G.R. No. L-28740, 24 February 1981, 103 SCRA 7


Claro L. Laureta filed an action for nullity, recovery of ownership and/or reconveyance with damages and attorney’s fees against Marcos Mata, Codidi Mata, Fermin Z. Caram, Jr.

On June 10, 1945, Marcos Mata conveyed a large tract of agricultural land covered by Original Certificate of Title No. 3019 in favor of Claro Laureta, plaintiff, the respondent herein. The deed of absolute sale in favor of the plaintiff was not registered because it was not acknowledged before a notary public or any other authorized officer. At the time the sale was executed, there was no authorized officer before whom the sale could be acknowledged inasmuch as the civil government in Tagum, Davao was not as yet organized.

On May 5, 1947, the same land covered by Original Certificate of Title No. 3019 was sold by Marcos Mata to defendant Fermin Z. Caram, Jr., petitioner herein. The deed of sale in favor of Caram was acknowledged before Atty. Abelardo Aportadera.

On May 22, 1947, Marcos Mata, filed a petition for the issuance of a new Owner’s Duplicate of Original Certificate of Title No. 3019, alleging as ground therefor the loss of said title. On June 5, 1947, issued an order directing the Register of Deeds of Davao to issue a new Owner’s Duplicate Certificate of Title No. 3019 in favor of Marcos Mata and declaring the lost title as null and void.

On December 9, 1947, the second sale between Marcos Mata and Fermin Caram, Jr. was registered with the Register of Deeds. On the same date, Transfer Certificate of Title No. 140 was issued in favor of Fermin Caram Jr.


1. Whether the petitioner is a purchaser in good faith.
2. Whether the first sale shall prevail over the second sale.


1. Petitioner Caram is not a purchase in good faith.

There is no doubt then that Irespe and Aportadera, acting as agents of Caram, purchased the property of Mata in bad faith. Applying the principle of agency, Caram as principal, should also be deemed to have acted in bad faith.
The Court cannot help being convinced that Irespe, attorney-in-fact of Caram, Jr. had knowledge of the prior existing transaction, Exhibit A, between Mata and Laureta over the land, subject matter of this litigation, when the deed, Exhibit F, was executed by Mata in favor of Caram, Jr. And this knowledge has the effect of registration as to Caram, Jr.

Even if Irespe and Aportadera did not have actual knowledge of the first sale, still their actions have not satisfied the requirement of good faith. Bad faith is not based solely on the fact that a vendee had knowledge of the defect or lack of title of his vendor. In the case of Leung Yee vs. F. L. Strong Machinery Co. and Williamson, this Court held:

One who purchases real estate with knowledge of a defect or lack of title in his vendor can not 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.
In the instant case, Irespe and Aportadera had knowledge of circumstances which ought to have put them an inquiry. Both of them knew that Mata’s certificate of title together with other papers pertaining to the land was taken by soldiers under the command of Col. Claro L. Laureta. Added to this is the fact that at the time of the second sale Laureta was already in possession of the land. Irespe and Aportadera should have investigated the nature of Laureta’s possession.

2. The first sale in favor of Laureta prevails over the sale in favor of Caram.

Caram was a registrant in bad faith, then it is as if there was no registration at all.
The question to be determined now is, who was first in possession in good faith? A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Laureta was first in possession of the property. He is also a possessor in good faith. It is true that Mata had alleged that the deed of sale in favor of Laureta was procured by force.

Such defect, however, was cured when, after the lapse of four years from the time the intimidation ceased, Marcos Mata lost both his rights to file an action for annulment or to set up nullity of the contract as a defense in an action to enforce the same.

*Case digest by Nikki P. Ebillo, JD-4, Andres Bonifacio Law School, SY 2019-2020