Double Sale G.R. No. 194846 June 19, 2013

DOUBLE SALE
G.R. No. 194846 June 19, 2013
ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first possession thereof in good faith, if it should be movable
property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first
in possession; and, in the absence thereof; to the person who presents the oldest title, provided
there is good faith.
Otherwise stated, ownership of an immovable property which is the subject of a double sale shall be
transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of
Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in
default thereof, to the person who presents the oldest title, provided there is good faith. The
requirement of the law then is two-fold: acquisition in good faith and registration in good faith. Good
faith must concur with the registration. If it would be shown that a buyer was in bad faith, the alleged
registration they have made amounted to no registration at all.
The principle of primus tempore, potior jure (first in time, stronger in right) gains greater significance
in case of a double sale of immovable property. When the thing sold twice is an immovable, the one
who acquires it and first records it in the Registry of Property, both made in good faith, shall be
deemed the owner. Verily, the act of registration must be coupled with good faith— that is, the
registrant must have no knowledge of the defect or lack of title of his vendor or must not have been
aware of facts which should have put him upon such inquiry and investigation as might be necessary
to acquaint him with the defects in the title of his vendor.) 35 [Emphases and underlining supplied]
When a piece of land is in the actual possession of persons other than the seller, the buyer must be
wary and should investigate the rights of those in possession. Without making such inquiry, one
cannot claim that he is a buyer in good faith. When a man proposes to buy or deal with realty, his
duty is to read the public manuscript, that is, to look and see who is there upon it and what his rights
are. A want of caution and diligence, which an honest man of ordinary prudence is accustomed to
exercise in making purchases, is in contemplation of law, a want of good faith. The buyer who has
failed to know or discover that the land sold to him is in adverse possession of another is a buyer in
bad faith.36 In the case of Spouses Sarmiento v. Court of Appeals, 37 it was written:
Verily, every person dealing with registered land may safely rely on the correctness of the certificate
of title issued therefor and the law will in no way oblige him to go behind the certificate to determine
the condition of the property. Thus, the general rule is that a purchaser may be considered a
purchaser in good faith when he has examined the latest certificate of title. An exception to this rule
is when there exist important facts that would create suspicion in an otherwise reasonable man to go
beyond the present title and to investigate those that preceded it. Thus, it has been said that a
person who deliberately ignores a significant fact which would create suspicion in an otherwise
reasonable man is not an innocent purchaser for value. A purchaser cannot close his eyes to facts
which should put a reasonable man upon his guard, and then claim that he acted in good faith under
the belief that there was no defect in the title of the vendor. As we have held:
The failure of appellees to take the ordinary precautions which a prudent man would have taken
under the circumstances, specially in buying a piece of land in the actual, visible and public
possession of another person, other than the vendor, constitutes gross negligence amounting to bad
faith.
In this connection, it has been held that where, as in this case, the land sold is in the possession of a
person other than the vendor, the purchaser is required to go beyond the certificate of title to make
inquiries concerning the rights of the actual possessor. Failure to do so would make him a purchaser
in bad faith. (Citations omitted).
One who purchases real property which is in the actual possession of another should, at least make
some inquiry concerning the right of those in possession. The actual possession by other than the
vendor should, at least put the purchaser upon inquiry. He can scarely, in the absence of such
inquiry, be regarded as a bona fide purchaser as against such possessors. (Emphases supplied)
In another case, it was held that if a vendee in a double sale registers the sale after he has acquired
knowledge of a previous sale, the registration constitutes a registration in bad faith and does not
confer upon him any right. If the registration is done in bad faith, it is as if there is no registration at
all, and the buyer who has first taken possession of the property in good faith shall be preferred.
Registration of the second buyer under Act 3344, providing for the registration of all
instruments on land neither covered by the Spanish Mortgage Law nor the Torrens
System (Act 496), cannot improve the standing of a party since Act 3344 itself
expresses that registration thereunder would not prejudice prior rights in good faith
(see Carumba vs. Court of Appeals, 31 SCRA 558). Registration, however, by the
first buyer under Act 3344 can have the effect of constructive notice to the second
buyer that can defeat his right as such buyer in good faith (see Arts. 708-709, Civil
Code; see also Revilla vs. Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA
700). Art. 1544 has been held to be inapplicable to execution sales of unregistered
land, since the purchaser merely steps into the shoes of the debtor and acquires the
latter’s interest as of the time the property is sold. (Carumba vs. Court of Appeals,
31 SCRA 558; see also Fabian vs. Smith, Bell & Co., 8 Phil. 496), (Remalante vs.
Tibe, 158 SCRA 138; Sps. Noel & Julie Abrigo vs. De Vera, G. R. No. 154409, June 21,
2004).

Double Sale G.R. No. 194846 June 19, 2013

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DOUBLE SALE

G.R. No. 194846 June 19, 2013

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