G.R. No. 93687, 6 May 1991, 286 SCRA 76

FACTS:

It appears that sometime in 1965, petitioner Marcelita Co contracted to buy two parcels of land owned by Andres Gabriel at Malabon, Rizal. The sale was on installment basis and she paid the entire consideration. Consequently, Marcelita Co had the final deeds of sale executed in the name of her brother, Ruperto Padonan. This arrangement was to constitute Ruperto Padonan only as a trustee of said properties. One of the lots was later sold to one Hipolito Tamayo, while the other was titled in the name of Ruperto Padonan and a house was constructed thereon.

On January 28, 1973, in furtherance of said trust agreement, Ruperto Padonan simultaneously executed a deed of absolute sale in favor of petitioner Marcelita Co and a special power of attorney constituting petitioner Romeo Co as attorney-in-fact authorizing him to alienate and encumber said properties. It does not appear that the deed of sale in favor of petitioner Marcelita Co was registered.

On September 10, 1974, Ruperto Padonan executed a deed of absolute sale of the lot registered in his name, together with the house thereon, in favor of private respondent Eduardo Memije. Although Transfer Certificate of Title No. 457594 was issued for the lot in the names of private respondents, they were not able to take possession of said properties as they were occupied by petitioners.

An action for recovery of possession was rendered in favor of herein defendants. Thus this instant petition.

ISSUE:

Whether there has been a double sale. If yes, who has a better right of possession of the property between the petitioner and respondent.

RULING:

YES, there has been a double sale.

The pertinent provision of the Civil Code states:

Art. 1544. If the same thing should have been sold to different vendors, 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.
x x x x x x x x x

As earlier narrated, the final deed of sale of the land was executed in 1966 in the name of Ruperto Padonan. On January 28, 1973, Ruperto Padonan executed a deed of absolute sale in favor of petitioner Marcelita Co. Again on September 10, 1974, Ruperto Padonan executed a deed of absolute sale of the same property in favor of respondent Eduardo Memije. These facts disclose that there was indeed a double sale, hence the abovequoted provision of law finds application.

Petitioners, however, contend that no double sale may arise due to the fact that an implied trust was created between them and the alleged vendor, Ruperto Padonan. The trust agreement was indeed recognized by the trial court in its decision.

Nonetheless, despite the existence of a trust agreement, the conflict is between the Co spouses, on the one hand, and the Memije spouses, on the other. The trust agreement is between Ruperto Padonan and herein petitioner Marcelita Co. Private respondents are not in privity with petitioners or Ruperto Padonan as far as the trust agreement is concerned. Private respondents relied on a clean transfer certificate of title in the name of Padonan, which title does not contain any annotation concerning the trust agreement.

Further, Respondents have the better right over the subject property. It has been held that a purchaser in good faith is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property. Also, in order that a purchaser of land with a Torrens title may be considered as a purchaser in good faith, it is enough that he examines the latest certificate of title which in this case was issued in the name of the immediate transferor. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he has purchased the property.

Furthermore, as established by respondent Eduardo Memije without contradiction, the property was already paid in full and the deed was registered before respondent spouses learned of the supposed adverse claim of petitioners. In his testimony, said respondent declared that he and Padonan, after agreeing on the projected sale, went and paid the mortgage on the property and, thereafter, Padonan executed the deed of sale prepared by the counsel of said private respondent. On the basis of said deed of sale and the release of mortgage over the property, the Register of Deeds for the Province of Rizal issued Transfer Certificate of Title No. 457594 in the names of respondent spouses. It was subsequent thereto when the keys to the house had been given to respondents by Padonan and the former went to occupy the house that they were prevented from doing so by petitioners.

Under the present posture of this case, therefore, it appearing that private respondents are the duly registered owners of the land, without sufficient proof of any flaw in their title thereto having been adduced by petitioners, the right of the former to the possession thereof and to be protected therein has to be conceded and respected.

*Case Digest by Doreena Pauline V. Aranal, JD – 4, Andres Bonifacio College, SY 2019 – 2020