SAN LORENZO DEVELOPMENT CORP. v CA payment.
Also, if they intended to transfer title, they could have
Facts:
 Sps. Lu owned 2 titled lots (3.6 hectares) and they sold it Aug 20,
1986 to Babasanta for 15/sqm. Babasanta made a downpayment
of 50K, evidenced by memorandum receipt issued by Pacita Lu;
his total payments reached 200K
 May 1989, Babasanta wrote a letter to Pacita demanding the
execution of DOS in his favor, having received info that sps. sold
the same to another person
 Pacita replied, acknowledged having agreed to sell the property
but reminded B that when balance became due, B requested for
reduction which she refused, so B backed out of the sale. She
returned the 50K to B through Oya.
 Thus this case filed by B for specific performance and damages
 Sps Lu contend that Pacita obtained loans from B, reaching 50K, so
B without the knowledge of pacita’s husband agreed to transform it
into contract to sell of 2 lots, w/50K as downpayment. B backed out
of the sale when Lu refused to reduce the price. Prop being
conjugal, sale void.
 SLDC filed motion for intervention. SLDC contends that Sps. Lu
executed on Feb 1989 an Option to Buy (option money = 316,160)
out of 1.2M price. After Sps. received a total of 632,320, they
executed on May 3, 1989 a Deed of Abs. Sale w/ Mortgage. Titles
delivered were clean, so buyer in good faith.
RTC: (in favor of SLDC) applying 1544, since both buyers didn’t register
sales, ownership should pertain to buyer who first acquired possession.
DOAS in favor of SLDC sufficient delivery
CA: (in favor of B) SLDC purchaser in bad faith
 SLDC contends that it bought prop w/o lien/encumbrance recorded
in prop’s titles. Also, B was not in possession. It had no prior notice
of sale to B when it advanced 200K check in favor of B upon
Pacita’s representation that she needed money to pay B. After
execution of sale, it took possession of the prop. Notice of lis
pendens annotated June 2, 1989; sale to SLDC consummated May
3, 1989
 B contends that SLDC in bad faith because at the time it
registered the sale in its favor, there’s already a notice of lis
pendens
ISSUE: Who bet B and SLDC has better right over the lots
HELD: SLDC
 Agreement bet B and Sps. Lu contract to sell. Subsequent act of
parties show that sps never intended to transfer ownership to B
except upon full payment. In B’s letter to Pacita, B requested for
the execution of DOS so he could pay balance, in effect recognizing
that ownership of prop would not be transferred to him until
executed DOS.
 B should have consigned the balance. Letter + intention to pay =
not valid tender of payment. Thus, Lu’s obligation to convey title
never acquired obligatory force.
 Sale is not a mode of transferring ownership, but merely a title.
Delivery may be actual or constructive (ex. Execution of public
instrument, symbolical tradition ie. delivery of key where movable
is kept, buyer already in possession prior to sell).
 B didn’t acquire ownership by mere execution of receipt bcoz it
was not embodied in public instrument
PAJUNAR v CA [175 SCRA 464 (July 19, 1989)]
Nature: Petition for certiorari to review the decision of the CA.
Ponente: J. Paras
Facts:
• Initial case for recovery of personal property with writ of replevin
filed by Arthur and Invencia Pajunat with the RTC. RTC dismissed
and CA affirmed.
• 1969: Respondents Mauro and Teofila Eluna bartered a 3-year old
male cow for a 1-year old female carabao in the possession of
Enopia; carabao had the brand “ART” in front and hind legs. Mauro
did not or could not register the transfer to him.
• March 1980: Arthur Pajunar learned that the carabao was in the
possession of Mauro. He claims that he is the original owner of the
carabao which got lost in 1974.
• Arthur demanded the return of the carabao and the delivery of its
2 offsprings.
• Mauro refused to do so despite repeated demands and filed the
initial case.
• Petitioner contends: Mauro failed to establish his ownership over
the mestisa carabao found in his possession. Failure of Mauro to
register in his name said carabao, constitutes a flaw in his
ownership as required by law.
• Respondent claims: he has been in possession of the carabao for
more than 10 years, by wirtue of barter with Enopia in 1969.
Hence, he acquired ownership by prescription under NCC 1132.
Issue: WON the transfer to Mauro of the carabao by barter was valid.
Held/Ratio:
No. Although the animal was branded “ART” at the time she was acquired
by Mauro, said respondent did not or could not register the transfer to him
in accordance with Sec. 529 of the Revised Administrative Code, which
requires registration in order for a transfer to be valid. Mauro was not
able to comply with this requirement. They are not possessors in good
faith as a possessor in good faith is one not aware of that there exists in
his title or mode of acquisition any flaw that invalidates it.
The duty to make a close inquiry into the certificate of registration of the
carabao should have been performed by Mauro but he failed to do so.
Thus, proving, he was in bad faith when he acquired the said carabao from
Enopia.

The possession in good faith for 4 years is NOT applicable, neither can
possession in bad faithof 8 years benefit respondent, for when the owner
of a movable has lost or has been illegally deprived of his property, he can
recover the same without need to reimburse the possessor (NCC 559).

Art. 716 cannot apply since it evidently refers to a possessor in

bad faith.

Dispositive: Decision reversed and set-aside.