Case

Carbonell vs. Court of Appeals

Dagupan Trading Company vs. Macam

Olivares vs. Gonzales

Valdez vs. Court of Appeals

Caram, Jr., vs. Laureta

Doctrine

The first buyer Carbonell has the superior right over the
subject property, relying on Article 1544 of the Civil Code,
second paragraph, which directs that ownership of immovable
property should be recognized in favor of one "who in good
faith first recorded" his right. Under the first and third
paragraphs, good faith must characterize the prior
possession, while under the second paragraph, good faith
must characterize the act of anterior registration.
The rule on double sale is not applicable to unregistered land.
Macam is preferred because in an execution sale, the
purchaser of unregistered land only steps into the shoes of
the judgment debtor and merely acquires the latters title at
the time of the levy. When Manila Trading acquired the land
by execution sale, the judgment debtor had no more interest
because of the earlier sale to Macam before the levy.
The equities of the case are with the Olivareses. The first sale
with pacto de retro by the Tuvillas to Tumabini was
unregistered; in contrast, the sale in favor of the Olivareses
was duly recorded. The Consolidation Case instituted by
Tumabini against the Tuvillas for consolidation of his
ownership did not include the Olivareses as parties
defendants even though they were then in possession of the
Disputed Property. Justice and equity demand, therefore, that
their side be heard.
a. The ownership of an immovable property belongs to
the person who acquired it in good faith and first
recorded it in the registry of property.
b. The recording of an adverse claim by virtue of a prior
sale is considered an act of registration of the land
since the prior sale is valid while the subsequent sale is
fraudulent.
Caram is in bad faith in registering the sale because his agent
is aware of the previous sale and possession of Laureta. The
agent should have inquired about the previous sale before
registering the sale. The act of the agent is binding on the
principal, and bad faith of the agent is bad faith on the

principals part.

Radiowealth Finance Company vs. Palileo

Occena vs. Esponilla

Cruz vs. Cabana

Nuguid vs. Court of Appeals

a. Article 1544 does not apply to land not unregistered

land. The purchaser of unregistered land at a sheriffs
execution sale only steps into the shoes of the
judgment debtor, and merely acquires the latters
interest in the property sold at the time the property
was levied upon.
b. Under Act. No 3344, registration of instruments
affecting unregistered lands is without prejudice to a
third party with a better right.
c. The mere registration of sale in ones favor does not
give him any right over the land if the vendor was not
the owner anymore of the land; having previously sold
the same to somebody else even if the earlier sale was
unrecorded.
A buyer of real property in the possession of persons other
than the seller must be wary and should investigate the rights
of those in possession. Without such inquiry, the buyer can
hardly be regarded as a buyer in good faith and cannot have
any right over the property.
Spouses Legaspi were the first buyers, first on June 1, 1965
under a sale with right of repurchase and later on October 21,
1968 under a deed of absolute sale and that they had taken
possession of the land sold to them; that Abelardo Cruz was
the second buyer under a deed of sale dated November 29,
1968, which to ail indications, contrary to the text, was a sale
with right of repurchase for ninety (90) days. There is no
question, either, that spouses Legaspi were the first and the
only ones to be in possession of the subject property. The
knowledge of the first sale Abelardo Cruz had gained defeats
his rights even if he is first to register the second sale, since
such knowledge taints his prior registration with bad faith
The private respondents cannot also honestly claim that they
became aware of the spouses Nuguids title only in 1978,
because ever since the latter bought the property in 1961,
the spouse Nuguid have occupied the same openly, publicly,
and continuously in the concept of owners, even building their

house thereon. For seventeen years they were in peaceful

possession, with the respondents Guevarras occupying less
than one-half of the same property.
Tanedo vs. Court of Appeals

David vs. Bandin

Moles vs. IAC

Engineering and Machinery Corporation vs. CA

As between two purchasers, the one who has 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.
The defense of having purchased the property in good faith
may be availed of only where registered land is involved and
the buyer had relied in good faith on the clean title of the
registered owner. One who purchases an unregistered land
does so at his peril. His claim of having bought the land in
good faith, would not protect him because the seller does not
actually own the property.
a. A certification issued by the vendor that a second-hand
machine was in A-1 condition is an express warranty
binding on the vendor. The general rule is that implied
warranty as to its quality or fitness does not apply to
secondhand articles subject to inspection at the time of
the sale, except when the buyer, expressly or
implication, makes known to the seller the particular
purpose for which the goods are acquired and that the
buyer relies on the sellers judgment. There is an
implied warranty that the good as reasonably fit for
such purpose.
b. Redhibitory effect must be an imperfection or defect of
such nature as to engender a certain degree of
importance.
c. In cases involving express warranty, the general rule
on prescription with regard to rescission of contract,
which is four years, shall apply.
a. The remedy against violations of the warranty against
hidden defects is either to: a) withdraw from the
contract (redhibitory action) or to demand a
proportionate reduction of the price (accion quanti
minoris), with damages in either case.
b. In determining the prescriptive period in filing an action
for breach of contract, the general law on prescription,
which is Article 1144 of the Civil Code, which provides
that actions based upon a written contract prescribes

in 10 years, will apply.

Catungal vs. Rodriguez

JM Tuason & Co. vs. CA

Sonny Lo vs. Kjs Eco-Formwork System Phil., Inc.

Ramos vs. CA

De Leon vs. Salvador

The option to rescind the contract is not purely potestative

but rather also subject to the same mixed condition as his
obligation to pay the balance of the purchase price. In the
event the condition is fulfilled, Rodriguez must pay the
balance of the purchase price. In the event that the condition
is not fulfilled, Rodriguez has the choice either to not procedd
with the sale and demand return of his downpayment or
waive the condition and pay the purchase price despite the
lack of road access.
One who purchases real estate with knowledge of a defect or
lack of title in his vendor cannot claim that he has acquired
title thereto in good faith, as against the true owner of the
land or of an interest therein; and the same rule must be
applied to one who has knowledge of facts which should have
put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his
vendor. A purchaser cannot close his eyes to facts which
should put a reasonable man upon his guard and then claim
that he acted in good faith under the belief that there was no
defect in the title of the vendor.
a. An assignment of credit is in the nature of a sale of
personal property. As in any contract of sale, the
vendor is bound by certain warranties.
b. The petitioner, Sonny Lo, as vendor or assignor, is
bound to warrant the existence and legality of the
credit at the time of the sale or assignment. This is
another example of implied warranty in a contract of
sale.
a. The existence of one circumstance in Article 1602 is
enough to create the presumption that such
transaction is an equitable mortgage.
a. But even if the foregoing requisites are shown, a
judicial sale will not be set aside by the court when
there is a right of redemption, since the more
inadequate the winning bid at public sale, the more
easily it is for the owner to redeem the property.

Flores vs. So

Alonzo vs. IAC

Lao vs. CA

Lanuza vs. De Leon

b. While in ordinary sales for reasons of equity a

transaction may be invalidated on the ground of
inadequacy of price, or when such inadequacy shocks
ones conscience as to justify the courts to interfere,
such does not follow when the law gives the owner the
right to redeem, as when a sale is made at public
auction upon the theory that the lesser the price is, the
easier it is for the owner to effect the redemption.
a. Under the old Civil Code, ownership in a pacto de retro
sale is consolidated by operation of law.
b. In a sale under a right of redemption, ownership over
the thing sold is transferred to the vendee upon
execution of the contract subject only to the resolutory
condition that the vendor exercise his right of
redemption within the period agreed upon.
a. Where the co-heirs filed an action for redemption of coheirs sold share only after thirteen years had elapsed
from the sale, they are deemed to have been actually
informed sometime during those years although no
written notice of sale was given to them.
b. The 30-day period of notification in legal redemption, in
this case, ran from the date of actual notice even in the
absence of a written notice, adopting an exception to
the general rule that the notice should be in writing, in
view of the peculiar circumstances of the case.
a. In determining the nature of a contract, the Court looks
at the intent of the parties and not the nomenclature
used to describe it.
b. A pacto de retro sale should be treated as a mortgage
where the property sold never left the possession of
the vendors.
c. Necessitious men are not, truly speaking, free men; but
to answer a present emergency, will submit to any
terms that the crafty may impose upon them.
a. A conveyance of real property of the conjugal
partnership made by the husband without the consent
of his wife is merely voidable.
b. Between an unrecorded sale of a prior date and a
recorded mortgage of a later date the former is
preferred to the latter.

c. The registration of a mortgage under Act. No. 3344 is

without prejudice to the better right of third parties.

Capulong vs. CA

Solid Homes, Inc. vs CA

Primary Structures Corp. vs. Valencia

Etcuban vs. CA

a. The deed of sale and deed of option to purchase the

property at bar are in reality an equitable mortgage, as
they were signed on the same day. The subsequent
sale of the property to the vendee a retros brother and
its registration the same day indicate that the said sale
is not bonafide.
a. The vendor a retros obligation in exercising the right of
redemption, is not limited to complying with Article
1616 only. Article 1601 adds that the vendor a retro
should also comply with other stipulations agreed
upon, such as in this case, the payment of additional
30% interest for the expenses of the contract.
b. Failure to annotate by the vendor a retro is not by itself
an indication of bad faith or malice. The vendor a retro
is not legally bound to cause its annotation, and the
vendee a retro could have taken steps to protect its
own interests.
a. Whenever a piece of rural land not exceeding one
hectare is alienated, the law grants to the adjoining
owners a right of redemption except when the grantee
or buyer does not own any other rural land.
b. The legal right of redemption shall not be exercised
except within thirty days from notice in writing by the
prospective vendor, and the deed of sale shall not be
recorded in the Registry of Property unless the same is
accompanied by an affidavit of the vendor that he has
given notice thereof to all possible redemptioners.
a. While written notice is required by the law in order to
exercise the right of legal pre-emption or redemption, it
is equally true that the same Art. 1623 does not
prescribe any particular form of notice, nor any
distinctive method for notifying the redemptioner. So
long therefore, as the latter is informed in writing of the
sale and the particulars thereof, the 30 days for
redemption start running, and the redemptioner has no

real cause to complain.

Bocaling & Co. vs. Bonnevie

Yek Seng Co. vs. CA

b. In the case at bar, where the vendors or co-owners of

petitioner stated under oath in the deeds of sale that
notice of sale had been given to prospective
redemptioners in accordance with Article 1623 of the
Civil Code. "A sworn statement or clause in a deed of
sale to the effect that a written notice of sale was given
to possible redemptioners or co-owners might be used
to determine whether an offer to redeem was made on
or out of time, or whether there was substantial
compliance with the requirement of said Art. 1623."
a. The fact that the Bonnevies had financial problems at
that time was no justification for denying them the first
option to buy the subject property. Even if the
Bonnevies could not buy it at the price qouted,
Reynoso could not sell it to another for a lower price
and under more favorable terms and conditions. Only if
the Bonnevies failed to exercise their right of first
priority could Reynoso lawfully sell the subject property
to others, and at that only under the same terms and
conditions offered to the Bonnevies.
b. It was not necessary to secure the approval by the
probate court of the Contract of Lease because it did
not involve an alienation of real property of the estate
nor did the term of the lease exceed one year so as top
make it fall under Article 1878(8) of the Civil Code.
Only if Paragraph 20 of the Contract of Lease was
activated and the said property was intended to be
sold would it be required of the administratrix to secure
the approval of the probate court pursuant to Rule 89
of the Rules of Court.
a. As the rental in the case at bar was paid monthly and
the term had not been expressly agreed upon, the
lease was understood under Article 1687 to be
terminable from month to month. At the time the
petitioner was asked to vacate the leased premises,
the lease contract had already expired and therefore,
following the above-quoted decisions, could no longer
be extended. In fact, even if such contract had not yet
expired, its extension would still be subject to the

b.

c.

Clutario vs. CA

a.

b.

Yap vs. Cruz

a.

b.
c.

sound discretion of the court and was by no means

obligatory upon it as a merely ministerial duty.
The circumstance that the petitioner has paid its
rentals religiously during the past twenty years is also
not sufficient to justify the extension of the lease it
demands. Neither are the substantial improvements it
allegedly made on the leased premises nor the
difficulty of finding another place of business, on which
it has not submitted any evidence at all.
Petitioner has only itself to blame if, being engaged in
business, it did not take the necessary precautions
against its possible and even abrupt displacement
because of the termination of the month-to-month
lease.
B.P. Blg. 25 (1979), which was the governing law at the
time of the filing of the complaint, provides, in section
5, six (6) grounds for ejectment. In seeking to oust
petitioners from the leased premises, private
respondents invoke two of those six grounds, namely:
(1) arrears in payment of rent for three (3) months at
any one time; and (2) need of the lessors to repossess
their property for their own use or for the use of any
immediate member of their family as residential unit.
The acceptance by private respondents of the
petitioners-lessees' back rentals did not constitute a
waiver or abandonment of their cause of action for
ejectment against the latter.
When the petitioners and the landlord executed a new
contract of lease, the lease of private respondent was
still valid and subsisting. private respondent has not
effectively relinquished his leasehold rights over the
premises in question in view of the failure of
negotiations for the sale of the goodwill.
The transfer of the leasehold rights is conditional in
nature and has no force and effect if the condition is
not complied with.
The lack of proper notice or demand to vacate upon Dr.
Cruz is evident. In the absence of such notice, the lease
of private respondent Dr. Cruz continues to be in force
and cannot be deemed to have expired as of the end of
the month automatically. Neither can the non-payment
of the rent for the month of August, 1985 be a ground

for termination of the lease without a demand to pay

and to vacate.

United Realty Corp vs. CA

Legar Management and Realty Corp vs. CA

a. Since the lease agreement in question is for a definite

period it follows that petitioner has a right to judicially
eject private respondent from the premises as an
exception to the general rule provided for in Section 4
of P.D. No. 20.
b. Moreover, under Section of 5(f) of B.P. Blg. 25 one of
the grounds for ejectment is the expiration of the
period of a written lease contract. In this case, because
of the failure of the private respondent to pay the
increased rental demanded by petitioner, petitioner
elected to terminate the contract and asked the private
respondent to vacate the premises. A lease contract
may be terminated at the end of any month, which
shall be deemed terminated upon the refusal to pay
the increased monthly rental demanded by the
petitioner, provided the same is not exhorbitant.
a. In a month to month lease situation, when petitioners
(lessor) gave private respondent (lessee) notice to
vacate the premises in question, the contract of lease
is deemed to have expired as of the end of the month.
b. A month to month lease under Article 1687 is a lease
with a definite period, the expiration of which upon
previous demand by the lessor to vacate, can justify
ejectment.