Cruz vs.

Cabaa
FACTS: In June 1965, respondent Leodegaria Cabaa sold the subject
property to respondent spouses Teofilo Legaspi and Iluminada Cabaa
(spouses Legaspi) under their contract entitled Bilihang Muling Mabibili
which stipulated that Cabaa can repurchase the land within one year from
December 31, 1966. The said land was not repurchased, however, so the
spouses Legaspi took possession of the said property. Later, Cabaa
requested that the land title be lent to her in order to mortgage the property to
the Philippine National Bank (PNB), to which the spouses Legaspi yielded.
On October 21, 1968, Cabaa formally sold the land to spouses Legaspi by
way of an absolute sale. The spouses Legaspi then attempted to register the
deed of sale, but failed because they could not present the owner's duplicate
of title which was still in the possession of the PNB as mortgage.
Subsequently, they were able to register the document of sale on May 13,
1969 under Primary Entry No. 210113 of the Register of Deeds of Quezon
Province.
On November 29, 1968, Cabaa sold the same property to herein petitioner
Abelardo Cruz (now deceased), who, in turn, tried to register the deed of sale
on September 3, 1970. However, he was informed that Cabaa had already
sold the property to the spouses Legaspi, so he was only able to register the
land in his name on February 9, 1971. The CFI of Quezon Province declared
the spouses Legaspi as the true and rightful owners of the subject property
and the land title that Cruz had acquired as null and void. The Court of
Appeals affirmed said decision, but ordered Cabaa reimburse to Cruz's
heirs the amounts of P2,352.50, which the late petitioner Abelardo Cruz paid
to PNB to discharge the mortgage obligation of Cabaa in favor of said bank,
and the amount of P3,397.50, representing the amount paid by said Abelardo
Cruz to her as consideration of the sale with pacto de retro of the subject
property.
ISSUE:
Who is the rightful owner of the subject property?
COURT RULING:
The Supreme Court affirmed the decision of the appellate court with
modification ordering and sentencing respondent Leodegaria Cabaa to
reimburse and pay to petitioner's heirs the total sum of P5,750.00.
There is no question that spouses Legaspi were the first buyers, first on June
1, 1965 under a sale with right of repurchase and later on October 21, 1968
under a deed of absolute sale and that they had taken possession of the land
sold to them; that Abelardo Cruz was the second buyer under a deed of sale
dated November 29, 1968, which to ail indications, contrary to the text, was a

sale with right of repurchase for ninety (90) days. There is no question,
either, that spouses Legaspi were the first and the only ones to be in
possession of the subject property.
The knowledge of the first sale Abelardo Cruz had gained defeats his rights
even if he is first to register the second sale, since such knowledge taints his
prior registration with bad faith. This is the price exacted by Article 1544 of
the Civil Code. Before the second buyer can obtain priority over the first, he
must show that he acted in good faith throughout (i.e. in ignorance of the first
sale and of the first buyer's rights) - from the time of acquisition until the title
is transferred to him by registration or failing registration, by delivery of
possession. The second buyer must show continuing good faith and
innocence or lack of knowledge of the first sale until his contract ripens into
full ownership through prior registration as provided by law."
RADIOWEALTH FINANCE COMPANY vs. PALILEO
FACTS: Defendant spouses Castro sold to plaintiff-appellee Palileo (private
respondent herein), a parcel of unregistered coconut land situated in Surigao
del Norte. The sale is evidenced by a notarized Deed of Absolute Sale (Exh.
E). The deed was not registered in the Registry of Property for unregistered
lands. Since the execution of the deed of sale, appellee Palileo exercised
acts of ownership over the land through his mother as administratrix or
overseer. Appellee has continuously paid the real estate taxes on said land
from 1971 until the present.
A judgment was rendered against defendant Castro by the then CFI to pay
herein defendant-appellant Radiowealth Finance Company (petitioner
herein). Upon the finality of the judgment, a writ of execution was issued.
Pursuant to said writ, defendant provincial Sheriff levied upon and finally sold
at public auction the subject land that defendant Enrique Castro had earlier
sold to appellee Palileo. A certificate of sale was executed by the Provincial
Sheriff in favor of defendant- appellant Radiowealth Finance Company, being
the only bidder. After the period of redemption has (sic) expired, a deed of
final sale was also executed by the same Provincial Sheriff. Both the
certificate of sale and the deed of final sale were registered with the RD.
Learning of what happened to the land, private respondent Palileo filed an
action for quieting of title over the same. After a trial on the merits, the court a
quo rendered a decision in his favor. On appeal, the decision of the trial court
was affirmed. Hence, this petition for review on certiorari.
ISSUE: Who, as between two buyers of unregistered land, is the rightful
ownerthe first buyer in a prior sale that was unrecorded, or the second

buyer who purchased the land in an execution sale whose transfer was
registered in the RD
HELD: PALILEO HAS THE SUPERIOR RIGHT OVER THE LAND
There is no doubt that had the property in question been a registered land,
this case would have been decided in favor of petitioner since it was
petitioner that had its claim first recorded in the RD.
It must be stressed however that this case deals with a parcel of unregistered
land and a different set of rules applies. We affirm the decision of the CA.
Under Act No. 3344, registration of instruments affecting unregistered lands
is without prejudice to a third party with a better right. The aforequoted
phrase has been held by this Court to mean that the mere registration of a
sale in ones favor does not give him any right over the land if the vendor was
not anymore the owner of the land having previously sold the same to
somebody else even if the earlier sale was unrecorded.
Applying this principle, the CA correctly held that the execution sale of the
unregistered land in favor of petitioner is of no effect because the land no
longer belonged to the judgment debtor as of the time of the said execution
sale.
NOTES: Findings of fact of the CA are conclusive on this Court and will not
be disturbed unless there is grave abuse of discretion. The finding of the CA
that the property in question was already sold to private respondent by its
previous owner before the execution sale is evidenced by a deed of sale.
Said deed of sale is notarized and is presumed authentic. There is no
substantive proof to support petitioners allegation that the document is
fictitious or simulated. With this in mind, We see no reason to reject the
conclusion of the CA that private respondent was not a mere administrator of
the property. That he exercised acts of ownership through his mother also
remains undisputed.

two deeds of sale conveying the property to herein respondent Rustico

Macam who thereafter took possession of the property and made substantial
improvements upon it. On October 14, 1955, OCT No. 6942 covering the
land was issued in the name of the Marons, free from all liens and
encumbrances.
On August 4, 1956, however, by virtue of a final judgment of the Municipal
Court of Manila in a civil case in favor of Manila Trading and Supply Co.
(Manila Trading) against Sammy Maron, levy was made upon whatever
interest he had in the subject property. Thereafter, said interest was sold at
public auction to the judgment creditor Manila Trading. The corresponding
notice of levy, certificate of sale and the sheriff's certificate of final sale in
favor of Manila Trading - because nobody exercised the right of redemption were duly registered, and on March 1, 1958, the latter sold all its rights and
title in the property to herein petitioner Dagupan Trading Company (Dagupan
Trading).
On September 4, 1958, Dagupan Trading filed an action against Macam,
praying that it be declared owner of one-eighth portion of the subject
property. The CFI of Pangasinan dismissed the said complaint, and the Court
of Appeals affirmed its decision.
ISSUE:
Who has the superior right over the one-eight portion of the subject property?
COURT RULING:
The Supreme Court likewise affirmed both decisions of the lower courts. At
the time of the levy, Sammy Maron already had no interest on the one-eight
portion of the property he and his siblings have inherited because for a
considerable time prior to the levy, said interest had already been conveyed
upon Macam "fully and irretrievably" - as the Court of Appeals held.
Consequently, the subsequent levy made on the property for the purpose of
satisfying the judgment rendered against Sammy Maron in favor of the
Manila Trading Company was void and of no effect.

Dagupan Trading vs. Macam

FACTS:
Sammy Maron and his seven brothers and sisters were pro-indiviso owners
of a parcel of unregistered land located in barrio Parayao, Binmaley,
Pangasinan. In 1955, while their application for registration of said land under
Act No. 496 was pending, they executed, on June 19 and on September 21,

The unregistered sale and the consequent conveyance of title and ownership
in favor Macam could not have been cancelled and rendered of no effect
upon the subsequent issuance of the Torrens title over the entire parcel of
land. Moreover, upon the execution of the deed of sale in his favor by
Sammy Maron, Macam had immediately taken possession of the land
conveyed as its new owner and introduced considerable improvements upon

it himself. To deprive him, therefore, of the same by sheer force of

technicality would be against both justice and equity.
CARUMBA vs. CA
FACTS: In 1955, the 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 located in Camarines Sur, to the spouses Amado Carumba
and Benita Canuto, The referred deed of sale was never registered in the
Office of the RD of Camarines Sur, and the Notary was not then an
authorized notary public in the place.
In 1957, a complaint for a sum or money was filed by Balbuena against
Amado Canuto and Nemesia Ibasco before the Justice of the Peace Court. A
decision was rendered in favor of Balbuena and against the defendants.
In 1968, the ex-officio Sheriff issued a Definite Deed of Sale of the property
now in question in favor of Balbuena, which instrument of sale was registered
before the Office of the RD.
The CFI, finding that after execution of the document Carumba had taken
possession of the land, and planted thereon:
declared him to be the owner of the property under a consummated sale;
held void the execution levy made by the sheriff, pursuant to a judgment
against Carumbas vendor, Amado Canuto;
and nullified the sale in favor of the judgment creditor, Balbuena.
The CA, without altering the findings of fact made by the court of origin,
declared that there having been a double sale of the land subject of the suit
Balbuenas title was superior to that of his adversary under Article 1544 of
the Civil Code of the Philippines, since the execution sale had been properly
registered in good faith and the sale to Carumba was not recorded.

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 sheriffs execution sale only steps into the shoes of the judgment debtor,
and merely acquires the latters 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 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, in 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 dominical interest nor 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.
Said 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
No. 496.
Siy Cong Bien vs. Hongkong Shanghai Bank

ISSUE: Who has the superior title to the land

HELD: CARUMBA

Facts

CA reversed. CFI affirmed.

Otto 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. The parties agreed to the aforesaid price, and on the
same date the quedans, together with the covering invoice, were sent to
Ranft by the plaintiff, without having been paid for the hemp, but the plaintiff's
understanding was that the payment would be made against the same

The SC disagrees with the CA. 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,

quedans, and it appear that in previous transaction of the same kind between
the bank and the plaintiff, quedans were paid one or two days after their
delivery to them.
However, on the day the Quedan was supposed to be delivered, Ranft died.
Thereupon, Siy discovered that Ranft delivered such quedans to the
Hongkong Shanghai Bank to whom Ranft was indebted to. Siy then filed
before the estate proceedings to collect the debt of Ranft and filed an action
against HSBC to demand for the recovery of possession of the quedans. Siy
further argued that there was negligence in the part of HSBC, because Ranft
had not yet acquired ownership over the quedans at the time of its
indorsment to HSBC.
Issue
Whether or not HSBC acquired the quedans in good faith
Held
The Supreme Court held that the quedans is now owned by HSBC, and not
by Ranft nor by Siy so as he claims. Ranft delivered to HSBC the quedans
for a valuable consideration, which is valid, and that as it appears as well,
those quedans were negotiable in form and endorsed in blank. So, upon
delivery, it no longer becomes property of the indorser but the indorsee as it
appears in this case, unless he pays for his indebtedness.
For a warehouse receipt to be negotiated, it should be properly indorsed and
delivered which is evident in this case. Since it was a blank warehouse
receipt, it may be delivered to any person, and the bearer thereon becomes
the owner of the receipt.
As to the question of ownership, Siy voluntarily clothed Ranft with all the
attributes of ownership, thus he is estopped to question the valid title of the
quedans. There is now no remedy for the plaintiff, and the bank is not
responsible if the quedans be negotiated to the bank as there is no proof of
fraud on the part of the defendant.
Almendra vs. IAC [G.R. No. 75111. November 21, 1991.]
Facts: The mother, Aleja Ceno, was first married to Juanso Yu Book with
whom she had 3 children named Magdaleno, Melecia and Bernardina, all
surnamed Ceno. Sometime in the 1920s, Juanso Yu Book took his family to
China where he eventually died. Aleja and her daughter Bernardina later
returned to the Philippines. During said marriage, Aleja acquired a parcel of

land which she declared in her name under Tax Declaration 11500. After
Juanso Yu Books death, Bernardina filed against her mother a case for the
partition of the said property in the then CFI Leyte. On 17 August 1970, the
lower court rendered a supplemental decision finding that the said property
had been subdivided into Lots 6354 (13,738 sq.ms.), 6353 (16,604 sq.ms.),
6352 (23,868 sq.ms.) and 6366 (71,656 sq.ms.). The Court declared
Bernardina Ojeda owner of and entitled to possession of Lot 6354; Ojeda as
owner of and entitled to possession of Lot 6353 without prejudice to whatever
rights her sister Melecia Ceno (presently in China) may have over the
property; Aleja Almendra as owner of and entitled to possession of Lot 6366;
and Aleja Almendra as owner of and entitled to possession of Lot 6352,
subject to whatever may be the rights thereto of her son Magdaleno Ceno
(presently in China). The Court ordered the parties to bear the fees of the
commissioner. Meanwhile, Aleja married Santiago Almendra with whom she
had 4 children named Margarito, Angeles, Roman and Delia. During said
marriage Aleja and Santiago acquired a 59,196-sq.ms. parcel of land in
Cagbolo, Abuyog, Leyte. OCT 10094 was issued therefor in the name of
Santiago Almendra married to Aleja Ceno and it was declared for tax
purposes in his name. In addition to said properties, Aleja inherited from her
father, Juan Geno, a 16,000-sq.ms. parcel of land also in Cagbolo. For his
part, her husband Santiago inherited from his mother, Nicolasa Alvero, a 16sq. ms. parcel of residential land located in Nalibunan, Abuyog, Leyte. While
Santiago was alive, he apportioned these properties among Alejas children
in the Philippines, including Bernardina, who, in turn, shared the produce of
the properties with their parents. After Santiagos death, Aleja sold to her
daughter, Angeles Almendra, for P2,000 two parcels of land in the deed of
sale dated 10 August 1973 ( portion or conjugal share of land [TD 22234,
OCT 10094], and portion or conjugal share of land [TD 27190] both
located in Bo. Cagbolo, Abuyog, Leyte. On 26 December 1973, Aleja sold to
her son, Roman Almendra, also for P2,000 a parcel of land described in the
deed of sale as located in Cagbolo, Abuyog, Leyte under T/D 11500 which
cancelled T/D 9635; having an area of 6.6181 hec., assessed at P1,580.00.
On the same day, Aleja sold to Angeles and Roman again for P2,000 yet
another parcel of land described in the deed of sale (Lot 6352). Aleja died on
7 May 1975.
On 21 January 1977 Margarito, Delia and Bernardina (plaintiffs) filed a
complaint against Angeles and Roman for the annulment of the deeds of sale
in their favor, partition of the properties subjects therein and accounting of
their produce. From China, their sister Melecia signed a special power of
attorney in favor of Bernardina. Magdaleno, who was still in China, was
impleaded as a defendant in the case and summons by publication was
made on him. Later, the plaintiffs informed the court that they had received a
document in Chinese characters which purportedly showed that Magdaleno

had died. Said document, however, was not produced in court. Thereafter,
Magdaleno was considered as in default without prejudice to the provisions
of Section 4, Rule 18 of the Rules of Court which allows the court to decide a
case wherein there are several defendants upon the evidence submitted only
by the answering defendants. On 30 April 1981, the lower court rendered a
decision declaring the deeds of sale to be simulated and therefore null and
void; ordering the partition of the estate of the deceased Aleja Ceno among
her heirs and assigns; appointing the Acting Clerk of Court, Atty. Cristina T.
Pontejos, as commissioner, for the purpose of said partition, who is expected
to proceed accordingly upon receipt of a copy of this decision; and to render
her report on or before 30 days from said receipt. The expenses of the
commissioner shall be borne proportionately by the parties.
The defendants appealed to the then Intermediate Appellate Court which, on
20 February 1986 rendered a decision upholding the validity of the deeds of
sale and ordered the partition of the undisposed properties left by Aleja and
Santiago Almendra and, if an extrajudicial partition can be had, that it be
made within a reasonable period of time after receipt of its decision. The
plaintiffs filed their motion for reconsideration, which was denied. Hence, the
petition for review on certiorari.
The Supreme Court affirmed the decision of the then Intermediate Appellate
Court subject to the modifications stated in the present decision. The Court
directed the lower court to facilitate with dispatch the preparation and
approval of a project of partition of the properties considered unsold under
the present decision.
1. No convincing reason to nullify deeds of sale; Testimony of the notary
given more credence
There is no valid, legal and convincing reason for nullifying the questioned
deeds of sale. Petitioner had not presented any strong, complete and
conclusive proof to override the evidentiary value of the duly notarized deeds
of sale. Moreover, the testimony of the lawyer who notarized the deeds of
sale that he saw not only Aleja signing and affixing her thumbmark on the
questioned deeds but also Angeles and Aleja counting money between
them, deserves more credence than the self-serving allegations of the
petitioners. Such testimony is admissible as evidence without further proof of
the due execution of the deeds in question and is conclusive as to the
truthfulness of their contents in the absence of clear and convincing evidence
to the contrary.
2. No proof that price (P2,000) was grossly inadequate
The petitioners allegations that the deeds of sale were obtained through

PAULMITAN V. CA- Co-ownership of Property

When a co-owner sells the entire property without consent from the other coowners, only his pro indiviso share on the property is transferred to the buyer.
FACTS:
The dispute covers 2 lots, Lot 757 and Lot 1091, which were owned by
Agatona Paulmitan. She had 2 children, Pascual and Donato. Pascuals (7)
children (Alicio, Elena, Abelino, Adelina, Anita, Baking, Anito) are the
respondents and Donato and his daughter and son-in-law are petitioners.
Donato executed an Affidavit of Declaration of Heirship, adjudicating to
himself Lot 757 claiming that he is the sole surviving heir thus the OCT of
Agatona was cancelled and a TCT was issued in his name. He executed a
deed of sale of Lot 1091 in favor of his daughter, Juliana. For non-payment of
taxes, the lot was forfeited and sole at a public to the Provincial Govt of
Negros Occidental, however, Juliana was able to redeem the property. Upon
learning these, the children of Pascual filed w/ the CFI a complaint against
petitioners to partition the land plus damages. Petitioners defense was that
the action has already prescribed for it was filed more than 11 years after the
issuance of the TCT and that Juliana has acquired exclusive ownership thru
the Deed of Sale and by redeeming the said property.
The CFI dismissed the complaint and became final and executory. With
respect to Lot 1091, the court decided in favor of respondents. They are
entitled to of Lot 1091, pro indiviso. The redemption did not in anyway
prejudice their rights. The land was ordered to be partitioned and the
petitioners were ordered to pay the respondents their share of the fruits and
the respondents to pay their share in the redemption of the land. The CA
affirmed the decision thus the case at bar.
ISSUE:
(1) Whether or not Pascuals children and Donato and Juliana were coowners of their mothers lot
(2) Whether or not Juliana acquired full ownership by redeeming the property
HELD:
(1) YES: When Agatona died, her estate was still unpartitioned. Art. 1078
states that Where there are 2 or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs, subject to
the payment of debts of the deceased. Since Pascual and Donato were still
alive when she died, they are co-owners of the estate. When Pascual died,
his children succeeded him in the co-ownership of the property.

When Donato sold to his daughter the lot, he was only a co-owner of the
same thus he can only sell his undivided portion of the property. Art. 493
states that each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign
or mortgage it and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or
mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the coownership.
Only the rights of the co-owner-seller are transferred making the buyer
(Juliana) a co-owner.

(2) NO: When she redeemed the property, it did not end the co-ownership.
The right of repurchase may be exercised by a co-owner w/ respect to
his/her share alone as stated in Art. 1612. But she may compel them to
reimburse her for half of the repurchase price for a co-owner has the right to
compel other co-owners to contribute to the expenses for the preservation of
the thing and to taxesfraud, undue influence and misrepresentation, and that
there was a defect in the consent of Aleja in the execution of the documents
because she was then residing with Angeles, had not been fully
substantiated. They failed to show that the uniform price of P2,000 in all the
sales was grossly inadequate. It should be emphasized that the sales were
effected between a mother and two of her children in which case filial love
must be taken into account.
3. Defendants proved they have means to purchase the properties
Angeles and Roman amply proved that they had the means to purchase the
properties. Petitioner Margarito Almendra himself admitted that Angeles had
a sari-sari store and was engaged in the business of buying and selling logs.
20 Roman was a policeman before he became an auto mechanic and his
wife was a school teacher. 21

4. Conjugal property; Aleja cannot claim title for definite portion of the
conjugal property before its partition
The 10 August 1973 sale to Angeles of one-half portion of the conjugal
property covered by OCT P-10094 may only be considered valid as a sale of
Alejas one-half interest therein. Aleja could not have sold the particular hilly
portion specified in the deed of sale in the absence of proof that the conjugal
partnership property had been partitioned after the death of Santiago. Before
such partition, Aleja could not claim title to any definite portion of the property
for all she had was an ideal or abstract quota or proportionate share in the
entire property.
5. Paraphernal property; Sale valid
The sale of the one-half portion of the parcel of land covered by Tax
Declaration 27190 is valid because the said property is paraphernal being
Alejas inheritance from her own father.
6. Land subject to Civil Case 4387; Aleja could not have intended the sale
of whole property already subdivided
As regards the sale of the property covered by Tax Declaration 11500, since
the property had been found in Civil Case 4387 to have been subdivided,
Aleja could not have intended the sale of the whole property covered by said
tax declaration. She could exercise her right of ownership only over Lot 6366
which was unconditionally adjudicated to her in said case.
7. Caveat emptor on Lot 6352; Lot still subject to rights of Magdaleno Ceno
Lot 6352 was given to Aleja in Civil Case 4387 subject to whatever may be
the rights thereto of her son Magdaleno Ceno. A reading of the deed of Sale
covering this parcel of land would show that the sale is subject to the
condition stated above; hence, the rights of Magdaleno Ceno are amply
protected. The role on caveat emptor applies.