Macke & Chandler (1909)

Ponente: Moreland, J.

Doctrine: Ownership of personal property cannot be transferred to the prejudice of third persons except
by delivery of the property itself; and that a sale without delivery gives the would-be purchaser no rights in
those property except those of a creditor. A bill of sale of personal property, executed in a private
document and unrecorded, which property described there was not delivered and remained in possession
of the vendor, c ould have no effect against a person dealing with the property upon the faith of
appearances.

FACTS: A Sheriff levied on a property based on a case of Chandler v. Krippendorf. Chandler won.
Kuenzle says the property is his while Chandler, who was the one who bought the property from the
auction, insists that the property is Krippendorfs. Apparently, Krippendorf sold the property to Kuenzle but
never delivered it. SC says Chandler has a good title to the lounge because a bill of sale of personal
property, executed in a private document and unrecorded, which property described there was not
delivered and remained in possession of the vendor, could have no effect against a person dealing with
the property upon the faith of appearances. (Jan 1907) Kuenzle says that it was the owner of the Oregon
Saloon (bar, furniture and fixtures worth P1 000) in Cavite and that the Sheriff levied on it. o Sheriff levied
based on a judgment won by Macke & Chandler (heretofore referred to as Chandler) against Stanley &
Krippendorf (heretofore referred to as Krippendorf). Kuenzle then notified the Sheriff that it was the owner
of the Oregon property but Sheriff ignored and proceeded to sell the property. o Chandler was the
purchaser. In this case, defendant Chandler says: o Property was not Kuenzles at the time of the levy and
sale. o The property was owned by Krippendorf who was in possession of the property at the time of the
levy. o That in Jan 1907, Krippendorf was indebted to Kuenzle. And so, Krippendorf attempted to sell the
property to Kuenzle. o It was in an instrument in writing but it was never recorded (it was a private
document) o That the property was not delivered to Kuenzle so the possession of the property remained
with Krippendorf. o Then, Krippendorf and Chandler conducted the sale after the execution of the
transaction between Krippendorf and Kuenzle (terms and conditions exactly the same), without reference
to Kuenzle

Issue: What is the effect of the instrument of sale with regards to transferring property from Krippendorf to
Kuenzle?

Held: Chandler was able to obtain a good title (this was the Courts answer. So I guess the transaction
between Krippendor & Kuenzle was inc omplete Ratio: SC cites the case of Fidelity & Deposit Company
v. Wilson which laid down a doctrine that ownership of personal property cannot be transferred to the
prejudice of third persons except by delivery of the property itself; and that a sale without delivery giv es
the would-be purchaser no rights in those property except those of a creditor The bill of sale in this case
was a bill of sale of personal property. A bill of sale of personal property, executed in a private document
and unrecorded, which property described there was not delivered and remained in possession of the
vendor, could have no effect against a person dealing with the property upon the faith of appearances.
Kuenzle cites a case (Kuenzle v. AS Watson) which the SC did not find to be applicable. o That was a
case of the sale of property upon the condition that the title should remain in the vendor until the purchase
price should be fully paid o And that in case of non-payment of the debt or any instalment, the vendor
would have a rights to take possession of the property and deal with it as provided for in the contract That
case was inapplicable because: o In that case, the Court held that such a contract for the conditional sale
of goods was valid also as to third persons, provided possession of the property was taken by the vendor
before the rights of third persons intervened against the same In this case, the bill of sale was not a
conditional sale of property so the principles in Kuenzle v. AS Watson are inapplicable. Chandler
purchased the property at an execution sale. And so, Chandler obtained a good title to the property as
against Kuenzle. Judgment affirmed.

MORELAND, J.:
This is an action brought by the plaintiff to recover of the defendants the sum of 1,000 pesos, the value of
certain personal property, constituting a saloon bar, furniture, furnishings, and fixtures. The plaintiff
alleges that on or about the month of January, 1907, it was the owner of the Oregon Saloon in Cavite,
Province of Cavite, consisting of bar, furniture, furnishings, and fixtures, of the value of 1,000 pesos; that
during the said month of January, 1907, the defendant Jose Desiderio, as sheriff, levied upon such
property by virtue of an execution issued upon a judgment secured by the defendant Macke & Chandler,
against Stanley & Krippendorf; that said plaintiff notified the sheriff, in the manner provided by law, that it
was the owner of said goods and forbade the sale thereof under said execution; that, notwithstanding
such claim upon the part of the plaintiff, the said sheriff sold said goods under said execution; that said
firm of Macke & Chandler was the purchaser of said goods and the same were delivered to it; that the
defendants Bachrach, Elser, and Gale, were the sureties upon the bond given to the sheriff by Macke &
Chandler before said goods were sold. The defendants in this case allege that the property described by
the plaintiff and sold at the execution sale referred to was not the property of the plaintiff at the time of
said levy and sale, but was the property of Stanley & Krippendorf, who were in possession of the same at
the time of such levy. They further allege that during the month of January, 1907, the said Stanley &
Krippendorf, being indebted in a considerable sum to the plaintiff in this case, attempted to sell to the said
plaintiff by an instrument in writing the property in question; that said instrument was never recorded; that
said instrument was a private document; that the said property was not delivered to the plaintiff under said
sale but that said property remained from the time of said sale forward in the exclusive possession and
control of said Stanley & Krippendorf, and that they conducted the business subsequent to the execution
of said instrument exactly as they had prior thereto in their own name purchasing goods and paying
therefor without reference to the plaintiff in this case.

The facts in relation to the manner and method in and by which the plaintiff obtained its alleged title to the
goods in question and the fact of continued possession by Stanley & Krippendorf, as set forth by the
defendants, are substantially admitted in this case.

The question to be determined is the effect which the said instrument of sale had, if any, in transferring
the property in question from Stanley & Krippendorf to the plaintiff.

The case of the Fidelity and Deposit Company against Wilson (8 Phil. Rep., 51) lays down a doctrine
which we think is decisive of this case. In that case it was held that the ownership of personal property
can not be transferred to the prejudice of third persons except by delivery of the property itself; and that a
sale without delivery gives the would-be purchaser no rights in said property except those of a creditor.
The bill of sale in the case at bar, under the circumstances of this case, could have no effect against a
person dealing with the property upon the faith of appearances. The case of Kuenzle & Streiff against A.
S. Watson & Co. (7 Off. Gaz., 425), [1] cited by the appellant in its brief, does not sustain its contention.
That was a case of the sale of property upon the condition that the title thereto should remain in the
vendor until the purchase price thereof should be fully paid, and that, in case of nonpayment of the debt
or of any installment thereof when due, the vendor would have a right to take possession of the property
and deal with it as provided for in the contract. In that case the court held that such a contract for the
conditional sale of goods was valid in these Islands between the parties thereto, and was valid also as to
third persons, provided possession of the property therein described was taken by the vendor before the
rights of third persons intervened against the same. In the case at bar it is evident that the bill of sale, so
called, was in no sense a conditional sale of property, such as is described in the case of Kuenzle &
Streiff against A. S. Watson & Co., and the principles applicable thereto are entirely inapplicable in the
case at bar. Moreover, possession of the property in suit was not taken at any time by the plaintiff.

The defendant Macke & Chandler, having purchased the property at an execution sale, properly
conducted, obtained a good title to the property in question as against the plaintiff in this case.

The judgment of the court below is, therefore, affirmed, with costs against the appellant. So ordered.

Arellano, C.J., Torres, Johnson, and Carson, JJ., concur.

Valdez(s) (P) v. CA, Judge Buzon, Sps Salvador (PRs) |

GR No.106042 | 2.28.94 | Double Sales | Nocon, J p:

On August 10, 1983, spouses Alfredo Valdez and Rufina Bautista, herein petitioners, [2] purchased a
parcel of land with an area of three hundred twenty six (326) square meters located in Barrio Maysilo
(now Santolan), Malabon originally registered in the name of Dionisio Santiago. [3]
Petitioners Valdez bought the subject property from Maria dela Cruz vda. de Santiago and Jose Santiago.
The sale was effected in a deed of extrajudicial settlement with absolute sale executed in their favor. [4] In
this instrument, vendors Maria dela Cruz and Jose Santiago, claiming to be the widow and son
respectively of Dionisio Santiago, adjudicated unto themselves, as the only heirs of the deceased, [5] the
latter's one half interest on the property covered by Transfer Certificate of Title No. 343919, which
together with the one half share thereon of Maria dela Cruz vda. de Santiago, was sold to spouses
Alfredo Valdez and Rufina Bautista for a consideration of P55,420.00. Consequently, Transfer Certificate
of Title (TCT) No. 343919 was cancelled, and in lieu thereof, TCT No. 105231 was issued in the name of
spouses Alfredo Valdez and Rufina Bautista.[6]
In a letter sent by their counsel dated February 27, 1984, petitioners demanded that herein private
respondents-spouses Donald and Cresencia Salvador show proof of their right to occupy the subject
premises and to vacate the same.[7] After respondents failed to vacate the premises despite intervention
by the barangay officials of the locality, [8] petitioners filed a complaint before the Regional Trial Court of
Malabon for recovery of possession of property on July 1, 1988. [9]
The actual possessors of the land in question, herein private respondents, represented by their attorney-
in-fact Philip Salvador, claim ownership over the property after having bought the same on installments
from the registered owner Dionisio Santiago. They allege that half of the property (163 sq. m.) was sold to
them on December 20, 1974 for P16,300.00.[10] Payment thereon was completed on October 15, 1981.
[11]
 On October 20, 1979 the other half of the land was bought for P20,000.00, payment of which was
received by Benjamina Magalong,[12] Dionisio Santiago's wife, allegedly because the latter was already
too weak and sickly.
On February 28, 1991 the trial court rendered judgment dismissing the complaint for lack of merit and
ordering the plaintiffs spouses Alfredo Valdez to pay defendants Salvador P5,000.00 for attorney's fees
and to pay the costs of the suit.[13]
The trial court found that there was a double sale of the immovable in question. Applying Article 1544 of
the New Civil Code, the court a quo held that as to half of the property in question, private respondents
(Salvador spouses) had a preferential right as against petitioners (Valdez spouses) who were purchasers
in bad faith.[14] The petitioners were taken to task for failing to make inquiry concerning the rights of private
respondents who were in possession of the property.
"In his testimony, plaintiff Alfredo Valdez stated that before he bought the property, he inquired from Maria
dela Cruz about the house erected thereon and he was informed by the latter that she had allowed her
relatives to build said house, with the understanding that they would vacate said property and remove
their house should she need the property, and that he did not inquire from the defendants themselves
why they have their house on the property nor inform them that he was buying said property (tsn, May 11,
1989, pp. 14-15). He likewise admitted that the property in question is only about one half kilometer away
from his residence; that the defendants have their house on said property since 1970 and that Dionisio
Santiago likewise had a house on said property where he lived with his common-law wife, Benjamina
Magalong, while his legal wife, Maria dela Cruz, lives in another place in the same neighborhood, and that
he did not talk to Benjamina Magalong (Ibid, pp. 7 and 10). In other words, plaintiffs merely relied on the
statement of Maria dela Cruz that defendants were her relatives whom she had allowed to build a house
on the property which she was offering to sell to them until such time that she needed the same, although
they knew that Maria dela Cruz did not live on said property with her husband Dionisio Santiago, who
resided thereon with his common-law wife Benjamina Magalong. Thus, had plaintiffs inquired from
defendants themselves or from Benjamina Magalong by what right did defendants have a house on the
property in question, before they bought the entire property, they could have been informed of the deed of
sale executed by Dionisio Santiago in defendants' favor. As held in De Guzman, Jr. v. Court of Appeals,
156 SCRA 701, 710:
"The failure of appellees to take the ordinary precautions which a prudent man would have taken under
the circumstances, specially in buying a piece of land in the actual, visible and public possession of
another person, other than the vendor, constitutes gross negligence amounting to bad faith.
'In this connection, it has been held that where, as in this case, the land sold is in the possession of a
person other than the vendor, the purchaser is required to go beyond the certificate of title and mae (sic)
inquiries concerning the rights of the actual possessor. Failure to do so would make him a purchaser in
bad faith. (Incala vs. Mendoza, CA-G.R. No. 13677-R, November 9, 1965; De Jesus vs. Revilla, CA -G.R.
No. 13562-R, October 5, 1965; Martelino vs. Manikan, CA-G.R. No. 32792-R, June 22, 1956).
'xxx.
'One who purchases real property which is in actual possession of another should, at least make some
inquiry concerning the right of those in possession. The actual possession by other than the vendor
should, at least put the purchaser upon inquiry. He can scarely (sic), in the absence of such inquiry, be
regarded as a bona fide purchaser as against such possessors. (Conspecto vs. Fruto, 31 Phil. 144)." [15]
With respect to the other half of the property (163 sq. m.) the trial court ruled that petitioners had
preferential right over the land. The sale made on December 20, 1979 by Benjamina Magalong in favor of
private respondents had no force and effect.
"xxx. Not being the registered owner nor authorized by the registered owner, Benjamina Magalong had no
right to sell the other half portion of the property covered by TCT No. 343919 . Consequently, upon the
demise of Dionisio Santiago on November 26, 1982, the latter's right over one half portion of the property
covered by TCT No. 343919 passed on to his legal heir, i.e., his wife Maria dela Cruz as appearing on the
face of said certificate of title, as the other half was already sold by him to Donald Salvador, by virtue of
the Deed of Absolute Sale dated December 20, 1974 (Exh. "14")." [16]
On appeal,[17] appellants-spouses Valdez challenged the trial court's decision to award one half of the
property to private respondents and claimed that they should have left the parties where they are
pursuant to the doctrine of in pari  delicto.[18]
The Court of Appeals held that these points were already raised and resolved by the court  a
quo. Nevertheless, the court proceeded to examine the case. Relief prayed for by appellants was denied
and the decision appealed from was affirmed in toto by respondent court.[19]
Hence the instant petition, where the following issues are elevated:
I
PUBLIC RESPONDENTS MISAPPLIED ARTICLE 1544 OF THE NEW CIVIL CODE. THEIR HOLDING
THAT PETITIONERS ARE IN BAD FAITH AND PRIVATE RESPONDENTS HAVE BETTER RIGHT
OVER THE QUESTIONED PROPERTY IS AGAINST THE EVIDENCE AND ESTABLISHED
PRINCIPLES OF LAW.
II
ASSUMING THAT PETITIONERS ARE IN BAD FAITH, PUBLIC RESPONDENTS ERRED WHEN THEY
DID NOT LEAVE THE PARTIES WHERE THEY ARE CONSIDERING THAT PRIVATE RESPONDENTS
SLEPT ON THEIR RIGHT FOR UNREASONABLE LENGTH OF TIME BY NOT REGISTERING THEIR
ALLEGED DEED OF SALE.[20]
The trial court already adjudged petitioners as having preferential right over one half of the subject
property.[21] Hence the present controversy covers only the remaining one half of the land which the trial
court adjudicated in favor of private respondents.
Petitioners theorize that public respondents (the Trial Court and the Court of Appeals) erred when they
held the spouses Valdez to be purchasers in bad faith. They claim to have satisfied the legal requirement
that "in order (for) a purchaser of land with a Torrens Title (to) be considered a purchaser in good faith, it
is enough that he examines the latest certificate of title xxx." [22] Further, they maintain that they inquired
from the vendors Maria dela Cruz vda. de Santiago and Jose Santiago, heirs of Dionisio Santiago,
concerning the rights of private respondents who were in possession of the property. [23]
The trial court held that plaintiffs spouses Valdez (herein petitioners) should have inquired from
defendants spouses Salvador themselves or from Benjamina Magalong. [24] This requirement, petitioners
argue, is unreasonable and pointless.
Firstly, because it exacts more than what the law requires from a buyer of land covered by a Torrens Title.
Secondly, although the private respondents were given the opportunities to present their claim of title or
ownership, the latter repeatedly failed to support their claim over the property. [25] Thirdly, to inquire from
Benjamina Magalong would be futile for she had no right to stay on the property, proof of which is her
subsequent eviction.[26]
We are not persuaded.
Before us is a case involving registered land which had been sold to two different persons.
The first sale was made by the registered owner Dionisio Santiago in favor of private respondents
(spouses Salvador) on December 20, 1974.[27] It was never registered although private respondents have
been in uninterrupted possession since 1970 up to the present, first as lessees and later on as owners.
The second sale was made by Dionisio Santiago's heirs, Maria dela Cruz vda. de Santiago and Jose
Santiago, in favor of petitioners on August 10, 1983, nearly a year after the former's death. It was
recorded and TCT No. 106251 was issued in the name of petitioners.
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 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
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith."
Where the thing sold twice is an immovable, the one who acquires it and first records it in the Registry of
Property, both made in good faith, [28] shall be deemed the owner. The requirement of the law then, is two-
fold: acquisition in good faith and registration in good faith. Mere registration of title is not enough, good
faith must concur with the registration. [29] To be entitled to priority, the second purchaser must not only
establish prior recording of his deed but must have acted in good faith, without knowledge of the
existence of another alienation by the vendor to another. [30]
Who then is a purchaser in good faith?
In the early case of Leung Yee v. F.L. Strong Machinery Co. and Williamson, [31] we explained the matter
in this wise:
"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 title of his
vendor. xxx. Good faith, or the lack of it, is in its last analysis a question of intention; but in ascertaining
the intention by which one is actuated in a given occasion, we are necessarily controlled by the evidence
as to the conduct and outward acts by which alone the inward motive may, with safety be determined. So
it is that "honesty of intention," "the honest lawful intent," which constitutes good faith implies a "freedom
from knowledge and circumstances which ought to put a person on inquiry," and so it is that proof of such
knowledge overcomes the presumption of good faith in which the courts always indulge in the absence of
proof to the contrary. "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." (Wilder vs. Gilman, 55 Vt., 504, 505; Cf. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet,
Cypress Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co. vs. Bromley, 119 Mich., 8,
10, 17.)
And more succinctly in Cui and Joven v. Henson[32], we said:
"A purchaser in good faith is one who buys 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 . Good faith
consists in an honest intention to abstain from taking any unconscientious advantage of another. Good
faith is an opposite of fraud and of bad faith, and its non existence must be established by competent
proof.
Being a question of intention, good faith or the lack of it can only be ascertained from the circumstances
surrounding the purchase of the land. We shall now analyze whether or not petitioners bought the land in
good faith.
According to the trial court, petitioners should have inquired from the actual possessors, including private
respondents, "by what right did they have for having a house on the property, before purchasing the
entire property" and not merely from the vendors.[33]
They claim that such a requirement is unreasonable and that their inquiry with the vendors is sufficient to
make them buyers in good faith.
It is true that petitioners examined the certificate of title of Dionisio Santiago before they bought the lot
and found it clean and without annotation of any encumbrance. And it is equally true that a person dealing
with the owner of registered land is not bound to go beyond the certificate of title as he is charged with
notice of burdens on the property which are noted on the face of the register or on the certificate of title. [34]
However, it is important to note that petitioners did not buy the land from the registered owner, Dionisio
Santiago. They bought it from his heirs, Maria dela Cruz and Jose Santiago.
Where a purchaser buys from one who is not the registered owner himself, the law requires a higher
degree of prudence even if the land object of the transaction is registered. One who buys from one who is
not the registered owner is expected to examine not only the certificate of title but all factual
circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his
capacity to transfer the land.[35]
The trial court correctly cited our pronouncement that "(o)ne who purchases real property which is in the
actual possession of others should at least, make some inquiry concerning the rights of those in
possession. The actual possession by others (sic) than the vendor should, at least, put the purchaser
upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as a  bona fide purchaser as
against such possessors."[36]
In order to fulfill the requisite of good faith, it is imperative for a purchaser of land which is possessed by
persons not the vendor to inquire and investigate into the rights or title of those in possession. The
absence of such an inquiry will remove them from the realm of bona fide acquisition.
Although petitioners made inquiry regarding the rights of private respondents to possess the subject
property, this case involves certain peculiarities which lead us to affirm the respondent trial and appellate
courts' finding that petitioners are not purchasers in good faith.
While petitioners claim to have so inquired, they did so from the vendors who were not the registered
owner. As we have seen from jurisprudence previously cited, buying land from one not the registered
owner should have put the buyer on guard concerning facts which would acquaint him with defects in the
title or capacity to transfer of the vendor.[37]
In addition, petitioners admit that they reside only half a kilometer away from the property in question.
This fact greatly facilitates such inquiry from the actual possessors and not only from the vendors.
Furthermore, petitioner's husband Alfredo Valdez (plaintiff in the lower court) knew that private
respondents have a house on the property in question which they have been occupying since 1970. [38] At
the very least, they would have been apprised of the reputation of private respondents' possession since
they are neighbors residing in the same locale.
As aptly put by the respondent court:[39]
"As records bear it out, appellants had knowledge of circumstances which ought to have put them on an
inquiry but they did not. Such failure to exercise ordinary care expected of real estate buyers necessarily
means bearing the consequences of their own acts. xxx."
Regarding private respondents' failure to present evidence of their claim of title despite several
opportunities to do so, the trial court adequately accounted for the same. It found that private respondent
Cresencia Salvador was not a proper party in the barangay conciliation proceedings and that Donald
Salvador was abroad at the time. Hence, her failure to present such evidence does not militate against
private respondents' inculpability.[40]
Next, petitioners argue that the land in question has not been properly identified and described in
evidence for private respondents [viz. Exhibits 14 & 14-A (Deed of Sale dated December 20, 1974) do not
describe which portion of land they refer; receipts of payment executed by Dionisio Santiago vary with
respect to their subject lots; the deed of sale was executed December 1974 when payment was only
completed on October 15, 1981; private respondents' evidence does not show that the land has been fully
paid for because a number of Exhibits (16-A; 16-E; 16-F; 16-M; 16-DD; 16-EE; and 16-GG) are no
evidence of payments. They are incompetent and hearsay for not being properly identified.] [41]
We are satisfied with the analysis and decision of the trial court regarding this matter. Apart from
petitioners' tenuous allegations, the identity of the subject property cannot be seriously doubted. It held:
"The circumstance that the Deed of Absolute Sale dated December 20, 1974, covering one half portion of
the property stated that the consideration of P16,300.00 was received by Dionisio Santiago from
defendant Donald Salvador (Exh. "14"), whereas said amount was actually paid in installment for a period
of almost seven (7) years, as shown by the receipts therefor (Exhs. "16", "16 -A", to "16-TT"), does not
affect the validity of the transaction. As explained by Philip Salvador, after the deed of sale was executed,
Dionisio Santiago wanted a full payment of the consideration but since he and Donald Salvador did not
have money, they agreed to have the consideration paid in installment and that the copy of said deed of
sale was given to him and Donald Salvador by Dionisio Santiago only upon full payment of the
consideration of P16,300.00 (tsn September 21, 1990, pp. 6-7). Moreover, defendant Donald Salvador
started paying the realty taxes on the property owned by Dionisio Santiago beginning with the year 1975-
76 (Exhs. "8", "9", "11", "12" and "13").
"In their Memorandum, plaintiffs pointed out the property allegedly sold by Dionisio Santiago to defendant
Donald Salvador was not properly identified as the deed of sale refers to one half portion of Lot 14-B
situated at Maysilo St., Municipality of Malabon, whereas TCT No. 343919 covering said property states
that it is situated in Barrio Maysilo, Municipality of Malabon and there is a wide difference between street
and barrio. No significance can be attributed to such circumstance. The deed of sale expressly mentioned
that the one half portion of the property (Lot 14-B) sold to Donald Salvador by Dionisio Santiago is
covered by TCT No. 343919. In fact plaintiffs' (herein petitioners) tax declaration covering the property in
question, attached as Annex "B" to their Complaint, also states that the property is located at Maysilo
Street. And as alleged in paragraph 3 of the Complaint, Barangay Maysilo is now called Santulan." [42]
Lastly, petitioners advance the theory that, even assuming petitioners to be purchasers in bad faith, public
respondents should have left the parties where they are since both are at fault. Private respondents are
equally to blame for failing to register the alleged sale from the time they possessed the Deed of Absolute
Sale (October 15, 1981) to the time petitioners purchased the property (August 10, 1983), an
unreasonable period of one year and ten months. It is because of this omission that the present
controversy arose, hence private respondents should be held responsible and the parties held to be in
pari delicto.[43]
The circumstance between the parties cannot qualify as being in pari delicto for they are not similarly
situated.
The trial court already held worthy of credence private respondents' testimony that they were not able to
register said deed of sale after they had paid the last installment to Dionisio Santiago because the latter
could no longer locate his copy of the transfer certificate of title. [44] We respect the findings of the trial
court on this factual matter, it being a better judge of the witness's demeanor at the time he is called to
the stand.
We also do not find private respondents equally blameworthy for failing to register during the period of
time cited above by petitioners. Their uninterrupted possession of the property may have fostered
complacency but their omission to register within this period cannot constitute a situation of in pari delicto.
WHEREFORE, the instant petition is DISMISSED.
SO ORDERED.
Valdez(s) (P) v. CA, Judge Buzon, Sps Salvador (PRs) | GR No. 106042 | 2.28.94 | Double Sales |
Nocon, J p:

 PR (Possessors) Sps bought a land in Malabon from Dionisio Santiago (DS) they didn’t register
the subject;
 P Valdez(s) bought the subject property from Ma. Dela Cruz vda. De Santiago (Original Wife) and
Jose Santiogo (Son), heirs of Dionisio Santiago, a TCT was named after them.
 Ps lawyer then demanded from PR to vacate, the other half of the subject, to no avail hence the
suing;
 PR claims that they bought the same property from Dionisio Santiago; claiming that they bought
the same by halves until the last half were payment was made to DS’s common law wife
Benjamina Magalong.
 The lower court dismissed the complaint for lack of merit; holding that there was a double sale of
the subject; holding petitioners as purchasers in bad faith, for failing to make inquiry concerning
the rights of PR; The CA affirmed hence this.
 Before us is a case registered land which had been sold to two different persons.
 Dismissed.
 It is true that petitioners examined the certificate of title; And it is equally true that a person
dealing with the owner of registered land is not bound to go beyond the certificate of title.
However, it is important to note that petitioners did not buy the land from the registered owner,
Dionisio Santiago. They bought it from his heirs, Maria dela Cruz and Jose Santiag, the law
requires a higher degree of prudence even if the land object of the transaction is registered.
 One who buys from one who is not the registered owner is expected to examine not only the
certificate of title but all factual circumstances necessary for him to determine if there are any
flaws in the title of the transferor, or in his capacity to transfer the land.
 Buying land from one not the registered owner should have put the buyer on guard concerning
facts which would acquaint him with defects in the title or capacity to transfer of the vendor.
 As records bear it out, appellant had knowledge of circumstances which ought to have put them
on an inquiry but they did not. Such failure to exercise ordinary care expected of real estate
buyers necessarily means bearing the consequences of their own acts.
 We also do not find private respondents equally blameworthy for failing to register during the
period of time cited above by petitioners. Their uninterrupted possession of the property may
have fostered complacency but their omission to register within this period cannot constitute a
situation of in pari delicto.

BAUTISTA VS. SIOSON

TORRES, J.:
This appeal through bill of exceptions was filed by counsel for the defendant Raymundo de la Cruz from
the judgment of December 29, 1916, whereby the judge of the Court of First Instance of Rizal held (1) that
Rosalio Bautista, the plaintiff, was by merger the owner of the properties described in subparagraphs (a)
and (6) of paragraph 2 of the-complaint; (2) ordered Raymundo de la Cruz to deliver to the plaintiff
Bautista the camarin or warehouse, built of strong materials, described in the subparagraph (a) above
mentioned; (3) ordered Francisco Sioson to pay to said plaintiff Bautista the sum of P200, the amount of
the rent due; (4) absolved Francisco Santos Paulino from the complaint, as the evidence did not show
that he had taken possession of the house described in said subparagraph (b); and, finally (5) ordered
each of the defendants Francisco Sioson and Raymundo de la Cruz to pay one-half of the costs. The
appellant moved for a new trial, which motion being denied, he entered an exception, and, upon filing the
proper bill of exceptions, the same was approved and forwarded, together with a transcript of all the
evidence, to the office of the clerk of this court.

On June 30, 1916, counsel for the plaintiff filed a complaint in the Court of First Instance of Rizal, in which
he alleged that on September 4, 1912, by virtue of a contract of sale executed on September 4, 1912,
between the plaintiff Rosalio Bautista and the spouses Francisco Sioson and Lorenza de la Cruz, for the
sale of a camarin or warehouse of strong materials with an iron roof and a house of mixed materials with
a nipa roof both buildings constructed on lots situated in the town of Malabon, Rizal, and belonging to the
chaplaincy known by the name of Concepcioii said buildings were delivered to him on the date of the
contract, which was drawn up before a notary, under the condition that the vendors might repurchase
them within the term of two years, counted from the date of the contract; that immediately after the sale
the plaintiff leased the purchased buildings to said vendor spouses, who had not paid the price of the
lease, nor repurchased said buildings, notwithstanding that the term of the contract had elapsed, with the
result that the other defendant Raymundo de la Cruz was then (at the time of the filing of the complaint) in
material possession of said camarin under title of owner, and Francisco Santos Paulino was in
possession of the house, also under a like title. Therefore he prayed the court to hold that the plaintiff's
ownership in said buildings was consolidated, to order the defendants to deliver them to the plaintiff, and
to order Francisco Sioson to pay to the plaintiff the price of the lease and to pay the costs.

The defendants Francisco Sioson and Francisco Santos Paulino did not put in an appearance to answer
the complaint, notwithstanding that they were duly summoned. They were therefore declared in default.

Counsel for the defendant Raymundo de la Cruz admitted paragraphs 1 and 6 of the complaint, and
denied generally and specifically the other paragraphs thereof. In special defense he alleged that the
camarin described in subparagraph (a), paragraph 2 of the complaint, was of the exclusive ownership of
the defendant Raymundo de la Cruz. He therefore asked that his client be absolved from the complaint,
with the costs against the plaintiff.

Upon the hearing of the case and the introduction of evidence by the parties, the court decided the suit in
the manner aforesaid.

It now behooves us to determine who is the owner of the camarin of strong materials with an iron roof, to
which reference is made in subparagraph (a) of paragraph 2 of the complaint: Whether it belongs to
Rosalio Bautista, in whose favor its ownership became consolidated by the lapse of the term of two years
without its having been repurchased by the vendors; or to Raymundo de la Cruz, to whom Francisco
Sioson likewise sold the said camarin on August 5, 1914, one year and eleven months after the sale of
this building to the plaintiff Bautista, effected on September 4, 1912.

In order that the issue raised in this suit may be properly decided we shall herein make a statement of the
contracts executed by and between the litigants.
On September 4, 1912, the defendant Francisco Sioson and his wife Lorenza de 3a Cruz, through a
notarial instrument, sold to the plaintiff Rosalio Bautista the camarin in question, besides some other
property, under the right of repurchase. It was stipulated that if within two years from the date of the
contract the vendors or their successors in interest should not repurchase said properties for the sum of
P400, the price of the sale, such sale should become absolute and thenceforth the ownership in the
properties sold should be consolidated, the execution of another instrument being unnecessary. (Exhibit
A, p. 10.)

On the same date, September 4, 1912, Rosalio Bautista, through a notarial instrument, leased the
properties sold to him to the vendors Francisco Sioson and Lorenza de la Cruz, for the price of F100 per
annum, for the period of two years counted from the date of the instrument. (Exhibit D, p. 15.)

On June 12, 1913, Lorenza de la Cruz died (sten. notes, p, 29) and on August 5, 1914, Francisco Sioson
executed before a notary a document by which he sold under right of repurchase to the defendant
Raymundo de la Cruz, the camarin in question. It was stipulated in this instrument that if within six
months, counted from the 1st of August. 1914, the vendor Francisco Sioson should return to the
purchaser Raymundo de la Cruz the sum of P422, the price of the purchase, then the purchaser
Raymundo de la Cruz would be obliged to execute in favor of said vendor Francisco Sioson an instrument
of resale, but that if within the period mentioned he should not make the redemption stip ulated, said sale
should become absolute, the execution of another instrument being unnecessary. (Exhibit 1, p. 17.)

From the instrument referred to in the preceding paragraphs it is concluded that the original owner of the
buildings in dispute, Francisco Sioson, and his wife, Lorenza de la Cruz, sold, on September 4, 1912, the
house and the cftmarin to the plaintiff Rosalio Bautista for ^=400, under agreement of their resale within
the term of two years counted from said date; and that, on the same date, by means of a constitutwti
possessorium agreement, and in another new notarial instrument, the purchaser Bautista leased the
properties sold to the vendors Francisco Sioson and Lorenza de la Cruz at an annual rent of P100, for a
period of two years counted from the date above mentioned.

After the lessee, Francisco Sioson, had been in possession of the properties leased for one year and
eleven months, he sold the camarin, one of them, by virtue of a notarial instrument to Raymurido de la
Cruz, under the agreement that if he did not redeem the camarin so sold within six months from the 1st of
August, 1914, and return the sum of P422, such sale under right of repurchase should become absolute,
the execution of another instrument being unnecessary.

As a result of the two said alienations, both set forth in notarial instruments though not recorded in the
registry of property the issue raised and to be decided is, which of the two purchasers, the plaintiff
Bautista and the defendant Cruz, is the lawful owner of the camarin successively sold to the former and to
the latter by the other defendant Francisco Sioson, its original owner, in accordance with the provisions
contained in article 1473 of the Civil Code, the last paragraph of which, among other things, prescribed:
"Should there be no entry, the property shall belong to the person who first took possession of it in good
faith * * *."
In view of the fact that the deed of sale executed by Francisco Sioson, the owner of the camaHi% and' his
wife, Lorenza de la Cruz, on September 4, 1912, in favor of Rosalio Bautista, was not entered in the
registry'of property, and o;f the further fact that, upon the execution of the second sale of the same
camarin by the said Sioson, which sale was made after the death of his wife Lorenza by virtue of an
instrument dated August 5, 1914, in favor of Raymundo de la Cruz, under agreement of repurchase for
the price of P422 the term of two years fixed for the redemption of the camarin so sold had not yet
expired, pt may be presumed^ in the absence of proof to the contrary, that the second purchaser
Raymundo de la Cruz, on acquiring the camarin of its original owner Francisco Sioson, who, according to
the written contract, became a tenant or lessee of the camarin, was not aware of said first sale to
Bautista, and believed that Sioson, who was in possession off the camarin, was still the owner thereof.
Therefore, Cruz acted in good faith in acquiring it, inasmuch as, through failure to enter the property in the
registry, there was no reason why the previous alienation of the camarin should have been known. But be
all this as it may, nevertheless, the actual and material possession of the camarin by Cruz does not
constitute a sufficient legal reason for holding that he has a better right to the building than the first
purchaser Rosalio Bautista, although the latter was not in actual, physical, and material possession of the
camarin that he had purchased. This conclusion is derived from a strict application of the provisions of
said article 1473 of the Civil Code.

Both alienations, effected successively by Francisco Sioson in favor of Bautista and Cruz, are recorded in
notarial instruments, though they were not entered in the registry of property. To determine who is the
lawful owner of the camarin sold, if the provisions of said article of the Code are ta be observed, we have
first to determine the contention in regard to which of the two purchasers is in possession thereof, and if,
on the execution of the contract of lease by the first purchaser in favor of the vendor himself, the
constitutum possessoriwm agreement is to be considered to have been stipulated, the conclusion must
necessarily be reached as to which of the two purchasers first took possession of the camarin sold, and
also whether the material possession of the tenant is of a precarious nature, enjoyed in the name and
representation of the owner Bautista.

Article 1462 of the Civil Code reads:

"A thing sold shall be considered as delivered, when it is placed in the hands and possession of the
vendee.

"When the sale should be made by means of a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if in said instrument the contrary
does not appear or may be clearly inferred."
From the context of this article it is deduced that the delivery or tradition of the thing sold may be real or
actual, and feigned. The execution of a public instrument constitutes one of the kinds of symbolic
tradition, but, in all the different manners by which the thing sold may be delivered, it is necessary that the
record bear proof and that it may be held that such delivery or tradition was determined by the will of the
parties to deliver and receive, respectively, the thing that is the subject of the contract.

In the contract of lease (Exhibit D, record, p. 15) the lessor, Rosalio Bautista, states that in his capacity as
owner he leased tti the spouses Francisco Sioson and Lorenza de la Cruz, among other properties, a
camarin of strong material with an iron roof, at an an. ual rent of !P1OO, the lessees binding themselves
to report to the lessor any act of disturbance committed by any other person, and all defects that might be
occasioned to the building. The execution of this instrument of lease shows that the camarin would be
continued to be occupied by its previous owner and vendor after it had been delivered, symbolically, by
means of the instrument executed for the purpose in favor of the purchaser, in order that he might hold it
in the capacity of lessee, it being supposed, by a legal fiction, that the purchaser entered into possession
of the camarin sold, a form of possession utilized by the purchaser by virtue of the clause known in law as
constitution possessorium, stipulated between the contracting parties.

So that, by the execution of the deed of sale of September 4, 1912, Rosalio Bautista entered into the
material possession under title of owner, of the camarin sold to him by Francisco Sioson, and, by virtue of
another instrument of lease, of the same date, the purchaser and owner of the camarin conveyed and
delivered this building to the lessee in view of said contract. Under these perfectly legal suppositions it is
unquestionable that the purchaser Rosalio Bautista was the first person who entered into the possession
of the camarin as soon as he acquired it by virtue of said sale.
The material possession which the other defendant, Raymundo de la Cruz, now enjoys, not only was
subsequent by one year and eleven months, but also, on the other hand, is an unlawful possession which
was transmitted to him by Francisco Sioson, who held the camarin precariously and in the capacity of
tenant, and, consequently, without any right whatever to convey to Raymundo de la Cruz the possession
under title of owner referred to in article 1473, aforementioned of the Civil Code,
This article says: "If the same thing should have been sold to different vendees * * *;" but it must be
understood that said sale was made by its original owner. In the instant case Francisco Sioson, on
effecting the second sale in favor of Raymundo de la Cruz, was in possession of the camarin and
occupied it, not in the capacity of owner, but in that of lessee or tenant, and therefore absolutely had no
right to dispose of the building in the capacity of owner thereof; consequently Sioson could not convey to
the second purchaser the lawful possession of the disputed camarin.

After the foregoing elucidation of the main issue submitted to this court for decision, we deem it
unnecessary to pass upon the other issues relative to whether Francisco Sioson could have sold, only
after the death of his wife, the said camarin to Raymundo de la Cruz, and whether the price of the second
sale was part of a larger sum that pertained to the second purchaser, as proceeds derived from the game
of jueteng, inasmuch as, for the reasons above stated, it has been shown that Raymundo de la Cruz
could not have acquired any right in the camarin involved in this suit; for Francisco Sioson, who sold to
Cruz, occupied it as a mere tenant and not as owner, and, consequently, was unable to transmit to the
purchaser any property right whatever nor lawful possession under title of owner.

For all the foregoing reasons, whereby the errors assigned to the judgment appealed from have been duly
refuted, said judgment, being in conformity with the evidence of record, should be, as it hereby is,
affirmed, with the costs against the appellant Raymundo de la Cruz. So ordered.

Arellano, C.J., Johnson, Araullo, Street, Avanceña, JJ., concur.

DISSENTING

CARSON, J.,

I dissent. Manresa, in his commentaries, on article 1473 of the Civil Code, clearly indicates that the
possession referred to in that article is the real, the physical possession of the property; and certain it is
that to hold that the possession contemplated in this article may be secured without the performance of
some act which will give notice to innocent subsequent purchasers, or of which subsequent purchasers
may inform themselves by due diligence tends to ^efeat the just and equitable provisions of the law.

Judgment affirmed.
 CARUMBA vs. CA

G.R. No. L-27587

February 18, 1970

FACTS: In 1955, the spouses Amado Canuto and Nemesia Ibasco, by virtue of a “Deed of Sale
of Unregistered Land with Covenants of Warranty” sold a parcel of land located in Camarines Sur, to
the spouses Amado Carumba and Benita Canuto, The referred deed of sale was never registered in the
Office of the RD of Camarines Sur, and the Notary was not then an authorized notary public in the place.

In 1957, a complaint for a sum or money was filed by Balbuena against Amado Canuto and Nemesia
Ibasco before the Justice of the Peace Court. A decision was rendered in favor of Balbuena and against
the defendants.

In 1968, the ex-officio Sheriff issued a “Definite Deed of Sale of the property now in question in favor of
Balbuena, which instrument of sale was registered before the Office of the RD.
The CFI, finding that after execution of the document Carumba had taken possession of the land, and
planted thereon:

1. declared him to be the owner of the property under a consummated sale;

2. held void the execution levy made by the sheriff, pursuant to a judgment against Carumba’s
vendor, Amado Canuto;
3. and nullified the sale in favor of the judgment creditor, Balbuena.
The CA, without altering the findings of fact made by the court of origin, declared that there having been a
double sale of the land subject of the suit Balbuena’s title was superior to that of his adversary under
Article 1544 of the Civil Code of the Philippines, since the execution sale had been properly registered in
good faith and the sale to Carumba was not recorded.

ISSUE: Who has the superior title to the land

HELD: CARUMBA
CA reversed. CFI affirmed.

The SC disagrees with the CA. While under the invoked Article 1544 registration in good faith prevails
over possession in the event of a double sale by the vendor of the same piece of land to different
vendees, said article is of no application to the case at bar, even if Balbuena, the later vendee, was
ignorant of the prior sale made by his judgment debtor in favor of petitioner Carumba. The reason is that
the purchaser of unregistered land at a sheriff’s execution sale only steps into the shoes of the
judgment debtor, and merely acquires the latter’s interest in the property sold as of the time the property
was levied upon. This is specifically provided by section 35 of Rule 39 of the Revised Rules of Court, the
second paragraph of said section specifically providing that:
Upon the execution and delivery of said (final) deed the purchaser, redemptioner, or his assignee 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, except as against the judgment debtor in possession, in which case the
substitution shall be effective as of the time of the deed … (Emphasis supplied)
While the time of the levy does not clearly appear, it could not have been made prior to 1957, when the
decision against the former owners of the land was rendered in favor of Balbuena. But the deed of sale in
favor of Canuto had been executed two years before, in 1955, and while only embodied in a private
document, the same, coupled with the fact that the buyer (petitioner Carumba) had taken possession of
the unregistered land sold, sufficed to vest ownership on the said buyer. When the levy was made by the
Sheriff, therefore, the judgment debtor no longer had dominical interest nor any real right over the land
that could pass to the purchaser at the execution sale. Hence, the latter must yield the land to petitioner
Carumba.

Said rule is different in case of lands covered by Torrens titles, where the prior sale is neither recorded
nor known to the execution purchaser prior to the levy; but the land here in question is admittedly not
registered under Act No. 496.