CRB vs. CA and HEIRS OF DELA CRUZ G.R. No. 132161

CRB  vs. CA and HEIRS OF DELA CRUZ

G.R. No. 132161

January 17, 2005

FACTS: The Madrid brothers  were the registered owners of Lot A situated in Isabela.

Said lot was subdivided into several lots. Rizal Madrid sold part of his share identified lot A-7 to Gamiao and Dayag by virtue of a Deed of Sale, to which his brothers offered no objection as evidenced by their Joint Affidavit .The deed of sale was not registered with the ORD of Isabela. However, Gamiao and Dayag declared the property in their names on a Tax Declaration. Gamiao and Dayag sold the subject southern half of lot to Teodoro dela Cruz, and the northern half to Hernandez. Thereupon, Teodoro dela Cruz and Hernandez took possession of and cultivated the portions of the property respectively sold to them (Later Restituto Hernandez donated the northern half to his daughter. The children of Teodoro dela Cruz continued possession of the southern half after their father’s death.) In a Deed of Sale the Madrid brothers conveyed all their rights and interests over lot A-7 to Marquez which the former confirmed^. The deed of sale was registered with the ORD of Isabela. Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the same date, Marquez and his spouse, Mercedita Mariana, mortgaged 4 lots to the Consolidated Rural Bank, Inc. of Cagayan Valley (hereafter, CRB) to secure a loan. These deeds of real estate mortgage were registered with the ORD. As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its favor and the lots were sold to it as the highest bidder. The Heirs-now respondents filed a case for reconveyance and damages for  the southern portion of Lot No. 7036-A (hereafter, the subject property) against Marquez and CRB. The RTC handed down a decision in favor of Marquez. The Heirs interposed an appeal with the CA, which upheld the claim of the Heirs. Hence, the instant CRB petition.

ISSUE: WON Art. 1544 of the Civil Code (double sale) applicable in this case

HELD: NO.

 The petition is denied, and the decision as modified is affirmed. Like the lower court, the appellate court resolved the present controversy by applying the rule on double sale provided in Article 1544 of the Civil Code. They, however, arrived at different conclusions. The RTC made CRB and the other defendants win, while the Court of Appeals decided the case in favor of the Heirs.

Article 1544 of the Civil Code reads, thus:

ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, 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. The provision is not applicable in the present case. It contemplates a case of double or multiple sales by a single vendor. It cannot be invoked where the two different contracts of sale are made by two different persons, one of them not being the owner of the property sold. And even if the sale was made by the same person, if the second sale was made when such person was no longer the owner of the property, because it had been acquired by the first purchaser in full dominion, the second purchaser cannot acquire any right. In the case at bar, the subject property was not transferred to several purchasers by a single vendor. In the first deed of sale, the vendors were Gamiao and Dayag whose right to the subject property originated from their acquisition thereof from Rizal Madrid with the conformity of all the other Madrid brothers. On the other hand, the vendors in the other or later deed were the Madrid brothers but at that time they were no longer the owners since they had long before disposed of the property in favor of Gamiao and Dayag.

In a situation where not all the requisites are present which would warrant the application of Art. 1544, the principle of prior tempore, potior jure or simply “he who is first in time is preferred in right, should apply.” The only essential requisite of this rule is priority in time; in other words, the only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the time he bought the real property, there was still no sale to a second vendee. In the instant case, the sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale by the Madrid brothers to Marquez. The Heirs also had possessed the subject property first in time. Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject property. Moreover, it is an established principle that no one can give what one does not have¾nemo dat quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can transfer legally.⁵³ In this case, since the Madrid brothers were no longer the owners of the subject property at the time of the sale to Marquez, the latter did not acquire any right to it.

Balatbat v. CA

Facts:

A parcel of land was acquired by plaintiff Aurelio Roque and Maria Mesina during their conjugal union. Maria died on August 28, 1966. On June 15, 1977, Aurelio filed a case for partition. The trial court held that Aurelio is entitled to the ½ portion at his share in the conjugal property, and 1/5 of the other half which formed part of Maria’s estate, divided equally among him at his 4 children. The decision having become final and executory, the Register of Deeds of Manila issued a transfer certificate of title on October 5, 1979 according to the ruling of the court. On April 1, 1980, Aurelio sold his 6/10 share to spouses Aurora Tuazon-Repuyan and Jose Repuyan, as evidenced by a deed of absolute sale. On June 21, 1980, Aurora caused the annotation of her affidavit of adverse claim. On August 20, 1980, Aurelio filed a complaint for rescission of contract grounded on the buyers’ failure to pay the balance of the purchase price. On February 4, 1982, another deed of absolute sale was executed between Aurelio and his children, and herein petitioner Clara Balatbat, involving the entire lot. Balatbat filed a motion for the issuance of writ of possession, which was granted by the court on September 20, 1982, subject to valid rights and interests of third persons. Balatbat filed a motion to intervene in the rescission case, but did not file her complaint in intervention. The court ruled that the sale between Aurelio and Aurora is valid.

Issues:(1) Whether the alleged sale to private respondents was merely executory(2) Whether there was double sale(3) Whether petitioner is a buyer in good faith and for value

Held:(1) Contrary to petitioner's contention that the sale dated April 1, 1980 in favor of private respondents Repuyan was merely executory for the reason that there was no delivery of the subject property and that consideration/price was not fully paid, we find the sale as consummated, hence, valid and enforceable. The Court dismissed vendor's Aurelio Roque complaint for rescission of the deed of sale and declared that the Sale dated April 1, 1980, as valid and enforceable. No appeal having been made, the decision became final and executory.The execution of the public instrument, without actual delivery of the thing, transfers the ownership from the vendor to the vendee, who may thereafter exercise the rights of an owner over the same. In the instant case, vendor Roque delivered the owner's certificate of title to herein private respondent. The provision of Article 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument. A contract of sale being consensual, it is perfected by the mere consent of the parties. Delivery of the thing bought or payment of the price is not necessary for the perfection of the contract; and failure of the vendee to pay the price after the execution of the contract does not make the sale null and void for lack of consideration but results at most in default on the part of the vendee, for which the vendor may exercise his legal remedies.

(2) Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership 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. In the case at bar, vendor Aurelio Roque sold 6/10 portion of his share to private respondents Repuyan on April 1, 1980. Subsequently, the same lot was sold again by vendor Aurelio Roque (6/10) and his children (4/10), represented by the Clerk of Court pursuant to Section 10, Rule 39 of the Rules of Court, on February 4, 1982. Undoubtedly, this is a case of double sale contemplated under Article 1544 of the New Civil Code. Evidently, private respondents Repuyan's caused the annotation of an adverse claim on the title of the subject property on July 21, 1980. The annotation of the adverse claim in the Registry of Property is sufficient compliance as mandated by law and serves notice to the whole world. On the other hand, petitioner filed a notice of lis pendens only on February 2, 1982. Accordingly, private respondents who first caused the annotation of the adverse claim in good faith shall have a better right over herein petitioner. As between two purchasers, the one who has 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. Further, even in default of the first registrant or first in possession, private respondents have presented the oldest title. Thus, private respondents who acquired the subject property in good faith and for valuable consideration established a superior right as against the petitioner.

(3) Petitioner cannot be considered as a buyer in good faith. If petitioner did investigate before buying the land on February 4, 1982, she should have known that there was a pending case and an annotation of adverse claim was made in the title of the property before the Register of Deeds and she could have discovered that the subject property was already sold to the private respondents. It is incumbent upon the vendee of the property to ask for the delivery of the owner's duplicate copy of the title from the vendor. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired 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 knowledge 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. Good faith, or the want of it is not a visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be judged of by actual or fancied tokens or signs.

ANAMA VS. COURT OF APPEALS
GR. No. 128609, January 29, 2004

Facts:

The property was previously owned by Douglas Anama’s parents, who mortgaged it to Philippine Savings Bank and later was foreclosed. Douglas and the PSBank entered into an agreement denominated as a Contract to Buy whereby the bank agreed to sell to Douglas the said land with all the improvements thereon. The Contract to Buy provides that Anama shall purchase the property of a certain amount and shall pay to the PSBank; it also provides that Anama shall apply with the bank for a loan, the proceeds of which answer for the balance of the purchase price; should the petitioner fail to comply with any of the terms of contract, all amounts paid are forfeited in favor of PSBank, the latter having the option either to demand full payment of total price or to rescind the contract. Anama was able to pay the first and second installments; however, he failed to pay the third installment when it became due. There were several transactions between them to settle the amount due. But later, the bank executed an Affidavit of Cancellation rescinding the contract, and forfeited the payments made by Anama which were applied as rentals of the use of the property. Anama was then advised to vacate the property despite his opposition to the rescission of the Contract to Buy. The bank sold the property to spouses Co, in whose favor TCT was issued. Anama then filed a case for Declaration of Nullity of Deed of Sale, Cancellation of TCT,and Specific Performance with Damages.

Issue:

Whether the rescission of the Contract to Buy was valid.

Held:

Since Anama failed to pay the third installment, PSBank was entitled to rescind the Contract to Buy. The contract provides the Bank two options in the event that petitioner fails to pay any of the installments. This was either (1) to rescind the contract outright and forfeit all amounts paid by the petitioner, or (2) to demand the satisfaction of the contract and insist on the full payment of the total price. After petitioner repeatedly failed to pay the third installment, the Bank chose to exercise the first option.
           

The Contract to Buy is actually a contract to sell whereby the vendor reserves ownership of the property and is not to pass until full payment. Such payment is a positive suspensive condition, the failure of which is not a breach but simply an event that prevents the obligation of the vendor to convey title from acquiring binding force. Since ownership of the subject property was not pass to petitioner until full payment of the purchase price, his failure to pay on the date stipulated, or in the extension granted, prevented the obligation for the Bank to pass title of the property to Anama. The bank could validly sell the property to the spouses Co, the right of the bank to sell the property being unequivocal.