DOUBLE SALE

1. CARBONELL V
CA
Prius tempore, portior jure.
Knowledge gained by the first buyer of the second sale cannot
defeat the first buyer's rights except only where the second
buyer first registers in GF the second sale ahead of the first.
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 nowledge taints his prior registration with bad faith. !nder
"#$$, for the second buyer to displace the first buyer, he must
have acted in GF from ac%uisition until transfer of title by
registration or failing registration, by delivery of possession.
2. DAGUPAN
TRADING V
MACAM
&here one of two conflicting sales of a piece of land was
executed before the land was registered, while the other was an
execution sale in favor of the judgment creditor of the owner
made after the same property had been registered, upon the
execution and delivery of the final certificate of sale in favor of
the purchaser of land sold in an execution sale, such purchaser
'shall be substituted to and ac%uire all the rights, title, interest
and claim of the judgment debtor to the property as of the time of
the levy'. &here for a considerable time prior to the levy on
execution the interest of the owner of the land levied upon had
already been conveyed to another who too possession thereof
and introduced improvements therein, the aforesaid levy is void.
(he prior sale, albeit unregistered, cannot be deemed
automatically cancelled upon the subse%uent issuance of the
(orrens title over the land.
3. DAVID V BANDIN (he defense of having purchased the property in good faith may
be availed of only where registered land is involved and the
buyer had relied in good faith on the clear title of the registered
owner. )ne who purchases an unregistered land does so at his
peril. *is claim of having bought the land in good faith, i.e.
without notice that some other person has a right to, or interest
in, the property, would not protect him if it turns out that the seller
does not actually own the property. *owever, the purchaser who
relies on the clean title of the registered owner is protected if he
is a purchaser in good faith for value. +n the absence of a
showing that he had actual notice of the defect in the title of the
vendors or that he is a buyer in bad faith, the deed of sale in his
favor and the corresponding certificate of title issued in his name
cannot be nullified and cancelled.
4. OLIVARES V
GONZALES
+n a consolidation case where the property was subjected to two
different sales, one, with pacto de retro which was unregistered
and an absolute sale which was registered, and the possession
of the property is with the vendee of the latter sale, who were not
included as party,defendant in the case. -ustice and e%uity
demand that said vendees in possession of property should be
heard first before adjudication of the ownership of the property. +n
double sale, the principle of prius tempore, patior jure enunciates
that the good faith of the first buyer remains all throughout
despite his subse%uent ac%uisition of nowledge of the
subse%uent sale. Knowledge by the first buyer of the second
sale cannot defeat the first buyer.s right except when the second
buyer registers first in good faith the second sale.
5. CARAM V
LAURETA
)ne who purchases real estate with nowledge of a defect or
lac of title in his vendor cannot claim that he has ac%uired title
thereto in good faith, as against the true owner of the land or of
an interest therein, and the same rule must be applied to one
who has nowledge of facts which should have put him upon
such in%uiry and investigation as might be necessary to ac%uaint
him with the defects in the title of his vendor. /rticle "#$$ does
not declare void a deed of sale registered in bad faith0 it does not
mean, however, that the said contract is not void. (he law on
double sale applies only to immovable properties sold by the
owner himself. (he status of the 1 contracts must be determined
and clarified,one must be declared valid so that one vendee may
exercise all rights of an owner while the other contract must be
declared void to cut off all rights which may arise from the said
contract.
6. CRUZ V CABANA +n order that the provisions of /rticle "#$$ of the new 2ivil 2ode
may be invoed, it is necessary that the conveyance must have
been made by a party who has an existing right in the thing and
the power to dispose of it. +t cannot be set up by a second
purchaser who comes into possession of the property that has
already been ac%uired by the first purchaser in full dominion, this
notwithstanding that the second purchaser records his title in the
public registry, if the registration be done in bad faith, the
philosophy underlying this rule being that the public records
cannot be covered into instruments of fraud and oppression by
one who secures an inscription therein in bad faith. / purchaser
who has nowledge of fact which would put him upon in%uiry and
investigation as to possible defects of the title of the vendor and
fails to mae such in%uiry and investigation, cannot claim that he
is a purchaser in good faith. Knowledge of a prior transfer of
registered property by a subse%uent purchaser maes him a
purchaser in bad faith and his nowledge of such transfer vitiates
his title ac%uired by virtue of the latter instrument of conveyance
which creates no right as against the first purchaser.
7. VALDES V CA +n a case where a notice of adverse claim was registered
previous to the sale by the possessor, a prior right is accorded to
the vendee who first recorded his right in good faith over an
immovable property. /n annotation of an adverse claim made
prior to a deed of assignment, establishes a superior right over
the property and it was effectively a notice to the whole world.
(his is e%uivalent to registration in good faith which /rticle "#$$
provides.
8. NUGUID V CA /lthough the second sale was made by the heirs of the
deceased the said heirs are deemed the judicial continuation of
the personality of the decedent. 3ssentially, therefore, the first
and second sales were made by the same person, as envisioned
under /rticle "#$$ of the 2ivil 2ode. (he disputed property being
immovable property, the ownership should belong to the vendee
who in good faith first recorded it in the 4egistry of Property,
pursuant to the same article. Good faith is deemed to be present
5a6 when the original certificate of title was clean and free from
any annotation or encumbrance and 5b6 when there is lac of
nowledge of the prior sale. /n innocent purchaser for value is
protected such that when land has already passed into the
hands of an innocent purchaser for value, reconveyance of the
same can no longer be made.
9. RADIOWEALTH
INANCE V
PALILEO
/ person dealing with registered land is not re%uired to go behind
the register to determine the condition of the property. *e is only
charged with notice of the burdens on the property which are
noted on the face of the register or certificate of title. *owever,
/rticle "#$$ does not apply where the second buyer ac%uires the
unregistered land at an execution sale, even if he was ignorant
of the prior sale made by his judgment debtor in favour of the
first buyer. (he purchaser of an unregistered land at a sheriff.s
execution sale only steps in the shoes of the judgment debtor
and merely ac%uires the latter.s interest in the property sold as of
the time the property was levied upon.
1!. TANEDO V CA )wnership shall belong to the buyer who in good faith registers
it first in the registry of property. /s between two purchasers,
the one who registered the sale in his favor has a preferred
right over the other who has not registered his title, even if the
latter is in actual possession of the immovable property.
&hen two deeds of sale for an inherited property which
were executed after the death of the decedent and after a
deed of extra,judicial settlement. /nd which said deeds of
sale where made on different dates, the ownership would
vest in the deed which was registered, even if the other deed
is executed earlier. (he same rule applies even if actual
possession is in the vendee of the deed executed earlier.7
11. OCCENA VS
ESPONILLA
8ere registration is not enough0 good faith must concur with
registration. (o be entitled to priority, the second purchaser must
also have acted in good faith,one without nowledge of the
previous alienation by the vendor to another or must not have
been aware of the facts which should put him upon in%uiry to
ac%uaint him with the defect or lac of title of his vendor. 9hould
he find out such circumstances, it would be incumbent upon him
to verify the extent of the occupant.s possessory rights. Failure to
tae precautionary steps would mean negligence on his part and
would preclude him from claiming or invoing the rights of a
purchaser in good faith.
IMPLIED WARRANT"
12. MOLES V IAC (here is no implied warranty as to the condition, adaptation,
fitness or suitability for the purpose for which made, or the %uality
of an article sold as and for a second,hand article. :ut such
articles might be sold under such circumstances as to raise an
implied warranty. / certification issued by the vendor that a
second,hand machine was in /," condition is an express
warranty binding on the vendor.
PRESCRIPTION O W
13. ENGR
MACHINER"
CORP V CA
(he remedy against violations of the warranty against hidden
defects is either to withdraw from the contract 5redhibitory action6
or to demand a proportionate reduction of the price 5accion
%uanti minoris6, with damages in either case. /ctions 'upon a
written contract' prescribe in ten 5";6 years. (he mere fact that
the employer accepted the wor does not, ipso facto, relieve the
petitioner from liability for deviations from and violations of the
written contract, as the law gives him ten 5";6 years within which
to file an action based on breach thereof.
CONDITION # WARRANT"
14. CATUNGAL VS
RODRIGUEZ
From the moment the contract is perfected, the parties are
bound not only to the fulfillment of what has been expressly
stipulated but also to all the conse%uences which, according to
their nature, may be in eeping with good faith, usage and law. +n
accordance with /rticle "#$# of the 2ivil 2ode, one must
distinguish< failure to comply with a condition imposed on the
perfection of a contract results in the failure of the contract while
failure to comply with a condition imposed merely on the
performance of an obligation merely gives the other party the
option to either refuse to proceed with the sale or to waive the
condition. 8oreover, where the so,called 'potestative condition' is
imposed not on the birth of the obligation but on its fulfillment,
only the condition is avoided, leaving unaffected the obligation
itself.
WARRANT" AGAINST EVICTION $ DAMAGES
15. TUAZON V CA +t is a re%uisite that the vendee himself must not be guilty of bad
faith in the execution of the sae. +f he new of the defect in the
title at the time of the sale, or had nown of the facts which
should have put him in in%uiry and investigation as may be
necessary to ac%uaint him with the defects in the title of the
vendor, he cannot claim that the vendor has warranted his legal
and peaceful possession of the property sold on the theory that
he proceeded with the sale with the assumption of the danger of
eviction. *e is not entitled to the warranty against eviction nor
entitle to the recovery of damages.
ASSIGNMENT O CREDIT
16. SONN" LO V CA /n assignment of credit, which is in the nature of a sale of
personal property, produces the effects of dacion en pago which
may extinguish the obligation. /rticle "=1> opines that the
vendor in good faith shall be responsible for the existence and
legality of the credit at the time of the sale, unless it should have
been sold as doubtful0 but not for the solvency of the debtor,
unless it has been so expressly stipulated or unless the
insolvency was prior to the sale and of common nowledge. (he
vendor?assignor is bound to warrant the existence and legality of
the credit of the time of the sale or assignment. :y warranting
the existence of the credit, the vendor should be deemed to have
ensured the performance in case the credit is later found to be
inexistent. *e should be liable to pay the vendee the amount of
his indebtedness.
CONVENTIONAL REDEMPTION % E& MORTGAGE
17. RAMOS V CA 9ince sales with right to repurchase are not favoured, such are
instead construed to be e%uitable mortgages. (o create the
presumption enunciated by /rticle "=;1, the existence of one
circumstance is enough. &here contracts purporting to be pacto
de retros were actually executed in consideration of the
aforesaid loans, said contracts are indubitably e%uitable
mortgages. (he rule is firmly settled that whenever it is clearly
shown that a deed of sale with pacto de retro, regular on its face,
is given as security for a loan, it must be regarded as an
e%uitable mortgage. 8ore so, an order granting the vendee's
petition for consolidation of ownership, without the vendor a retro
being named as respondent, summoned and heard, is a patent
nullity for want of jurisdiction of the court over the person of the
latter.
18. DE LEON V
SALVADOR
&hile in ordinary sales for reasons of e%uity a transaction may
be invalidated on the ground of inade%uacy of price, or when
such inade%uacy shocs one's conscience as to justify the courts
to interfere, such does not follow when the law gives to the
owner the right to redeem, as when a sale is made at public
auction, upon the theory that the lesser the price the easier it is
for the owner to effect the redemption. &hen there is the right to
redeem, inade%uacy of price should not be material, because the
judgment debtor may reac%uire the property or also sell his right
to redeem and thus recover the loss he claims to have suffered
by reason of the price obtained at the auction sale.
19. LORES V SO (he new 2ivil 2ode shall not be applicable to a pacto de retro
sale executed before it was enacted, hence the old civil code
governs. +t is provided in /rticle "#;@ thereof that if the vendor
does not comply with the provisions of /rticle "#">, 5i.e. to return
the price, plus expenses6 the vendee shall ac%uire irrevocably
the ownership of the thing sold. !nder the old 2ivil 2ode, the
ownership was consolidated in the vendee a retro by operation
of law. /rticles "=;= and "=;A of the new 2ivil 2ode which
re%uire registration of the consolidation of ownership in the
vendee a retro only by judicial order, do not apply.
2!. LAO V CA 3xistence of one of the circumstances under /rticle "=;1 is
enough to purport a pacto de retro sale to be one of e%uitable
mortgage. +n the case at bar, the vendor remained in possession
of the property as a beneficial owner before, during and after the
alleged sale0 there was extension of the period of redemption 5in
fact, this was done twice60 and that the vendors were in Bdire
need of money. which led them to mortgage their property. Given
such circumstances, the contract was held to be one of e%uitable
mortgage.
21. LANUZA V
DELEON
(he stipulation in deed denominated by the parties as a 'Ceed of
9ale &ith 4ight to 4epurchase' to the effect that if the vendor
fails to pay the amount agreed upon within the stipulated period,
his right to repurchase the property shall be forfeited and the
ownership over the same would automatically pass to the
vendee without need of court intervention, is contrary to the
nature of a true pacto de retro sale, under which a vendee
ac%uires ownership of the thing sold immediately upon execution
of the sale, subject only to the vendor's right of redemption.
9ince pacto commissorium is contrary to law, such contract is
deemed to be an e%uitable mortgage. /lso, preference of
mortgage credits is determined by the priority of registration of
the mortgages, following the maxim Dprior tempore potior jure'.
22. CAPULONG V CA +n practically all of the so,called contracts of sale with right of
repurchase, the real intention of the parties is that the pretended
purchase price is money loaned and in order to secure the
payment of the loan, a contract purporting to be a sale with pacts
de retro is drawn up. +f the transaction is an absolute sale of
property, particularly land, the vendee would ordinarily assume
immediate possession after the execution of the deed of sale.
LEGAL REDEMPTION
23. ALONZO V IAC !nder /rticle "=1E, the right of legal pre,emption or redemption
shall not be exercised except within thirty days from the notice in
writing by the prospective vendor, or by the vendors, as the case
may be. (he deed of sale shall not be recorded in the 4egistry of
Property, unless accompanied by an affidavit of the vendor that
he has given written notice thereof to all possible redemptioners.
/n exception to the mandatory written rule is when the co,heirs
only brought an action for redemption of hereditary right sold by
another co,heir only after so many years, after having actual
nowledge thereof, by their actuations, with other circumstances
such as being neighbors with the purchaser. &hile the general
rule is, that to charge a party with laches in the assertion of an
alleged right it is essential that he should have nowledge of the
facts upon which he bases his claim, yet if the circumstances
were such as should have induced in%uiry, and the means of
ascertaining the truth were readily available upon in%uiry, but the
party neglects to mae it, he will be chargeable with laches, the
same as if he had nown the facts.
24. SOLID HOMES V
CA
+n a contract of sale with pacto de retro, the vendee has a right to
the immediate possession of the property sold, unless otherwise
agreed upon. +t is basic that in pacto de retro sale, the title and
ownership of the property sold are immediately vested in the
vendee a retro, subject only to the resolutory condition of
repurchase by the vendor a retro within the stipulated period.
&hen the vendor remains in actual physical possession of the
land and enjoys the fruits thereof, circumstances reveal the real
intention of the parties to secure the payment of the loans with
the land as security. 8oreover, /rticle "="= is not restrictive, the
interest and penalty in the redemption price may be considered
as Dother expenses7.
25. PRIMAR"
STRUCTURES V
VALENCIA
&henever a piece of rural land not exceeding one hectare is
alienated, the law grants to the adjoining owners a right of
redemption except when the grantee or buyer does not own any
other rural land. +n order that the right may arise, the land sought
to be redeemed and the adjacent property belonging to the
person exercising the right of redemption must both be rural
lands. +f one or both are urban lands, the right cannot be
invoed. *ere, the one or both are urban lands, the right cannot
be invoed. /rticle "=1" of the 2ivil 2ode expresses that the
right of redemption it grants to an adjoining owner of the property
conveyed may be defeated if it can be shown that the buyer or
grantee does not own any other rural land. (he statement in the
deed of sale to the effect that the vendors have complied with
mandatory written notice as being the written affirmation under
oath, as well as the evidence, that the re%uired written notice to
petitioner under /rticle "=1E has been met.
LEASE
26. GUZMAN
BOCALING AND
CO VS BONNEVIE
+n the right of first priority, there should be identity of the terms
and conditions to be offered to the lessees and all other
prospective buyers. +t is only when the lessees fail to exercise
the right that the property could be lawfully sold to others.
Furthermore, it is only if the right of first priority would be effected
and the said property is to be sold that the administrator be
re%uired to secure the approval of the probate court pursuant to
4ule >@ of the 4ules of 2ourt.
27. "E' SENG CO V
CA
(he mere occupancy of the premises for a number of years, by
itself is not sufficient. 9ince the contract of lease is for a definite
term, the lessee cannot avail of the benefits under /rticle "=>A
which applies only if there is no definite term. (he power of the
2ourts to fix a longer term for lease is protestative or
discretionary, 'may' is the word F to be exercised or not in
accordance with the particular circumstances of the case0 a
longer term to be granted where e%uities come into play
demanding extension, to be denied where none appears, always
with due deference to the parties freedom to contract.
28. CLUTARIO V CA /cceptance by the lessor of the payment by the lessee of the
rentals in arrears does not constitute a waiver of the default in
the payment of rentals as a valid cause of action for ejectment.
For the lessor to be able to validly eject the lessee on the ground
of need for the leased property, it must be shown that there is no
other available residential unit to satisfy that need. (he non,
availability must exist at the time of the demand by the lessor on
the lessee to vacate the property.
29. "AP V CRUZ (he transfer of the leasehold rights is conditional in nature and
has no force and effect if a service of notice of demand to pay
and to vacate is not complied with. +n the absence of such
notice, the lease continues to be in force and cannot be deemed
to have expired as of the end of the month automatically. Geither
can the non,payment of the monthly rent be a ground for
termination of the lease without a demand to pay and to vacate.
3!. UNITED REALT"
CORP
/ lease on a month,to,month basis expires after the last day of
the E;th day period repeating the same cycle of the E;,day
period until either party express their prerogative under their
agreement to terminate the same. / lease contract may be
terminated at the end of any month, which shall be deemed
terminated upon the refusal to pay the increased monthly rental
demanded by the lessor, provided the same is not exorbitant.
Furthermore, when the lease agreement refers to a dwelling unit
or land is for a definite period, the lessor has a right to judicially
eject the lessee from the leased premises, as exception to
9ection $ of Presidential Cecree Go. 1; which suspends the
application of /rticle "=AE5"6 of the 2ivil 2ode, providing for the
fixed period for the termination of leases.
31. LEGAL MGT AND
REALT" V CA
Hease agreements with no specified period, but in which rentals
are paid monthly, are considered to be on a month,to,month
basis. (hey are for a definite period and expire after the last day
of any given thirty,day period, upon proper demand and notice
by the lessor to vacate even if the lease agreement was verbal in
nature.