Monday, October 4, 2010

VILLARTA V. CA (May 29, 1987)

FACTS:

Respondent Rosalinda Cruz entrusted to petitioner Victoria Villarta seven pieces of jewelry on November

1968. On December of the same year, Villarta exchanges one jewelry to another and issued a post-dated

check in favor of Cruz. Cruz deposited the check but it was dishonored for lack of funds.

An estafa case was filed against Villarta but she argued that she can only be civilly liable because even

though the check bounced, she only gave it for a pre-existing obligation. She contends a person cannot

be imprisoned for non-payment of debt.

ISSUE:

WON the transaction is a “sale or return”

HELD:

The transaction is not a sale or return but a sale on approval or sale on acceptance.

When Cruz gave the jewelry to Villarta on November, the clear intention is to make the latter choose

which item she wanted to buy. There was no meeting of the minds yet at this point and hence, it cannot

be considered as delivery.

If ownership over the jewelry was not transmitted on that date, then it could have been transmitted only in

December 1968, the date when the check was issued. In which case, it was a "sale on approval" since

ownership passed to the buyer. Vallarta, only when she signified her approval or acceptance to the seller,

Cruz, and the price was agreed upon.

It is still criminal fraud or deceit in the issuance of a check which is made punishable under the Revised

Penal Code, and not the non-payment of the debt.

ROSARIO CARBONELL, petitioner, vs.HONORABLE COURT OF APPEALS, JOSE PONCIO, EMMA INFANTE and RAMON INFANTE, respondents.

G.R. No. L-29972 January 26, 1976

FACTS:

Petitioner Carbonell lives in an adjoining lot owned by Respondent Poncio, latter’s lot is mortgaged in favor of Republic Savings Bank for P1,500.

Petitioner and another Respondent (Infante) offered to buy the land owned by Poncio. Which Poncio, in his failure to pay the mortgaged agreed for the petitioner to buy the land including his house for P9.50 per square meter on the condition that from the purchase price would come the money to be paid to the bank.

Both parties settled the arrears of the mortgaged amounting P247.26. However, Petitioner only have P200.00 as per respondent’s information that he only owes the same to the bank. Respondent then withdrew the deficit amount and was reimbursed by Carbonell the following day.

The parties executed a document stipulating that, Poncio may still occupy the land sold by him to the petitioner and if after a year, he still can’t find a place to move, that he shall pay rent in favor of the petitioner.

Subsequently, Poncio had told Carbonell that the former can no longer pursue with the sale for he had given the land to Infante, to which he cannot withdraw even if he goes to jail. The said lot was fenced by Infante.

Atty. Jose Garcia advised her to present an adverse claim over the land in question with the Office of the Register of Deeds of Rizal.

Poncio, admittedly sold the land to Infante when she improved her offer.

With the information that the land was not yet registered, Atty. Garcia in favor of the petitioner prepared an adverse claim over the property. Whereby upon registration of the same by Infante, the said adverse claim was noted in the Transfer Certificate of Title.

Petitioner filed a second complaint, alleging that the sale between Poncio and Infante be declared null and void. Respondent’s allegation was that, Petitioner’s claim was unenforceable for lack of written document.

Trial Court ruled that the second sale was null and void. However, after re-trial, Trial Court reversed it’s decision ruling that the claim of the respondents were greater than that of the petitioner.

CA ruled in favor of petitioner, alleging that it has a superior right over the respondent. After a motion for reconsideration CA reversed its decision.

ISSUE:

Whether or not Petitioner have the superior right over the property.

HELD:

YES.

Article 1544, New Civil Code, which is decisive of this case, recites:

If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith (emphasis supplied).

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon. Carbonell was not aware — and she could not have been aware — of any sale of Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith. Her good faith subsisted and continued to exist when she recorded her adverse claim four (4) days prior to the registration of Infantes's deed of sale. Carbonell's good faith did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante. Because of that information, Carbonell wanted an audience with Infante, which desire underscores Carbonell's good faith. With an aristocratic disdain unworthy of the good breeding of a good Christian and good neighbor, Infante snubbed Carbonell like a leper and refused to see her. So Carbonell did the next best thing to protect her right — she registered her adversed claim on February 8, 1955. Under the circumstances, this recording of her adverse claim should be deemed to have been done in good faith and should emphasize Infante's bad faith when she registered her deed of sale four (4) days later on February 12, 1955

Consolidated Rural Bank (Cagayan Valley), Inc vs Court of Appeals

448 SCRA 347 January 17, 2005

Ponente: Tinga

Nature: Petition for review on certiorari of a decision and resolution of the Court of Appeals

Facts:

The Madrid brothers were registered owners of Lot No. 7036-A in Isabela per TCT No. T-8121. It was subdivided into several lots.

1 ST SALE (August 15 1957)

Rizal Madrid sold part of his share to Gamiao and Dayag by virtue of a deed of sale, to which his brothers offered no objection. The deed of sale was not registered with the Office of the Register of Deeds, however, Gamiao and Dayag declared the property in their names for taxation purposes.

Gamiao and Dayag sold the southern portion of the land to Teodoro dela Cruz, and the northern portion was sold to Restituto Hernandez. These buyers took possession of and cultivated the portions of the property respectively sold to them.

2 ND SALE (June 15 1976)

The Madrid brothers conveyed all their rights and interests to Pacifico Marquez. The deed of sake was registered with the Office of the Register of Deeds. Marquez subdivided the lot into 8. Lots 7036-A-7-A until 7036-A-7-D were mortgaged to the Consolidated Rural Bank to secure a loan of P100,000. Additionally, Marquez mortgaged Lot No. 7036-A-7-E to the Rural Bank of Cauayan to secure a loan of P10,000. These deeds of real estate mortgage were registered with the Office of the Register of Deeds. Meanwhile, Marquez sold Lot No. 7036-A-7-G to Romeo Calixto.

Marquez defaulted in the payment of his loan and CRB caused the foreclosure of the mortgages and the lots were sold to it as the highest bidder.

The heirs of Teodoro dela Cruz filed a case for reconveyance and damages as to the southern portion of the land, claiming to be null and void the issuance of TCTs to Marquez; the foreclosure sale in favour of CRB; to mortgage to RBC; and the sale to Calixto. Evangeline del Rosario, successor-in-interest of Hernandez,

filed a Complaint in Intervention wherein she claimed the northern portion of Lot No. 7036-A-7.

Marquez argued that he was a buyer in good faith and for value. He argued as well that being the first registrant, the sale in favour of him must prevail over the sale to Gamiao and Dayag which shouldn’t be binding upon him, that being unregistered. CRB, on the other hand, insisted that they were mortgagees in good faith and that they had the right to rely on the titles of Marquez.

The RTC ruled in favour of Marquez, finding nothing to show that Marquez was aware of dela Cruz and del Rosario’s claim of ownership and holding that it was, indeed, Marquez, who first registered.

The CA, however, reversed the ruling of the RTC, holding that Marquez failed to prove that he was a purchaser in good faith and noting that while Marquez was the first registrant, there was no showing that the registration was coupled with good faith. Marquez admitted having knowledge that there was dispute over said property and that the Heirs of dela Cruz were also in possession of the land.

As to the mortgages, the CA held that the banks merely relied on the certificates o title and this failure to observe diligence in standard banking procedure constitutes bad faith and on that basis, the mortgages were declared null and void. CRB insisted that Marquez had the right over the said property being the first registered owners. Hence, this petition.

Issue: WON Marquez, having registered first, has better right over the property

Held//Ratio:

No.

But first, important!! Applicability of 1544.

The RTC and the CA, albeit arriving at different conclusions, both relied on the NCC’s provision on double sale (1544) to resolve the case. However, the Supreme Court held that such provision is not applicable in this case. 1544 contemplates a case of double sale by a single vendor. It is necessary that the conveyance must have been made by a party who has an existing right in the thing and the power to dispose of it. It cannot be invoked where the two different contracts of sale are made by two different persons, one of them not being the owner of the property sold.

In the case at bar, the subject property was not transferred to several purchasers by a single vendor. In the first sale, the vendors were Gamiao and Dayag whose right to the property originated from their acquisition thereof from

Rizal Madrid. In the second sale, the vendors were the Madrid brothers but at that time they were no longer the owners since they had long disposed of the property.

In a situation where not all the requisites are present which would warrant the application of 1544, the principle that “he who is first in time is preferred in right” should apply. In the instant case, the sale by Gamiao and Dayag who first bought it from Rizal Madrid was anterior to the sale to Marquez. The Heirs of dela Cruz and Hernandez also had possession of the property first. Thus, applying the principle, the Heirs have a superior right to the subject property. Morover, since the Madrid brothers were no longer the owners of the lot at the time of the sale to Marquez, Marquez did not acquire any right to it.

Assuming arguendo that 1544 applies, the claim of Marquez still cannot prevail over the right of the Heirs since he was not a purchaser in good faith.

RICARDO CHENG vs RAMON GENATO and SPS. DA JOSE

G.R. NO. 129760, December 29, 1998

FACTS:

Ramon Genato is the owner of two parcels of land located at Paradise Farms, San Jose del Monte, Bulacan.

September 6, 1989: Genato entered into an agreement with the Da Jose Spouses over said land. The agreement culminated in the execution of a contract to sell gor which the purchase price was P80.00 per sq.m. It was in a public instrument and contained the stipulation that: “after 30 days, after having satisfactorily verified and confirmed the truth and authenticity of documents… vendee shall pay the vendor the full payment of the purchase price.”

The Da Jose Spouses asked for an extension of 30 days when it failed to verify the said titles on the condition that a new set of documents be made seven days after.

Pending effectivity of said extension period, and without due notice to Spouses Da Jose, Genato executed an affidavit to annul the Contract to Sell. This was not annotated at the back of his titles right away.

October 24, 1989: Ricardo Cheng went to Genato’s residence and expressed interest in buying the subject properties. Genato showed Cheng the copies of his titles and the annotations at the back thereof of his contract to sell with the Da Jose Spouses. He likewise showed Cheng the affidavit to annul contract to sell.

Despite these, Cheng still issued a check for P50,000 upon the assurance that the previous contract will be annulled.

The Da Jose Spouses met Genato at the Office of the Resgistry of Deeds by coincidence, and were later shocked of Genato’s decision to annul the contract and protested regarding the matter. They reminded Genato that the 30 day extension period was still in effect and they are willing to pay the downpayment.

Genato later continued with their contract, informed Cheng of hi decision and returned to the latter, the downpayment paid. Cheng however contended that their contract to sell said property had already been perfected.

ISSUES:

1. W/N the contact to sell between Genato and Spouses Da Jose was validly rescinded.2. W/N Cheng’s own contract with Genato was not just a contract to sell but of a conditional

contract of sale.

HELD:

1. NO.

In a Contract to Sell, the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force. Article 1191 of the New Civil Code cannot be made to apply to the situation in the instant case because no default can be ascribed to the Da Jose spouses since the 30-day extension period has not yet expired.

The contention of the Da Jose spouses that no further condition was agreed when they were granted the 30-day extension period from October 7, 1989 in connection with clause 3 of their contract to sell should be upheld. Also, Genato could have sent at least a notice of such fact, and there being no stipulation authorizing him for automatic rescission, so as to finally clear the encumbrance on his titles and make it available to other would be buyers, it bolstered that there was no default on the part of the Da Jose Spouses. Genato is not relieved from the giving of a notice, verbal or written, to the Da Jose spouses for his decision to rescind their contract. In many cases.

2. IT WAS A CONTRACT TO SELL.

The Court ruled that if it was assumed that the receipt is to be treated as a conditional contract of sale, it did not acquire any obligatory force since it was subject to suspensive condition that the earlier contract to sell between Genato and the Da Jose spouses should first be cancelled or rescinded — a condition never met, as Genato, to his credit, upon realizing his error, redeemed himself by respecting and maintaining his earlier contract with the Da Jose spouses.

Art.1544 should apply because for not only was the contract between herein respondents first in time, it was also registered long before petitioner's intrusion as a second buyer (PRIMUS TEMPORE, PORTIOR JURE). (Spouses made annotation on the title of Genato). Since Cheng was fully aware, or could have been if he had chosen to inquire, of the rights of the Da Jose spouses under the Contract to Sell duly annotated on the transfer certificates of titles of Genato, it now becomes unnecessary to further elaborate in detail the fact that he is indeed in bad faith in entering into such agreement.

NB: "Registration", as defined by Soler and Castillo, means any entry made in the books of the registry, including both registration in its ordinary and strict sense, and cancellation, annotation, and even marginal notes.In its strict acceptation, it is the entry made in the registry which records solemnly and permanently the right of ownership and other real rights.

SAN LORENZO DEVELOPMENT CORPORATION, petitioner, vs.COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU and PACITA ZAVALLA LU, respondents

G.R. No. 124242             January 21, 2005

FACTS

On 20 August 1986, the Spouses Lu purportedly sold two parcels of land to respondent Pablo Babasanta, for the price of fifteen pesos (P15.00) per square meter. Babasanta made a downpayment of (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date.

Babasanta wrote a letter to Pacita Lu to demand the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. In response, Pacita Lu wrote a letter to Babasanta wherein she reminded Babasanta that when the balance of the purchase price became due, he requested for a reduction of the price and when she refused, Babasanta backed out of the sale

herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion for Intervention. SLDC alleged that it had legal interest in the subject matter under litigation because on 3 May 1989, the two parcels of land involved had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation

Respondent Babasanta, however, argued that SLDC could not have acquired ownership of the property because it failed to comply with the requirement of registration of the sale in good faith. He emphasized that at the time SLDC registered the sale in its favor on 30 June 1990, there was already a notice of lis pendens annotated on the titles of the property made as early as 2 June 1989. Hence, petitioner’s registration of the sale did not confer upon it any right.

ISSUE:

Did the registration of the sale after the annotation of the notice of lis pendens obliterate the effects of delivery and possession in good faith which admittedly had occurred prior to SLDC’s knowledge of the transaction in favor of Babasanta?

HELD:NO

It must be stressed that as early as 11 February 1989, the Spouses Lu executed the Option to Buy in favor of SLDC upon receiving P316,160.00 as option money from SLDC. After SLDC had paid more than one half of the agreed purchase price, the Spouses Lu subsequently executed on 3 May 1989 a Deed of Absolute Sale in favor or SLDC. At the time both deeds were executed, SLDC had no knowledge of the prior transaction of the Spouses Lu with Babasanta. Simply stated, from the time of execution of the first deed up to the moment of transfer and delivery of possession of the lands to SLDC, it had acted in good faith and the subsequent annotation of lis pendens has no effect at all on the consummated sale between SLDC and the Spouses Lu.

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.

We rule that SLDC qualifies as a buyer in good faith since there is no evidence extant in the records that it had knowledge of the prior transaction in favor of Babasanta. At the time of the sale of the property to SLDC, the vendors were still the registered owners of the property and were in fact in possession of the lands.

In assailing knowledge of the transaction between him and the Spouses Lu, Babasanta apparently relies on the principle of constructive notice incorporated in Section 52 of the Property Registration Decree (P.D. No. 1529) which reads, thus:

Sec. 52. Constructive notice upon registration. – Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed, or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing, or entering.

However, the constructive notice operates as such by the express wording of Section 52 from the time of the registration of the notice of lis pendens which in this case was effected only on 2 June 1989, at which time the sale in favor of SLDC had long been consummated insofar as the obligation of the Spouses Lu to transfer ownership over the property to SLDC is concerned.

G.R. No. 104482 January 22, 1996BELINDA TAREDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ TANEDO, representing her minor daughter VERNA TANEDO, petitionersvs. THE COURT OF APPEALS, SPOUSES RICARDO M. TAREDO AND TERESITA BARERA TAREDO, respondents

FACTS: 1. October 20, 1962: Lazardo Tañedo executed a notarized deed of absolute sale in favor of his

eldest brother, Ricardo Tañedo, and the latter’s wife, Teresita Barera (private respondents) whereby he conveyed for P1,500 one hectare of his future inheritance from his parents.

2. February 28, 1980: Upon the death of his father Matias, Lazaro made another affidavit to reaffirm the 1962 sale.

3. January 13, 1981: Lazaro acknowledged therein his receipt of P 10,000.00 as consideration for the sale.

4. February 1981: Ricardo learned that Lazaro sold the same property to his children (petitioners) through a deed of sale dated December 29, 1980

5. On June 7, 1982, Ricardo recorded the Deed of Sale in their favor in the Registry of Deeds

Petitioners filed a complaint for rescission (plus damages) of the deeds of sale executed by Lazaro in favor of Ricardo. They contend that Lolo Matias desired that whatever inheritance Lazaro would receive from him should be given to his (Lazaro’s) children.

Ricardo (private respondents) however presented in evidence a “Deed of Revocation of a Deed of Sale” wherein Lazaro revoked the sale in favor of his children for the reason that it was “simulated or fictitious - without any consideration whatsoever.”

LAZARO’S VERSION: He executed a sworn statement in favor of his children. BUT he also testified that he sold the property to Ricardo, and that it was a lawyer who induced him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a “drink”. LABO

Trial court ruled in favor of Lazaro’s children. Ca affirmed TC’s decision.

ISSUES: 1. Is the sale of a future inheritance valid? NO2. Was Ricardo’s registration of the deed of valid? YES

HELD: SC rules in favor of Ricardo.

Pursuant to Art 1347, the contract made in 1962 (sale of future inheritance) is not valid and cannot be the source of any right nor the creator of any obligation between the parties. (“No contract may be entered into upon a future inheritance except in cases expressly authorized by law.)

However, Article 1544 governs the preferential rights of vendees in cases of multiple sales. The property in question is land, an immovable, and ownership shall belong to the buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor of Ricardo was later than the one in favor of Lazaro’s children, ownership would vest with Ricardo because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all.

Lazaro’s children contend that they were in possession of the property and that Ricardo never took possession thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property.

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED.

II. SUBJECT MATTER 2.Licita.) BELINDA TAÑEDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ TAÑEDO, representing her minor daughter VERNA TAÑEDO vs. COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND TERESITA BARERA TAÑEDO

FACTS:

On October 20, 1962, Lazardo Tañedo executed a notarized deed of absolute sale in favor of his eldest brother, Ricardo Tañedo, and the latter's wife, Teresita Barera, private respondents herein, whereby he conveyed to the latter in consideration of P1,500.00, "one hectare of whatever share I shall have over Lot No. 191", the said property being his "future inheritance" from his parents. Upon the death of his father, Lazaro executed an "Affidavit of Conformity" to "re-affirm, respect, acknowledge and validate the sale I made in 1962." On January 13, 1981, Lazaro executed another notarized deed of sale in favor of Ricardo and Teresita, covering his "undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 ". He acknowledged his receipt of P10,000 as consideration. Ricardo learned that Lazaro sold the same property to his children, petitioners herein, through another deed of sale. On June 7, 1982, private respondents recorded the Deed of Sale in their favor in the Registry of Deeds and entry was made in the TCT.

Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by Lazaro in favor of private respondents. Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of Sale" conveying to his ten children his allotted portion from the extrajudicial partition executed by the heirs of Matias. Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias, stating that it was his desire that whatever inheritance Lazaro would receive from him should be given to his (Lazaro's) children; (2) a typewritten document signed by Lazaro wherein he confirmed that he would voluntarily abide by the wishes of his father; and (3) a letter of Lazaro to his daughter, Carmela, stating that his share in the extrajudicial settlement of the estate of his father was intended for his children, petitioners herein.

Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale", wherein Lazaro revoked the sale in favor of petitioners for the reason that it was "simulated or fictitious without any consideration whatsoever". Shortly after the case a quo was filed, Lazaro executed a sworn statement which virtually repudiated the contents of the Deed of Revocation of a Deed of Sale and the Deed of Sale in favor of private respondents. However, Lazaro testified that he sold the property to Ricardo, and that it was a lawyer who induced him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a "drink".

TC: decided in favor of private respondents, holding that petitioners failed "to adduce a proponderance of evidence to support (their) claim. CA: affirmed the decision of the TC, ruling that the Deed of Sale dated January 13, 1981 was valid and that its registration in good faith vested title in said respondents.

ISSUES: I. Is the sale of a future inheritance valid?II. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a deed of

sale covering the same property to the same buyers valid?

HELD: IThe sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision conceded "it may be legally correct that a contract of sale of anticipated future inheritance is null and void." But to

remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, "(n)o contract may be entered into upon a future inheritance except in cases expressly authorized by law." Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of any obligation between the parties.

Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the 1962 sale, is also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even private respondents in their memorandum4 concede this.

IIHowever, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13, 1981 in favor of private respondents covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of sale dated December 29, 1980 in favor of petitioners covering the same property. These two documents were executed after the death of Matias (and his spouse) and after a deed of extra-judicial settlement of his estate was executed, thus vesting in Lazaro actual title over said property. In other words, these dispositions, though conflicting, were no longer infected with the infirmities of the 1962 sale.

The CA correctly identified the subject matter of the January 13, 1981 sale to be the entire undivided 1/12 share of Lazaro in Lot No. 191 and which is the same property disposed of on December 29, 1980 in favor of petitioners. Critical in determining which of these two deeds should be given effect is the registration of the sale in favor of private respondents with the register of deeds on June 7, 1982.

Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales. The property in question is land, an immovable, and following the above-quoted law, ownership shall belong to the buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership would vest in the former because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all. Petitioners contend that they were in possession of the property and that private respondents never took possession thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property.

Republic of the PhilippinesSUPREME COURT

ManilaTHIRD DIVISION

G.R. No. 170405               February 2, 2010RAYMUNDO S. DE LEON, Petitioner, vs.BENITA T. ONG.1 Respondent.

D E C I S I O NCORONA, J.:On March 10, 1993, petitioner Raymundo S. de Leon sold three parcels of land2 with improvements situated in Antipolo, Rizal to respondent Benita T. Ong. As these properties were mortgaged to Real Savings and Loan Association, Incorporated (RSLAI), petitioner and respondent executed a notarized deed of absolute sale with assumption of mortgage3 stating:

x xx           x xx          x xxThat for and in consideration of the sum of ONE MILLION ONE HUNDRED THOUSAND PESOS (P1.1 million), Philippine currency, the receipt whereof is hereby acknowledged from [RESPONDENT] to the entire satisfaction of [PETITIONER], said [PETITIONER] does hereby sell, transfer and convey in a manner absolute and irrevocable, unto said [RESPONDENT], his heirs and assigns that certain real estate together with the buildings and other improvements existing thereon, situated in [Barrio] Mayamot, Antipolo, Rizal under the following terms and conditions:1. That upon full payment of [respondent] of the amount of FOUR HUNDRED FIFTEEN THOUSAND FIVE HUNDRED (P415,000), [petitioner] shall execute and sign a deed of assumption of mortgage in favor of [respondent] without any further cost whatsoever;

2. That [respondent] shall assume payment of the outstanding loan of SIX HUNDRED EIGHTY FOUR THOUSAND FIVE HUNDRED PESOS (P684,500) with REAL SAVINGS AND LOAN,4 Cainta, Rizal… (emphasis supplied)

x xx           x xx          x xxPursuant to this deed, respondent gave petitioner P415,500 as partial payment. Petitioner, on the other hand, handed the keys to the properties and wrote a letter informing RSLAI of the sale and authorizing it to accept payment from respondent and release the certificates of title.Thereafter, respondent undertook repairs and made improvements on the properties.5 Respondent likewise informed RSLAI of her agreement with petitioner for her to assume petitioner’s outstanding loan. RSLAI required her to undergo credit investigation.Subsequently, respondent learned that petitioner again sold the same properties to one Leona Viloria after March 10, 1993 and changed the locks, rendering the keys he gave her useless. Respondent thus proceeded to RSLAI to inquire about the credit investigation. However, she was informed that petitioner had already paid the amount due and had taken back the certificates of title.Respondent persistently contacted petitioner but her efforts proved futile.On June 18, 1993, respondent filed a complaint for specific performance, declaration of nullity of the second sale and damages6 against petitioner and Viloria in the Regional Trial Court (RTC) of Antipolo, Rizal, Branch 74. She claimed that since petitioner had previously sold the properties to her on March 10, 1993, he no longer had the right to sell the same to Viloria. Thus, petitioner fraudulently deprived her of the properties.Petitioner, on the other hand, insisted that respondent did not have a cause of action against him and consequently prayed for the dismissal of the complaint. He claimed that since the transaction was subject to a condition (i.e., that RSLAI approve the assumption of mortgage), they only entered into a contract to sell. Inasmuch as respondent did apply for a loan from RSLAI, the condition did not arise. Consequently, the sale was not perfected and he could freely dispose of the properties. Furthermore, he made a counter-claim for damages as respondent filed the complaint allegedly with gross and evident bad faith.Because respondent was a licensed real estate broker, the RTC concluded that she knew that the validity of the sale was subject to a condition. The perfection of a contract of sale depended on RSLAI’s approval of the assumption of mortgage. Since RSLAI did not allow respondent to assume petitioner’s obligation, the RTC held that the sale was never perfected.In a decision dated August 27, 1999,7 the RTC dismissed the complaint for lack of cause of action and ordered respondent to pay petitioner P100,000 moral damages, P20,000 attorney’s fees and the cost of suit.Aggrieved, respondent appealed to the Court of Appeals (CA),8 asserting that the court a quo erred in dismissing the complaint.The CA found that the March 10, 2003 contract executed by the parties did not impose any condition on the sale and held that the parties entered into a contract of sale. Consequently, because petitioner no longer owned the properties when he sold them to Viloria, it declared the second sale void. Moreover, it found petitioner liable for moral and exemplary damages for fraudulently depriving respondent of the properties.In a decision dated July 22, 2005,9 the CA upheld the sale to respondent and nullified the sale to Viloria. It likewise ordered respondent to reimburse petitioner P715,250 (or the amount he paid to RSLAI). Petitioner, on the other hand, was ordered to deliver the certificates of titles to respondent and pay her P50,000 moral damages andP15,000 exemplary damages.Petitioner moved for reconsideration but it was denied in a resolution dated November 11, 2005.10 Hence, this petition,11 with the sole issue being whether the parties entered into a contract of sale or a contract to sell.Petitioner insists that he entered into a contract to sell since the validity of the transaction was subject to a suspensive condition, that is, the approval by RSLAI of respondent’s assumption of mortgage. Because RSLAI did not allow respondent to assume his (petitioner’s) obligation, the condition never materialized. Consequently, there was no sale.Respondent, on the other hand, asserts that they entered into a contract of sale as petitioner already conveyed full ownership of the subject properties upon the execution of the deed.We modify the decision of the CA.Contract of Sale or Contract to Sell?The RTC and the CA had conflicting interpretations of the March 10, 1993 deed. The RTC ruled that it was a contract to sell while the CA held that it was a contract of sale.In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of the contract. Should the buyer default in the payment of the purchase price, the seller may either sue for the collection thereof or have the contract judicially resolved and set aside. The non-payment of the price is therefore a negative resolutory condition.12

On the other hand, a contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price. For this reason, if the buyer defaults in the payment thereof, the seller can only sue for damages.13

The deed executed by the parties (as previously quoted) stated that petitioner sold the properties to respondent "in a manner absolute and irrevocable" for a sum of P1.1 million.14 With regard to the manner of payment, it required respondent to pay P415,500 in cash to petitioner upon the execution of the deed, with the balance15payable directly to RSLAI (on behalf of petitioner) within a reasonable time.16 Nothing in said instrument implied that petitioner reserved ownership of the properties until the full payment of the purchase price.17 On the contrary, the terms and conditions of the deed only affected the manner of payment, not the immediate transfer of ownership (upon the execution of the notarized contract) from petitioner as seller to respondent as buyer. Otherwise stated, the said terms and conditions pertained to the performance of the contract, not the perfection thereof nor the transfer of ownership.Settled is the rule that the seller is obliged to transfer title over the properties and deliver the same to the buyer.18In this regard, Article 1498 of the Civil Code19 provides that, as a rule, the execution of a notarized deed of sale is equivalent to the delivery of a thing sold.In this instance, petitioner executed a notarized deed of absolute sale in favor of respondent. Moreover, not only did petitioner turn over the keys to the properties to respondent, he also authorized RSLAI to receive payment from respondent and release his certificates of title to her. The totality of petitioner’s acts clearly indicates that he had unqualifiedly delivered and transferred ownership of the properties to respondent. Clearly, it was a contract of sale the parties entered into.Furthermore, even assuming arguendo that the agreement of the parties was subject to the condition that RSLAI had to approve the assumption of mortgage, the said condition was considered fulfilled as petitioner prevented its fulfillment by paying his outstanding obligation and taking back the certificates of title without even notifying respondent. In this connection, Article 1186 of the Civil Code provides:Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.

Void Sale Or Double Sale?Petitioner sold the same properties to two buyers, first to respondent and then to Viloria on two separate occasions.20 However, the second sale was not void for the sole reason that petitioner had previously sold the same properties to respondent. On this account, the CA erred.This case involves a double sale as the disputed properties were sold validly on two separate occasions by the same seller to the two different buyers in good faith.

Article 1544 of the Civil Code provides:Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. (emphasis supplied)This provision clearly states that the rules on double or multiple sales apply only to purchasers in good faith. Needless to say, it disqualifies any purchaser in bad faith.

A purchaser in good faith is one who buys the property of another without notice that some other person has a right to, or an 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 some other person’s claim or interest in the property.21 The law requires, on the part of the buyer, lack of notice of a defect in the title of the seller and payment in full of the fair price at the time of the sale or prior to having notice of any defect in the seller’s title.Was respondent a purchaser in good faith? Yes.Respondent purchased the properties, knowing they were encumbered only by the mortgage to RSLAI. According to her agreement with petitioner, respondent had the obligation to assume the balance of petitioner’s outstanding obligation to RSLAI. Consequently, respondent informed RSLAI of the sale and of her assumption of petitioner’s obligation. However, because petitioner surreptitiously paid his outstanding obligation and took back her certificates of title, petitioner himself rendered respondent’s obligation to assume petitioner’s indebtedness to RSLAI impossible to perform.

Article 1266 of the Civil Code provides:

Article 1266. The debtor in obligations to do shall be released when the prestation become legally or physically impossible without the fault of the obligor.

Since respondent’s obligation to assume petitioner’s outstanding balance with RSLAI became impossible without her fault, she was released from the said obligation. Moreover, because petitioner himself willfully prevented the condition vis-à-vis the payment of the remainder of the purchase price, the said condition is considered fulfilled pursuant to Article 1186 of the Civil Code. For purposes, therefore, of determining whether respondent was a purchaser in good faith, she is deemed to have fully complied with the condition of the payment of the remainder of the purchase price.

Respondent was not aware of any interest in or a claim on the properties other than the mortgage to RSLAI which she undertook to assume. Moreover, Viloria bought the properties from petitioner after the latter sold them to respondent. Respondent was therefore a purchaser in good faith. Hence, the rules on double sale are applicable.Article 1544 of the Civil Code provides that when neither buyer registered the sale of the properties with the registrar of deeds, the one who took prior possession of the properties shall be the lawful owner thereof.In this instance, petitioner delivered the properties to respondent when he executed the notarized deed22 and handed over to respondent the keys to the properties. For this reason, respondent took actual possession and exercised control thereof by making repairs and improvements thereon. Clearly, the sale was perfected and consummated on March 10, 1993. Thus, respondent became the lawful owner of the properties.

Nonetheless, while the condition as to the payment of the balance of the purchase price was deemed fulfilled, respondent’s obligation to pay it subsisted. Otherwise, she would be unjustly enriched at the expense of petitioner.Therefore, respondent must pay petitioner P684,500, the amount stated in the deed. This is because the provisions, terms and conditions of the contract constitute the law between the parties. Moreover, the deed itself provided that the assumption of mortgage "was without any further cost whatsoever." Petitioner, on the other hand, must deliver the certificates of title to respondent. We likewise affirm the award of damages.

WHEREFORE, the July 22, 2005 decision and November 11, 2005 resolution of the Court of Appeals in CA-G.R. CV No. 59748 are hereby AFFIRMED with MODIFICATION insofar as respondent Benita T. Ong is ordered to pay petitioner Raymundo de Leon P684,500 representing the balance of the purchase price as provided in their March 10, 1993 agreement.Costs against petitioner.SO ORDERED.

De Leon vs. Benita T. OngGR No. 170405, Feb. 2, 2010Absolute and Conditional Sales

Facts:On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita T. Ong(respondent). The said properties were mortgaged to a financial institution; Real Savings & Loan Association Inc. (RSLAI). The parties then executed a notarized deed of absolute sale withassumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that the petitioner (de leon) shall execute a deed of assumption of mortgage in favor of Ong (respondent)after full payment of the P415,000. They also agreed that the respondent (Ong) shall assume themortgage. The respondent then subsequently gave petitioner P415,000 as partial payment. On theother hand, de leon handed the keys to Ong and de leon wrote a letter to inform RSLAI that themortgage will be assumed by Ong. Thereafter, the respondent took repairs and madeimprovements in the properties. Subsequently, respondent learned that the same properties weresold to a certain Viloria after March 10, 1993 and changed the locks,

rendering the keys given toher useless. Respondent proceeded to RSLAI but she was informed that the mortgage has beenfully paid and that the titles have been given to the said person. Respondent then filed a complaintfor specific performance and declaration of nullity of the second sale and damages. The petitioner contended that respondent does not have a cause of action against him because the sale wassubject to a condition which requires the approval of RSLAI of the mortgage. Petitioner reiteratedthat they only entered into a contract to sell. The RTC dismissed the case. On appeal, the CAupheld the sale to respondent and nullified the sale to Viloria. Petitioner moved for reconsideration to the SC

.Issue: Whether the parties entered into a contract of sale or a contract to sell?

Held:In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfectionof the contract. The non-payment of the price is a negative resolutory condition. Contract to sellis subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price.In the present case, the deed executed by the parties did not show that the owner intends toreserve ownership of the properties. The terms and conditions affected only the manner of payment and not the immediate transfer of ownership. It was clear that the owner intended a sale because he unqualifiedly delivered and transferred ownership of the properties to the respondent

Agricultural and Home Extension Development Group vs. CA [G.R. No. 92310. September 3, 1992.] First Division, Cruz (J): 3 concurring Facts: On 29 March 1972, the spouses Andres Diaz and Josefa Mia sold to Bruno Gundran a 19-hectare parcel of land in Las Piñas, Rizal, covered by TCT 287416. The owner’s duplicate copy of the title was turned over to Gundran. However, he did not register the Deed of Absolute Sale because he said he was advised in the Office of the Register of Deeds of Pasig of the existence of notices of lis pendens on the title. On 20 November 1972, Gundran and Agricultural and Home Development Group (AHDG) entered into a Joint Venture Agreement for the improvement and subdivision of the land. This agreement was also not annotated on the title. On 30 August 1976, the spouses Andres Diaz and Josefa Mia again entered into another contract of sale of the same property with Librado Cabautan. On 3 September 1976, by virtue of an order of the CFI Rizal, a new owner’s copy of the certificate of title was issued to the Diaz spouses, who had alleged the loss of their copy. On that same date, the notices of lis pendens annotated on TCT 287416 were canceled and the Deed of Sale in favor of Cabautan was recorded. A new TCT S-33850/T-172 was thereupon issued in his name in lieu of the canceled TCT 287416. On 14 March 1977, Gundran instituted an action for reconveyance before the CFI Pasay City * against Librado Cabautan and Josefa Mia seeking, among others, the cancellation of TCT 33850/T-172 and the issuance of a new certificate of title in his name. On 31 August 1977, AHDG, represented by Nicasio D. Sanchez, Sr. (later substituted by Milagros S. Bucu), filed a complaint in intervention with substantially the same allegations and prayers as that in Gundran’s complaint. In a decision dated 12 January 1987, Gundran’s Sales, 2003 ( 15 ) Haystacks (Berne Guerrero) complaint and petitioner’s complaint in intervention were dismissed for lack of merit. So was Cabautan’s counterclaims, for insufficiency of evidence. Upon appeal, this decision was affirmed by the Court of

Appeals, with the modification that Josefa Mia was ordered to pay Gundran the sum of P90,000.00, with legal interest from 3 September 1976, plus the costs of suit. The Supreme Court denied the petition and affirmed in toto the questioned decision; with costs against AHDG. 1. Article 1544 Under Article 1544 of the Civil Code of the Philippines, it is provided that “If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. 2. Preferential right of first to register The first sale to Gundran was not registered while the second sale to Cabautan was registered. Preferential rights are accorded to Cabautan, who had registered the sale in his favor, as against AHDG’s coventurer whose right to the same property had not been recorded. 3. Purchaser in good faith A purchaser in good faith is defined as “one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property.” In the present case, an examination of TCT 287416 discloses no annotation of any sale, lien, encumbrance or adverse claim in favor of Gundran or AHDC. 4. Registered property under Torrens system; Person charge with notice of burdens noted on the register of title When the property sold is registered under the Torrens system, registration is the operative act to convey or affect the land insofar as third persons are concerned. Thus, a person dealing with registered land is only charged with notice of the burdens on the property which are noted on the register or certificate of title. 5. Notices of lis pendes not a lien or encumbrance, merely notice of litigation of property subject to the result of the suit Notices of lis pendens in favor of other persons were earlier inscribed on the title did not have the effect of establishing a lien or encumbrance on the property affected. Their only purpose was to give notice to third persons and to the whole world that any interest they might acquire in the property pending litigation would be subject to the result of the suit. 6. Cabautan a purchaser in good faith and for value Cabautan took the risk of acquiring the property even in the light of notice of lis pendens inscribed in the title. Significantly, three days after the execution of the deed of sale in his favor, the notices of lis pendens were canceled by virtue of the orders of the CFI Rizal, Branch 23, dated 1 and 4 April 1974. Cabautan therefore acquired the land free of any liens or encumbrances and so could claim to be a purchaser in good faith and for value. Sales, 2003 ( 16 ) Haystacks (Berne Guerrero) 7. No evidence of alleged possession by AHDG AHDG insists that it was already in possession of the disputed property when Cabautan purchased it and that he could not have not known of that possession. Such knowledge should belie his claim that he was an innocent purchaser for value. However, the courts below found no evidence of the alleged possession, which the Supreme Court must also reject in deference to this factual finding. 8. Casis vs. CA not applicable; Different issues The issue in the present case is whether Cabautan is an innocent purchaser for value and so entitled to the priority granted under Article 1544 of the Civil Code. The Casis case, on the other hand, involved the issues of whether or not: 1) certiorari was the proper remedy of the petitioner: 2) the previous petition for certiorari which originated from the quieting of title case was similar to and, hence, a bar to the petition for certiorari arising from the forcible entry case; and 3) the court a quo committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the order which dissolved

the restraining order issued in connection with the ejectment case. The Court was not called upon in that case to determine who as between the two purchasers of the subject property should be preferred. 9. Excerpt used by AHDG a narration of background facts and not adopted as a doctrine by the Supreme Court AHDG invokes the ruling of the lower court in that case to the effect that the registration of the sale in favor of the second purchaser and the issuance of a new certificate of title in his favor did not in any manner vest in him any right of possession and ownership over the subject property because the seller, by reason of their prior sale, had already lost whatever right or interest she might have had in the property at the time the second sale was made. The excerpt was included in the ponencia only as part of the narration of the background facts and was not thereby adopted as a doctrine of the Court. It was considered only for the purpose of ascertaining if the court below had determined the issue of the possession of the subject property pending resolution of the question of ownership. Obviously, the Court could not have adopted that questionable ruling as it would clearly militate against the provision of Article 1544. 10. No one can sell what he does not own; Article 1544 either an exception to the general rule or a reiteration of the general rule insofar as innocent third parties are concerned Justice Edgardo L. Paras observed that “No one can sell what he does not own, but this is merely the general rule. Is Art. 1544 then an exception to the general rule? In a sense, yes, by reason of public convenience (See Aitken v. Lao, 36 Phil. 510); in still another sense, it really reiterates the general rule in that insofar as innocent third persons are concerned, the registered owner (in the case of real property) is still the owner, with power of disposition. 11. Language of Article 1544 clear; Cabautan deemed owner The language of Article 1544 is clear and unequivocal. In light of its mandate and of the facts established in the present case, Ownership must be recognized in the private respondent, who bought the property in good faith and, as an innocent purchaser for value, duly and promptly registered the sale in his favor. [6]

SPOUSES JOSE USI and AMELITA USI, Respondents.

Facts:

The case involves a lot originally owned by the Mendozas divided into seven parts, one

part of which was sold to the petitioner. On the other hand, there was also a subject

agreement between the Mendozas and Spouses Usi, Respondent wherein the subject lot

was divided into 13 parts, some parts went to the Respondents. The conflict arose as to

whom originally belongs the subject land.

In lieu, Spouses Usi instituted complaints against Viray, among others is a Petition for

accion publiciana/reivindicatoria before the RTC. On the other hand, petitioners moved

for the dismissal of the said petition, on the ground of litis pendencia and res judicata.

The RTC dismissed the petition for failure to establish preponderant evidence to support

their claim of title, possession and ownership over the subject lots. Hence, they

appealed before the CA. The CA reversed RTC’s decision basing its ruling on the 2

notarized subject agreements. Viray appealed but was denied, hence this.

Issue:

Whether or not the Court of Appeals erred in ruling that Respondents are the legal and

valid owners of the subject lot?

 

Ruling:

The court held that the petition is barred by res judicata – defined as one that operates

as bar by prior judgement when there is a final judgement on merits rendered by a

court with jurisdiction and the first and second action has identical parties, subject

matter or cause of action.

The better right to possess and right of ownership cannot be relitigated because of res

judicata

NAVERA V. CA (April 26, 1990)

FACTS:

Leocadio Navera owns a parcel of land in Albay which was inherited by his 5 children. His 3 children

already have their share of the inheritance from the other properties of Leocadio. The subject land was

now owned by his 2 daughters. An OCT was issued in the name of Elena Navera et.al (et.al refers to his

sister Eduarda Navera)

When Elena died, his share of the land was inherited by her heirs Arsenio and Felix Narez. The other

portion was owned by Eduarda.

Eduarda sold her portion to her nephew Arsenio and then one year after to Mariano Navera. Both sales

were made in a public instrument but both sales were also not registered in the Registry of Property.

ISSUE:

WON the second sale of the property is valid.

HELD:

Since the records show that both sales were not recorded in the Registry of Property, the law clearly

vests the ownership upon the person who in good faith was first in possession of the disputed lot.

The possession viewed in the law includes not only the material but also the symbolic possession, which

is acquired by the execution of a public instrument. This means that after the sale of a realty by means of

a public instrument, the vendor, who resells it to another, does not transmit anything to the second

vendee, and if the latter, by virtue of this second sale, takes material possession of the thing, he does it

as mere detainer, and it would be unjust to protect this detention against the rights of the thing lawfully

acquired by the first vendee.

In the case at bar, the prior sale of the land to respondent Arsenio Nares by means of a public instrument

is clearly tantamount to a delivery of the land resulting in the material and symbolic possession thereof by

the latter.

Navera vs. CA [G.R. No. L-56838. April 26, 1990.] First Division, Medialdea (J): 4 concur Facts: Leocadio Navera has 5 children, namely: Elena, Mariano, Basilio, Eduarda and Felix, all surnamed Navera. Mariano Navera is the father of petitioner Genaro Navera (married to Emma Amador). Elena Navera, on the other hand has three children by Antonio Nares. Two of them are respondent Arsenio Nares and Felix Nares. The other child, Dionisia is already deceased and has left children. Petitioner and respondents are Sales, 2003 ( 171 ) Haystacks (Berne Guerrero) therefore, first cousins. Way back in 1916, Leocadio Navera donated to Fausto Mustar in a private instrument a certain property in consideration of the marriage of the former’s son, Mariano Navera, to the daughter of Fausto Mustar by the name of Restituta Mustar. On 19 July 1927, OCT RO-154(NA) was issued in the name of “Elena Navera, et al.”, covering the land in dispute, namely Lot 1460, situated in the Municipality of Camalig, Albay. Sometime in 1924, Elena Navera died. On 14 May 1947, Eduarda Navera, by means of a public instrument, sold to her nephew, Arsenio Nares, all of her share in Lot 1460, which is titled in the name of “Elena Navera, et al.”. Eduarda Navera’s share in the lot is 1/2 of the total area of Lot 1460 (The other half allegedly owned by Lina Navera, the deceased mother of the buyer, who was the administrator of said half. Arsenio Nares thus take care of the whole property). On 26 June 1948, Eduarda Navera sold for the second time a portion of Lot 1460 to Mariano Navera (50 meters long and 59 meters wide). On 30 January 1953, Arsenio Nares sold to Perpetua Dacillo a portion of Lot 4167 containing an area of 5,726 sq. ms. Perpetua Dacillo thereafter donated the said property to Francisco Dacillo. On 13 August 1955, Mariano Navera, sold to his brother-in-law, Serapio Mustar, the lot which he bought from Eduarda Navera. On 11 February 1956, a deed of sale was supplemented by the following stipulation “(b) as to the property under paragraph (2) thereof, the same pertains to Cadastral Lot No. 1460, containing an area of 1-99-69 square meters, more or less, (in the said document there was clerical error of the area, as previously stated in the total area of 00-09- 16, which is hereto corrected as 1-90-71 square meters, as the total area sold).” On 7 April 1959, Serapio Mustar later sold to Genaro Navera Lot 1460 which he bought from the latter’s father, Mariano Navera, containing an area of 19,969 sq. ms. more or less. On 3 September 1971, Francisco Dacillo sold to Genaro Navera the land which the former received by way of donation from Perpetua Dacillo. All of the foregoing transfers of Lot 1460 were not annotated and

inscribed in the OCT. [Nares complaint] In their complaint dated 14 March 1971 filed with the then CFI Albay (now RTC; Civil Case 4359), Arsenio and Felix Nares, alleged inter alia: that they are the absolute owners of the whole of Lot 1460 covered by OCT No. RO-154(NA), and are entitled to the possession of the same; that Lot 1460 is registered in the name of “Elena Navera, et al.”, the “et al.” being Eduarda Navera; that they acquired the property by inheritance from their deceased mother Elena Navera; that a portion thereof which had been adjudicated to Eduarda Navera was later sold to Arsenio Nares; that sometime in August, 1955, Mariano Navera, without any legal right whatsoever and under the pretense of ownership sold the said property to his brother-in-law Serapio Mustar, who in turn sold the same to Genaro Navera, son of Mariano. They also claimed that all the foregoing sales were sham and manipulated transactions and that Mariano Navera knew fully well that he had no right to sell the property. They admitted however, that they sold a portion of the property containing 6,726 square meters to Perpetua Dacillo, so that the remaining portion still belongs to them. They further contended that Genaro Navera entered the land after the sale to him by Mustar and took possession of the same and acquired the produce thereof since 1957 up to the present time; and that they have exerted earnest efforts toward a compromise but Navera instead challenged them to go to court. [Navera’s counterclaim] Genaro Navera and Emma Amador filed their answer with counterclaim, denying Nares’ claims, and alleging inter alia: that Leocadio Navera is the father of five children, namely, Elena, Mariano, Eduarda, Basilio and Felix; that after deducting 12,415 square meters which Leocadio Navera donated to Fausto Mustar in 1916, the remaining area of Lot 1460 was divided in equal shares among Elena, Mariano and Eduarda, to the extent of 4,860 square meters each; that Basilio and Felix were given their shares in other parcels of land. They also submitted that the “et al.” appearing in the title of the property refers to Fausto Mustar (12,415 sq. ms.), Eduarda Navera (4,860 sq. ms.), Mariano Navera (4,860 sq. ms.) and Elena Navera (4,860 sq. ms.); that Eduarda Navera sold 2,695 sq. ms. of her share to Mariano Navera while the remaining 2,166 sq sq. ms. of her share was sold to Arsenio Nares; that Arsenio’s property totalled 7,026 sq. ms. which he later sold to Perpetua Dacillo. They further contended that they are presently in possession of Lot 1460 and their possession tacked to that of their predecessor-in-interest as early as 1916; that the complaint states no cause of action and that if Nares had any, the same has long prescribed. [Court’s ruling] On 28 February 1978, the trial court rendered a decision declaring Nares owners of the lot described in the OCT RO-15480, except 5,726 sq. ms. which rightfully belongs to Genaro Navera. Sales, 2003 ( 172 ) Haystacks (Berne Guerrero) Not satisfied with the decision of the trial court, Navera appealed to the Court of Appeals (CA-GR 63926-R). On 16 December 1980, the appellate court rendered judgment affirming in toto the decision of the trial court. Hence the petition for review on certiorari. The Supreme Court denied the petition but modified the decision of the Court of Appeals dated 16 December 1980 to the effect that as against Genaro Navera and Emma Amador, Arsenio Nares and Felix Nares are declared the rightful owners of the disputed Lot 1460, except with respect to 5,726 square meters thereof which belongs to Genaro Navera, without prejudice however, to whatever rights and interests that the other compulsory heirs of Elena Navera may have in the one-half portion of Lot 1460. The respective rights of respondents to Lot 1460 as between themselves is a matter outside of the controversy and is therefore, beyond the jurisdiction of the Court to pass upon. 1. “Et. al” refer only to Eduarda; Factual finding of courts conclusive upon the Supreme Court The whole of Lot 1460 is titled in the name of “Elena Navera, et al.”, the phrase “et al.” referring only to Eduarda, sister of Elena since the other brothers of Elena and Eduarda namely,

Mariano, Basilio and Felix had received their shares from the other properties of their father Leocadio Navera. These factual findings are conclusive upon the Supreme Court. Thus, when Elena Navera died sometime in 1924, her compulsory heirs including Arsenio Nares and Felix Nares acquired Elena’s shares in Lot 1460 by inheritance, which is 1/2of Lot 1460. As to the other half of Lot 1460 owned by Eduarda Navera, the latter sold the same to two vendees, one in favor of Arsenio Nares and the other in favor of Mariano Navera, Genaro Navera’s predecessor-ininterest. 2. Double Sale; Eduarda Navera had no existing right anymore to convey portion of property in a subsequent sale to Mariano Navera On this matter of double sale, all the transfers or conveyances are not inscribed in the OCT RO- 15480(NA). It would not be amiss to state that the sale of Eduarda Navera to Arsenio Nares, and the sale of Eduarda Navera to Mariano Navera, the property referred to in both sales is the very same property covered by reconstituted title. The sale of Eduarda Navera to Arsenio Nares covered all her portion to the property, thus, she could not possibly sell on 26 June 1948, another portion of the same property to Mariano Navera. Thus, the portion referred to in the sale to Mariano Navera by Eduarda Navera may not be validly transferred by Mariano Navera to Serapio Mustar. It likewise follow that Serapio Mustar may not effectively convey the same to Genaro Navera. It is irremissible to state that the alleged conveyance made by Serapio Mustar in favor of Genaro Navera have no legal effect whatsoever, for the simple reason that Serapio Mustar could not properly convey the portion referred to in the sale of 26 June 1948, by Eduarda Navera in favor of Mariano Navera. In the first place, Eduarda Navera has no existing right to convey another portion of the property because she had already sold all her portion to Arsenio Nares. Thus at the time Eduarda Navera conveyed a portion of the property which she already conveyed to appellee Arsenio Nares, she has no right on the property and the power to dispose it. Mariano Navera therefore never acquired that portion subject of the sale on 26 June 948. Having acquired that portion of the property subject of the sale on 26 June 1948 from Mariano Navera, Serapio Mustar has likewise no existing right and power to dispose of that portion of the property to Genaro Navera. 3. Navera not possessors in good faith; Knowledge of flaw of title Article 526 of the New Civil Code provides that a possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it and a possessor in bad faith is one who possesses in any case contrary to the foregoing. “Every possessor in good faith becomes a possessor in bad faith from the moment he becomes aware that what he believed to be true is not so.” His possession is legally interrupted when he is summoned to trial according to Article 1123 of the New Civil Code (Tacas v. Tabon, 53 Phil. 356).” 4. Conclusions and finding of facts by trial court given great weight Sales, 2003 ( 173 ) Haystacks (Berne Guerrero) The conclusions and findings of facts by the trial court are entitled to great weight and will not be disturbed on appeal unless for strong and cogent reasons because the trial court is in a better position to examine real evidence as well as to observe the demeanor of witnesses while testifying on the ease. (Macua vs. Intermediate Appellate Court, No. L-70810, October 26, 1987, 155 SCRA 29). 5. Article 1544 of the Civil Code Article 1544 of the Civil Code provides that “If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.” 6. Sales not registered; Ownership vested upon first possessor

in good faith The first sale of Eduarda Navera’s share in the said lot to Arsenio Nares was made in a public instrument on 14 May 1947. The second sale of the same property was executed also in a public instrument in favor of Mariano Navera, who is the predecessor in interest of Genaro Navera, on 26 June 1948, or more than a year after the first sale. Since the records show that both sales were not recorded in the Registry of Property, the law clearly vests the ownership upon the person who in good faith was first in possession of the disputed lot. 7. Possession of vendor includes not only the material but also symbolic possession; Vendor does not transmit anything to second vendee The possession mentioned in Article 1544 for determining who has better right when the same piece of land has been sold several times by the same vendor includes not only the material but also the symbolic possession, which is acquired by the execution of a public instrument. This means that after the sale of a realty by means of a public instrument, the vendor, who resells it to another, does not transmit anything to the second vendee, and if the latter, by virtue of this second sale, takes material possession of the thing, he does it as mere detainer, and it would be unjust to protect this detention against the rights of the thing lawfully acquired by the first vendee (Quimson vs. Rosete, 87 Phil. 159; Sanchez vs. Ramos, 40 Phil. 614; Florendo vs. Foz, 20 Phil. 388). 8. Constructive delivery in the execution of public instrument The prior sale of the land to Arsenio Nares by means of a public instrument is clearly tantamount to a delivery of the land resulting in the material and symbolic possession thereof by the latter. Further, actual evidence points to the prior actual possession by Nares before he was evicted from the land by Navera and their predecessors in 1957 when the latter entered the disputed property. No other evidence exists on record to show the contrary. 9. Prior est in tempore, potior est in jure Prior est in tempore, potior est in jure (he who is first in time is preferred in right). The priority of possession stands good in favor of Nares. Ownership should therefore be recognized in favor of the first vendee, Arsenio Nares. 10. Prescription must be expressly relied upon in the pleadings; One asserting ownership through adverse possession must prove essential elements of acquisitive prescription Navera alleged that they have been in possession of the lot for more than 46 years. Prescription, as a defense, must be expressly relied upon in the pleadings. It cannot be availed of, unless it is specially pleaded in the answer; and it must be proved or established with the same degree of certainty as any essential allegation in the civil action (Hodges vs. Salas, 63 Phil. 567; Corporacion de PP. Augustinus Recolectos vs. Crisostomo, 32 Phil. 427). In the present case, Navera did not claim acquisitive prescription in their answer in Sales, 2003 ( 174 ) Haystacks (Berne Guerrero) the lower court, and even if they did, it cannot be given judicial sanction on mere allegations. The law requires one who asserts ownership by adverse possession to prove the presence of the essential elements of acquisitive prescription (Morales vs. CFI, et al., No. L-52278, May 29, 1980, 97 SCRA 872). 11. Nares evicted, thus Navera is in bad faith; 30-year requirement in adverse possession not met (suit filed 1971, 14 years after dispossession) There is lack of sufficient proof to establish clearly and positively Navera’s claim of acquisitive prescription. The Court is more inclined to believe Nares’ version that he was evicted from the property by Navera sometime in 1957, thereby showing the latter’s bad faith in acquiring the possession of the property until 1971 when the action against Navera was filed. Thus, the ordinary acquisitive prescription of 10 years cannot be considered in favor of Navera in the absence of good faith. Neither is Navera entitled to extraordinary acquisitive prescription, in the absence of sufficient proof of compliance with the thirty-year requirement of possession in case of bad faith. 12. Navera has knowledge of right and interest of cousins in disputed land The law clearly states that “possession has to be in the concept of an owner, public, peaceful and

uninterrupted” (Article 1118, Civil Code). A reading of the demand letter from Nares dated 27 May 1970, submitted in evidence by Navera, shows that the dispute over Lot 1460 had been going on for a number of years among them and their families. During the time when Navera bought the land in 1959 and the following years thereafter when the latter possessed the property, they have known or should have known of the rights and interests of their cousins over the disputed land. 13. Navera’s predecessor-in-interest did not declare themselves owner of land for taxation purposes Moreover, the tax declarations for the years 1951 and 1965 showed that Arsenio and Felix Nares were the declared owners. Navera’s predecessors in interest, namely, Mariano Navera and the subsequent purchasers of the lot, had not bothered to declare the land in their own names for purposes of taxation during the time that they were allegedly in possession of the land. It was only in the year 1966 when Genaro Navera started to declare himself owner of the land for taxation purposes. 14. Nares not bound by alleged donation propter nuptias in favor of Mustar; No evidence that donated property was transferred to Mariano Navera Arsenio and Felix Nares are not bound by their alleged knowledge of the previous donation propter nuptias by their ancestor, Leocadio Navera in favor of Fausto Mustar. The donation propter nuptias made by Leocadio Navera sometime in October 1916, should have been at least recorded in the registry of property or inscribed in the Original Certificate of Title or the donee shall have titled the property in his name. The alleged donee Fausto Mustar is not a party to the case nor had he transferred the said donated property to the spouses Mariano Navera in a public instrument or conveyance. Nowhere in the evidence on record would show that the said donated property was ever transferred to Mariano Navera, father of Genaro Navera. 15. Knowledge of alleged donation immaterial; OCT clear without mention of any previous donation of any portion of the land The knowledge of Nares concerning the alleged previous donation is immaterial. The facts are clear that the original certificate of title itself covers the whole of 26,995 square meters of the disputed Lot 1460 in the name of “Elena Navera, et al.”, without any mention of any previous donation of a portion of the said lot to the alleged donee.

NAAWAN COMMUNITY RURAL BANK INC., petitioner, vs. THE COURT OF APPEALS and SPOUSES ALFREDO AND ANNABELLE LUMO, respondents.

[G.R. No. 128573. January 13, 2003]

Under the established principles of land registration, a person dealing with registered land may generally rely on the correctness of a certificate of title and the law will in no way oblige him to go beyond it to determine the legal status of the property.

FACTS:

1. On April 30, 1988, a certain Guillermo Comayas offered to sell to private respondent-spouses Alfredo and Annabelle Lumo, a house and lot measuring located at Pinikitan, Camaman-an, Cagayan de Oro City.

2. Wanting to buy said house and lot, private respondents made inquiries at the Office of the Register of Deeds of Cagayan de Oro City where the property is located and the Bureau of Lands on the legal status of the vendor’s title. They found out that the property was mortgaged for P8,000 to a

certain Mrs. Galupo and that the owner’s copy of the Certificate of Title to said property was in her possession.

3. Private respondents directed Guillermo Comayas to redeem the property from Galupo at their expense, giving the amount of P10,000 to Comayas for that purpose.

4. On May 30, 1988, a release of the adverse claim of Galupo was annotated on TCT No. T-41499 which covered the subject property.

5. In the meantime, on May 17, 1988, even before the release of Galupo’s adverse claim, private respondents and Guillermo Comayas, executed a deed of absolute sale. The subject property was allegedly sold for P125,000 but the deed of sale reflected the amount of only P30,000 which was the amount private respondents were ready to pay at the time of the execution of said deed, the balance payable by installment.

6. On June 9, 1988, the deed of absolute sale was registered and inscribed on TCT No. T-41499 and, on even date, TCT No. T-50134 was issued in favor of private respondents

7. After obtaining their TCT, private respondents requested the issuance of a new tax declaration certificate in their names. However, they were surprised to learn from the City Assessor’s Office that the property was also declared for tax purposes in the name of petitioner Naawan Community Rural Bank Inc. Records in the City Assessor’s Office revealed that, for the lot covered by TCT No. T-50134, Alfredo Lumo’s T/D # 83324 bore the note: “This lot is also declared in the name of Naawan Community Rural Bank Inc. under T/D # 71210”. Apparently, on February 7, 1983, Guillermo Comayas obtained a P15,000 loan from petitioner

Bank using the subject property as security. At the time said contract of mortgage was entered into, the subject property was then an unregistered parcel of residential land, tax-declared in the name of a certain Sergio A. Balibay while the residential one-storey house was tax-declared in the name of Comayas.

Balibay executed a special power of attorney authorizing Comayas to borrow money and use the subject lot as security. But the Deed of Real Estate Mortgage and the Special Power of Attorney were recorded in the registration book of the Province of Misamis Oriental, not in the registration book of Cagayan de Oro City.

It appears that, when the registration was made, there was only one Register of Deeds for the entire province of Misamis Oriental, including Cagayan de Oro City. It was only in 1985 when the Office of the Register of Deeds for Cagayan de Oro City was established separately from the Office of the Register of Deeds for the Province of Misamis Oriental

For failure of Comayas to pay, the real estate mortgage was foreclosed and the subject property sold at a public auction to the mortgagee Naawan Community Rural Bank as the highest bidder in the amount of P16,031.35.

Meanwhile, on September 5, 1986, the period for redemption of the foreclosed subject property lapsed and the MTCC Deputy Sheriff of Cagayan de Oro City issued and delivered to petitioner bank the sheriff’s deed of final conveyance. This time, the deed was registered under Act 3344 and recorded in the registration book of the Register of Deeds of Cagayan de Oro City.

By virtue of said deed, petitioner Bank obtained a tax declaration for the subject house and lot.

8. Thereafter, petitioner Bank instituted an action for ejectment against Comayas before the MTCC which decided in its favor. On appeal, the Regional Trial Court affirmed the decision of the MTCC in a decision dated April 13, 1988.

9. On January 27, 1989, the Regional Trial Court issued an order for the issuance of a writ of execution of its judgment. The MTCC, being the court of origin, promptly issued said writ.

10. However, when the writ was served, the property was no longer occupied by Comayas but herein private respondents, the spouses Lumowho had, as earlier mentioned, bought it from Comayas on May 17, 1988

11. Alarmed by the prospect of being ejected from their home, private respondents filed an action for quieting of title. After trial, the Regional Trial Court rendered a decision declaring private respondents as purchasers for value and in good faith, and consequently declaring them as the absolute owners and possessors of the subject house and lot.

ISSUE:

1. WHETHER OR NOT REGISTRATION OF SHERIFF’S DEED OF FINAL CONVEYANCE IN THE PROPER REGISTRY OF DEEDS IS MORE SUPERIOR THAN THE TORRENS TITLE? NO.

2. WHETHER OR NOT PRIVATE RESPONDENTS COULD BE CONSIDERED AS BUYERS IN GOOD FAITH? YES.

HELD:

Petitioner bank contends that the earlier registration of the sheriff’s deed of final conveyance in the day book under Act 3344 should prevail over the later registration of private respondents’ deed of absolute sale under Act 496, as amended by the Property Registration Decree, PD 1529.

1. This contention has no leg to stand on. 2. It has been held that, where a person claims to have superior proprietary rights over another on the

ground that he derived his title from a sheriff’s sale registered in the Registry of Property, Article 1473 (now Article 1544) of the Civil Code will apply only if said execution sale of real estate is registered under Act 496.

3. Unfortunately, the subject property was still untitled when it was acquired by petitioner bank by virtue of a final deed of conveyance. On the other hand, when private respondents purchased the same property, it was already covered by the Torrens System.

Petitioner also relies on the case of Bautista vs. Fulewhere the Court ruled that the registration of an instrument involving unregistered land in the Registry of Deeds creates constructive notice and binds third person who may subsequently deal with the same property.

4. However, a close scrutiny of the records reveals that, at the time of the execution and delivery of the sheriff’s deed of final conveyance on September 5, 1986, the disputed property was already covered by the Land Registration Act and Original Certificate of Title No. 0-820 pursuant to Decree No. N189413 was likewise already entered in the registration book of the Register of Deeds of Cagayan De Oro City as of April 17, 1984.

5. Thus, from April 17, 1984, the subject property was already under the operation of the Torrens System. Under the said system, registration is the operative act that gives validity to the transfer or creates a lien upon the land.

6. Moreover, the issuance of a certificate of title had the effect of relieving the land of all claims except those noted thereon.

7. Accordingly, private respondents, in dealing with the subject registered land, were not required by law to go beyond the register to determine the legal condition of the property. They were only charged with notice of such burdens on the property as were noted on the register or the certificate of title. To have required them to do more would have been to defeat the primary object of the Torrens System which is to make the Torrens Title indefeasible and valid against the whole world.

8. Mere registration of title in case of double sale is not enough; good faith must concur with the registration.

Petitioner contends that the due and proper registration of the sheriff’s deed of final conveyance on December 2, 1986 amounted to constructive notice to private respondents. Thus, when private respondents bought the subject property on May 17, 1988, they were deemed to have purchased the said property with the knowledge that it was already registered in the name of petitioner bank.

1. The “priority in time” principle being invoked by petitioner bank is misplaced because its registration referred to land not within the Torrens System but under Act 3344.

2. On the other hand, when private respondents bought the subject property, the same was already registered under the Torrens System. It is a well-known rule in this jurisdiction that persons dealing with registered land have the legal right to rely on the face of the Torrens Certificate of Title and to dispense with the need to inquire further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry.

3. Private respondents exercise the required diligence in ascertaining the legal condition of the title to the subject property so as to be considered as innocent purchasers for value and in good faith Before private respondents bought the subject property from Guillermo Comayas, inquiries

were made with the Registry of Deeds and the Bureau of Lands regarding the status of the vendor’s title. No liens or encumbrances were found to have been annotated on the certificate of title. Neither were private respondents aware of any adverse claim or lien on the property other than the adverse claim of a certain Geneva Galupo to whom Guillermo Comayas had mortgaged the subject property. But, as already mentioned, the claim of Galupo was eventually settled and the adverse claim previously annotated on the title cancelled. Thus, having made the necessary inquiries, private respondents did not have to go beyond the certificate of title. Otherwise, the efficacy and conclusiveness of the Torrens Certificate of Title would be rendered futile and nugatory.

Considering therefore that private respondents exercised the diligence required by law in ascertaining the legal status of the Torrens title of Guillermo Comayas over the subject property and found no flaws therein, they should be considered as innocent purchasers for value and in good faith.

Accordingly, the appealed judgment of the appellate court upholding private respondents Alfredo and Annabelle Lumo as the true and rightful owners of the disputed property is affirmed.

Radiowealth Finance Co. vs. Palileo 197 SCRA 245 

May 1991

FACTS: 

In April 1970, defendant spouses Enrique Castro and Herminio R. Castro (spouse Castro) sold to herein respondent Manuelito Palileo a parcel of unregistered coconut land in Surigao del Norte. The sale is evidenced by a notarized Deed of Absolute Sale, but the deed was not registered in the Registry of Property for unregistered lands in the province of Surigao del Norte. Since the execution of the deed of sale, Palileo who was then employed in Lianga, Surigao del Sur, exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix or overseer. Manuelito Palileo has continuously paid the real estate taxes on said land from 1971 until the present. 

In November 1976, the CFI of Manila rendered a judgment was rendered against defendant Enrique T. Castro to pay herein petitioner Radiowealth Finance Company (Radiowealth), the sum of P22,350.35 with interest rate of 16% per annum from November 2, 1975 until fully paid, and upon the finality of the judgment, a writ of execution was issued. The Provincial Sheriff Marietta E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied upon and finally sold at public auction the subject land that defendant Enrique Castro had sold to Palileo in 1970. The said Provincial Sheriff executed a certificate of sale was by the in favor of Radiowealth as the only bidder, and upon expiration of the redemption period, she also executed a deed of final sale. Both documents were registered with the Registry of Deeds. 

Learning of what happened to the land, Palileo filed an action for recovery of the subject property. The court a quo rendered a decision in favor of Palileo, which the Court of Appeals affirmed. 

ISSUE: 

Who is the rightful owner of the subject property? 

COURT RULING: 

The Supreme Court likewise affirmed the appellate court’s decision on this case. There is no doubt that had the subject property been a registered land, this case would have been decided in favor of Radiowealth since it was the company that had its claim first recorded in the Registry of Deeds for it is the act of registration that operates to convey and affect registered land. Therefore, a bonafide purchaser of a registered land at an execution sale acquires a good title as against a prior transferee, if such transfer was unrecorded. 

However, a different set of rules applies in the case at bar which deals with a parcel of unregistered land. Under Act No. 3344, registration of instruments affecting unregistered lands is "without prejudice to a third party with a better right." The aforequoted phrase has

been held by the Supreme Court to mean that the mere registration of a sale in one's favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. Applying this principle, the Court of Appeals correctly held that the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale.