As is is a legal term used to disclaim some implied warranties for an item being sold.

Certain
types of implied warranties must be specifically disclaimed, such as the implied warranty of title.
"As is" denotes that the seller is selling, and the buyer is buying an item in whatever condition it
presently exists, and that the buyer is accepting the item "with all faults", whether or not
immediately apparent. This is the classic "buyer beware" situation, where the careful buyer
should take the time to examine the item before accepting it, or obtain expert advice.[1]
On the other hand, the phrase "as is" does not disclaim express warranties, such as those
created by the seller's description of an item. In other words, the item may be sold "as is," but if
the item does not conform to the seller's description, the buyer has a right to reject it.
For example, a seller of a used automobile sells his car to a buyer, and puts into the contract of
sale the statement: "The buyer accepts the automobile AS IS, WITH ALL FAULTS." Two minutes
after the buyer drives off with it, the engine seizes, and the car stalls. Unless the buyer can
show that there was some fraud involved, or the seller breached an express warranty, the buyer
is not entitled to a refund.[citation needed] This would be a specific example where fraud in the
inducement could outweigh anything in the contract, express or implied: it simply doesn't matter
what disclaimer or limitations may be found in the contract, if the contract is void (or voidable)
for any reason.
Disgruntled buyers of real estate, and their respective improvements, may be faced with other
complicated property law issues if a deed is conveyed as a result of a contract with an "as is"
clause. In real estate, these are the larger potential problems than issues with the structure
itself, which can be drawn out with an inspector. Searching public records is often difficult, and
often done lazily by the seller; this means that the buyer may be burdened with liens on the
home, and face various fees related to things such as public utilities.
In many jurisdictions disclaimer of various implied warranties is void. For instance, laws on
consumer protection, and unfair contract terms may limit the ability of a manufacturer or seller to
limit or exclude liability for various types of damage. See, for instance, the Unfair Terms in
Consumer Contracts Regulations 1999 and Sale of Goods Act 1979.
https://en.wikipedia.org/wiki/As_is
In a nutshell, I believe the term as is where is simply means that the buyer will inherit all of the
physical and legal conditions of the foreclosed property they are going to buy, as is! In essence,
the definition of as is where is can be summarized as, you get everything that comes with a
property, at its present condition, good or bad, when you buy it.
For example, if a property badly needs repairs, or if it has illegal occupants, or if the title of a
foreclosed property has a problem, or if it is located beside a garbage dump or cemetery, etc,
the buyer expressly agrees to buy the property in such condition. Any costs related to fixing any
of these problems will be for the account of the buyer.
Tip: There are banks who shoulder arrears for real property taxes, condo or home owners
association dues, electricity, water, etc., up to the date the property was purchased. You just
need to verify this before you enter into a binding agreement, or before you make a bid during
an auction.

This is the reason why banks highly encourage interested buyers to verify the physical and legal
conditions of the foreclosed properties before they buy. Banks expect interested buyers to have
already done their due diligence BEFORE the auction, or before signing a binding contract.
While interested buyers can expect banks to have a full disclosure policy and disclose any
information they have about their foreclosed properties for sale, I still believe that a prudent
buyer should always do his/her own due diligence.
You need yo do your own due diligence to verify if a target property has any pending court
cases or lis pendens, liens, encumbrances, physical defects, or any technical
problems/discrepancies, etc, just in case the bank was not aware of them, if any.
In other words, while you can expect the bank to tell you things as they really are, you still need
to do your part by asking the right questions.
http://www.foreclosurephilippines.com/what-does-as-is-where-is-mean/
It pretty much says "what you see is what you get". It may or may not work. It may or may not
have hidden defects. The only assurance the seller is making is that you will get what is shown
or what you see after you make the commitment to purchase.As is where is example
Heres a more detailed explanation from Wikipedia:
As is, is a legal term and concept used to disclaim liability for an item being sold. "As-is"
denotes that the seller is selling, and the buyer is buying an item in whatever condition it
presently exists, and that the buyer is accepting the item "with all faults", whether or not
immediately apparent.
The "where-is" part simply means it is the buyers responsibility to get the item from the location
where it is at the time of sale to the location where the buyer wants it. This is basically another
way of saying that the buyer is responsible for all cost of packing, shipping and insurance (or
picking it up in person--or via the buyers agent--without packing). In the event that it is a large
item that is installed, needs to be dismantled for shipping or requires rigging services, it means
the buyer is responsible for getting this done and paying for it.
Vehicles being sold without a current WOF need to be sold as is where is. In most cases you
could assume there are problems with the vehicle, however this may not always be the case.
http://www.motorweb.co.nz/pub/blogpost/0/what-does-as-is-where-is-mean

CARAM v. LAURETA
103 SCRA 7
FACTS:
This is a petition for certiorari to review the decision of the Court of Appeals promulgated
on January 29, 1968 in CA-G. R. NO. 35721-R entitled "Claro L. Laureta, plaintiff-appellee
versus Marcos Mata, Codidi Mata and Fermin Caram, Jr., defendants- appellants; Tampino
(Mansaca), et al. Intervenors-appellants," affirming the decision of the Court of First Instance of
Davao in Civil Case No. 3083.
On June 25, 1959, Claro L. Laureta filed in the Court of First Instance of Davao an action for
nullity, recovery of ownership and/or reconveyance with damages and attorney's fees against
Marcos Mata, Codidi Mata, Fermin Z. Caram, Jr. and the Register of Deeds of Davao City.
On June 10, 1945, Marcos Mata conveyed a large tract of agricultural land covered by Original
Certificate of Title No. 3019 in favor of Claro Laureta, plaintiff, the respondent herein. 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 such as the Owner's Duplicate Original Certificate of Title No.
3019, sketch plan, tax declaration, tax receipts and other papers related thereto. Since June
10, 1945, the plaintiff Laureta had been and is stin in continuous, adverse and notorious
occupation of said land, without being molested, disturbed or stopped by any of the defendants
or their representatives. In fact, Laureta had been paying realty taxes due thereon and had
introduced improvements worth not less than P20,000.00 at the time of the filing of the
complaint.
On May 5, 1947, the same land covered by Original Certificate of Title No. 3019 was sold by
Marcos Mata to defendant Fermin Z. Caram, Jr., petitioner herein. The deed of sale in favor of
Caram was acknowledged before Atty. Abelardo Aportadera. On May 22, 1947, Marcos Mata,
through Attys. Abelardo Aportadera and Gumercindo Arcilla, filed with the Court of First Instance
of Davao a petition for the issuance of a new Owner's Duplicate of Original Certificate of Title
No. 3019, alleging as ground therefor the loss of said title in the evacuation place of defendant
Marcos Mata in Magugpo, Tagum, Davao. On June 5, 1947, the Court of First Instance of
Davao issued an order directing the Register of Deeds of Davao to issue a new Owner's
Duplicate Certificate of Title No. 3019 in favor of Marcos Mata and declaring the lost title as null
and void. On December 9, 1947, the second sale between Marcos Mata and Fermin Caram, Jr.
was registered with the Register of Deeds. On the same date, Transfer Certificate of Title No.
140 was issued in favor of Fermin Caram Jr.
On August 29, 1959, the defendants Marcos Mata and Codidi Mata filed their answer with
counterclaim admitting the existence of a private absolute deed of sale of his only property in
favor of Claro L. Laureta but 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 with its headquarters at Project No. 7
(Km. 60, Davao Agusan Highways), in the Municipality of Tagum, Province of Davao; that
Laureta's words and requests were laws; that although the defendant Mata did not like to sell
his property or sign the document without even understanding the same, he was ordered to
accept P650.00 Mindanao Emergency notes; and that due to his fear of harm or danger that will

happen to him or to his family, if he refused he had no other alternative but to sign the
document.
The defendants Marcos Mata and Codidi Mata also admit the existence of a record in the
Registry of Deeds regarding a document allegedly signed by him in favor of his co-defendant
Fermin Caram, Jr. but denies that he ever signed the document for he knew before hand that he
had signed a deed of sale in favor of the plaintiff and that the plaintiff was in possession of the
certificate of title; that if ever his thumb mark appeared in the document purportedly alienating
the property to Fermin Caram, did his consent was obtained through fraud and
misrepresentation for the defendant Mata is illiterate and ignorant and did not know what he was
signing; and that he did not receive a consideration for the said sale.
The defendant Fermin Caram Jr. filed his answer on October 23, 1959 alleging that he has no
knowledge or information about the previous encumbrances, transactions, and alienations in
favor of plaintiff until the filing of the complaints.
The trial court rendered a decision declaring that the deed of sale, Exhibit A, executed by
Marcos Mata in favor of Claro L. Laureta stands and prevails over the deed of sale, in favor of
Fermin Caram, Jr.
The defendants appealed from the judgment to the Court of Appeals which promulgated its
decision affirming the judgment of the trial court.
ISSUE:
Whether there is a valid sale of the property was made through his representatives,
Pedro Irespe and Atty. Abelardo Aportadera.
HELD:
The contention of the petitioner has no merit. 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. Thus, the sale of the property could have only
been through Caram's representatives, Irespe and Aportadera. The petitioner, in his answer,
admitted that Atty. Aportadera acted as his notary public and attorney-in-fact at the same time in
the purchase of the property.
The petitioner contends that he cannot be considered to have acted in bad faith because there
is no direct proof showing that Irespe and Aportadera, his alleged agents, had knowledge of the
first sale to Laureta. This contention is also without merit.
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.
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.

The principle that a person dealing with the owner of the registered land is not bound to go
behind the certificate and inquire into transactions the existence of which is not there intimated
should not apply in this case. It was of common knowledge that at the time the soldiers of
Laureta took the documents from Mata, the civil government of Tagum was not yet established
and that there were no officials to ratify contracts of sale and make them registerable. Obviously,
Aportadera and Irespe knew that even if Mata previously had sold t he Disputed such sale could
not have been registered.
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.
Since Caram was a registrant in bad faith, the situation is as if there was no registration at all.
The question to be determined now is, who was first in possession in good faith? A possessor in
good faith is one who is not aware that there exists in his title or mode of acquisition any flaw
which invalidates it. Laureta was first in possession of the property. He is also a possessor in
good faith. It is true that Mata had alleged that the deed of sale in favor of Laureta was procured
by force. 21 Such defect, however, was cured when, after the lapse of four years from the time
the intimidation ceased, Marcos Mata lost both his rights to file an action for annulment or to set
up nullity of the contract as a defense in an action to enforce the same.
Anent the fourth error assigned, the petitioner contends that the second deed of sale, Exhibit
"F", is a voidable contract. Being a voidable contract, the action for annulment of the same on
the ground of fraud must be brought within four (4) years from the discovery of the fraud. In the
case at bar, Laureta is deemed to have discovered that the land in question has been sold to
Caram to his prejudice on December 9, 1947, when the Deed of Sale, Exhibit "F" was recorded
and entered in the Original Certificate of Title by the Register of Deeds and a new Certificate of
Title No. 140 was issued in the name of Caram. Therefore, when the present case was filed on
June 29, 1959, plaintiff's cause of action had long prescribed.
The petitioner's conclusion that the second deed of sale, "Exhibit F", is a voidable contract is not
correct. I n order that fraud can be a ground for the annulment of a contract, it must be
employed prior to or simultaneous to the, consent or creation of the contract. The fraud or dolo
causante must be that which determines or is the essential cause of the contract. Dolo
causante as a ground for the annulment of contract is specifically described in Article 1338 of
the New Civil Code of the Philippines as "insidious words or machinations of one of the
contracting parties" which induced the other to enter into a contract, and "without them, he
would not have agreed to".
The second deed of sale in favor of Caram is not a voidable contract. No evidence whatsoever
was shown that through insidious words or machinations, the representatives of Caram, Irespe
and Aportadera had induced Mata to enter into the contract.
Since the second deed of sale is not a voidable contract, Article 1391, Civil Code of the
Philippines which provides that the action for annulment shall be brought within four (4) years
from the time of the discovery of fraud does not apply. Moreover, Laureta has been in
continuous possession of the land since he bought it in June 1945.
A more important reason why Laureta's action could not have prescribed is that the second
contract of sale, having been registered in bad faith, is null and void. Article 1410 of the Civil

Code of the Philippines provides that any action or defense for the declaration of the inexistence
of a contract does not prescribe.
In a Memorandum of Authorities submitted to this Court on March 13, 1978, the petitioner
insists that the action of Laureta against Caram has prescribed because the second contract of
sale is not void under Article 1409 23 of the Civil Code of the Philippines which enumerates the
kinds of contracts which are considered void. Moreover, Article 1544 of the New Civil Code of
the Philippines does not declare void a second sale of immovable registered in bad faith.
The fact that the second contract is not considered void under Article 1409 and that Article 1544
does not declare void a deed of sale registered in bad faith does not mean that said contract is
not void. Article 1544 specifically provides who shall be the owner in case of a double sale of an
immovable property. To give full effect to this provision, the status of the two contracts must be
declared valid so that one vendee may contract must be declared void to cut off all rights which
may arise from said contract. Otherwise, Article 1544 win be meaningless.
The first sale in favor of Laureta prevails over the sale in favor of Caram.
WHEREFORE, the petition is hereby denied and the decision of the Court of Appeals sought to
be reviewed is affirmed, without pronouncement as to costs. SO ORDERED.

FERMIN Z. CARAM, JR. V. CLARO L. LAURETA

G.R. No. L-28740. February 24, 1981
FERNANDEZ, J.
FACTS:
On June 25, 1959, Claro L. Laureta filed in the Court of First Instance of Davao an action for
nullity, recovery of ownership and/or reconveyance with damages and attorney's fees against
Marcos Mata, Codidi Mata, Fermin Z. Caram Jr. and the Register of Deeds of Davao City.
On June 10, 1945, Marcos Mata conveyed a large tract of agricultural land covered by Original
Certificate of Title No. 3019 in favor of Claro Laureta, plaintiff, the respondent herein. 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 such as the Owner's Duplicate Original Certificate of Title No.
3019, sketch plan, tax declaration, tax receipts and other papers related thereto. 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. In fact, Laureta had been paying realty taxes due thereon and had introduced
improvements worth not less than P20,000.00 at the time of the filing of the complaint.
However, the said property was sold to Fermin Caram, Jr., the petitioner, by Marcos Mata on
May 5, 1947. And was able to declare the ODOCT in the possession of Laureta null and void,
after Mata filed for an issuance of new ODOCT before the RD of Davao on the ground of loss of
the said title.

The Trial Court ruled infavor of Laureta, stating that Caram, Jr. was not a purchaser in good
faith, and the Court of Appeals thenafter affirmed the decision of the lower court.
PETITIONERS CONTENTION:
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 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.
ISSUES:
Whether petitioner have acted in bad faith through his agents action.
RULING:
In the case at bar, the court found that the Attorneys Irespe and Aportadera had knowledge of
the circumstances, and 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. 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.
The principle that a person dealing with the owner of the registered land is not bound to go
behind the certificate and inquire into transactions the existence of which is not there intimated
18 should not apply in this case. It was of common knowledge that at the time the soldiers of
Laureta took the documents from Mata, the civil government of Tagum was not yet established
and that there were no officials to ratify contracts of sale and make them registrable. Obviously,
Aportadera and Irespe knew that even if Mata previously had sold the disputed property such
sale could not have been registered.cdrep
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.
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 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. (1973)".
Since Caram was a registrant in bad faith, the situation is as if there was no registration at all.
CARBONELL v CA
FACTS: Poncio, a Batanes native, owned a parcel of land, which he offered to sell to Carbonell
and Infante. The land was mortgaged to Republic Bank. Poncio and Carbonell agreed to the
sale of the land, and the latter assumed to pay the mortgage in favor of the bank.
Poncio and Carbonell executed an instrument where the latter allowed the former to remain in
the premises in spite of the sale for a period of 1 year. Later on, when the Formal Deed of Sale
was to be executed, Poncio told Carbonell that he could no longer proceed with the sale as he
had already sold the same to Infante for a better price. Carbonell immediately sought to register
adverse claim; 4 days later, Infante registered the sale with the adverse claim annotated thereto.
Infante thereafter introduced significant improvements on the property.
They now dispute ownership over the said land.
ISSUE: Who has a better title, Carbonell or Infante?
HELD: CARBONELL. In order to claim the benefit of Art. 1544, the buyer of realty must register
the property in good faith. It is a pre-condition to a superior title. In this case, Infante was not in
good faith, thus the prior sale to Carbonell must prevail. Infante registered her claim 4 days after
the adverse claim was registered, she had notice that Carbonell paid off the mortgage debt as
the mortgage passbook was already in his possession. She likewise ignored Carbonell and
refused to talk to here. These are badges of bad faith that taint her registration.
Carbonell vs. Court of Appeals, and Poncio
69 SCRA 99
January 1976
FACTS:
On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his
parcel of land with improvements situated in San Juan, Rizal in favor of petitioner Rosario
Carbonell who knew that the said property was at that time subject to a mortgage in favor of the
Republic Savings Bank (RSB) for the sum of P1,500.00. Four days later, Poncio, in another
private memorandum, bound himself to sell the same property for an improved price to one
Emma Infante for the sum of P2,357.52, with the latter still assuming the existing mortgage debt
in favor of the RSB in the amount of P1,177.48. Thus, in February 2, Poncio executed a formal
registerable deed of sale in her (Infante's) favor. So, when the first buyer Carbonell saw the
seller Poncio a few days afterwards, bringing the formal deed of sale for the latter's signature
and the balance of the agreed cash payment, she was told that he could no longer proceed with

formalizing the contract with her (Carbonell) because he had already formalized a sales contract
in favor of Infante.
To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the
Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante,
the second buyer, was able to register the sale in her favor only on February 12, 1955, so that
the transfer certificate of title issued in her name carried the duly annotated adverse claim of
Carbonell as the first buyer. The trial court declared the claim of the second buyer Infante to be
superior to that of the first buyer Carbonell, a decision which the Court of Appeals reversed.
Upon motion for reconsideration, however, Court of Appeals annulled and set aside its first
decision and affirmed the trial courts decision.
ISSUE:
Who has the superior right over the subject property?
COURT RULING:
The Supreme Court reversed the appellate courts decision and declared the first buyer
Carbonell to have the superior right over the subject property, relying on Article 1544 of the Civil
Code. Unlike the first and third paragraphs of said Article 1544, which accord preference to the
one who first takes possession in good faith of personal or real property, the second paragraph
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.
When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer
thereof and the title of Poncio was still in his name solely encumbered by bank mortgage duly
annotated thereon. Carbonell was not aware - and she could not have been aware - of any sale
to Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase of the
land was made in good faith which did not cease after Poncio told her on January 31, 1955 of
his second sale of the same lot to Infante. Carbonell wanted to meet Infante but the latter
refused so to protect her legal rights, Carbonell registered her adverse claim on February 8,
1955. Under the circumstances, this recording of Carbonells adverse claim should be deemed
to have been done in good faith and should emphasize Infante's bad faith when the latter
registered her deed of sale 4 days later.

Carbonell vs. CA
Tuesday, September 9, 2014

Facts:

Respondent Jose Poncio was the owner of the parcel of land located in Rizal.
(Area more or less 195 sq. m.)

The said lot was subject to mortgage in favor of the Republic Savings Bank for
the sum of P1,500.00.

Carbonell and respondent Emma Infante offered to buy the said lot from Poncio.

Poncio offered to sell his lot to Carbonell excluding the house on which he and
his family stayed. Carbonell accepted the offer and proposed the price of
P9.50/sq. m..

Poncio accepted the price on the condition that from the purchase price would
come the money to be paid to the bank.

January 27, 1995: The parties executed a document in the Batanes dialect which
is translated as: CONTRACT FOR ONE HALF LOT WHICH I (Poncio) BOUGHT
FROM.

Carbonell asked a lawyer to prepare the deed of sale and delivered the
document, together with the balance of P400, to Jose Poncio. (Note: Carbonell
already paid P200 for the mortgage debt of Poncio + obligated herself to pay the
remaining installments.)

However, when she went to Poncio, the latter informed her that he could no
longer proceed with the sale as the lot was already sold to Emma Infante and
that he could not withdraw with the sale.

Poncio admitted that on January 30, 1995, Mrs. Infante improved her offer and
he agreed to sell the land and its improvements to her for P3,535.00.

In a private memorandum agreement, Poncio bound to sell to Infante the lot for
the sum of P2,357.52, with Infante still assuming the mortgage debt of
P1,177.48. (Note: The full amount of mortgage debt was already paid by the
Infantes)

February 2, 1995: A deed of sale was executed between Poncio and Infante.

February 8, 1995: Knowing that the sale to Infante has not been registered,
Carbonell filed an adverse claim.

February 12, 1995: The deed of sale was registered but it has an annotation of
the adverse claim of Carbonell.

Thereafter, Emma Infante took possession of the lot, built a house and
introduced some improvements.

In June 1995, Carbonell filed a complaint praying that she be declared the lawful
owner of the land, that the subsequent sale to spouses Infante be declared null
and void, and that Jose Poncio be ordered to execute the corresponding deed of
conveyance of said land in her favor

RTC ruled that the sale to spouses Infante was null and void. After re-trial, it
reversed its ruling. CA ruled in favor of Carbonell but after a MfR, it reversed its
ruling and ruled in favor of the Infantes.

Issue: WON Carbonell has a superior right over Emma Infante. YES
Held:
Article 1544 provides that for double sale of an immovable property, the
ownership shall belong to the person who first acquired it in good faith and
recorded it in the Registry of Property
Article 1544, New Civil Code, which is decisive of this case, recites:
If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if
it should movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it
who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good
faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
The buyer must act in good faith in registering the deed of sale
It is essential that the buyer of realty must act in good faith in registering his deed of
sale to merit the protection of the second paragraph of said Article 1544.
Unlike the first and third paragraphs of said Article 1544, which accord preference to
the one who first takes possession in good faith of personal or real property, the
second paragraph 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
paragraph, good faith must characterize the act of anterior registration.
Rule when there is inscription or not
If there is no inscription, what is decisive is prior possession in good faith. If there is
inscription, as in the case at bar, prior registration in good faith is a pre-condition to
superior title.

Carbonell was in good faith when she bought the lot

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only
buyer thereof and the title of Poncio was still in his name solely encumbered by bank
mortgage duly annotated thereon. Carbonell was not aware and she could not have
been aware of any sale of Infante as there was no such sale to Infante then.
Hence, Carbonell's prior purchase of the land was made in good faith. Her good faith
subsisted and continued to exist when she recorded her adverse claim four (4) days
prior to the registration of Infantes's deed of sale.
Carbonells good faith did not cease when she was informed by Poncio about the
sale to Emma Infante
After learning about the second sale, Carbonell tried to talk to the Infantes but the
latter refused.
(Exact words of the SC: With an aristocratic disdain unworthy of the good breeding of a
good Christian and good neighbor, Infante snubbed Carbonell like a leper and refused
to see her.)
So Carbonell did the next best thing to protect her right she registered her adversed
claim on February 8, 1955. Under the circumstances, this recording of her adverse
claim should be deemed to have been done in good faith and should emphasize
Infante's bad faith when she registered her deed of sale four (4) days later on February
12, 1955.
The Infantes were in bad faith (5 indications of bad faith listed below)
Bad faith arising from previous knowledge by Infante of the prior sale to Carbonell is
shown by the following facts:
1. Mrs. Infante refused to see Carbonell.
Her refusal to talk to Carbonell could only mean that she did not want to listen to
Carbonell's story that she (Carbonell) had previously bought the lot from Poncio.
2. Carbonell was already in possession of mortgage passbook and copy of the
mortgage contract. (Not Poncios saving deposit passbook.)
Infante naturally must have demanded from Poncio the delivery to her of his mortgage
passbook and mortgage contract so that the fact of full payment of his bank mortgage
will be entered therein; and Poncio, as well as the bank, must have inevitably informed
her that said mortgage passbook could not be given to her because it was already
delivered to Carbonell.
3. Emma Infante did not inquire why Poncio was no longer in possession of the
mortgage passbook and why it was in Carbonells possession.
The fact that Poncio was no longer in possession of his mortgage passbook and that
the said mortgage passbook was already in possession of Carbonell, should have

compelled Infante to inquire from Poncio why he was no longer in possession of the
mortgage passbook and from Carbonell why she was in possession of the same.
4. Emma Infante registered the sale under her name after Carbonell filed an adverse
claim 4 days earlier.
Here she was again on notice of the prior sale to Carbonell. Such registration of
adverse claim is valid and effective.
5. Infante failed to inquire to Poncio WON he had already sold the property to
Carbonell especially that it can be shown that he was aware of the offer made by
Carbonell.
Poncio alleged in his answer that Mrs. Infante and Mrs. Carbonell offered to buy the lot
at P15/sq. m. which offers he rejected as he believed that his lot is worth at least
P20.00/sq. m. It is therefore logical to presume that Infante was told by Poncio and
consequently knew of the offer of Carbonell which fact likewise should have put her on
her guard and should have compelled her to inquire from Poncio whether or not he
had already sold the property to Carbonell
The existence of prior sale to Carbonell was duly established
From the terms of the memorandum, it tends to show that the sale of the property in
favor of Carbonell is already an accomplished act. As found by the trial court, to repeat
the said memorandum states "that Poncio is allowed to stay in the property which he
had sold to the plaintiff ..., it tends to show that the sale of the property in favor of the
plaintiff is already an accomplished act..."
There was an adequate consideration or price for the sale in favor of Carbonell
Poncio agreed to sell the same to Carbonell at P9.50 per square meter, on condition
that Carbonell:
1. should pay (a) the amount of P400.00 to Poncio and the arrears in the amount of
P247.26 to the bank
2. should assume his mortgage indebtedness.
The bank president agreed to the said sale with assumption of mortgage in favor of
Carbonell an Carbonell accordingly paid the arrears of P247.26.
It is evident therefore that there was ample consideration, and not merely the sum of
P200.00, for the sale of Poncio to Carbonell of the lot in question.
The subject property was identified and described
The court has arrived at the conclusion that there is sufficient description of the lot
referred to in Exh. As none other than the parcel of lot occupied by the defendant
Poncio and where he has his improvements erected. The Identity of the parcel of land
involved herein is sufficiently established by the contents of the note Exh. 'A'.