Designer Baskets, Inc v.

Air Sea Transport knowledge of DBI, and without it receiving payment

Facts:
 DBI is a domestic corporation engaged in the
production of housewares and handicraft items for
export.
 In October 1995, Ambiente, a foreign-based company,
ordered from DBI 223 cartons of assorted wooden
items.
 Ambiente designated ACCLI as the forwarding agent
that will ship out its order from the Philippines to the
United States. ACCLI is a domestic corporation acting
as agent of ASTI, a US based corporation engaged in
carrier transport business, in the Philippines.
 On January 7, 1996, DBI delivered the shipment to
ACCLI for sea transport from Manila and delivery to
Ambiente. To acknowledge receipt and to serve as the
contract of sea carriage, ACCLI issued to DBI triplicate
copies of ASTI Bill of Lading. DBI retained possession
of the originals of the bills of lading pending the
payment of the goods by Ambiente.
 On January 23, 1996, Ambiente and ASTI entered into
an Indemnity Agreement. Under the Agreement,
Ambiente obligated ASTI to deliver the shipment to it
or to its order “without the surrender of the relevant
bill(s) of lading due to the non-arrival or loss thereof.”
In exchange, Ambiente undertook to indemnify and
hold ASTI and its agent free from any liability as a
result of the release of the shipment. Thereafter, ASTI
released the shipment to Ambiente without the
for the total cost of the shipment.
 DBI then made several demands to Ambiente for the
payment of the shipment, but to no avail. Thus, on
October 7, 1996, DBI filed the Original Complaint
against ASTI, ACCLI and ACCLI’s incorporators-
stockholders
 DBI claimed that under Bill of Lading is “to release and
deliver the cargo/shipment to the consignee, x x x, only
after the original copy or copies of [the] Bill of Lading
is or are surrendered to them; otherwise, they become
liable to the shipper for the value of the shipment.” DBI
also averred that ACCLI should be jointly and severally
liable with its codefendants because ACCLI failed to
register ASTI as a foreign corporation doing business in
the Philippines. In addition, ACCLI failed to secure a
license to act as agent of ASTI.
Issue: WON ASTI, ACCLI, and Ambiente are solidarily liable
to DBI for the value of the shipment.

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Held:
Petition Denied.
1) A common carrier may release the goods to the
consignee even without the surrender of the bill of
lading.
The general rule is that upon receipt of the goods, the
consignee surrenders the bill of lading to the carrier and their
respective obligations are considered canceled. The law,
however, provides two exceptions where the goods may be
released without the surrender of the bill of lading because the
consignee can no longer return it. These exceptions are when
the bill of lading gets lost or for other cause. In either case, the
consignee must issue a receipt to the carrier upon the release of
the goods. Such receipt shall produce the same effect as the
surrender of the bill of lading.
We have already ruled that the non-surrender of the original
bill of lading does not violate the carrier’s duty of
extraordinary diligence over the goods (Republic v. Lorenzo
Shipping Corporation). Thus, we held that the surrender of the
original bill of lading is not a condition precedent for a
common carrier to be discharged of its contractual obligation.
Clearly, law and jurisprudence is settled that the surrender of
the original bill of lading is not absolute; that in case of loss or
any other cause, a common carrier may release the goods to the
consignee even without it.
2) Articles 1733, 1734, and 1735 of the Civil Code are
not applicable.
Articles 1733, 1734, and 1735 speak of the common carrier's
responsibility over the goods. They refer to the general liability
of common carriers in case of loss, destruction or deterioration
of goods and the presumption of negligence against them.
The applicable provision instead is Article 353 of the Code of
Commerce, the Article allows the release of the goods to the
consignee even without his surrender of the original bill of
lading. In such case, the duty of the carrier to exercise
extraordinary diligence is not violated. Nothing, therefore,
prevented the consignee and the carrier to enter into an
indemnity agreement of the same nature as the one they entered
here. No law or public policy is contravened upon its
execution.
3) Article 1503 of the Civil Code does not apply to
contracts for carriage of goods.
Articles 1523 and 1503, , refer to a contract of sale between a
seller and a buyer. In particular, they refer to who between the
seller and the buyer has the right of possession or ownership
over the goods subject of the sale. Articles 1523 and 1503 do
not apply to a contract of carriage between the shipper and the
common carrier.
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 had an obligation to pay the remaining balance in the amount
of ₱145,000.00. They also separately executed deeds of
DASMARIÑAS T. ARCAINA and MAGNANI T. BANTA
absolute sale over the property in Ingram’s favor. Both
vs. NOEMI L. INGRAM, represented by MA. NENETTE
deeds described the property to wit:
L. ARCHINUE

DESCRIPTION
G.R. No. 196444 | February 15, 2017
A parcel of land Lot No. 3230, situated at
Decided by: Third Division
Salvacion, Sto. Domingo, Albay, Bounded on the
Ponente: J. Jardeleza
NE-by Lot 3184 on the SE-by Seashore on the
Nature of Action: Petition for Review on Certiorari
SW-Lot No. 3914 and on the NW-by Road with
Topic: Sale
an area of SIX THOUSAND TWO
HUNDRED (6,200) sq. meters more or less.
FACTS:

5. Ingram surveyed the property, and discovered that it has an

1. Dasmariñas Arcaina (Arcaina) is the owner of Lot No. 3230
actual area of 12,000 sq. m.
(property) located at Salvacion, Sto. Domingo, Albay.
6. Banta insisted that the difference of 5,800 sq. m. remains
Noemi Ingram (Ingram) is the prospective buyer of the
unsold, and that they would like to fence the unsold portion.
property.
7. However, Ingram (the buyer) opposed against it claiming
2. Magnani Banta (Banta) is the attorney-in-fact of Arcaina.
that she owns the whole lot by virtue of the sale. Thus,
While, Ma. Nenette L. Archinue (Archinue) is the attorney-
Archinue, on behalf of Ingram, instituted the recovery case
in-fact of Ingram. The sale was negotiated by their respective
against petitioners before the MCTC, and to declare her the
attorneys-in-fact.
owner of the whole property.
3. Banta sold the property to Ingram. When the property was
8. Ingram offered to pay the balance of ₱145,000.00 as soon as
showed to Ingram and Archinue, the agreed area was more
petitioners recognize her ownership of the whole property.
or less 6,200 square meters (sq.m.) as per the tax declaration
After all, the sale contemplated the entire property as in fact
covering it. The contract price was ₱1,860,000.00, and
the boundaries of the lot were clearly stated in the deeds of
Ingram made the installment payments totaling
sale.
₱1,715,000.00.
9. Petitioners denied that the sale contemplates the entire
4. Banta and Ingram executed a Memorandum of Agreement
property and contended that they agreed for the sale of only
acknowledging the previous payments, and that Ingram still

3|P a ge
 6,200 sq. m. at the rate of ₱300.00 per sq. m. In addition,
they alleged that Ingram declared only 6,200 sq. m. of the
property for tax purposes, while Arcaina declared the
remaining portion under her name with no objection from
Ingram.
10. After trial, MCTC dismissed Ingram’s recovery case due to
insufficiency of evidence, and was ordered to pay the
₱145,000.00 remaining balance in favor of the Petitioners. It
ruled that Ingram failed present evidence showing that she
paid for the excess 5,800 sq. m. portion of the property.
Therefore, Ingram cannot claim ownership and possession
of the whole property. Art. 1540 of the Civil Code requires
that:
If there is a greater area or number in the
immovable than that stated in the contract, the
vendee may accept the area included in the
contract and reject the rest. If he accepts the
whole area, he must pay for the same at the
contract rate.
11. RTC reversed the Order of the MCTC. Although the court
ordered Ingram to pay the ₱145,000.00 remaining balance,
Ingram was declared the owner of the whole property. As
shown by the boundaries indicated in the deeds of sale, Lot
No. 3230 is only 6,200 sq. m. more or less. Having sold Lot
No. 3230 to Ingram in lump sum, Art. 1542 applies. Arcaina
must vacate it.
12. CA affirmed the RTC's ruling. The sale was made for a lump
sum and not on a per-square-meter basis, and the deed of
sale only provided for the specific boundaries of the
property. It explained that in case of conflict between the
area and the boundaries of a land, Art. 1542 requires the
vendor to deliver to the vendee everything within the
boundaries.
13. Petitioners contend that the contract was not a lump sum
sale. It was on a per-square-meter basis, at the rate of
₱300.00 per sq. m. hence, petitioners argue that it is Article
1539, and not Article 1542 of the Civil Code, which governs.
ISSUES:
1. Was the property sold for a lump sum or on a per-square-
meter basis?
2. If in the sale of immovable property, the actual area sold
is greater or larger than those stipulated or agreed upon
in the contract, which between Articles 1539 and 1542
should apply?
3. Is 5,800 sq. m. more than the area intended to be sold is
a reasonable excess that can be deemed included in the
sale under the phrase “more or less”?
HELD:
1. Lot No. 3230, with an actual area of 12,000 sq.m., was
sold for a lump sum.
2. Article 1542 applies if the actual area sold is greater than
the agreed area in the contract
3. No, the phrase “more or less” in a contract of sale
pertains to a risk of a reasonable excess or deficiency that
can be overlooked. An excess of 5,800 sq.m. is obviously
sizeable and too substantial to be overlooked.
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RULING:
1. SOLD FOR A LUMP SUM
In sales involving real estate, the parties may choose between
two types of pricing agreement: a unit price contract wherein
the purchase price is determined by way of reference to a stated
rate per unit area (e.g, ₱1,000.00 per sq. m.) or a lump sum
contract which states a full purchase price for an immovable the
area of which may be declared based on an estimate or where
both the area and boundaries are stated (e.g., ₱1 million for
1,000 sq. m., etc.). Here, the Deed of Sale executed by Banta
(attorney-in-fact), and the Deed of Sale executed by Arcaina
(owner) both show that the property was conveyed to Ingram at
the predetermined price of ₱1,860,000.00. There was no
indication that it was bought on a per-square-meter basis. Thus,
Article 1542 of the Civil Code governs the sale.
2. ARTICLE 1542 APPLIES
Art. 1542. In the sale of real estate, made for a lump
sum and not at the rate of a certain sum for a unit of
measure or number, there shall be no increase or
decrease of the price, although there be a greater or
less area or number than that stated in the contract.
The same rule shall be applied when two or more
immovables are sold for a single price; but if, besides
mentioning the boundaries, which is indispensable in
every conveyance of real estate, its area or number
should be designated in the contract, the vendor shall
be bound to deliver all that is included within said
boundaries, even when it exceeds the area or number
specified in the contract; and, should he not be able
to do so, he shall suffer a reduction in the price, in
proportion to what is lacking in the area or number,
unless the contract is rescinded because the vendee
does not accede to the failure to deliver what has
been stipulated.
The provision teaches that where both the area and the
boundaries of the immovable are declared in a sale of real estate
for a lump sum, the area covered within the boundaries of the
immovable prevails over the stated area. The vendor is obliged
to deliver all that is included within the boundaries regardless
of whether the actual area is more than what was specified
in the contract of sale; and he/she shall do so without a
corresponding increase in the contract price. This is particularly
true when the stated area is qualified to be an approximate only,
such as when the words "more or less" were used.
The deeds of sale in this case provide both the boundaries and
the estimated area of the property. (See the description of the
property above.) The uniform allegations of both parties,
however, reveal that the actual area amounts to more or less
12,000 sq. m., with a difference of 5,800 sq. m. from what was
stated in the deeds of sale.
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 3. 5,800 SQ.M. IS TOO SUBSTANTIAL TO BE A
REASONABLE EXCESS
In the similar case of Del Prado v. Spouses Caballero, the
Supreme Court ruled that the vendee/buyer is entitled only to the
area stated in the contract of sale. The rule laid down in Article
1542 is not hard and fast and admits of an exception. “The use
of ‘more or less’ or similar words in designating quantity covers
only a reasonable excess or deficiency. A vendee of land sold in
gross or with the description "more or less" with reference to its
area does not thereby ipso facto take all risk of quantity in the
land.
Black's Law Dictionary intended the phrase "more or less" to
cover slight or unimportant inaccuracies in quantity, and are
ordinarily to be interpreted as taking care of unsubstantial
differences or differences of small importance.
In a lump sum contract, a vendor is generally obligated to deliver
all the land covered within the boundaries, regardless of whether
the real area should be greater or smaller than that recited in the
deed. However, in case there is conflict between the area
actually covered by the boundaries and the estimated area stated
in the contract of sale, the vendor shall do so only when the
excess or deficiency between the former and the latter
is reasonable.
Applying the Del Prado case, the difference of 5,800 sq.m.
more than the area intended to be sold is not a reasonable excess
that can be deemed included in the sale. Only 6,200 sq.m. was
agreed upon between Petitioners and Ingram. Declaring Ingram
as the owner of the whole 12,000 sq.m. on the premise that this
is the actual area included in the boundaries would be ordering
the delivery of almost twice the area stated in the deeds of sale.
Surely, Article 1542 does not contemplate such an unfair
situation to befall a vendor – that he/she would be compelled to
deliver double the amount that he/she originally sold without a
corresponding increase in price. Ingram is entitled only to 6,200
sq. m. of the property.
When petitioners offered the property for sale and when Ingram
accepted the offer, the object of their consent or meeting of the
minds is only a 6,200 sq.m. property. The deeds of sale merely
put into writing what was agreed upon by the parties.
The contract of sale is the law between Ingram and the
Petitioners; it must be complied with in good faith. Petitioners
have already performed their obligation by delivering the 6,200
sq.m. property. Since Ingram has yet to fulfill her end of the
bargain, she must pay Petitioners the remaining balance of the
contract price amounting to ₱145,000.00.
DISPOSITIVE PORTION: Petition is granted.
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CARMEN DEL PRADO v. SPS. ANTONIO L. CABALLERO
AND LEONARDA CABALLERO, GR No. 148225, 2010-03-
03
Facts:
In a judgment rendered on February 1, 1985 in Cadastral Case
No. N-6 (LRC Rec. No. N-611), Judge Juan Y. Reyes of the
Regional Trial Court (RTC) of Cebu City, Branch 14,
adjudicated in favor of Spouses Antonio L. Caballero and
Leonarda B. Caballero several parcels of land... situated in
Guba, Cebu City, one of which was Cadastral Lot No. 11909,
the subject of this controversy.[2] On May 21, 1987, Antonio
Caballero moved for the issuance of the final decree of
registration for their lots.[3] Consequently,... on May 25, 1987,
the same court, through then Presiding Judge Renato C.
Dacudao, ordered the National Land Titles and Deeds
Registration Administration to issue the decree of registration
and the corresponding titles of the lots in favor of the
Caballeros.[4]
On June 11, 1990, respondents sold to petitioner, Carmen del
Prado, Lot No. 11909 on the basis of the tax declaration
covering the property.
On March 20, 1991, petitioner filed in the same cadastral
proceedings a "Petition for Registration of Document Under
Presidential Decree (P.D.) 1529"[7] in order that a certificate of
title be issued in her name, covering the whole Lot No. 11909.
petitioner alleged that the tenor of the instrument of sale
indicated that the sale was for a lump sum or cuerpo cierto, in
which case, the vendor was bound to deliver all that was
included within said boundaries even when it exceeded the area
specified in the... contract. Respondents opposed, on the main
ground that only 4,000 sq m of Lot No. 11909 was sold to
petitioner.
claimed that the sale was not for a cuerpo cierto.
They moved for the outright dismissal of the petition on
grounds of prescription and lack of... jurisdiction.
After trial on the merits, the court found that petitioner had
established a clear and positive right to Lot No. 11909. The
intended sale between the parties was for a lump sum, since
there was no evidence presented that the property was sold for
a price per unit. It was... apparent that the subject matter of the
sale was the parcel of land, known as Cadastral Lot No. 11909,
and not only a portion thereof.
An appeal was duly filed. On September 26, 2000, the CA
promulgated the assailed decision, reversing and setting aside
the decision of the RTC.
The CA no longer touched on the character of the sale, because
it found that petitioner availed herself of an improper remedy.
The "petition for registration of document" is not one of the
remedies provided under P.D. No. 1529, after the original
registration has been effected.
Thus, the CA ruled that the lower court committed an error
when it assumed jurisdiction over the petition, which prayed
for a remedy not sanctioned under the Property Registration
Decree.
Issues:
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED GRAVE ERROR IN MAKING FINDINGS OF
FACT CONTRARY TO THAT OF THE TRIAL COURT[;]
7|P a ge
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED GRAVE ERROR IN FAILING TO RULE
THAT THE SALE OF THE LOT IS FOR A LUMP SUM OR
CUERPO CIERTO[;]
WHETHER OR NOT THE COURT A QUO HAS
JURISDICTION OVER THE PETITION FOR
REGISTRATION OF THE DEED OF ABSOLUTE SALE
DATED 11 JUNE 1990 EXECUTED BETWEEN HEREIN
PETITIONER AND RESPONDENTS[.][11]
The core issue in this case is whether or not the sale of the land
was for a lump sum or not.
Ruling:
In the instant case, the deed of sale is not one of a unit price
contract. The parties agreed on the purchase price of
P40,000.00 for a predetermined area of 4,000 sq m, more or
less, bounded on the North by Lot No. 11903, on the East by
Lot No. 11908, on the South by Lot
Nos. 11858 & 11912, and on the West by Lot No. 11910. In a
contract of sale of land in a mass, the specific boundaries stated
in the contract must control over any other statement, with
respect to the area contained within its boundaries.[16]
Contracts are the law between the contracting parties. Sale, by
its very nature, is a consensual contract, because it is perfected
by mere consent. The essential elements of a contract of sale
are the following: (a) consent or meeting of the minds, that is,
consent to transfer... ownership in exchange for the price; (b)
determinate subject matter; and (c) price certain in money or its
equivalent. All these elements are present in the instant case.
WHEREFORE, the petition is DENIED.
In the instant case, the deed of sale is not one of a unit price
contract. The parties agreed on the purchase price of ₱40,000.00
for a predetermined area of 4,000 sq m, more or less, bounded
on the North by Lot No. 11903, on the East by Lot No. 11908, on
the South by Lot Nos. 11858 & 11912, and on the West by Lot
No. 11910. In a contract of sale of land in a mass, the specific
boundaries stated in the contract must control over any other
statement, with respect to the area contained within its
boundaries.161avv phi1
Black’s Law Dictionary17 defines the phrase "more or less" to
mean:
About; substantially; or approximately; implying that both parties
assume the risk of any ordinary discrepancy. The words are
intended to cover slight or unimportant inaccuracies in quantity,
Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily
to be interpreted as taking care of unsubstantial differences or
differences of small importance compared to the whole number of
items transferred.
Clearly, the discrepancy of 10,475 sq m cannot be considered a
slight difference in quantity. The difference in the area is
obviously sizeable and too substantial to be overlooked. It is not a
reasonable excess or deficiency that should be deemed included
in the deed of sale.
We take exception to the avowed rule that this Court is not a trier
of facts. After an assiduous scrutiny of the records, we lend
credence to respondents’ claim that they intended to sell only
4,000 sq m of the whole Lot No. 11909, contrary to the findings of
the lower court. The records reveal that when the parties made
an ocular inspection, petitioner specifically pointed to that portion
of the lot, which she preferred to purchase, since there were
mango trees planted and a deep well thereon. After the sale,
respondents delivered and segregated the area of 4,000 sq m in
favor of petitioner by fencing off the area of 10,475 sq m
belonging to them
8|P a ge
 Uraca v. CA
Facts:
The Velezes were the owners of the lot and commercial building
in Cebu while the petitioners were lessees of the said building.
The Velezes through Ting wrote a letter offering to sell the
subject property for P1,050,000.00 and at the same time
requesting the petitioners to reply in three days. Such sale was
accepted.
Uraca went to see Ting about the offer to sell but she was told
by the latter that the price was P1,400,000.00 in cash or
managers check and not P1,050,000.00 as erroneously stated in
their letter-offer after some haggling. Emilia Uraca agreed to the
price of P1,400,000.00 but counter- proposed that payment be
paid in installments with a down payment of P1,000,000.00 and
the balance of P400,000 to be paid in 30 days. Carmen Velez
Ting did not accept the said counter offer of Emilia Uraca
although this fact is disputed by Uraca. However, no payment
was made.
The Velezes sold the lot and commercial building to the Avenue
Group for P1,050,000.00 net of taxes, registration fees, and
expenses of the sale. At the time the Avenue Group purchased
the subject property on July 13, 1985 from the Velezes, the
certificate of title of the said property was clean and free of any
annotation of adverse claims or lis pendens.
Issues:
I. Whether or not the contract of sale was perfected;
and
II. Whether or not the CA erred in not ruling that
petitioners have better rights to buy and own the Velezes
property for registering their notice of lis pendens ahead of the
Avenue Groups registration of their deeds of sale.
Held:
Novation is never presumed; it must be sufficiently established
that a valid new agreement or obligation has extinguished or
changed an existing one. The registration of a later sale must be
done in good faith to entitle the registrant to priority in
ownership over the vendee in an earlier sale.
On the first issue: no extinctive novation.
The lynchpin of the assailed Decision is the public respondents
conclusion that the sale of the real property in controversy. The
Court noted that the petitioners accepted in writing and without
qualification the Velezes written offer to sell at P1,050,000.00
within the three-day period stipulated therein. Hence, from the
moment of acceptance on July 10, 1985, a contract of sale was
perfected since undisputedly the contractual elements of
consent, object certain and cause concurred.
Article 1600 of the Civil Code provides that (s)ales are
extinguished by the same causes as all other obligations, x x x.
Article 1231 of the same Code states that novation is one of the
ways to wipe out an obligation. Extinctive novation requires: (1)
the existence of a previous valid obligation; (2) the agreement of
all the parties to the new contract; (3) the extinguishment of the
old obligation or contract; and (4) the validity of the new one.
On the second issue: double sale of an immovable.
9|P a ge
Under the foregoing, the prior registration of the disputed
property by the second buyer does not by itself confer ownership
or a better right over the property.Article 1544 requires that such
registration must be coupled with good faith. Jurisprudence
teaches us that (t)he 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 buyers
rights except where the second buyer registers in good faith the
second sale ahead of the first, as provided by the Civil Code.
Such knowledge of the first buyer does not bar her from availing
of her rights under the law, among them, to register first her
purchase as against the second buyer. But in converso
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 This is the
price exacted by Article 1544 of the Civil Code for the second
buyer being able to displace the first buyer; that before the
second buyer can obtain priority over the first, he must show that
he acted in good faith throughout.

10 | P a g e
Sps. Vallido vs. Sps. Pono,
G.R. No. 200173, April 15, 2013,
J. Mendoza
Facts: This case is a petition for review on certiorari assailing
th decision of CA on a case involving a double sale of a parcel
of land.It appears that Martino was the registered owner of a
parcel of land but he then sold that land to Cerna and gave to
the latter the owner's copy of OCT No. P-429.
Cerna then sold a portion of the land to Pono, the husband, and
delivered the above mentioned owner's copy to the latter. Pono,
herein respondent, registered the portion he bought for taxation
purposes and later allowed his son, herein respondent, to build
a house thereon.
On June 14, 1990, Pono sold the whole subject property to his
grandson Vallido but can no longer deliver any certificate of
title since he had delivered the said OCT No. P-429 to Cerna in
1960.
On Sept. 17, 1999, Vallido registered the deed that was granted
by the RTC to Pono when he filed for the same and the Registry
of Deeds issued a Transfer Certificate of Title. Subsequently,
herein petitioners filed a complaint for quieting of title,
recovery of possession of real property and damages against
the respondents.
The RTC ruled in favor of petitioners and held that there was a
double sale but the CA ruled in favor of the defendant stating
that petitioners were neither buyers or registrants in good faith.
ISSUE: Whether or not the petitioners are buyers or registrants
in good faith.
Ruling: The Supreme Court ruled on the negative. The Court
explained that it is undisputed that there is a double sale and
that the respondents are the first buyers while the petitioners
are the second buyers.
The burden of proving good faith lies with the second buyer
(petitioners herein) which is not discharged by simply invoking
the ordinary presumption of good faith. After the Court's
assiduous assessment of the evidentiary records, they find that
the petitioners are NOT buyers in good faith as they failed to
discharge their burden of proof.
There are several indicia that should have placed the petitioners
on guard and prompted them to investigate or inspect the
property being sold to them.
First, Martino, as seller, did not have possession of the subject
property.
Second, during the sale on July 4, 1990, Martino did not have
the owner’s duplicate copy of the title.
Third, there were existing permanent improvements on the
land.
Fourth, the respondents were in actual possession of the land.
These circumstances are too glaring to be overlooked and
should have prompted the petitioners, as prospective buyers, to
investigate or inspect the land.
Where the vendor is not in possession of the property, the
prospective vendees are obligated to investigate the rights of
one in possession.
11 | P a g e
12 | P a g e
Sps. Vallido vs. Sps. Pono, G.R. No. 200173, April 15, 2013, J. petitioners on guard and prompted them to investigate or
MendozaFacts: This case is a petition for review on certiorari inspect the property being sold to them. First, Martino, as
assailing th decision of CA on a case involving a double sale of seller, did not have possession of the subject property. Second,
a parcel of land.It appears that Martino was the registered during the sale on July 4, 1990, Martino did not have the
owner of a parcel of land but he then sold that land to Cerna owner’s duplicate copy of the title. Third, there were existing
and gave to the latter the owner's copy of OCT No. P-429. permanent improvements on the land. Fourth, the respondents
Cerna then sold a portion of the land to Pono, the husband, and were in actual possession of the land. These circumstances are
delivered the above mentioned owner's copy to the latter. Pono, too glaring to be overlooked and should have prompted the
herein respondent, registered the portion he bought for taxation petitioners, as prospective buyers, to investigate or inspect the
purposes and later allowed his son, herein respondent, to build land. Where the vendor is not in possession of the property, the
a house thereon.On June 14, 1990, Pono sold the whole subject prospective vendees are obligated to investigate the rights of
property to his grandson Vallido but can no longer deliver any one in possession.
certificate of title since he had delivered the said OCT No. P-
429 to Cerna in 1960.On Sept. 17, 1999, Vallido registered the
deed that was granted by the RTC to Pono when he filed for the
same and the Registry of Deeds issued a Transfer Certificate of
Title. Subsequently, herein petitioners filed a complaint for
quieting of title, recovery of possession of real property and
damages against the respondents.The RTC ruled in favor of
petitioners and held that there was a double sale but the CA
ruled in favor of the defendant stating that petitioners were
neither buyers or registrants in good faith.ISSUE: Whether or
not the petitioners are buyers or registrants in good
faith.Ruling: The Supreme Court ruled on the negative. The
Court explained that it is undisputed that there is a double sale
and that the respondents are the first buyers while the
petitioners are the second buyers. The burden of proving good
faith lies with the second buyer (petitioners herein) which is
not discharged by simply invoking the ordinary presumption of
good faith. After the Court's assiduous assessment of the
evidentiary records, they find that the petitioners are NOT
buyers in good faith as they failed to discharge their burden of
proof.There are several indicia that should have placed the

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