CRB vs.

CA and HEIRS OF DELA CRUZ

G.R. No. 132161
January 17, 2005
FACTS: The Madrid brothers were the registered owners of Lot A situated in
Isabela.
Said lot was subdivided into several lots. Rizal Madrid sold part of his share
identified lot A-7 to Gamiao and Dayag by virtue of a Deed of Sale, to which his
brothers offered no objection as evidenced by their Joint Affidavit .The deed of
sale was not registered with the ORD of Isabela. However, Gamiao and Dayag
declared the property in their names on a Tax Declaration.
Gamiao and Dayag sold the subject southern half of lot to Teodoro dela Cruz,
and the northern half to Hernandez. Thereupon, Teodoro dela Cruz and
Hernandez took possession of and cultivated the portions of the property
respectively sold to them (Later Restituto Hernandez donated the northern half
to his daughter. The children of Teodoro dela Cruz continued possession of the
southern half after their father’s death.)
In a Deed of Sale the Madrid brothers conveyed all their rights and interests over
lot A-7 to Marquez which the former confirmed. The deed of sale was registered
with the ORD of Isabela.
Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the same date,
Marquez and his spouse, Mercedita Mariana, mortgaged 4 lots to the
Consolidated Rural Bank, Inc. of Cagayan Valley (hereafter, CRB) to secure a
loan. These deeds of real estate mortgage were registered with the ORD.

As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of
the mortgages in its favor and the lots were sold to it as the highest bidder.

The Heirs-now respondents filed a case for reconveyance and damages for the
southern portion of Lot No. 7036-A (hereafter, the subject property) against
Marquez and CRB.

The RTC handed down a decision in favor of Marquez. The Heirs interposed an
appeal with the CA, which upheld the claim of the Heirs. Hence, the instant CRB
petition.

ISSUE: WON Art. 1544 of the Civil Code (double sale) applicable in this case

HELD: NO.
The petition is denied, and the decision as modified is affirmed. Like the lower
court, the appellate court resolved the present controversy by applying the rule
on double sale provided in Article 1544 of the Civil Code. They, however, arrived
at different conclusions. The RTC made CRB and the other defendants win,
while the Court of Appeals decided the case in favor of the Heirs.

Article 1544 of the Civil Code reads, thus:

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 possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good faith.

The provision is not applicable in the present case. It contemplates a case of

double or multiple sales by a single vendor. It cannot be invoked where the two
different contracts of sale are made by two different persons, one of them not
being the owner of the property sold. And even if the sale was made by the same
person, if the second sale was made when such person was no longer the owner
of the property, because it had been acquired by the first purchaser in full
dominion, the second purchaser cannot acquire any right.

In the case at bar, the subject property was not transferred to several purchasers
by a single vendor. In the first deed of sale, the vendors were Gamiao and Dayag
whose right to the subject property originated from their acquisition thereof
from Rizal Madrid with the conformity of all the other Madrid brothers. On the
other hand, the vendors in the other or later deed were the Madrid brothers but
at that time they were no longer the owners since they had long before disposed
of the property in favor of Gamiao and Dayag.

In a situation where not all the requisites are present which would warrant the
application of Art. 1544, the principle of prior tempore, potior jure or simply “he
who is first in time is preferred in right, should apply.” The only essential
requisite of this rule is priority in time; in other words, the only one who can
invoke this is the first vendee. Undisputedly, he is a purchaser in good faith
because at the time he bought the real property, there was still no sale to a
second vendee. In the instant case, the sale to the Heirs by Gamiao and Dayag,
who first bought it from Rizal Madrid, was anterior to the sale by the Madrid
brothers to Marquez. The Heirs also had possessed the subject property first in
time. Thus, applying the principle, the Heirs, without a scintilla of doubt, have
a superior right to the subject property.
Moreover, it is an established principle that no one can give what one does not
have¾nemo dat quod non habet. Accordingly, one can sell only what one owns or
is authorized to sell, and the buyer can acquire no more than what the seller can
transfer legally.53 In this case, since the Madrid brothers were no longer the
owners of the subject property at the time of the sale to Marquez, the latter did
not acquire any right to it.
NOTES:
In any event, assuming arguendo that Article 1544 applies to the present case,
the claim of Marquez still cannot prevail over the right of the Heirs since
according to the evidence he was not a purchaser and registrant in good faith.
In the instant case, the actions of Marquez have not satisfied the requirement
of good faith from the time of the purchase of the subject property to the time
of registration. Found by the Court of Appeals, Marquez knew at the time of the
sale that the subject property was being claimed or “taken” by the Heirs. This
was a detail which could indicate a defect in the vendor’s title which he failed to
inquire into. Marquez also admitted that he did not take possession of the
property and at the time he testified he did not even know who was in
possession.

CRB vs. CA and HEIRS OF DELA CRUZ

G.R. No. 132161
January 17, 2005
FACTS: The Madrid brothers were the registered owners of Lot A situated in Isabela.
Said lot was subdivided into several lots. Rizal Madrid sold part of his share identified lot A-7 to
Gamiao and Dayag by virtue of a Deed of Sale, to which his brothers offered no objection as
evidenced by their Joint Affidavit .The deed of sale was not registered with the ORD of Isabela.
However, Gamiao and Dayag declared the property in their names on a Tax Declaration. Gamiao
and Dayag sold the subject southern half of lot to Teodoro dela Cruz, and the northern half to
Hernandez. Thereupon, Teodoro dela Cruz and Hernandez took possession of and cultivated the
portions of the property respectively sold to them (Later Restituto Hernandez donated the northern
half to his daughter. The children of Teodoro dela Cruz continued possession of the southern half
after their father’s death.) In a Deed of Sale the Madrid brothers conveyed all their rights and
interests over lot A-7 to Marquez which the former confirmed. The deed of sale was registered
with the ORD of Isabela. Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the
same date, Marquez and his spouse, Mercedita Mariana, mortgaged 4 lots to the Consolidated
Rural Bank, Inc. of Cagayan Valley (hereafter, CRB) to secure a loan. These deeds of real estate
mortgage were registered with the ORD. As Marquez defaulted in the payment of his loan, CRB
caused the foreclosure of the mortgages in its favor and the lots were sold to it as the highest bidder.
The Heirs-now respondents filed a case for reconveyance and damages for the southern portion
of Lot No. 7036-A (hereafter, the subject property) against Marquez and CRB. The RTC handed
down a decision in favor of Marquez. The Heirs interposed an appeal with the CA, which upheld
the claim of the Heirs. Hence, the instant CRB petition.
ISSUE: WON Art. 1544 of the Civil Code (double sale) applicable in this case
HELD: NO.
The petition is denied, and the decision as modified is affirmed. Like the lower court, the appellate
court resolved the present controversy by applying the rule on double sale provided in Article 1544
of the Civil Code. They, however, arrived at different conclusions. The RTC made CRB and the
other defendants win, while the Court of Appeals decided the case in favor of the Heirs.
Article 1544 of the Civil Code reads, thus:
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 possession; and, in the absence thereof, to the person who presents the oldest title, provided
there is good faith. The provision is not applicable in the present case. It contemplates a case of
double or multiple sales by a single vendor. It cannot be invoked where the two different contracts
of sale are made by two different persons, one of them not being the owner of the property sold.
And even if the sale was made by the same person, if the second sale was made when such person
was no longer the owner of the property, because it had been acquired by the first purchaser in full
dominion, the second purchaser cannot acquire any right. In the case at bar, the subject property
was not transferred to several purchasers by a single vendor. In the first deed of sale, the vendors
were Gamiao and Dayag whose right to the subject property originated from their acquisition
thereof from Rizal Madrid with the conformity of all the other Madrid brothers. On the other hand,
the vendors in the other or later deed were the Madrid brothers but at that time they were no longer
the owners since they had long before disposed of the property in favor of Gamiao and Dayag.
In a situation where not all the requisites are present which would warrant the application of Art.
1544, the principle of prior tempore, potior jure or simply “he who is first in time is preferred in
right, should apply.” The only essential requisite of this rule is priority in time; in other words, the
only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith
because at the time he bought the real property, there was still no sale to a second vendee. In the
instant case, the sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid,
was anterior to the sale by the Madrid brothers to Marquez. The Heirs also had possessed the
subject property first in time. Thus, applying the principle, the Heirs, without a scintilla of doubt,
have a superior right to the subject property. Moreover, it is an established principle that no one
can give what one does not have¾nemo dat quod non habet. Accordingly, one can sell only what
one owns or is authorized to sell, and the buyer can acquire no more than what the seller can
transfer legally.53 In this case, since the Madrid brothers were no longer the owners of the subject
property at the time of the sale to Marquez, the latter did not acquire any right to it.
RADIOWEALTH; GABRIEL; DE LEONcase digest of Julianne Dominique
Alpuerto
Double Sale
G.R. No. 83432 May 20, 1991
RADIOWEALTH FINANCE COMPANY, petitioner,
vs.
MANUELITO S. PALILEO, respondent.
FACTS:
In April 1970, defendant spouses Enrique Castro and Herminio R. Castro (spouse Castro) sold to
herein respondent Manuelito Palileo a parcel of unregistered coconut land in Surigao del Norte.
The sale is evidenced by a notarized Deed of Absolute Sale, but the deed was not registered in
the Registry of Property for unregistered lands in the province of Surigao del Norte. Since the
execution of the deed of sale, Palileo who was then employed in Lianga, Surigao del Sur,
exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix
or overseer. Manuelito Palileo has continuously paid the real estate taxes on said land from 1971
until the present.
In November 1976, the CFI of Manila rendered a judgment was rendered against defendant
Enrique T. Castro to pay herein petitioner Radiowealth Finance Company (Radiowealth), the sum
of P22,350.35 with interest rate of 16% per annum from November 2, 1975 until fully paid, and
upon the finality of the judgment, a writ of execution was issued. The Provincial Sheriff Marietta
E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied upon and finally
sold at public auction the subject land that defendant Enrique Castro had sold to Palileo in 1970.
The said Provincial Sheriff executed a certificate of sale was by the in favor of Radiowealth as the
only bidder, and upon expiration of the redemption period, she also executed a deed of final sale.
Both documents were registered with the Registry of Deeds.
Learning of what happened to the land, Palileo filed an action for recovery of the subject property.
The court a quo rendered a decision in favor of Palileo, which the Court of Appeals affirmed.
ISSUE:
Who is the rightful owner of the subject property?
COURT RULING:
The Supreme Court likewise affirmed the appellate court’s decision on this case. There is no
doubt that had the subject property been a registered land, this case would have been decided in
favor of Radiowealth since it was the company that had its claim first recorded in the Registry of
Deeds for it is the act of registration that operates to convey and affect registered land. Therefore,
a bonafide purchaser of a registered land at an execution sale acquires a good title as against a
prior transferee, if such transfer was unrecorded.
However, a different set of rules applies in the case at bar which deals with a parcel of
unregistered land. Under Act No. 3344, registration of instruments affecting unregistered lands is
"without prejudice to a third party with a better right." The afore quoted phrase has been held by
the Supreme Court to mean that the mere registration of a sale in one's favor does not give him
any right over the land if the vendor was not anymore the owner of the land having previously
sold the same to somebody else even if the earlier sale was unrecorded. Applying this principle,
the Court of Appeals correctly held that the execution sale of the unregistered land in favor of
petitioner is of no effect because the land no longer belonged to the judgment debtor as of the
time of the said execution sale.

Radiowealth Finance Co. vs. Palileo

197 SCRA 245

May 1991

FACTS:

In April 1970, defendant spouses Enrique Castro and Herminio R. Castro

(spouse Castro) sold to herein respondent Manuelito Palileo a parcel of
unregistered coconut land in Surigao del Norte. The sale is evidenced by a
notarized Deed of Absolute Sale, but the deed was not registered in the Registry
of Property for unregistered lands in the province of Surigao del Norte. Since
the execution of the deed of sale, Palileo who was then employed in Lianga,
Surigao del Sur, exercised acts of ownership over the land through his mother
Rafaela Palileo, as administratrix or overseer. Manuelito Palileo has
continuously paid the real estate taxes on said land from 1971 until the present.

In November 1976, the CFI of Manila rendered a judgment was rendered

against defendant Enrique T. Castro to pay herein petitioner Radiowealth
Finance Company (Radiowealth), the sum of P22,350.35 with interest rate of
16% per annum from November 2, 1975 until fully paid, and upon the finality of
the judgment, a writ of execution was issued. The Provincial Sheriff Marietta E.
Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied
upon and finally sold at public auction the subject land that defendant Enrique
Castro had sold to Palileo in 1970. The said Provincial Sheriff executed a
certificate of sale was by the in favor of Radiowealth as the only bidder, and
upon expiration of the redemption period, she also executed a deed of final sale.
Both documents were registered with the Registry of Deeds.

Learning of what happened to the land, Palileo filed an action for recovery of
the subject property. The court a quo rendered a decision in favor of Palileo,
which the Court of Appeals affirmed.

ISSUE:

Who is the rightful owner of the subject property?

COURT RULING:

The Supreme Court likewise affirmed the appellate court’s decision on this case.
There is no doubt that had the subject property been a registered land, this case
would have been decided in favor of Radiowealth since it was the company that
had its claim first recorded in the Registry of Deeds for it is the act of
registration that operates to convey and affect registered land. Therefore, a
bonafide purchaser of a registered land at an execution sale acquires a good title
as against a prior transferee, if such transfer was unrecorded.

However, a different set of rules applies in the case at bar which deals with a
parcel of unregistered land. Under Act No. 3344, registration of instruments
affecting unregistered lands is "without prejudice to a third party with a better
right." The aforequoted phrase has been held by the Supreme Court to mean
that the mere registration of a sale in one's favor does not give him any right
over the land if the vendor was not anymore the owner of the land having
previously sold the same to somebody else even if the earlier sale was
unrecorded. Applying this principle, the Court of Appeals correctly held that the
execution sale of the unregistered land in favor of petitioner is of no effect
because the land no longer belonged to the judgment debtor as of the time of
the said execution sale.

G.R. No. 170405 February 2, 2010

RAYMUNDO S. DE LEON, Petitioner,
vs.
BENITA T. ONG. Respondent.

Facts:
On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita T.
Ong(respondent). The said properties were mortgaged to a financial institution; Real Savings
& Loan Association Inc. (RSLAI). The parties then executed a notarized deed of absolute sale with
assumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that
the petitioner (de Leon) shall execute a deed of assumption of mortgage in favor of Ong
(respondent)after full payment of the P415,000. They also agreed that the respondent (Ong) shall
assume the mortgage. The respondent then subsequently gave petitioner P415,000 as partial
payment. On the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to
inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the respondent took repairs
and made improvements in the properties. Subsequently, respondent learned that the same
properties were sold to a certain Viloria after March 10, 1993 and changed the locks, rendering
the keys given to her useless. Respondent proceeded to RSLAI but she was informed that the
mortgage has been fully paid and that the titles have been given to the said person. Respondent
then filed a complaint for specific performance and declaration of nullity of the second sale and
damages. The petitioner contended that respondent does not have a cause of action against him
because the sale was subject to a condition which requires the approval of RSLAI of the mortgage.
Petitioner reiterated that they only entered into a contract to sell. The RTC dismissed the case. On
appeal, the CA upheld the sale to respondent and nullified the sale to Viloria. Petitioner moved
for reconsideration to the SC.

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

Held:
In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection
of the contract. The non-payment of the price is a negative resolutory condition. Contract to sell
is subject to a positive suspensive condition. The buyer does not acquire ownership of
the property until he fully pays the purchase price.In the present case, the deed executed by
the parties did not show that the owner intends to reserve ownership of the properties. The
terms and conditions affected only the manner of payment and not the immediate transfer of
ownership. It was clear that the owner intended a sale because he unqualifiedly delivered and
transferred ownership of the properties to the respondent

CARDENTE V. RUBIN (1987)

SECOND DIVISION
[ G.R. No. 73651, November 27, 1987 ]
IGNACIO CARDENTE AND ANASTACIA T. CARDENTE, PETITIONERS, VS.
THE INTERMEDIATE APPELLATE COURT AND SPOUSES RUPERTO
RUBIN AND PRIMITIVA C. RUBIN, RESPONDENTS.

FACTS:
Sometime in 1956, CARDENTE purchased from Isidro Palanay one hectare of land. The
sale was by public document. Immediately after the purchase, the Cardentes took
possession of the land and planted various crops and trees thereon. They have been in
continuous possession ever since, adverse to the whole world. Four years later, Isidro
Palanay sold the entire property to the private respondents, RUPERTO RUBIN who was
informed by the former of the first sale of the one-hectare portion to CARDENTE. The
deed of sale was registered and a new title was issued.

ISSUE:
Who has the better right over the property?
Whether or not the private respondents acted in good faith when they registered the deed
of sale.

HELD:

1) CARDENTES. Because of the notorious and continuous possession and full enjoyment
by petitioners of the disputed one-hectare property long before the private respondents
purchased the same from Palanay.
2) RUBIN's failure to inquire and to investigate the basis of CARDENTE's actual
occupation of the land forming a substantial part of what they were buying militates
against their posited lack of knowledge of the first sale.

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.
It is undisputed that the private respondents registered the sale in their favor whereas the
petitioners did not. But mere registration of the sale is not enough. Good faith must
concur with the registration. Bad faith renders the registration nothing but an exercise in
futility.
POWER COMMERCIAL V. CA (June 20, 1997)

FACTS:
Petitioner asbestos manufacturer Power Commercial and industrial corporation bought the property of
spouses Reynaldo and Angelita Quiambao located in Makati City.

Since there are lessees occupying the subject land, part of the deed of sale is a warranty of respondents
that will defend its title and peaceful possession in favor of the petitioners.

The property is mortgage to PNP and as such, petitioners filed a request to assume responsibility of the
mortgage. Because of petitioners failure to produce the required papers, their petition was denied.

Petitioners allege that the contract should be rescinded because of failure of delivery.

ISSUE:
WON the contract is recissible due to breach of contract.

HELD:
There is no breach of contact in this case since there is no provision in the contract that imposes the
obligation to the respondents to eject the people occupying the property.

There was also a constructive delivery because the deed of sale was made in a public document. The
contention of the petitioners that there could be no constructive delivery because the respondents is not in
possession of the property is of no merit. What matters in a constructive delivery is control and not
possession. Control was placed in the hands of the petitioners that is why they were able to file an ejectment
case. Prior physical delivery or possession is not legally required and the execution of the deed of sale is
deemed equivalent to delivery.