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Philippine Supreme Court Jurisprudence > Year 1992 > September 1992 Decisions > G.R. No. 92310 September
3, 1992 - AGRICULTURAL AND HOME EXTENSION DEVELOPMENT GROUP v. COURT OF APPEALS, ET AL.:
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SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; SALE; RULE IN CASE OF DOUBLE SALE; APPLICATION IN CASE AT
BAR. — Under Article 1544 of the Civil Code of the Philippines: Art. 1544. If the same thing should have
been sold to different vendees, the ownership shall be transferred to the person who may have first
taken possession thereof in good faith, if it should be movable property. Should it be immovable property,
the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of
Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided
there is good faith. It is not disputed that the first sale to Gundran was not registered while the second
sale to Cabautan was registered. Following the above-quoted provision, the courts below were justified in
according preferential rights to the private respondent, who had registered the sale in his favor, as
against the petitioner’s co-venturer whose right to the same property had not been recorded.
DebtKollect Company, Inc. 2. ID.; ID.; ID.; PURCHASER IN GOOD FAITH; DEFINED. — A purchaser in good faith is defined as "one
who buys the property of another without notice that some other person has a right to or interest in such
property and pays a full and fair price for the same at the time of such purchase or before he has notice
of the claim or interest of some other person in the property." cralaw virtua1aw library
3. ID.; ID.; ID.; ID.; SALE OF PROPERTY REGISTERED UNDER THE TORRENS SYSTEM; EFFECT OF
NOTICE OF LIS PENDENS ANNOTATED ON THE CERTIFICATE. — The petitioner claims, however, that
Cabautan was a purchaser in bad faith because he was fully aware of the notices of lis pendens at the
back of TCT No. 287416 and of the earlier sale of the land to Gundran. An examination of TCT No.
287416 discloses no annotation of any sale, lien, encumbrance or adverse claim in favor of Gundran or
the petitioner. Well-settled is the rule that when the property sold is registered under the Torrens system,
registration is the operative act to convey or affect the land insofar as third persons are concerned. Thus,
a person dealing with registered land is only charged with notice of the burdens on the property which
are noted on the register or certificate of title. While it is true that notices of lis pendens in favor of other
persons were earlier inscribed on the title, these did not have the effect of establishing a lien or
encumbrance on the property affected. Their only purpose was to give notice to third persons and to the
whole world that any interest they might acquire in the property pending litigation would be subject to
the result of the suit.
DECISION
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ChanRobles Intellectual Property
Division CRUZ, J.:
We are asked again to determine who as between two successive purchasers of the same land should be
recognized as its owner. The answer is simple enough. But we must first, as usual, plow through some
alleged complications.
The pertinent background facts are as follows: chanrob1es virtual 1aw library
On March 29, 1972, the spouses Andres Diaz and Josefa Mia sold to Bruno Gundran a 19-hectare parcel
of land in Las Piñas, Rizal, covered by TCT No. 287416. The owner’s duplicate copy of the title was turned
over to Gundran. However, he did not register the Deed of Absolute Sale because he said he was advised
in the Office of the Register of Deeds of Pasig of the existence of notices of lis pendens on the title. chanrobles law library
On November 20, 1972, Gundran and the herein petitioner, Agricultural and Home Development Group,
entered into a Joint Venture Agreement for the improvement and subdivision of the land. This agreement
was also not annotated on the title.
On August 30, 1976, the spouses Andres Diaz and Josefa Mia again entered into another contract of sale
of the same property with Librado Cabautan, the herein private Respondent.
On September 3, 1976, by virtue of an order of the Court of First Instance of Rizal, a new owner’s copy
of the certificate of title was issued to the Diaz spouses, who had alleged the loss of their copy. On that
same date, the notices of lis pendens annotated on TCT No. 287416 were canceled and the Deed of Sale
in favor of private respondent Cabautan was recorded. A new TCT No. S-33850/T-172 was thereupon
issued in his name in lieu of the canceled TCT No. 287416.
On March 14, 1977, Gundran instituted an action for reconveyance before the Court of First Instance of
Pasay City * against Librado Cabautan and Josefa Mia seeking, among others, the cancellation of TCT No.
33850/T-172 and the issuance of a new certificate of title in his name.
On August 31, 1977, the petitioner, represented by Nicasio D. Sanchez, Sr., filed a complaint in
intervention with substantially the same allegations and prayers as that in Gundran’s complaint.
In a decision dated January 12, 1987, 1 Gundran’s complaint and petitioner’s complaint in intervention
were dismissed for lack of merit. So was the private respondent’s counterclaims, for insufficiency of
evidence.
September-1992 Upon appeal, this decision was affirmed by the respondent Court of Appeals, with the modification that
Josefa Mia was ordered to pay Gundran the sum of P90,000.00, with legal interest from September 3,
Jurisprudence 1976, plus the costs of suit. 2
A.M. No. RTJ-88-22 September 1, 1992 - JOEL Under Article 1544 of the Civil Code of the Philippines: chanrob1es virtual 1aw library
G.R. No. 32657 September 1, 1992 - PEOPLE OF Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith
THE PHIL. v. JOSE S. RODRIGUEZ, ET AL. first recorded it in the Registry of Property.
G.R. Nos. 70746-47 September 1, 1992 - Should there be no inscription, the ownership shall pertain to the person who in good faith was first in
BIENVENIDO O. MARCOS v. FERNANDO S. RUIZ, ET the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
AL.
good faith.
G.R. No. 86051 September 1, 1992 - JAIME
LEDESMA v. COURT OF APPEALS, ET AL. It is not disputed that the first sale to Gundran was not registered while the second sale to Cabautan was
registered.
G.R. No. 86844 September 1, 1992 - SPOUSES
CESAR DE RAMOS, ET AL. v. COURT OF APPEALS, ET Following the above-quoted provision, the courts below were justified in according preferential rights to
AL. the private respondent, who had registered the sale in his favor, as against the petitioner’s co-venturer
whose right to the same property had not been recorded.
A.M. No. 92-8-027-SC September 2, 1992 - RE:
JOSEFINA V. PALON The petitioner claims, however, that Cabautan was a purchaser in bad faith because he was fully aware of
the notices of lis pendens at the back of TCT No. 287416 and of the earlier sale of the land to Gundran.
G.R. No. 43747 September 2, 1992 - REPUBLIC OF
chanrobles virtual
ET AL.
A purchaser in good faith is defined as "one who buys the property of another without notice that some
G.R. No. 46025 September 2, 1992 - FLORITA T. other person has a right to or interest in such property and pays a full and fair price for the same at the
BAUTISTA v. COURT OF APPEALS, ET AL. time of such purchase or before he has notice of the claim or interest of some other person in the
property." 3
G.R. No. 50618 September 2, 1992 - LEOPOLDO
FACINAL, ET AL. v. AGAPITO I. CRUZ, ET AL. An examination of TCT No. 287416 discloses no annotation of any sale, lien, encumbrance or adverse
claim in favor of Gundran or the petitioner. Well-settled is the rule that when the property sold is
G.R. No. 51289 September 2, 1992 - RODOLFO registered under the Torrens system, registration is the operative act to convey or affect the land insofar
ENCARNACION v. DYNASTY AMUSEMENT CENTER as third persons are concerned. 4 Thus, a person dealing with registered land is only charged with notice
CORPORATION, ET AL. of the burdens on the property which are noted on the register or certificate of title. 5
G.R. No. 56865 September 2, 1992 - IRENEO
While it is true that notices of lis pendens in favor of other persons were earlier inscribed on the title,
TOBIAS, ET AL. v. TEMISTOCLES B. DIEZ
these did not have the effect of establishing a lien or encumbrance on the property affected. Their only
G.R. No. 61043 September 2, 1992 - DELTA MOTOR purpose was to give notice to third persons and to the whole world that any interest they might acquire
SALES CORPORATION v. NIU KIM DUAN, ET AL. in the property pending litigation would be subject to the result of the suit.
G.R. Nos. 62554-55 September 2, 1992 - REPUBLIC Cabautan took this risk. Significantly, three days after the execution of the deed of sale in his favor, the
BANK v. COURT OF TAX APPEALS, ET AL. notices of lis pendens were canceled by virtue of the orders of the Court of First Instance of Rizal, Branch
23, dated April 1, 1974, and April 4, 1974. Cabautan therefore acquired the land free of any liens or
G.R. No. 70120 September 2, 1992 - CIVIL encumbrances and so could claim to be a purchaser in good faith and for value.
AERONAUTICS ADMINISTRATION, ET AL. v.
INTERMEDIATE APPELLATE COURT, ET AL. The petitioner insists that it was already in possession of the disputed property when Cabautan
purchased it and that he could not have not known of that possession. Such knowledge should belie his
G.R. No. 73198 September 2, 1992 - PRIVATE
claim that he was an innocent purchaser for value. However, the courts below found no evidence of the
DEVELOPMENT CORPORATION OF THE PHIL. v.
INTERMEDIATE APPELLATE COURT, ET AL.
alleged possession, which we must also reject in deference to this factual finding. chanrobles virtual lawlibrary
G.R. No. 74618 September 2, 1992 - ANA LIM The petitioner’s reliance on Casis v. Court of Appeals 6 is misplaced.
KALAW v. INTERMEDIATE APPELLATE COURT, ET AL.
The issue at bar is whether private respondent Cabautan is an innocent purchaser for value and so
G.R. No. 75242 September 2, 1992 - MANILA entitled to the priority granted under Article 1544 of the Civil Code. The Casis case, on the other hand,
RESOURCE DEVELOPMENT CORP. v. NATIONAL LABOR involved the issues of whether or not: 1) certiorari was the proper remedy of the petitioner: 2) the
RELATIONS COMMISSION, ET AL. previous petition for certiorari which originated from the quieting of title case was similar to and, hence,
a bar to the petition for certiorari arising from the forcible entry case; and 3) the court a quo committed
G.R. No. 78777 September 2, 1992 - MERLIN P. grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the order which dissolved
CAIÑA v. PEOPLE OF THE PHIL., ET AL. the restraining order issued in connection with the ejectment case. The Court was not called upon in that
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10/28/2019 G.R. No. 92310 September 3, 1992 - AGRICULTURAL AND HOME EXTENSION DEVELOPMENT GROUP v. COURT OF APPEALS, …
case to determine who as between the two purchasers of the subject property should be preferred.
G.R. No. 80812 September 2, 1992 - LUZ E. TAN v.
COURT OF APPEALS, ET AL. The petitioner invokes the ruling of the lower court in that case to the effect that the registration of the
sale in favor of the second purchaser and the issuance of a new certificate of title in his favor did not in
G.R. No. 84256 September 2, 1992 - ALEJANDRA any manner vest in him any right of possession and ownership over the subject property because the
RIVERA OLAC, ET AL. v. COURT OF APPEALS, ET AL.
seller, by reason of their prior sale, had already lost whatever right or interest she might have had in the
G.R. No. 87318 September 2, 1992 - PEOPLE OF property at the time the second sale was made.
THE PHIL. v. JAIME G. SERDAN
This excerpt was included in the ponencia only as part of the narration of the background facts and was
G.R. No. 91535 September 2, 1992 - PEOPLE OF not thereby adopted as a doctrine of the Court. It was considered only for the purpose of ascertaining if
THE PHIL. v. EDUARDO L. DE JESUS, ET AL. the court below had determined the issue of the possession of the subject property pending resolution of
the question of ownership. Obviously, the Court could not have adopted that questionable ruling as it
G.R. No. 92461 September 2, 1992 - ESTATE would clearly militate against the provision of Article 1544.chanrobles.com:cralaw:red
G.R. No. 92789 September 2, 1992 - SILLIMAN True, no one can sell what he does not own, but this is merely the general rule. Is Art. 1544 then an
UNIVERSITY v. NATIONAL LABOR RELATIONS
exception to the general rule? In a sense, yes, by reason of public convenience (See Aitken v. Lao, 36
COMMISSION, ET AL.
Phil. 510); in still another sense, it really reiterates the general rule in that insofar as innocent third
G.R. No. 92795-96 September 2, 1992 - PEOPLE OF persons are concerned, the registered owner (in the case of real property) is still the owner, with power
THE PHIL. v. FREDDIE B. TANTIADO of disposition. 7
G.R. No. 93141 September 2, 1992 - PEOPLE OF The language of Article 1544 is clear and unequivocal. In light of its mandate and of the facts established
THE PHIL v. ESTANISLAO GENERALAO, JR. in this case, we hold that ownership must be recognized in the private respondent, who bought the
property in good faith and, as an innocent purchaser for value, duly and promptly registered the sale in
G.R. No. 93634 September 2, 1992 - PEOPLE OF his favor.
THE PHIL. v. MASALIM CASIM
WHEREFORE, the petition is DENIED and the questioned decision AFFIRMED in toto, with costs against
G.R. No. 94918 September 2, 1992 - DANILO I. the petitioner.
SUAREZ, ET AL. v. COURT OF APPEALS, ET AL.
G.R. No. 99359 September 2, 1992 - ORLANDO M. 7. Paras, Civil Code of the Philippines, 1990 Ed., Vol. V, p. 157.
ESCAREAL v. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.
G.R. No. 91284 September 3, 1992 - PEOPLE OF 1933 1934 1935 1936 1937 1938 1939 1940
THE PHIL. v. PEPITO T. PEÑERO 1941 1942 1943 1944 1945 1946 1947 1948
G.R. No. 92310 September 3, 1992 - 1949 1950 1951 1952 1953 1954 1955 1956
AGRICULTURAL AND HOME EXTENSION 1957 1958 1959 1960 1961 1962 1963 1964
DEVELOPMENT GROUP v. COURT OF APPEALS, ET AL.
1965 1966 1967 1968 1969 1970 1971 1972
G.R. No. 77285 September 4, 1992 - PEOPLE OF 1973 1974 1975 1976 1977 1978 1979 1980
THE PHIL. v. AMADEO ABUYEN
1981 1982 1983 1984 1985 1986 1987 1988
G.R. No. 83995 September 4, 1992 - BENJAMIN 1989 1990 1991 1992 1993 1994 1995 1996
EDAÑO v. COURT OF APPEALS
1997 1998 1999 2000 2001 2002 2003 2004
G.R. No. 88788 September 4, 1992 - RESTITUTO DE 2005 2006 2007 2008 2009 2010 2011 2012
LEON v. COURT OF APPEALS, ET AL.
2013 2014 2015 2016 2017 2018
G.R. No. 89278 September 4, 1992 - PEOPLE OF
THE PHIL. v. FERNANDITO S. SICAT
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