Fullido vs Grilli

Grilli was an Italian national while Fullido was a Filipino. They were lovers (they had a common law
relationship). Fullido owned a plot of land within which Grilli had a house built. They entered into a lease
agreement wherein Grilli would rent the lot for 50 years for P10,000 (for the whole 50 year term), and
that Fullido cannot perform acts of ownership over the land for the term. They also entered into a
Memorandum Agrement which said that Grilli was actually the owner of the house and lot. Their
relationship soured after 16 years (they both accused each other of infidelity). Grilli then filed a
complaint for unlawful detainer against Fullido. The lower courts granted the petition. Hence this
petition

Whether the complaint for unlawful detainer may prosper –NO

In a complaint for unlawful detainer, the complainant in an unlawful detainer case must have some right
of possession over the property. In this case, Grilli bases his right to ownership on the lease agreement.
The Court finds that such lease agreement is void as it violates PD 471. It provides that the maximum
period allowable for the duration of leases of private lands to aliens or alien-owned corporations,
associations, or entities not qualified to acquire private lands in the Philippines shall be twenty-five (25)
years, renewable for another period of twenty-five (25) years upon mutual agreement of both lessor
and lessee. It also provides that any contract or agreement made or executed in violation thereof shall
be null and void ab initio.

Since the term for the lease in this case was for 25 years, it is void ab initio. Consequently, the
complaint for unlawful detainer must fail.

Whether the In Pari Delicto Principle is applicable? –NO

The application of the doctrine of in pari delicto is not always rigid. An accepted exception arises when
its application contravenes well-established public policy. n the present case, both Grilli and Fullido were
undoubtedly parties to a void contract. Fullido, however, was not barred from filing the present petition
before the Court because the matters at hand involved an issue of public policy, specifically the
Constitutional prohibition against land ownership by aliens. As pronounced in Philippine Banking
Corporation v. Lui She, the said constitutional provision would be defeated and its continued violation
sanctioned if the lands continue to remain in the hands of a foreigner. 40 Thus, the doctrine of in pari
delicto shall not be applicable in this case.

Notes

1.) Requisites for Unlawful Detainer:

a. (1) initially, possession of property by the defendant was by contract with or by
tolerance of the plaintiff;
b. (2) eventually, such possession became illegal upon notice by plaintiff to defendant of
the termination of the latter's right of possession;
c. (3) thereafter, the defendant remained in possession of the property and deprived the
plaintiff of the enjoyment thereof; and
d. (4) within one year from the last demand on defendant to vacate the property, the
plaintiff instituted the complaint for ejectment.
2.) If a lease to an alien had an option to buy, it would be violative of the Constitution.
Melecio Domingo v. Spouses Genaro Molina and Elena Molina

Spouses Domingo bought property in Tarlac consisting of a one-half undivided portion over an 18,164
square meter parcel of land. During his lifetime, Anastacio (the husband Domingo) borrowed money
from spouses Molina. Flora (the wife Domingo) died. Anastacio allegedly sold his interest over the land
to the Molinas before he died. The sale of Anastacio's interest was registered under a TCT. Anastacio
died. Melecio, one of the children of Anastacio and Flora, learned of the transfer and filed a Complaint
for Annulment of Title and Recovery of Ownership. He alleged that the sale of conjugal property was
invalid as it was without the consent of Flora, and the sale was fraudulent

Whether the sale was valid –YES

We must note here that what was sold by Anastacio was his undivided interest in the property. When
one of the spouses in a marriage dies, the properties of a dissolved conjugal partnership fall under the
regime of co-ownership among the surviving spouse and the heirs of the deceased spouse until final
liquidation and partition. The surviving spouse, however, has an actual and vested one-half undivided
share of the properties, which does not consist of determinate and segregated properties until
liquidation and partition of the conjugal partnership. As per Art 493 of the Civil Code(See Note 1) , a co-
owner may alienate his right over the property. In this case, when Anastacio sold his right to the
Molinas, such sale effectively transferred, making the spouses Molina a co-owner of the subject
property to the extent of Anastacio's interest.

Whether there was fraud –NO

This is a question of fact already resolved by the lower courts. There is no compelling reason to overturn
the findings of the lower court that there was no fraud.

Notes

1.) Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership. (399)

EDCA Publishing vs Santos

A person, identifying himself as a Jose Cruz, a Dean of La Salle, bought 406 books from EDCA. After a 2 nd
order by Cruz, EDCA became suspicious. EDCA eventually learned that Cruz was actually an imposter and
he had no funds to support the check. After an entrapment operation, Cruz, whose real name was
actually Tomas de la Pena, was captured. De la Pena revealed that he sold 120 of the books to Santos.
EDCA then, with the help of the police, entered Santos premises, and seized the books without a
warrant. Santos filed for recovery of the books. The lower courts ruled that Santos was the true owner
of the books.

Whether Santos was the owner of the books? –YES

The argument of EDCA mainly revolved around Art 559 of the Civil Code. He argues that since he has
been “unlawfully deprived” of the books, he is entitled to recovery. The Court, however, finds that there
is no unlawful deprivation. There was contract of sale entered into, and there was delivery on the part of
EDCA. In such cases, the delivery of the item transfers ownership unless there is a stipulation reserving
ownership to the seller. In this case, there was no such reservation. As such, the delivery transferred
ownership to Santos. There is no unlawful deprivation to speak of.

Notes

1.) ART. 559. The possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully deprived has
acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing
the price paid therefor.

Phil Suburban Development Corp

In order to fulfill an informal settler relocation plan, the People's Homesite and Housing Corporation
(PHHC) purchased land from Philippine Suburban Development Corporation (PSDC). There relevant
dates of the events are as follows:

 On June 1960, prior to the signing of the deed by the parties, the PHHC acquired possession of
the property, with the consent of petitioner, to enable the said PHHC to proceed immediately
with the construction
 On December 29, 1960, the parties executed the Deed of Sale. The Deed was not registered in
the Office of the Register of Deeds until March 14, 1961
 On April 12, 1961, the Provincial Treasurer of Bulacan asked PSDC to pay realty tax due on the
property involved for the calendar year 1961

The taxes were paid by PSDC through PHHC under protest. The main argument of PSDC was that it was
not liable for realty tax for the year 1961 as it ceased to be the owner before then. The lower court ruled
for the Auditor General. Hence this petition.

Whether PSDC was liable for realty tax for the year 1961? –NO

Under the Civil Code, when the sale of real property is made in a public instrument, the execution
thereof is equivalent to the delivery of the thing object of the contract, if from the deed the contrary
does not appear or cannot clearly be inferred. other words, there is symbolic delivery of the property
subject of the sale by the execution of the public instrument, unless from the express terms of the
instrument,or by clear inference therefrom, this was not the intention of the parties. In the case at bar,
there is no question that the vendor had actually placed the vendee in possession and control over the
thing sold(June 1960) , even before the date of the sale (Dec 1960)
The argument of the Auditor that the sale was not valid and effective until the deed of sale was
registered has no merit In a long line of cases already decided by this Court, the constant doctrine has
been that, as between the parties to a contract of sale, registration is not necessary to make it valid and
effective, for actual notice is equivalent to registration.

Notes

 Personal note: So did the ownership transfer when PHHC took possession (June 1960) or was it
at the time the Deed of Sale was executed(Dec 1960)? Was there delivery when PHHC took
possession of the land before the execution?

Skunac vs Sylianteng

The parties in this case allege that they are the true owners of a parcel of land. The Syliantengs alleged
that they obtained the land through their mother Emereciana, who obtained it via a sale to her by Luis
Pujate. On the other hand, Skunac Corp base their ownership on the sale to them by Romeo Pujalte who
allegedly was the sole heir of Luis. It is of note that the sale to the Sylianteng’s mother was registered on
1958, while the sale to Skunac was on 1992 (although the cases did not mention registration).

Whether double sale exists in this case? –NO

Not all the requisites under Art 1544 (See Note 1) are present. Specifically, the buyers in this case did
not buy the property from the same seller. The subject lots were sold to petitioners and respondents by
two different vendors — Emerenciana and Romeo Pujalte (Romeo). Hence, Article 1544 of the Civil Code
is not applicable.

Whether Skunac had a better right to the property? –NO

The disputed lots were already sold by Luis during his lifetime. Thus, these parcels of land no longer
formed part of his estate when he died. The conclusion is that Romeo could not have obtained the
property through succession, and could not have subsequently sold what he did not have.

Even granting that the subject lots formed part of the estate of Luis, it was subsequently proven in a
separate case that Romeo is not his heir. In a criminal case for use of falsified documents filed against
Romeo, it was proven that his claim of heirship is spurious. In the said criminal case, his birth certificate
and the marriage certificate of his supposed parents, which he presented before the estate court, to
prove his claim that he is the sole heir of Luis, were found by the criminal court to be falsified.

Even granting that both petitioners and respondents bought the disputed lots in good faith by simply
relying on the certificates of the sellers, and subsequently, acquiring titles in their own names,
Sylianteng’s' title shall still prevail. It is a settled rule that when two certificates of title are issued to
different persons covering the same land in whole or in part, the earlier in date must prevail, and, in
case of successive registrations where more than one certificate is issued over the land, the person
holding a prior certificate is entitled to the land as against a person who relies on a subsequent
certificate. The titles of respondents, having emanated from an older title, should thus be upheld.

Notes

1.) The requisites that must concur for Article 1544 to apply are:
 a. (a) The two (or more sales) transactions must constitute valid sales;
b. (b) The two (or more) sales transactions must pertain to exactly the same subject
matter;
c. (c) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each represent conflicting interests; and
d. (d) The two (or more) buyers at odds over the rightful ownership of the subject matter
must each have bought from the very same seller.
2.) Bad faith on the part of Skunac - In the instant case, The Torrens Certificate of Title (TCT No.
5760-R) in the name of Romeo, which was the title relied upon by petitioners, also contained
Entry No. P.E. 4023, quoted above, which essentially informs petitioners that the lots which they
were about to buy and which they in fact bought, were already sold to Emerenciana. 39 This
entry should have alerted petitioners and should have prodded them to conduct further
investigation. Simple prudence would have impelled them as honest persons to make deeper
inquiries to clear the suspiciousness haunting Romeo's title. On the contrary, rather than taking
caution in dealing with Romeo, petitioners, instead, subsequently executed deeds of sale 40
over the same properties but all of which were, nonetheless, disallowed by the estate court in
its Order 41 dated October 11, 1993 on the ground that the said lots were already sold, this
time, by Emerenciana to respondents. In this regard, petitioners acted in bad faith

Manigque vs Cattleya Land

Catlleya (as vendee) entered into a contract of Sale with Tecson Sr. (Vendee) over 9 parcels of land.
Neither the Contract of Conditional Sale nor the Deed of Absolute Sale could be annotated on the
certificate of title covering the subject property because the then Register of Deeds of Bohol as there
was writ of attachment that was annotated on the certificate of title of the subject property. Meanwhile,
Taina and her common-law husband, Mike Stone (a foreign national) bought the same property. A Deed
of Absolute Sale was executed under Taina’s name. Cattleya instituted against Taina a civil action for
quieting of title and/or recovery of ownership and cancellation of title with damages. The lower court
ultimately ruled in Cattleya’s favor, hence this petition.

Whether Taina and her foreign spouse had a better right to the property? –NO

Taina’s claim to the proper was based on a void contract of sale. The sale violated the Constitutional
proscription against foreigners owning Philippine land. While it was true that the sale was registered
under Taina (and not her foreigner husband’s name), the court saw that the foreigner spouse was
actually the buyer, and that Taina was merely a dummy. This was proven by the fact that:

1.) Taina herself admitted that it was really Mike who paid with his own funds the subject lot;
hence, Mike was its real purchaser or buyer.
2.) Taina also admitted during cross examination that the property was registered in her name
because they knew that foreigners cant own land here.

Given the fact that the sale by the Tecson spouses to Taina as Mike's dummy was totally abhorrent and
repugnant to the Philippine Constitution, and is thus, void ab initio, it stands to reason that there can be
no double sale to speak of here.
Spring Homes Subdivision vs Tablada Jr.

Spouses Lumbre entered into a Joint Venture Agreement with Spring Homes Subdivision Co., Inc
wherein Lumbre would provide land, and Spring Homes would sell the property. In order to facilitate the
acquisition of permits and licenses in connection with the project, the Spouses Lumbres transferred the
titles to the parcels of land in the name of Spring Homes. Spring Homes then entered into a contract to
sale with Spouses Tablada for a parcel of land (which was a part of the parcels provided by Lumbre).
Spring Homes eventually executed a Deed of Absolute Sale with Spouses Tablada(under the Deed, the
purchase price was P157,500), but Spring Homes alleges that this was merely for the purpose of getting
a PAG-IBIG Loan, and that there was no actual sale between them yet. The title over the property
remained with Spring Homes. Lumbre later filed a complaint for a sum of money against Spring Homes
for its alleged failure to comply with the terms of the Joint Venture Agreement. Lumbre and Spring
Homes eventually entered into a Compromise Agreement, wherein the Lumbres were authorized to
collect Spring Homes' account receivables arising from the conditional sales of several properties, as well
as to cancel said sales, in the event of default. Lumbre sent demands to Tablada for the deficiency
(P230,000) under the Contract to Sell. Since Tablada failed to pay, Lumbre caused the cancellation of the
Contract to Sell. Spouses Lumbres and Spring Homes executed a Deed of Absolute Sale over the subject
property, and as a result, a new title, as issued in the name of the Spouses Lumbres. Spouses Tablada
filed a complaint for the nullification of the 2 nd Deed of Sale in favor of the Lumbres. The lower courts
ultimately ruled for the Tabladas. Hence this petition.

Whether there was a Double Sale? --YES

The theory of the Lumbres was that the land was never sold to the Tabladas. The Deed of Absolute Sale
was executed solely for the purpose of obtaining a PAG-IBIG loan, and thus did not actually operate as a
valid sale in favor of the Tabladas. Since the Tabladas also failed to pay the amount under the Contract
to Sell, the Lumbres had the right to cancel the Contract, and then resell the property to themselves.
The Court disagreed. There was already a previous case involving the same spouses Spouses Lumbres v.
Spouses Tablada in 2007) wherein the court ruled that the Deed of Absolute Sale to the Tabladas was
valid, as there was no proof that the execution of the Deed was for any other purpose, and the Tabladas
paid the amount indicated in the Deed of Sale (the Contract to Sell had a higher amount, but that is
immaterial).

Given that there was a 1st sale to the Tabladas, and a 2 nd sale to the Lumbres, there is a double sale.

Given that there is a double sale, whether the Lumbres had a better right? –NO

the Court has consistently ruled that ownership of an immovable property which is the subject of a
double sale 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.
The requirement of the law then is two-fold: acquisition in good faith and registration in good faith.
Good faith must concur with the registration — that is, the registrant must have no knowledge of the
defect or lack of title of his vendor or must not have been aware 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. If it is shown that a buyer was in bad faith, the alleged registration they have made
amounted to no registration at all.

Here, the first buyers of the subject property, the Spouses Tablada, were able to take said property into
possession but failed to register the same because of Spring Homes' unjustified failure to deliver the
owner's copy of the title whereas the second buyers, the Spouses Lumbres, were able to register the
property in their names. But while said the Spouses Lumbres successfully caused the transfer of the title
in their names, the same was done in bad faith. the Spouses Lumbres cannot claim good faith since at
the time of the execution of their Compromise Agreement with Spring Homes, they were indisputably
and reasonably informed that the subject lot was previously sold to the Spouses Tablada. They were also
already aware that the Spouses Tablada had constructed a house thereon and were in physical
possession thereof. or this reason, the Court cannot, therefore, consider them as the true and valid
owners of the disputed property and permit them to retain title thereto.

Edu vs Gomez

Lt. Bala allegedly lost a car (a Volkswagen). The Agents of Anti-Carnapping Unit (ANCAR) found the car in
the possession of Lucila Abello and immediately seized and impounded the car as stolen property. The
Commissioner of Land Transportation, seized the car pursuant to Section 60 of Republic Act 4136 which
empowers him to seize the motor vehicle for delinquent registration. Lucila Abello filed a complaint for
replevin. The lower court ruled in favor of Lucila Abello. Hence this petition

Whether Abello had the right to possess the car? –YES

The acquirer or the purchaser in good faith of a chattel of movable property is entitled to be respected
and protected in his possession as if he were the true owner thereof until a competent court rules
otherwise. In the meantime, as the true owner, the possessor in good faith cannot be compelled to
surrender possession nor to be required to institute an action for the recovery of the chattel, whether or
not an indemnity bond is issued in his favor. The filing of an information charging that the chattel was
illegally obtained through estafa from its true owner by the transferor of the bonafide possessor does
not warrant disturbing the possession of the chattel against the will of the possessor.

Manlan vs Beltran

A 1214 sqm land was owned by the Orbetas. 500 sqm was sold by Manuel Orbeta to the Manlans. Later,
he Orbetas (except for Manuel Orbeta who was already deceased) sold 714 sqm of the land to the
Beltrans, and executed a Deed of Absolute Sale therefore. Later, the Beltrans bought the remaing
500sqm (which was previously sold by Manuel to the Manlans) as evidenced by another Deed of
Absolute. The Beltrans asked the Manlans to leave, but the Manlans refused. The Beltran then filed an
action for quieting of title and recovery of possession of the 500 sq.m. portion of the subject land. The
lower court ruled in favor of the Beltrans. Hence this petition.

Whether the rules on double sale under Article 1544 of the New Civil Code are applicable –NO

The Manlans tried to argue that there was double sale, and under the rules of double sale they have a
better right over the property since they acquired it in good faith first. The Court disagreed; there was
no double sale . There are 3 requisites in order for Article 1544 to apply:

1. The two (or more) sales transactions in issue must pertain to exactly the same subject matter,
and must be valid sales transactions.
2. The two (or more) buyers at odds over the rightful ownership of the subject matter must each
represent conflicting interests; and
3. The two (or more) buyers at odds over the rightful ownership of the subject matter must each
have bought from the very same seller.

In fine, there is double sale when the same thing is sold to different vendees by a single vendor. In this
case, there were different vendors. The sale to Manlan was by Manuel as vendor, whereas the sale to
Beltran was by all of the original coowners (except for Manuel and Serbio, who are already deceased) as
vendor.

Whether the sale to Manlan was valid –NO

As found by the RTC and the CA, nothing on the records shows that Manuel was duly authorized by the
other co-owners to sell the subject property in 1983

Whether the fact that the notarization of the Deed of Sale was defective affects the legality of the
sale. –NO

Basic is the rule in civil law that the necessity of a public document for contracts which transmit or
extinguish real rights over immovable property, as mandated by Article 1358 31 of the Civil Code, is only
for convenience. It is not essential for its validity or enforceability.

In addition, it has been held, time and again, that a sale of a real property that is not consigned in a
public instrument is, nevertheless, valid and binding among the parties. This is in accordance with the
time-honored principle that even a verbal contract of sale of real estate produces legal effects between
the parties. Contracts are obligatory, in whatever form they may have been entered into, provided all
the essential requisites for their validity are present.

Following these principles, the defective notarization of the Deed of Absolute Sale does not affect the
validity of the transaction between the Orbetas and respondents. It has no effect on the transfer of
rights over the subject property from the Orbetas to respondents.

Spouses Occena vs Esponilla

The Tordesillas spouses died. Their lot was inherited by their children Harod and Angela, and Rosario,
the latter having been survived by her two (2) children, Arnold and Lilia de la Flor. In 1954, Arnold and
Lilia sold 748 sqm of the property to Alberta Morales. In 1956 Arnold de la Flor borrowed the OCT from
Alberta covering the lot. In 1966, Arnold and Angela, executed a Deed of Extrajudicial Settlement
declaring the two of them as the only co-owners of the undivided 1,198 sq. m. lot. Angela and Alberta
eventually died. There were several requests by the heirs of Alberta for the return of the title, but it was
never returned. The heirs of Alberta left for the US. Arnold then used the OCT to subdivide the lots, and
then sold the lots to the Occenas. A deed of Sale was executed, and the titles were transferred to their
names. When the heirs of Alberta found out, they filed a petition for the annulment of sale. The main
defense of the Occenas was that they were buyer in good faith as the law does not obligate them to go
beyond a clean certificate of title to determine the condition of the property. The lower court ultimately
granted the annulment.

Whether the Occenas were buyers in good faith –NO

The general rule is that one who deals with property registered under the Torrens system need not go
beyond the same, but only has to rely on the title. He is charged with notice only of such burdens and
claims as are annotated on the title. However, this principle does not apply when the party has actual
knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry
or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to
induce a reasonably prudent man to inquire into the status of the title of the property in litigation. One
who falls within the exception can neither be denominated an innocent purchaser for value nor a
purchaser in good faith.

At the trial, Tomas Occeña admitted that he found houses built on the land during its ocular inspection
prior to his purchase. The evidence show that when Tomas Occeña conducted an ocular inspection of
the land prior to the second sale, Abas, the caretaker of the house which Alberta Morales built on the
land, personally informed Tomas that the lot had been previously sold by the same vendor Arnold to
Alberta Morales. With this information, the Occeñas were obliged to look beyond the title of their
vendor and make further inquiries from the occupants of the land as to their authority and right to
possess it. However, despite this information about a prior sale, the Occeñas proceeded with the
purchase in haste. They did not inquire from Abas how they could get in touch with the heirs or
representatives of Alberta to verify the ownership of the land. Neither do the records reveal that they
exerted effort to examine the documents pertaining to the first sale. Having discovered that the land
they intended to buy was occupied by a person other than the vendor not in actual possession thereof,
it was incumbent upon the petitioners to verify the extent of the occupant’s possessory rights. The
Occeñas did nothing and chose to ignore and disbelieve Abas’ statement.

Notes

1. The petition at bar presents a case of double sale of an immovable property. Article 1544 of the
New Civil Code provides that in case an immovable property is sold to different vendees, the
ownership shall belong: (1) to the person acquiring it who in good faith first recorded it in the
Registry of Property; (2) should there be no inscription, the ownership shall pertain to the
person who in good faith was first in possession; and, (3) in the absence thereof, to the person
who presents the oldest title, provided there is good faith.

Ten Forty Realty vs Cruz

A plot of land was sold twice by Barbara Galino; to Ten Forty Realty on Dec 5, 1996, and to Cruz on April
24, 1998. The property was never occupied by Ten Forty, while Cruz immediately occupied the property
after the sale to it. A complaint for ejectment was subsequently filed by Ten Forty against Cruz. Both Ten
Forty and Cruz alleged that they were the true owners of the property. The MTCC ruled for Ten Forty.
The RTC reversed, thus ruling for Cruz. The CA sustained the RTC. Hence this petition.

Whether Cruz or Ten Forty had ownership of the property. –CRUZ HAD OWNERSHIP

The ownership of immovable property sold to two different buyers at different times is governed by
Article 1544 of the Civil Code (See Note 1*****). Galino allegedly sold the property in question to
petitioner on December 5, 1996 and, subsequently, to respondent on April 24, 1998. Petitioner thus
argues that being the first buyer, it has a better right to own the realty. However, it has not been able to
establish that its Deed of Sale was recorded in the Registry of Deeds of Olongapo City.39 Its claim of an
unattested and unverified notation on its Deed of Absolute Sale40 is not equivalent to registration. It
admits that, indeed, the sale has not been recorded in the Registry of Deeds.

In the absence of the required inscription, the law gives preferential right to the buyer who in good faith
is first in possession. In determining the question of who is first in possession, certain basic parameters
have been established by jurisprudence.

1.) First, the possession mentioned in Article 1544 includes not only material but also symbolic
possession.
2.) Second, possessors in good faith are those who are not aware of any flaw in their title or mode
of acquisition.
3.) Third, buyers of real property that is in the possession of persons other than the seller must be
wary -- they must investigate the rights of the possessors.
4.) Fourth, good faith is always presumed; upon those who allege bad faith on the part of the
possessors rests the burden of proof.

The subject property had not been delivered to petitioner; hence, it did not acquire possession either
materially or symbolically. As between the two buyers, therefore, respondent was first in actual
possession of the property.

Notes

1.) Article 1544. 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.
2.) The Court also ruled that Ten Forty was disqualified from owning the land as Private
corporations are disqualified from acquiring lands of the public domain, as provided under
Section 3 of Article XII of the Constitution. According to the certification by the City Planning and
Development Office of Olongapo City, the contested property in this case is alienable and
disposable public land.
3.) In a contract of sale, the buyer acquires the thing sold only upon its delivery in any of the ways
specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the
possession is transferred from the vendor to the vendee.31 With respect to incorporeal
property, Article 1498 lays down the general rule: the execution of a public instrument shall be
equivalent to the delivery of the thing that is the object of the contract if, from the deed, the
contrary does not appear or cannot be clearly inferred.
However, ownership is transferred not by contract but by tradition or delivery. Nowhere in the
Civil Code is it provided that the execution of a Deed of Sale is a conclusive presumption of
delivery of possession of a piece of real estate. The execution of a public instrument gives rise
only to a prima facie presumption of delivery. Such presumption is destroyed when the delivery
is not effected because of a legal impediment.