048 CUIZON V REMOTO Author: Jade

G.R. No. 143027 October 11, 2005 Notes:

Topic: Transfer of Ownership General Rule Prior tempore, potior jure - He who is first in time is
Ponente: AUSTRIA-MARTINEZ, J preferred in right.
FACTS: The issue in this case is the ownership of a 4300 sq. m. land in Brgy. Basilisa, Remedios T. Romualdez, Agusan
del Norte.

Petitioners-spouses Encarnacion and Salvador Cuizon holds TCT # RT-3121 in the name of Encarnacion L. Cuizon
married to Salvador Cuizon. Such certificate was issued by the Registry of Deeds of Agusan del Norte on March 15,
1984 pursuant to the Extra-Judicial Settlement with Sale dated August 3, 1983 executed by the heirs of Placida Tabada-
Lambo. The heirs adjudicated unto themselves of Placidas share and sold said portion to their co-heir, Encarnacion
Cuizon.

The original TCT is TCT # RT-183 which covers 16 hectares of land in the name of Placida Tabada-Lambo (married to
Gervacio Lambo), Eugenio Tabada, Raymunda Tabada and Patrecia Tabada, each being shrareowner.

Respondents (Remoto) have notarized in their favor a Deed of Sale of Real Property dated September 19, 1968 involving
a portion of the same property (TCT # RT-183) measuring 4300 sq. m. Said deed was executed by Placida in favor of
Angel Remoto, husband of respondent Mercedes Remoto, and father of other respondents, Leonida Meynard, Celerina
Rosales and Remedios Remoto.

The Remotos filed an action for reconveyance against the Cuizons on August 13, 1984. The RTC of Butuan City
rendered a decision on March 9, 1990, ruling in favor of the Remotos and ordered that the property be reconveyed to
them and to pay P2000 as litigation expenses, P5000 as attorneys fees and the costs of the suit.

The Court of Appeals affirmed the findings of the RTC and dismissed the petition on December 16, 1999. Cuizons filed
a motion for reconsideration but got denied on March 31, 2000.

The Cuizons filed a petition for review to the Supreme Court. The Cuizons insist that they are the rightful owners of the
property based on TCT # RT-3121. They also claim that the 1968 Deed of Sale is void, fictitious, unenforceable and has
no legal effect. Their other arguments are:

1. the property is covered by TCT No. RT-183 issued on June 21, 1930, and every person dealing with registered land
may safely rely on the correctness of the title
2. at the time the 1968 Deed of Sale was executed, no written notice was given to all possible co-redemptioners, co-
heirs, and co- owners, as provided for under Articles 1620 and 1623 of the Civil Code
3. respondents possession is ineffectual against a torrens title
4. respondents action is barred by prescription and laches.
ISSUE: Who has a better right to the property in dispute?

HELD: The Remotos are the rightful owner of the property in dispute. (Petition is dismissed.)
RATIO: The trial court and the CA correctly ruled that the 1968 Deed of Sale executed by Placida in favor of Angel
Remoto should prevail over the 1983 Extra-Judicial Settlement with Sale made by the heirs of Placida in favor of
petitioners-spouses Cuizon.

Applying the principle of prior tempore, potior jure, the only essential requisite is priority in time and the only one who
can invoke this is the first vendee (Remoto records show that right after the sale between Placida and Angel, Angel
immediately took possession of the land - superior right to property).

When Placida sold her portion of the property covered by TCT #- RT-183 in 1968, the 1983 Extra-Judicial Settlement
with Sale was not yet in place and not yet transferred by succession to Placidas heirs.
The sale between Placida and Angel is proved by a duly notarized deed of sale, which means the deed of sale is a public
document and admissible in evidence without necessity of preliminary proof as to their authenticity and due execution.
The deed of sale is presumed regular and the burden of contradicting its regularity in on the Cuizons who failed to
present any clear and convincing evidence to prove that the deed of sale is void, fictitious, unenforceable and has no
legal effect.

The Cuizons only argued that the 1968 Deed of Sale was not registered or annotated on TCT # RT-183. However,
registration is not a requirement for validity of the contract as between parties because the effect of registration is to bind
3rd persons. Accordingly, the Cuizons are not 3rd persons within the contemplation of the rule on registration. They are
both related to the original owner, Placida (Encarnacion is an heir of Placida ; Salvador is Encarnacions husband.), thus,
registration is not required to bind them in the sale executed by Placida.

The trial court found that before the Cuizons bought the property in 1983, they went to the Remotos residence in 1982.
A copy of the 1968 Deed of Sale was shown to them. The Cuizons only disputed the year of their visit to the Remotos
residence (according to them, it was in 1983) but the findings of the trial court will stand for they are in the best position
to assess the testimonies of the contending parties. In this case, it is therefore showed that the Cuizons has knowledge of
a prior existing interest which is unregistered at the time they acquired a right to the same property, his knowledge of that
prior unregistered interest has the effect of registration as to him.

When TCT # RT-3121 (pursuant to the 1983 Extra-Judicial Settlement with Sale) was issued to the petitioners-spouses,
the heirs of Placida was no longer the owner of the property because the property was earlier sold to Angel. One can sell
only what one owns or is authorized to sell. The heirs of Placida did not acquire a right to adjudicate the property unto
them and sell it to Encarnacion.

The defense of indefeasibility of the torrens title does not extend to a transferee who takes the certificate of title with
notice of a flaw in his title. The principle of indefeasibility of title is unavailing where there was fraud that attended the
issuance of the free patents and titles. As previously noted, petitioners knew of the existence of the 1968 Deed of Sale as
the Remotos showed it to them in 1982, a year before the execution of the 1983 Extra-Judicial Settlement with Sale.
Thus, it cannot be said that petitioners are transferees in good faith and therefore, the defense of indefeasibility of the
torrens title is not applicable to them.

Likewise, petitioners cannot complain that no written notice was given to all possible redemptioners or heirs at the time
of the execution of the 1968 Deed of Sale. The right of legal redemption pertains to Placidas original co-owners,
namely, Eugenio Tabada, Raymunda Tabada and Patrecia Tabada, and their respective heirs, but not to petitioners who
are the heirs of Placida. Also, the written notification should come from the vendor or prospective vendor because the
vendor is in the best position to know who are his co-owners that under the law must be notified of the sale. In this case
it should be from Placida. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection; and its
validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller may
still contest the alienation. This assurance would not exist if the buyer should give the notice.

Even if the property has not yet been formally subdivided, records show that the particular portions belonging to the co-
owners have already been allocated and Placidas co-owners have already been exercising proprietary rights over their
respective allotments. As inscribed on TCT No. RT-183, several deeds of mortgages were executed by Placidas co-
owner Eugenio C. Tabada in favor of the Butuan City Rural Bank with respect to his one-fourth share, and a Deed of
Sale with Right of Repurchase dated May 13, 1968 was executed by the spouses Eugenio G. Tabada and Trinidad
Ontong in favor of one Hernando R. Sanchez, also covering Eugenios one-fourth portion of the property.

The Court notes, however, that the property originally co-owned by Placida, Eugenio Tabada, Raymunda Tabada and
Patrecia Tabada, covered by TCT No. RT-183, measures 16 hectares, while the 1968 Deed of Sale covers 4,300 square
meters. The sale to Angel affects only Placidas pro indiviso share in the property, and Angel gets only what corresponds
to Placidas share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only
the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property. The portion sold
by Placida and bought by Angel under the 1968 Deed of Sale should only pertain to one-fourth of Placidas share in the
16-hectare property, or 4,000 square meters.

Prescription and laches do not apply in this case. The Remotos have been in actual and continuous possession of the
property since Angel first bought it in 1968. If a person claiming to be the owner is in actual possession of the property,
the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. They are not guilty
of laches as well for it was their vigilance in protecting their right over the property that gave rise to this case. The action
for reconveyance was filed only after a year and 10 days from the execution of the 1983 Extra-Judicial Settlement with
Sale, 1 year and 3 days after its registration, and 4 months and 28 days after the issuance of TCT # RT-3121.
DOCTRINE
SEPARATE OPINION:
049 Sun Bros. & Co. v. Jose Velasco
O.G. 5143, August 11, 1958
Topic: Rights and Obligations of the Vendor;
Exception: Purchases from a Merchants Store
/ Markets / Fairs
Author: Loren Vicedo
Notes: O.G. 5143
A case of an imperfect or void title which ripens into a valid
one, because of some intervening causes

Ponente: Angeles, J.
FACTS:
1. Sun Bros. & Co. (SBC) owns a refrigerator. Sun Brothers sells refrigerator. It sold a refrigerator to Lopez
on installment basis. Under the stipulation, Sun Brothers reserves the ownership until its full payment.
Lopez only paid Php500. The total value of the refrigerator is Php1700. The balance is to be paid on
installment basis. However, Lopez then sold the refrigerator to Velasco.
2. The case involves one Admiral refrigerator Model 9D-7 (Originally owned by the plaintiff).
3. SBC delivered to Francisco Lopez an Admiral refrigerator. The stipulated price was P1700, but Lopez only
paid the downpayment of P500.
4. The following are the stipulation of their contract:
a. Lopez shall not remove the refrigerator nor part possession without the express written consent
of SBC.
b. In the event of a violation of the agreement, SBC may rescind the contract of sale and recover
possession of the refrigerator. In addition, any amount previously paid shall be forfeited as
liquidated damages, and the refrigerator remains as SBCs absolute property until Lopez is
able to pay the full purchase price.
5. Lopez misrepresented himself as Jose Lim and without the knowledge of SBC, he sold the refrigerator to
JV Trading, which is owned by Jose Velasco for the value of Php850. Lopez then executed a document
which states that he is the absolute owner of the refrigerator.
6. The refrigerator was displayed at the JV Trading store and later on sold to Co Kang Chiu for Php 985 and
was delivered to his house.
7. When the SBC knew about the sale of the refrigerator, it then filed a complaint for replevin against both
Lopez and Co Kang Chiu. JV Trading was included in the complaint as well. SBC is asking for recovery of
the possession of the refrigerator through preliminary writ of replevin.
8. But because of Co Kang Chius request and his filing of counter-bond, the refrigerator was not taken out of
his house.
9. CFI ruled in favor of SBC: It being the absolute owner. It ordered Co Kang Chiu to return the refrigerator.
Otherwise, Lopez shall pay the full amount of Php1700 (original value of the refrigerator) to SBC and JV
Trading should return the amount of Php985 to Co Kang Chiu as reimbursement.

ISSUE: Can Sun Bros recover refrigerator?

HELD: NO.

RATIO: Though the general rule is goods sold by a person who is not an owner and with no authority to do
so, the buyer acquires no better title than the seller had. But, the exception to such is when the said thing is
sold in a merchant store to an innocent purchaser for value; the rights of the said purchaser shall be
protected. Collection from Lopez is the proper remedy.

Art. 1505: Subject to the provisions of this Title, where goods are sold by a person who is not the owner
thereof, and who does not sell them under authority or with the consent of the owner the buyer acquires no
better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from
denying the sellers authority to sell. Nothing in this Title, however, shall affect: xxx 3) Purchases made in a
merchants store, or in fairs, or markets, in accordance with the Code of Commerce, and special laws.

The JV Trading store from which Co Kang Chiu purchased the refrigerator was a merchant store, as
merchant store defined in the Code of Commerce. Co Kang Chiu bought the refrigerator at the JV Trading
after the same has been put on display thereat. This is a case of an imperfect or void title ripening into a valid
one, as a result of some intervening causes. The rule embodied in par. 3 of Art. 1505 protecting innocent third
party who have made purchases at merchants stores in good faith and for value appears to us to be a wise
and necessary rule not only to facilitate commercial sales on movables but to give stability to business
transactions. This rule is necessary in a country such as ours where free enterprise prevails, for buyers
cannot reasonably be expected to look behind the title of every article when he buys at a store.
Co Kang Chiu should be declared to have acquired a valid title, although his predecessors-in-interest did not
have any right of ownership thereto. It is a case where an imperfect or void title ripens into a valid one,
because of some intervening causes.

DOCTRINE
The rights and interests of an innocent purchaser for value should be protected when it comes into clash with
the rights and interests of a vendor. This is embodied in NCC 1505 (3) to facilitate commercial sales of
movables and to give stability to business transactions.

GR: Goods sold by a person who is not an owner and with no authority to do so, the buyer acquires title.
EXC: When the thing sold in a merchant store is purchased by an innocent purchaser for value, the rights of
the said purchaser shall be protected.
50 SALONGA v. CONCEPCION Author:
470 SCRA 291, September 20, 2005

FACTS:
1. Spouses Salonga owned a commercial building which they leased to traders and merchants, and lived in a house which
the lot they owned

2. To finance their business, the spouses secured a loan from the Associated Bank. To secure the payment thereof, they
executed a Real Estate Mortgage in favor of the bank over some properties they owned

3. The spouses likewise secured a loan from the Philippine National Bank (PNB), and also executed a real estate
mortgage, and more loans from other banks. (Associate Bank, DBP, & Rural Bank of Malasiqui, Inc.)

4. A big earthquake in 1990 severely damaged the building they owned after which they could not use for their business
anymore. Because of this, spouses Salonga defaulted in their payments to the bank; creditor banks subsequently
started to foreclose the mortgaged properties due to non-payment of the Salongas

5. To prevent further foreclosures, they secured several loans from the Concepcion Spouses from 200,000 to 2,000,000
to pay the banks

6. Spouses Salongas failed to pay the debt they owed to the Concepcions, so they issued a Deed of Absolute Sale
covering several of the properties Associate Bank previously foreclosed.

i. Concepcion executed a Deed of Absolute Sale over the property covered by TCTs in favor of the Florencia Realty
Corporation.

7. Spouses Salonga executed a Deed of Absolute Sale over their properties previously mortgaged with the PNB and
DBP, covered by TCTs in favor of the spouses Concepcion.

i. The spouses Concepcion filed the deed of absolute sale on the same day

8. Spouses Salonga filed a complaint against the spouses Concepcion and the Florencia Realty Corporation for the
reconveyance of the property subject of said deeds with damages.i. The spouses Salonga alleged that the two
deeds of absolute sale were simulated and did not reflect their true agreements, that is, that their property
would guarantee the payment of the total amount of remittances the defendants had paid to the mortgagors-
banks for the redemption of their property, plus 3% a month of their loans as interests, and if the property were
sold to a third-party, a 5% commission of the purchase price thereof. They also alleged that their agreement
with the spouses Concepcion that the latter would not register the said deeds in the Office of the Register of
Deeds and secure titles over the properties in their names; the defendants, in evident bad faith, registered the said
deeds and secured titles in their names; the market price of the whole property amounted to P10,000,000.00, but
it appeared that the property was sold to the spouses Concepcion for only P2,000,000.00, which was the amount
the spouses Concepcion remitted to the bank in their account

9. Spouses Concepcion admitted that they gave loans to the spouses Salonga in the total amount of P3,131,154.54 which
they remitted to the DBP, the PNB and Associated Bank for the plaintiffs account, with the assurance that they
would sell the property within three months; from the proceeds of the sale. Salongas failed to pay their loans, and
offered, instead, to sell their property for the price equivalent to the spouses Concepcions remittances to the
creditors-banks, plusan additional amount. The spouses Concepcion further alleged that they agreed to spouses
Salongas offer.

10.The spouses Salonga assert that their transactions with the spouses Concepcion relative to their property were in the
nature of equitable mortgages as shown,inter alia, by the fact that the prices of the property as appearing in the deeds of
absolute sale were a little more than P2,000,000.00, grossly inadequate as compared to their market value of
P10,000,000.00;

11. the parties had agreed that the deeds of sale would not be registered in the Office of the Register of Deeds, but that
the spouses Concepcion registered the said deeds in gross and evident bad faith; despite the existence of the deeds of
absolute sale, the spouses Salonga remained in possession of the property.

ISSUE: Were the Deeds of Absolute Sale executed by spouses Salonga in the nature of equitable mortgages?

HELD: YES. A contract purporting to be a sale with right to repurchase shall be considered as an equitable
mortgage. In a contract of mortgage, the mortgagor merely subjects the property to a lien, but the ownership and
possession thereof are retained by him.

RATIO:
1. Articles 1602, 1603 and 1604 of the New Civil Code were designed to prevent the circumvention of the use
[50]
of usury and the prohibition against the creditor appropriating the mortgaged properties. Besides, in
times of grave financial distress which render persons hard-pressed to answer an emergency, such persons
would have no choice but to sign a deed of absolute sale of property if only to obtain a much-needed loan
[51]
from unscrupulous money lenders.

2. - The notarization of the document does not guarantee its validity because it is not the function of the
notary public to validate an instrumentthat was never intended by the parties to have any binding legal
effect on him. Neither is the notarization of a document conclusive of the nature of the transaction conferred
by the said document, nor is it conclusive of the true agreement of the parties thereto.

3. Salongas were hard-pressed to pay their obligations and to avert their eviction from their house, they opted to
execute the deeds of absolute sale. The Concepcions were burdened to prove that the Salongas agreed to sell
their property in payment of the obligations, but the Concepcions failed to do so.

4. After a thorough examination of the records, we find the Deeds of Absolute Sale are mere equitable mortgages
and not bona fide absolute sale of the parcels of land therein described.

Deeds of Absolute Sale executed by the petitioners in favor of the respondentsare NULLIFIED. The transactions
covered by said deeds are declared equitable mortgages, not bona fide sales of the lots therein covered

1. It cant actually be said that Lauchangco ever had ownership over the land. It is true that it was stipulated in the
sale to her that Berenguer would cease to be the owner and would be her lessee, but there is a lack of juridical
reality to suppose the this was equivalent to a delivery of possession, because on that date, Berenguer had no
possession which he could transfer, inasmuch as he was then a mere lessee of Singian, and therefore, his
possession was not for himself but in representation of the latter.
2. In case of a double sale and in the absence of inscription, the preference between who the owner is can not be
determined, according to article 1473, by the possession which the stipulation implies that vendor ceases to
become owner and becomes the lessee of the vendee, it follows that, for the purposes of this article, neither
Singian nor Lauchangco actually took possession of the land. Under this supposition, the preference between
both sales shall also have to be decided in favor of that made to Singian, because it is of a prior date.
3. Even supposing that the sale to Singian, for lack of registry, had lost its efficacy as a title transferring ownership
(as against the sale to Lauchangco which was registered), still there remains for Singian the title of prescription
which has not been destroyed by another to the contrary (since 25 years had elapsed from the time Singian took
possession of the land up to the time of registration).
4. That, in 1904, Singian sold the land to Berenguer does not affect the merits of the case. In the said sale, it was
agreed that Berenguer would pay the stipulated price within the period of 8 years and if, at the expiration of the 8
years, the amount should not have been completely paid, the ownership of the land would revert to the vendor. It
does not appear that no payment on account of this price has been made
DOCTRINE
052 Premiere Devt Bank v. CA Author: Danna
453 SCRA 630, 18 March 2005 Notes:
Topic: Who can transfer ownership - Exceptions http://sc.judiciary.gov.ph/jurisprudence/2005/mar2005/128122.htm
Ponente: Garcia, J.
FACTS:
1. 2 different persons with exactly the same name (Vicente T. Garaygay) claimed exclusive ownership of Lot 23
located in Matandang Balara.
Matandang Balara used to be a part of the district of Caloocan. At such time, Lot 23 was registered as
TCT No. 9780.
Eventually, Quezon City was made and included Matandang Balara within its borders. Thus, a new TCT
was issued for Lot 23 to reflect the territorial changes. The TCT issued was TCT No. 9780 (693).
2. Garaygay (who is a resident) of Rizal held TCT No. 9780, whereas Garaygay (who is a resident) of Cebu
held TCT No. 9780 (693).
3. Garaygay of Cebu executed a deed of sale over the lot in favor of his nephew, Joselito.
4. In another transaction, Garaygay of Rizal sold to Yambao and Rodriguez the same property.
5. June 11, 1988 - a fire occurred in Quezon City Hall and destroyed the original copy of TCT No. 9780 (693) on
file with the Registry of Deeds.
6. Barely a month later, Engr. Hobre filed an application, signed by Garaygay of Cebu, for the reconstitution of
the burned original on the basis of his duplicate certificate. The LRA issued an order of reconstitution, by virtue
of which Garaygay of Cebu acquired reconstituted TCT No. RT-1764 (9780) (693).
7. May 26, 1989 - the deed of sale executed by Garaygay of Cebu was registered, and so, TCT No. 12183 was
issued. Thereafter, thru the efforts of Engr. Cortez, Lot 23 was subdivided into 3 lots, for which TCTs were
administratively constituted. Joselito sold a portion to Toundjis who, pursuant to a Contract to Sell, undertook
to pay Joselito the P.5 Million balance of the P2.5 Million purchase price once she is placed in possession of a
fenced-off property.
8. February 26, 1991 - Joselito assigned the other 2 lots to Century Realty which, after securing TCTs, were
mortgaged to Premiere Bank.
9. Clashing claims of ownership first came to a head in May 1990, when Yambao forcibly prevented Joselitos
from concrete-fencing the subject property.
ISSUE #1: Whether the real owner of Lot 23 is Garaygay of Rizal or Garaygay of Cebu
HELD: Garayray of Rizal is the real owner.

ISSUE #2: Whether or not Toundjis and Premiere Bank are in good faith and hold the lot for value
HELD: No, because the titles to the lot were only administratively reconstituted. Moreover, Toundjis is not a purchaser
in good faith and for value, because the Contract to Sell between him and Joselito was not annotated on the title of the
property. Premiere Bank is not a mortgagee in good faith and for value, because it didnt exercise the care and prudence
expected of it.
RATIO:
For Issue #1
5. A piece of land cannot plausibly be covered at the same time, under the same concept of ownership, by two (2)
outstanding certificates of title, each having the same validity, force and effect. One has to be spurious, or at least
one has to prevail over the other. Else, the ideal sought to be achieved by the Torrens system would be illusory.
As it were, the Torrens system of land registration aims to obviate possible conflicts of title by giving the public
the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring
further; on the part of the registered owner, the system gives him complete peace of mind that he would be
secured in his ownership as long as he has not voluntarily disposed of any right over the covered property.
6. That Garaygay of Rizal is an authentic person, once residing in and a registered voter of Angono, Rizal has
adequate evidentiary support in his voters ID, the COMELEC and barangay certifications, and the testimony of
an occupant of Lot 23. On the other hand, Garaygay of Cebu had even failed to be a witness in the case.
7. The possessor-owner of the authentic copy of TCT No. 9780 was necessary the real owner of Lot 23.
8. Garayray of Rizals TCT has no physical defect, except for its partly being torn due to exposure of the
document to the elements, like rain, because of his evacuation from Manila to Angono, Rizal during the Japanese
occupation. On the other hand, there were several irregularities with Garaygay of Cebus copy.
Two (2) Victory stamps issued after liberation were strangely pasted on the seal of Garaygay of Cebus title when such stamps
were not yet in existence when such title was entered in the Registry of Deeds;
TCT No. 9780 (693) was prepared on Judicial Form No. 109-D Revised June 1945, which came into circulation after June 14,
1944;
TCT No. 9780 (693) bears the handwritten figure 9780 in ink above the typewritten number 693. There is no initial to
suggest that the handwritten number 9780 over the typewritten title number 693 was officially authorized;
The first letter Y in the surname Garaygay in TCT No. 9780 (693) was inserted in ink;
TCT No. 9780 (693) carries the annotation subject to further disposition by the government with respect to real estate
 transactions consummated during the Japanese regime, and subject to the provisions of Sec. 4, Rule 74 of the New Rules of
Court. Such annotation is supposed to have been contemporaneously made on the date of the issuance of the title in 1944. Yet,
advertence is made to transactions consummated during the Japanese regime and to Rule 74 of the Rules of Court, logically
implying that the annotation was entered after liberation and also after 1964 when the New Rules of Court came into effect.
9. Payment by Garaygay of Cebu of land taxes on Lot 23 does not also necessary detract from the spurious nature
of his title. After all, anyone can pay real estate taxes on a given property without being quizzed by the local
treasury whether or not the payor owns the real property. This, of course, doesnt mean that tax receipts are
evidence of ownership, since they are not, albeit they are good indicia of possession in the concept of owner, for
no one would ordinarily be paying taxes for a property not in his actual or at least constructive possession.
10. Moreover, Garaygay of Cebu was never in possession of Lot 23, unlike Garaygay of Rizal who managed to
place the property under the care of certain individuals who built semi-permanent structure-dwelling houses
thereon without so much of a protest from Garaygay of Cebu or his nephew Joselito. It has been said that a
partys failure to raise a restraining arm or a shout of dissent to anothers possession for an unreasonably long
period is simply contrary to his claim of ownership.

For Issue #2
1. Where the certificate of title is in the name of the seller or mortgagor, the innocent purchaser or mortgagee for
value has the right to rely on what appears on the certificate without inquiring further. In the absence of anything
to excite or arouse suspicion, or except when the party concerned had actual knowledge of facts or circumstances
that should impel a reasonably cautious person to make such further inquiry, said purchaser or mortgagee is
without obligation to look beyond the certificate and investigate the title of the seller or mortgagor.
2. TCT 14414 covering Lot 23-A that Toundjis contracted to buy from Joselito carried an annotation that it was
administratively reconstituted. Records also show that Toundjis knew, at the time of the sale, that Joselito did not
have possession of the lot inasmuch as she agreed to pay the balance of the purchase price as soon as the seller
can fence off the property and surrender physical possession thereof to her.
3. Moreover, a purchaser of a property cannot be in good faith where the title thereof shows that it was
reconstituted.
4. Likewise, contract to sell which is unregistered and not annotated at the back of the title of the property cannot
adversely affect appellees because under Sec. 51 of PD 1529 (Property Registration Act), the act of registration
shall be the operative act to convey or affect the land in so far as third parties are concerned.
5. Premiere Bank, being in the business of extending loans secured by real estate mortgage, is expected to exercise
more care and prudence than private individuals in their dealing with registered lands. Accordingly, the
suspicion-provoking presence of occupants other than the owner on the land shouldve made Premiere Bank
conduct a more exhaustive investigation on the history of the mortgagors title. Since Premiere Bank accepted in
mortgage the property despite the structures on the property, such act constitutes gross negligence amounting to
bad faith. Premier Bank is thus not entitled to have its lien annotated on the genuine title
DOCTRINES
A purchaser of a property cannot be in good faith where the title thereof shows that it was reconstituted.
Under Sec. 51 of PD 1529 (Property Registration Act), the act of registration shall be the operative act to
convey or affect the land in so far as third parties are concerned.
Those in the business of extending loans secured by real estate mortgage are familiar with the rules on land
registration. Thus, they are expected to exercise more care and prudence than private individuals in their dealing
with registered lands.
053 SIY CONG BIENG & CO., INC. v. Author: Loi La Chica
HONGKONG & SHANGHAI BANKING Notes:
CORPORATION http://www.lawphil.net/judjuris/juri1932/mar1932/gr_l-
G.R. No. L-34655 March 5, 1932 34655_1932.html
Topic: Rights and Obligation of the Vendor; To
Transfer Ownership
Ponente: OSTRAND, J.:
FACTS:
1. Both Siy Cong Bieng & Co. (Siy) and the Hongkong & Shanghai Banking Corporation (HSBC) are corporations
domicile in Manila and duly authorized to transact business in accordance with the laws of the Philippine Islands.
2. Siy is a corporation engaged in business generally.
3. HSBC is a foreign bank authorized to engage in the banking business in the Philippines
3. June 25, 1926 - certain negotiable warehouse receipts described below were pledge by Otto Ranft to the HSBC to
secure the payment of his preexisting debts to the latter:
4. Total baled hemp covered by warehouse receipts was worth P31,635; receipts number 1707,133,1722, 1723, 1634, and
1702 being endorsed in blank by Siy and Otto Ranft, and numbers 1918 and 2, by Otto Ranft alone.
5. June 25, 1926 (at night), Otto Ranft died suddenly at his house in Manila
6. August 7, 1929 - Both parties submitted an agreed statement of facts, but reserved their right to have in evidence upon
other points not included, and upon which they cannot come to an agreement (in Manila)
7. Evidence shows: June 25, 1926 - Ranft called at the office of the herein plaintiff to purchase hemp (abaca), and he was
offered the bales of hemp as described in the quedans above mentioned. They agreed to the price, and on the same date
the quedans, together with the covering invoice, were sent to Ranft by Siy, without having been paid for the hemp, but
Siy's understanding was that the payment would be made against the same quedans.
8. It appears that in previous transaction of the same kind between the bank and Siy, quedans were paid one or two days
after their delivery to them.
9. The day that Ranft died is also the day upon which the quedans in question were delivered to HSBC. When Siy found
that such was the case, it immediately demanded the return of the quedans, or the payment of the value, but was told that
the quedans had been sent to HSBC as soon as they were received by Ranft.
10. Shortly thereafter, Siy filed a claim for the aforesaid sum of P31,645 in the intestate proceedings of the estate of the
deceased Otto Ranft --- forming the decision of the committee on claims
11. In the meantime, demand had been made by Siy on HSBC, which demand was refused on the ground that it was a
holder of the quedans in due course.
12. Siy filed its first complaint against HSBC, wherein it alleged that it has "sold" the quedans in question to the
deceased O. Ranft for cash, but that the said O. Ranft had not fulfilled the conditions of the sale.
13. Siy later filed an amended complaint, wherein they changed the word "sold" referred to in the first complaint to the
words "attempted to sell"
14. CFI Manila: Favored Siy. HSBC did not act in good faith. Their own witness, Thiele, said the quedans were
delivered to the bank in order to secure the debts of Ranft for the payment of their value and from which it might be
deduced that the said bank knew that the value of the said quedans was not as yet paid when the same were endorsed to
it, and its alleged belief that Ranft was the owner of the said quedans was not in accordance with the facts proved at the
time". "The bank knew, or should have known, that Ranft had not yet acquired the ownership of the said quedans and
that it therefore could not invoke the presumption that it was acting in good faith and without negligence on its part".
15. Siy recovers P31,645, the value of 464 bales of hemp deposited in certain bonded warehouses as evidenced by
the quedans (warehouse receipts) described in the complaint, having been delivered as pledge by Otto Ranft to HSBC,
for the guarantee of a preexisting debt of the Otto to HSBC.
ISSUE:
Did CFI Manila err in its decision?

HELD:
YES. The judgment of the court below is not tenable.
RATIO:
1. The quedans were negotiable in form
2. Quedans were pledge by O.Ranft to HSBC to secure the payment of his preexisting debts to the bank
3. Quedans as were issued in the name of the Siy were duly endorsed in blank by the Siy and by Otto Ranft
4. Two remaining quedans which were duly endorsed in blank by him
5. O. Ranft was indebted to HSBC (P622,753.22) when the quedans were negotiated, which indebtedness was partly
covered by quedans. He was also being pressed to deposit additional payments as a further security to the bank, and there
is no doubt that the quedans were received by the bank to secure the payment of Ranft's preexisting debts
6. There is no evidence to the effect that the bank was at any time bound to pay back to Ranft the amount of any of
the quedans.
There is nothing in the record to show that the bank has promised to pay the values of the quedans neither to
Ranft nor to the Siy; on the contrary, the delivery of the qeudans to the bank they were no longer the property of the
indorser unless he liquidated his debt with the bank.
7. The bank had a perfect right to act as it did and not ascertain whether Ranft had any authority to negotiate the quedans,
and its action is in accordance with sections 47 (When negotiation not impaired by fraud, mistake, or duress), 38
(Negotiation of negotiable receipts by indorsement), and 40 (who may negotiate a receipt ) of the Warehouse Receipts
Act (Act No. 2137).
8. HSBC acquired the quedans after indorsement and delivery to it by Ranft, citing sec. 41 of Act No. 2137:
SEC. 41. Rights of person to whom a receipt has been negotiated. A person to whom a negotiable receipt has
been duly negotiated acquires thereby:
(a) Such title to the goods as the person negotiating the receipt to him had or had ability to convey to a purchaser
in good faith for value, and also such title to the goods as the depositor of person to whose order the goods were
to be delivered by the terms of the receipt had or had ability to convey to a purchaser in good faith for value,
and. . . .
9. There is now no remedy available to the plaintiff.
Siy is estopped to deny that the bank had a valid title to the quedans for the reason that Siy had voluntarily
clothed Ranft with all the attributes of ownership and upon which the defendant bank relied. The bank is not responsible
for the loss; the negotiable quedans were duly negotiated to the bank and as far as the record shows, there has been no
fraud on the part of the defendant.
10. CFI reversed and the appellant is absolved from Siys complaint.
DOCTRINE
If the quedans are negotiable in form and duly indorsed to the creditor, the delivery of the quedans to the creditor
makes the creditor the owner of the property.
The fact that the quedans were indorsed and delivered as a security for the payment of an indebtedness did not
prevent the bank from acquiring ownership, since the only effect of the transfer was that the debtor could reacquire said
ownership upon payment of his obligation. Section 41 of Act No. 2137 had already been construed by this court in the
sense that ownership passes to the indorsee, although the quedans are indorsed and delivered merely as a security.
Separate Opinions
ROMUALDEZ, J., dissenting: I dissent and vote for the confirmation of the appealed judgment.
054 Lucena Masiclat, et al. v. Natalia Centeno Author: Loi La Chica
No. L-8420. May 31, 1956 Notes:
Topic: Rights and Obligation of the Vendor; To Copyright 2014 Central Book Supply, Inc. All rights reserved.
Transfer Ownership [Masiclat, et al vs. Centeno, 99 Phil. 1043(1956)]
Ponente: Paras, C. J.

FACTS:
[SORRY, I REALLY CANT FIND THE FACTS]
1. A person tried to buy rice from Natalia Centeno.
2. The rice was sold to Ramon Masiclat
3. CFI Pampanga: Did not award the rice to Centeno
4. CA: Reversed CFI Pampanga. Awarded rice in to the defendant. Rice should be awarded to Natalia Centeno
5. Masiclat filed an appeal by certiorari to the SC

ISSUE:

HELD:
CA is affirmed.
RATIO:
1. The evidence does not clearly show the identity of the person who tried to buy the rice from the respondent, and
neither does it show that the same person was the one who sold the commodity to Ramon Masiclat
2. Although a cojitraet of sale is perfected upon the parties having agreed as to the thing which is the subject matter of
the contract and the price (Warner, Barnes & Co. vs. Inza, 43 Phil., 505; Article 1475, Civil Code), ownership is not
considered transmitted until the property is actually delivered and the purchaser has taken possession thereof and has
paid the price agreed upon (Roman vs. Grimalt, 6 Phil., 96; Article 1524, Civil Code).

DOCTRINE
Ownership is not considered transmitted until the property is actually delivered and the purchaser has taken possession
thereof and has paid the price agreed upon (Roman vs. Grimalt, 6 Phil., 96; Article 1524, Civil Code).
055 Ilao-Quianay v. Mapile Author: Pat
GR154087, October 25, 2005 Notes:
Topic: When/How transfer is effected?; General http://sc.judiciary.gov.ph/jurisprudence/2005/oct2005/154087.htm
Rule:
Ponente: Puno, J.
FACTS:
10. Subject of this case is a parcel of land in Sta. Cruz, Manila and covered by TCT in the name of the deceased
Simplicio Ilao (Ilao)
11. Ilaos heirs found out that the title of the subject property had an annotation of adverse claim filed by a Juanito Ibarra
(Ibarra).
12. Atty. Rodolfo Mapile (respondent), filed a motion to exclude the property from the inventory on the ground that the
same no longer formed part of Ilaos estate having been disposed of during Ilaos lifetime in favor of Ibarra
13. Civil Case No.106865: the heirs of Ilao, filed on December 8, 1976 case for Quieting of Title and Damages
14. CFI denied respondents Mapiles motion and, in an order, authorized the sale of the subject property to Virgilio
Sevilla subject to the outcome of Civil Case No. 105865
15. It appears that in 1974, Ibarra filed a petition for the issuance of a new owners duplicate copy of the title of the
property, claiming that he was in possession of said owners duplicate but that he lost it in a fire that in Bo. Sta.
Ignacia, Tarlac on April 26, 1974
This allegation was uncovered by the trial court to be false when, upon the courts subpoena, Ilaos heirs
appeared and presented the certificate of title Ibarra claimed to have been lost.
16. Civil Case No. 83-20520: On October 3, 1983, respondent Mapile filed a case for Specific Performance and
Declaration of Nullity of Contract, claiming that the property had been sold by Ilao to Ibarra pursuant to a Deed of
Absolute Sale (deed of sale) dated February 7, 1972, and that Ibarra, in turn, sold the property to him.
17. Civil Case No. 105865 and Civil Case No. 83-20520 were consolidated
18. TC: rendered judgment in favor of respondent Mapile, finding that the deed of sale was genuine and ordering, among
others, that petitioners Ilaos must surrender the owners duplicate copy of TCT and all
TCs finding that the conflicting testimonies of the handwriting experts presented by both parties left it no choice
but to favor the notarized deed of sale and to rule that the same is genuine.
19. CA: affirmed the TC
20. Petitioners Ilaos allege:
that at no time did Ibarra exercise ownership over the subject property as neither the property
nor the certificate of title covering it were delivered to Ibarra
that the CA erred in disregarding the testimonies of the expert witnesses allegedly to the effect that
Ilaos signature on the deed of sale was forged
as hearsay the factual findings of the TC on the sale of the property to Ibarra which were based only on
respondents narration, without Ibarra actually testifying thereon.
These circumstances, i.e., that it was Ibarras father who paid for the property allegedly to induce
Ibarra to marry a girl his father had wanted for him; that instead of marrying the girl, Ibarra fled to
Mindanao; and that he later returned and was advised by a lawyer, who turned out to be an
impostor, to file a petition claiming that the certificate of title had been destroyed by fire were
adopted by the appellate court as the factual backdrop of the case.
That TC and CA erred the fact that Ibarra neither took possession of the property nor of the certificate
of title covering it; that Ibarra never paid the real estate taxes on the property as the tax declarations
have remained in the name of Ilao; and that no capital gains tax, documentary stamps tax and other
transfer taxes were ever paid pursuant to the supposed deed of sale
21. Respondent Mapile argues:
that he is a buyer in good faith because he bought the property after procuring a certified true copy of
the deed of sale from the clerk of court of the then CFI and ascertaining from the transcript taken of the
testimony of the notary public who notarized the document that Ibarras claim of ownership is valid
ISSUE:
1. WON the TC and CA failed to take into account the fact that the handwriting expert presented by respondent Mapile
as his witness agreed with the finding of petitioners own expert witness that Ilaos signature on the deed of
sale was forged
2. WON the deed of sale between Ilao and Ibarra was genuine
3. WON the property was validly transferred to respondent Mapile
HELD:
1. No.
2. Yes.
3. Yes.
RATIO:
1. Courts are not bound by expert testimonies. We find that the TC and CA did not commit an error in their
evaluation of the testimonies of the handwriting experts. In fact, we quite agree that the conflicting
testimonies should be completely disregarded
2. The validity of the deed of sale should, therefore, be recognized, the only opposition thereto being the
alleged forgery of Ilaos signature which was not satisfactorily demonstrated. There is no doubt that the
deed of sale was duly acknowledged before a notary public. As a notarized document, it has in its favor
the presumption of regularity and it carries the evidentiary weight conferred upon it with respect to its due
execution. It is admissible in evidence without further proof of its authenticity and is entitled to full faith
and credit upon its face
3. It has been held that ownership of the thing sold is acquired only from the delivery thereof, either actual or
constructive. Article 1498 of the Civil Code provides that when the sale is made through a public
instrument, as in this case, the execution thereof shall be equivalent to the delivery of the thing which is the
object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. The
execution of the public instrument, even 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 this case, a
public instrument was executed through which constructive delivery of the subject property was made
transferring ownership thereof to Ibarra. As the new owner, Ibarra acted perfectly within his rights when
he sold the property to respondent
DOCTRINE
It has been held that ownership of the thing sold is acquired only from the delivery thereof, either actual or
constructive.

Article 1498 of the Civil Code provides that when the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred.

The execution of the public instrument, even 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.
056 VALLARTA v CA Author: Jade
G.R. No. L-40195 May 29, 1987 Notes:
Topic:
Ponente: CORTES, J
FACTS:
1. Rosalinda Cruz and Victoria Vallarta are longtime friends and business acquaintances.
2. On November 20, 1968, Cruz entrusted to Vallarta 7 pieces of jewelry.
3. In December 1968, Vallarta decided to buy some items, exchanged one item with another, and issued a post-
dated check in the amount of P5,000 dated January 30, 1969.
4. Cruz deposited said check with the bank. However, upon presentment, the check was dishonored. She was
informed that Vallartas account had been closed.
5. Cruz apprised Vallarta of the dishonor and the latter promised to give another check. Later, Vallarta pleaded for
more time. Still later, she started avoiding Cruz. Hence, a criminal action was instituted.
6. Both the trial court and the Court of Appeals found Vallarta guilty beyond reasonable doubt of the crime of
estafa.
ISSUE: Whether or not the transaction between Vallarta and Cruz is characterized as a sale or return.
HELD: The transaction in question is not a sale or return. Vallarta is guilty of estafa.
RATIO: Vallarta stressed that the transaction between her and Cruz was a sale or return perfected and consummated
on November 20, 1968 when the 7 pieces of jewelry were delivered and the check she issued in December 1968 was in
payment of a pre-existing obligation. Even if it was dishonored, Vallarta claimed that she can only be held civilly liable
only under Art. 315 (2) (d), Revised Penal Code. She also added that what prompted Cruz to deliver the jewelry was the
social standing of petitioner Vallarta and not the postdated check.

To determine whether what transpired between Vallarta and Cruz was a sale or return or some other transaction, it is
necessary to determine the intention of the parties.

It was noted that Vallarta changed the ruby ring because it was not acceptable to her, and chose another ring. Likewise,
the price to be paid for the jewelry was finally agreed upon only in December 1968. In this instance, there was a meeting
of the minds between the parties as to the object of the contract and the consideration which was completed in December
1968, the same time that the check was issued. The purpose of the delivery of the jewelry made on November 20, 1968
was to enable Vallarta to select what jewelry she wanted.

If there was no meeting of the minds on November 20, 1968 so as of that date, there was yet no contract of sale which
could be the basis of delivery or tradition. Thus, the delivery made on November 20, 1968 was not a delivery for
purposes of transferring ownership. If ownership over the jewelry was not transmitted on that date, then it could have
been transmitted only in December 1968, when Vallarta signified her approval or acceptance to Cruz, when the price was
agreed upon and when the check was issued.

When the check which later bounced was issued, it was not in payment of a pre-existing obligation. Instead the issuance
of the check was simultaneous with the transfer of ownership over the jewelry

The transaction entered into by Cruz and Vallarta was not a "sale or return." Rather, it was a "sale on approval " (also
called " sale on acceptance, " "sale on trial." or "sale on satisfaction" [CIVIL CODE, art. 1502]).

In a "sale or return," the ownership passes to the buyer on delivery (CIVIL CODE, art. 1502). (The subsequent return
of the goods reverts ownership in the seller [CIVIL CODE, art. 1502]). Delivery, or tradition. as a mode of acquiring
ownership must be in consequence of a contract (CIVIL CODE, art. 712), e.g. sale.
DOCTRINE
New Civil Code Art. 1502. When goods are delivered to the buyer "on sale or return" to give the buyer an option to
return the goods instead of paying the price, the ownership passes to the buyer of delivery, but he may revest the
ownership in the seller by returning or tendering the goods within the time fixed in the contract, or, if no time has been
fixed, within a reasonable time. (n)
When goods are delivered to the buyer on approval or on trial or on satisfaction, or other similar terms, the ownership
therein passes to the buyer:
(1) When he signifies his approval or acceptance to the seller or does any other act adopting the transaction;
(2) If he does not signify his approval or acceptance to the seller, but retains the goods without giving notice of rejection,
then if a time has been fixed for the return of the goods, on the expiration of such time, and, if no time has been fixed, on
the expiration of a reasonable time. What is a reasonable time is a question of fact. (n)
057 Lawyers Cooperative Publishing Company
(plaintiff-appellee) vs. Perfecto A. Tabora (defendant-
appellant)
GR No. L-21263 Date: April 30, 1965
Topic: Risk of loss or Deterioration (Total/Partial)
Ponente: Bautista, J.
FACTS:
Author: Bea Mationg
Notes:
Article 1504 of our Civil Code, which in part provides:
(1) Where delivery of the goods has been made to the
buyer or to a bailee for the buyer, in pursuance of the
contract and the ownership in the goods has been retained
by the seller merely to secure performance by the buyer of
his obligations under the contract, the goods are at the
buyer's risk from the time of such delivery.

1. Perfecto A. Tabora bought from the Lawyers Cooperative Publishing Company one complete set of American
Jurisprudence consisting of 48 volumes with 1954 pocket parts, plus one set of American Jurisprudence, General
Index, consisting of 4 volumes, for a total price of P1,675.50 which, in addition to the cost of freight of P6.90,
makes a total of P1,682.40.
2. Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books were duly delivered and
receipted for by Tabora on May 15, 1955 in his law office Ignacio Building, Naga City.
3. In the midnight of the same date, however, a big fire broke out in that locality which destroyed and burned all the
buildings standing on one whole block including at the law office and library of Tabora. As a result, the books
bought from the company as above stated, together with Tabora's important documents and papers, were burned
during the conflagration.
4. This unfortunate event was immediately reported by Tabora to the company in a letter he sent on May 20, 1955.
On May 23, the company replied and as a token of goodwill it sent to Tabora free of charge volumes 75, 76, 77
and 78 of the Philippine Reports.
5. As Tabora failed to pay the monthly installments agreed upon on the balance of the purchase price
notwithstanding the long time that had elapsed, the company demanded payment of the installments due, and
having failed, to pay the same, it commenced the present action before the Court of First Instance of Manila for
the recovery of the balance of the obligation. Plaintiff also prayed that defendant be ordered to pay 25% of the
amount due as liquidated damages, and the cost of action.
6. TABORAS (DEFENDANTS) CONTENTION: He pleaded force majeure as a defense. He alleged that the
books bought from the plaintiff were burned during the fire that broke out in Naga City on May 15, 1955, and
since the loss was due to force majeure he cannot be held responsible for the loss. He prayed that the complaint
be dismissed and that he be awarded moral damages in the amount of P15,000.00.
7. TRIAL COURT RULING: The court rendered judgment for the plaintiff. It ordered the defendant to pay the sum
of P1,382.40, with legal interest thereon from the filing of the complaint, plus a sum equivalent to 25% of the
total amount due as liquidated damages, and the cost of action.
8. CA RULING: The case involved questions of law so CA issued certification. Thus, SC must decide.

ISSUE/S:
W/N the defendant-appellant (Tabora) is still liable to pay the balance of the purchase price despite the loss of the thing
HELD:
Yes, the defendant-appellant (Tabora) is still liable to pay the balance of the purchase price.
RATIO:

It was provided in the contract that "title to and ownership of the books shall remain with the seller until the
purchase price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall be borne
by the buyer." While as a rule the loss of the object of the contract of sale is borne by the owner or in case
of force majeure the one under obligation to deliver the object is exempt from liability, the application of that
rule does not here obtain because the law on the contract entered into on the matter argues against it. It is true
that in the contract entered into between the parties the seller agreed that the ownership of the books shall remain
with it until the purchase price shall have been fully paid, but such stipulation cannot make the seller liable in
case of loss not only because such was agreed merely to secure the performance by the buyer of his obligation
but in the very contract it was expressly agreed that the "loss or damage to the books after delivery to the buyer
shall be borne by the buyer."
 Any such stipulation is sanctioned by Article 1504 of our Civil Code, which in part provides:

(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the
contract and the ownership in the goods has been retained by the seller merely to secure performance by the
buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery.

The claim that since the books were destroyed by fire without any fault on his part he should be relieved from
the resultant obligation under the rule that an obligor should be held exempt from liability when the loss occurs
thru a fortuitous event is not applicable in this case. This rule only holds true when the obligation consists in the
delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event.
Here these qualifications are not present. The obligation does not refer to a determinate thing, but is pecuniary in
nature, and the obligor bound himself to assume the loss after the delivery of the goods to him.

DOCTRINE:

The claim that since the books were destroyed by fire without any fault on his part he should be relieved from
the resultant obligation under the rule that an obligor should be held exempt from liability when the loss occurs
thru a fortuitous event is not applicable in this case. This rule only holds true when the obligation consists in the
delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event.
Here these qualifications are not present. The obligation does not refer to a determinate thing, but is pecuniary in
nature, and the obligor bound himself to assume the loss after the delivery of the goods to him.

SEPARATE OPINION: N/A

058 DE LIZARDI v YAPTICO AUTHOR: Krystelle
[G.R. No. 9954, March 22, 1915. ]
TOPIC: Risk of Loss or Deterioration: Exceptions
PONENTE: Torres, J.

FACTS:

1. Manuel Perez Lim Jocsing, a Chinese merchant of the town of Malitbog, Leyte, secured from the firm of F. M.
Yaptico, called also Chiat Seng, of Cebu, the opening of an account current on its books and furthermore the
extension to him of a credit of P15,000 to be employed in the purchase of abaca and copra, this credit to be
guaranteed by all his business. The Chinaman Manuel telegraphed several times to the Yaptico firm asking it to
send him one of its steamers, with money and certain goods he had ordered that same, wherefore Yaptico sent the
steamer Bais to Malitbog, carrying 850 sacks of rice and other goods the value whereof amounted to P7,127, and
also the sum of P4,000 in cash consigned to the said Chinaman Lim Jocsing.

2. Having received the goods and the money sent by the defendant, said Lim Jocsing in his turn on loaded upon the
Bais 430 piculs of abaca consigned to the defendant in Cebu, which abaca at the rate of P22 a picul was worth
P9,460, and this amount was charged to the defendant, while it was also credited on the account current of Lim
Jocsing, as appears from the extract of accounts entered on page 46 of the record.

3. Aside from the consignment of abaca, copra was also loaded upon the said steamer, and these articles of
merchandise were insured at P15,000 for and in the name of Chiat Seng that is, the defendant Yaptico, in two
insurance companies, whose agent in Cebu was the defendant himself.

4. It is an indisputable fact that the defendant Yaptico collected the sum of P10,320, the insurance on 430 piculs of
abaca at the rate of P24 a picul, which sum he retains in his possession on the ground that the abaca insured and
lost through the wrecking of the said steamer belonged to him.

5. Counsel for Carlos de Lizardi, administrator of the property of the deceased Lim Jocsing, appointed in the
proceedings for the settlement of his intestate estate, filed a complaint in writing in the CFI of Cebu alleging:

- That said Lim Jocsing, then living, placed on board the steamer Bais, lying at Malitbog, Leyte, a certain
quantity of abaca valued at P15,000, consigned to the defendant F. M. Yaptico to be sold in Cebu, Lim Jocsing
insuring said abaca for the sum of P15,000 with an insurance company whose agent in Cebu was the defendant
himself and paying the premium on the insurance policy;
- that on or about October 15, 1912, by reason of the wrecking of the said steamer Bais in its voyage to Cebu,
Lim Jocsing perished in the sea and at the same time all the abaca he had on board was lost;
- that the defendant Yaptico collected the insurance, amounting to P15,000, and appropriated this sum to his
own use, refusing to return it to the plaintiff; wherefore, judgment is prayed against the defendant by
sentencing him to pay the sum of P15,000 to the plaintiff administrator of the property of Lim Jocsing.

6. F. M. Yaptico's answer:
- admitted as a fact that Lim Jocsing had delivered for him and loaded on board the steamer Bais a certain
quantity of abaca valued at P10,320, and under an express contract made between him and Lim Jocsing the
abaca the latter delivered on board the Bais became the property of Yaptico;
- also admitted that said shipment of abaca had been insured in his own name by the defendant, who paid the
corresponding premium; that this abaca was lost as a consequence of the wrecking of the said steamer, on
which occasion the said Lim Jocsing perished;
- that he likewise admitted the fact of having collected the insurance on the abaca;
- but he denied that said insurance belonged to Lim Jocsing, and furthermore denied all other allegations in the
complaint not specifically admitted in his answer.

7. TC: the abaca loaded by Lim Jocsing on the steamer Bais was his property, wherefore it rendered the decision
above mentioned.
ISSUES:
1.Who was the owner of the abaca carried on board the Bais when it was wrecked?
2. Who is entitled to collect the insurance on that abaca?
HELD:
1. Defendant Yaptico.
2. Defendant Yaptico.
RATIO:
In the said contract appears the stipulation, among other things, that all the abaca and copra which Lim Jocsing might
secure should be delivered to the defendant Yaptico and the value thereof should be credited on the shippers account, said
Lim Jocsing obligating himself to ship these articles only in Yapticos steamers and to pay the latter the freight charges set
forth in the contract. Lim Jocsing bound himself to send and deliver to Yaptico at least 10,000 piculs of abaca, annually,
but no quantity of copra was fixed, and if the abaca secured did not amount to 10,000 piculs he would pay the difference,
and he obligated himself to pay to the defendant a commission of 20 centavos for each piculs sent; but the warehouse
charges, fire insurance and other expenses the abaca might occasion while it was stored in Cebu would be for the account
of the shipper Lim Jocsing. In the fourth paragraph it was agreed that whenever Yaptico should send a streamer to Lim
Jocsing to get the abaca and copra he would also furnish the latter money and merchandise in value approximating the
amount of abaca and copra delivered. The fifth paragraph of the contract reads literally: "The abaca and copra that I may
deliver to be received on board by his agent shall be for the account of Yaptico, except in case I should otherwise expressly
provide in writing."cralaw virtua1aw library

Upon this understanding of the contract the parties had dealings during the three or four years they maintained commercial
relations, for the manager of the Yaptico firm asserted that whenever Lim Jocsing had abaca or copra to forward, he sent
him money and goods of a value equal to that of said merchandise which Lim Jocsing was to receive and the latter
obligated himself in such case to transfer the goods by sale to the defendant, since the collection and acquisition thereof
were made with money of the defendant, and for these reasons he had an agent, named Go Tiu, who at the same time was
the supercargo of the Bais, for the purpose of receiving any abaca and copra Lim Jocsing might deliver. On the occasions
when the latter did not need money from the defendant the abaca or copra was sold to other persons, not to the defendant,
the merchandise in such cases being insured in the name of the shipper Lim Jocsing (sten. notes, p. 23). In fact, the
insurance policies, Exhibits E, F, and G, demonstrate that in the months of February, April, and May, 1912, Lim Jocsing
insured in his own name certain shipments of abaca and copra forwarded to the defendant in Cebu to be sold by him and
these must have been acquired by Lim Jocsing with his own money; but the other policies, Exhibits H and I, must
undoubtedly have been for the insurance of the abaca and copra collected and acquired with money of the defendant, for
they were issued in favor of Chiat Seng that is, the defendant.

It is, therefore, a fact proven that, under clause 5 of the contract before mentioned, under the terms of which the contracting
parties acted, the abaca and copra delivered by Lim Jocsing on board the steamer Bais for the defendant became the latters
property, nor can the plaintiff be permitted to maintain a different theory from that which clearly and indisputably appears
in the fifth paragraph of the contract, Exhibit B, for it is provided in article 1281 of the Civil Code
that:jgc:chanrobles.com.ph

"When the terms of an obligation stated in a written contract are clear and leave no room for doubt, the plain meaning of
the wording thereof should be observed, it not being lawful to include therein things and cases different from those which
the interested parties intended to contract for."

"Persons who enter into a contract which is not contrary to law, to good morals, or to public policy are bound by the terms
of their agreement."

Moreover, in the first paragraph it was stipulated that, when Lim Jocsing sent his products to the defendant, the latter was
to credit the formers account with the value of the abaca and copra forwarded. Hence it follows that upon receiving the
goods and crediting Lim Jocsings account current with the value thereof the defendant made himself the real owner of the
merchandise delivered and therefore had a right to protect his interests by insuring it as he did. If the abaca lost in the
wrecking of the Bais had not been insured, upon whom would the loss have fallen? Under the paragraph of the contract
cited, Lim Jocsing would not have lost the value of the abaca because upon receipt of the goods on board the steamer the
defendant had to place the value thereof to the credit of Lim Jocsing, and whether the shipment arrived at Cebu or not its
value was already entered on his account, wherefore the one who would have suffered the loss in that case would have
been the defendant; but as he insured it in his name and on his account to provide against accident and as the abaca
belonged to him, it is just that he collect the value of the insurance thereon

True it is that Lim Jocsing was on board the Bais with the abaca in question when it was lost; and that when he was going
in person to Cebu with his abaca, the shipment was not Yapticos, but his own, because he had acquired it with his own
money; but it is not proven in the record that Lim Jocsing had disposed by letter of the abaca which disappeared, the value
whereof was Yapticos, and therefore once delivered on board the steamer to the supercargo, according to the fifth
paragraph of the contract, the abaca should be regarded as sold to Yaptico and as belonging to him, with the value of the
insurance.

This theory is in conformity with the terms of the contract and is reasonable, for when the defendant extended credit to
Lim Jocsing he furnished him in cash the sum of P15,000 and, furthermore, obligated himself to send money and goods of
approximately the same value as the abaca and copra he should receive from Lim Jocsing, so that the latter might secure
more, thus furnishing in advance the value of the goods which Lim Jocsing obligated himself to deliver to the party who
was furnishing him in advance the value of the shipment, and these goods, consisting of copra and abaca, forwarded and
delivered to the agent of the defendant, became the reimbursement or payment of the sum advanced; wherefore it is only
just that the defendant, as owner of the money or of the value of the shipment, should be regarded as the owner thereof and
consequently of the insurance, the premiums on which he had paid.

Plaintiff argues that it is ridiculous and in conflict with the other clauses of the said contract, Exhibit B, to suppose that the
abaca and copra shipped on the defendants steamer would be his property and yet that Lim Jocsing should be obligated to
pay the freight charges, insurance, storage, and other expenses, for if Lim Jocsing had not been the owner of said articles
then he would not have been obligated to bear those expenses.

The fact that Lim Jocsing had to reimburse these expenses does not conflict with the property rights of the defendant
Yaptico in the abaca and copra received from Lim Jocsing, taking into consideration that the latter was doing business with
capital or money of the defendant Yaptico, without payment of any premium or interest; wherefore nothing is more just
than that the creditor should benefit from the freight charges on his boats, from the commission on the sales, and that he be
indemnified for the expenses of storage, fire insurance, and so forth, because the defendant advanced his money without
getting any profit from the operations of buying up abaca and copra carried on by the said Lim Jocsing.

The circumstance that the defendant Yaptico kept Lim Jocsing informed of the price of the abaca and copra sold in Cebu,
even of the goods delivered on board to the supercargo, does not indicate ownership rights, but merely the interest Lim
Jocsing had in knowing the price of the sales, since the result of the latter would appear in the account current and the
amount the sale produced would be deducted from the sum advanced to him by the defendant.

As owner of the abaca the defendant Yaptico was interested in its preservation and had the right to insure it against any
risk or accident prejudicial to his interests, and since the loss of the abaca would have injured Yaptico as the owner of both
the fiber and the money with which it was acquired, nothing is more just than that when it was insured the insurance
should accrue to his benefit and in payment of the value of the abaca, which he had already advanced.
CASE LAW/ DOCTRINE:
1. CONTRACTS; DELIVERY OF GOODS; OWNERSHIP OF PROPERTY. Under an express stipulation in a written
contract with reference to merchandise delivered by one of the contracting parties on board a steamer belonging to the
other, who received it through the agency of the supercargo of said steamer, it becomes the property of the party who owns
the steamer, when the person who delivered it has not expressly provided otherwise by letter in accordance with the terms
of the contract.

2. ID.; ID.; RESPONSIBILITY FOR LOSS. According to the agreement between the parties, in case of loss of the
merchandise delivered by one of them and received on board the boat belonging to the other through his agent, who is at
the same time the super-cargo, such loss shall fall upon the party in whose name it was received on board.

3. ID.; ID.; ID.; RECOVERY OF INSURANCE. On this hypothesis the insurance on the merchandise taken out by the
party who received it accrues wholly to him, because the loss thereof operates to his prejudice as owner, and especially
when he had advanced to the other party the price of the merchandise lost, which is held to have been purchased by him;
whence, the insurance thereon becomes the security and protection of his interest, and his right to collect it cannot be
denied.
DISSENTING/CONCURRING OPINION: N/A
060 CUIZON V REMOTO Author: Jade
G.R. No. 143027 October 11, 2005 Notes:
Topic: Double Sales Prior tempore, potior jure - He who is first in time is
Ponente: AUSTRIA-MARTINEZ, J preferred in right.
FACTS: The issue in this case is the ownership of a 4300 sq. m. land in Brgy. Basilisa, Remedios T. Romualdez, Agusan
del Norte.

Petitioners-spouses Encarnacion and Salvador Cuizon holds TCT # RT-3121 in the name of Encarnacion L. Cuizon
married to Salvador Cuizon. Such certificate was issued by the Registry of Deeds of Agusan del Norte on March 15,
1984 pursuant to the Extra-Judicial Settlement with Sale dated August 3, 1983 executed by the heirs of Placida Tabada-
Lambo. The heirs adjudicated unto themselves of Placidas share and sold said portion to their co-heir, Encarnacion
Cuizon.

The original TCT is TCT # RT-183 which covers 16 hectares of land in the name of Placida Tabada-Lambo (married to
Gervacio Lambo), Eugenio Tabada, Raymunda Tabada and Patrecia Tabada, each being shrareowner.

Respondents (Remoto) have notarized in their favor a Deed of Sale of Real Property dated September 19, 1968 involving
a portion of the same property (TCT # RT-183) measuring 4300 sq. m. Said deed was executed by Placida in favor of
Angel Remoto, husband of respondent Mercedes Remoto, and father of other respondents, Leonida Meynard, Celerina
Rosales and Remedios Remoto.

The Remotos filed an action for reconveyance against the Cuizons on August 13, 1984. The RTC of Butuan City
rendered a decision on March 9, 1990, ruling in favor of the Remotos and ordered that the property be reconveyed to
them and to pay P2000 as litigation expenses, P5000 as attorneys fees and the costs of the suit.

The Court of Appeals affirmed the findings of the RTC and dismissed the petition on December 16, 1999. Cuizons filed
a motion for reconsideration but got denied on March 31, 2000.

The Cuizons filed a petition for review to the Supreme Court. The Cuizons insist that they are the rightful owners of the
property based on TCT # RT-3121. They also claim that the 1968 Deed of Sale is void, fictitious, unenforceable and has
no legal effect. Their other arguments are:

1. the property is covered by TCT No. RT-183 issued on June 21, 1930, and every person dealing with registered land
may safely rely on the correctness of the title
2. at the time the 1968 Deed of Sale was executed, no written notice was given to all possible co-redemptioners, co-
heirs, and co- owners, as provided for under Articles 1620 and 1623 of the Civil Code
3. respondents possession is ineffectual against a torrens title
4. respondents action is barred by prescription and laches.
ISSUE: Who has a better right to the property in dispute?

HELD: The Remotos are the rightful owner of the property in dispute. (Petition is dismissed.)
RATIO: The trial court and the CA correctly ruled that the 1968 Deed of Sale executed by Placida in favor of Angel
Remoto should prevail over the 1983 Extra-Judicial Settlement with Sale made by the heirs of Placida in favor of
petitioners-spouses Cuizon.

Applying the principle of prior tempore, potior jure, the only essential requisite is priority in time and the only one who
can invoke this is the first vendee (Remoto records show that right after the sale between Placida and Angel, Angel
immediately took possession of the land - superior right to property).

When Placida sold her portion of the property covered by TCT #- RT-183 in 1968, the 1983 Extra-Judicial Settlement
with Sale was not yet in place and not yet transferred by succession to Placidas heirs.
The sale between Placida and Angel is proved by a duly notarized deed of sale, which means the deed of sale is a public
document and admissible in evidence without necessity of preliminary proof as to their authenticity and due execution.
The deed of sale is presumed regular and the burden of contradicting its regularity in on the Cuizons who failed to
present any clear and convincing evidence to prove that the deed of sale is void, fictitious, unenforceable and has no
legal effect.

The Cuizons only argued that the 1968 Deed of Sale was not registered or annotated on TCT # RT-183. However,
registration is not a requirement for validity of the contract as between parties because the effect of registration is to bind
3rd persons. Accordingly, the Cuizons are not 3rd persons within the contemplation of the rule on registration. They are
both related to the original owner, Placida (Encarnacion is an heir of Placida ; Salvador is Encarnacions husband.), thus,
registration is not required to bind them in the sale executed by Placida.

The trial court found that before the Cuizons bought the property in 1983, they went to the Remotos residence in 1982.
A copy of the 1968 Deed of Sale was shown to them. The Cuizons only disputed the year of their visit to the Remotos
residence (according to them, it was in 1983) but the findings of the trial court will stand for they are in the best position
to assess the testimonies of the contending parties. In this case, it is therefore showed that the Cuizons has knowledge of
a prior existing interest which is unregistered at the time they acquired a right to the same property, his knowledge of that
prior unregistered interest has the effect of registration as to him.

When TCT # RT-3121 (pursuant to the 1983 Extra-Judicial Settlement with Sale) was issued to the petitioners-spouses,
the heirs of Placida was no longer the owner of the property because the property was earlier sold to Angel. One can sell
only what one owns or is authorized to sell. The heirs of Placida did not acquire a right to adjudicate the property unto
them and sell it to Encarnacion.

The defense of indefeasibility of the torrens title does not extend to a transferee who takes the certificate of title with
notice of a flaw in his title. The principle of indefeasibility of title is unavailing where there was fraud that attended the
issuance of the free patents and titles. As previously noted, petitioners knew of the existence of the 1968 Deed of Sale as
the Remotos showed it to them in 1982, a year before the execution of the 1983 Extra-Judicial Settlement with Sale.
Thus, it cannot be said that petitioners are transferees in good faith and therefore, the defense of indefeasibility of the
torrens title is not applicable to them.

Likewise, petitioners cannot complain that no written notice was given to all possible redemptioners or heirs at the time
of the execution of the 1968 Deed of Sale. The right of legal redemption pertains to Placidas original co-owners,
namely, Eugenio Tabada, Raymunda Tabada and Patrecia Tabada, and their respective heirs, but not to petitioners who
are the heirs of Placida. Also, the written notification should come from the vendor or prospective vendor because the
vendor is in the best position to know who are his co-owners that under the law must be notified of the sale. In this case
it should be from Placida. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection; and its
validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller may
still contest the alienation. This assurance would not exist if the buyer should give the notice.

Even if the property has not yet been formally subdivided, records show that the particular portions belonging to the co-
owners have already been allocated and Placidas co-owners have already been exercising proprietary rights over their
respective allotments. As inscribed on TCT No. RT-183, several deeds of mortgages were executed by Placidas co-
owner Eugenio C. Tabada in favor of the Butuan City Rural Bank with respect to his one-fourth share, and a Deed of
Sale with Right of Repurchase dated May 13, 1968 was executed by the spouses Eugenio G. Tabada and Trinidad
Ontong in favor of one Hernando R. Sanchez, also covering Eugenios one-fourth portion of the property.

The Court notes, however, that the property originally co-owned by Placida, Eugenio Tabada, Raymunda Tabada and
Patrecia Tabada, covered by TCT No. RT-183, measures 16 hectares, while the 1968 Deed of Sale covers 4,300 square
meters. The sale to Angel affects only Placidas pro indiviso share in the property, and Angel gets only what corresponds
to Placidas share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only
the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property. The portion sold
by Placida and bought by Angel under the 1968 Deed of Sale should only pertain to one-fourth of Placidas share in the
16-hectare property, or 4,000 square meters.

Prescription and laches do not apply in this case. The Remotos have been in actual and continuous possession of the
property since Angel first bought it in 1968. If a person claiming to be the owner is in actual possession of the property,
the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. They are not guilty
of laches as well for it was their vigilance in protecting their right over the property that gave rise to this case. The action
for reconveyance was filed only after a year and 10 days from the execution of the 1983 Extra-Judicial Settlement with
Sale, 1 year and 3 days after its registration, and 4 months and 28 days after the issuance of TCT # RT-3121.
DOCTRINE
SEPARATE OPINION:
061 Ulep v. Court of Appeals, 472 Author: Loren Vicedo
SCRA 274, October 11, 2005 Notes:
Topic: Double Sales http://sc.judiciary.gov.ph/jurisprudence/2005/oct2005/125254.htm
Ponente: GARCIA, J.:.
Knowledge gained by the second buyer of the first sale defeats
his rights even if he is first to register the second sale, since such
knowledge taints his prior registration with bad faith
FACTS:
22. Principal petitioners Samuel Ulep (deceased), and substituted by his heirs, and Valentina Ulep are
brother-and-sister. Together with their siblings, namely, Atinedoro Ulep and Rosita Ulep, they are children
of the late Valentin Ulep.
23. Valentin Ulep (Father) owned a parcel of land, Lot 840 (3,270 sqm), located at Asingan, Pangasinan.
24. 1950: The older Ulep sold the eastern portion of Lot 840 (1,635 sqm), to respondent Maxima Rodico,
while the remaining western portion (same sqm value), to his son Atinedoro Ulep married to Beatriz
Ulep, and to his other daughter Valentina Ulep.
25. June 5, 1952: All the transferees of Lot 840, namely, Maxima Rodico (Eastern portion) and Atinedoro
Ulep and Valentina Ulep (Western portion), were jointly issued TCT in their names.
26. June 18, 1971: Atinedoro Ulep, his wife Beatriz and sister Valentina Ulep sold the 1/2 portion of the area
sold to them by their father to their brother Samuel Ulep and the latters wife, Susana Repogia-Ulep. The
portion sold to Samuel and Susana has an area of 817.5 square meters. The document of sale was
registered with the Office of the Registry of Deeds of Pangasinan on February 20, 1973.
27. 507.5 square meters of the western portion was later on sold by the spouses Ulep to respondent Warlito
Paringit and to his wife, (TCT issued on September 23, 1975).
28. *Note that all the transactions above were done and effected without any formal subdivision of Lot 840
29. June 1977: Respondent Iglesia ni Cristo (INC) begun constructing its chapel on Lot 840. In the process,
INC encroached portions thereof allegedly pertaining to petitioners and blocked their pathways
30. Alarmed by the INCs construction, Samuel Ulep and sister Rosita Ulep made inquiries with the Office of
the Register of Deeds of Pangasinan. They discovered from the records of said office that a deed of sale
bearing date December 21, 1954, was purportedly executed by their brother Atinedoro Ulep his, wife
Beatriz and their sister Valentina Ulep in favor of INC over a portion of 620 sqm, more or less, of Lot 840,
and that on the basis of said deed, INC was issued TCT on September 23, 1975 over the portion allegedly
sold to it by the three.
31. Samuel also found out that on July 9, 1975, an affidavit of subdivision was executed by
respondents INC, Maxima Rodico and the spouses Warlito Paringit and Encarnation Gante, on the
basis of which affidavit Lot 840 was subdivided into four (4) lots, namely:
(1) Lot 840-A, under his (Samuels) name;
(2) Lot 840-B, under the names of Warlito Paringit and the latters wife Encarnacion Gante;
(3) Lot-C 840-C, under the name of INC; and
(4) Lot 840-D, under the name of Maxima Rodico.
11. On March 29, 1983, in the Regional Trial Court at Pangasinan,
a. the spouses Samuel Ulep and Susana Repogia-Ulep,
b. the spouses Atinedoro Ulep and Beatriz Ulep
c. and their sister Valentina Ulep,
filed their complaint for Quieting of Title, Reconveyance and Declaration of Nullity of Title and Subdivision
Plan with Damages against respondents (INC, Maxima Rodico and spouses Warlito Paringit and
Encarnacion Gante).
12. Uleps basically alleged that they and respondents are co-owners of Lot 840 in the following
proportions:
o 1,635 square meters to Maxima Rodico;
o 817.5 square meters to spouses Samuel Ulep and Susana Repogia-Ulep;
o 507.5 square meters to spouses Warlito Paringit and Encarnacion Gante;
o 210 square meters to spouses Atinedoro Ulep and Beatriz Ulep, and Valentina Ulep; 100 square
meters to INC
13. Also, spouses Atinedoro Ulep and Beatriz Ulep and their sister Valentina Ulep denied having executed a
deed of sale in favor of INC over a portion of 620 square meters of Lot 840, claiming that their signatures
appearing on the deed were forged. At the most, so they claimed, what they sold to INC was only 100 square
meters and not 620 square meters.
14. Petitioners Samuel Ulep and Valentina Ulep, along with the spouses Atinedoro Ulep and Beatriz Ulep,
likewise averred that the subject lot was subdivided without their knowledge and consent.
15. The trial court rendered judgment in favor of the petitioners by saying that INC is entitled only to 100 sqm.
16. CA modified that of the TC decision, ruling in favour of the INC that it is entitled to 620 square
meters instead of a 100 square meters.

IMPORTANT FACTS RE: DOUBLE SALE: On December 21, 1954, Atinedoro Ulep, his wife Beatriz Ulep
and sister Valentina Ulep sold the disputed area (620 square-meter) of Lot 840 to INC. Subsequently,
on January 18, 1971, a second sale was executed by the same vendors in favor of spouses Samuel Ulep
and Susana Ulep. The Court is, therefore, called upon to determine which of the two groups of buyers has a
better right to the area in question.

ISSUE: Are the petitioners correct in contending that respondent INC is entitled to only 100 square meters
and not 620 square meters of the western portion of Lot 840?

HELD: NO.

INC is entitled to 620 sqm. The deed of sale conveying 620 square meters thereof to INC was valid and the
petitioners allegation that their signature were forged was not proven with evidence.

The sale to INC should prevail over the sale made to spouses Samuel and Susana because INC was
the first registrant in good faith.

In the instant case, the registration made by respondent INC of its deed of sale more than satisfies this
requirement. The same thing cannot be said of petitioners Samuel Ulep and Susana Ulep. Said petitioners,
by their own admission, were aware that there existed an agreement between INC and vendors Atinedoro
Ulep, his wife Beatriz and sister Valentina Ulep involving a portion of 100 square meters of Lot 840.

The sale to INC should prevail over the sale made to spouses Samuel and Susana because INC was
the first registrant in good faith.

RATIO:
Article 1544 of the Civil Code provides the statutory solution. A double sale of immovable transfers ownership
to
(1) the first registrant in good faith;
(2) then, the first possessor in good faith; and
(3) finally, the buyer who in good faith presents the oldest title.

Registration means any entry made in the books of the Registry which records solemnly and permanently.
the right of ownership and other real rights. However, mere registration is not sufficient. Good faith must
concur with registration, else registration becomes an exercise in futility

Petitioners failed to prove that there existed forgery. Petitioners claim of forgery is unsupported by any
substantial evidence other than their own self-serving testimonies.

INCs deed of sale was duly notarized by Atty. Bernabe Salcedo Calimlim. Generally, a notarized document
carries the evidentiary weight conferred upon it with respect to its due execution, and documents
acknowledged before a notary public have in their favor the presumption of regularity. Thus, the notarized
deed of sale executed on December 21, 1954 by Atinedoro Ulep, his wife Beatriz and sister Valentina Ulep
over the contested area in favor of respondent INC deserves full credence and is valid and enforceable in the
absence, as here, of overwhelming evidence to the contrary.

DOCTRINE

Jurisprudence teaches that the governing principle is primus tempore, potior jure (first in time, stronger in
right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyers rights except
where the second buyer registers in good faith the second sale ahead of the first, as provided by the
aforequoted provision of the Civil Code.
Shorter Version Relevant to Double Sale

The sale of the disputed 620 square-meter portion of Lot 840 to respondent INC was made on December 21,
1954 and registered with the Registry of Deeds of Pangasinan on January 5, 1955. In fact, INC was issued a
title over the same portion on September 23, 1975. On the other hand, the conveyance to the spouses
Samuel Ulep and Susana Repogia-Ulep happened on January 18, 1971 and the spouses registered their
document of conveyance only on February 22, 1973.

Clearly, not only was respondent INC the first buyer of the disputed area. It was also the first to
register the sale in its favor long before petitioners Samuels and Susanas intrusion as second
buyers. Although Samuel and Susana thereafter registered the sale made to them, they did so only after 18
years from the time INC caused the registration of its own document of sale.
62 SIGAYA v. MAYUGA
467 SCRA 341, August 18,
TOPIC : Double Sale
Ponente:
FACTS:
1. Dionisia Alorsabes owned a three hectare land in Dao, Capiz
2. In 1934, she sold a portion of the lot to Juanito Fuentes while the remainder was inherited by her children Paz
Dela Cruz, Rosela Dela Cruz, and Consorcia Arroja (an adopted child), and a grandson, Francisco Abas.
3. The heirs executed an Extra-Judicial Settlement with Sale dated February 4, 1964 wherein Consorcia sold her
share with an area of 6,694 square meters to spouses Balleriano Mayuga.
4. On April 1, 1977, Paz also sold her share to Honorato de los Santos. Later, another document entitled Extra-
Judicial Partition with Deed of Sale dated November 2, 1972 was uncovered wherein the heirs of Dionisia
purportedly adjudicated Lot 3603 among themselves and sold their shares to Francisco.
5. On January 9, 1978, Francisco executed a Deed of Sale over Lot 3603 in favor of Teodulfo Sigaya. Thus, the title
over Lot 3603 was cancelled and a new one was issued in the name of Teodulfo, predecessor-in-interest of the
petitioners herein.
6. On October 14, 1986, the petitioners, who are the widow and children of Teodulfo, filed for recovery of
possession and damages against Diomer Mayuga, Honorato de los Santos, Sps. Jose Viva and Rosela Dela Cruz-
Viva, and Renato Distor respectively, before the RTC, praying that respondents be ordered to vacate the Lot and
turn over the same to petitioners and that petitioners right of ownership and possession over the property be
confirmed and that respondents be ordered to pay damages in the form of unrealized income starting 1980, plus
attorneys fees and costs.
7. Respondents in their answers with counterclaim averred that: the Deed of Sale executed by Francisco in favor of
Teodulfo and the title thereon are null and void for being based on a fictitious Extra-Judicial Settlement with Sale;
Rosela Dela Cruz-Viva and Paz Dela Cruz, who are illiterates, were fraudulently made to sign as vendees in the
Extra-Judicial Settlement with Sale dated 1972, when Francisco represented that they were merely signing as
witnesses to the sale of Francisco of his share to Teodulfo. As counterclaim, they asked for attorneys fees and
damages.
8. Respondent Mayuga asserted that he possesses his portion of the property by virtue of the sale by Consorcia
Arroja of her share to his parents, Sps. Balleriano Mayuga.
9. Respondent de los Santos meanwhile averred that Paz Dela Cruz sold her share to him in 1957. Respondents
Rosela Dela Cruz-Viva and her husband Jose Viva claimed that the portion of land occupied by them pertains to
Roselas share which she inherited from Dionisia, while respondent Renato Distor claimed that his wife inherited
said property from her father Juanito Fuentes, who in turn bought the same from Dionisia during her lifetime.
10. The RTC ruled in favor of the defendants
11. The CA
ISSUE
Whether or not the rule on double sales apply.

HELD
No. The rule 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.

RATIO
1. The law on double sales as provided in Art. 1544 of the Civil Code contemplates a situation where a single vendor
sold one and the same immovable property to two or more buyers.
2. For the rule to apply, 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 it.
3. The rule 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.
4. In this case, respondents derive their right over their respective portions either through inheritance or sale from
Dionisia while petitioners invoke their right from the sale of the land from Francisco. Clearly, the law on double
sales does not apply here.
064 Lichauco v. Berenguer Author: Danna
39 Phil 643, 27 February 1919 Notes:
Topic: Double Sales http://www.lawphil.net/judjuris/juri1919/feb1919/gr_l-
Ponente: Avancena, J. 11907_1919.html
FACTS:
10. A parcel of land was twice sold by Macario Berenguer: the first sale was made in 1882 in favor of Cristino
Singian and the second, in 1889, in favor of Cornelia Lauchangco, predecessor in interest of the plaintiffs.
Both were executed by means of public instruments.
Neither of the instruments was inscribed.
Sale to Singian was not registered. Sale to Lauchangco was registered.
11. Records show that when the same land was sold in 1889 by Berenguer to Lauchangco, the latter did not take a
direct possession of it but agreed to lease it to Berenguer under certain conditions. It thus appears that both
Singian and Lauchangco, in a similar manner, took possession of the land through the same vendor, when
Berenguer, on ceasing to be the owner, became the lessee of each of the former respectively.
ISSUE: Whether the owner of the land is the Lauchangco or Singian

HELD: The owner is Singian. Since neither of the instruments was inscribed, the preference should be in favor of the
purchaser who first took possession of the land. Singian, by himself and through a representative, took possession of the
land since its sale in 1882 and has been continuing in this possession up to the present time. There is evidence in the
record which establishes the conclusion, and there is no proof to the contrary.
RATIO:
11. It has been held that when a person buys a piece of land and, instead of taking possession of it, gives it
under a lease to the vendor, possession by the latter after the sale is possession by the vendee; and such
possession, in case of a double sale, determine the preference in favor of the one who first took possession
of it, in the absence of inscription, in accordance with the provision of article 1473 of the Civil Code and
notwithstanding the material and personal possession by the second vendee. Thus, the decision must
necessarily be in favor of the sale to Singian who first enjoyed such possession.
12. It cant actually be said that Lauchangco ever had ownership over the land. It is true that it was stipulated in the
sale to her that Berenguer would cease to be the owner and would be her lessee, but there is a lack of juridical
reality to suppose the this was equivalent to a delivery of possession, because on that date, Berenguer had no
possession which he could transfer, inasmuch as he was then a mere lessee of Singian, and therefore, his
possession was not for himself but in representation of the latter.
13. In case of a double sale and in the absence of inscription, the preference between who the owner is can not be
determined, according to article 1473, by the possession which the stipulation implies that vendor ceases to
become owner and becomes the lessee of the vendee, it follows that, for the purposes of this article, neither
Singian nor Lauchangco actually took possession of the land. Under this supposition, the preference between
both sales shall also have to be decided in favor of that made to Singian, because it is of a prior date.
14. Even supposing that the sale to Singian, for lack of registry, had lost its efficacy as a title transferring ownership
(as against the sale to Lauchangco which was registered), still there remains for Singian the title of prescription
which has not been destroyed by another to the contrary (since 25 years had elapsed from the time Singian took
possession of the land up to the time of registration).
15. That, in 1904, Singian sold the land to Berenguer does not affect the merits of the case. In the said sale, it was
agreed that Berenguer would pay the stipulated price within the period of 8 years and if, at the expiration of the 8
years, the amount should not have been completely paid, the ownership of the land would revert to the vendor. It
does not appear that no payment on account of this price has been made
DOCTRINE
When a person buys a piece of land and, instead of taking possession of it, gives it under a lease to the vendor,
possession by the latter after the sale is possession by the vendee; and such possession, in case of a double sale,
determine the preference in favor of the one who first took possession of it, in the absence of inscription, in accordance
with the provision of article 1473 of the Civil Code and notwithstanding the material and personal possession by the
second vendee.
065 ROMEO PAYLAGO and ROSARIO Author: Loi La Chica
DIMAANDAL vs. INES PASTRANA Notes:
JARABE and THE HONORABLE COURT http://www.lawphil.net/judjuris/juri1968/mar1968/gr_l-
OF APPEALS 20046_1968.html
G.R. No. L-20046 March 27, 1968
Topic: Rights and Obligation of the Vendor;
Double Sales
Ponente: REYES J.B.L.,:
FACTS:
1. June 7, 1920 Homestead Patent was issued under Act No. 926 and later under OCT No. 251 of the Registry of Deeds
of Mindoro
2. June 22, 1920 issued lot in the name of Anselmo Lacatan
3. May 17, 1948 - after the death of Anselmo, TCT No. T-728 was issued in the name his 2 sons and heirs, Vidal and
Florentino
4. August 27, 1950 - Vidal died
5. March 23, 1953 - Vidal's heirs (Maximo, Tomas and Lucia) executed a deed of sale in favor of the sps. Romeo
Paylago and Rosario Dimaandal
North Provincial Road; East Property of Romeo Paylago;
South Property of Florentino Lacatan; West Provincial Road (Nabuslot-Batingan);
Total area: 3.9500 hectares
7. October 6, 1953 - Florentino also died
8. Dec 31, 1953 - his widow and three children (Felipe, Rosita and Florencia) likewise executed a deed of sale in favor of
the same vendees over another portion of the same lot described as follows:
North Provincial Road (Calapan-Pinamalayan); East Heirs of Sotero Mongo;
South Aniceta Lolong; West Heirs of Vidal Lacatan;
Total area: 2.8408 hectares
9. March 2, 1954 - by virtue of the registration of the two deeds of sale, a new TCT covering the total area of 6.7908
hectares was issued in favor of Paylago sps.
10. A subsequent subdivision survey for the purpose of segregating the two portions of land disclosed that a portion (1/2
hectare) of the total area purchased by sps. Paylago and indicated in the sketch at a point marked Exh. B-1 was being
occupied by Ines Jarabe.
11. Sps filed an action to recover possession and ownership of the said portion.
12. CFI Mindoro: Sps. Are not purchasers in good faith
- Found that a portion of land in question, 1 hectares was purchased by Hilario Jarabe, late husband of Ines
Jarabe, from one Apolonio Lacatan
- Evidenced by an unregistered deed of sale
- Apolonio Lacatan, in turn, bought the same in 1936 from Anselmo Lacatan, the original registered owner in
whose favor OCT and later TCT were issued; that the first deed of sale, also unregistered, executed by Anselmo
Lacatan in favor of Apolonio Lacatan was lost during the Japanese occupation
- Jarabe has been in possession of the said portion continuously, publicly, peacefully and adversely as owner
thereof from 1938 up to the present
- Sps. Paylago knew, nay, admitted in a deed of lease that defendant-respondent has been in possession of the
premises since 1945.
13. CA: Affirmed in toto RTC
Appeal by certiorari

ISSUE
Who has a better right in case of double sale of real property, the registered buyer or the prior but unregistered
purchaser?

HELD
Paylago spouses cannot have the better right because of bad faith. Affirmed CA.
General Rule: Between two purchasers, the one who has registered the sale in his favor, in good faith, has a preferred
right over the other who has not registered his title, even if the latter is in the actual possession of the immovable
property.
New Civil Code, Article 1544, "the ownership shall belong to the person acquiring it who in good faith first
recorded it in the registry of property."
Exception: When their acquisition and subsequent registration is tainted with the vitiating element of bad faith,
the actual possessor (even without a registered title) is the rightful owner.
RATIO:
1. Both Courts below found that petitioners knew beforehand that the parcel of land in question was owned by Jarabe.
The boundaries of the lands that the Paylagos purchased in 1953 and 1954 were well defined, so they must have
known the portion occupied by Jarabe under claim of ownership and leased to them by the latter was included in the
description. They knew that Jarabe purchased the same from Apolonio Lacatan, and failed to inquire and make an
investigation as to the possible defects of the title of the Lacatan heirs over the entire lot sold to them, granting that the
latter's certificate of title was clear. They cannot now claim complete ignorance.
"A purchaser who has knowledge of facts which should put him upon inquiry and investigation as to possible
defects of the title of the vendor and fails to make such inquiry and investigation, cannot claim that he is a purchaser in
good faith and has acquired a valid title thereto". (Sampilo vs. Court of Appeals, 55 O.G. No. 30, p. 5772).
3. Rights secured under the provisions of Article 1544 of the New Civil Code to the one of the two purchasers of the
same real estate, who has secured and inscribed his title thereto in the Registry of Deeds, do not accrue, as already
mentioned, unless such inscription is done in good faith (Leung Yee v. F.L. Strong Machinery Co., et al., op. cit.). To
hold otherwise would reduce the Torrens system to a shield for the commission of fraud (Gustilo, et al. v. Maravilla, op.
cit.).
4. The identity of the land in question has been established both oral and documentary, showing that the said portion of
land has been in fact identified and segregated from the entire lot covered by TCT issued in the names of Paylagos.
5. The alleged unregistered document could no longer be examined by the parties in court, because it was lost but its
original has been sufficiently proved as having existed.
And after proving the due execution and delivery of the document, together with the fact that the same has been
lost or destroyed, its contents may be proved, among others, by the recollection of witnesses (Vaguillas v. Jaucian, 25
Phil. 315).

DOCTRINE
The fundamental premise of the preferential rights established by Article 1544 of the New Civil Code is good faith
(Bernas v. Bolo, 81 Phil. 16). To be entitled to the priority, the second vendee must not only show prior recording of his
deed of conveyance or possession of the property sold, but must, above all, have acted in good faith, that is to say,
without knowledge of the existence of another alienation by his vendor to a stranger (Obras Pias v. Ignacio, 17 Phil. 45;
Leung Yee v. F.L. Strong Machinery Co., et al., op. cit.; Emas v. De Zuzuarregui, et al., 53 Phil. 197).
066 TOMASA QUIMSON and MARCOS Author: Loi La Chica
SANTOS vs. FRANCISCO ROSETE Notes:
G.R. No. L-2397 August 9, 1950 http://www.lawphil.net/judjuris/juri1950/aug1950/gr_l-
Topic: Rights and Obligation of the Vendor; 2397_1950.html
Double Sales
TUASON, J.:

FACTS: [ORIGINAL IN SPANISH]

1. A farm originally belonged to the deceased Dionysius Quimson
2. June 7, 1932 - she granted in writing the transfer of the same in favor of her daughter, Tomasa Quimson, but continued
in its possession and use.
3. May 3, 1935 - property was sold to spouses Magno Agustin and Paulina Manzano with agreement of repurchasing it
within 6 years
4. Barely two years later, in April 5, 1937, it was sold again to Francisco Rosete, also with a pacto de retro agreement for
the term of 5 years, after having verified repurchase of Agustin's and Manzano with money that facilitated.
5. Rosete spoke to Agustin granting him the writing of sale (Exhibit 1).
6. Since then, Rosete was the one in possession and enjoyment, peacably and quietly, even after the death of Dionysius
Quimson (June 6, 1939)
7. January 1943 - Tomasa Quimson went to the Justice of Peace of San Marcelino, Zambales to intervene through an
arrangement with Rosete on the farm by racing to gain priority registration and sale in Iba, the capital of Zambales.
8. February 17, 1943 - Dionysius Quimson as granting favor to Tomasa Quimson and Francisco Rosete, respectively,
raced to register the property at 9:30 a.m. and the other at 10:30 a.m. of the same day.
9. CA: Reversed CFI Zambales. The registration of Quimsons document has no effect. Rosette was prior in possession
(second purchaser)
ISSUE
(1) What were the effects of the registration of plaintiff's document? MATERIAL AND SYMBOLIC POSSESSION
(2) Who was prior in possession? ROSETE

HELD
Decision of CA is set aside. CA made no findings on damages for Rosette's use of the property in controversy.
Accept TCs appraisal of the damages: P 180 for the occupation of the agricultural years 143-44,1944-45 and 1945-46,
and P 60 a year thereafter until the possession of the property was restituted to the plaintiffs
RATIO:
1. Articles 1462 and 1473 of the Civil Code provide:
ART. 1462. The thing sold shall be deemed delivered, when it is placed in the control and possession of the
vendee.
When the sale is made by means of a public instrument, the execution thereof shall be equivalent to the delivery
of the thing which is the object of the contract, if from the said instrument the contrary does not appear or may
not be clearly inferred.
ART. 1473. 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 first recorded it in
the registry.
Should there be no inscription, the ownership shall belong to the person who in good faith was first in the
possession; and, in the absence of this, to the person who represents the oldest title, provided there is good faith.

2. Cited Sanchez vs. Ramon (40 Phil., 614), Justice Avancea, later CJ:
Our interpretation of article 1473 is more in consonance with the principles of the justice. The execution of the
public instrument is equivalent to the delivery of the realty sold (art. 1462, Civil Code ) and its possession by the
vedee (art. 438).Under these conditions the sale is considered consummated and completely transfers to the
vendee all of the thing. the vendee by virtue of this sale has acquired everything and nothing, absolutely nothing,
is left to the vendor. Form this moment the vendor is a stranger to the thing sold like any other who has never
been its owner. As the obligation of even delivering it. If he continues taking materials possession of it, is simply
on account of the vendee's tolerance and, in this sense, his possession is vendor's possession. And if the latter
should have to ask him for the delivery of this materials possession it would not be by virtue of the sale, because
this has been already consummated and has produced all its effects, but by virtue of the vendee's ownership, in
the same were not the vendor.
This means that after the sale of the realty by means of a public instruments, the vendor, who resells it to
another, does not transmitted anything to this second sale, takes materials possession of the thing, he does it as
mere detainer, and it would be unjust to protect this detention against the rights to the thing lawfully acquired by
 the first vendee.
The possession mentioned in the article 1473 (for determining who has better right when the same piece of land
has been sold several times by the vendor ) includes not the materials but also the symbolic possession, which is
acquired by the execution of a public instrument.
3. The Supreme Court of Spain and Manresa sustain the theory of the CA in the literal meaning of article 1473. Under
both Spanish and Philippine rules of interpretation, the spirit, the intent, the law prevails over its letter.
The deed of conveyance was made by Dionisio Quimson in favor of his daughter. The vendor received form the
vendee the consideration of sale, P 250, acknowledge before the notary public the notary public having executed the
instruments of his own free will.
DOCTRINE
The possession in article 1473 (for determining who has better right when the same piece of land has been sold several
times by the same vendor) include not only the material but also the symbolic possession, which is acquired by the
execution of a public instrument. The doctrine laid down in Sanchez v. Ramos (40 Phil., 614), reiterated
067 Carumba v. CA Author: Pat
GR L-27587, February 18, 1970 Notes:
Topic: When not applicable; unregistered lands http://www.lawphil.net/judjuris/juri1970/feb1970/gr_27587_1970.html
Ponente: JBL Reyes, J.
FACTS:
32. April 12, 1995: spouses Amado Canuto and Nemesia Ibasco, by virtue of a "Deed of Sale of Unregistered Land
with Covenants of Warranty" sold a parcel of land, partly residential and partly coconut land Santo Domingo,
Camarines Sur, to the spouses Amado Carumba and Benita Canuto, for P350.00
33. The said deed of sale was never registered in the Office of the Register of Deeds of Camarines Sur, and the Notary
was not then an authorized notary public
34. It has been expressly admitted by appellee that he is the brother-in-law of Amado Canuto, the alleged vendor of the
property sold to him. Amado Canuto is the older brother of the wife of the herein appellee, Amado Carumba
35. January 21, 1957: a complaint for a sum or money was filed by Santiago Balbuena against Amado Canuto and
Nemesia Ibasco
36. April 15, 1967: Decision was rendered in favor of the plaintiff and against the defendants
37. October 1, 1968: ex-officio Sheriff issued a "Definite Deed of Sale of the property in favor of Santiago Balbuena,
which instrument of sale was registered before the Office of the Register of Deeds of Camarines Sur, on October 3,
1958
38. Said property was declared for taxation purposes in the name of Santiago Balbuena in 1958
39. CFI: declared Carumba to be the owner of the property under a consummated sale finding that after execution of the
document, Carumba had taken possession of the land, planting bananas, coffee and other vegetables thereon. Court
held void the execution levy made by the sherriff and nullified the sale in favor of the judgment creditor (Santiago
Balbuena)
40. CA: declared that there having been a double sale of the land subject of the suit Balbuena's title was superior to
that of his adversary under Article 1544 of the Civil Code, since the execution sale had been properly registered in
good faith and the sale to Carumba was not recorded.
ISSUE:
WON Article 1544 of the CC is applicable in this case.
HELD: decision of the CA is reversed and that of CFI is affirmed.
No.
RATIO:

While under the invoked Article 1544, registration in good faith prevails over possession in the event of a double sale by
the vendor of the same piece of land to different vendees, said article is of no application to the case at bar, even if
Balbuena, the later vendee, was ignorant of the prior sale made by his judgment debtor in favor of petitioner Carumba.

The reason is that the purchaser of unregistered land at a sheriff's execution sale only steps into the shoes of
the judgment debtor, and merely acquires the latter's interest in the property sold as of the time the property
was levied upon.
This is specifically provided by section 35 of Rule 39 of the Revised Rules of Court, the second paragraph of said
section specifically providing that:

Upon the execution and delivery of said (final) deed the purchaser, redemptioner, or his assignee shall
be substituted to and acquire all the right, title, interest, and claim of the judgment debtor to the property
as of the time of the levy, except as against the judgment debtor in possession, in which case the
substitution shall be effective as of the time of the deed ... (Emphasis supplied)

While the time of the levy does not clearly appear, it could not have been made prior to 15 April 1957, when the decision
against the former owners of the land was rendered in favor of Balbuena.

But the deed of sale in favor of Canuto had been executed two years before, on 12 April 1955, and while only
embodied in a private document, the same, coupled with the fact that the buyer (petitioner Carumba) had taken
possession of the unregistered land sold, sufficed to vest ownership on the said buyer.

When the levy was made by the Sheriff, therefore, the judgment debtor no longer had any real right over the land that
could pass to the purchaser at the execution sale.Hence, the latter must yield the land to petitioner Carumba. The rule is
different in case of lands covered by Torrens titles, where the prior sale is neither recorded nor known to the
execution purchaser prior to the levy; but the land here in question is admittedly not registered under Act. 496.
DOCTRINE:

Under Article 1544, registration in good faith prevails over possession in the event of a double sale by the vendor of the
same piece of land to different vendees. However, this does not apply to unregistered lands. The reason is that the
purchaser of unregistered land at a sheriff's execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latter's interest in the property sold as of the time the property was levied upon.
068 Vda. De Jomoc v. Court of Appeals, supra Author: Yayie Lanting
G.R. No. 92871 August 2, 1991 Notes:
Topic: Double Sales- Art.1544
Ponente: Gutierrez, Jr., J.
FACTS:
1. The subject lot in Cagayan de Oro City forms part of the estate of the late Pantaleon Jomoc.

2. It was fictitiously sold and transferred to third persons, so petitioner Maria P. Vda. Jomoc, as administratrix of the
estate and in behalf of all the heirs, filed suit to recover the property before the trial court of Misamis Oriental. Mariano
So intervened.

3. The case was decided in favor of Jomoc and was accordingly appealed by Mariano So and one Gaw Sur Cheng to the
Court of Appeals.

4.In February 1979, pending the appeal, Jomoc executed a Deed of Extrajudicial Settlement and Sale of Land with
Maura So for P300,000.00. The document was not yet signed by all the parties nor notarized but in the meantime, Maura
So had made partial payments amounting to P49,000.00.

5.In 1983, Mariano So, the appellant in the recovery proceeding, agreed to settle the case by executing a Deed of
Reconveyance of the land in favor of the heirs of Pantaleon Jomoc. The reconveyance was in compliance with the
decision in the recovery case and resulted in the dismissal of his appeal.

6. On February 28, 1983, the heirs of Jomoc executed another extra-judicial settlement with absolute sale in favor of
intervenors Lim Leong Kang and Lim Pue filing.

7. Later, Maura So demanded from the Jomoc family the execution of a final deed of conveyance. They ignored the
demand.

8. Private respondent Maria So(or Maura) sued petitioners-heirs for specific performance to compel them to execute and
deliver the proper registrable deed of sale over the lot. So then filed a notice of lis pendens with the Register of Deeds on
February 28, 1983.

9. It was on the same date, February 28, 1983, allegedly upon the Jomocs' belief that Maura So had backed out from the
transaction that the Jomocs executed the other extrajudicial settlement with sale of registered land in favor of the spouses
Lim for a consideration of P200,000.00 part of which amount was allegedly intended to be returned to Maura So as
reimbursement. The spouses Lim, however, registered their settlement and sale only on April 27, 1983.

10. The Jomocs as defendants, and the spouses Lim as intervenors:

Maura So backed out as evidenced by an oral testimony that she did so in a conference with the Jomocs' lawyers
where she expressed frustration in evicting squatters who demanded large sums as a condition for vacating. They
alleged the lack of signatures of four of the heirs of Jomoc and Maura So herself as well as the lack of
notarization.

TC: there was no sufficient evidence to show Maura Sos withdrawal from the sale,
concluded that: (1) the case is one of double sale; (2) the spouses-intervenors are registrants in bad faith who registered
their questioned deed of sale long after the notice of lis pendens of Civil Case No. 8983 was recorded.

CA: the trial court decision was affirmed except for the award of moral and exemplary damages and attorney's fees and
expenses for litigation.
ISSUE: Whether or not the trial court and the appellate court erred in declaring as void the subsequent deed of extra-
judicial settlement with spouses Lim since specific performance and not annulment of contract due to existence of double
sale, was the thrust of the complaint

HELD: NO. There was no hard evidence to show that the vinculum or contractual relation between petitioners-heirs and
Maura So. Maura So has the better right over the property
RATIO:
Article 1544 of the Civil Code provides:
xxx 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. xxx
In view of this provision, the two courts below correctly ruled that the spouses Lim do not have a better right. They
purchased the land with full knowledge of a previous sale to private respondent and without requiring from the vendors-
heirs any proof' of the prior vendee's revocation of her purchase. They should have exercised extra caution in their
purchase especially if at the time of the sale, the land was still covered by TCT No. 19648 bearing the name of Mariano
So and was not yet registered in the name of petitioners- heirs of Pantaleon Jomoc although it had been reconveyed to
said heirs. Not having done this, petitioners spouses Lim cannot be said to be buyers in good faith. When they registered
the sale on April 27, 1983 after having been charged with notice of lis pendens annotated as early as February 28, 1983
(the same date of their purchase), they did so in bad faith or on the belief that a registration may improve their position
being subsequent buyers of the same lot. Under Article 1544, mere registration is not enough to acquire new title. Good
faith must concur.

DOCTRINE

SEPARATE OPINION:
069 ILLUMINADO HANOPOL (plaintiff-appellant) Author: Bea Mationg
vs. PERFECTO PILAPIL (defendant-appellee) Notes:
GR No. L-19248 Date: February 28, 1963
Topic: When not applicable? 1. Unregistered Lands Double Sale; Article 1544 also applies to unregistered
Ponente: Barrera, J. lands.
FACTS:

1. This is a case of double sale of the same parcel of unregistered land decided by the Court of First Instance of
Leyte.
2. Appellant Hanopol claims ownership of the land by virtue of a series of purchases effected in 1938 by means of
private instruments, executed by the former owners Teodora, Lucia, Generosa, Sinforosa and Isabelo, all
surnamed Siapo.
3. Additionally, Hanopol invokes in his favor a decision rendered by the Court of First Instance of Leyte on a
complaint he filed on June 16, 1948, against the same vendors, who, according to his own averments, took
possession of the said property in December, 1945 through fraud, threat and intimidation, pretending falsely to
be the owners thereof and ejecting the tenants of Hanopol thereon,and since then had continued to possess the
land. Decision declaring him the exclusive owner of the land in question and ordering therein defendants to
deliver possession thereof was rendered on September 21, 1958.
4. On the other hand, Pilapil asserts title to the property on the strength of a duly notarized deed of sale executed in
his favor by the same owners on December 3, 1945, which deed of sale was registered in the Registry of Deeds
of Leyte on August 20, 1948 under the provisions of Act No. 3344.
5. CA: Ruled in favor of Pilapil. (Didnt mention the trial court ruling but it implies that it ruled in favor of
Hanopol--See Item No.3!!!)

ISSUE/S:

1. Whether or not the judgment in the former case against the vendors Siapos is binding upon the defendant-
appellee (Pilapil) as their successor-in-interest; and
2. Whether or not the registration of the second deed of sale in favor of appellee Pilapil affects his right as the first
vendee.

HELD:

1. NO. Appellee Pilapil is not a party to the action in the former case. The judgment is not binding on him.
2. YES. Appellant did not even have the better right based from Act 3344 and the Civil Code provision Article
1544.

RATIO:

1. The appellant (HANOPOL) contends that inasmuch as appellee (PILAPIL) claims to be the successor-in-interest
of the vendors, he is bound by the judgment rendered against the latter. This contention is without merit, because
it appears from the documentary evidence that appellee Pilapil derived his right to the land from the sale to him
of the said property on December 3, 1945, long before the filing of the complaint against the vendors in 1948. He
was not made a party in the case against the Siapos, and there was not even a claim that he had knowledge of
said litigation. He cannot, therefore, be bound by such judgment in view of the provision of paragraph (b),
Section 44 of Rule 39 of the Rules of Court which speaks of the effect of judgment as follows:

... the judgment so ordered is, in respect to the matter directly adjudged, conclusive between the parties and their
successors in interest by title subsequent to commencement of the action or special proceeding, litigating for the
same thing and under the same title and in the same capacity. (Emphasis supplied)

Since Pilapil was not a party to the action and is not a successor-in-interest by title subsequent to the commencement of
the action, having acquired his title in 1945 and the action filed in 1948, the decision in said case cannot be binding on
him.

2. Appellant argues under the second issue raised by him that the registration of Pilapil's notarized deed of sale in
1948 under Act No. 3344 "shall be understood to be without prejudice to a third party with a better right". He
contends that since at the time the Siapos sold the land in question in 1945 to Pilapil, the former were no longer
 the owners as they had already sold the same to appellant since 1938, the first sale to him is a better right which
cannot be prejudiced by the registration of the second sale.

SC: We do not think the quoted proviso in Act No. 3344 justifies appellant's contention. If his theory is correct, then the
second paragraph of Article 1544 of the New Civil Code (formerly Article 1473 of the old Code) would have no
application at all except to lands or real estate registered under the Spanish Mortgage Law or the Land Registration Act.
Such a theory would thus limit the scope of that codal provision. But even if we adopt this latter view, that is, that Article
1544 (formerly Article 1473) only applies to registered land, still we cannot agree with the appellant that by the mere fact
of his having a previous title or deed of sale, he has acquired thereby what is referred to in Act No. 3344 as the "better
right" that would be unaffected by the registration of a second deed of sale under the same law. Under such theory, there
would never be a case of double sale of the same unregistered property.

There appears to be no clear evidence of Hanopol's possession of the land in controversy. In fact, in his
complaint against the vendors, Hanopol alleged that the Siapos took possession of the same land under claim of
ownership in 1945 and continued and were in such possession at the time of the filing of the complaint against
them in 1948. Consequently, since the Siapos were in actual occupancy of the property under claim of
ownership, when they sold the said land to appellee Pilapil on December 3, 1945, such possession was
transmitted to the latter, at least constructively, with the execution of the notarial deed of sale, if not actually and
physically as claimed by Pilapil in his answer filed in the present case. Thus, even on this score, Hanopol cannot
have a better right than appellee Pilapil who, according to the trial court, "was not shown to be a purchaser in
bad faith".

DOCTRINE: Article 1544 of the New Civil Code (formerly Article 1473 of the old Code) would have no application at
all except to lands or real estate registered under the Spanish Mortgage Law or the Land Registration Act. Such a theory
would thus limit the scope of that codal provision. Therefore, it also applies to unregistered lands.
SEPARATE OPINION:

REYES, J.B.L., J., concurring:

I concur, but reserve my vote as to the effect of registration under Act 3344.
070 KUENZLE & STREIFF v. MACKE & AUTHOR: Krystelle
CHANDLER ET AL.
[G.R. No. 5295. December 16, 1909. ]
TOPIC: Constructive Delivery: when goods are in the
possession of a third person- Art. 521(3)
PONENTE: Moreland, J.

FACTS:

1. This is an action brought by the plaintiff to recover of the defendants the sum of 1,000 pesos, the value of certain
personal property, constituting a saloon bar, furniture, furnishings, and fixtures.

2. The plaintiff alleges that on or about the month of January, 1907, it was the owner of the Oregon Saloon in Cavite,
Province of Cavite, consisting of bar, furniture, furnishings, and fixtures, of the value of 1,000 pesos;

3. That during the said month of January, 1907, the defendant Jose Desiderio, as sheriff, levied upon such property
by virtue of an execution issued upon a judgment secured by the defendant Macke & Chandler, against Stanley &
Krippendorf; that said plaintiff notified the sheriff, in the manner provided by law, that it was the owner of said
goods and forbade the sale thereof under said execution; that, notwithstanding such claim upon the part of the
plaintiff, the said sheriff sold said goods under said execution; that said firm of Macke & Chandler was the
purchaser of said goods and the same were delivered to it; the defendants Bachrach, Elser, and Gale, were the
sureties upon the bond given to the sheriff by Macke & Chandler before said goods were sold.

4. The defendants in this case allege that the property described by the plaintiff and sold at the execution sale referred
to was not the property of the plaintiff at the time of said levy and sale, but was the property of Stanley &
Krippendorf, who were in possession of the same at the time of such levy.

5. They further allege that during the month of January, 1907, the said Stanley & Krippendorf, being indebted in a
considerable sum to the plaintiff in this case, attempted to sell to the said plaintiff by an instrument in writing the
property in question; that said instrument was never recorded; that said instrument was a private document; that the
said property was not delivered to the plaintiff under said sale but that said property remained from the time of said
sale forward in the exclusive possession and control of said Stanley & Krippendorf, and that they conducted the
business subsequent to the execution of said instrument exactly as they had prior thereto in their own name
purchasing goods and paying therefor without reference to the plaintiff in this case.

6. The facts in relation to the manner and method in and by which the plaintiff obtained its alleged title to the goods
in question and the fact of continued possession by Stanley & Krippendorf, as set forth by the defendants, are
substantially admitted in this case.

ISSUES: Whether or not the defendant Macke & Chandler, obtained a good title to the property in question as against the
plaintiff.
HELD: Yes. The defendant Macke & Chandler, having purchased the property at an execution sale, properly conducted,
obtained a good title to the property in question as against the plaintiff in this case.
RATIO:

The case of the Fidelity and Deposit Company against Wilson (8 Phil. Rep., 51) lays down a doctrine which we think is
decisive of this case. In that case it was held that the ownership of personal property can not be transferred to the prejudice
of third persons except by delivery of the property itself; and that a sale without delivery gives the would-be purchaser no
rights in said property except those of a creditor.

The bill of sale in the case at bar under the circumstances of this case, could have no effect against a person dealing with
the property upon the faith of appearances. The case of Kunzle & Streiff against A.S. Watson & Co. (7 Off. Gaz., 425), 1
cited by the appellant in its brief, does not sustain its contention. That was a case of the sale of property upon the condition
that the title thereto should remain in the vendor until the purchase price thereof should be fully paid, and that, in case of
nonpayment of the debt or of any installment thereof when due, the vendor would have a right to take possession of the
property and deal with it as provided for in the contract.

In that case the court held that such a contract for the conditional sale of goods was valid in these Islands between the
parties thereto, and was valid also as to third persons, provided possession of the property therein described was taken by
the vendor before the rights of third persons intervened against the same. In the case at bar it is evident that the bill of sale,
so called, was in no sense a conditional sale of property, such as is described in the case of Kunzle & Streiff against A.S.
Watson & Co., and the principles applicable thereto are entirely inapplicable in the case at bar. Moreover, possession of the
property in suit was not taken at any time by the plaintiff.

The defendant Macke & Chandler, having purchased the property at an execution sale, properly conducted, obtained a
good title to the property in question as against the plaintiff in this case.
CASE LAW/ DOCTRINE:
1. SALE OF PERSONAL PROPERTY WITHOUT DELIVERY. The ownership of personal property can not be
transferred to the prejudice of third persons except by delivery of the property itself, and a sale without such delivery gives
the would-be purchaser no rights in said property except those of a creditor.

2. ID.; PRIVATE BILL OF SALE; THIRD PARTIES. A bill of sale of personal property, executed as a private
document and unrecorded, the property described in said instrument not having been delivered but remaining exclusively
in possession of the vendor, can have no effect against a person dealing with the property upon the faith of appearances
DISSENTING/CONCURRING OPINION: N/A
072 DANGUILAN V. IAC Author: JADE
G.R. No. L-69970 November 28, 1988 Notes:
Topic:
Ponente: CRUZ, J.
FACTS: The subject of dispute: 2 lots owned by Domingo Melad claimed by both the petitioner and the respondent.

On January 29, 1962, private respondent, Apolonia Melad, filed a complaint against the petitioner in the then CFI of
Cagayan for recovery of a farm lot and a residential lot which she claimed she had purchased from Domingo Melad in
1943 and were being unlawfully withheld by Felix Danguilan.

Danguilan denied the allegation and averred that he is the owner of said lots which he had been in open, continuous and
adverse possession. He claimed that he acquired them from Domingo Meland in 1941 and 1943.

The case was dismissed for failure to prosecute but was refiled in 1967.

At the trial, Apolonia Melad presented a deed of sale dated December 4, 1943, purportedly signed by Domingo Melad
and duly notarized, which conveyed the said properties to her for the sum of P80.00. She said the amount was earned by
her mother as a worker at the Tabacalera factory. Apolonia claimed to be an illegitimate daughter of Domingo. She and
her mother were living with him when he died in 1945. She claimed also that she moved out of the farm only in 1946
when Danguilan approached her and asked permission to cultivate the land and to stay therein. She agreed on the
condition that Danguilan would deliver part of the harvest of the farm to her. Danguilan did so from 1946 to 1958. When
the deliveries stopped, Apolonia consulted the municipal judge to advised her to file the complaint against Danguilan.

Felix Danguilan testified that he was the husband of Domingos niece, Isidra Melad, who was taken by Domingo and his
wife into their home as their ward for they had no child of their own. Danguilan and Isidra lived with the couple in their
house on the residential lot and helped Domingo cultivate the farm. Domingo signed in 1941 a private instrument which
gave him the farm and another private instrument in 1943 which gave him the residential lot. Their agreement is that
Danguilan will take care of Domingo and would bury him upon his death.

The trial court decided mainly on the issue of possession. The judge held that Danguilan was more credible for
Apolonias evidence was unpersuasive and unconvincing. The decision concluded that where there was doubt as to the
ownership of the property, the presumption was in favor of the one actually occupying the same, which in this case was
Danguilan.

IAC reviewed the case and did not rule in favor of Danguilan. IAC held that conveyance of the 2 parcels of land by
Domingo Melad were null and void for they were donations of real property which should be effected through a public
instrument.

ISSUE: Who is the rightful owner of the parcels of land left by Domingo Melad?

HELD: There is not dispute that rightful possession is in favor Felix Danguilan.
(Decision of the IAC is set aside ; decision of the trial court is reinstated.)
RATIO: Considering the language of the 2 instruments executed by Domingo Melad in favor of Felix Danguilan,
Domingo Melad intended to donate the properties to Felix Danguilan however, Domingo Melad was not under pure
liberality. The conveyances were onerous donations because they were given to Danguilan in exchange of his obligation
to take care of Domingo Melad until his death. This being so, the donation is not covered by Article 749 of the Civil
Code requiring real property donations to be effected through a public instrument.

Apolonia Melad argued that there is no equivalence in the value of the parcels of land and the services to be rendered by
Danguilan so it should be considered a pure or gratuitous donations of real rights that should be effected through a public
instrument. However, Apolonia was not able to present evidence showing that values exchanged were disproportionate
or unequal.

Domingo Melad died when he was almost 100 years old. It was affirmed both by the trial court and the IAC that
Danguilan took care of Domingo Melad and later arranged for his burial accordingly. It was not denied that Danguilan
farmed the land and took care of Domingo Melad and his wife during the latter part of Domingos life. It can be assumed
that there was a fair exchange between the donor and the donee and this made their transaction an onerous donation.

On the other hand, the claim of Antonia Melad was supported by a deed of sale, which was allegedly executed when she
was only 3 years old and the consideration was supposedly paid by her mother, Maria Yedan who was a wage worker in
a factory. This transaction was suspicious because the transfer could have been made to Maria Yedan who was after all
paying for the lands but instead it was made in favor of Apolonia Melad, who was using the surname Yedan before the
instrument was signed and even after she got married. It was alleged that the contract was simulated and prepared after
Domingos death in 1945.

The record showed that Antonia Melad did not take possession of the disputed properties and waited until 1962 to file an
action for recovery of the lands from Danguilan. Antonia failed to show that she consummated the contract of sale by
actual delivery of the properties to her and her actual possession in the concept of purchaser-owner. If she indeed
possessed the land, she transferred the same to Danguilan in 1946 and moved out to another lot belonging to her step-
brother. She was inconsistent in claiming that Danguilan was her tenant.
DOCTRINE
Non mudis pactis sed traditione dominia rerum transferuntur- Article 609 par. 2 of the New Civil Code
The ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succession,
and, in consequence of certain contracts, by tradition".

Article 1095 of the New Civil Code

A creditor has the rights to the fruits of a thing from the time the obligation to deliver it arises. However, he shall not
acquire a real right" (and the ownership is surely such) "until the property has been delivered to him."

Article 1462 of the New Civil Code

The vendor has the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed "in the
hands and possession of the vendee." the article declares that the execution of a public instrument is equivalent to the
delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect
of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale,
its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a
public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the
enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such
tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to realitythe delivery has
not been effected.

Santos & Espinosa v. Estejada doctrine:

If the claim of both the plaintiff and the defendant are weak, judgment must be for the defendant, for the latter being in
possession is presumed to be the owner, and cannot be obliged to show or prove a better right.
SEPARATE OPINION:
073. Pasagui v. Villablanca, Author: Loren Vicedo
68 SCRA 18, November 10, 1975 Notes:
Topic: To deliver the object and its
accessions http://www.lawphil.net/judjuris/juri1975/nov1975/gr_21998_1975.html
Ponente: Antonio, J.:
FACTS:

1. February 4, 1963: Calixto Pasagui and Fausta Mosar filed a complaint with the CFI Tacloban. They
are alleging that on November 15, 1962, for and in consideration of P2,800.00, they bought from
appellees Eustaquia Bocar and Catalina Bocar a parcel of agricultural land situated in Hamindangon,
Pastrana, Leyte.
2. November 16, 1962: The corresponding document of sale was executed, notarized on the same date,
and recorded in the Registry of Deeds of Tacloban, Leyte.
3. February 1963: Defendant spouses Ester T. Villablanca and Zosimo Villablanca, "illegally and without
any right, whatsoever, took possession of the above property harvesting coconuts from the coconut
plantation thereon, thus depriving plaintiffs" of its possession.
4. Plaintiffs prayed for a decision ordering defendants to surrender the possession of the parcel of land
above-described to them and to pay damages in the amounts specified.
5. February 21, 1963: Villablanca moved to dismiss the complaint on the ground that the CFI had no
jurisdiction over the subject matter, the action being one of forcible entry.
6. Pasagui opposed the Motion to Dismiss asserting that the action is not one for forcible entry inasmuch
as in the complaint, there is no allegation that the deprivation of possession was effected through
"force, intimidation, threat, strategy or stealth."
7. CFI dismissed the complaint for lack of jurisdiction, it appearing from the allegations in the complaint
that the case is one for forcible entry which belongs to the exclusive jurisdiction of the Justice of the
Peace (Municipal Court) of Pastrana, Leyte.
8. The first Motion for Reconsideration was denied and the second was likewise denied. From the
aforementioned orders, appeal on a pure question of law was interposed to this Court.

Averments of the Plaintiff:

1. Plaintiffs bought on November 12, 1962 from defendants-appellees Eustaquia Bocar and Catalina
Bocar the parcel of land in question for the amount of P2,800.00.
2. A deed of sale was executed, notarized and registered; that "during this first week of February, 1963,
defendants Ester T. Villablanca and her husband, Zosimo Villablanca, illegally and without any right
whatsoever, took possession of the above described property, harvesting coconuts from the coconut
plantation therein, thus depriving of its possession herein plaintiffs, and causing them damages for the
amount of P800.00.
3. For the purpose of enforcing the vendors' warranty in case of eviction, Eustaquia Bocar and Catalina
Bocar were also included as defendants; and, therefore, plaintiffs-appellants pray that a decision be
rendered, ordering:
(a) defendants Ester T. Villablanca and her husband, Zosimo Villablanca, "to surrender the
possession of the above described property to said plaintiffs";
(b) defendants Ester T. Villablanca and her husband, Zosimo Villablanca, "to pay to said
plaintiffs the amount of EIGHT HUNDRED PESOS (P800.00) as damages for the usurpation
by them of said property"; and
(c) defendants Eustaquia Bocar and Catalina Bocar "to pay the plaintiffs the amount of
P2,800.00, plus incidental expenses, as provided for by Art. 1555 of the Civil Code, in case
of eviction or loss of ownership to said above described property on the part of plaintiffs."

ISSUE: 1. Whether or not the rule that execution of public instrument is equivalent to delivery absolute
(Issue relevant to the topic)
2. Whether or not the case is under the jurisdiction of CFI.

HELD:

1. YES. The execution of the deed of absolute sale in a public instrument is equivalent to delivery of the
land subject of the sale. This presumptive delivery only holds true when there is no impediment that
may prevent the passing of the property from the hands of the vendor into those of the vendee. It can
 be negated by the reality that the vendees actually failed to obtain material possession of the land
subject of the sale. In the present case, Pasagui and Mosar had not acquired physical possession of
the land since its purchase on 12 November 1962. As a matter of fact, their purpose in filing the
complaint in Civil Case 3285 is precisely to get the possession of the property.

2. What determines the jurisdiction of the municipal court in a forcible entry case is the nature of the
action pleaded as appears from the allegations in the complaint. In ascertaining whether or not the
action is one of forcible entry within the original exclusive jurisdiction of the municipal court, the
averments of the complaint and the character of the relief sought are the ones to be consulted. The
bare allegation in the complaint that the plaintiff has been deprived of the land of which he is and has
been the legal owner for a long period has been held to be insufficient. Though it is true that the mere
act of a trespasser in unlawfully entering the land, planting himself on the ground and excluding
therefrom the prior possessor would imply the use of force, no such inference could be made as
Pasagui and Mosar had not claimed that they were in actual physical possession of the property prior
to the entry of the Villablancas.

RATIO:

Article 1498. The execution of the deed of absolute sale in a public instrument is equivalent to delivery of the
land subject of the sale.

DOCTRINE

The execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject
of the sale. This presumptive delivery only holds true when there is no impediment that may prevent the
passing of the property from the hands of the vendor into those of the vendee. It can be negated by the reality
that the vendees actually failed to obtain material possession of the land subject of the sale.
076 Florendo v. Foz Author: Danna
G.R. No. L-6565, 24 October 1911 Notes:
Topic: Delivery http://www.lawphil.net/judjuris/juri1911/oct1911/gr_l-
Ponente: Arellano, C.J. 6565_1911.html
FACTS:
12. Foz executed in Manila a contract, ratified before a notary, obligating himself to deliver his house and lot for a
consideration of P6,000 to Florendo. Florendo already paid P2,000 of the purchase price.
13. In the contract, it was stipulated that Florendo shall pay the outstanding balance of P4,000 upon Fozs arrival at
Vigan. Should Foz be unable to go there, Florendo was to pay the debt to a Church where Foz had a debt.
Likewise, Florendo was authorized by Foz to obtain the title of the subject matter of the sale.
14. Foz went to Vigan. Thus, Florendo paid the P4,000 to him. However, Foz refused to accept it, contending that
the true price of the sale, as recorded in another instrument executed on the 2nd or 3rd day after the 1st contract,
was P10,000.
15. Thus, Florendo filed a suit to make Foz comply with the contract of absolute purchase and sale, by delivering the
property sold to Florendo.
ISSUE: Whether or not material delivery of the property should be made to Florendo

HELD: Yes

RATIO:
16. Pursuant to article 1466 of the Civil Code, the vendor shall not be bound to deliver the thing sold, if the vendee
should not have paid the price, or if a period for the payment has not been fixed in the contract. If in the contract
a period has been fixed for the payment, the vendor must deliver the thing sold.
17. In this case, a period was fixed for the payment. As stipulated in their contract, the period for payment is when
the vendor shall have arrived at Vigan; and if he does not arrive at Vigan, such period is, according to the second
clause, indefinite, the vendee merely taking it upon himself to send the rest to Manila, after the month of June,
1909, should the vendor not arrive at Vigan.
18. Based on Art 1466, the rule is that the thing shall not be delivered, unless the price be paid; and the exception is
that the thing must be delivered, though the price be not first paid, if a time for such payment has been fixed in
the contract.
19. Hence, all the discussions between the contending parties, with respect to whether the deposit of the P4000, a
part of the price, was or was not made, or was duly or unduly made, is entirely impertinent: the conveyance of
the thing sold does not depend on the payment of the price.
20. Moreover, after the lapse of the period for the delivery of the price, Florendo hastened to pay it and, on account
of the Foz's refusal to receive it, duly deposited it, in order to avoid the consequences that might issue from
delinquency in the payment of a sum entrusted to him for a fixed period.
21. It is the material delivery of the property sold which the defendant must make in compliance with the contract,
inasmuch as the formal delivery de jure was made, according to the provisions of article 1462, 2nd paragraph, of
the same code: When the sale should be made by means of a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if in said instrument the contrary does
not appear or may be clearly inferred.
22. As the contrary does not appear, the execution of the public instrument was really a formal or symbolical
delivery of the property sold and authorized the plaintiff to use the title of ownership as proof that he was
thenceforth the owner of the property.
DOCTRINES
The rule is that the thing shall not be delivered, unless the price be paid; and the exception is that the thing must be
delivered, though the price be not first paid, if a time for such payment has been fixed in the contract.

It is the material delivery of the property sold which the defendant must make in compliance with the contract, inasmuch
as the formal delivery de jure was made, according to the provisions of article 1462, 2nd paragraph, of the same code:
When the sale should be made by means of a public instrument, the execution thereof shall be equivalent to the delivery
of the thing which is the object of the contract, if in said instrument the contrary does not appear or may be clearly
inferred.
077 PHILIPPINE SUBURBAN Author: Loi La Chica
DEVELOPMENT CORP. vs. THE Notes:
AUDITOR GENERAL, PEDRO M. http://www.lawphil.net/judjuris/juri1975/apr1975/gr_19545_1975.html
GIMENEZ
G.R. No. L-19545 April 18, 1975
Topic: Rights and Obligation of the Vendor;
To deliver the object and its accessions
Ponente: ANTONIO, J

FACTS:
1. June 8, 1960 - the President of the Philippines, in a Cabinet meeting, acting on the reports of the Committee created to
survey suitable lots for relocating squatters in Manila and suburbs, and of the Social Welfare Administrator together with
the recommendation of the GSIS Manager, approved in principle the acquisition by the People's Homesite and Housing
Corporation
- Unoccupied portion of the Sapang Palay Estate in Sta. Maria, Bulacan for relocating the squatters who desire to
settle north of Manila, and
- In Las Pias or Paraaque, Rizal, or Bacoor, Cavite - to settle south of Manila
2. The project was to be financed through the flotation of bonds under the charter of the PHHC in the amount of P4.5
million, the same to be absorbed by the GSIS. The Executive Secretary informed the PHHC of such approval by letter
3. June 10, 1960 - the Board of Directors of the PHHC passed Resolution No. 700 authorizing the purchase of the
unoccupied portion of the Sapang Palay Estate at P0.45 per square meter "subject to the certain conditions.
4. July 13, 1960 - the President authorized the floating of bonds under RA Nos. 1000 and 1322 in the amount of
P7,500,000.00 to be absorbed by the GSIS, in order to finance the acquisition by the PHHC of the entire Sapang Palay
Estate at a price not to exceed P0.45 per sq. meter.
5. December 29,1960 - after an exchange of communications, Petitioner PSDC, as owner of the unoccupied portion of
the Sapang Palay Estate (specifically two parcels), and the People's Homesite and Housing Corporation, entered into a
contract embodied in a public instrument entitled "Deed of Absolute Sale" whereby the former conveyed unto the latter
the two parcels of land.
6. March 14, 1961 Deed of Absolute Sale was registered in delay at the Office of the Register of Deeds since PHHC
could not at once advance the money needed for registration expenses.
7. A copy of the contract was submitted for approval in conformity with EO No. 290 to the Auditor General. He
expressed objections and requested a re-examination of the contract, in view of the fact that from 1948 to December 20,
1960, the entire hacienda was assessed at P131,590.00, and reassessed beginning December 21, 1960 in the greatly
increased amount of P4,898,110.00.
8. It appears that as early as the first week of June, 1960, prior to the signing of the deed by the parties, the PHHC
acquired possession of the property, with the consent of petitioner, to enable the said PHHC to proceed immediately with
the construction of roads in the new settlement and to resettle the squatters and flood victims in Manila who were
rendered homeless by the floods or ejected from the lots which they were then occupying.
9. April 12, 1961 - the Provincial Treasurer of Bulacan requested the PHHC to withhold P30,099.79 from the purchase
price to be paid by it to PSDC as realty tax due on the property involved for the calendar year 1961
10. Secretary of Finance Dominador Aytona: Denied PSDCs protest to order a refund.
It agreed with Provincial Treasurer that, as under the Land Registration Act (Act No. 496), PSDC is still the
owner of the property until the deed of sale covering the same has been actually registered. The vendor is still
liable to the payment of real property tax for the calendar year 1961.
11. PSDCs contention: It ceased to be the owner of the land in question upon the execution of the Deed of Absolute
Sale.
Cited Article 1498, NCC which provides that "when the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred" and
Article 1496, NCC that "the ownership of the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the vendor to the vendee."
12. Auditor General Pedro M. Gimenez: Disallowed request of PSDC for the refund of real estate tax in the amount of
P30,460.90 paid to the Provincial Treasurer of Bulacan.
Appeal by certiorari
ISSUE
Did the Auditor General err in disallowing the refund of the real estate? YES. Order of refund is granted.

HELD
Aside from the presumptive delivery of the property by the execution of the deed of sale on December 29, 1960, the
possession of the property was actually delivered to the vendee prior to the sale, and, therefore, by the transmission of
ownership to the vendee, PSDC has ceased to be the owner of the property involved, and, consequently, under no
obligation to pay the real property tax for the year 1961.

RATIO:
1. The contract here involved which is for a special purpose to meet a special situation was entered into precisely
to implement the Presidential directive, the prior approval by the Auditor General envisioned by Administrative Order
No. 290, dated February 3, 1959, would therefore, not be necessary.
Where the contract already bears the approval of the President, the action of the Auditor General would no
longer be necessary because under the said Administrative Order, the President has, at any rate, the final say.
2. There is no question that the vendor had actually placed the vendee in possession and control over the thing sold, even
before the date of the sale.
The condition that petitioner should first register the deed of sale and secure a new title in the name of the
vendee before the latter shall pay the balance of the purchase price, did not preclude the transmission of ownership. In
the absence of an express stipulation to the contrary, the payment of the purchase price of the good is not a condition,
precedent to the transfer of title to the buyer, but title passes by the delivery of the goods.
3. As between the parties to a contract of sale, registration is not necessary to make it valid and effective, for actual
notice is equivalent to registration.
Sec. 50, Land Registration Act provides that, even without the act of registration, a deed purporting to convey or
affect registered land shall operate as a contract between the parties. The registration is intended to protect the buyer
against claims of third persons arising from subsequent alienations by the vendor, and is certainly not necessary to give
effect to the deed of sale, as between the parties to the contract.
No rights of third persons are involved, much less is there any subsequent alienation of the same property.
DOCTRINE
The property was in the possession of the vendee, even as early as the first week of June, 1960, or six (6) months
prior to the execution of the Deed of Absolute Sale. Since the delivery of possession, coupled with the execution of
the Deed of Absolute Sale, had consummated the sale and transferred the title to the purchaser, the payment of
the real estate tax after such transfer is the responsibility of the purchaser. However, the purchaser PHHC is a
government entity not subject to real property tax.
078 BOARD OF LIQUIDATORS vs. Author: Loi La Chica
EXEQUIEL FLORO, ET AL. Notes:
G.R. No. L-15155 December 29, 1960 http://www.lawphil.net/judjuris/juri1960/dec1960/gr_l-
Topic: Rights and Obligation of the Vendor; To 15155_1960.html
deliver the object and its accessions
Ponente: REYES, J.B.L., J.:
FACTS:
1. Board of Liquidators (Board) - agency of the Government created under EO No. 372 (Nov 24, 1950), and, pursuant to
EO No. 377 (Dec 1, 1950), took over the functions of the defunct Surplus Property Liquidating Committee.
2.June 14, 1952 - Melecio Malabanan entered into an agreement with the Board for the salvage of surplus properties
sunk in territorial waters off the provinces of Mindoro, La Union, and Batangas
3. Terms: Malabanan was to commence operations within 30 days from execution of said contract, which was to be
effective for 1 year from the start of operations, extendible for a total period of not more than six (6) months.
4. June 10, 1953 - Malabanan requested for an extension of 1 year for the salvage in waters of Mindoro and Batangas;
and the Board extended the contract up to November 30, 1953.
5. November 18, 1953 - requested a second extension of 1 more year for the waters of Occidental Mindoro, and Board
again extended the contract up to August 31, 1954.
6. July 26, 1954 - Malabanan submitted a recovery report, wherein it is stated that he had recovered a total of 13,107
pieces of steel mattings.
7. Four months previously (March 31, 1954), Malabanan had entered into an agreement with Exequiel Floro, it was
agreed that:
- Floro would advance to Malabanan certain sums of money, not to exceed P25,000.00, repayment, thereof being
secured by quantities of steel mattings which Malabanan would consign to Floro
- The advances were to paid within a certain period, and upon default at the expiration thereof.
- Floro was authorized to sell whatever steel mattings were in his possession under said contract, in the amount
sufficient to satisfy the advances.
8. Now, Floro claims to have made total advances to the sum of P24,224.50.
9. It appears that as Malabanan was not able to repay Floro's advances
Floro sold 11,047 pieces of steel mattings to Eulalio Legaspi for P24,803.40.
10. August 21, 1954 (17 days later) - Malabanan filed in CFI Manila a petition for voluntary insolvency, attaching
thereto a Schedule of Accounts, in which the Board was listed as one of the creditors for P10,874.46, and Exequiel Floro
for P24,220.50. Also attached was an Inventory of Properties, listing certain items of personal property allegedly
aggregating P33,707.00 in value (which included 11,167 pieces of steel mattings with an alleged estimated value of
P33,501.00).
11. Boards contention:
- Board owns the listed steel matting and filed a petition to exclude them from the inventory
- Make the insolvent account for a further 1,940 pieces of steel matting, the difference between the number
stated in the insolvent's recovery report of July 26, 1954 and that stated in the inventory.
12. Exequiel Floros contention:
- The steel matting listed had become the property of Eulalio Legaspi by virtue of a deed of sale in his favor,
executed by Floro pursuant to the latter's contract with Malabanan on March 31, 1954.
- Malabanan did not acquire ownership over the steel mattings due to his failure to comply with the terms of the
contract, allegedly constituting conditions precedent for the transfer of title, namely: payment of the price; audit
and check as to the nature, quantity and value of properties salvaged; weighing of the salvaged properties to be
conducted jointly by representatives of the Board and of Malabanan; determination of the site for storage; audit
and verification of the recovery reports by government auditors; and firing of performance bond.
13. CFI Manila: Denied petition to exclude certain pieces of steel matting from the assets of the insolvent Malabanan.
Malabanan had acquired ownership over the steel mattings under his contract with the Board. Floro was properly
authorized to dispose of the steel mattings under Floro's contract with Malabanan. The sale to Eulalio Legaspi was valid
and not contrary to the Insolvency Law.
14. CA: Certified the case to the SC on the ground that only questions of law are involved
ISSUE:
When did Malabanan become the owner of salvaged properties? From the time he was able to salvage them or from the
time he paid the government for them?
HELD:
The contract between Malabanan and the Board had the effect of vesting Malabanan with title to, or ownership of the
steel mattings in question as soon as they were brought up from the bottom of the sea. This was from the time he gained
effective possession of the goods. These goods may now be attached to his own private creditor as his private property.
Had the agreement state a reservation of title or a provision for non-delivery, Malabanans ownership could have been
from the time he paid the government. CA is affirmed. Costs against Floro.
RATIO:
1. Provisions of the contract proves that Malabanan has all right, title and interest in and to all surplus
properties salvaged by the contractor under this contract. The contractor shall pay to the Government P90 per long
ton(2,240 lbs.) of surplus properties recovered (Item #10 of the contract). Payment of the agreed price shall be made
monthly during the first 10 days of every month on the basis of recovery reports of sunken surplus properties salvaged
during the preceding month, duly verified and audited by the authorized representative of the Board (Item #11).
2. All circumstances indicated that ownership of the goods passed to Malabanan as soon as they were recovered or
salvaged:
- The operation for salvage were entirely at Malabanan's expense and risks
- Gold, silver, copper, coins, currency, jewelry, precious stones, etc. were excepted from the contract, and were
instead required to be turned over to the Board for disposition
- Expenses for storage, including guard service, were for Malabanan's account
3.There is nothing in the said contract which may be deemed a reservation of title, or from which it may clearly be
inferred that delivery was not intended.
4. There was delivery. There was no physical tradition, but there was one by agreement (traditio longa manu) in
conformity with Article 1499 of the CC
Art. 1499 The delivery of movable property may likewise be made by the mere consent or agreement of the
contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale.
5. There is nothing in the terms of the public instrument in question from which an intent to withhold delivery or transfer
of title may be inferred.
There was no longer any bond from June 11, 1953 to Aug. 31, 1954 when the steel mattings were recovered
during the extended period of the contract. The lapse of the bond did not extinguish the contract between Malabanan and
the Board. A bond merely stands as guaranty for a principal obligation which exist independently of said bond, the latter
being an accessory contract (Valencia vs. RFC & C.A.).
6. There is no novation. Novation is never presumed, it being required that the intent to novate be expressed clearly and
unequivocally, or that the terms of the new agreement be incompatible with the old contract (Article 1292, NCC). Here,
there was neither express novation nor incompatibility from which it could be implied. Moreover, a mere extension of
the term (period) for payment or performance is not novation (Inchausti vs. Yulo,...)

DOCTRINE
The contract between Malabanan and the Board had the effect of vesting Malabanan with title to, or ownership of the
steel mattings in question as soon as they were brought up from the bottom of the sea. This was from the time he gained
effective possession of the goods. These goods may now be attached to his own private creditor as his private property.
Had the agreement state a reservation of title or a provision for non-delivery, Malabanans ownership could have been
from the time he paid the government.
079 Rudolf Lietz Inc. v CA Author: Pat
GR 122463; December 19, 2005 Notes:
Topic: Quality/Quantity http://sc.judiciary.gov.ph/jurisprudence/2005/dec2005/122463.htm
Ponente: Puno, J.
FACTS:
41. Respondent Agapito Buriol previously owned a parcel of unregistered land in San Vicente, Palawan.
42. August 15, 1986: Respondent Buriol entered into a lease agreement with Flavia Turatello and respondents Turatello
and Sani, all Italian citizens, involving one (1) hectare of respondent Buriols property. (The lease agreement was
for a period of 25 years, renewable for another 25 years)
43. The lessees took possession of the land after paying respondent Buriol a down payment of P10,000.00.
44. The lease agreement, however, was reduced into writing only in January 1987
45. November 17, 1986: respondent Buriol sold to petitioner Rudolf Lietz, Inc. the same land for P30,000.00 under the
Deed of Absolute Sale:
A parcel of land, consisting of FIVE (5) hectares, more or less, a portion of that parcel of land
declared in the name of Agapito Buriol, under Tax Declaration No. 0021, revised in the year 1985,
together with all improvements thereon, situated at the Island of Capsalay, Barangay Port Barton,
municipality of San Vicente, province of Palawan which segregated from the whole parcel described in
said tax declaration, has the following superficial boundaries: NORTH, Sec. 01-017; and remaining
property of the vendor; EAST, by Seashore; SOUTH, 01-020; and WEST, by 01-018
46. Petitioner later discovered that respondent Buriol owned only 4 hectares, and with one more hectare covered
by lease, only 3 hectares were actually delivered to petitioner
47. April 3, 1989: Petitioner instituted a complaint for Annulment of Lease with Recovery of Possession with
Injunction and Damages against respondents and Flavia Turatello
The complaint alleged that with evident bad faith and malice, respondent Buriol sold to petitioner 5
hectares of land when respondent Buriol knew for a fact that he owned only four (4) hectares and
managed to lease one more hectare to Flavia Turatello and respondents Tiziana Turatello and Paola Sani
The complaint sought the issuance of a restraining order and a writ of preliminary injunction to prevent
Flavia Turatello and respondents Turatello and Sani from introducing improvements on the property, the
annulment of the lease agreement between respondents, and the restoration of the amount paid by
petitioner in excess of the value of the property sold to him.
48. TC: rendered judgment dismissing both petitioners complaint and respondents counterclaim for damages
but plaintiff is ordered to pay defendant Turatello and Sanis counsel the sum of P3,010.38
49. CA: affirmed the dismissal of petitioners complaint and awarded respondents Turatello and Sani damages
and attorneys fees. It also declared as inapplicable Art.1542 of the CC, which read:
Art. 1542. In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit
of measure or number, there shall be no increase or decrease of the price, although there be a greater or
lesser area or number than that stated in the contract.
The same rule shall be applied when two or more immovables are sold for a single price; but if, besides
mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number
should be designated in the contract, the vendor shall be bound to deliver all that is included within said
boundaries, even when it exceeds the area or number specified in the contract; and, should he not be
able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or
number, unless the contract is rescinded because the vendee does not accede to the failure to deliver
what has been stipulated.
50. Petitioner contends:
that the propertys boundaries as stated in the Deed of Absolute Sale are superficial and unintelligible
and, therefore, cannot prevail over the area stated in the contract
that it is entitled to the corresponding reduction of the purchase price because the agreement was for the
sale of five (5) hectares although respondent Buriol owned only four (4) hectares
Art. 1539. The obligation to deliver the thing sold includes that of placing in the control of the vendee all
that is mentioned in the contract, in conformity with the following rules:

If the sale of real estate should be made with a statement of its area, at the rate of a certain price for a
unit of measure or number, the vendor shall be obliged to deliver to the vendee, if the latter should
demand it, all that may have been stated in the contract; but, should this be not possible, the vendee may
choose between a proportional reduction of the price and the rescission of the contract, provided that, in
the latter case, the lack in the area be not less than one-tenth of that stated.
 ISSUE:
Whether or not petitioner is entitled to the delivery of the entire five hectares or its equivalent
HELD: CA decision is affirmed with the modification that the award of moral and exemplary damages is deleted.
No. The sale between petitioner and respondent Buriol is one made for a lump sum. The Deed of Absolute Sale shows
that the parties agreed on the purchase price on a predetermined area of five hectares within the specified boundaries and
not based on a particular rate per area. In accordance with Article 1542, there shall be no reduction in the purchase price
even if the area delivered to petitioner is less than that stated in the contract. In the instant case, the area within the
boundaries as stated in the contract shall control over the area agreed upon in the contract.

RATIO:
1. In the case where the area of the immovable is stated in the contract based on an estimate, the actual area
delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the
Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure
or number, there shall be no increase or decrease of the price although there be a greater or lesser area or number
than that stated in the contract. However, the discrepancy must not be substantial. A vendee of land, when sold in
gross or with the description more or less with reference to its area, does not thereby ipso facto take all risk
of quantity in the land. The use of more or less or similar words in designating quantity covers only a
reasonable excess or deficiency.

Where both the area and the boundaries of the immovable are declared, the area covered within the
boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries,
it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or
less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating
its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the
contract must control over any statement with respect to the area contained within its boundaries. It is not of
vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy.
It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error
as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the
boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object.

1. ***Article 1539 governs a sale of immovable by the unit, that is, at a stated rate per unit area. In a unit price contract, the
statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area
actually delivered. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all
that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not
possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the
amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate.

In some instances, a sale of an immovable may be made for a lump sum and not at a rate per unit. The parties agree on a
stated purchase price for an immovable the area of which may be declared based on an estimate or where both the area
and boundaries are stated.

2. Petitioner also asserts that respondent Buriol is guilty of misleading petitioner into believing that the latter was
buying five hectares when he knew prior to the sale that he owned only four hectares. The review of the
circumstances of the alleged misrepresentation is factual and, therefore, beyond the province of the Court. Besides,
this issue had already been raised before and passed upon by the trial court and the Court of Appeals. The factual
finding of the courts below that no sufficient evidence supports petitioners allegation of misrepresentation is binding
on the Court.
DOCTRINE:
A vendee of land, when sold in gross or with the description more or less with reference to its area, does not thereby
ipso facto take all risk of quantity in the land. The use of more or less or similar words in designating quantity covers
only a reasonable excess or deficiency.

In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control
over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or
contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively
indicated with sufficient precision to enable one to identify it.
080 Santa Ana, Jr. v. Hernandez Author: Yayie Lanting
G.R. No. L-16394 December 17, 1966 Notes:
Topic: Kinds of Delivery of Corporeal Property (Tradition)
- Art. 1477 :Quality/Quantity
Ponente: REYES, J.B.L., J.
FACTS:
1. petitioners spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo, owned a 115,850-square meter parcel of land
situated in barrio Balasing, Sta. Maria, Bulacan. On 28 May 1954, they sold two (2) separate portions of the land for
P11,000.00 to the herein respondent Rosa Hernandez.

2. The portions were described in the deed of sale as follows:

Bahaguing nasa gawing Hilagaan. Humahanga sa Hilaga, kina Maria Perez, at Aurelio Perez; sa Timugan, sa
lupang kasanib; sa Silanganan, kay Mariano Flores at Emilio Ignacio; sa Kanluran, kay Cornelio Ignacio;
Mayroong (12,500), m.c. humigit kumulang.

Bahaguing nasa gawing Silanganan Humahanga sa Hilagaan, sa kay Rosa Hernandez; sa Silanganan, kay
Domingo Hernandez at Antonio Hernandez; sa Timugan, sa Sta. Maria-Tigbi Road; at sa Kanluran, sa lupang
kasanib (Jose Sta. Ana, Jr.), mayroong (26,500) metros cuadrados, humigit kumulang.

3. After the sale (there were two other previous sales to different vendees of other portions of the land), the petitioners
Santa Ana caused the preparation of a subdivision plan, Psd-43187, was approved on 13 January 1955 by the Director of
Lands.

4. Rosa Hernandez, however, unlike the previous vendees, did not conform to the plan and refused to execute an
agreement of subdivision and partition for registration with the Register of Deeds of Bulacan; and she, likewise, refused
to vacate the areas that she had occupied. Instead, she caused the preparation of a different subdivision plan, which was
approved by the Director of Lands on 24 February 1955. This plan, Psd-42844, tallied with the areas that the defendant,
Rosa Hernandez, had actually occupied.

5. On 28 February 1955, herein petitioners-spouses filed suit against respondent Rosa Hernandez in the Court of First
Instance of Bulacan, claiming that said defendant was occupying an excess of 17,000 square meters in area of what she
had bought from them.

6. Hernandez: the alleged excess was part of the areas that she bought.

7. TC: ordered the defendant Hernandez, among other things, to vacate "the excess portions actually occupied by her and
to confine her occupation only to Lots 4-a and 4-b as shown in the plan, of the plaintiffs . . .," referring to Psd-43187.

8. CA: dismissed the complaint and declared Rosa Hernandez the owner of lots 4-a and 4-b in her plan, Psd-42844
The contract between appellees and appellant provided for the sale of two separate portions of the same land for
the single consideration of P11,000.00.
Ignacio, notarial officer of the contract of sale, testified that appellant complained to him and the appellees to the
effect that the areas stated in the contract were less than the actual areas of the parcels of land being sold and
here we quote the notarial officer's own words:
"That the area stated in the document will not be the one to prevail but the one to prevail is
the boundary of the land which you already know."

Applied Article 1542 of the new Civil Code:

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or
number, there shall be no increase or decrease of the price, although there be greater or less area or number
than that stated in the contract.
The same rule shall be applied when two or more immovables are sold for a single price; but if, besides
mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number
should be designated in the contract, the vendor shall be bound to deliver all that is included within said
boundaries, even when it exceeds the area or number specified in the contract

Sta Ana: insist that the recited area should be taken as controlling. They combat the application of Article 1542 of the
Civil Code, on the ground that the boundaries given in the deed are indefinite
ISSUE: Whether or not the Court of Appeals committed a grave error of law when it held that the deed of sale was for a
lump sum, despite the fact that the boundaries given therein were not sufficiently certain and the boundaries indicated did
not clearly identify the land
HELD: NO
RATIO:
It is unquestionable that the sale made was of a definite and identified tract, a corpus certum, that obligated the vendors
to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller
than what is recited in the deed. And this is particularly true where, as in the case now before this Court, the area given is
qualified to be approximate only ("humigit kumulang")

To hold the buyer to no more than the area recited on the deed, it must be made clear therein that the sale was made by
unit of measure at a definite price for each unit.

If the defendant intended to buy by the meter be should have so stated in the contract

The ruling of the Supreme Court of Spain, in construing Article 1471 of the Spanish Civil Code (copied verbatim in our
Article 1542) is highly persuasive that as between the absence of a recital of a given price per unit of measurement, and
the specification of the total area sold, the former must prevail and determines the applicability of the norms concerning
sales for a lump sum.
DOCTRINE
Art. 1542. In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure
or number, there shall be no increase or decrease of the price, although there be a greater or less area or number
than that stated in the contract.

The same rule shall be applied when two or more immovables as sold for a single price; but if, besides mentioning
the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated
in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it
exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a
reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded
because the vendee does not accede to the failure to deliver what has been stipulated.

SEPARATE OPINION:
082 AZARRAGA v. GAY
G.R. No. L-29449; December 29, 1928
TOPIC: Constructive Delivery: Quality/ Quantity
PONENTE: Villamor, J.

FACTS:
1. By a public document, the plaintiff sold two parcels of lands to the defendant for the lump sum of P47,000,
payable in installments. The conditions of the payment were:
- P5,000 at the time of signing the contract Exhibit A;
- P20,000 upon delivery by the vendor to the purchaser of the Torrens title to the first parcel described in the
deed of sale,
- P10,000 upon delivery by the vendor to the purchaser of Torrens title to the second parcel; and -lastly the sum
of P12,000 one year after the delivery of the Torrens title to the second parcel.
2. The vendee paid P5,000 to the vendor when the contract was signed. The vendor delivered the Torrens title to the
first parcel to the vendee who, pursuant to the agreement, paid him P20,000.
3. In the month of March 1921, Torrens title to the second parcel was issued and forthwith delivered by the vendor to
the vendee who, however, failed to pay the P10,000 as agreed, neither did she pay the remaining P12,000 one year
after having received the Torrens title to the second parcel.
4. The plaintiff here claims the sum of P22,000, with legal interest from the month of April 1921 on the sum of
P10,000, and from April 1922 on the sum of P12,000, until full payment of the amounts claimed.
5. The defendant admits that she purchased the two parcels of land referred to by plaintiff, by virtue of the deed of
sale Exhibit A, but alleges in defense:
- That the plaintiff knowing that the second parcels of land he sold had an area of 60 hectares, by
misrepresentation lead the defendant to believe that said second parcel contained 98 hectares, and thus made it
appear in the deed of sale and induced the vendee to bind herself to pay the price of P47,000 for the two
parcels of land, which he represented contained an area of no less than 200 hectares, to which price the
defendant would not have bound herself had she known that the real area of the second parcel was 60 hectares,
and, consequently, she is entitled to a reduction in the price of the two parcels in proportion to the area lacking,
that is, that the price be reduced to P38,000;
- that the defendant, in addition to the amounts acknowledged by the plaintiff, had paid other sums amounting to
P4,000; and
- that the defendants never refused to pay the justly reduced price, but the plaintiff refused to receive the just
amount of the debt.
6. The plaintiff, replying to the amended answer, alleges that the contract of sale in question was made only for the
lump sum of P47,000, and not at the rate of so much per hectare, and that the defendant's claim for alleged
damages has prescribed.
7. TC: neither the plaintiff nor the defendant gave any importance to the area of the land in consenting to the contract
in question, and that there having been no fraud when the parties agreed to the lump sum for the two parcels of
land described in the deed.
8. Plaintiff's contention: the defendant has no right to ask for the reduction of price, whatever may be the area of the
two parcels of land sold her.
9. Defendant's contention: according to paragraph 2 of the same article of the Civil Code, she has a right to ask for a
reduction of the price due on the second parcel, in proportion to the area lacking.
10. Hence, the instant case.
ISSUES:
1. Whether or not the defendant was deceived by the plaintiff as to measure of the land.
2. Whether or not the defendant is entitled to the reduction from the price due on the second parcel as stated in the
contract of sale.
HELD:
1. No. The defendant went over the plaintiff's land and made her wn calculations as to the area of said two parcels
2. No.
RATIO:
ISSUE No. 1
The defendant went over the plaintiff's land and made her wn calculations as to the area of said two parcels. But this not
all. The plaintiff delivered to the defendant the documents covering the land he was trying to sell. As to the first parcel
there is no question whatever and the defendant's contention is limited solely to the actual area of the second parcel.

If, notwithstanding the fact that it appeared in Exhibit 4 that the area of the second parcel was, approximately, 70 hectares,
the defendant, however, stated in said document Exhibit A that said second parcel contained 98 hectares as was admitted
by him in his interviews with the plaintiff in the months of April and June, 1924, then she has no right to claim from the
plaintiff the shortage in area of the second parcel. Furthermore, there is no evidence of record that the plaintiff made
representatin to the defendant as to the area of said second parcel, and even if he did make such false representations as are
now imputed to him by the defendant, the latter accepted such representations at her own risk and she is the only one
responsible for the consqunces of her inexcusable credulousness.

The defendant had ample opportunity to appraise herself of the condition of the land which she purchased, and the plaintiff
did nothing to prevent her from making such investigation as she deemed fit, and as was said in Songco vs. Sellner, supra,
when the purchaser proceeds to make investigations by himself, and the vendor does nothing to prevent such investigation
from being as complete as the former might wish, the purchaser cannot later allege that the vendor made false
representations to him.

The same doctrine has been sustained by the courts of the United States in the following cases, among others:
Misrepresentation by a vendor of real property with reference to its area are not actionable, where a correct description of
the property was given in the deed and recorded chain of title, which the purchaser's agent undertook to investigate and
report upon, and the vendor made on effort to prevent a full investigation."

ISSUE No. 2
It appears that by the contract Exhibit A, the parties agreed to the sale of two parcels of land, the first one containing 102
hectares, 67 ares and 32 centares, and the second one containing about 98 hectares, for the lump sum of P47,000 payable
partly in cash and partly in installments. Said two parcels are defind by means of the boundaries given in the instrument.
Therefore, the case falls within the provision of article 1471 of the Civil Code, which reads as follows:
ART. 1471. In case of the sale of real estate for a lump sum and not at the rate of a specified price for each unit
of measure, there shall be no increase or decrease of the price even if the area be found to be more or less than that
stated in the contract.
The same rule shall apply when two or more estates are sold for a single price; but, if in addition to a statement of the
boundaries, which is indispensable in every conveyance of real estate, the area of the estate should be designated in the
contract, the vendor shall be obliged to deliver all that is included with such boundaries, even should it exceed the area
specified in the contract; and, should he not be able to do so, he shall suffer a reduction of the price in proportion to what is
lacking of the area, unless the contract be annulled by reason of the vendee's refusal to accept anything other than that
which was stipulated.

Quoting Manresa: In the delivery of a determinate object, says the author, two cases may arise; either the determinate
object is delivered as stipulated, that is, delivering everything included within the boundaries, inasmuch as it is the entirety
thereof that distinguishes the determinate object; or that such entirely is impaired in the delivery by failing to deliver to the
purchaser something included within the boundaries. For the first case, Manresa gives the following rule: "Whether or not
the object of the sale be one realty for a lump sum, or two or more for a single price also a lump sum, and, consequently,
not for so much per unit of measure or number, there shall be no increase or decrease in the price ecven if the area be
found to be more or less than that stated in the contract." And for the second case, this other: "Whether or not the object of
the sale one realty for a lump sum, or two or more for a single price also a lump sum, and, consequently, not at the rate a
specified price for each unit of measure or number, the vendor shall be bnound to deliver everything that is included within
the boundaries stated, although it may exceed the area or number expressed in the contract; in case he cannot deliver it, the
purchaser shall have the right either to reduce the price proportionately to what is lacking of the area or number, or to
rescind the contract, at his option."

Considering the facts of the present controversy, it seems clear to us that the rule formulated for the second paragraph or
article 1471 is inapplicable in the instant case inasmuch as all the land included within the boundaries of the two parcels
sold has been delivered inits entirety to the vendee. There is no division of the land enclosed within the boundaries of the
properties sold; the determinate object which is the subject matter of the contract has been delivered by the vendor in its
entirety as he obligate himself to do. Therefore, there is no right to complain either on the part of the vendor, even if there
be a greater area than that stated in the deed, or on the part of the vendee, though the area of the second parcel be really
much smaller. (Irureta Goyena vs. Tambunting, 1 Phil., 490.)
084 BEHN, MEYER & CO. (LTD.) v. YANCO Author: Jade
G.R. No. 13203 September 18, 1918 Notes:
Topic:
Ponente: MALCOLM, J.
FACTS:

A memorandum of agreement was executed by duly authorized representatives of the parties on March 7, 1916.

The contract was for 80 drums of caustic soda, 76 per cent "Carabao" brand, at the price of $9.75 per one hundred
pounds, cost, insurance, and freight included, to be shipped during March, 1916, to be delivered to Manila and paid for
on delivery of the documents.

The drums of soda was shipped from New York on the steamship Chinese Prince. The steamship was detained in Penang
by the British authorities. Part of the cargo, including 71 drums of the soda was removed.

Yanco refused to accept the delivery of the remaining 9 drums of soda on the ground that the goods were in bad order.
Yanco also refused to accept the optional offer of Behn, Meyer & Co 1. To wait for the remainder of the shipment to
arrive or 2. To accept a substitute 71 drums of caustic soda of similar grade from plaintiffs stock

ISSUE: Whether or not Yanco is liable for not accepting the delivery of the caustic soda or accepting the optional offer
of Behn, Meyer & Co

HELD: There is sufficient ground for rescission of contract. Yanco is not liable.
RATIO:

Behn, Meyer & Co was not proven to have performed its part of the conditions precedent in its contract with Yanco. The
material promise of the seller to the buyer was not complied with. If this is the case, the buyer may resort to rescission of
the contract of sale because of a breach in substantial particulars essential to the contract.

According to article 1451 of the Civil Code, the vendee can demand fulfillment of the contract, and this being shown
impossible, obligation is relieved.

DOCTRINE

SEPARATE OPINION:
085 Bislig Bay Lumber Co. v. CIR, Author: Loren Vicedo
1 SCRA 156, January 28,1961 Notes:
Topic: Place of Delivery; Ownership
Logs sold to buyers in Japan; Sales tax case
Ponente: Padilla, J.
FACTS:

1. The Collector of Internal Revenue assessed Bislig Bay Lumber deficiency sales tax for the following:
a) sales of logs to buyers in Japan from 14 June 1951 to 19 June 1953
b) sales of lumber to buyers in Manila and Cebu from Q1 1951 to Q4 1954
2. Bislig Bay Lumber requested reconsideration of the assessment on the ground that with respect to the
logs sold to buyers in Japan, the title to the logs passed outside of the Philippines, hence such sales were
not subject to tax.
3. The CIR denied the request.
4. Bislig Bay lumber then filed a petition for review in the Court of Tax Appeals.
5. CTA affirmed the assessment on the deficiency sales tax on sale of logs to buyers in Japan. It found that
the transfer of ownership happened in Manila since the logs were shipped F.O.B. or C.&I.

ISSUE: Did delivery of the logs to buyers in Japan take place in Manila under F.O.B. (free on board)
shipping terms?

HELD: YES.

- Freight was paid by the buyers, thus, transfer of ownership took place in Manila.
- The fact that the buyers do not have representatives in the Philippines and that all the shipping
documents were relating to exports do not necessarily prove that title to the logs passed into the
buyers in Japan and not in the Philippines, thereby exempting Bislig Bay lumber from the payment of
sales tax.
- Decision affirmed.
- Where the logs were shipped F.O.B. Bislig, Surigao to the buyer in Japan, and the bill of lading was
endorsed in blank by the seller and presented for collection to a local bank, with whom a letter of credit
for the price was opened by the buyer, the Court held that the place of delivery was in the Philippines
(Cited in Baviera Book)

RATIO:

- Ownership of the logs passed in the Philippines from the seller to the foreign buyers because the
freight charges were paid by the buyers, the shipments were insured by the buyers, and the bills of
lading and other shipping documents were indorsed in blank by the seller and presented for collection
to a local bank where the foreign buyers opened irrevocable letters of credit.
- SC upheld the legality of the assessments for sales tax in two similar cases:
a) Misamis Lumber vs CIR: Misamis Lumber shipped lumber and logs for export on board
foreign merchant vessels purchased by foreign buyers established abroad. Shipment was
F.O.B., Misamis Lumber defraying all expenses incurred from the sawmills to the loading on
board the vesses; the buyers paying in Manila all freight, insurance charges, and price.
b) Western Mindanao Lumber vs CTA: Facts were similar to Misamis Lumber but loading was
made in corresponding invoices and bulls of lading to the local banks where the buyers had
opened letters of credit, after the various shipments had been made.

DOCTRINE

o If the buyer pays the freight, it is reasonable to suppose that he does so because the goods became
his at the point of shipment. F.O.B. which means free on board and the seller bears the expenses of
transportation up to the F.O.B. point.
o The best indication of the intention of the parties as to the place of delivery of the goods to the buyer is
the manner and place of payment of the price agreed upon by the parties. Where the price is payable
upon the proof of shipment of the goods, then the buyer agrees to accept delivery at the point of
shipment.
86 REPUBLIC vs. LITTON & CO.
94 PHIL 52, November 28, 1953
Topic:
Ponente: PARAS, CJ
FACTS:
7. Defendants are the partnership Litton &Co, and George Litton. They sell office supplies from the United States.
8. The defendants were contracted to supply (1) Padlocks and (2) office supplies for the upcoming April 23, 1946
elections.
9. They were tasked to deliver all of the above by April 8.
10. Their contract with the Republic included a stipulation that The stipulated delivery period shall not be exceeded.
11. The items were insured by Central Surety Co. with bonds.
12. The defendants notified the Republic through mail that it is understood that the government will give a letter
certifying that the padlocks are urgently needed and that the export license can be secured without delay.
13. The defendants did not deliver everything on time.
14. The defendants asked for an extension which was granted, but nevertheless, they still failed to deliver the items on
time.
15. The Republic was forced to buy the remaining equipment from another supplier at a higher cost because they still
lacked some supplies for the elections. It is now filing a case of damages against the defendants for their failure to
deliver the goods on time for the elections.
16. The defendants claim they are not liable because it was necessary for the republic to furnish the export license
in order to quicken the delivery of the items to meet the date.

Issue: Whether or not it is a condition precedent for the Republic to first provide the export license before the
defendants could meet the strict deadline they had agreed upon?

Held: No, the intent of the contract, was to furnish the demanded supplies before the elections, regardless if there was an
export license or not (which was strictly provided for in the contracts stipulation

Ruling:

1. The contract has a section called Important Conditions, which carries the stipulation that The stipulated
delivery period shall not be exceeded. This makes defendants liable in all eventualities.
2. The letter wrote by the defendants only shows that they merely expected the Republic to give a certification. It
was never considered a condition precedent.
3. Although the Republic granted some effort in granting the U.S. authorities of the necessary export
088 Philippine Manufacturing Co. v. Go Jocco Author: Danna
48 Phil 621, 21 January 1926 Notes:
Topic: Warranties http://www.lawphil.net/judjuris/juri1926/jan1926/gr_l-
Ponente: Ostrand, J. 24256_1926.html
FACTS:
16. A contract was entered into by Plaintiff and Defendant regarding the sale of coconut oil.
Aside from a stipulation that aside from the stipulation that not more than 5% of free fatty acid would be
allowed, it contained no express warranty against impurities.
17. 15 Nov 1922 - The oil purchased was stored in Defendant's tanks. It was analyzed by a chemist who attested that
the oil was in conformity with the terms of the contract.
18. 17 Nov 1922 - Plaintiff sold the oil by contract in writing to the Portsmouth Cotton Oil Refining Corporation
(Portsmouth).
19. 27 Nov 1922 - The oil was drawn from the tanks by Plaintiff. It was brought aboard a tank steamer for shipment
to Portsmouth together with other oil manufactured by Plaintiff and by the Philippine Vegetable Oil Company.
20. Upon its arrival, Portsmouth refused to accept the oil because it was allegedly contaminated with cottonseed oil.
21. In accordance with their contract, the matter was submitted for arbitration. Samples of the shipment were tested
and were found to be contaminated with cottonseed oil.
22. During the proceedings, it was mentioned by Plaintiffs VP/Treasurer that the oil was sold to Proctor & Gamble
Co. Unlike the Contract of Sale between Plaintiff and Defendant, theirs contained an express warranty against
impurities.
23. 27 Dec 1923 - Plaintiff brought the present action asking for damages.
Defendant answered with a general denial and set up as special defenses that under the provisions of
paragraph 1 of article 336 of the Code of Commerce, Plaintiff had no right of action having examined
the oil at the time of its delivery; that conceding without admitting that the oil was defective in quality,
Plaintiff had lost its right of action by failing to make its claim within 30 days immediately following the
delivery.
ISSUE: Whether or not the action filed may based on an express or on an implied warranty

HELD: No, it may not be based on either. There was no express guaranty against impurities in their contract. An implied
warranty cant be inferred either because Plaintiff had examined the oil.
RATIO & DOCTRINE:
23. The Court found that Plaintiff had not sufficiently proved that the oil bought from Defendant was contaminated
by an admixture of kapok oil. And even assuming that it existed, Court still found that Plaintiff had no cause of
action.
24. The comparatively small quantity of kapok oil alleged to have been mixed with the coconut oil can only be
regarded as an impurity and did not change the essential character of the merchandise; this is sufficiently shown
by the fact that it, after analysis, was sold by the plaintiff to Proctor & Gamble Co. as "Manila Coconut Oil" and
at the current New York price for that article. In contradistinction to the contract between Plaintiff and the
Portsmouth, the contract of sale between Plaintiff and Defendant contains no express warranty against
impurities aside from the stipulation that not more than 5 per cent of free fatty acid would be allowed.
This is, therefore, not an action on an express warranty.
25. In the absence of an examination of the oil by Plaintiff, the latter might have had a right of action on an implied
warranty under Article 336 of the Code of Commerce, which in part reads as follows: A purchaser who, at the
time of receiving the merchandise, fully examines the same, shall not have a right of action against the vendor,
alleging a defect in the quantity or quality of the merchandise. As it appears that Plaintiff examined the oil to
his satisfaction, it is evident that he cannot now rely on this article for his cause of action.
26. The result will be the same if we regard impurity complained of as a latent defect which could not be discovered
by an ordinary examination. The case would then come under Article 342 of the Code of Commerce, but the
right of action mentioned in that article was extinguished by the failure of Plaintiff to present his claim
within 30 days from the delivery of the merchandise
27. Defendant was not advised of the fact that the oil was sold to Portsmouth under an express warranty against
impurities and possibly for a special purpose.
28. That it was still of good merchantable quality clearly appears from the fact that it was bought by Proctor &
Gamble Co. at current market prices.
29. NO FRAUD (Art 334) EITHER because of the absence of an intention to deceive or mislead the other party.
089 JAIME GUINHAWA v. PEOPLE OF THE Author: Loi La Chica
PHILIPPINES Notes:
G.R. No. 162822 August 25, 2005 http://sc.judiciary.gov.ph/jurisprudence/2005/aug2005/162822.htm
Topic: Rights and Obligation of the Vendor;
Warranties
Ponente: CALLEJO, SR., J.:
FACTS:
1. Jaime Guinhawa was engaged in the business of selling brand new motor vehicles, including Mitsubishi vans, under
the business name of Guinrox Motor Sales. His office and display room for cars were located along Panganiban Avenue,
Naga City. He employed Gil Azotea as his sales manager.
2. March 17, 1995 - Guinhawa purchased a brand new Mitsubishi L-300 Versa Van from the Union Motors Corporation
(UMC) in Paco, Manila. Plate No. DLK 406. Color: beige.
3. Guinhawas driver, Leopoldo Olayan, drove the van from Manila to Naga City but along the way suffered a heart
attack.
4. The van went out of control, traversed the highway onto the opposite lane, and was ditched into the canal parallel to
the highway. The van was damaged, and the left front tire had to be replaced.
5. The incident was reported to the local police authorities and was recorded in the police blotter.
6. The van was repaired and later offered for sale in Guinhawas showroom.
7. October 1995 - spouses Ralph and Josephine Silo wanted to buy a new van for their garment business; they purchased
items in Manila and sold them in Naga City.
8. Sps went to Guinhawas office, and were shown the L-300 Versa Van which was on display. The couple inspected its
interior portion and found it beautiful. They no longer inspected the under chassis since they presumed that the vehicle
was brand new.
9. Unaware that the van had been damaged and repaired on account of the accident in Daet, the couple decided to
purchase the van for P591,000.00.
10. Azotea suggested that the couple make a downpayment ofP118,200.00, and pay the balance of the purchase price by
installments via a loan from UCPB Naga Branch, with the L-300 Versa Van as collateral.
11. Promisory notes were issued and a Deed of Sale was executed and the couple paid the P161,470.00 dp. They were
furnished a Service Manual which contained the warranty terms and conditions. Azotea instructed the couple on how to
start the van and to operate its radio.
12. Ralph Silo no longer conducted a test drive; he and his wife assumed that there were no defects in the van as it was
brand new.
13. Oct 15/16, 1995 - On a return trip to Naga from Manila driver Bayani Pingol heard a squeaking sound which seemed
to be coming from underneath the van. They were in Calauag, Quezon, where there were no humps along the
road. Pingol drove the van to Naga City, the squeaking sound persisted. Believing that the van merely needed grease,
Pingol stopped at a Shell gasoline station where it was examined. The mechanic discovered that some parts underneath
the van had been welded.
16. When Pingol complained to Guinhawa, the latter told him that the defects were mere factory defects. As the defects
persisted, the spouses Silo requested that Guinhawa change the van with two Charade-Daihatsu vehicles within a week
or two, with the additional costs to be taken from their DP.
17. The couple stopped paying the monthly amortization on their loan, pending the replacement of the van. Guinhawa
initially agreed to the couples proposal, but later changed his mind and told them that he had to sell the van first.
18. The spouses then brought the vehicle to the Rx Auto Clinic in Naga City for examination. Jesus Rex Raquitico, Jr.,
the mechanic, examined the van and discovered that it was the left front stabilizer that was producing the annoying
sound, and that it had been repaired.
19. Josephine Silo filed a complaint for the rescission of the sale and the refund of their money before the Department of
Trade and Industry (DTI). During the confrontation between her and Guinhawa, Josephine learned that Guinhawa had
bought the van from UMC before it was sold to them, and after it was damaged in Daet. Subsequently, the spouses Silo
withdrew their complaint from the DTI.
20. February 14, 1996 - Josephine Silo filed a criminal complaint for violation of paragraph 1, Article 318 of the RPC
against Guinhawa in the Office of the City Prosecutor of Naga City.
21: MTC: Convicted Guinhawa. Guinhawa made false pretenses or misrepresentations that the van was a brand new one.
Guilty of the crime of Other Deceits defined and penalized under Art. 318(1) of the Revised Penal Code. Imposed
penalty of imprisonment from 2 months and 1 day to 4 months of Arresto Mayor and a fine of P180,711.00 the total
amount of the actual damages caused to private complainant.
Civil aspect was deemed instituted with this criminal case, the Civil Code (contracts/quasi-contracts and
in crimes/quasi-delicts) and awarded:
- Php180,711.00 represents the 20% downpayment and other miscellaneous expenses paid by the
complainant plus the amount of Php19,241.00, representing the 1st installment payment made by the
private complainant to the bank
 - Moral damanges Php100,000 - of the moral pain suffered
- Exemplary damages Php200,000 as deterrent for those businessmen similarly inclined to take undue
advantage over the publics innocence
- Attorneys fees Php100,000
22. RTC: Affirmed the appealed judgment
23. CA: Affirmed with modification RTC. Sps Silo had the right to assume that the van was brand new because
Guinhawa held himself out as a dealer of brand new vans. The act of displaying the van in the showroom without notice
to any would-be buyer that it was not a brand new unit was tantamount to deceit.
a) moral damages is hereby REDUCED to P10,000.00
b) attorneys fees and exemplary damages are hereby DELETED for lack of factual basis
MR: denied
ISSUE
(1) Whether, under the Information, the petitioner was charged of other deceits under paragraph 1, Article 318 of the
Revised Penal Code
(2) Whether the respondent adduced proof beyond reasonable doubt of the petitioners guilt for the crime charged.

HELD
Petition is DENIED. The assailed Decision and Resolution are AFFIRMED WITH MODIFICATION.
6 months imprisonment. Guinhawa suffers subsidiary imprisonment in case of insolvency.
RATIO:
1. The false or fraudulent representation by a seller that what he offers for sale is brand new (when, in fact, it is not) is
one of those deceitful acts envisaged in paragraph 1, Article 318 of the Revised Penal Code. The provision reads:
Art. 318. Other deceits. The penalty of arresto mayor and a fine of not less than the amount of the damage
caused and not more than twice such amount shall be imposed upon any person who shall defraud or damage
another by any other deceit not mentioned in the preceding articles of this chapter. (taken from Article 554 of the
Spanish Penal Code)
Other deceits essential elements:
(a) false pretense, fraudulent act or pretense other than those in the preceding articles;
(b) such false pretense, fraudulent act or pretense must be made or executed prior to or simultaneously
with the commission of the fraud; and
(c) as a result, the offended party suffered damage or prejudice. It is essential that such false statement or
fraudulent representation constitutes the very cause or the only motive for the private complainant to part
with her property.
2. Petitioners reliance on paragraph 2(a), Article 315 of the Revised Penal Code is misplaced.
Jurisdiction is conferred by the Constitution or by law. It cannot be conferred by the will of the parties, nor
diminished or waived by them. The jurisdiction of the court is determined by the averments of the complaint or
Information, in relation to the law prevailing at the time of the filing of the criminal complaint or Information, and the
penalty provided by law for the crime charged at the time of its commission.
3. Section 32 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, provides that the MTC has exclusive
jurisdiction over offenses punishable with imprisonment not exceeding 6 years, irrespective of the amount of the fine.
Since the felony of other deceits is punishable by arresto mayor, the MTC had exclusive jurisdiction over the offense
lodged against the petitioner.
4. Azoteas representation may be in the form of words, or conduct resorted to by an individual to serve as an advantage
over another. It has thus become admitted that the petitioner was dealing with brand new vehicles a fact which, up to
now, petitioner has not categorically denied. It was accentuated by the fact that the petitioner gave the Service Manual to
the private complainant, which manual contained the warranty terms and conditions, signifying that the van was brand
new.
5. Concealment which the law denounces as fraudulent implies a purpose or design to hide facts which the other party
sought to know. Failure to reveal a fact which the seller is, in good faith, bound to disclose may generally be classified
as a deceptive act due to its inherent capacity to deceive. Suppression of a material fact which a party is bound in good
faith to disclose is equivalent to a false representation. Moreover, a representation is not confined to words or positive
assertions; it may consist as well of deeds, acts or artifacts of a nature calculated to mislead another and thus allow the
fraud-feasor to obtain an undue advantage.
6. Article 1389 of the New Civil Code provides that failure to disclose facts when there is a duty to reveal them
constitutes fraud. Deceit is accomplished by the suppression of the truth.
7. The seller cannot be heard to say that the vendee should not have relied upon the fraudulent concealment; that
negligence, on the part of the vendee, should not be a defense in order to prevent the vendor from unjustifiably escaping
with the fruits of the fraud.
8. The maximum term of imprisonment imposed on the petitioner was four months and one day of arresto
mayor. Hence, the MTC was proscribed from imposing an indeterminate penalty on the petitioner. An indeterminate
penalty may be imposed if the minimum of the penalty is one year or less, and the maximum exceeds one year. A
straight penalty of imprisonment of six months is reasonable.
9. Conformably with Article 39 in relation to paragraph 3, Article 38 of the RPC, the petitioner shall suffer subsidiary
imprisonment if he has no property with which to pay the penalty of fine.
DOCTRINE
Deceit is the false representation of a matter of fact whether by words or conduct by false or misleading allegations or by
concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall
act upon it to his legal injury. Concealment which the law denotes as fraudulent implies a purpose or design to hide facts
which the other party ought to have.
090 Power Commercial and Industrial Corp. v. Author: Pat
CA, supra Notes:
GR 119745, June 20, 1997 http://sc.judiciary.gov.ph/jurisprudence/1997/jun1997/119745.htm
Topic: Implied warranties; warranty against
eviction
Ponente: Panganiban, J.
FACTS:
51. Petitioner Power Commercial & Industrial Development Corporation (PowerCom), an industrial asbestos
manufacturer, needed a bigger office space and warehouse for its products.
52. January 31, 1979: Petitioner PowerCom entered into a contract of sale with the respondent spouses Reynaldo and
Angelita R. Quiambaoinvolving a 612-sq. m. parcel of land in San Antonio Village, Makati City
53. The parties agreed that petitioner PowerCom would pay private respondents spouses Quiambao P108,000.00 as
down payment, and the balance of P295,000.00 upon the execution of the deed of transfer of the title. Further,
petitioner assumed, as part of the purchase price, the existing mortgage on the land. In full satisfaction thereof, he
paid P79,145.77 to respondent PNB
54. June 1, 1979: respondent spouses mortgaged again said land to PNB to guarantee a loan of P145,000.00
P80,000.00 of which was paid to respondent spouses. Petitioner PowerCom agreed to assume payment of the loan.
55. June 26, 1979: the parties executed a Deed of Absolute Sale With Assumption of Mortgage. On the same date,
Mrs. C.D. Constantino, then General Manager of PowerCom, submitted to PNB said deed with a formal application
for assumption of mortgage
56. February 15, 1980: PNB informed respondent spouses that, for petitioners failure to submit the papers necessary for
approval pursuant to the formers letter dated January 15, 1980, the application for assumption of mortgage was
considered withdrawn; that the outstanding balance of P145,000.00 was deemed fully due and demandable; and that
said loan was to be paid in full within fifteen (15) days from notice
57. Petitioner PowerCom paid PNB P41,880.45 on June 24, 1980 and P20,283.14 on December 23, 1980, payments
which were to be applied to the outstanding loan.
58. On March 17, 1982, petitioner filed Civil Case No. 45217 against respondent spouses for rescission and damages
59. Petitioner demanded the return of the payments it made on the ground that its assumption of mortgage was never
approved
60. May 31, 1983: while this case was pending, the mortgage was foreclosed. The property was subsequently bought by
PNB during the public auction
61. TC: ruled that the failure of respondent spouses to deliver actual possession to petitioner entitled the latter to rescind
the sale, and in view of such failure and of the denial of the latters assumption of mortgage, PNB was obliged to
return the payments made by the latter
62. CA: reversed the trial court. it held that the deed of sale between respondent spouses and petitioner did not obligate
the former to eject the lessees from the land in question as a condition of the sale, nor was the occupation thereof by
said lessees a violation of the warranty against eviction. Hence, there was no substantial breach to justify the
rescission of said contract or the return of the payments made
63. Petitioner contends:
there was a substantial breach of the contract between the parties warranting rescission
CA gravely erred in failing to consider in its decision that a breach of implied warranty under Article 1547 in
relation to Article 1545 of the Civil Code applies in the case-at-bar.
ISSUE:
1. WON the alleged failure of respondent spouses to eject the lessees from the lot in question and to deliver
actual and physical possession can be considered a substantial breach of condition
2. WON there was a substantial breach of the contract between the parties warranting rescission
HELD:
1. No.
2. No. It is petitioners failure to establish any breach of the warranty against eviction. Despite its protestation that
its acquisition of the lot was to enable it to set up a warehouse for its asbestos products and that failure to deliver
actual possession thereof defeated this purpose, still no breach of warranty against eviction can be appreciated
because the facts of the case do not show that the requisites for such breach have been satisfied.
RATIO:

The deed of sale provides: We hereby also warrant that we are the lawful and absolute owners of the above described
property, free from any lien and/or encumbrance, and we hereby agree and warrant to defend its title and peaceful
possession thereof in favor of the said Power Commercial and Industrial Development Corporation, its successors and
assigns, against any claims whatsoever of any and all third persons; subject, however, to the provisions hereunder
provided to wit:
1. The alleged failure of respondent spouses to eject the lessees from the lot in question and to deliver actual and
physical possession thereof cannot be considered a substantial breach of a condition for two reasons: first, such
failure was not stipulated as a condition -- whether resolutory or suspensive -- in the contract; and second, its
effects and consequences were not specified either. The provision adverted to by petitioner does not impose a
condition or an obligation to eject the lessees from the lot

If the parties intended to impose on respondent spouses the obligation to eject the tenants from the lot sold, it should
have included in the contract a provision similar to that referred to in Romero vs. Court of Appeals, where the
ejectment of the occupants of the lot sold by private respondent was the operative act which set into motion the
period of petitioners compliance with his own obligation, i.e., to pay the balance of the purchase price. In the case
cited, the contract specifically stipulated that the ejectment was a condition to be fulfilled; otherwise, the obligation
to pay the balance would not arise. This is not so in the case at bar.

Absent a stipulation therefor, we cannot say that the parties intended to make its nonfulfillment a ground for
rescission. If they did intend this, their contract should have expressly stipulated so.

2. Requisites of Breach of Warranty Against Eviction: A breach of this warranty requires the concurrence of the
following circumstances:
(a) The purchaser has been deprived of the whole or part of the thing sold;
(b) This eviction is by a final judgment;
(c) The basis thereof is by virtue of a right prior to the sale made by the vendor; and
(d) The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee.

In the absence of these requisites, a breach of the warranty against eviction under Article 1547 cannot be
declared.

As correctly pointed out by CA, the presence of lessees does not constitute an encumbrance of the land, nor does it
deprive petitioner of its control thereof.

We note, however, that petitioners deprivation of ownership and control finally occurred when it failed and/or
discontinued paying the amortizations on the mortgage, causing the lot to be foreclosed and sold at public auction. But
this deprivation is due to petitioners fault, and not to any act attributable to the vendor-spouses.

DOCTRINE
Requisites of Breach of Warranty Against Eviction: A breach of this warranty requires the concurrence of the following
circumstances:
(a) The purchaser has been deprived of the whole or part of the thing sold;
(b) This eviction is by a final judgment;
(c) The basis thereof is by virtue of a right prior to the sale made by the vendor; and
(d) The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee.