Carbonell vs.

Court of Appeals, and Poncio

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 court’s decision.

ISSUE:

Who has the superior right over the subject property?

COURT RULING:

The Supreme Court reversed the appellate court’s 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 Carbonell’s
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.

CHENG V. GENATO (December 29, 1998)

FACTS:

Respondent Genato entered a contract to sell to spouses Da Jose pertaining to his property in Bulacan.
The contract made in public document states that the spouses shall pay the down payment and 30 days
after verifying the authenticity of the documents, they shall pay the remaining purchase price.

Da Jose spouses was not able to finish verifying the documents and as such asked for a 30 day extension.
Pending the extension and without notice to the spouses, Genato made a document for the annulment
of the contract.

Petitioner Cheng expressed interest over the property and paid 50K check with the assurance that the
contract between Genato and the spouses Da Jose will be annulled. Da Jose spouses protested with the
annulment and persuaded Genato to continue the contract. Genato returned the check to Cheng and
hence, this petition.
HELD:

The contract between Genato and spouses Da Jose was a contract to sell which is subject to a suspensive
condition. Thus, there will be no contract to speak of, if the obligor failed to perform the suspensive
condition which enforces a juridical relation. Obviously, the foregoing jurisprudence cannot be made to
apply to the situation in the instant case because no default can be ascribed to the Da Jose spouses since
the 30-day extension period has not yet expired.

Even assuming that the spouses defaulted, the contract also cannot be validly rescinded because no
notice was given to them. Thus, Cheng's contention that the Contract to Sell between Genato and the Da
Jose spouses was rescinded or resolved due to Genato's unilateral rescission finds no support in this
case.

The contract between Genato and Cheng is a contract to sell not a contract of sale. But But even
assuming that it should be treated as a conditional contract of sale, it did not acquire any obligatory
force since it was subject to a suspensive condition that the earlier contract to sell between Genato and
the Da Jose spouses should first be cancelled or rescinded.

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

THELMA RODRIGUEZ v. SPOUSES JAIME SIOSON & ARMI SIOSON, GR No. 199180, 2016-07-27

Facts:

the Municipality of Orani, Bataan (Municipality) purchased from Neri an area... to be used for the
extension of the Municipality's public market.
Lot 398 was subsequently subdivided into 5 lots: Lot 398-A, Lot 398-B, Lot 398-C, Lot 398-D, and Lot 398-
E. Lots 398-C and 398-D pertain to the portions that were sold to the Municipality, while Lot 398-E is a
road lot.

Consequently, only Lots 398-A and 398-B were left as the remaining portions over which Neri retained
absolute title.

Neri, however, alleged that then Municipal Mayor Mario Zuñiga suggested that he sell Lot 398-A to his
aunt, petitioner Thelma Rodriguez (Thelma). The Municipality would then expropriate the same from
Thelma. Neri agreed to the suggestion.

After agreeing to the amount of P1,243,000.00 as the selling price, Thelma,... ssued a check for said
amount payable to Neri. When it fell due, no sufficient funds were available to cover the check.
Consequently, it was agreed that Thelma would pay the purchase price in installments

Thelma, however, was only able to pay P442,293.50.

Thelma caused the annotation of an adverse claim on TCT No. T-209894.[10] At about the same time,
Thelma saw an announcement that a new Orani Common Terminal would be built on Lot 398-A.

As she has not yet entered into any agreement regarding the utilization of said lot, Thelma filed a
Complaint for Injunction... against then incumbent mayor Efren Pascual, Jr. (Mayor Pascual), and the
Municipality under claim of ownership.

To support her claim, Thelma incorporated in her complaint a copy of an undated and unnotarized deed
of absolute sale allegedly executed by Neri in her favor.

Mayor Pascual and the Municipality acknowledged that Thelma became the owner of Lot 398-A by way
of purchase from Neri.
Neri executed an affidavit claiming that the owner's copies of TCT No. T-209894 (covering Lot 398-A) and
TCT No. T-209895 (covering Lot 398-B) were lost, which was annotated on the original copy of TCT No. T-
209894

Neri caused the cancellation of Thelma's adverse claim.

Neri also caused the reconstitution of new owner's copies of TCT Nos. T-209894 and T-209895.

Thereafter, new copies of TCT Nos. T-209894 and T-209895 were issued, and Neri then sold Lot 398-A to
Spouses Jaime and Armi Sioson, Spouses Joan and Joseph Camacho, and Agnes Samonte (respondents) -
in a deed of sale

A special power of attorney was executed by Violeta delos Reyes (Violeta) in favor of Neri for the
purpose.

Consequently, TCT No. T-209894 was cancelled, and TCT No. T-226775 was thus issued in the
respondents' names.

Upon the issuance of TCT No. T-226775, the respondents declared Lot 398-A for tax purposes and paid
them accordingly.

They sought to take actual possession thereof by filling it; however, after they filled said lot with about
40 truckloads of soil/fillings, Thelma sent two armed blue guards who entered the premises and set up a
tent therein.

the respondents filed a forcible entry case against Thelma before the Municipal Circuit Trial Court

After Thelma learned of the second sale of Lot 398-A, she filed against the respondents a complaint for
the Declaration of Nullity of the Second Sale
In support of her claim, Thelma once again presented a deed of absolute sale executed by Neri in her
favor. This time, the deed of sale she presented was duly signed by her and Neri, witnessed, notarized
and dated

The respondents countered that they are innocent purchasers for value having bought Lot 398-A at the
time when Thelma's adverse claim was already cancelled. While they admit Thelma's possession of the
subject property, they, however, qualify that possession is being contested in a separate action for
forcible entry.

The RTC jointly heard Civil Case No. 7394 and Civil Case No. 7664 and after trial, rendered judgment in
favor of Thelma.

The RTC concluded that by Neri's admission that he sold the subject lot to Thelma for a consideration of
P1,243,000.00, and his acknowledgement receipt of P442,293.50 as partial payment from the latter, the
transaction between Thelma and Neri should be regarded as an executed contract of sale. Hence, Lot
398-A was subjected to a double sale when Neri sold the same property to the respondents.

The respondents... elevated their case to the CA.

he CA promulgated the assailed Decision... the CA found that the contract between Neri and Thelma was
a mere contract to sell and not a contract of sale; hence, there was no double sale of Lot 93 8-A.

Issues:

there was double sale... whether the transaction between Neri and Thelma is a contract of sale or a
contract to sell.

Ruling:
The rule on double sale, as provided in Article 1544 of the Civil Code,[30] does not apply to a case where
there was a sale to one party of the land itself while the other contract was a mere promise to sell the
land or at most an actual assignment of the right to repurchase the same land.

The real character of the contract is not the title given, but the intention of the parties."[34] In this case,
there exist two deeds of absolute sale.

Though identically worded, the first contract was undated, not notarized, signed only by Neri,... while the
second deed was dated... notarized... signed by both Neri and Thelma... these two documents, and,
coupled with Thelma's own admissions, correctly found that it was a mere contract to sell.

the apparent disparity between the two (2) "deeds of absolute sale" by testifying that the undated and
unnotarized deed of sale served only as a "receipt" which was signed by Neri when the latter received
the downpayment for the lot. The dated and notarized deed of sale, on the other hand, was signed by
both Thelma and Neri upon Thelma's alleged full payment of the purchase price:

Thelma testified that the "deed of absolute sale"... which was attached to Thelma's complaint in Civil
Case No. 7664 was signed by her, Neri and their witnesses only upon full payment of the purchase price.

Thelma further testified that she and Neri agreed to place the amount of the purchase price on the deed
of absolute sale only at the time when Thelma had fully paid the same

Despite the denomination of their agreement as one of sale, the circumstances tend to show that Neri
agreed to sell the subject property to Thelma on the condition that title and ownership would pass or be
transferred upon the full payment of the purchase price.

This is the very nature of a contract to sell, which is a "bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the property despite delivery thereof to the prospective
buyer, binds himself to sell the property exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, i.e., the full payment of the purchase price."... the agreement to execute a deed
of sale upon full payment of the purchase price "shows that the vendors reserved title to the subject
property until full payment of the purchase price."... the alleged delivery of the property, even if true, is
irrelevant considering that in a contract to sell, ownership is retained by the registered owner in spite of
the partial payment of the purchase price and delivery of possession of the property.

since the petitioners have not paid the final installment of the purchase price... they "cannot validly
claim ownership over the subject portion even if they had made an initial payment and even took
possession of the same."

Accordingly, the CA did not commit any reversible error in concluding that "the contract between Thelma
and Neri was a mere contract to sell, the transfer of ownership over Lot 398-A being conditioned on
Thelma's full payment of the purchase price. Having failed to pay the purchase price in full, Thelma
cannot claim ownership over Lot 398-A and Neri is not legally proscribed from alienating the same lot to
other buyers."

WHEREFORE, the petition is DENIED for lack of merit.

WHEREFORE, the petition is DENIED for lack of merit.

the Decision... of the Court of Appeals... are AFFIRMED.

SPOUSES TANGLAO vs. SPOUSES PARUNGAO

G.R. No. 166913

October 5, 2007

[KNOWLEDGE BY FIRST BUYER]

FACTS: Spouses Parungao, purchased from Spring Homes 7 Subdivision Lots in Laguna. Respondents
made a down payment, leaving a balance exclusive of interest. Respondents introduced improvements
on the lots. Under the terms of the Contracts to Sell signed by respondents and Spring Homes, the
balance of was to be paid by them within one year from its execution. Respondents failed to pay the
installments.

Later, Spring Homes executed two separate Deeds of Absolute Sale in favor of spouses Tanglao,
petitioners, wherein the former sold to the latter two lots. It turned out that the lots sold to them were
among the lots previously sold to the spouses Parungao.

In a letter, respondents demanded that Spring Homes deliver to them the corrected Contracts to Sell, as
well as the TCTs covering the lots they purchased.

Meanwhile, petitioners took possession of the two lots they bought. They forcibly opened the steel gate
as well as the doors of the buildings and entered the premises.

When informed of these events, respondents demanded an explanation from Spring Homes; it
apologized and promised she would settle the matter with petitioners. However, the controversy was not
settled.

Respondent Spouses Parungao filed with the Housing and Land Use Regulatory Board (HLURB), a
complaint for annulment of deed of sale and/or return of investment for the seven (7) lots and costs of
improvements, plus interest and damages. Impleaded as respondents were Spring Homes and
petitioners. Despite notice, Spring Homes did not appear during the hearings.

The HLURB Arbiter rendered a Decision ordering respondent Spring Homes to pay complainants by way
of refund of payments and damages.

Dissatisfied with the ruling, respondents filed a petition for review with the HLURB Board of
Commissioners. The HLURB Board of Commissioners reversed the Arbiter’s Decision and granted the
petition for review. Petitioners filed a motion for reconsideration, but this was denied by the HLURB
Board of Commissioners. Petitioners then filed an appeal with the Office of the President, which
dismissed their appeal and affirmed the Decision of the HLURB Board of Commissioners. Petitioners’ MR
was also denied by the said Office.

Eventually, petitioners filed with the CA a petition for review.The CA rendered its Decision dismissing the
petition, hence this petition for Review on Certiorari

ISSUE: Who between the petitioners and respondents have the right of ownership over the two lots in
controversy.

HELD: SPOUSES PARUNGAO, the first buyer.

PETITION DENIED. The Decision of the CA is AFFIRMED in toto.

The ownership of immovable property sold to two different persons at different times is governed by
Article 1544 of the Civil Code,2 which provides:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have 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
possession and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith.

In all of these cases, good faith is essential, being the basic premise of the preferential rights granted to
the person claiming ownership of the immovable.
In Occeña v. Esponilla,5 this Court, speaking through then Associate Justice (now Chief Justice) Reynato
S. Puno, laid down the following rules in the application of Article 1544:

(1) Knowledge by the first buyer of the second sale cannot defeat the first buyer’s rights except when the
second buyer first registers in good faith the second sale; and

(2) Knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register,
since such knowledge taints his registration with bad faith. Differently put, the act of registration by the
second buyer must be coupled with good faith, meaning, the registrant must have no knowledge of the
defect or lack of title of his vendor or must not have been aware of facts which should put him upon
such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his
vendor.

At the time of the second sale to petitioners by Spring Homes, there were already occupants and
improvements on the two lots in question. These facts should have put petitioners on their guard.
Settled is the rule that a buyer of real property in possession of persons other than the seller must be
wary and should investigate the rights of those in possession, for without such inquiry the buyer can
hardly be regarded as a buyer in good faith and cannot have any right over the property.

As the petitioners cannot be considered buyers in good faith, they cannot rely upon the indefeasibility of
their TCTs in view of the doctrine that the defense of indefeasibility of a torrens title does not extend to
transferees who take the certificate of title in bad faith.

Considering that respondents who, in good faith, were first in possession of the subject lots, we rule that
the ownership thereof pertains to them

NOTES:

A purchaser in good faith or innocent purchaser for value is one who buys property and pays a full and
fair price for it at the time of the purchase or before any notice of some other person’s claim on or
interest in it.7 The burden of proving the status of a purchaser in good faith lies upon him who asserts
that status and it is not sufficient to invoke the ordinary presumption of good faith, that is, that everyone
is presumed to have acted in good faith.8

CARUMBA vs. THE COURT OF APPEALS

Addie Antazo

10 months ago

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FACTS

Amado Canuto and Nemesia Ibasco sold a parcel of land located in the barrio of Santo Domingo, Iriga,
Camarines Sur, to the spouses Amado Carumba and Benita Canuto. The deed of sale was never
registered. On January 21, 1957, a complaint for a sum of money was filed by Santiago Balbuena against
Amado Canuto and Nemesia Ibasco. A decision was rendered in favor of the plaintiff. The ex-officio
sheriff issued a “Definite Deed of Sale” of the property in favor of Santiago which was subsequently
registered. The CFI, finding that after the execution of the document, Carumba had taken possession of
the land, planting bananas, coffee and other vegetables, declared him to be the owner of the property
under a consummate sale; held void the execution levy made by the sheriff, pursuant to a judgment
against Carumba’s vendor, Amado Canuto; and nullified the sale in favor of the judgment creditor,
Santiago Balbuena. The Court, therefore, declared Carumba the owner of the litigated property. The
Court of Appeals declared that there having been a double sale of the land, Balbuena’s title was superior
to that of his adversary since the execution sale had been properly registered in good faith and the sale
to Carumba was not recorded.

ISSUE

Whether the rule on double sale would apply on the case at bar.

HELD
No. While under Article 1544, registration in good faith prevails over possession in the event of a double
sale by the vendor of the same piece of land to different vendees, said article is of no application to the
case at bar. The reason is that the purchaser of unregistered land at a sheriff’s execution sale only steps
into the shoes of the judgment debtor. He merely acquires the latter’s interest in the property sold as of
the time the property was levied upon.

ILUMINADO HANOPOL vs. PERFECTO PILAPIL

G.R. No. L-19248

February 28, 1963

Facts:

Ilumindao Hanopol claims ownership of the land by virtue of a series of purchases effected in 1938 by
means of private instruments, executed by the former owners Teodora, Lucia, Generosa, Sinforosa and
Isabelo, all surnamed Siapo. Perfecto Pilapil. asserts title to the property on the strength of a duly
notarized deed of sale executed in his favor by the same owners on December 3, 1945, which deed of
sale was registered in the Registry of Deeds.

Issue:

Is the registration of the second sale in favor of Pilapil affects Hanopol’s rights as the first vendee?

Held:

Yes. The better right referred to in Act No. 3344 is more than a mere prior deed. It involves facts and
circumstances which combined, would make it clear that the first buyer has a better right than the
second purchaser. However, there seems to be no clear evidence of Hanopol’s possession of the land.
Hanopol cannot have a better right than Pilapil who, according to the Trial Court was not a purchaser in
bad faith.

Dagupan Trading vs. Macam

Dagupan Trading vs. Macam

14 SCRA 99

May 1965

FACTS:

Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of unregistered
land located in barrio Parayao, Binmaley, Pangasinan. In 1955, while their application for registration of
said land under Act No. 496 was pending, they executed, on June 19 and on September 21, two deeds of
sale conveying the property to herein respondent Rustico Macam who thereafter took possession of the
property and made substantial improvements upon it. On October 14, 1955, OCT No. 6942 covering the
land was issued in the name of the Marons, free from all liens and encumbrances.

On August 4, 1956, however, by virtue of a final judgment of the Municipal Court of Manila in a civil case
in favor of Manila Trading and Supply Co. (Manila Trading) against Sammy Maron, levy was made upon
whatever interest he had in the subject property. Thereafter, said interest was sold at public auction to
the judgment creditor Manila Trading. The corresponding notice of levy, certificate of sale and the
sheriff's certificate of final sale in favor of Manila Trading - because nobody exercised the right of
redemption - were duly registered, and on March 1, 1958, the latter sold all its rights and title in the
property to herein petitioner Dagupan Trading Company (Dagupan Trading).

On September 4, 1958, Dagupan Trading filed an action against Macam, praying that it be declared
owner of one-eighth portion of the subject property. The CFI of Pangasinan dismissed the said
complaint, and the Court of Appeals affirmed its decision.
ISSUE:

Who has the superior right over the one-eight portion of the subject property?

COURT RULING:

The Supreme Court likewise affirmed both decisions of the lower courts. At the time of the levy, Sammy
Maron already had no interest on the one-eight portion of the property he and his siblings have
inherited because for a considerable time prior to the levy, said interest had already been conveyed
upon Macam "fully and irretrievably" - as the Court of Appeals held. Consequently, the subsequent levy
made on the property for the purpose of satisfying the judgment rendered against Sammy Maron in
favor of the Manila Trading Company was void and of no effect.

The unregistered sale and the consequent conveyance of title and ownership in favor Macam could not
have been cancelled and rendered of no effect upon the subsequent issuance of the Torrens title over
the entire parcel of land. Moreover, upon the execution of the deed of sale in his favor by Sammy Maron,
Macam had immediately taken possession of the land conveyed as its new owner and introduced
considerable improvements upon it himself. To deprive him, therefore, of the same by sheer force of
technicality would be against both justice and equity.

ESPIRITU V. VALERIO (December 23, 1976)

FACTS:

Valerio filed a case to quiet title against mother and daughter Espiritu who were asserting their
adversary rights over said land and disturbing his possession thereof.

Valerio presented a deed of sale from which he acquired the property while the Espiritus allege that they
acquire the same from their deceased father.

The Espiritus also presented two deeds of sale to prove that their deceased father have a legal right over
the property which they inherited.

ISSUE:
WON mother and daughter Espiritu have a better right over the property.

HELD:

Apparently, this case concerns the sales of one parcel of land by the same vendor but in favor of two
different vendees.

If both allegations of the parties are valid, Espiritu's contention that they have a better right than that
the claimed by Valerio would seem to be meritorious in the light of the facts of the case and the
provisions of Article 1544 of the New Civil Code, it not being disputed that the Deed of Sale in favor of
them was registered first.

But since the deeds of sale presented by Esiritu are found to be falsified, they have no legal right to claim
the disputed property.

QUIMSON vs. ROSETE G.R. No. L-2397, August 9, 1950

Addie Antazo

10 months ago

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FACTS

The estate belonging to the deceased Dionysus Quimson was first transferred in favor of his daughter
TomasaQuimson through a deed of conveyance, but continued in his possession and enjoyment. He sold
it to Francisco Rosete, with a repurchase agreement for the term of five years granting to this effect the
writing of sale. Since then Rosete is the one in his possession and enjoyment, in a peaceful and quiet
manner, even after the death of DionisioQuimson, which occurred on June 6, 1939 until January of 1943.
TomasaQuimsonpetitioned that the property should be given to her as she is the true owner and
possessor of the property.

ISSUE

What were the effects of the registration of plaintiff’s document?

Who was prior in possession?

HELD

The Court held that the execution of a public instrument is equivalent to the delivery of the realty sold
and its possession by the vendee. Under these conditions the sale is considered consummate and
completely transfers to the vendee all of the vendor’s rights of ownership including his real rights over
the thing. This means that after the sale of a realty by means of a public instrument, the vendor, who
resells it to another, does not transmit anything to the second vendee and if the latter, by virtue of this
second sales, take material possession of the thing, he does it as a mere detainer, and it would be unjust
to protect this detention against the rights to the thing lawfully acquired by the first vendee. Hence, the
Court ruled that TomasaQuimson is the rightful owner of the property.