CASTRO, JANINE MARIE BERNADETTE C.

20190200558

CARMELITA FUDOT vs. CATTLEYA LAND, INC., VELASCO, JR., JJ

G.R. No. 171008 September 13, 2007

FACTS:

Sometime in July 1992, Cattleya Land, Inc. (hereinafter referred to as respondent)

asked someone to check, on its behalf, the titles of nine (9) lots, the subject land
included, which it intended to buy from the spouses Troadio and Asuncion Tecson.
Finding no defect on the titles, respondent purchased the nine lots through a Deed of
Conditional Sale. Subsequently, respondent and the Tecsons executed a Deed of
Absolute Sale over the same properties. The Register of Deeds, Atty. Narciso dela
Serna, refused to actually annotate the deed of sale on the titles because of the existing
notice of attachment in connection with pending civil case before the Regional Trial
Court. The attachment was eventually cancelled by virtue of a compromise agreement
between the Tecsons and their attaching creditor which was brokered by respondent.

On 23 January 1995, petitioner presented for registration before the Register of Deeds
the owner’s copy of the title of the subject property, together with the deed of sale
purportedly executed by the Tecsons in favor of petitioner. On the following day,
respondent sent a letter of protest/opposition to petitioner’s application. Much to its
surprise, respondent learned that the Register of Deeds had already registered the
deed of sale in favor of petitioner and issued a new title in her name.

On 5 May 1995, Asuncion filed a complaint-in-intervention, claiming that she never

signed any deed of sale covering any part of their conjugal property in favor of
petitioner. She averred that her signature in petitioner’s deed of sale was forged thus,
said deed should be declared null and void. She also claimed that she has discovered
only recently that there was an amorous relationship between her husband and
petitioner.
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The RTC dismissed Asuncion’s claim for damages against petitioner for lack of factual
basis and petitioner’s counterclaim for lack of the required preponderance of evidence.
It further declared that the deed of sale between petitioner and spouses Tecson was
invalid.

According to the trial court, respondent had recorded in good faith the deed of sale in its
favor ahead of petitioner. Moreover, based on Asuncion’s convincing and unrebutted
testimony, the trial court concluded that the purported signature of Asuncion in the deed
of sale in favor of petitioner was forged, thereby rendering the sale void.

Petitioner sought recourse to the Court of Appeals, arguing in the main that the rule on
double sale was applicable to the case. The appellate court, however, dismissed her
appeal, holding that there was no double sale because the alleged sale to petitioner
was null and void in view of the forgery of Asuncion’s purported signature in the deed.
The appellate court noted that petitioner failed to rebut Asuncion’s testimony despite
opportunities to do so. Moreover, even if there was double sale, according to the
appellate court, respondent’s claim would still prevail since it was able to register the
second sale in its favor in good faith, had made inquiriesh before it purchased the lots,
and was informed that the titles were free from encumbrance except the attachment on
the property due to a pending civil case.

Hence, this petition.

ISSUE:

Whether or not Fudot has a better right as the first buyer of the subject property in
accordance with Art. 1544 in regards to double sale.
CASTRO, JANINE MARIE BERNADETTE C.
20190200558

HELD:

No. Petitioner’s arguments, which rest on the assumption that there was a double
sale, must fail.

The Court held that in the first place, there is no double sale to speak of. Art. 1544 of
the Civil Code, which provides the rule on double sale, applies only to a situation where
the same property is validly sold to different vendees. In this case, there is only one sale
to advert to, that between the spouses Tecson and respondent.

Even assuming that there was double sale in this case, petitioner would still not prevail.
In interpreting this provision, the Court declared that the governing principle is primus
tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer
of the second sale cannot defeat the first buyer’s rights, except where the second buyer
registers in good faith the second sale ahead of the first as provided by the aforequoted
provision of the Civil Code. Such knowledge of the first buyer does not bar him from
availing of his rights under the law, among them to register first his purchase as against
the second buyer. However, knowledge gained by the second buyer of the first sale
defeats his rights even if he is first to register the second sale, since such knowledge
taints his prior registration with bad faith. It is thus essential, to merit the protection of
Art. 1544, second paragraph, that the second realty buyer must act in good faith in
registering his deed of sale.

Hence, the Court agree with the trial court and the Court of Appeals that respondent
was a buyer in good faith, having purchased the nine (9) lots, including the subject lot,
without any notice of a previous sale, but only a notice of attachment relative to a
pending civil case. In fact, in its desire to finally have the title to the properties
transferred in its name, it persuaded the parties in the said case to settle the same so
that the notice of attachment could be cancelled.
CASTRO, JANINE MARIE BERNADETTE C.
20190200558

SPOUSES AVELINO and EXALTACION SALERA vs. SPOUSES CELEDONIO and

POLICRONIA RODAJE
G.R. No. 135900 August 17, 2007

FACTS:

On May 7, 1993, spouses Avelino and Exaltacion Salera, now petitioners, filed with the
Regional Trial Court (RTC), a complaint for quieting of title, against spouses Celedonio
and Policronia Rodaje. Petitioners alleged that they are the absolute owners of a parcel
of land situated at Basud, San Isidro, Leyte. They acquired the property from the heirs
of Brigido Tonacao. Petitioners further alleged that they have been in possession of the
property and the house they built thereon because they had paid the purchase price
even before the execution of the deed of sale.

In their answer to the complaint, respondents claimed that they are the absolute owners
of the same property. They acquired it from Catalino Tonacao, the father of Brigido, they
had a verbal contract of sale with Catalino. Since then, they have been exercising their
right of ownership over the property and the building constructed thereon peacefully,
publicly, adversely and continuously. Apart from being the first registrants, they are
buyers in good faith.

The RTC rendered a Decision declaring petitioners the rightful and legal owners of the
property. On appeal, the Court of Appeals, in a Decision, reversed and set aside the
trial court’s Decision.

Hence, this petition.

ISSUE:
Whether or not the contract of sale of herein petitioners is valid.
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20190200558

HELD:
Yes. The Court held that the contract of sale of herein petitioners is valid. The
Court of Appeals is wrong. Article 1544 of the Civil Code contemplates a case of double
sale or multiple sales by a single vendor. More specifically, it covers a situation where a
single vendor sold one and the same immovable property to two or more buyers. 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.

In the instant case, the property was sold by two different vendors to different
purchasers. The first sale was between Catalino and herein respondents, while the
second was between Brigido’s heirs and herein petitioners.

Settled is the principle that this Court is not a trier of facts. In Gabriel v. Mabanta we
said that "(t)his rule, however, is not an iron-clad rule." One of the recognized
exceptions is when the findings of fact of the Court of Appeals are contrary to those of
the trial court, as in this case.The plaintiffs-appellees had prior knowledge of the sale of
the questioned property to the defendants-appellants—and even recognized and
respected the latter’s possession thereof—they acted with gross and evident bad faith in
perfecting a contract of sale in their favor.

Accordingly, since it has been proven that the defendants-appellants were the anterior
possessors in good faith, ownership of the questioned property vested in them by sheer
force of law. Besides, the defendants-appellants subsequently registered the deed of
sale in their favor on June 10, 1986. For all intents and purposes, they were the first to
register the deed of conveyance. Since they were the first vendees, their registration
enjoyed the presumption of good faith.

Hence, the Decision of the RTC is reinstated.

CASTRO, JANINE MARIE BERNADETTE C.
20190200558

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY vs. SPOUSES EDITO

and MERIAN TIROL, et. al.
G.R. No. 171535 June 5, 2009

FACTS:

Plaintiffs-appellees and business partners, Edito P. Tirol and Alejandro Y. Ngo, along
with their respective spouses, claim to have purchased a 2,000 square meter parcel of
land, from a certain Mrs. Elma S. Jenkins, a Filipino citizen married to a certain Mr.
Scott Edward Jenkins, an American citizen, per Deed of Absolute Sale, which bear no
annotation of liens, encumbrances, lis pendens or any adverse claim whatsoever. After
the sale wherein plaintiffs-appellees were purportedly purchasers for value and in good
faith, they succeeded in titling the said lot. It was only in January 1996 that plaintiffs-
appellees discovered a cloud on their title when their request for a Height Clearance
with the Department of Transportation and Communications was referred to the
defendant-appellant Mactan[-]Cebu International Airport Authority, on account of the
latter’s ownership of the said lot by way of purchase thereof dating far back to 1958.

The trial court, in its Decision, ruled in favor of petitioner MCIAA. It held that there was a
valid transfer of title from Spouses Julian Cuison and Marcosa Cosef to the Civil
Aeronautics Administration (CAA), and accordingly, the respondents did not buy the lot
from a person who could validly dispose of it.

Respondents filed their Motion for Reconsideration and thereafter in an Order, the trial
court did a complete volte face and reversed its Decision. Holding that Article 1544 of
the New Civil Code – which set forth the rule on double sales – finds application to the
instant case, the trial court ratiocinated:
CASTRO, JANINE MARIE BERNADETTE C.
20190200558

In the words of the Supreme Court in Cruz vs. Cabana, this Court finds that in the case
of double sale of real property, Article 1544 of the New Civil Code applies. Defendant
was certainly the first buyer and the plaintiffs were the subsequent buyers.

ISSUE:
Whether or not respondents Spouses Tirol and Spouses Ngo has the superior right to
the subject property.

HELD:

Yes. The Court ruled in favor of the respondents, but on grounds different than
those relied upon by the Court of Appeals and the trial court. Preliminarily, reliance
on Article 1544 of the New Civil Code is misplaced. The said provision has no
application in cases where the sales involved were initiated not by just one vendor but
by several successive vendors.

In the instant case, respondents and petitioner had acquired the subject property from
different transferors. Petitioner, through its predecessor-in-interest (CAA), acquired the
entire from its original owners, spouses Julian Cuison and Marcosa Cosef. On the other
hand, respondents acquired the subject parcel of land, a portion of the lot, from Mrs.
Elma Jenkins, another transferee, some thirty-five years later. The immediate
transferors of Elma Jenkins were the spouses Moises Cuizon and Beatriz Patalinghug
who, in turn, obtained the subject property from spouses Julian Cuison and Marcosa
Cosef. Therefore, the instant controversy cannot be governed by Article 1544 since
petitioner and respondents do not have the same immediate seller.

This notwithstanding, we find that respondents have a better right to the disputed
property.

Also, Petitioner did not contest that the lot of which the property subject of this case is a
part, was registered under Act No. 496 (the Land Registration Act) even before the
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20190200558

Second World War. In this regard, well-settled is the rule that registration of instruments
must be done in the proper registry in order to effect and bind the land.

Consequently, the fact that petitioner MCIAA was able to register its Deed of Absolute
Sale under Act No. 3344 is of no moment, as the property subject of the sale is
indisputably registered land. Section 50 of Act No. 496 in fact categorically states that it
is the act of registration that shall operate to convey and affect the land; absent any
such registration, the instrument executed by the parties remains only as a contract
between them and as evidence of authority to the clerk or register of deeds to make
registration.

Hence, respondents may not be characterized as buyers in bad faith for having bought
the property notwithstanding the registration of the first Deed of Absolute Sale under Act
No. 3344. An improper registration is no registration at all. Likewise, a sale that is not
correctly registered is binding only between the seller and the buyer, but it does not
affect innocent third persons.
CASTRO, JANINE MARIE BERNADETTE C.
20190200558

PHILIPPINE NATIONAL BANK v. MEGA PRIME REALTY AND HOLDINGS

CORPORATION
G.R. NO. 173454 October 6, 2008
FACTS:

Mega Prime filed a complaint for annulment of contract before the RTC. In its amended
complaint, Mega Prime alleged, among others, that PNB operates a subsidiary by the
name of PNB Management and Development Corporation. In line with PNB's
privatization plan, it opted to sell or dispose of all its stockholdings over PNB-Madecor
to Mega Prime. Thereafter, a deed of sale, was executed between PNB (as vendor) and
Mega Prime (as vendee) whereby PNB sold, transferred and conveyed to Mega Prime.

Mega Prime further alleged that one of the principal inducements for it to purchase the
stockholdings of defendant PNB in PNB-Madecor was to acquire assets of PNB-
Madecor.
Mega Prime then entered into a joint venture to develop the Pantranco property.
However, Mega Prime's joint venture partner pulled out of the agreement when it
learned that the property was likewise the subject matter of another title registered in
the name of the City Government of Quezon City. Thereafter, Mega Prime sought the
annulment of the deed of sale on ground that PNB misrepresented that among the
assets to be acquired by Mega Prime from the sale of shares of stock was the property.
However, the subject property was outside the commerce of man, the same being a
road owned by the Quezon City Government.

According to PNB, Mega Prime's accusation that there was fraudulent

misrepresentation on the former's part is without basis.

The RTC gave judgment in favor of Mega Prime and against PNB. PNB elevated the
matter to the CA reversed and nullified the RTC ruling.
CASTRO, JANINE MARIE BERNADETTE C.
20190200558

ISSUE:

Whether or not there was a breach in the warranties of the seller PNB.

HELD:

Yes. The Court holds that there was a breach in the warranties of the seller PNB.
Resultantly, a reduction in the sale price should be decreed.

An important sense of the deed of sale is the transfer of ownership over the subject
properties to Mega Prime. Clearly, the failure of the seller PNB to effect a change in
ownership of the subject properties amounts to a hidden defect within the contemplation
of Articles 1547 and 1561 of the New Civil Code.

Up to now, the title of the said property is still under the name of the former registered
owner Marcris Realty Corporation. Mega Prime's subsequent discovery that the
property is covered by a title pertaining to the City Government of Quezon City coupled
with PNB's inability up to the present to submit a title in the name of PNB-Madecor
constitutes a breach of warranty. Hence, a proportionate reduction in the consideration
of the sale is justified, applying the Civil Code principle that "no person shall be enriched
at the expense of another."

The sale of shares of stock was undertaken to effect the transfer of the subject
properties with a total area of 19,080 square meters. When PNB failed to deliver the title
to the property covered, PNB violated an express warranty under the deed of sale.
Thus, the total consideration in the Deed of Sale should be proportionately reduced
equivalent to the value of the property.
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20190200558

Necessarily, Mega Prime cannot be considered in default with respect to its obligation to
petitioner bank in view of the modification of the stipulated consideration.