G.R. No. 132161, 17 January 2005


Rizal, Anselmo, Gregorio, Filomeno and Domingo, all surnamed Madrid were the registered owners of a Lot situated in San Mateo, Isabela per Transfer Certificate of Title (TCT) No. T-8121 issued by the Register of Deeds of Isabela in September 1956. On 15 August 1957, Rizal Madrid sold part of his share to Aleja Gamiao and Felisa Dayag by virtue of a Deed of Sale, to which his brothers Anselmo, Gregorio, Filomeno and Domingo offered no objection as evidenced by their Joint Affidavit dated 14 August 1957. The deed of sale was not registered with the Office of the Register of Deeds of Isabela. However, Gamiao and Dayag declared the property for taxation purposes in their names on March 1964 under Tax Declaration No. 7981.

On 28 May 1964, Gamiao and Dayag sold the southern half of their Lot to Teodoro dela Cruz, and the northern half, to Restituto Hernandez. Thereupon, Dela Cruz and Hernandez took possession of and cultivated the portions of the property respectively sold to them. Later on Hernandez donated the northern half to his daughter, Evangeline Hernandez-del Rosario. The children of Dela Cruz continued possession of the southern half after their father’s death on 7 June 1970.

In a Deed of Sale dated 15 June 1976, the Madrid brothers conveyed all their rights and interests over their Lot to Pacifico Marquez which the former confirmed and the deed of sale was registered with the Office of the Register of Deeds of Isabela. Subsequently, Marquez subdivided the Lot into eight (8) lots. With his spouse, Mercedita Mariana, mortgaged 4 Lots to the Consolidated Rural Bank, Inc. of Cagayan Valley to secure a loan and were registered with the Office of the Register of Deeds on 2 April 1984. On 6 February 1985, Marquez mortgaged one Lot likewise to the Rural Bank of Cauayan (RBC) to secure a loan. Also sold one lot to Romeo Calixto. 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 on 25 April 1986..

Claiming to be null and void the issuance of the titles; the foreclosure sale; the mortgage to RBC; and the sale to Calixto, the Heirs-now respondents herein-represented by Edronel dela Cruz, filed a case for reconveyance and damages the southern portion (hereafter, the subject property) against Marquez, Calixto, RBC and CRB in December 1986. Evangeline del Rosario, the successor-in-interest of Restituto Hernandez, filed with leave of court a Complaint in Intervention wherein she claimed the northern portion.

After trial, the Regional Trial Court, handed down a decision in favor of the defendants. On 27 May 1997, the Court of Appeals rendered its assailed Decision reversing the RTC’s judgment. Thus, this appeal based on rule 45 of the ROC.


1)WON the Court of Appeals committed serious error of law in upholding the Heirs’ ownership claim over the subject property considering that there was no finding that they acted in good faith in taking possession thereof nor was there proof that the first buyers, Gamiao and Dayag, ever took possession of the subject property.
2)WON the sale to Gamiao and Dayag was confirmed a day ahead of the actual sale, clearly evincing bad faith.
3) WON Marquez has right over the property being its registered owner.


The petition is devoid of merit. However, the dismissal of the petition is justified by reasons different from those employed by the Court of Appeals. 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.

The provision is not applicable in the present case. It contemplates a case of double or multiple sales by a single vendor. More specifically, it covers a situation where a single vendor sold one and the same immovable property to two or more buyers. According to a noted civil law author, it is necessary that the conveyance must have been made by a party who has an existing right in the thing and the power to dispose of it. 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 in 1957, followed by their declaration of the property in its entirety for taxation purposes in their names. This Court declared in the case of Heirs of Simplicio Santiago v. Heirs of Mariano E. Santiago , tax declarations “are good indicia of possession in the concept of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession.”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.

Madrid brothers are bound by the sale by virtue of their confirmation thereof in the Joint Affidavit dated 14 August 1957. That this was executed a day ahead of the actual sale on 15 August 1957 does not diminish its integrity as it was made before there was even any shadow of controversy regarding the ownership of the subject property.

Moreover, it is an established principle that no one can give what one does not have, “nemo 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. 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, , the claim of Marquez still cannot prevail over the right of the Heirs since according to the evidence he was not a purchaser and registrant in good faith.Found by the Court of Appeals, Marquez knew at the time of the sale that the subject property was being claimed or “taken” by the Heirs. Marquez also admitted that he did not take possession of the property and that he did not fight for the possession of the property if it were true that he had a better right to it.

Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. Hence, for merely relying on the certificates of title and for its failure to ascertain the status of the mortgaged properties as is the standard procedure in its operations, we agree with the Court of Appeals that CRB is a mortgagee in bad faith. While certificates of title are indefeasible, unassailable and binding against the whole world, they merely confirm or record title already existing and vested. They cannot be used to protect a usurper from the true owner, nor can they be used for the perpetration of fraud; neither do they permit one to enrich himself at the expense of others.

*Case digest by Paul C. Gandola, JD – 4, Andres Bonifacio College, SY 2019 – 2020