Dignos vs. Court of Appeals, and Jabil 158 SCRA 378 February 1988

FACTS:

In July 1965, herein petitioners Silvestre T. Dignos and Isabela Lumungsod de Dignos (spouses Dignos) sold their parcel of land in Opon, LapuLapu to herein private respondent Antonio Jabil for the sum of P28,000 payable for two installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the sum of P12,000 and the next installment of P4,000 to be paid in September 1965. In November 1965, the spouses Dignos sold the same parcel of land for P35,000 to defendants Luciano Cabigas and Jovita L. de Cabigas (spouses Cabigas) who were then US citizens, and executed in their favor an Absolute Deed of Sale duly registered in the Office of the Register of Deeds.

Upon discovery of the 2nd sale of the subject land, Jabil filed the case at bar in the CFI of Cebu which rendered its Decision in August 1975 declaring the 2nd sale to the spouses Cabigas null and void ab initio and the 1st sale to Jabil not rescinded. The CFI of Cebu also ordered Jabil to pay the remaining P16,000 to the spouses Dignos and to reimburse the spouses Cabigas a reasonable amount corresponding the expenses in the construction of hollow block fences in the said parcel of land. The spouses Dignos were also ordered to return the P35,000 to the spouses Cabigas.

Both Jabil and the spouses Dignos appealed to the Court of Appeals, which affirmed in July 1981 the CFI of Cebus Decision except for the part of Jabil paying the expenses of the spouses Cabigas for building a fence. The spouses Dignos contested that the contract between them and Jabil was merely a contract to sell and not a deed of sale.

ISSUE:

Is the contract between the parties a contract of sale or a contract to sell?

COURT RULING:

The Supreme Court affirmed the Decision of the Court of Appeals saying stated that all the elements of a valid contract of sale are present in the document and that the spouses Dignos had no right to sell the land in question because an actual delivery of its possession has already been made in favor of Jabil as early as March 1965. It was also found that the spouses Dignos never notified Jabil by notarial act that they were rescinding the contract, and neither did they file a suit in court to rescind the sale. There is no showing that Jabil properly authorized a certain Cipriano Amistad to tell petitioners that he was already waiving his rights to the land in question.Aitken v. Lao

Facts:

Chinaman (To Jan Co) erected a store bldg on a parcel of land belonging to Apolonia Remigio, whereby agreement that half of rents were to go to her half to Jan Co. Owner of land did not receive rents agreed upon, thus instituted action aganst Jan Co to recover rents. Judgment rendered in favor of Remigio, execution issued and thereafter house purchased by judgment creditor (remigio) at the sheriff's sale as such now in possession of house and land. Defendant is administrator of estate of Remigio. Jan Co later executed unregisted deed of sale to another Chinaman (To Cun), reserving right to repurchase but did no exrcise such. Cun never took possession, later Cun executed unregistered deed of sale to Aitken, who later instituted action for possession of house.

Issue: WON purchaser or claimant under prior unrecorded deed of sale has better right

Held:

Purchaser in GF at a sheriff's sale of all right, tite, intersest of a judgment dbtor in a house is entitled to prop under Art 1473 of Civil Code as against one who claims property by virtue of unrecorded deed of sale executed in his favor by judgment debtor prior to date of sheriff's sale, it appearing that purchaser at the sheriff's sale secured possession and that claimany under undrecorded deed of sale never went into possession.

Fabian et al v. Smith Bell & Co

Facts:

Emilio Boncan owner of real estate, titlr recorded in registry of prop. Sold and conveyed same by public doc to plaintiffs, deed was never recorded with registry of property. Later, Smith Bell & Co obtained judgment against Boncan thus levied an execution issued on said judgment upon real estate in question which was recorded in registry as that of Boncan's. Fabian brought action to restrain judgment creditors from selling property.

Issue: WON levy of an execution against a judgment debtor upon real estate which stands in his name in registry of prop takes precedence on an unrecorded deed of same property made by judgment debtor prior to levy in execution.

Held:

Levy of an execution against a judgment debtor upon real estate which stands in his name in registry of property does not take precedence over an unrecorded deed of same property executed by judgment debtor prior to levy of attachment. Attachment does not change character of a debt and does not convert claim of creditor into a right to the thing itslef, nor does it give him any preference over existing claims against attached property that have not been recorded.

Art 1473 ov Civil Code which gives preference to that one of the two deeds which is first recorded does not extend to attachments or executions.

Jacobus Bernhard vs PR Builders Inc

25 September 2008

Facts: Petitioner contends that the Contract to Sell between petitioner and respondent involved a condominium unit and did not violate the Constitutional proscription against ownership of land by aliens. He argues that the contract to sell will not transfer to the buyer ownership of the land on which the unit is situated; thus, the buyer will not get a transfer certificate of title but merely a Condominium Certificate of Title as evidence of ownership; a perusal of the contract will show that what the buyer acquires is the seller's title and rights to and interests in the unit and the common areas.

The Contract to Sell between petitioner and respondent provides as follows:

Section 3. TITLE AND OWNERSHIP OF UNIT

Upon full payment by the BUYER of the purchase price stipulated in Section 2 hereof, x x x, the SELLER shall deliver to the BUYER the Deed of Absolute Sale conveying its rights, interests and title to the UNIT and to the common areas appurtenant to such UNIT, and the corresponding Condominium Certificate of Title in the SELLER's name; x x x

The Seller shall register with the proper Registry of Deeds, the Master Deed with the Declaration of Restrictions and other documents and shall immediately comply with all requirements of Republic Act No. 4726 (The Condominium Act) and Presidential Decree No. 957 (Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof). It is hereby understood that all title, rights and interest so conveyed shall be subject to the provisions of the Condominium Act, the Master Deed with Declaration of Restrictions, the Articles of Incorporation and By-Laws and the Rules and Regulations of the Condominium Corporation, zoning regulations and such other restrictions on the use of the property as annotated on the title or may be imposed by any government agency or instrumentality having jurisdiction thereon.[4] (Emphasis supplied)

Under Republic Act (R.A.) No. 4726, otherwise known as the Condominium Act, foreign nationals can own Philippine real estate through the purchase of condominium units or townhouses constituted under the Condominium principle with Condominium Certificates of Title.

Issue: w/n the purchase of a condo unit by an alien falls under the express prohibition of land ownership by aliens

Ruling: No. Considering that the rights and liabilities of the parties under the Contract to Sell is covered by the Condominium Act wherein petitioner as unit owner was simply a member of the Condominium Corporation and the land remained owned by respondent, then the constitutional proscription against aliens owning real property does not apply to the present case. There being no circumvention of the constitutional prohibition, the Court's pronouncements on the invalidity of the Contract of Sale should be set aside.

AURORA ALCANTARA-DAUS, vs. Spouses HERMOSO and SOCORRO DE LEON

Facts: Respondents alleged that they are the owners of a parcel of land described as: No. 4786 of the Cadastral Survey of San Manuel situated in the Municipality of San Manuel, Bounded on the NW., by Lot No. 4785; and on the SE., by Lot Nos. 11094 & 11096; containing an area of Four Thousand Two Hundred Twelve (4,212) sq. m., more or less. Covered by Original Certificate of Title No. 22134 of the Land Records of Pangasinan. which Hermoso de Leon inherited from his father Marcelino de Leon by virtue of a Deed of Extrajudicial Partition. Sometime in the early 1960s, respondents engaged the services of the late Atty. Florencio Juan to take care of the documents of the properties of his parents. Atty. Juan let them sign voluminous documents. After the death of Atty. Juan, some documents surfaced and most revealed that their properties had been conveyed by sale or quitclaim to Hermosos brothers and sisters, to Atty. Juan and his sisters, when in truth and in fact, no such conveyances were ever intended by them. His signature in the Deed of Extra-judicial Partition with Quitclaim made in favor of Rodolfo de Leon was forged. They discovered that the land in question was sold by Rodolfo de Leon to Aurora Alcantara. They demanded annulment of the document and reconveyance but defendants refused. Aurora Alcantara-Daus that she bought the land in question in good faith and for value. [She] has been in continuous, public, peaceful, open possession over the same and has been appropriating the produce thereof without objection from anyone.

Issue: 1. Whether or not the Deed of Absolute Sale \ executed by Rodolfo de Leon over the land in question in favor of petitioner was perfected and binding upon the parties therein?

2. Whether or not the possession of petitioner including her predecessor-in-interest Rodolfo de Leon over the land in question was in good faith?

Ruling: Petition has no merit.

1. A contract of sale is consensual. It is perfected by mere consent,]upon a meeting of the minds on the offer and the acceptance thereof based on subject matter, price and terms of payment. At this stage, the sellers ownership of the thing sold is not an element in the perfection of the contract of sale. The contract, however, creates an obligation on the part of the seller to transfer ownership and to deliver the subject matter of the contract. It is during the delivery that the law requires the seller to have the right to transfer ownership of the thing sold. In general, a perfected contract of sale cannot be challenged on the ground of the sellers non-ownership of the thing sold at the time of the perfection of the contract.

2. It is well-settled that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. Neither can prescription be allowed against the hereditary successors of the registered owner, because they merely step into the shoes of the decedent and are merely the continuation of the personality of their predecessor in interest\ Consequently, since a certificate of registration covers it, the disputed land cannot be acquired by prescription regardless of petitioners good faith.

Heirs of Arturo Reyes versus Socco-Beltran

Facts: The subject land was a part of a larger parcel of land partitioned into three extra-judicially by the heirs of Constancia Socco sometime in 1965. Respondent applied before the DAR the purchase of the subject land stating thatthe land was adjudicated in her favor. However, the Heirs of Reyes protested against the application claiming that thesubject land was owned by their predecessor-in-interest evidenced by a conditional Contract to Sell executed by thebrother of the respondent and stated therein that he was to inherit the subject parcel of land. The director of DAR deniedthe application on the ground that she was not the actual tiller of the land and abandoned the land for a period of 40years. On appeal to the secretary of DAR, it was reversed and found that petitioners predecessor-in-interest was not theactual occupant of the said land. Petitioners sought remedy from the Office of the President by appealing but the Office of the President rendered its Decision denying petitioners appeal and affirming the DAR Secretarys Decision.Consequently, petitioners filed an appeal before the Court of Appeals, however, the Court of Appeals affirmed thedecision of the Office of the President.

Issue: Whether or not petitioners have a better right to the subject property over the respondent

Held: Petitioners cannot derive title to the subject property by virtue of the Contract to Sell. It was unmistakably statedin the Contract and made clear to both parties thereto that the vendor, Miguel R. Socco, was not yet the owner of thesubject property and was merely expecting to inherit the same as his share as a co-heir of Constancias estate.

It was also declared in the Contract itself that Miguel R. Soccos conveyance of the subject to the buyer, Arturo Reyes, was aconditional sale. It is, therefore, apparent that the sale of the subject property in favor of Arturo Reyes was conditioned upon the event that Miguel Socco would actually inherit and become the owner of the said property. Absent suchoccurrence, Miguel R. Socco never acquired ownership of the subject property which he could validly transfer to Arturo Reyes. Under Article 1459 of the Civil Code on contracts of sale, The thing must be licit and the vendor must have a right to transfer ownership thereof at the time it is delivered. The law specifically requires that the vendor must haveownership of the property at the time it is delivered.It was explicit in the Contract itself that, at the time it was executed,

Miguel R. Socco was not yet the owner of the property and was only expecting to inherit it. Hence, there was no validsale from which ownership of the subject property could have transferred from Miguel Socco to Arturo Reyes. Withoutacquiring ownership of the subject property, Arturo Reyes also could not have conveyed the same to his heirs, herein petitioners.

Rudolf Leitz, Inc, vs CA

Facts:

Respondent Agapito Buriol previously owned a parcel of unregistered land situated at Capsalay Island, Port Barton, San Vicente, Palawan. On August 15, 1986, respondent Buriol entered into a lease agreement with Flavia Turatello and respondents Turatello and Sani, all Italian citizens, involving one (1) hectare of respondent Buriols property. The lease agreement was for a period of 25 years, renewable for another 25 years. The lessees took possession of the land after paying respondent Buriol a down payment of P10,000.00. The lease agreement, however, was reduced into writing only in January 1987. On November 17, 1986, respondent Buriol sold to petitioner Rudolf Lietz, Inc. the same parcel of land for the amount of P30,000.00. TheDeed of Absolute Sale embodying the agreement described the land as follows:

A parcel of land, consisting of FIVE (5) hectares, more or less, a portion of that parcel of land declared in the name of Agapito Buriol, under Tax Declaration No. 0021, revised in the year 1985, together with all improvements thereon, situated at the Island of Capsalay, Barangay Port Barton, municipality of San Vicente, province of Palawan which segregated from the whole parcel described in said tax declaration, has the following superficial boundaries: NORTH, Sec. 01-017; and remaining property of the vendor; EAST, by Seashore; SOUTH, 01-020; and WEST, by 01-018 (now Elizabeth Lietz)

Petitioner later discovered that respondent Buriol owned only four (4) hectares, and with one more hectare covered by lease, only three (3) hectares were actually delivered to petitioner. Thus, petitioner instituted on April 3, 1989 a complaint for Annulment of Lease with Recovery of Possession with Injunction and Damages against respondents and Flavia Turatello before the RTC. The complaint alleged that with evident bad faith and malice, respondent Buriol sold to petitioner five (5) hectares of land when respondent Buriol knew for a fact that he owned only four (4) hectares and managed to lease one more hectare to Flavia Turatello and respondents Tiziana Turatello and Paola Sani. The complaint sought the issuance of a restraining order and a writ of preliminary injunction to prevent Flavia Turatello and respondents Turatello and Sani from introducing improvements on the property, the annulment of the lease agreement between respondents, and the restoration of the amount paid by petitioner in excess of the value of the property sold to him. The trial court rendered judgment on May 27, 1992, dismissing both petitioners complaint and respondents counterclaim for damages. Petitioner and respondents Turatello and Sani separately appealed the RTC Decision to the Court of Appeals, which affirmed the dismissal of petitioners complaint and awarded respondents Turatello and Sani damages and attorneys fees.

Issue:

1. Whether or not petitioner is entitled to the delivery of the entire five hectares or its equivalent, and

2. Whether or not damages may be awarded to either party.

Held:

Petitioner contends that it is entitled to the corresponding reduction of the purchase price because the agreement was for the sale of five (5) hectares although respondent Buriol owned only four (4) hectares. As in its appeal to the Court of Appeals, petitioner anchors its argument on the second paragraph of Article 1539 of the Civil Code, The Court of Appeals Decision, however, declared as inapplicable Article 1539 and instead ruled that petitioner is no longer entitled to a reduction in price based on the provisions of Article 1542 of the Civil Code.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded because the vendee does not accede to the failure to deliver what has been stipulated.

Article 1539 governs a sale of immovable by the unit, that is, at a stated rate per unit area. In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. According to Article 154 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price although there be a greater or lesser area or number than that stated in the contract. However, the discrepancy must not be substantial. A vendee of land, when sold in gross or with the description more or less with reference to its area, does not thereby ipso facto take all risk of quantity in the land. The use of more or less or similar words in designating quantity covers only a reasonable excess or deficiency.

Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object. The sale between petitioner and respondent Buriol involving the latters property is one made for a lump sum. The Deed of Absolute Sale shows that the parties agreed on the purchase price on a predetermined area of five hectares within the specified boundaries and not based on a particular rate per area. In accordance with Article 1542, there shall be no reduction in the purchase price even if the area delivered to petitioner is less than that stated in the contract. In the instant case, the area within the boundaries as stated in the contract shall control over the area agreed upon in the contract.

The Court rejects petitioners contention that the propertys boundaries as stated in the Deed of Absolute Sale are superficial and unintelligible and, therefore, cannot prevail over the area stated in the contract. First, as pointed out by the Court of Appeals, at an ocular inspection prior to the perfection of the contract of sale, respondent Buriol pointed to petitioner the boundaries of the property. Hence, petitioner gained a fair estimate of the area of the property sold to him. Second, petitioner cannot now assail the contents of the Deed of Absolute Sale, particularly the description of the boundaries of the property, because petitioners subscription to the Deed of Absolute Sale indicates his assent to the correct description of the boundaries of the property.

DOUBLE SALE

Ulep v CA

G.R. No. 125254, October 11, 2005

J. Garcia

Facts:

During his lifetime, the father Valentin Ulep owned a parcel of land an area of 3,270. In 1950, the older Ulep sold the one-half (1/2) eastern portion comprising an area of 1,635 square meters, to respondent Maxima Rodico, while the remaining one-half (1/2) western portion with the same area, to his son Atinedoro Ulep married to Beatriz Ulep, and to his other daughter Valentina Ulep. On June 5, 1952, Transfer Certificate of Title was issued to transferees. On June 18, 1971, Atinedoro Ulep, his wife Beatriz and sister Valentina Ulep sold the one-half (817.5 square meters) portion of the area sold to them by their father to their brother Samuel Ulep and his wife. The document of sale was registered with the Office of the Registry of Deeds of Pangasinan on February 20, 1973. Later, an area of 507.5 square meters of the western portion sold by the spouses Atinedoro Ulep and Beatriz Ulep to respondent Warlito Paringit and his wife, who were then issued TCT No. 12688 on September 23, 1975. Evidently, all the foregoing transactions were done and effected without an actual ground partition or formal subdivision of the lot. In June 1977, respondent Iglesia ni Cristo (INC) begun constructing its chapel on lot 840. This prompted Samuel Ulep and sister Rosita Ulep to make inquiries with the Office of the Register of Deeds of Pangasinan. To their consternation, they discovered from the records of said office that a deed of sale bearing date December 21, 1954, purportedly executed by their brother Atinedoro Ulep his, wife Beatriz and their sister Valentina Ulep in favor of INC over a portion of 620 square meters of the lot and that on the basis of said deed, INC was issued TCT No. 12689 on September 23, 1975 over the portion allegedly sold to it by the three. On March 29, 1983, in the Regional Trial Court, the spouses Samuel Ulep and Susana Repogia-Ulep, the spouses Atinedoro Ulep and Beatriz Ulep and their sister Valentina Ulep, filed their complaint for Quieting of Title, Reconveyance and Declaration of Nullity of Title and Subdivision Plan with Damages. The Uleps basically alleged that they and respondents are co-owners of the lot in the following proportions:

1,635 square meters to Maxima Rodico;

817.5 square meters to spouses Samuel Ulep and Susana Repogia-Ulep;

507.5 square meters to spouses Warlito Paringit and Encarnacion Gante;

210 square meters to spouses Atinedoro Ulep and Beatriz Ulep, and Valentina Ulep;

100 square meters to Iglesia Ni Cristo.http://www.lawphil.net/judjuris/juri2005/oct2005/gr_125254_2005.html - fnt6

Issue: Whether or not Samuel Ulep and his wife has a better right to the lot than the INC.

Held:

The governing principle is primus tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyers rights except where the second buyer registers in good faith the second sale ahead of the first, as provided by Art. 1544 of the Civil Code. Such knowledge of the first buyer does not bar him from availing of his rights under the law, among them to register first his purchase as against the second buyer. In converso, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by the same provision of the Civil Code for the second buyer to be able to displace the first buyer; before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. ignorance of the first sale and of the first buyers rights) from the time of acquisition until the title is transferred to him by registration, or, failing registration, by delivery of possession.

Per records, the sale of the disputed 620 square-meter portion of Lot 840 to respondent INC was made on December 21, 1954 and registered with the Registry of Deeds of Pangasinan on January 5, 1955. In fact, INC was issued a title over the same portion on September 23, 1975. On the other hand, the conveyance to the spouses Samuel Ulep and Susana Repogia-Ulep happened on January 18, 1971 and the spouses registered their document of conveyance only on February 22, 1973.http://www.lawphil.net/judjuris/juri2005/oct2005/gr_125254_2005.html - fnt14

Clearly, not only was respondent INC the first buyer of the disputed area. It was also the first to register the sale in its favor long before petitioners Samuels and Susanas intrusion as second buyers. Although Samuel and Susana thereafter registered the sale made to them, they did so only after 18 years from the time INC caused the registration of its own document of sale.

Here, the spouses Samuel Ulep and Susana Ulep were fully aware, or could have been, if they had chosen to inquire, of the rights of INC under the deed of sale duly annotated on the common title of the spouses Atinedoro Ulep and Beatriz Ulep and Valentina Ulep. Verily, the sale to INC should prevail over the sale made to spouses Samuel and Susana because INC was the first registrant in good faith.

DOUBLE SALE

Aitken v La O.

L-11198, March 20, 1917

J. Carson

Facts:

Chinaman named To Jan Co erected a store building on a parcel of land belonging to Apolonia Remigio, under an agreement whereby one-half of the rents were to go to her and one-half to To Jan Co; that the owner of the land, nor having received the rents agreed upon, instituted an action on September 21, 1908, against To Jan Co and one of the occupants of the building to recover these rents; that judgment having been rendered in her favor in the sum of P3,425, execution issued and thereafter the house was purchased by the judgment creditor, Apolonia Remigio, at the sheriff's sale on February 11, 1910, had under authority of the execution; that she took possession forthwith. October 6, 1908 To Jan Co executed an unregistered deed of sale of the house in question to another Chinaman named To Cun, reserving therein the right to repurchase within ninety days; that this right was never exercised. On October 22, 1912, To Cun (the second Chinaman) executed an unregistered deed of sale of the house to the plaintiff in this action, who, on June 9, 1915, instituted these proceedings wherein he prays a judgment for possession of the house, and for an accounting of the rentals collected thereon since the first days of September, 1908, alleging that his one-half share of these rentals amounts to P2,485. The defendant in this action is the administrator of the estate of Apolonia Remigio deceased, and as such is now in possession of the house and the land upon which it stands.

Issue: Whether or not Aitken is the rightful owner of the house/building.

Held:

First, it must be stressed that the sale of the building to To Cun and the latter sale of same by To Cun to the plaintiff cannot be upheld because To Jan Co, the original vendor, had no right to sell it to To Cun after having lost the right to do so during the foreclosure of the property, and the latter had no right to make the sale to Aitken. To Cun acquired no right in the building; consequently he could convey nothing to the purchaser.

Second, 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 personal property.

Should it be real property, it shall belong to the person acquiring it who first recorded it in the registry.

Should there be no entry, the property shall belong to the person who first took possession of it in good faith, and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

Granting, for the sake of argument, that the sale from To Jan Co to To Cun was a valid and binding transaction, it is evident that the house has been sold as his property to two different vendees, and the sale To Cun not having been recorded in the registry, the property belongs to the estate of Apolonia Remigio, the purchaser who first took possession in good faith.

Premiere Development Bank v. CA

GR No. 128122 March 18, 2005

Doctrine: where the certificate of title is in the name of the seller or mortgagor, the innocent purchaser or mortgagee for value has the right to rely on what appears on the certificate without inquiring further in the absence of anything to excite or arouse suspicion, or except when the party concerned has actual knowledge of facts or circumstances that should impel a reasonably cautious person to make such further inquiry.

Facts: Two (2) different persons with exactly the same name, i.e., Vicente T. Garaygay, each claimed exclusive ownership of Lot 23 by virtue of an owners duplicate certificate each had possession of during the period material covering said lot. One held TCT No. 9780, supra, and the other, TCT No. 9780 (693), supra. The technical description of the land appearing in one copy corresponds exactly with that in the other. The date "June 14, 1944" appears on the face of both copies as a common date of entry. One, however, contained certain features, markings, and/or entries not found in the other and vice versa.

On April 17, 1979, one of the two Vicente T. Garaygays, a resident of Cebu City (hereinafter referred to as Garaygay of Cebu), executed a deed of sale over the lot described in and covered by his TCT No. 9780 (693) in favor of his nephew, Joselito P. Garaygay ("Joselito", hereinafter). The sale notwithstanding, the owners duplicate certificate remained for some time in the sellers possession.

In another transaction, the other Vicente T. Garaygay, a resident of Rizal (hereinafter referred to as Garaygay of Rizal), sold to Liberto G. Yambao and Jesus B. Rodriguez the same property described in TCT 9780. "YCM Compound, Angono, Rizal" is set out in the February 11, 1986 conveying deed as the sellers residence. Buyers Yambao and Rodriquez would later sell a portion of their undivided interests on the land to Jesus D. Morales.

Then came the June 11, 1988 fire that gutted a portion of the Quezon City hall and destroyed in the process the original copy of TCT No. 9780 (693) on file with the Registry of Deeds of Quezon City. Barely a month later, a certain Engr. Hobre filed an application, signed by Garaygay of Cebu, for the reconstitution of the burned original on the basis of the latters owners duplicate certificate. One Engr. Felino Cortez of the Land Registration Authority (LRA) did the follow-up on the application. After due proceedings, the LRA issued an order of reconstitution, by virtue of which Garaygay of Cebu acquired reconstituted TCT No. RT-1764 (9780) (693).

Meanwhile, or on May 26, 1989, the deed of sale executed by Garaygay of Cebu in favor of his nephew Joselito was registered, paving the issuance in the latters name of TCT No. 12183.9 Thereafter, thru the efforts of same Engr. Cortez,10 Lot 23 was subdivided into three (3) lots, namely: Lot 23-A, Lot 23-B and Lot 23-C for which TCT Nos. 14414, 14415 and 14416, respectively,11 were issued. Joselito posthaste sold Lot 23-A to Lilian Toundjis who, pursuant to a Contract to Sell executed on March 23, 1990,12 undertook to pay Joselito the P.5 Million balance of the P2.5 Million purchase price once she is placed in possession of a fenced-off property. And, for shares of stock, Joselito assigned on February 26, 1991, the other two (2) lots, i.e., Lot 23-B and Lot 23-C to Century Realty and Development Corporation ("Century Realty") which, after securing TCT Nos. 34390 and 34391 therefor, mortgaged13 the same to Premiere Development Bank, Inc. ("Premiere Bank") to secure a P2.5 Million loan.

Clashing claims of ownership first came to a head when, sometime in May 1990, Liberato G. Yambao and his agents forcibly prevented Joselitos hired hands from concrete-fencing the subject property. The police and eventually the National Bureau of Investigation (NBI) entered into the picture.

In the meantime, Yambao, Rodriquez and Morales as pro indiviso buyers of Lot No. 23, caused the annotation on December 17, 1990, January 16, 1991 and February 15, 1991 of their respective adverse claims on Joselitos TCT Nos. 14414, 14415 and 14416. They then filed with the Regional Trial Court at Quezon City suit against Joselito, Century Realty and Premiere Bank for quieting of title and annulment of said defendants fake titles with prayer for damages.

Issue: whether or not Toundjis be considered, as she has claimed, an innocent purchaser for value, meaning one who buys or acquires, for valuable consideration, a piece of land of another without notice that some other person has a right to, or interest in, such property at the time of purchase, or before he has notice of the claim or interest of some other persons in the property.

Held: The rule that a subsequent declaration of a title as null and void is not a ground for nullifying the contractual right of a purchaser, mortgagee or other transferees in good faith, with the exceptions thereto, is well-settled. Where the certificate of title is in the name of the seller or mortgagor, the innocent purchaser or mortgagee for value has the right to rely on what appears on the certificate without inquiring further. In the absence of anything to excite or arouse suspicion, or except when the party concerned had actual knowledge of facts or circumstances that should impel a reasonably cautious person to make such further inquiry, said purchaser or mortgagee is without obligation to look beyond the certificate and investigate the title of the seller or mortgagor. Thus, where innocent third persons, relying on the correctness of the certificate, acquire rights over the property as buyer or mortgagee, the subsequent declaration of nullity of title is not a ground for nullifying the right of such buyer or mortgagee.

A study of the record shows that TCT 14414 covering Lot. 23-A that Toundjis contracted to buy from Joselito carried an annotation that it was administratively reconstituted. Records also indicate that Toundjis knew at the time of the sale that Joselito did not have possession of the lot inasmuch as she agreed to pay the balance of the purchase price as soon as the seller can fence off the property and surrender physical possession thereof to her.

Even for these two (2) reasons alone, which should have placed Toundjis on guard respecting Joselitos title, her claim of being a bona fide purchaser for value must fail. The rejection, therefore, by the Court of Appeals of such claim is correct. Likewise acceptable is the appellate courts holding, citing Republic vs. Court of Appeals, that a purchaser of a property cannot be in good faith where the title thereof shows that it was reconstituted. Noted with approval, too, is the appellate courts observation that the "contract to sell (Exh. "44") which is unregistered and not annotated at the back of the title of the property [cannot adversely affect appellees]" for the reason that under "Sec. 51 of PD 1529 (Property Registration Act), the act of registration shall be the operative act to convey or affect the land in so far (sic) as third parties are concerned."

Premiere Bank cannot also be accorded the status of an innocent mortgagee for value vis--vis the mortgage of the lots covered by TCT Nos. 34390 and 34391 constituted in its favor by Century Realty.

Sigaya v. Mayuga

GR. No. 143254 August 18, 2005

Facts: Dionisia Alorsabes owned a three hectare land in Dao, Capiz, denominated as Lot 3603. In 1934, she sold a portion of the lot to Juanito Fuentes while the remainder was inherited by her children Paz Dela Cruz, Rosela Dela Cruz, and Consorcia Arroja (an adopted child), and a grandson, Francisco Abas, in representation of his deceased mother Margarita Dela Cruz. These four heirs executed an Extra-Judicial Settlement with Sale dated February 4, 1964 wherein Consorcia sold her share with an area of 6,694 square meters to spouses Balleriano Mayuga. On April 1, 1977, Paz also sold her share to Honorato de los Santos. Later, another document entitled Extra-Judicial Partition with Deed of Sale dated November 2, 1972 was uncovered wherein the heirs of Dionisia purportedly adjudicated Lot 3603 among themselves and sold their shares to Francisco. On January 9, 1978, Francisco executed a Deed of Sale over Lot 3603 in favor of Teodulfo Sigaya. Thus, the title over Lot 3603 was cancelled and a new one was issued in the name of Teodulfo, predecessor-in-interest of the petitioners herein.

On October 14, 1986, the petitioners, who are the widow and children of Teodulfo, filed Civil Case Nos. V-5325, V-5326, V-5327 and V-5328 for recovery of possession and damages against Diomer Mayuga, Honorato de los Santos, Sps. Jose Viva and Rosela Dela Cruz-Viva, and Renato Distor, respectively, before the Regional Trial Court (RTC) of Roxas City, Branch 16, praying that respondents be ordered to vacate Lot 3603, and turn over the same to petitioners; that petitioners right of ownership and possession over the property be confirmed and that respondents be ordered to pay damages in the form of unrealized income starting 1980, plus attorneys fees and costs.

Respondents in their answers with counterclaim averred that: the Deed of Sale executed by Francisco in favor of Teodulfo and the title thereon are null and void for being based on a fictitious Extra-Judicial Settlement with Sale; Rosela Dela Cruz-Viva and Paz Dela Cruz, who are illiterates, were fraudulently made to sign as vendees in the Extra-Judicial Settlement with Sale dated 1972, when Francisco represented that they were merely signing as witnesses to the sale of Francisco of his share to Teodulfo. As counterclaim, they asked for attorneys fees and damages.

Respondent Mayuga further asserted that he possesses his portion of the property by virtue of the sale by Consorcia Arroja of her share to his parents, Sps. Balleriano Mayuga. Respondent de los Santos meanwhile averred that Paz Dela Cruz sold her share to him in 1957. Respondents Rosela Dela Cruz-Viva and her husband Jose Viva claimed that the portion of land occupied by them pertains to Roselas share which she inherited from Dionisia, while respondent Renato Distor claimed that his wife inherited said property from her father Juanito Fuentes, who in turn bought the same from Dionisia during her lifetime.

Issue: Whether or not the rule on double sale of real property should apply in this case since they are the first to register the sale in good faith

Held: No. Apart from the fact that Teodulfo is not a purchaser in good faith, the law on double sales as provided in Art. 1544 of the Civil Code contemplates a situation where a single vendor sold one and the same immovable property to two or more buyers. For the rule to apply, 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 it. The rule 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 this case, respondents derive their right over their respective portions either through inheritance or sale from Dionisia while petitioners invoke their right from the sale of the land from Francisco. Clearly, the law on double sales does not apply here. NORKIS DISTRIBUTORS vs. CA and Nepales

FACTS:

Petitioner Norkis Distributors, Inc, is the distributor of Yamaha motorcycles in Negros Occidental with Avelino Labajo as its Branch Manager. On September 20, 1979, private respondent Alberto Nepales bought from the Norkis-Bacolod branch a brand new Yamaha Wonderbike motorcycle.

The price of P7,500.00 was payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), which Norkis' Branch Manager Labajo agreed to accept. Hence, credit was extended to Nepales for the price of the motorcycle payable by DBP upon release of his motorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of DBP.

On November 6, 1979, the motorcycle was registered in the Land Transportation Commission in the name of Alberto Nepales. A registration certificate in his name was issued by the Land Transportation Commission on November 6, 197. The registration fees were paid by him, evidenced by an official receipt.

On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter denies it. The record shows that Alberto and Julian Nepales presented the unit to DBP's Appraiser-Investigator Ernesto Arriesta.

The motorcycle met an accident on February 3, 1980 at Binalbagan, Negros Occidental. An investigation conducted by the DBP revealed that the unit was being driven by a certain Zacarias Payba at the time of the accident. The unit was a total wreck and was returned, and stored inside Norkis' warehouse.

On March 20, 1980, DBP released the proceeds of private respondent's motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of P328 and demanded the delivery of the motorcycle. When Norkis could not deliver, he filed an action for specific performance with damages against Norkis in the Regional Trial Court.

Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, the risk of loss or damage had to be borne by him as owner of the unit

ISSUE:

Whether there has been a transfer of ownership to Nepales at the time it was destroyed

HELD:

In all forms of delivery, it is necessary that the act of delivery whether constructive or actual, be coupled with the intention of delivering the thing. The act, without the intention, is insufficient.

When the motorcycle was registered by Norkis in the name of private respondent, Norkis did not intend yet to transfer the title or ownership to Nepales, but only to facilitate the execution of a chattel mortgage in favor of the DBP for the release of the buyer's motorcycle loan.

In other words, the critical factor in the different modes of effecting delivery, which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition

PHIL SUBURBAN DEVT CORP vs. AUDITOR GENERAL

FACTS:

The President of the Philippines, approved in principle the acquisition by the People's Homesite and Housing Corporation (PHHC) of the unoccupied portion of the Sapang Palay Estate in Sta. Maria, Bulacan for relocating the squatters who desire to settle north of Manila, and of another area either in Las Pias or Paraaque, Rizal, or Bacoor, Cavite for those who desire to settle south of Manila. The project was to be financed through the flotation of bonds under the charter of the PHHC in the amount of P4.5 million, the same to be absorbed by the Government Service Insurance System.

On June 10, 1960, the Board of Directors of the PHHC passed Resolution No. 700 authorizing the purchase of the unoccupied portion of the Sapang Palay Estate at P0.45 per square meter

On December 29,1960, after an exchange of communications, Petitioner Philippine Suburban Development Corporation, as owner of the unoccupied portion of the Sapang Palay Estate (specifically two parcels covered by TCT Nos. T-23807 and T-23808), and the People's Homesite and Housing Corporation, entered into a contract embodied in a public instrument entitled "Deed of Absolute Sale"

The document was not registered in the Office of the Register of Deeds until March 14, 1961, due to the fact, petitioner claims, that the PHHC could not at once advance the money needed for registration expenses. In the meantime, the Auditor General, to whom a copy of the contract had been submitted for approval in conformity with Executive Order No. 290, expressed objections thereto and requested a re-examination of the contract, in view of the fact that from 1948 to December 20, 1960, the entire hacienda was assessed at P131,590.00, and reassessed beginning December 21, 1960 in the greatly increased amount of P4,898,110.00. Said objections were embodied in a letter to the President, dated January 9, 1961, but this notwithstanding, the President, through the Executive Secretary, approved the Deed of Absolute Sale on February 1, 1961.

Prior to the signing of the deed by the parties, the PHHC acquired possession of the property, with the consent of petitioner.

On April 12, 1961, the Provincial Treasurer of Bulacan requested the PHHC to withhold the amount of P30,099.79 from the purchase price to be paid by it to the Philippine Suburban Development Corporation. Said amount represented the realty tax due on the property involved for the calendar year 1961

Petitioner, through the PHHC, paid under protest the abovementioned amount to the Provincial Treasurer of Bulacan and thereafter, or on June 13, 1961, by letter, requested then Secretary of Finance Dominador Aytona to order a refund of the amount so paid. Petitioner claimed that it ceased to be the owner of the land in question upon the execution of the Deed of Absolute Sale on December 29, 1960. Upon recommendation of the Provincial Treasurer of Bulacan, said request was denied by the Secretary of Finance in a letter-decision dated August 22, 1961.

ISSUE

Whether there was already a valid transfer of ownership between the parties.

HELD:

Considering the aforementioned approval and authorization by the President of the Philippines of the specific transaction in question, the prior approval by the Auditor General envisioned by Administrative Order would therefore, not be necessary.

Under the civil law, delivery (tradition) as a mode of transmission of ownership maybe actual (real tradition) or constructive (constructive tradition). 2 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. 3

In 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. Such would be the case, for instance, when a certain date is fixed for the purchaser to take possession of the property subject of the conveyance, or where, in case of sale by installments, it is stipulated that until the last installment is made, the title to the property should remain with the vendor, or when the vendor reserves the right to use and enjoy the properties until the gathering of the pending crops, or where the vendor has no control over the thing sold at the moment of the sale, and, therefore, its material delivery could not have been made.

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, even before the date of the sale. The condition that petitioner should first register the deed of sale and secure a new title in the name of the vendee before the latter shall pay the balance of the purchase price, did not preclude the transmission of ownership. In the absence of an express stipulation to the contrary, the payment of the purchase price of the good is not a condition, precedent to the transfer of title to the buyer, but title passes by the delivery of the goods.

[G.R. No. 132161. January 17, 2005]

CONSOLIDATED RURAL BANK (CAGAYAN VALLEY), INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and HEIRS OF TEODORO DELA CRUZ, respondents.

Facts:

Rizal, Anselmo, Gregorio, Filomeno and Domingo, all surnamed Madrid (hereafter the Madrid brothers), were the registered owners of Lot No. 7036-A of plan Psd-10188, Cadastral Survey 211, situated in San Mateo, Isabela. On 23 and 24 October 1956, Lot No. 7036-A was subdivided into several lots under subdivision plan Psd- 50390. One of the resulting subdivision lots was Lot No. 7036-A-7 with an area of Five Thousand Nine Hundred Fifty-Eight (5,958) square meters. On 15 August 1957, Rizal Madrid sold part of his share identified as Lot No. 7036-A-7, to Aleja Gamiao (hereafter Gamiao) and Felisa Dayag (hereafter, Dayag) by virtue of a Deed of Sale, to which his brothers Anselmo, Gregorio, Filomeno and Domingo offered no objection. On 28 May 1964, Gamiao and Dayag sold the southern half of Lot No. 7036-A-7, denominated as Lot No. 7036-A-7-B, to Teodoro dela Cruz,[10] and the northern half, identified as Lot No. 7036-A-7-A,[11] to Restituto Hernandez. Later, on 28 December 1986, Restituto Hernandez donated the northern half to his daughter, Evangeline Hernandez-del Rosario.[14] The children of Teodoro dela Cruz continued possession of the southern half after their fathers death on 7 June 1970.

In a Deed of Sale[15] dated 15 June 1976, the Madrid brothers conveyed all their rights and interests over Lot No. 7036-A-7 to Pacifico Marquez (hereafter, Marquez), which the former confirmed[16] on 28 February 1983. Subsequently, Marquez subdivided Lot No. 7036-A-7 into eight (8) lots, namely: Lot Nos. 7036-A-7-A to 7036-A-7-H, for which TCT Nos. T-149375 to T-149382 were issued to him on 29 March 1984.[19] On the same date, Marquez and his spouse, Mercedita Mariana, mortgaged Lots Nos. 7036-A-7-A to 7036-A-7-D to the Consolidated Rural Bank, Inc. of Cagayan Valley (hereafter, CRB) to secure a loan of One Hundred Thousand Pesos (P100,000.00).[20] These deeds of real estate mortgage were registered with the Office of the Register of Deeds on 2 April 1984. On 6 February 1985, Marquez mortgaged Lot No. 7036-A-7-E likewise to the Rural Bank of Cauayan (RBC) to secure a loan of Ten Thousand Pesos (P10,000.00).[21]

As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its favor and the lots were sold to it as the highest bidder on 25 April 1986.[22]

On 31 October 1985, Marquez sold Lot No. 7036-A-7-G to Romeo Calixto (Calixto).[23] Claiming to be null and void the issuance of TCT Nos. T-149375 to T-149382; the foreclosure sale of Lot Nos. 7036-A-7-A to 7036-A-7-D; the mortgage to RBC; and the sale to Calixto, the Heirsnow respondents hereinrepresented by Edronel dela Cruz, filed a case[24] for reconveyance and damages the southern portion of Lot No. 7036-A (hereafter, the subject property) against Marquez, Calixto, RBC and CRB in December 1986. Marquez, as defendant, alleged that apart from being the first registrant, he was a buyer in good faith and for value. He also argued that the sale executed by Rizal Madrid to Gamiao and Dayag was not binding upon him, it being unregistered. For his part, Calixto manifested that he had no interest in the subject property as he ceased to be the owner thereof, the same having been reacquired by defendant Marque. CRB, as defendant, and co-defendant RBC insisted that they were mortgagees in good faith and that they had the right to rely on the titles of Marquez which were free from any lien or encumbrance.

Petitioner CRB, in essence, alleges that the Court of Appeals committed serious error of law in upholding the Heirs ownership claim over the subject property considering that there was no finding that they acted in good faith in taking possession thereof nor was there proof that the first buyers, Gamiao and Dayag, ever took possession of the subject property. CRB also makes issue of the fact that the sale to Gamiao and Dayag was confirmed a day ahead of the actual sale, clearly evincing bad faith, it adds. Further, CRB asserts Marquezs right over the property being its registered owner.

Issue: Won the Heirs of Teodoro dela Cruz have a better title than CRB?

HELD:

Article 1544 is not applicable in the present case. It contemplates a case of double or multiple sales by a single vendor. More specifically, it covers a situation where a single vendor sold one and the same immovable property to two or more buyers.

In a situation where not all the requisites are present which would warrant the application of Art. 1544, the principle of prior tempore, potior jure or simply he who is first in time is preferred in right,[50] should apply.[51] The only essential requisite of this rule is priority in time; in other words, the only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the time he bought the real property, there was still no sale to a second vendee.[52] In the instant case, the sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale by the Madrid brothers to Marquez. The Heirs also had possessed the subject property first in time. Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject property.

Moreover, it is an established principle that no one can give what one does not havenemo dat quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can transfer legally.[53] In this case, since the Madrid brothers were no longer the owners of the subject property at the time of the sale to Marquez, the latter did not acquire any right to it.

In any event, assuming arguendo that Article 1544 applies to the present case, the claim of Marquez still cannot prevail over the right of the Heirs since according to the evidence he was not a purchaser and registrant in good faith.

Following Article 1544, in the double sale of an immovable, the rules of preference are: (a) the first registrant in good faith; (b) should there be no entry, the first in possession in good faith; and (c) in the absence thereof, the buyer who presents the oldest title in good faith. [54]

Prior registration of the subject property does not by itself confer ownership or a better right over the property. Article 1544 requires that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e., in ignorance of the first sale and of the first buyers rights)from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession.[55]In the instant case, the actions of Marquez have not satisfied the requirement of good faith from the time of the purchase of the subject property to the time of registration. Found by the Court of Appeals, Marquez knew at the time of the sale that the subject property was being claimed or taken by the Heirs. This was a detail which could indicate a defect in the vendors title which he failed to inquire into. Marquez also admitted that he did not take possession of the property and at the time he testified he did not even know who was in possession.

One who purchases real property which is in actual possession of others should, at least, make some inquiry concerning the rights of those in possession. The actual possession by people other than the vendor should, at least, put the purchaser upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as a bona fidepurchaser as against such possessions.[58] The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendors title takes all the risks and losses consequent to such failure.[59]

WHEREFORE, the Petition is DENIED.

Heirs of Jesus Mascunana v. CA

Facts:

Masunana bought a parcel of land from the Wuthrich siblings. Part of which Mascunana, he later sold to Sumilhig. The contract price is 4,690 with 3,690 as down payment. Their agreement says, That the balance of ONE THOUSAND PESOS (P1,000.00) shall be paid by the VENDEE unto the VENDOR as soon as the above-portions of Lot 124 shall have been surveyed in the name of the VENDEE and all papers pertinent and necessary to the issuance of a separate Certificate of Title in the name of the VENDEE shall have been prepared. Sumilhig later sold the same lot to Layumas. Years after, Layumas wrote to the heirs of Mascunana offering to pay the 1,000 balance of the purchase price of the property. The addressee, however, refused to receive the mail matter. Heirs Mascunana then filed a complaint for recovery of possession against Barte.Issue:

Whether or not the contract of alienation of the subject lot in favor of Sumilhig was a contract to sell or a contract of sale.Held:

It is a contract of sale. Article 1458 of the New Civil Code provides: By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or conditional. Thus, there are three essential elements of sale,. consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price, determinate subject matter; and Price certain in money or its equivalent. In this case, there was a meeting of the minds between the vendor and the vendee, when the vendor undertook to deliver and transfer ownership over the property covered by the deed of absolute sale to the vendee for the price of P4,690.00 of which P3,690.00 was paid by the vendee to the vendor as down payment. The vendor undertook to have the property sold, surveyed and segregated and a separate title therefor issued in the name of the vendee, upon which the latter would be obliged to pay the balance of P1,000.00. There was no stipulation in the deed that the title to the property remained with the vendor, or that the right to unilaterally resolve the contract upon the buyers failure to pay within a fixed period was given to such vendor. Patently, the contract executed by the parties is a deed of sale and not a contract to sell.

Salinas vs Faustino

Facts: Respondent Bienvenido S. Faustino by a Deed of Absolute Sale dated June 27, 1962, purchased from his several co-heirs, including his first cousins Benjamin Salinas and herein petitioner Dolores Salinas, their respective shares to a parcel of land in the name of their grandmother Carmen Labitan, located in Subic, Zambales. On March 15, 1982, respondent Faustino, joined by his wife, filed before the then Court of First Instance ofZambales a complaint for recovery of possession with damages against petitioner. Respondent spouses further alleged that they allowed petitioner and co-heirs to occupy and build a house on a portion of the land on the condition that they would voluntarily and immediately remove the house and vacate that portion of the land should the respondents need the land. When they asked petitioner and her co-heir-occupants to remove the house and restore the possession of the immediately-described portion of the land, they refused, hence, the filing of the complaint. Petitioner claimed that she is the owner of that portion of the land and alleges that her signature in the June 27, 1962 Deed of Sale is forged. The RTC found petitioner's claim of forgery unsupported. It nevertheless dismissed the complaint. The boundaries of the land indicated in the Deed of Sale are different from that of which is claimed by the respondents. Even the tax declaration submitted by the plaintiff indicates different boundaries with that of the land indicated in the Deed of Sale.

ISSUE: Whether or not a description of a lot area can be used as evidence for purchase and ownership of the lot.RULING: In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. Thus, it is the boundaries indicated in a deed of absolute sale, and not the area in sq. m. mentioned therein 300.375 sq.m. in the Deed of Sale in respondents favor that control in the determination ofwhich portion of the land a vendee acquires. In concluding that Faustino acquired via the June 27, 1962 Deed of Sale the total land area of 753 sq. m., the Court ofAppeals subtracted from the total land area of 1,381 sq. m. reflected in Exh. A, which is Plan of Lot 3, Block 5-k, Psd-8268, as prepared for Benjamin R. Salinas containing an area of 1,381 sq. m. and which was prepared on February 10, 1960 by a private land surveyor, the 628 sq. m. area of the lot claimed by Salinas as reflected in Tax Declaration No. 1017 in her name. As will be shown shortly, however, the basis of the appellate courts conclusion is erroneous. As the immediately preceding paragraph reflects, the Plan of Lot 3, Bk 5-K, Psd-82 was prepared for Spouses Faustino and Salinas first cousin co-heir Benjamin Salinas on February 10, 1960. Why the appellate court, after excluding the 628 sq. m. lot covered by a Tax Declaration in the name of petitioner from the 1,381 sq. m. lot surveyed for Benjamin P. Salinas in 1960, concluded that what was sold via the 1962 Deed of Sale to respondent Faustino was the remaining 753 sq. m., despite the clear provision of said Deed of Sale that what was conveyed was 300.375 sq. m., escapes comprehension. It defies logic, given that respondents base their claim of ownership of the questioned 628 sq. m. occupied by Salinas on that June 27, 1962 Deed of Sale covering a 300.375 sq. m. lot. The Court of Appeals thus doubly erred in concluding that 1) what was sold to respondents via the June 27, 1962 Deed of Sale was the 1,381 sq. m. parcel of land reflected in the Plan-Exh. A prepared in 1960 for Benjamin Salinas, and 2) Salinas occupied 628 sq. m. portion thereof, hence, Spouses Faustino own the remaining 753 sq. m.

De Leon vs. Benita T. Ong

GR No. 170405, Feb. 2, 2010

Absolute 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 with assumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that thepetitioner (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 the mortgage. The respondent then subsequently gave petitioner P415,000 as partial payment. On the other hand, de leon handed the keys to Ong and de leon wrote a letter to inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the respondent took repairs and made improvements in the properties. Subsequently, respondent learned that the same properties were sold to a certain Viloria after March 10, 1993 and changed the locks, rendering the keys given to her useless. Respondent proceeded to RSLAI but she was informed that the mortgage has been fully paid and that the titles have been given to the said person. Respondent then filed a complaint for specific performance and declaration of nullity of the second sale and damages. The petitionercontended 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 reiterated that they only entered into a contract to sell. The RTC dismissed the case. On appeal, the CA upheld the sale to respondent and nullified the sale to Viloria. Petitioner moved forreconsideration 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 perfection of the contract. The non-payment of the price is a negative resolutory condition. Contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of theproperty until he fully pays the purchase price. In the present case, the deed executed by the parties did not show that the owner intends to reserve ownership of the properties. The terms and conditions affected only the manner ofpayment and not the immediate transfer of ownership. It was clear that the owner intended a salebecause he unqualifiedly delivered and transferred ownership of the properties to the respondent.

G.R. No. L-43059 October 11, 1979

SAMPAGUITA PICTURES, INC., plaintiff-appellant,

vs.

JALWINDOR MANUFACTURERS, INC., defendant-appellee.

FACTS:

Plaintiff-appellant Sampaguita Pictures, Inc, is the owner of the Sampaguita Pictures Building located at the corner of General Araneta and General Roxas Streets, Cubao, Quezon City. The roofdeck of the building and all existing improvements thereon were leased by Sampaguita to Capitol "300" Inc., and it was agreed, among other things, that the premises shall be used by Capitol for social purposes exclusively for its members and guests; that all permanent improvements made by the lessee on the leased premises shall belong to the lessor without any obligation on the part of the lessor to reimburse the lessee for the sum spent for said improvements; that the improvements made by lessee have been considered as part of the consideration of the monthly rental and said improvements belong to the lessor; that any remodelling, alterations and/or addition to the premises shall be at the expense of the lessee and such improvements belong to the lessor, without any obligation to reimburse the lessee of any sum spent for said improvements.

Capitol "300" purchased on credit from defendant-appellee Jalwindor Manufacturers, Inc. (hereinafter referred to as Jalwindor) glass and wooden jalousies which were delivered and installed in the leased premises by Jalwindor replacing the existing windows. Jalwindor filed with action for collection of a sum of money with a petition for preliminary attachment against Capitol for its failure to pay its purchases. The parties submitted to the trial court a Compromise Agreement wherein Capitol acknowledged its indebtedness to Jalwindor wherein all the materials purchased by Capitol will be considered as security for such undertaking. Capitol likewise failed to comply with the terms of the Compromise Agreement. Subsequently, the Sheriff of Quezon City made levy on the glass and wooden jalousies in question. Sampaguita filed a third party claim alleging that it is the owner of said materials and not Capitol, Jalwindor however, filed an indemnity bond in favor of the Sheriff and the items were sold at public auction on August 30, 1965 with Jalwindor as the highest bidder for P6,000.00.

Sampaguita filed with the Court of First Instance of Rizal, Branch IV of Quezon City, an action to nullify the Sheriff's Sale and for the issuance of a writ of preliminary injunction against Jalwindor from detaching the glass and wooden jalousies.

ISSUE:

Whether or not transfer of ownership to Capitol 300 was made upon the delivery of the items in question.

HELD:

When the glass and wooden jalousies in question were delivered and installed in the leased premises, Capitol became the owner thereof. Ownership is not transferred by perfection of the contract but by delivery, either actual or constructive. This is true even if the purchase has been made on credit, as in the case at bar. Payment of the purchase price is not essential to the transfer of ownership as long as the property sold has been delivered. Ownership is acquired from the moment the thing sold was delivered to vendee, as when it is placed in his control and possession. (Arts. 1477, 1496 and 1497, Civil Code of the Phil.) Capitol entered into a lease Contract with Sampaguita in 1964, and the latter became the owner of the items in question by virtue of the agreement in said contract "that all permanent improvements made by lessee shall belong to the lessor and that said improvements have been considered as part of the monthly rentals." When levy or said items was made on July 31, 1965, Capitol, the judgment debtor, was no longer the owner thereof. The items in question were illegally levied upon since they do not belong to the judgemnt debtor. Since the items already belong to Sampaguita and not to Capitol, the judgment debtor, the levy and auction sale are, accordingly, null and void.

Toyota Shaw Inc. vs. Court of Appeals, and Sosa

244 SCRA 320

May 1995

FACTS:

Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the Toyota office at Shaw Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where they met Popong Bernardo who was a sales representative of said branch. Sosa emphasized that he needed the car not later than June 17, 1989 because he, his family, and a balikbayan guest would be using it on June 18 to go home to Marinduque where he will celebrate his birthday on June 19. Bernardo assured Sosa that a unit would be ready for pick up on June 17 at 10:00 in the morning, and signed the "Agreements Between Mr. Sosa &Popong Bernardo of Toyota Shaw, Inc., a document which did not mention anything about the full purchase price and the manner the installments were to be paid. Sosa and Gilbert delivered the down payment of P100,000.00 on June 15, 1989 and Bernardo accomplished a printed Vehicle Sales Proposal (VSP) No. 928 which showed Sosas full name and home address, that payment is by "installment," to be financed by "B.A.," and that the "BALANCE TO BE FINANCED" is "P274,137.00", but the spaces provided for "Delivery Terms" were not filled-up.

When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence, Sosa asked that his down payment be refunded and petitioner Toyota issued also on June 17 a Far East Bank check for the full amount of P100,000.00, the receipt of which was shown by a check voucher of Toyota, which Sosa signed with the reservation, "without prejudice to our future claims for damages." Petitioner Toyota contended that the B.A. Finance disapproved Sosas the credit financing application and further alleged that a particular unit had already been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in cash but Sosa refused.

The trial court found that there was a valid perfected contract of sale between Sosa and Toyota which bound the latter to deliver the vehicle and that Toyota acted in bad faith in selling to another the unit already reserved for Sosa, and the Court of Appeals affirmed the said decision.

ISSUE:

Was there a perfected contract of sale between respondent Sosa and petitioner Toyota?

COURT RULING:

The Supreme Court granted Toyotas petition and dismissed Sosas complaint for damages because the document entitled Agreements Between Mr. Sosa &Popong Bernardo of Toyota Shaw, Inc., was not a perfected contract of sale, but merely an agreement between Mr. Sosa and Bernardo as private individuals and not between Mr. Sosa and Toyota as parties to a contract.

There was no indication in the said document of any obligation on the part of Toyota to transfer ownership of a determinate thing to Sosa and neither was there a correlative obligation on the part of the latter to pay therefor a price certain. The provision on the downpayment of P100,000.00 made no specific reference to a sale of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on installment basis, as VSP No.928 executed on June 15, 1989 confirmed. The VSP also created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.

SPS. ALFREDO R. EDRADA and ROSELLA L. EDRADA vs. CARMENCITA RAMOS, SPS. EDUARDO RAMOS

Facts:

Respondent spouses Eduardo and Carmencita Ramos (respondents) are the owners of two (2) fishing vessels, the "Lady Lalaine" and the "Lady Theresa." On 1 April 1996, respondents and petitioners executed an untitled handwritten document which lies at the center of the present controversy.

Upon the signing of the document, petitioners delivered to respondents four (4) postdated Far East Bank and Trust Company (FEBTC) checks payable to cash drawn by petitioner Rosella Edrada, in various amounts totaling One Hundred Forty Thousand Pesos (P140,000.00). The first three (3) checks were honored upon presentment to the drawee bank while the fourth check for One Hundred Thousand Pesos (P100,000.00) was dishonored because of a "stop payment" order.

On 3 June 1996, respondents filed an action against petitioners for specific performance with damages before the RTC, praying that petitioners be obliged to execute the necessary deed of sale of the two fishing vessels and to pay the balance of the purchase price. In their Complaint,7 respondents alleged that petitioners contracted to buy the two fishing vessels for the agreed purchase price of Nine Hundred Thousand Pesos (P900,000.00), as evidenced by the above-quoted document, which according to them evinced a contract to buy. However, despite delivery of said vessels and repeated oral demands, petitioners failed to pay the balance, so respondents further averred.

Belying the allegations of respondents, in their Answer with Counterclaim,8petitioners averred that the document sued upon merely embodies an agreement brought about by the loans they extended to respondents. According to petitioners, respondents allowed them to manage or administer the fishing vessels as a business on the understanding that should they find the business profitable, the vessels would be sold to them for Nine Hundred Thousand Pesos (P900,000.00). But petitioners "decided to call it quits" after spending a hefty sum for the repair and maintenance of the vessels which were already in dilapidated condition.

Issue:

Whether or not there is a perfected contract of sale.

Held:

An examination of the document reveals that there is no perfected contract of sale. The agreement may confirm the receipt by respondents of the two vessels and their purchase price. However, there is no equivocal agreement to transfer ownership of the vessel, but a mere commitment that "documents pertaining to the sale and agreement of payments[are] to follow." Evidently, the document or documents which would formalize the transfer of ownership and contain the terms of payment of the purchase price, or the period when such would become due and demandable, have yet to be executed. But no such document was executed and no such terms were stipulated upon. The fact that there is a stated total purchase price should not lead to the conclusion that a contract of sale had been perfected.

A contract is perfected when there is concurrence of the wills of the contracting parties with respect to the object and the cause of the contract. In this case, the agreement merely acknowledges that a purchase price had been agreed on by the parties. There was no mutual promise to buy on the part of petitioners and to sell on the part of respondents. Again, the aforestated proviso in the agreement that documents pertaining to the sale and agreement of payments between the parties will follow clearly manifests lack of agreement between the parties as to the terms of the contract to sell, particularly the object and cause of the contract.

The agreement in question does not create any obligatory force either for the transfer of title of the vessels, or the rendition of payments as part of the purchase price. At most, this agreement bares only their intention to enter into either a contract to sell or a contract of sale.

Doctrine:

Before a valid and binding contract of sale can exist, the manner of payment of the purchase price must first be established, as such stands as essential to the validity of the sale. After all, such agreement on the terms of payment is integral to the element of a price certain, such that a disagreement on the manner of payment is tantamount to a failure to agree on the price.

De Leon v Ong

Facts:

On March 10, 1993, petitioner Raymundo S. de Leon sold three parcels of land 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 mortgage. Pursuant 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.

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.

On June 18, 1993, respondent filed a complaint for specific performance, declaration of nullity of the second sale and damages against petitioner and Viloria, claiming 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, 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.

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

Whether or not there is double sale.

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. Whereas, 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.

The deed executed by the parties stated that petitioner sold the properties to respondent in a manner absolute and irrevocable for a sum of P1.1 million.[14] Nothing in said instrument implied that petitioner reserved ownership of the properties until the full payment of the purchase price.[17] 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.[18] In this regard, Article 1498 of the Civil Code[19] 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 petitioners 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, 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. Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.

VOID SALE OR DOUBLE SALE?

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.

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.

In this instance, petitioner delivered the properties to respondent when he executed the notarized deed[22] 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.

Caram v Laureta

FACTS:

On June 10, 1945, Marcos Mata conveyed a large tract of agricultural land covered in favor of Claro Laureta. The deed of absolute sale in favor of the plaintiff was not registered because it was not acknowledged before a notary public or any other authorized officer. At the time the sale was executed, there was no authorized officer before whom the sale could be acknowledged inasmuch as the civil government in Tagum, Davao was not as yet organized. However, the defendant Marcos Mata delivered to Laureta the peaceful and lawful possession of the premises of the land together with the pertinent papers thereof. Since June 10, 1945, the plaintiff Laureta had been and is still in continuous, adverse and notorious occupation of said land, without being molested, disturbed or stopped by any of the defendants or their representatives.

The same land was sold by Marcos Mata to defendant Fermin Z. Caram, Jr. The deed of sale in favor of Caram was acknowledged. On May 22, 1947, Marcos Mata filed with the Court of First Instance of Davao a petition for the issuance of a new Owner's Duplicate of Original Certificate alleging as ground therefor the loss of said title in the evacuation place of defendant Mata. The second sale between Marcos Mata and Fermin Caram, Jr. was registered with the Register of Deeds and was issued in favor of Fermin Caram Jr. 5

On August 29, 1959, the defendants Marcos Mata and Codidi Mata filed their answer alleging that he signed the same as he was subjected to duress, threat and intimidation for the plaintiff was the commanding officer of the 10th division USFIP operating in the unoccupied areas of Northern Davao

The petitioner assails the finding of the trial court that the second sale of the property was made through his representatives, Pedro Irespe and Atty. Abelardo Aportadera. He argues that Pedro Irespe was acting merely as a broker or intermediary with the specific task and duty to pay Marcos Mata the sum of P1,000.00 for the latter's property and to see to it that the requisite deed of sale covering the purchase was properly executed by Marcos Mata; that the Identity of the property to be bought and the price of the purchase had already been agreed upon by the parties; and that the other alleged representative, Atty. Aportadera, merely acted as a notary public in the execution of the deed of sale.

ISSUE: Whether or not Caram is bound by the acts of his agents.

Whose is the land?

Yes. The facts of record show that Mata, the vendor, and Caram, the second vendee had never met. During the trial, Marcos Mata testified that he knows Atty. Aportadera but did not know Caram. 12 Thus, the sale of the property could have only been through Caram's representatives, Irespe and Aportadera.

Even if Irespe and Aportadera did not have actual knowledge of the first sale, still their actions have not satisfied the requirement of good faith. Bad faith is not based solely on the fact that a vendee had knowledge of the defect or lack of title of his vendor. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith.

In the instant case, Irespe and Aportadera had knowledge of circumstances which ought to have put them an inquiry. Both of them knew that Mata's certificate of title together with other papers pertaining to the land was taken by soldiers under the command of Col. Claro L. Laureta. 16 Added to this is the fact that at the time of the second sale Laureta was already in possession of the land. Irespe and Aportadera should have investigated the nature of Laureta's possession. If they failed to exercise the ordinary care expected of a buyer of real estate they must suffer the consequences. The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendor's title takes all the risks and losses consequent to such failure. 17

There is no doubt then that Irespe and Aportadera, acting as agents of Caram, purchased the property of Mata in bad faith. Applying the principle of agency, Caram as principal, should also be deemed to have acted in bad faith.

The first sale in favor of Laureta prevails over the sale in favor of Caram.

Article 1544 of the New Civil Code provides that:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable