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Q:

A and B deed of sale, A and C deed of sale. B’s contract of sale if earlier than C’s. C registered the
property not knowing of the existence of B’s sales. B also without knowing C registered the property. Who
has better rights?

A:

C has the better right. C is preferred because C is first in registration and he is in good faith because
he has no knowledge of any prior interest or any interest whatsoever to the property.

So how is it different now? We just tweaked the facts. We just said that C remains to be without
knowledge however in this case B was first in registration but B has knowledge of C’s existence. If you’re
saying that B is preferred because he has an older title that is the 3 rd rule, ONLY if the first two are not
applicable. Was there registration? Yes. But B registered in bad faith because he knew if C’s existence. He
knew that there is a contract between A and C that’s why he registered the property already knowing that
he may be benefited by the law on sales as first to register. The definition of purchaser in good faith is that
one who buys the property without notice that some other person has a right to it. Remember its not just
first to register the law qualifies registration with good faith registration. You cannot just register it
otherwise those who may not be active enough to protect their rights may be lost by speed itself. It’s not
first registration it’s the first who registered in good faith. Who has a better right? It is B. Why? Bad
faith does not apply to the first purchaser. It is only applicable to the second and subsequent
purchasers. Such that if the second or subsequent purchasers knew of the existence of the first
purchaser then all their registrations will be considered in bad faith and B will remain to be
preferred forever. B’s right will only be defeated by a registrant in good faith. Therefore, if C has
no kowledge of the existence of B and C is the first to register his right will be preferred.

(sir explaining the process for registering and making tct with the sold land)

CONDITIONS AND WARRANTIES

Distinguish condition from warranty.

A condition goes to the very root of the existence of the obligation. Which means that the existence
or the perfection of a contract may or may not depend on the condition. If it is dependent on a condition
non-compliance or non-fulfillment of the condition will prevent the perfection of the contract.

Warranty presupposes an existing contract or a perfected contract of sale.

Therefore, condition goes to the existence or perfection of a contract itself. While the warranty goes
to the performance of the obligation.
In general, non-fulfillment of a condition results to non-perfection of a contract. Non-fulfillment of a
warranty results in breach of a contract. Therefore, if a condition is not fulfilled and a contract is not
perfected there is no obligation or liability on the part of any party. However, if a warranty is not fulfilled
and therefore results in a breach of warrant or breach of contract then the person responsible for the
breach will be liable for damages.

There are two kinds of conditions that you have to consider:

First, condition imposed on perfection

Second condition imposed on performance of an obligation.

Condition imposed on perfection

- Suspensive - compliance or fulfillment of the condition gives rise to an obligation

- Resolutory - conpliance or fulfillment of the condition extinguishes an obligation

Condition imposed on performance

- non-compliance of a condition imposed on performance will not result in the non-perfection of


a contract. If a condition is imposed on performance it means that the contract is already perfected
and that the condition is only imposed on how you will perform the obligation. Therefore, if the
non-compliance of the condition imposed on perfection results to non-perfection of a contract what
happens if it is non-fulfillment of a condition imposed on performance? Will it extinguish the
contract? NO.

The aggrieved party will have the following remedies:

1. The aggrieved party may refuse to proceed with the contract, or;

2. Waive the condition and proceed with the contract.

When is a condition considered a warranty?

If the parties promise that a condition will definitely happen that condition will become a warranty.
Non-fulfillment of that condition is non-fulfillment of a warranty therefore result in breach of contract
which would entitle the aggrieved party for damages.

Two kinds of warranties:

Express and Implied

Requisites for express warranty:


1. The warranty must be an affirmation of fact or a promise by the seller relating to the subject
matter of the sale. (ex. As to its quality, performance or etc.)

2. The buyer buys the property based on the affirmation of the seller.

XPN:

The affirmation is merely the seller’s opinion or sweet talk.

XPN to the XPN:

The seller is actually an expert on the subject matter. If he gives his opinion and the buyer relies on
his opinion then it will be a warranty

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