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 pric
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'.
SPOUSES ROQUE vs. AGUADO, et.al.
G.R. No. 193787
April 7, 2014
PONENTE: Perlas-Bernabe, J.
TOPIC: Contract of conditional sale, contract to sell, double sale
FACTS:
On July 21, 1977, petitioners-spouses Roque and the original owners of the then unregistered Lot 18089
namely, Rivero, et al. executed the 1977 Deed of Conditional Sale over a 1,231-sq. m. portion of Lot 18089
for a consideration of P30,775.00. The parties agreed that Sps. Roque shall make an initial payment of
P15,387.50 upon signing, while the remaining balance of the purchase price shall be payable upon the
registration of Lot 18089, as well as the segregation and the concomitant issuance of a separate title over
the subject portion in their names. After the deeds execution, Sps. Roque took possession and introduced
improvements on the subject portion which they utilized as a balut factory.
Pertinent provision of the 1977 Deed of Conditional Sale:
DEED OF CONDITIONAL SALE OF REAL PROPERTY
KNOW ALL MEN BY THESE PRESENTS:
xxx
That for and in consideration of the sum of THIRTY THOUSAND SEVEN HUNDRED SEVENTY FIVE
PESOS (P30,775.00), Philippine Currency, payable in the manner hereinbelow specified, the VENDORS do
hereby sell, transfer and convey unto the VENDEE, or their heirs, executors, administrators, or assignors,
that unsegregated portion of the above lot, x x x.
That the aforesaid amount shall be paid in two installments, the first installment which is in the amount of
__________ (P15,387.50) and the balance in the amount of __________ (P15,387.50), shall be paid as
soon as the described portion of the property shall have been registered under the Land Registration Act
and a Certificate of Title issued accordingly;
That as soon as the total amount of the property has been paid and the Certificate of Title has been issued,
an absolute deed of sale shall be executed accordingly;
xxx
On August 12, 1991, Sabug, Jr, applied for a free patent over the entire Lot 18089 and was eventually
issued OCT No. M-59558 in his name on October 21, 1991. On June 24, 1993, Sabug, Jr. and Rivero, in her
personal capacity and in representation of Rivero, et al., executed the 1993 Joint Affidavit, acknowledging
that the subject portion belongs to Sps. Roque and expressed their willingness to segregate the same from
the entire area of Lot 18089.
On December 8, 1999, however, Sabug, Jr., through the 1999 Deed of Absolute Sale, sold Lot 18089 to
Aguado for P2,500,000.00, who, in turn, caused the cancellation of OCT No. M-5955 and the issuance of
TCT No. M-96692 dated December 17, 199911 in her name.

Thereafter, Aguado obtained an P8,000,000.00 loan from the Land Bank secured by a mortgage over Lot
18089. When she failed to pay her loan obligation, Land Bank commenced extra-judicial foreclosure
proceedings and eventually tendered the highest bid in the auction sale. Upon Aguados failure to redeem
the subject property, Land Bank consolidated its ownership, and TCT No. M-11589513 was issued in its
name on July 21, 2003.
On June 16, 2003, Sps. Roque filed a complaint for reconveyance, annulment of sale, deed of real estate
mortgage, foreclosure, and certificate of sale, and damages before the RTC.
Aguado: innocent purchaser for value
Landbank: no knowledge of Sps. Claim. At the time when the loan was taken out, Lot 18089 was registered
in Aguados name and no lien was annotated on COT.
RTC: dismissed complaint of spouses roque and NCCP.
CA: affirmed RTC ruling.
ISSUE:
Whether or not the 1977 Deed of Conditional Sale is a conditional contract of sale or a contract to sell.
HELD:
It is a CONTRACT TO SELL. The Court held that where the seller promises to execute a deed of absolute
sale upon the completion by the buyer of the payment of the purchase price, the contract is only a contract
to sell even if their agreement is denominated as a Deed of Conditional Sale, as in this case. This treatment
stems from the legal characterization of a contract to sell, that is, a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to
the prospective buyer, binds himself to sell the subject property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon, such as, the full payment of the purchase price. Elsewise stated, in
a contract to sell, ownership is retained by the vendor and is not to pass to the vendee until full payment of
the purchase price.
In contracts to sell the obligation of the seller to sell becomes demandable only upon the happening of the
suspensive condition, that is, the full payment of the purchase price by the buyer. It is only upon the
existence of the contract of sale that the seller becomes obligated to transfer the ownership of the thing sold
to the buyer. Prior to the existence of the contract of sale, the seller is not obligated to transfer the ownership
to the buyer, even if there is a contract to sell between them.
Final installment not paid thus no perfected contract of sale
Here, it is undisputed that Sps. Roque have not paid the final installment of the purchase price. As such, the
condition which would have triggered the parties obligation to enter into and thereby perfect a contract of
sale in order to effectively transfer the ownership of the subject portion from the sellers (i.e., Rivero et al.) to
the buyers (Sps. Roque) cannot be deemed to have been fulfilled. Consequently, the latter cannot validly
claim ownership over the subject portion even if they had made an initial payment and even took possession
of the same.
Conditional contract of sale and contract to sell in relation to double sale
It is essential to distinguish between a contract to sell and a conditional contract of sale specially in cases
where the subject property is sold by the owner not to the party the seller contracted with, but to a third
person, as in the case at bench.
In a contract to sell, there being no previous sale of the property, a third person buying such
property despite the fulfillment of the suspensive condition such as the full payment of the purchase
price, for instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek
the relief of reconveyance of the property.
There is no double sale in such case. Title to the property will transfer to the buyer after registration because
there is no defect in the owner-sellers title per se, but the latter, of course, may be sued for damages by
the intending buyer.
On the matter of double sales, suffice it to state that Sps. Roques reliance 64 on Article 154465 of the Civil
Code has been misplaced since the contract they base their claim of ownership on is, as earlier stated, a
contract to sell, and not one of sale. In Cheng v. Genato, 66 the Court stated the circumstances which must
concur in order to determine the applicability of Article 1544, none of which are obtaining in this case, viz.:
(a) The two (or more) sales transactions in issue must pertain to exactly the same subject matter, and must

be valid sales transactions;

(b) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent
conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have
bought from the same seller.

The action for reconveyance shall fail.