaint for partition docketed as Civil Case No.
109032 against Corazon Roque, Alberto de los Santos, Feliciano Roque, Severa Roque and Osmundo Roque
before the then Court of First Instance of Manila, Branch IX. 2 Defendants therein were declared in default
and plaintiff presented evidence ex-parte. On March 29, 1979, the trial court rendered a decision in favor of
plaintiff Aurelio A. Roque, the pertinent portion of which reads: 3
"From the evidence, it has been clearly established that the lot in question covered by Transfer Certificate of
Title No. 51330 was acquired by plaintiff Aurelio Roque and Maria Mesina during their conjugal union and the
house constructed thereon was likewise built during their marital union. Out of their union, plaintiff and
Maria Mesina had four children, who are the defendants in this case. When Maria Mesina died on August 28,
1966, the only conjugal properties left are the house and lot above stated of which plaintiff herein, as the
legal spouse, is entitled to one-half share pro-indiviso thereof. With respect to the one-half share proindiviso now forming the estate of Maria Mesina, plaintiff and the four children, the defendants here, are
each entitled to one-fifth (1/5) share pro-indiviso. The deceased wife left no debt.
Wherefore, judgment is hereby rendered ordering the partition of the properties, subject matter of this case
consisting of the house and lot, in the following manner:
1. Of the house and lot forming the conjugal properties, plaintiff is entitled to one-half share pro-indiviso
thereof while the other half forms the estate of the deceased Maria Mesina;
2. Of the Estate of deceased Maria Mesina, the same is to be divided into five (5) shares and plaintiff and his
four children are entitled each to one-fifth share thereof pro-indiviso.
Plaintiff claim for moral, exemplary and actual damages and attorneys fees not having been established to
the satisfaction of the Court, the same is hereby denied.
Without pronouncement as to costs.
SO ORDERED.
On June 2, 1979, the decision became final and executory. The corresponding entry of judgment was made
on March 29, 1979. 4
On October 5, 1979, the Register of Deeds of Manila issued a Transfer Certificate of Title No. 135671 in the
name of the following persons in the following proportions: 5
Aurelio A. Roque 6/10 share
Severina M. Roque 1/10 share
Osmundo M. Roque 1/10 share
Feliciano M. Roque 1/10 share
Corazon M. Roque 1/10 share
On April 1, 1980, Aurelio A. Roque sold his 6/10 share in T.C.T. No. 135671 to spouses Aurora TuazonRepuyan and Jose Repuyan as evidenced by a "Deed of Absolute Sale." 6
On July 21, 1980, Aurora Tuazon Repuyan caused the annotation of her affidavit of adverse claim 7 on the
Transfer Certificate of Title No. 135671, 8 to wit:
"Entry No. 5627/T-135671 NOTICE OF ADVERSE CLAIM Filed by Aurora Tuazon Repuyan, married,
claiming among others that she bought 6/10 portion of the property herein described from Aurelio Roque for
the amount of P50,000.00 with a down payment of P5,000.00 and the balance of P45,000.00 to be paid
after the partition and subdivision of the property herein described, other claims set forth in Doc. No. 954,
page 18, Book 94 of _________________ 64 __________________ PEDRO DE CASTRO, Notary Public of
Manila.
Date of instrument July 21, 1980
Date of inscription -July 21, 1980 at 3:35 p.m.
TERESITA H. NOBLEJAS
Acting Register of Deeds
By:
RAMON D. MACARICAN
Acting Second Deputy"
On August 20, 1980, Aurelio A. Roque filed a complaint for "Rescission of Contract" docketed as Civil Case
No. 134131 against spouses Aurora Tuazon-Repuyan and Jose Repuyan before Branch IV of the then Court
of First Instance of Manila. The complaint is grounded on spouses Repuyans failure to pay the balance of
P45,000.00 of the purchase price. 9 On September 5, 1980, spouses Repuyan filed their answer with
counterclaim. 10
In the meantime, the trial court issued an order in Civil Case No. 109032 (Partition case) dated February 2,
1982, to wit: 11
"In view of all the foregoing and finding that the amount of P100,000.00 as purchase price for the sale of
the parcel of land covered by TCT No. 51330 of the Registry of Deeds of Manila consisting of 84 square
meters situated in Callejon Sulu, District of Santa Cruz, Manila, to be reasonable and fair, and considering
the opportunities given defendants to sign the deed of absolute sale voluntarily, the Court has no alternative
but to order, as it hereby orders, the Deputy Clerk of this Court to sign the deed of absolute sale for and in
behalf of defendants pursuant to Sec. 10, Rule 39 of the Rules of Court, in order to effect the partition of the
property involved in this case.
SO ORDERED."
A deed of absolute sale was executed on February 4, 1982 between Aurelio S. Roque, Corazon Roque,
Feliciano Roque, Severa Roque and Osmundo Roque and Clara Balatbat, married to Alejandro Balatbat. 12
On April 14, 1982, Clara Balatbat filed a motion for the issuance of a writ of possession which was granted
by the trial court on September 14, 1982 "subject, however, to valid rights and interest of third persons over
the same portion thereof, other than vendor or any other person or persons privy to or claiming any rights
or interest under it." The corresponding writ of possession was issued on September 20, 1982. 13
On May 20, 1982, petitioner Clara Balatbat filed a motion to intervene in Civil Case No. 134131 14 which
was granted as per courts resolution of October 21, 1982. 15 However, Clara Balatbat failed to file her
complaint in intervention. 16 On April 15, 1986, the trial court rendered a decision dismissing the complaint,
the pertinent portion of which reads: 17
"The rescission of contracts are provided for in the laws and nowhere in the provision of the Civil Code under
the title Rescissible Contracts does the circumstances in the case at bar appear to have occurred, hence, the
prayer for rescission is outside the ambit for which rescissible [sic] could be granted.
"The Intervenor Plaintiff, Clara Balatbat, although allowed to intervene, did not file her complaint in
intervention.
"Consequently, the plaintiff having failed to prove with sufficient preponderance his action, the relief prayed
for had to be denied. The contract of sale denominated as "Deed of Absolute Sale" (Exh. 7 and submarkings) being valid and enforceable, the same pursuant to the provisions of Art. 1159 of the Civil Code
which says:
"Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith."
has the effect of being the law between the parties and should be complied with. The obligation of the
plaintiff under the contract being to have the land covered by TCT No. 135671 partitioned and subdivided,
and title issued in the name of the defendant buyer (see page 2 par. C of Exh. 7-A) plaintiff had to comply
thereto to give effect to the contract.
"WHEREFORE, judgment is rendered against the plaintiff, Aurelio A. Roque, and the plaintiff in intervention,
Clara Balatbat, and in favor of the defendants, dismissing the complaint for lack of merit, and declaring the
Deed of Absolute Sale dated April 1, 1980 as valid and enforceable and the plaintiff is, as he is hereby
ordered, to partition and subdivide the land covered by T.C.T. No. 135671, and to aggregate therefrom a
portion equivalent to 6/10 thereof, and cause the same to be titled in the name of the defendants, and after
which, the defendants to pay the plaintiff the sum of P45,000.00. Considering further that the defendants
suffered damages since they were forced to litigate unnecessarily, by way of their counterclaim, plaintiff is
hereby ordered to pay defendants the sum of P15,000.00 as moral damages, attorneys fees in the amount
of P5,000.00.
Costs against plaintiff.
SO ORDERED."
On March 3, 1987, petitioner Balatbat filed a notice of lis pendens in Civil Case No. 109032 before the
Register of Deeds of Manila. 18

On December 9, 1988, petitioner Clara Balatbat and her husband, Alejandro Balatbat filed the instant
complaint for delivery of the owners duplicate copy of T.C.T. No. 135671 docketed as Civil Case No. 8847176 before Branch 24 of the Regional Trial Court of Manila against private respondents Jose Repuyan and
Aurora Repuyan. 19
On January 27, 1989, private respondents filed their answer with affirmative defenses and compulsory
counterclaim. 20
On November 13, 1989, private respondents filed their memorandum 21 while petitioners filed their
memorandum on November 23, 1989. 22
On August 2, 1990, the Regional Trial Court of Manila, Branch 24, rendered a decision dismissing the
complaint, the dispositive portion of which reads: 23
"Considering all the foregoing, this Court finds that the plaintiffs have not been able to establish their cause
of action against the defendants and have no right to the reliefs demanded in the complaint and the
complaint of the plaintiff against the defendants is hereby DISMISSED. On the counterclaim, the plaintiff are
ordered to pay defendants the amount of Ten Thousand Pesos by way of attorneys fees, Five Thousand
Pesos as costs of litigation and further to pay the costs of the suit.
SO ORDERED."
Dissatisfied, petitioner Balatbat filed an appeal before the respondent Court of Appeals which rendered the
assailed decision on August 12, 1992, to wit: 24
"WHEREFORE, the judgment appealed from is affirmed with the modification that the awards of P10,000.00
for attorneys fees and P5,000.00 as costs of litigation are deleted.
SO ORDERED."
On March 22, 1993, the respondent Court of Appeals denied petitioners motion for reconsideration.25
cralaw:re d
Hence, this petition for review.

Petitioner raised the following issues for this Courts resolution:
I
WHETHER OR NOT THE ALLEGED SALE TO THE PRIVATE RESPONDENTS WAS MERELY EXECUTORY AND NOT
A CONSUMMATED TRANSACTION?
II
WHETHER OR NOT THERE WAS A DOUBLE SALE AS CONTEMPLATED UNDER ART. 1544 OF THE CIVIL CODE?
III
WHETHER OR NOT PETITIONER WAS A BUYER IN GOOD FAITH AND FOR VALUE?
IV
WHETHER OR NOT THE COURT OF APPEALS ERRED IN GIVING WEIGHT AND CONSIDERATION TO THE
EVIDENCE OF THE PRIVATE RESPONDENTS WHICH WERE NOT OFFERED?
Petitioner asseverates that the respondent Court of Appeals committed grave abuse of discretion tantamount
to lack or excess of jurisdiction in affirming the appealed judgment considering (1) that the alleged sale in
favor of the private respondents Repuyan was merely executory; (2) that there is no double sale; (3) that
petitioner is a buyer in good faith and for value; and (4) that private respondents did not offer their
evidence during the trial.
Contrary to petitioners contention that the sale dated April 1, 1980 in favor of private respondents Repuyan
was merely executory for the reason that there was no delivery of the subject property and that
consideration/price was not fully paid, we find the sale as consummated, hence, valid and enforceable. In a
decision dated April 15, 1986 of the Regional Trial Court of Manila, Branch IV in Civil Case No. 134131, the
Court dismissed vendors Aurelio Roque complaint for rescission of the deed of sale and declared that the
sale dated April 1, 1980, as valid and enforceable. No appeal having been made, the decision became final
and executory. It must be noted that herein petitioner Balatbat filed a motion for intervention in that case
but did not file her complaint in intervention. In that case wherein Aurelio Roque sought to rescind the April
1, 1980 deed of sale in favor of the private respondents for non-payment of the P45,000.00 balance, the
trial court dismissed the complaint for rescission. Examining the terms and conditions of the "Deed of Sale"
dated April 1, 1980, the P45,000.00 balance is payable only "after the property covered by T.C.T No. 135671
has been partitioned and subdivided, and title issued in the name of the BUYER" hence, vendor Roque
cannot demand payment of the balance unless and until the property has been subdivided and titled in the
name of the private respondents. Devoid of any stipulation that "ownership in the thing shall not pass to the
purchaser until he has fully paid the price", 26 ownership in the thing shall pass from the vendor to the
vendee upon actual or constructive delivery of the thing sold even if the purchase price has not yet been
fully paid. The failure of the buyer to make good the price does not, in law, cause the ownership to revest to
the seller unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the
New Civil Code. 27 Non-payment only creates a right to demand the fulfillment of the obligation or to
rescind the contract.
With respect to the non-delivery of the possession of the subject property to the private respondent, suffice
it to say that ownership of the thing sold is acquired only from the time of delivery thereof, either actual or
constructive. 28 Article 1498 of the Civil Code provides that when the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the
contract, if from the deed the contrary does not appear or cannot be inferred. 29 The execution of the public
instrument, without actual delivery of the thing, transfers the ownership from the vendor to the vendee, who
may thereafter exercise the rights of an owner over the same. 30 In the instant case, vendor Roque
delivered the owners certificate of title to herein private Respondent. It is not necessary that vendee be
physically present at every square inch of the land bought by him, possession of the public instrument of the
land is sufficient to accord him the rights of ownership. Thus, delivery of a parcel of land may be done by
placing the vendee in control and possession of the land (real) or by embodying the sale in a public
instrument (constructive). The provision of Article 1358 on the necessity of a public document is only for
convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a
parcel of land that this be embodied in a public instrument. 31
A contract of sale being consensual, it is perfected by the mere consent of the parties. 32 Delivery of the
thing bought or payment of the price is not necessary for the perfection of the contract; and failure of the
vendee to pay the price after the execution of the contract does not make the sale null and void for lack of
consideration but results at most in default on the part of the vendee, for which the vendor may exercise his
legal remedies. 33
Article 1544 of the New Civil Code provides:
"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 movable property, the ownership shall belong to the person acquiring it who in good faith first
possession and in the absence thereof, to the person who present the oldest title, provided there is good
faith."
Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership shall
be transferred (1) to the person acquiring it who in good faith first recorded it in the Registry of Property;
(2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to
the person who presents the oldest title, provided there is good faith. 34
In the case at bar, vendor Aurelio Roque sold 6/10 portion of his share in TCT No. 135671 to private
respondents Repuyan on April 1, 1980. Subsequently, the same lot was sold again by vendor Aurelio Roque
(6/10) and his children (4/10), represented by the Clerk of Court pursuant to Section 10, Rule 39 of the
Rules of Court, on February 4, 1982. Undoubtedly, this is a case of double sale contemplated under Article
1544 of the New Civil Code.
This is an instance of a double sale of an immovable property hence, the ownership shall vests in the person
acquiring it who in good faith first recorded it in the Registry of Property. Evidently, private respondents
Repuyans caused the annotation of an adverse claim on the title of the subject property denominated as
Entry No. 5627/T-135671 on July 21, 1980. 35 The annotation of the adverse claim on TCT No. 135671 in
the Registry of Property is sufficient compliance as mandated by law and serves notice to the whole world.
On the other hand, petitioner filed a notice of lis pendens only on February 2, 1982. Accordingly, private
respondents who first caused the annotation of the adverse claim in good faith shall have a better right over
herein petitioner. Moreover, the physical possession of herein petitioners by virtue of a writ of possession
issued by the trial court on September 20, 1982 is "subject to the valid rights and interest of third persons
over the same portion thereof, other than vendor or any other person or persons privy to or claiming any
rights to interest under it." 36 As between two purchasers, the one who has registered the sale in his favor,
has a preferred right over the other who has not registered his title even if the latter is in actual possession
of the immovable property. 37 Further, even in default of the first registrant or first in possession, private
respondents have presented the oldest title. 38 Thus, private respondents who acquired the subject property
in good faith and for valuable consideration established a superior right as against the petitioner.
Evidently, petitioner cannot be considered as a buyer in good faith. In the complaint for rescission filed by
vendor Aurelio Roque on August 20, 1980, herein petitioner filed a motion for intervention on May 20, 1982
but did not file her complaint in intervention, hence, the decision was rendered adversely against her. If
petitioner did investigate before buying the land on February 4, 1982, she should have known that there was
a pending case and an annotation of adverse claim was made in the title of the property before the Register
of Deeds and she could have discovered that the subject property was already sold to the private
respondents. It is incumbent upon the vendee of the property to ask for the delivery of the owners duplicate
copy of the title from the vendor. A purchaser of a valued piece of property cannot just close his eyes to
facts which should put a reasonable man upon his guard and then claim that he acted in good faith and
under the belief that there were no defect in the title of the vendor. 39 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 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. Good faith, or the want of it is not a
visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be
judged of by actual or fancied tokens or signs. 40
In fine, petitioner had nobody to blame but herself in dealing with the disputed property for failure to inquire
or discover a flaw in the title to the property, thus, it is axiomatic that culpa lata dolo aequiparatur
gross negligence is equivalent to intentional wrong.
IN VIEW OF THE FOREGOING PREMISES, this petition for review is hereby DISMISSED for lack of merit. No
pronouncement as to costs.
IT IS SO ORDERED.

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[G.R. No. 103577. October 7, 1996.

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RECEIPT OF DOWN PAYMENT

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[G.R. No. 16420. October 12, 1921. ]

[G.R. No. 120191. October 10, 1997.]

"1. The Deed of Conditional Sale, Exhibit A is hereby declared valid;

9. The counterclaims of the Appellees are dismissed.

Reasonable Compensation for the Occupancy Thereof .

[G.R. No. L-18018. December 26, 1963.]

[G.R. No. 104482. January 22, 1996.]

BELINDA TAEDO v COURT OF APPEALS

From the foregoing, the issues may be restated as follows:

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1. Is the sale of a future inheritance valid?

of any obligation between the parties.

[G.R. No. 56232. June 22, 1984.]

[G.R. No. L-56838. April 26, 1990.]

6. ID.; DONATION PROPTER NUPTIALS, MUST BE RECORDED IN THE REGISTRY OF PROPERTY OR

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Tabon, 53 Phil. 356)" (pp. 25-26, Rollo).

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[G.R. No. 92310. September 3, 1992.]

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chanrobles virtual lawlibrary

The petitioners reliance on Casis v. Court of Appeals 6 is misplaced.

chanrob1es virtual 1aw library

[G.R. No. 109410. August 28, 1996.]

TORRES, JR., J.:

cralaw virtua1aw library

The records show the following factual antecedents:

chanrob1es virtual 1aw library

chanrob1es virtual 1aw library

cralaw virtua1aw library

cralaw virtua1aw library

Register of Deeds of Manila. 18

cralaw virtua1aw library

cralaw virtua1aw library

Hence, this petition for review.

chanrob1es virtual 1aw library

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