Carbonell vs.

Court of Appeals, and Poncio

69 SCRA 99
January 1976

FACTS:

On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of
land with improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew
that the said property was at that time subject to a mortgage in favor of the Republic Savings Bank
(RSB) for the sum of P1,500.00. Four days later, Poncio, in another private memorandum, bound
himself to sell the same property for an improved price to one Emma Infante for the sum of P2,357.52,
with the latter still assuming the existing mortgage debt in favor of the RSB in the amount of
P1,177.48. Thus, in February 2, Poncio executed a formal registerable deed of sale in her (Infante's)
favor. So, when the first buyer Carbonell saw the seller Poncio a few days afterwards, bringing the
formal deed of sale for the latter's signature and the balance of the agreed cash payment, she was told
that he could no longer proceed with formalizing the contract with her (Carbonell) because he had
already formalized a sales contract in favor of Infante.

To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the
Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante, the
second buyer, was able to register the sale in her favor only on February 12, 1955, so that the transfer
certificate of title issued in her name carried the duly annotated adverse claim of Carbonell as the first
buyer. The trial court declared the claim of the second buyer Infante to be superior to that of the first
buyer Carbonell, a decision which the Court of Appeals reversed. Upon motion for reconsideration,
however, Court of Appeals annulled and set aside its first decision and affirmed the trial court’s
decision.

ISSUE:Who has the superior right over the subject property?

COURT RULING:
The Supreme Court reversed the appellate court’s decision and declared the first buyer Carbonell to
have the superior right over the subject property, relying on Article 1544 of the Civil Code. Unlike the
first and third paragraphs of said Article 1544, which accord preference to the one who first takes
possession in good faith of personal or real property, the second paragraph directs that ownership of
immovable property should be recognized in favor of one "who in good faith first recorded" his right.
Under the first and third paragraphs, good faith must characterize the prior possession, while under
the second paragraph, good faith must characterize the act of anterior registration.

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and
the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon.
Carbonell was not aware - and she could not have been aware - of any sale to Infante as there was no
such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith which
did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante.
Carbonell wanted to meet Infante but the latter refused so to protect her legal rights, Carbonell
registered her adverse claim on February 8, 1955. Under the circumstances, this recording of
Carbonell’s adverse claim should be deemed to have been done in good faith and should emphasize
Infante's bad faith when the latter registered her deed of sale 4 days later
 DAGUPAN vs. MACAM
FACTS:

 Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of
unregistered land located in Pangasinan. Pending their application for registration of said land
under Act No. 496, they executed two deeds of sale conveying the property to Macam, who took
possession and introduced substantial improvements to it. One month later an OCT was issued in
the name of the Maron's, free from all liens and encumbrances.
 By virtue of a final judgment rendered in a civil case of the MTC of Manila against Maron in favor
of the Manila Trading and Supply Company, levy was made upon whatever interest he had in the
property. The interest was sold at public auction to the judgment creditor. The corresponding
notice of levy, certificate of sale and the Sheriff's certificate of final sale in favor of the Manila
Trading and Supply Co. — because nobody exercised the right of redemptions — were duly
registered. Manila Trading and Supply company sold all its rights and title to the property to
Dagupan.

ISSUE: Who has the better right as between Dagupan Trading Company, and Rustico Macam to the
one-eighth share of Sammy Maron in the subject property?

HELD: Dagupan

RATIO:
 If the property were unregistered land, Macam would have the better right because his claim
would then be based on a prior sale coupled with public, exclusive and continuous possession as
owner.
 If the property were registered land, Dagupan would have a better right. The Court consistently
held that in case of conveyance of registered real estate, the registration of the deed of sale is the
operative act that gives validity to the transfer.
 The deeds of sale executed in Macam’s favor were not registered while the levy in execution and
the provisional certificate of sale as well as the final deed of sale in favor of Dagupan were
registered.
 Consequently, this registered conveyance must prevail although posterior to the one executed in
favor of Macam, and Dagupan must be deemed to have acquired such right, title and interest as
appeared on the certificate of title issued in favor of Sammy Maron, subject to no lien,
encumbrance or burden not noted thereon.
 The present case, however, does not fall within either, situation. Here, the sale in favor of
Macam was executed before the subject land was registered, while the conflicting sale in favor of
Dagupan was executed after the same property had been registered.
 Section 35, Rule 39 of the Rules of Court: Upon the execution and delivery of the final certificate
of sale in favor of the purchaser of land sold in an execution sale, such purchaser "shall be
substituted to and acquire all the right, title, interest and claim of the judgment debtor to the
property as of the time of the levy.
 At the time of the levy, Maron had no interest and claim on the 1/8 portion of the property
inherited by him and his co-heirs because for a considerable time prior to the levy, his interest had
already been conveyed to Macam. Consequently, subsequent levy made on the property for the
purpose of satisfying the judgment rendered against Sammy Maron in favor of the Manila Trading
Company was void and of no effect.
 The unregistered sale and the consequent conveyance of title and ownership in favor of Macam
could not have been cancelled and rendered of no effect upon the subsequent issuance of the
Torrens title over the entire parcel of land.
 To quote the CA decision:
... . Separate and apart from this however, we believe that in the inevitable conflict between a right of
ownership already fixed and established under the Civil Law and/or the Spanish Mortgage Law — which
cannot be affected by any subsequent levy or attachment or execution — and a new law or system which
would make possible the overthrowing of such ownership on admittedly artificial and technical grounds,
the former must be upheld and applied.
 As stated, upon the execution of the deed of sale in his favor by Maron, Macam took possession of
the land as owner, and introduced considerable improvement. To deprive him now of the same by
sheer force of technicality would be against both justice and equity.
 Carbonell vs. Court of Appeals, and Poncio
69 SCRA 99
January 1976

FACTS:

On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of
land with improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew
that the said property was at that time subject to a mortgage in favor of the Republic Savings Bank
(RSB) for the sum of P1,500.00. Four days later, Poncio, in another private memorandum, bound
himself to sell the same property for an improved price to one Emma Infante for the sum of P2,357.52,
with the latter still assuming the existing mortgage debt in favor of the RSB in the amount of
P1,177.48. Thus, in February 2, Poncio executed a formal registerable deed of sale in her (Infante's)
favor. So, when the first buyer Carbonell saw the seller Poncio a few days afterwards, bringing the
formal deed of sale for the latter's signature and the balance of the agreed cash payment, she was told
that he could no longer proceed with formalizing the contract with her (Carbonell) because he had
already formalized a sales contract in favor of Infante.

To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the
Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante, the
second buyer, was able to register the sale in her favor only on February 12, 1955, so that the transfer
certificate of title issued in her name carried the duly annotated adverse claim of Carbonell as the first
buyer. The trial court declared the claim of the second buyer Infante to be superior to that of the first
buyer Carbonell, a decision which the Court of Appeals reversed. Upon motion for reconsideration,
however, Court of Appeals annulled and set aside its first decision and affirmed the trial court’s
decision.

ISSUE:Who has the superior right over the subject property?

COURT RULING:
The Supreme Court reversed the appellate court’s decision and declared the first buyer Carbonell to
have the superior right over the subject property, relying on Article 1544 of the Civil Code. Unlike the
first and third paragraphs of said Article 1544, which accord preference to the one who first takes
possession in good faith of personal or real property, the second paragraph directs that ownership of
immovable property should be recognized in favor of one "who in good faith first recorded" his right.
Under the first and third paragraphs, good faith must characterize the prior possession, while under
the second paragraph, good faith must characterize the act of anterior registration.

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and
the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon.
Carbonell was not aware - and she could not have been aware - of any sale to Infante as there was no
such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith which
did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante.
Carbonell wanted to meet Infante but the latter refused so to protect her legal rights, Carbonell
registered her adverse claim on February 8, 1955. Under the circumstances, this recording of
Carbonell’s adverse claim should be deemed to have been done in good faith and should emphasize
Infante's bad faith when the latter registered her deed of sale 4 days later

DAGUPAN vs. MACAM

FACTS:

 Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of
unregistered land located in Pangasinan. Pending their application for registration of said land
under Act No. 496, they executed two deeds of sale conveying the property to Macam, who took
possession and introduced substantial improvements to it. One month later an OCT was issued in
the name of the Maron's, free from all liens and encumbrances.
 By virtue of a final judgment rendered in a civil case of the MTC of Manila against Maron in favor
of the Manila Trading and Supply Company, levy was made upon whatever interest he had in the
property. The interest was sold at public auction to the judgment creditor. The corresponding
notice of levy, certificate of sale and the Sheriff's certificate of final sale in favor of the Manila
Trading and Supply Co. — because nobody exercised the right of redemptions — were duly
registered. Manila Trading and Supply company sold all its rights and title to the property to
Dagupan.

ISSUE: Who has the better right as between Dagupan Trading Company, and Rustico Macam to the
one-eighth share of Sammy Maron in the subject property?

HELD: Dagupan

RATIO:
 If the property were unregistered land, Macam would have the better right because his claim
would then be based on a prior sale coupled with public, exclusive and continuous possession as
owner.
 If the property were registered land, Dagupan would have a better right. The Court consistently
held that in case of conveyance of registered real estate, the registration of the deed of sale is the
operative act that gives validity to the transfer.
 The deeds of sale executed in Macam’s favor were not registered while the levy in execution and
the provisional certificate of sale as well as the final deed of sale in favor of Dagupan were
registered.
 Consequently, this registered conveyance must prevail although posterior to the one executed in
favor of Macam, and Dagupan must be deemed to have acquired such right, title and interest as
appeared on the certificate of title issued in favor of Sammy Maron, subject to no lien,
encumbrance or burden not noted thereon.
 The present case, however, does not fall within either, situation. Here, the sale in favor of
Macam was executed before the subject land was registered, while the conflicting sale in favor of
Dagupan was executed after the same property had been registered.
 Section 35, Rule 39 of the Rules of Court: Upon the execution and delivery of the final certificate
of sale in favor of the purchaser of land sold in an execution sale, such purchaser "shall be
substituted to and acquire all the right, title, interest and claim of the judgment debtor to the
property as of the time of the levy.
 At the time of the levy, Maron had no interest and claim on the 1/8 portion of the property
inherited by him and his co-heirs because for a considerable time prior to the levy, his interest had
already been conveyed to Macam. Consequently, subsequent levy made on the property for the
purpose of satisfying the judgment rendered against Sammy Maron in favor of the Manila Trading
Company was void and of no effect.
 The unregistered sale and the consequent conveyance of title and ownership in favor of Macam
could not have been cancelled and rendered of no effect upon the subsequent issuance of the
Torrens title over the entire parcel of land.
 To quote the CA decision:
... . Separate and apart from this however, we believe that in the inevitable conflict between a right of
ownership already fixed and established under the Civil Law and/or the Spanish Mortgage Law — which
cannot be affected by any subsequent levy or attachment or execution — and a new law or system which
would make possible the overthrowing of such ownership on admittedly artificial and technical grounds,
the former must be upheld and applied.
 As stated, upon the execution of the deed of sale in his favor by Maron, Macam took possession of
the land as owner, and introduced considerable improvement. To deprive him now of the same by
sheer force of technicality would be against both justice and equity.

Carbonell vs. Court of Appeals, and Poncio

69 SCRA 99
January 1976

FACTS:

On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of
land with improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew
that the said property was at that time subject to a mortgage in favor of the Republic Savings Bank
(RSB) for the sum of P1,500.00. Four days later, Poncio, in another private memorandum, bound
himself to sell the same property for an improved price to one Emma Infante for the sum of P2,357.52,
with the latter still assuming the existing mortgage debt in favor of the RSB in the amount of
P1,177.48. Thus, in February 2, Poncio executed a formal registerable deed of sale in her (Infante's)
favor. So, when the first buyer Carbonell saw the seller Poncio a few days afterwards, bringing the
formal deed of sale for the latter's signature and the balance of the agreed cash payment, she was told
that he could no longer proceed with formalizing the contract with her (Carbonell) because he had
already formalized a sales contract in favor of Infante.

To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the
Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante, the
second buyer, was able to register the sale in her favor only on February 12, 1955, so that the transfer
certificate of title issued in her name carried the duly annotated adverse claim of Carbonell as the first
buyer. The trial court declared the claim of the second buyer Infante to be superior to that of the first
buyer Carbonell, a decision which the Court of Appeals reversed. Upon motion for reconsideration,
however, Court of Appeals annulled and set aside its first decision and affirmed the trial court’s
decision.

ISSUE:Who has the superior right over the subject property?

COURT RULING:
The Supreme Court reversed the appellate court’s decision and declared the first buyer Carbonell to
have the superior right over the subject property, relying on Article 1544 of the Civil Code. Unlike the
first and third paragraphs of said Article 1544, which accord preference to the one who first takes
possession in good faith of personal or real property, the second paragraph directs that ownership of
immovable property should be recognized in favor of one "who in good faith first recorded" his right.
Under the first and third paragraphs, good faith must characterize the prior possession, while under
the second paragraph, good faith must characterize the act of anterior registration.

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and
the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon.
Carbonell was not aware - and she could not have been aware - of any sale to Infante as there was no
such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith which
did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante.
Carbonell wanted to meet Infante but the latter refused so to protect her legal rights, Carbonell
registered her adverse claim on February 8, 1955. Under the circumstances, this recording of
Carbonell’s adverse claim should be deemed to have been done in good faith and should emphasize
Infante's bad faith when the latter registered her deed of sale 4 days later

DAGUPAN vs. MACAM

FACTS:

 Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of
unregistered land located in Pangasinan. Pending their application for registration of said land
under Act No. 496, they executed two deeds of sale conveying the property to Macam, who took
possession and introduced substantial improvements to it. One month later an OCT was issued in
the name of the Maron's, free from all liens and encumbrances.
 By virtue of a final judgment rendered in a civil case of the MTC of Manila against Maron in favor
of the Manila Trading and Supply Company, levy was made upon whatever interest he had in the
property. The interest was sold at public auction to the judgment creditor. The corresponding
notice of levy, certificate of sale and the Sheriff's certificate of final sale in favor of the Manila
Trading and Supply Co. — because nobody exercised the right of redemptions — were duly
registered. Manila Trading and Supply company sold all its rights and title to the property to
Dagupan.

ISSUE: Who has the better right as between Dagupan Trading Company, and Rustico Macam to the
one-eighth share of Sammy Maron in the subject property?

HELD: Dagupan

RATIO:
 If the property were unregistered land, Macam would have the better right because his claim
would then be based on a prior sale coupled with public, exclusive and continuous possession as
owner.
 If the property were registered land, Dagupan would have a better right. The Court consistently
held that in case of conveyance of registered real estate, the registration of the deed of sale is the
operative act that gives validity to the transfer.
 The deeds of sale executed in Macam’s favor were not registered while the levy in execution and
the provisional certificate of sale as well as the final deed of sale in favor of Dagupan were
registered.
 Consequently, this registered conveyance must prevail although posterior to the one executed in
favor of Macam, and Dagupan must be deemed to have acquired such right, title and interest as
appeared on the certificate of title issued in favor of Sammy Maron, subject to no lien,
encumbrance or burden not noted thereon.
 The present case, however, does not fall within either, situation. Here, the sale in favor of
Macam was executed before the subject land was registered, while the conflicting sale in favor of
Dagupan was executed after the same property had been registered.
 Section 35, Rule 39 of the Rules of Court: Upon the execution and delivery of the final certificate
of sale in favor of the purchaser of land sold in an execution sale, such purchaser "shall be
substituted to and acquire all the right, title, interest and claim of the judgment debtor to the
property as of the time of the levy.
 At the time of the levy, Maron had no interest and claim on the 1/8 portion of the property
inherited by him and his co-heirs because for a considerable time prior to the levy, his interest had
already been conveyed to Macam. Consequently, subsequent levy made on the property for the
purpose of satisfying the judgment rendered against Sammy Maron in favor of the Manila Trading
Company was void and of no effect.
 The unregistered sale and the consequent conveyance of title and ownership in favor of Macam
could not have been cancelled and rendered of no effect upon the subsequent issuance of the
Torrens title over the entire parcel of land.
 To quote the CA decision:
 ... . Separate and apart from this however, we believe that in the inevitable conflict between a right of
ownership already fixed and established under the Civil Law and/or the Spanish Mortgage Law — which
cannot be affected by any subsequent levy or attachment or execution — and a new law or system which
would make possible the overthrowing of such ownership on admittedly artificial and technical grounds,
the former must be upheld and applied.
 As stated, upon the execution of the deed of sale in his favor by Maron, Macam took possession of
the land as owner, and introduced considerable improvement. To deprive him now of the same by
sheer force of technicality would be against both justice and equity.