G.R. No. 194846, 19 June 2013, 699 SCRA 232
Sps. Luis and Honorata acquired several real properties in Daan Banatayan, Cebu City, including the subject properties. The couple had nine (9) children namely: Hospicio, Arturo, Florita, Lucila, Eduardo, Manuel, Cleofe, Antonio, and Angelica. On April 25, 1952, Honorata died. Later on, Luis married Lourdes Pastor Rosaroso (Lourdes).
On January 16, 1995, a complaint for Declaration of Nullity of Documents with Damages was filed by Luis, as one of the plaintiffs, against his daughter, Lucila; Lucila’s daughter, Laila; and Meridian Realty Corporation (Meridian). Due to Luis’ untimely death, however, an amended complaint was filed on January 6, 1996, with the spouse of Laila, Ham Solutan (Ham); and Luis’ second wife, Lourdes, included as defendants.
In the amended complaint, it was alleged by petitioners that a Deed of Absolute Sale was executed with the full knowledge and consent of the second wife covering the properties located at Daanbantayan, Cebu, in their favor.
Petitioners also alleged that the second sale took place when the respondents made Luis sign the Deed of Absolute Sale conveying to Meridian three (3) parcels of residential land; that Meridian was in bad faith when it did not make any inquiry as to who were the occupants and owners of said lots; and that if Meridian had only investigated, it would have been informed as to the true status of the subject properties and would have desisted in pursuing their acquisition.
Lourdes posited that her signature as well as that of Luis appearing on the deed of sale in favor of petitioners was obtained through fraud, deceit and trickery. She explained that tey signed the prepared deed out of pity because petitioners told them that it was necessary for a loan application. In fact, there was no consideration involved in the First Sale. With respect to the Second sale, she never encouraged the same and neither did she participate in it. It was purely her husband’s own volition that the second sale materialized. She, however, affirmed that she received Meridian’s payment on behalf of her husband who was then bedridden.
Whether Meridian is a buyer in good faith?
Meridian is not a buyer in good faith.
The fact that Meridian had them first registered will not help its cause. In case of double sale, Article 1544 of the Civil Code provides:
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 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.
Otherwise stated, 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. If it would be shown that a buyer was in bad faith, the alleged registration they have made amounted to no registration at all.
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. When the thing sold twice is an immovable, the one who acquires it and first records it in the Registry of Property, both made in good faith, shall be deemed the owner. Verily, the act of registration must be coupled with good faith— 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.
When a piece of land is in the actual possession of persons other than the seller, the buyer must be wary and should investigate the rights of those in possession. Without making such inquiry, one cannot claim that he is a buyer in good faith. When a man proposes to buy or deal with realty, his duty is to read the public manuscript, that is, to look and see who is there upon it and what his rights are. A want of caution and diligence, which an honest man of ordinary prudence is accustomed to exercise in making purchases, is in contemplation of law, a want of good faith. The buyer who has failed to know or discover that the land sold to him is in adverse possession of another is a buyer in bad faith.
*Case digest by Jhazeel Zhan Jebone, JD-4, Andres Bonifacio Law School, SY 2019-2020