Answers to 2010 Bar Examination Questions Related to Sales

Question:

X was the owner of an unregistered parcel of land in Cabanatuan City. As she was abroad, she advised
her sister Y via overseas call to sell the land and sign a contract of sale on her behalf.

Y thus sold the land to B1 on March 31, 2001 and executed a deed of absolute sale on behalf of X. B1
fully paid the purchase price.

B2, unaware of the sale of the land to B1, signified to Y his interest to buy it but asked Y for her authority
from X. Without informing X that she had sold the land to B1, Y sought X for a written authority to sell.

X e-mailed Y an authority to sell the land. Y thereafter sold the land on May 1, 2001 to B2 on monthly
installment basis for two years, the first installment to be paid at the end of May 2001.

Who between B1 and B2 has a better right over the land? Explain. (5%)

Answer:

Suggested:

B2 has a better title. This is not a case of double sale since the first sale was void. The law
provides that when a sale of a piece of land or any interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall be void (Article 1874, New Civil Code). The
property was sold by Y to B1 without any written authority from the owner X. Hence, the sale to B1 was
void.

Alternative:

Under the facts, B1 has a better right to the land. Given the fact that the Deed of Sale in favor of
B1 and B2 are not inscribed in the Registry of Deeds, the case is governed by Article 1544 of the New
Civil Code which provides that in case of double sale of an immovable property, 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 a case, the Supreme Court has held that in a sale of real estate the execution of a notarial
document of sale is tantamount to delivery of the possession of the property sold. Ownership of the land
therefore pertains to the 1st buyer. It may also be mentioned that under Act 3344 no instruments or deed
establishing, transmitting, acknowledging, modifying, or extinguishing right to real property not
registered under Act 496 shall be valid except as between the parties. Thus the Deed of Sale of B2 has no
binding effect on B1