SALES 2E
The
MODULE 3
CASES:
FULLIDO VS. GRILLI, 785 SCRA 278
FACTS:
Grilli, an Italian national, met Fullido in Bohol and courted her. Grilli decided to build a
residential house where he and Fullido would to stay whenever he would be vacationing in the
country. Grilli financially assisted Fullido in procuring a lot from her parents which was
registered in her name On the said property, they constructed a house, which was funded by
Grilli. Upon completion, they maintained a common-law relationship and lived there
whenever Grilli was on vacation in the Philippines twice a year. Grilli and Fullido executed a
contract of lease a memorandum of agreement and a special power of attorney to define their
respective rights over the house and lot.
The lease contract stipulated, among others, that Grilli as the lessee, would rent the lot,
registered in the name of Fullido, for a period of fifty (50) years, to be automatically renewed
for another fifty (50) years upon its expiration; and that Fullido as the lessor, was prohibited
from selling, donating, or encumbering the said lot without the written consent of Grilli. The
MOA, on the other hand, stated, among others, that Grilli paid for the purchase price of the
house and lot; that ownership of the house and lot was to reside with him; and that should the
common-law relationship be terminated, Fullido could only sell the house and lot to
whomever Grilli so desired.
Lastly, the SPA allowed Grilli to administer, manage, and transfer the house and lot on behalf
of Fullido. Initially, their relationship was harmonious, but it turned sour after 16 years of
living together. Both charged each other with infidelity. They could not agree who should
leave the common property, and Grilli sent formal letters to Fullido demanding that she vacate
the property, but these were unheeded. Grilli filed a complaint for unlawful detainer with
prayer for issuance of preliminary injunction against Fullido The MCTC dismissed the case
after finding that Fullido could not be ejected from their house and lot. The MCTC opined that
she was a co-owner of the house as she contributed to it by supervising its construction. RTC
reversed and set aside the MCTC decision CA upheld the decision of the RTC emphasizing
that in an ejectment case, the only issue to be resolved would be the physical possession of the
property. Hence, this petition.
ISSUE:
Whether or not Grilli has the right to possess the property by virtue of the Contract of Lease.
RULING:
No. The lease contract and the MOA circumvent the constitutional restraint against foreign
ownership of lands. Hence, it is null and void. Under Section 1 of Article XIII of the 1935
Constitution, natural resources shall not be alienated, except with respect to public agricultural
lands and in such cases, the alienation is limited to Filipino citizens.
Concomitantly, Section 5 thereof states that, save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain in the Philippines.
prohibition, however, is not limited to the sale of lands to foreigners. It also covers leases of
lands amounting to the transfer of all or substantially all the rights of dominion. Where a
scheme to circumvent the Constitutional prohibition against the transfer of lands to aliens is
readily revealed as the purpose for the contracts, then the illicit purpose becomes the illegal
cause rendering the contracts void.
Thus, if an alien is given not only a lease of, but also an option to buy, a piece of land by
virtue of which the Filipino owner cannot sell or otherwise dispose of his property, this to last
for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership
whereby the owner divests himself in stages not only of the right to enjoy the land but also of
the right to dispose of it — rights which constitute ownership.
If this can be done, then the Constitutional ban against alien landholding in the Philippines, is
indeed in grave peril. Based on the above-cited constitutional, legal and jurisprudential
limitations, the Court finds that the lease contract and the MOA in the present case are null
and void for virtually transferring the reigns of the land to a foreigner.
MELECIO DOMINGO V. SPOUSES GENARO G.R. NO. 200274
Facts:
The spouses Anastacio and Flora Domingo bought a property in Camiling, Tarlac, consisting
of a one-half undivided portion over an 18,164 square meter parcel of land. During his
lifetime, Anastacio borrowed money from the respondent spouses Genaro and Elena Molina
(spouses Molina). On September 10, 1978 or 10 years after Flora's death, Anastacio sold his
interest over the land to the spouses Molina to answer for his debts. The sale to the spouses
Molina was annotated at the OCT of the subject property. In 1986, Anastacio died.
In May 19, 1995, the sale of Anastacio's interest was registered under Transfer Certificate of
Title (TCT) No. 272967... and transferred the entire one-half undivided portion of the land to
the spouses Molina. Melecio, one of the children of Anastacio and Flora, learned of the
transfer and filed a Complaint for Annulment of Title and Recovery of Ownership (Complaint)
against the spouses Molina on May 17, 1999.
Melecio claims that Anastacio gave the subject property to the spouses Molina to serve as
collateral for the money that Anastacio borrowed. Anastacio could not have validly sold the
interest over the subject property without Flora's consent, as Flora was already dead at the time
of the sale.
Melecio also claims that Genaro Molina must have falsified the document transferring
Anastacio and Flora's one-half undivided interest over the land. Finally, Melecio asserts that
he occupied the subject property from the time of Anastacio's death up to the time he filed the
Complaint.
Melecio presented the testimonies of the Records Officer of the Register of Deeds of Tarlac,
and of Melecio's nephew, George Domingo (George). The Records Officer testified that he
could not locate the instrument that documents the transfer of the subject property ownership
from Anastacio to the spouses Molina. The Records Officer also testified that the alleged sale
was annotated at the time when Genaro Molina's brother was the Register of Deeds for
Camiling, Tarlac.
George, on the other hand, testified that he has been living on the subject property owned by
Anastacio since 1986. George testified, however, that aside from himself, there were also four
other occupants on the subject property, namely Jaime Garlitos, Linda Sicangco, Serafio
Sicangco and Manuel Ramos.
The spouses Molina asserted that Anastacio surrendered the title to the subject property to
answer for his debts and told the spouses Molina that they already own half of the land. The
spouses Molina have been in possession of the subject property before the title was registered
under their names and have religiously paid the property's real estate taxes.
The spouses Molina also asserted that Melecio knew of the disputed sale since he
accompanied Anastacio several times to borrow money. The last loan was even used to pay for
Melecio's wedding. Finally, the spouses Molina asserted that Melecio built his nipa hut on the
subject property only in 1999, without their knowledge and consent.
The spouses Molina presented Jaime Garlitos (Jaime) as their sole witness and who is one of
the occupants of the subject lot.Jaime testified that Elena Molina permitted him to build a
house on the subject property in 1993. Jaime, together with the other tenants, planted fruit
bearing trees on the subject property and gave portions of their harvest to Elena Molina
without any complaint from Melecio. Jaime further testified that Melecio never lived on the
subject property and that only George Domingo, as the caretaker of the spouses Molina, has a
hut on the property.
Meanwhile, the spouses Molina died during the pendency of the case and were substituted by
their adopted son, Cornelio Molina.
Issues:
(1) whether the sale of a conjugal property to the spouses Molina without Flora's consent is
valid and legal
Ruling:
Melecio argues that the sale of the disputed property to the spouses Molina is void without
Flora's consent.We do not find Melecio's argument meritorious.Anastacio and Flora's conjugal
partnership was dissolved upon Flora's death.
There is no dispute that Anastacio and Flora Domingo married before the Family Code's
effectivity on August 3, 1988 and their property relation is a conjugal partnership. The
conjugal partnership of Anastacio and Flora was dissolved when Flora died in 1968
Article 130 of the Family Code requires the liquidation of the conjugal partnership upon death
of a spouse and prohibits any disposition or encumbrance of the conjugal property prior to the
conjugal partnership liquidation,... Article 130. Upon the termination of the marriage by death,
the conjugal partnership property shall be liquidated in the same proceeding for the settlement
of the estate of the deceased.If no judicial settlement proceeding is instituted, the surviving
spouse shall liquidate the conjugal partnership property either judicially or extra-judicially
within one year from the death of the deceased spouse. If upon the lapse of the six month
period no liquidation is made, any disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be void. x x x
While Article 130 of the Family Code provides that any disposition involving the conjugal
property without prior liquidation of the partnership shall be void, this rule does not apply
since the provisions of the Family Code shall be "without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws.
An implied co-ownership among Flora's heirs governed the conjugal properties pending
liquidation and partition. An implied ordinary co-ownership ensued among Flora's surviving
heirs, including Anastacio, with respect to Flora's share of the conjugal partnership until final
liquidation and partition; Anastacio, on the other hand, owns one-half of the original conjugal
partnership properties as his share, but this is an undivided interest.
Article 493 of the Civil Code on co-ownership provides:Article 493. Each co-owner shall have
the full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
Thus, Anastacio, as co-owner, cannot claim title to any specific portion of the conjugal
properties without an actual partition being first done either by agreement or by judicial
decree. Nonetheless, Anastacio had the right to freely sell and dispose of his undivided interest
in the subject property.
The spouses Molina became co-owners of the subject property to the extent of Anastacio's
interest. At the time of the sale, Anastacio's undivided interest in the conjugal properties
consisted of: (1) one-half of the entire conjugal properties; and (2) his share as Flora's heir on
the conjugal properties.
Anastacio, as a co-owner, had the right to freely sell and dispose of his undivided interest, but
not the interest of his co-owners. Consequently, Anastactio's sale to the spouses Molina
without the consent of the other co-owners was not totally void, for Anastacio's rights or a
portion thereof were thereby effectively transferred, making the spouses Molina a co-owner of
the subject property to the extent of Anastacio's interest.
Melecio's recourse as a co-owner of the conjugal properties, including the subject property, is
an action for partition under Rule 69 of the Revised Rules of Court. As held in the case of
Heirs of Protacio Go, Sr., "it is now settled that the appropriate recourse of co-owners in cases
where their consent were not secured in a sale of the entire property as well as in a sale merely
of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69
of the Revised Rules of Court."
EDCA PUBLISHING V. 184 SCRA 614
FACTS:
Professor Jose Cruz, identified himself as such placed an order by telephone with the EDCA
for 406 books, payable on delivery. Corresponding invoice were prepared and delivered the
books as ordered, for which Cruz issued a personal check covering the purchase price. Cruz
sold 120 of the books to private respondent Leonor Santos who, after verifying the seller’s
ownership from the invoice he showed her, paid him P1,700.00.
Over investigation it was made known that Jose Cruz’s real name is Tomas de la Peña.
Petitioners with the assistance of authority, seized without warrant the books sold to the
respondent Leonor Santos and delivered it to the petitioners.
ISSUE:
Whether or not the petitioner may seize the books from private respondent because it has been
unlawfully deprived of the books due to the dishonored check issued by the impostor.
RULING:
No. In its extended memorandum, EDCA cites numerous cases holding that the owner who
has been unlawfully deprived of personal property is entitled to its recovery except only where
the property was purchased at a public sale, in which event its return is subject to
reimbursement of the purchase price. The petitioner is begging the question. It is putting the
cart before the horse. Unlike in the cases invoked, it has yet to be established in the case at bar
that EDCA has been unlawfully deprived of the books.
Actual delivery of the books having been made, Cruz acquired ownership over the books
which he could then validly transfer to the private respondents. The fact that he had not yet
paid for them to EDCA was a matter between him and EDCA and did not impair the title
acquired by the private respondents to the books.
PHILIPPINE SUBURBAN DEV CORP VS AUDITOR GENERAL 63 SCRA 397
FACTS:Petitioner Philippine Suburban Development Corporation, as owner and People’s
Homesite and Housing Corporation (PHHC), as authorized by the President of the Philippines,
entered into a contract embodied in a public instrument entitled “Deed of Absolute Sale”
whereby the former conveyed unto the latter the unoccupied portion of the Sapang Palay
Estate. This was not registered in the Office of the Register of Deeds until March 14, 1961,
due to the fact, petitioner claims, that the PHHC could not at once advance the money needed
for registration expenses. On April 12, 1961, the Provincial Treasurer of Bulacan requested the
PHHC to withhold the amount of P30,099.79 from the purchase price to be paid by it to the
Philippine Suburban Development Corporation. Said amount represented the realty tax due on
the property involved for the calendar year 1961. Petitioner, through the PHHC, paid under
protest the abovementioned amount and thereafter, by letter, requested then Secretary of
Finance Dominador Aytona to order a refund of the amount so paid. Upon recommendation of
the Provincial Treasurer of Bulacan, said request was denied by the Secretary of Finance.
ISSUE:
Whether or not there was already a valid transfer of ownership between the parties and thus
petitioner is entitled for a refund.
HELD:
YES. There was already a valid transfer of ownership. Under the civil law, delivery (tradition)
as a mode of transmission of ownership maybe actual (real tradition) or constructive
(constructive tradition). When the sale of real property is made in a public instrument, the
execution thereof is equivalent to the delivery of the thing/object of the contract, if from the
deed the contrary does not appear or cannot clearly be inferred. In other words, there is
symbolic delivery of the property subject of the sale by the execution of the public instrument,
unless from the express terms of the instrument, or by clear inference therefrom, this was not
the intention of the parties made. In the case at bar, there is no question that the vendor had
actually placed the vendee in possession and control over the thing sold, even before the date
of the sale. The condition that petitioner should first register the deed of sale and secure a new
title in the name of the vendee before the latter shall pay the balance of the purchase price, did
not preclude the transmission of ownership. In the absence of an express stipulation to the
contrary, the payment of the purchase price of the good is not a condition precedent to the
transfer of title to the buyer, but title passes by the delivery of the goods. It goes without
saying that the petitioner is entitled for a refund.
SKUNAC CORPORATION V. SYLIANTENG
FACTS:
The Sylianteng brothers, claims ownership of two parcels of land situated at Pujalte
Subdivision, Greenhills, San Juan City. Their claims are based on the Deed of Absolute Sale
executed in favor of their mother. They allege that the said lots were acquired by their mother
from Luis Pujalte, the previous owner of the property in dispute, as reflected and annotated in
the TCT which was sold to them.
Petitioners, herein, claim that Romeo Pujalte was declared by the RTC of Pasig City as the
sole heir of Luis Pujalte, which eventually caused the reconstitution of the Mother Title
resulting to its cancellation and the issuance of another TCT in his favor. Romeo Pujalte then
sold the said properties to herein petitioners.
[Respondents] contend that they have a better right to the lots in question because the
transactions conveying the same to them preceded those claimed by [petitioners] as source of
the latter’s titles. [Respondents] further assert that [petitioners] could not be considered as
innocent purchasers in good faith and for value because they had prior notice of the previous
transactions as stated in thememorandum of encumbrances annotated on the titles covering the
subject lots. [Petitioners], for their part, maintain that [respondents] acquired the lots under
questionable circumstances it appearing that there was no copy of the Deed of Sale, between
Emerenciana and Luis Pujalte, on file with the Office of the Register of Deeds.
ISSUES:
1. Whether the mother of the Sylianteng brothers validly acquired the subject lots from Luis.
2. Whether the respondents, in tuen, validly acquire the same lots from their mother.
RULING:
The Court rules in the affirmative, but takes exception to the CA’s and RTC’s application of
Article 1544 of the Civil Code.
Reliance by the trial and appellate courts on Article 1544 of the Civil Code is misplaced. The
requisites that must concur for Article 1544 to apply are:
(a) The two (or more sales) transactions must constitute valid sales;
(b) The two (or more) sales transactions must pertain to exactly the same subject matter;
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each represent conflicting interests; and
(d) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each have bought from the very same seller.
Obviously, said provision has no application in cases where the sales involved were initiated
not by just one but two vendors. In the present case, the subject lots were sold to petitioners
and respondents by two different vendors – Emerenciana and Romeo Pujalte (Romeo). Hence,
Article 1544 of the Civil Code is not applicable. Nonetheless, the Court agrees with the
findings and conclusion of the CA that Emerenciana’s acquisition of the subject lots from Luis
and her subsequent sale of the same to respondents are valid and lawful.
Granting that both petitioners and respondents bought the disputed lots in good faith by simply
relying on the certificates of the sellers, and subsequently, acquiring titles in their own names,
respondents’ title shall still prevail. It is a settled rule that when two certificates of title are
issued to different persons covering the same land in whole or in part, the earlier in date must
prevail, and, in case of successive registrations where more than one certificate is issued over
the land, the person holding a prior certificate is entitled to the land as against a person who
relies on a subsequent certificate.37 The titles of respondents, having emanated from an older
title, should thus be upheld.
Anent petitioners’ bad faith, this Court finds no persuasive reason to depart from the findings
of the CA that petitioners had prior knowledge of the estate proceedings involving the subject
lots and that they have notice of the defect in the title of Romeo.
MANIGQUE-STONE V. CATTLEYA LAND, INC.
FACTS:
Cattleya Land, Inc., entered into a contract of conditional sale with the sps. Tecson covering 9
parcels of land including the subject property. The parties then executed a Deed of Absolute
Sale covering the subject property. However, neither of the two could be annotated on the
Certificate of Title because the Register of Deeds refused to annotate both deeds. Even after
the success of Cattleya to have lifted the writ of attachment that was on the certificate of title
to the subject property, it has failed to register a title because the TCT (owner’s copy) was not
yet surrendered by the Tecson sps. According to Cattleya, the Tecson sps could not possibly
deliver the certificate for it had been destroyed in a fire.
It turns out that the spouses could not deliver the certificate because it was already presented
to a previous sale to Taina Stone, a Filipina who married a foreigner. The RTC found that
Taina was only a dummy in the contract of sale and that her subsequent marriage to the
foreigner will not validate or legitimize the sale. Stone asserts that as long as the name
registered is a Filipino, the trial court is barred from inquiring into its legality.
ISSUE:
Whether the assailed Decision is legally correct in not applying the rules on double sale, which
clearly favor petitioner Taina.
RULING:
The petition is bereft of merit.
Petitioner’s arguments, which rest on the assumption that there was a double sale, must fail. 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.
SPRING HOMES SUBDIVISION CO., INC., SPOUSES PEDRO L. LUMBRES AND
REBECCA T. ROARING VS. SPOUSES PEDRO TABLADA, JR. AND ZENAIDA
TABLADA, 
 
Facts:
Petitioners, Spouses Pedro L. Lumbres and Rebecca T. Roaring, (Spouses Lumbres) entered
into a Joint Venture Agreement with Spring Homes Subdivision Co., Inc., through its
chairman, the late Mr. Rolando B. Pasic, for the development of several parcels of land. The
Spouses Lumbres transferred the titles to the parcels of land in the name of Spring Homes.
Spring Homes entered into a Contract to Sell with respondents, Spouses Pedro Tablada, Jr. and
Zenaida Tablada, (Spouses Tablada) for the sale of a parcel of land. The Spouses Lumbres
filed with the RTC of Calamba City a complaint for Collection of Sum of Money, Specific
Performance and Damages with prayer for the issuance of a Writ of Preliminary Attachment
against Spring Homes for its alleged failure to comply with the terms of the Joint Venture
Agreement. Spring Homes executed a Deed of Absolute Sale in favor of the Spouses Tablada.
The title over the subject property, however, remained with Spring Homes for its failure to
cause the cancellation of the TCT and the issuance of a new one in favor of the Spouses
Tablada.
The Spouses Lumbres and Spring Homes entered into a Compromise Agreement wherein
Spring Homes conveyed the subject property, as well as several others, to the Spouses
Lumbres. The Spouses Lumbres started collecting deficiency payments from the subdivision
lot buyers. When no payment was received, the Spouses Lumbres caused the cancellation of
the Contract to Sell previously executed by Spring Homes in favor of the Spouses Tablada. the
Spouses Lumbres and Spring Homes executed a Deed of Absolute Sale over the subject
property, and as a result, a new title was issued in the name of the Spouses Lumbres.
The Spouses Lumbres filed an ejectment suit of their own before the Municipal Trial Court in
Cities (MTCC) of Calamba City demanding that the Spouses Tablada vacate the subject
property and pay rentals due thereon. The MTCC, however, dismissed the suit, ruling that the
Spouses Lumbres registered their title over the subject property in bad faith. Such ruling was
reversed by the Regional Trial Court (RTC) which found that there was no valid deed of
absolute sale between the Spouses Tablada and Spring Homes. Nevertheless, the CA, on
appeal, agreed with the MTCC and reinstated the decision thereof.
Issue: Whether or not Spouses Lumbres acquired ownership over the property.
Ruling: No. The principle of primus tempore, potior jure (first in time, stronger in right) gains
greater significance in case of a double sale of immovable property. Thus, the Court has
consistently ruled that ownership of an immovable property which is the subject of a double
sale shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the
Registry of Property; (2) in default thereof, to the person who in good faith was first in
possession; and (3) in default thereof, to the person who presents the oldest title, provided
there is good faith.  The requirement of the law then is two-fold: acquisition in good faith and
registration in good faith. Good faith must concur with the registration – that is, the registrant
must have no knowledge of the defect or lack of title of his vendor or must not have been
aware of facts which should have put him upon such inquiry and investigation as might be
necessary to acquaint him with the defects in the title of his vendor. If it is shown that a buyer
was in bad faith, the alleged registration they have made amounted to no registration at all.
Here, the first buyers of the subject property, the Spouses Tablada, were able to take said
property into possession but failed to register the same because of Spring Homes’ unjustified
failure to deliver the owner’s copy of the title whereas the second buyers, the Spouses
Lumbres, were able to register the property in their names. But while said the Spouses
Lumbres successfully caused the transfer of the title in their names, the same was done in bad
faith. As correctly observed by the Court in Spouses Lumbres v. Spouses Tablada, 56 the
Spouses Lumbres cannot claim good faith since at the time of the execution of their
Compromise Agreement with Spring Homes, they were indisputably and reasonably informed
that the subject lot was previously sold to the Spouses Tablada. They were also already aware
that the Spouses Tablada had constmcted a house thereon and were in physical possession
thereof. They cannot, therefore, be permitted to freely claim good faith on their part for the
simple reason that the First Deed of Absolute Sale between Spring Homes and the Spouses
Tablada was not annotated at the back of the subject property’s title. It is beyond the Court’s
imagination how spouses Lumbres can feign ignorance to the first sale when the records
clearly reveal that they even made numerous demands on the Spouses Tablada to pay, albeit
erroneously, an alleged balance of the purchase price.
EDU VS GOMEZ
FACTS:
The 1968 model Volkswagen, bantam car, allegedly owned by Lt. Walter A. Bala under
whose name it was originally registered, was reported to the Office of the Commission on
Land Transportation as stolen on June 29, 1970 from the residence of Lt. Bala. Upon receipt of
such information the agents of Anti-Carnapping Unit (ANCAR) of the Philippine
Constabulary, on detail with the Land Transportation Commission recognized subject car on 2
February 1971 in the possession of LUCILA ABELLO and immediately seized and
impounded the car as stolen property.
Romeo F. Edu, then Commissioner of Land Transportation, seized the car pursuant to Section
60 of Republic Act 4136 which empowers him to seize the motor vehicle for delinquent
registration aside from his implicit power deducible from Sec. 4(5), Sec. 5 and 31 of said
Code, "to seize motor vehicles fraudulently or otherwise not properly registered.”
Lucia Abello filed a complaint for replevin with damages in the Court of First Instance of
Manila. CFI ruled in facor of ABELLO. CFI found that the car was acquired by ABELLO by
purchase from its registered owner Marcelino Guansing for P9,000 and that she has been in
possession thereof since then until when the car was seized from her by ANCAR who acted in
belief that the car was stolen from Lt. Bala.
ISSUE:
Whether or not the seizure of the car by the officials are valid.
RULING:
NO. There is no merit in the petition considering that the acquirer or the purchaser in good
faith of a chattel of movable property is entitled to be respected and protected in his possession
as if he were the true owner thereof until a competent court rules otherwise. In the meantime,
as the true owner, the possessor in good faith cannot be compelled to surrender possession nor
to be required to institute an action for the recovery of the chattel, whether or not an indemnity
bond is issued in his favor. The filing of an information charging that the chattel was illegally
obtained through estafa from its true owner by the transferor of the bona fide possessor does
not warrant disturbing the possession of the chattel against the will of the possessor.
Finally, the claim of petitioners that the Commission has the right to seize and impound the car
under Section 60 of Republic Act 4136 which reads:
Sec. 60. The lien upon motor vehicles. Any balance of fees for
registration, re-registration or delinquent registration of a motor vehicle,
remaining unpaid and all fines imposed upon any vehicle owner, shall
constitute a first lien upon the motor vehicle concerned.
is untenable. it is clear from the provision of said Section 60 of Republic Act 4136 that the
Commissioner's right to seize and impound subject property is only good for the proper
enforcement of lien upon motor vehicles. The Land Transportation Commission may issue a
warrant of constructive or actual distraint against motor vehicle for collection of unpaid fees
for registration, re-registration or delinquent registration of vehicles.
SPOUSES MANLAN VS. SPOUSES BELTRAN
TEN FORTY REALTY AND DEVELOPMENT CORPORATION VS MARINA CRUZ
DOCTRINE:
The execution of public instrument gives rise only to a prima facie presumption of delivery,
presumption is destroyed when the delivery is not effected because of a legal impediment of
failure to take actual possession of the property sold.
FACTS:
An ejectment suit was filed by petitioner Ten Forty against Marina Cruz alleging that the
former is the true and absolute owner of a parcel of land and residential house located in #71
18th St., E.B.B. Olongapo City with an area of 324 square meters having acquired said
property from Barbara Galino by virtue of Deed of Absolute Sale. After few years, petitioner
Ten Forty learned that same property was sold to Cruz who immediately occupied the
property. Failure to arrive at an amicable settlement, a demand letter was sent to respondent
Cruz to vacate and pay reasonable amount for the occupation of the same, however, Cruz
refused to vacate the premises. A counterclaim was submitted by respondent contending that
petitioner is not qualified to the property being a public land, that Galino did not sell the
property to petitioner but merely obtained a loan from Veronica Lorenzana, president of the
corporation, no allegation as to the prior possession of petitioner of the subject land wherein
Galino was the actual possessor when it was sold and vacated the premises in favor of the
respondent. MTCC ruled in favor of petitioner and ordered respondent to vacate the property
and surrender the possession thereof to Ten Forty. RTC reversed MTCC’s decision and ruled
that the execution of Deed of Absolute Sale in favor of petitioner Ten Forty without actual
transfer of the physical possession did not have the effect of making the petitioner the owner
of the property because there was no delivery of the object of the sale. An appeal was
submitted to Court of Appeals which sustained the ruling of RTC.
ISSUE:
 Whether or not delivery occurred upon the execution of Deed of Sale to warrant possession
over the subject land.
HELD:
Art. 1498 lays down the rule that an execution of public instrument shall be equivalent to the
delivery of the thing that is the object of the contract if, from the deed, the contrary does not
appear or cannot be clearly inferred. Ownership is transferred not by contract but by actual
delivery, Civil Code did not indicate that the execution of Deed of Sale is a conclusive
presumption of delivery of possession of real estate. Supreme Court held that the execution of
public instrument is a prima facie presumption of delivery and may be destroyed when actual
delivery is not effected because of a legal impediment. Petitioner Ten Forty never acquired
the property from the time it was sold to the corporation since Galino remained in possession
of the subject land and later vacated it after the second sale to Cruz, hence, it remained under
the control and possession of Galino and was never transferred to petitioner. Tax declarations
of Galino and Cruz represented an adverse claim over the unregistered property and derogated
its claim of control and possession of the subject land.
SPOUSES TOMAS AND OCCENA VS. ESPONILLA
SUMMARY:
The Tordesillas spouses owned a 1,198 sqm lot in Antique. Their heirs sold a 798 sqm portion
of this lot to Alberta Morales. Later, Arnold de la Flor (a grandchild and one of the heirs of the
Tordesillas spouses) sold the same portion to the Occeña spouses. Alberta’s nieces (her heirs,
and the respondents in this appeal) filed an action to annul the sale to the Occeña spouses,
alleging that the spouses were buyers in bad faith. The Occeña spouses claimed that Alberta’s
nieces were barred by prescription and laches. The CA ruled for Alberta’s nieces; hence, this
appeal.
 
DOCTRINE:  first in possession;
Prescription does not apply when the person seeking annulment of title or reconveyance is in
possession of the lot because the action partakes of a suit to quiet title, which is
imprescriptible.
 
FACTS:
• A 1,198 sqm lot in Sibalom, Antique was owned by the Tordesillas spouses. They had 3
children: Harod, Angela, and Rosario.
• When the Tordesillas spouses died, Harod and Angela, along with Rosario’s children Arnold and
Lilia (Rosario had died by then) inherited the lot. 
o 1951: They executed a Deed of Pacto de Retro Sale in favor of Alberta Morales over the
southwestern portion of the lot, which had an area of 748 sqm.
• 1954: Arnold and Lilia executed a Deed of Definite Sale of Shares, Rights, Interests, and
Participations over the same 748-sqm portion in favor of Alberta Morales.
• Alberta possessed the lot as owner, constructed a house on it, and appointed a caretaker to
oversee the property.
• 1956: Arnold borrowed the OCT covering the lot from Alberta. He executed an affidavit
acknowledging receipt of the OCT in trust.
• 1966: Arnold and Angela, without the knowledge of Alberta, executed a Deed of Extrajudicial
Settlement declaring the two of them as the only co-owners of the entire 1,198 sqm lot,
without acknowledging the sale of the 748-sqm portion to Alberta.
• 1983: Arnold executed an Affidavit of Settlement of the Estate of Angela, declaring himself as
the sole heir of Angela (who died in 1978). Thus, the title of the entire lot was consolidated in
his name.
• 1985: Alberta died. Her nieces (her only heirs) succeeded in the ownership of the 748-sqm lot.
They kept asking Arnold to deliver the title covering the lot, but the latter failed.
• 1986: Arnold used the OCT he borrowed from Alberta in 1956, subdividing the 1,198 sqm lot
into 3 lots and paying taxes on the property. 
• 1990: Arnold sold 2 of the 3 subdivided lots (which included the 748 sqm portion he had sold to
Alberta) to the Occeña spouses, Tomas and Sylvina. A Deed of Absolute Sale was executed in
their favor, and titles transferred to their names.
• 1993: Arnold died. Alberta’s nieces found out about the sale to the Occeña spouses once they
were notified that they were being ejected.
• Alberta’s nieces filed a case for annulment of sale with cancellation of titles, with damages,
against the Occeña spouses. 
• Occeña spouses claimed they were in good faith when they bought the lots, as the titles were free
from encumbrances when they bought them. They also claimed the defenses of laches and
prescription (Alberta and the nieces having failed to assert their right for 40 years).
• The lower court ruled for the Occeña spouses as they were buyers in good faith. This was
reversed by the CA, who ruled in favoe of Alberta’s nieces-heirs.
ISSUE/S & RATIO:
1. WON the Occeña spouses were purchasers in good faith – No.
o The instant petition is a case of double sale of immovable property. According to Art. 1544,
NCC, the ownership of an immovable sold to different vendees shall belong:
▪ To the person acquiring it who in good faith first recorded it in the Registry of Property;
▪ Should there be no inscription, ownership shall belong to the person who in good faith was
▪ If none, the person who presents the oldest title in good faith.
o Here, the Occeña spouses failed to prove good faith in their purchase. 
▪ A purchaser in good faith and for value is one who buys property without notice that some
other person has a right to or interest in such property and pays its fair price before he has
notice of the adverse claims and interest of another person in the same property. 
▪ During trial, the Occeña spouses admitted that they saw houses built on the subject lot when
they inspected it. They said they relied on the representation of Arnold that these were owned
by squatters.
▪ The Occeña spouses should have verified from the occupants of the land the nature and
authority of their possession instead of merely relying on the representation of the vendor that
they were squatters, having seen for himself that the land was occupied by persons other than
the vendor who was not in possession of the land at that time. 
▪ The settled rule is that a buyer of real property in the possession of persons other than
the seller must be wary and should investigate the rights of those in possession. Without
 such inquiry, the buyer can hardly be regarded as a buyer in good faith and cannot have any
right over the property.
 
2. WON the action of Alberta’s nieces for annulment is barred by laches and prescription – No.
o Laches cannot be used to defeat justice or perpetuate fraud and injustice.
o Prescription does not apply when the person seeking annulment of title or reconveyance is
in possession of the lot because the action partakes of a suit to quiet title which is
imprescriptible.
▪ In this case, Alberta had actual possession of the land when she had a house built thereon and
had appointed a caretaker to oversee her property. 
▪ Alberta’s undisturbed possession of the land for a period of fifty 50 long years gave her and
her heirs a continuing right to seek the aid of a court of equity to determine the nature of the
claim of ownership of petitioner-spouses.
o The general rule is that registration under the Torrens system is the operative act which gives
validity to the transfer of title on the land. 
▪ However, it does not create or vest title especially where a party has actual knowledge of the
claimants actual, open and notorious possession of the property at the time of his registration.

RULING: Petition dismissed.