[G.R. No. 148376. March 31, 2005] A: Employees of Judge Villegas of Bais City.
Q: Did you see them sign that document?
LEONARDO ACABAL and RAMON NICOLAS, petitioners, vs. VILLANER ACABAL, EDUARDO
ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL,
ARMIN ACABAL, RAMIL ACABAL, and BYRON ACABAL, respondents.
DECISION
CARPIO MORALES, J.:
Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision[1] of the
Court of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35. [2]
In dispute is the exact nature of the document[3] which respondent Villaner Acabal (Villaner) executed
in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.
Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio
Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in Tax
Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971,[5] his parents transferred for
P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan.[6]
Sometime after the foregoing transfer, it appears that Villaner became a widower.
Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of
Leonardo.
Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a
Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his wife
Lacorte, what he signed was a document captioned Lease Contract[9] (modeled after a July 1976 lease
agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro[11]) wherein he
leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was witnessed by two
women employees of one Judge Villegas of Bais City.
Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC against Leonardo
and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale.
At the witness stand, Villaner declared:
Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant
Leonardo Acabal on April 19, 1990, please tell the court whether you have really agreed
to sell this property to the defendant on or before April 19, 1990?
A: We had some agreement but not about the selling of this property.
Q: What was your agreement with the defendant Leonardo Acabal?
A: Our agreement [was] that he will just rent.[14]
xxx
Q: Now, please tell the court how were you able to sign this document on April 19, 1990?
A: I do not know why I signed that, that is why I am puzzled.
Q: Why, did you not read the contents of this document?
A: I have not read that. I only happened to read the title of the Lease Contract.
Q: And do you recall who were the witnesses of the document which you signed in
favor of Leonardo Acabal?
A: Yes, sir.
Q: These signatures appearing in this document marked as Exhibit C for the plaintiff
and Exhibit 1 for the defendant, please examine over (sic) these signatures if
these were the signatures of these witnesses who signed this document?
A: These are not the signatures of the two women.
Q: And after signing this document on April 19, 1990, did you appear before a notary public to
have this notarized?
A: No, I went home to San Carlos.[15]
xxx
Q: According to this document, you sell (sic) this property at P10,000.00, did you sell this
property to Leonardo Acabal?
A: No, sir.
Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal?
A: No, sir.[16]
xxx
Q: Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he
promised to you, what did you do of (sic) his refusal to pay that amount?
A: I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared the
papers and to ask Leonardo Acabal why he will not comply with our
agreement.
Q: By the way, who is this Mellie Cadalin?
A: Mellie Cadalin is also working in the sala of Judge Villegas.
Q: Who requested Mellie Cadalin to prepare this document?
A: Maybe it was Leonardo Acabal.
Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your
agreement to lease this property to him?
A: March 14, 1990, in San Carlos.
Q: And what document did you give to him in order that that document will be
prepared?
A: I have given (sic) some papers and contract of lease that I have signed to (sic)
Mrs. Montenegro.[17] (Emphasis and underscoring supplied)
xxx
Q: Now, Carmelo Cadalin [Mellie] also testified before this court that in fact he identified the
document marked as Exhibit C for the plaintiff that what you executed on April 19, 1990
was a deed of sale and not a contract of lease, what can you say to that statement?
A: That is a lie.
Q: And whats the truth then?
A: What really (sic) I have signed was the document of lease contract.
Q: Now, can you explain to the Honorable Court why it so happened that on April 19,
you were able to sign a deed of sale?
A: What I can see now is that perhaps those copies of the deed of sale were placed
by Mr. Cadalin under the documents which I signed the lease contract. But why
is it that it has already a deed of sale when what I have signed was only the lease of
contract or the contract of lease.
 Q: Now, Mr. Cadalin also stated before this court that he handed over to you this Deed of Sale
marked as Exhibit C and according to him you read this document, what can you say to
this statement?
A: Yes, there was a document that he gave me to read it (sic)but it was a contract of lease.
Q: How sure are you that what you signed on April 19, 1990 was really a contract of lease and
not a contract of sale?
A: Because when I signed the contract of lease the witnesses that witnessed my
signing the document were the employees of Judge Villegas and then I am
now surprised why in the deed of sale which I purportedly signed are
witnessed by Carmelo Cadalin and his wife Lacorte.[18] (Emphasis and
underscoring supplied)
On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a
consideration of P10,000.00 which he had already paid,[19] and as he had become the absolute owner of
the property, he validly transferred it to Ramon Nicolas on May 19, 1990. [20]
Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness,
along with his wife, to the execution of the document corroborated Leonardos claim:
Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?
A: Yes, I know.[21]
xxx
Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?
A: At the time that he went to our house together with Leonardo Acabal he
requested me to prepare a deed of sale as regards to a sale of the property.[22]
xxx
Q: And after they requested you to prepare a document of sale, what did you do?
A: At first I refused to [do] it because I have so many works to do, but then they
insisted so I prepared the deed.
Q: After you prepared the document, what did you do?
A: After I prepared it I gave it to him so that he could read the same.
Q: When you say him, whom do you refer to?
A: Villaner Acabal.
Q: And did Villaner Acabal read the document you prepared?
A: Yes, he read it.
Q: And after reading it what did Villaner Acabal do?
A: He signed the document.
Q: Showing to you a document which is marked Exhibit C for the plaintiff and Exhibit
1 for the defendants, please tell the Honorable Court what relation this
document has to the document which you described earlier?
COURT INTERPRETER:
Witness is confronted with the said document earlier marked as Exhibit C for the
prosecution and Exhibit 1 for the defense.
A: Yes, this is the one.[23]
xxx
Q: Also stated in the document is the phrase Signed in the presence of and there is a
number and then two signatures, could you please examine the document and
say whether these signatures are familiar to you?
A: Yes, number one is my signature and number 2 is the signature of my wife as
witness.[24]
xxx
Q: After Villaner Acabal signed the document, what did Villaner Acabal do?
A: He was given the payment by Leonardo Acabal.[25]
xxx
Q: Aside from the document, deed of absolute sale, that you mentioned earlier that you
prepared for Villaner Acabal and Leonardo Acabal, what other documents, if any, did you
prepare for them?
A: Affidavit of non-tenancy and aggregate area.[26] (Emphasis and underscoring supplied)
The complaint was later amended[27] to implead Villaners eight children as party plaintiffs, they being
heirs of his deceased wife.
By Decision of August 8, 1996, the trial court found for the therein defendants-herein petitioners
Leonardo and Ramon Nicolas and accordingly dismissed the complaint.
Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial
court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was simulated
and fictitious.[28]
Hence, Leonardo and Ramon Nicolas present petition for review on certiorari,[29] anchored on the
following assignments of error:
I.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT
VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF ABSOLUTE SALE WHEN THE LATTER
KNOWINGLY, FREELY AND VOLUNTARILY EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO
ACABAL.
II.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE DEED OF
ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS UNUSUALLY LOW AND
INADEQUATE, ESPECIALLY TAKING INTO ACCOUNT THE LOCATION OF THE SUBJECT PROPERTY.
III.
THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT VILLANER ACABAL
ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF PETITIONER RAMON NICOLAS IN COURT
AFTER THE LATTER WAS IN OPEN, CONTINUOUS AND PEACEFUL POSSESSION OF THE SUBJECT
PROPERTY FOR ALMOST THREE (3) YEARS.
IV.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED TO DECLARE
PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE LATTER TOOK THE NECESSARY
STEPS AN ORDINARY AND PRUDENT MAN WOULD HAVE TAKEN BEFORE BUYING THE QUESTIONED
PROPERTY.
V.
THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER ACABAL WHEN THE
LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE ALLEGED CONTRACT OF LEASE
WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY THE EMPLOYEES OF JUDGE VILLEGAS.
 VI. Q: And can you also say, if a person who came to you having a document to be
notarized and if he will appear again after a month, can you remember
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED THAT RULE 8,
whether he was the one who came to you?
SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT APPLICABLE IN THE CASE AT
BAR, CONTRARY TO THE RULING OF THE LOWER COURT. A: Not so much because everyday there are many people who appear with
documents to be notarized,
VII.
Q: So, it is safe to say that if Villaner Acabal came to you on April 25 or rather April
THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY RESPONDENTS JOINTLY AND
16, 1990 andhave (sic) his document notarized if he comes back in, say May
SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00 PER YEAR FROM 1990 UP TO THE TIME THEY
25, can you still remember if he was the one who came to you?
VACATE THE PREMISES.[30]
A: I cannot be sure but at least, there are times I can remember persons because he
Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8,
seems to be close to me already.
Rule 8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness and
due execution of the April 19, 1990 Deed of Absolute Sale. Q: Is this Villaner close to you?
Petitioners contention does not persuade. The failure to deny the genuineness and due execution of A: Because he has been frequenting the house/asking for a copy of the document.
an actionable document does not preclude a party from arguing against it by evidence of fraud, mistake,
Q: So, he became close to you after you notarized the document?
compromise, payment, statute of limitations, estoppel, and want of consideration.[31]
A: Yes.[38] (Emphasis and underscoring supplied)
On the merits, this Court rules in petitioners favor.
On Villaners claim that two women employees of Judge Villegas signed as witnesses to the
It is a basic rule in evidence that the burden of proof lies on the party who makes the
deed[39] but that the signatures appearing thereon are not those of said witnesses, [40] the same must be
allegations[32] ei incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis
discredited in light of his unexplained failure to present such alleged women employee-witnesses.
probatio nulla sit.[33] If he claims a right granted by law, he must prove it by competent evidence, relying
on the strength of his own evidence and not upon the weakness of that of his opponent. In another vein, Villaner zeroes in on the purchase price of the property P10,000.00 which to him was
unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax
More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or
Declarations covering the property for the years 1971,[41] 1974,[42] 1977,[43] 1980,[44] 1983,[45] 1985,[46] as
undue influence are never presumed but must be established not by mere preponderance of evidence but
well as a Declaration of Real Property executed in 1994.[47]
by clear and convincing evidence.[34] For the circumstances evidencing fraud and misrepresentation are as
varied as the people who perpetrate it in each case, assuming different shapes and forms and may be It bears noting, however, that Villaner failed to present evidence on the fair market value of the
committed in as many different ways.[35] property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the fair
market value of a land as of the time of its sale, it cannot be concluded that the price at which it was sold
In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was
was inadequate.[48] Inadequacy of price must be proven because mere speculation or conjecture has no
deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction was
place in our judicial system.[49]
one of lease, he failed to adduce evidence in support thereof. His conjecture that perhaps those copies of
the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract of Victor Ragay, who was appointed by the trial court to conduct an ocular inspection [50] of the property
lease,[36] must fail, for facts not conjectures decide cases. and to investigate matters relative to the case,[51] gave an instructive report dated December 3,
1994,[52] the pertinent portions of which are hereby reproduced verbatim:
Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized
the document. While on direct examination, Atty. Real virtually corroborated Villaners claim that he did not a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was never
bring the document to him for notarization,[37] on cross-examination, Atty. Real conceded that it was cultivated;
impossible to remember every person who would ask him to notarize documents:
b) the soil is reddish and somewhat sandy in composition;
Q: And in the course of your notarization, can you remember each and every face
c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate);
that come (sic) to you for notarization?
d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10 hectares
A: No, it is impossible.
of the land in question is plain or flat;
Q: In the case of Villaner Acabal which you have his document notarized (sic) in
e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the
1990, can you remember his face when he came to you?
defendant Nicolas) were planted to sugar cane by the owners Kadusales;
A: No.
f) the road going to the land in question (as claimed to be the road) is no longer passable because it has
been abandoned and not maintained by anyone, thus it makes everything impossible for anybody to get
and haul the sugar cane from the area;
g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot, along
the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks to the
scene of the harvest;
h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were three
(3) feet in height and their structural built was thin or lean;
i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and not
suitable for planting to sugarcane.[53]
Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6-hectare property
adjoining that of the subject property for only P1,600.00[54] or P266.67 per hectare. Given that, had the
18-hectare subject property been sold at about the same time, it would have fetched the amount
of P4,800.00,[55] hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990
document is more than reasonable.
Even, however, on the assumption that the price of P10,000.00 was below the fair market value of
the property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale.
For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at it
and such that a reasonable man would neither directly nor indirectly be likely to consent to it. [56]
Still in another vein, Villaner submits that Leonardos transfer of the property to Nicolas in a span of
one month for a profit of P30,000.00 conclusively reflects Leonardos fraudulent intent. This submission is
a non sequitur.
As for Villaners argument that the sale of the property to Leonardo and the subsequent sale thereof
to Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions of said law
read:
SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may retain, directly or
indirectly, any public or agricultural land, the size of which may vary according to factors governing a
viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as
determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each
child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of
age; and (2) that he is tilling the land or directly managing the farm: Provided, That landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally
retained by them thereunder:[57] Provided further, That original homestead grantees or direct compulsory
heirs who still own the original homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.
xxx
Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer
of possession of private lands executed by the original landowner in violation of this Act shall
be null and void: Provided, however, that those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act.
Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction involving
agricultural lands in excess of five (5) hectares.
xxx
SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands retained
by a land owner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that
shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the
landholding ceilings provided for in this Act.
Any sale or disposition of agricultural lands after the effectivity of this Act found to be
contrary to the provisions hereof shall be null and void.
Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit
attesting that his total landholdings as a result of the said acquisition do not exceed the landholding
ceiling. The Register of Deeds shall not register the transfer of any agricultural land without the submission
of his sworn statement together with proof of service of a copy thereof to the BARC. (Emphasis and
underscoring supplied)
As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private
lands devoted to or suitable for agriculture are covered by it. [58] As priorly related, Victor Ragay, who was
appointed by the trial court to conduct an ocular inspection of the property, observed in his report that
only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was not
suitable for planting as the soil was full of limestone.[59] He also remarked that the sugarcanes were only 3
feet in height and very lean,[60] whereas sugarcanes usually grow to a height of 3 to 6 meters (about 8 to
20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick.[61]
It is thus gathered that the property was not suitable for agricultural purposes. In any event, since
the area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4
hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no
violation of the Comprehensive Agrarian Reform Law.
Even assuming that the disposition of the property by Villaner was contrary to law, he would still have
no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to afirmative
relief one who seeks equity and justice must come to court with clean hands. In pari delicto potior est
conditio defendentis.[62]
The proposition is universal that no action arises, in equity or at law, from an illegal contract;
no suit can be maintained for its specific performance, or to recover the property agreed to be
sold or delivered, or the money agreed to be paid, or damages for its violation. The rule has
sometimes been laid down as though it were equally universal, that where the parties are in pari delicto,
no affirmative relief of any kind will be given to one against the other. [63] (Emphasis and underscoring
supplied)
The principle of pari delicto is grounded on two premises: first, that courts should not lend their good
offices to mediating disputes among wrongdoers;[64] and second, that denying judicial relief to an admitted
wrongdoer is an effective means of deterring illegality. [65] This doctrine of ancient vintage is not a principle
of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v. Johnson:[66]
The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all
times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever
allowed; but it is founded in general principles of policy, which the defendant has the advantage of,
contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of
public policy is this; ex dolo malo non oritur actio.[67] No court will lend its aid to a man who founds his
cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the
cause of action appears to arise ex turpi causa,[68] or the transgression of a positive law of this country,
there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake
of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and the
defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter
would then have the advantage of it; for where both are equally in fault potior est conditio defendentis.[69]
Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal
agreement and will leave them where it finds them.
The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of
the Civil Code.
ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the
law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover
what he has paid or delivered.
Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is
allowed only when the following requisites are met: (1) the contract is not illegal per se but merely
prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced
thereby.[70] The exception is unavailing in the instant case, however, since the prohibition is clearly not for
the protection of the plaintiff-landowner but for the beneficiary farmers.[71]
In fine, Villaner is estopped from assailing and annulling his own deliberate acts.[72]
More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone
assert that he is less guilty than Leonardo. Under Article 3 of the Civil Code, ignorance of the law excuses
no one from compliance therewith.
And now, Villaners co-heirs claim that as co-owners of the property, the Deed of Absolute Sale
executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an
undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code [73] provides:
ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife. [74]
The presumption, this Court has held, applies to all properties acquired during marriage. For the
presumption to be invoked, therefore, the property must be shown to have been acquired during the
marriage.[75]
In the case at bar, the property was acquired on July 6, 1971 during Villaners marriage with
Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering the
property was solely in the name of Villaner it is his personal and exclusive property.
In Bucoy v. Paulino[76] and Mendoza v. Reyes[77] which both apply by analogy, this Court held that
registration alone of the properties in the name of the husband does not destroy the conjugal nature of
the properties.[78] What is material is the time when the land was acquired by Villaner, and that was during
the lawful existence of his marriage to Justiniana.
Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the
presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden is on
petitioners then to prove that it is not. This they failed to do.
The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was
terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal
partnership became actual and vested with respect to an undivided one-half portion.[80] Justiniana's rights
to the other half, in turn, vested upon her death to her heirs [81] including Villaner who is entitled to the
same share as that of each of their eight legitimate children.[82] As a result then of the death of Justiniana,
a regime of co-ownership arose between Villaner and his co-heirs in relation to the property.[83]
With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited,
applying the provisions on the law of succession, her eight children and Villaner each receives one-ninth
(1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or one
eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half (1/2)
or nine-eighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or five-ninths (5/9).
While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite
portion of the community property until its actual partition by agreement or judicial decree. Prior to
partition, all that he has is an ideal or abstract quota or proportionate share in the property.[85] Villaner,
however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil Code
provides so:
ART. 493. 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 the 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 co-ownership.
Thus, every co-owner has absolute ownership of his undivided interest in the co-owned property and is
free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner has
the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot
alienate the shares of his other co-owners nemo dat qui non habet.[86]
Villaner, however, sold the entire property without obtaining the consent of the other co-owners.
Following the well-established principle that the binding force of a contract must be recognized as far as it
is legally possible to do so quando res non valet ut ago, valeat quantum valere potest[87] the disposition
affects only Villaners share pro indiviso, and the transferee gets only what corresponds to his grantors
share in the partition of the property owned in common.[88]
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will
affect only his own share but not those of the other co-owners who did not consent to the sale. This is
because under the aforementioned codal provision, the sale or other disposition affects only his undivided
share and the transferee gets only what would correspond to this grantor in the partition of the thing
owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are
valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale
to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel
of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.
the enjoyment thereof.
From the foregoing, it may be deduced that 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.
However, only the rights of the co-owner-seller are transferred., thereby making the buyer a co-owner of
the property.
The proper action in cases like this is not for the nullification of the sale or the recovery of possession of
the thing owned in common from the third person who substituted the co-owner or co-owners who
alienated their shares, but the DIVISION of the common property as if it continued to remain in the
possession of the co-owners who possessed and administered it.[89]
Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not
secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the
co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of
possession nor restitution can be granted since the defendant buyers are legitimate proprietors and
possessors in joint ownership of the common property claimed.[90] (Italics in the original; citations omitted;
underscoring supplied)
This Court is not unmindful of its ruling in Cruz v. Leis[91] where it held:
It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common. Article 493 of the Civil Code provides:
xxx
Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely in
the name of Gertrudes Isidro, widow. Where a parcel of land, forming part of the undistributed properties
of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the
face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a
valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that a
person dealing with registered land is not required to go behind the register to determine the condition of
the property. He is only charged with notice of the burdens on the property which are noted on the face of
the register or the certificate of title. To require him to do more is to defeat one of the primary objects of
the Torrens system.[92] (Citation omitted)
Cruz, however, is not applicable for the simple reason that in the case at bar the property in dispute is
unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale
is a registered land but not where the property is an unregistered land.[93] One who purchases an
unregistered land does so at his peril.[94] Nicolas claim of having bought the land in good faith is thus
irrelevant.[95]
WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-G.R.
CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor of
petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but only
insofar as five-ninths (5/9) of the subject property is concerned.
No pronouncement as to costs.
SO ORDERED.
G.R. No. L-27587 February 18, 1970 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.
AMADO CARUMBA, petitioner,
vs. We disagree. While under the invoked Article 1544 registration in good faith prevails over possession in the
THE COURT OF APPEALS, SANTIAGO BALBUENA and ANGELES BOAQUIA as Deputy event of a double sale by the vendor of the same piece of land to different vendees, said article is of no
Provincial Sheriff, respondents. 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
Luis N. de Leon for petitioner.
at a sheriff's execution sale only steps into the shoes of the judgment debtor, and merely acquires the
Reno R. Gonzales for respondents. 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:
REYES, J.B.L., J.:
Upon the execution and delivery of said (final) deed the purchaser, redemptioner, or his
Amado Carumba petitions this Supreme Court for a certiorari to review a decision of the Court of Appeals, assignee shall be substituted to and acquire all the right, title, interest, and claim of the
rendered in its Case No. 36094-R, that reversed the judgment in his favor rendered by the Court of First judgment debtor to the property as of the time of the levy, except as against the
Instance of Camarines Sur (Civil Case 4646). judgment debtor in possession, in which case the substitution shall be effective as of the
time of the deed ... (Emphasis supplied)
The factual background and history of these proceedings is thus stated by the Court of Appeals (pages 1-
2): 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
On April 12, 1955, the spouses Amado Canuto and Nemesia Ibasco, by virtue of a "Deed of sale in favor of Canuto had been executed two years before, on 12 April 1955, and while only embodied
of Sale of Unregistered Land with Covenants of Warranty" (Exh. A), sold a parcel of land, in a private document, the same, coupled with the fact that the buyer (petitioner Carumba) had taken
partly residential and partly coconut land with a periphery (area) of 359.09 square possession of the unregistered land sold, sufficed to vest ownership on the said buyer. When the levy was
meters, more or less, located in the barrio of Santo Domingo, Iriga, Camarines Sur, to the made by the Sheriff, therefore, the judgment debtor no longer had dominical interest nor any real right
spouses Amado Carumba and Benita Canuto, for the sum of P350.00. The referred deed over the land that could pass to the purchaser at the execution sale. 1 Hence, the latter must yield the land
of sale was never registered in the Office of the Register of Deeds of Camarines Sur, and to petitioner Carumba. The rule is different in case of lands covered by Torrens titles, where the prior sale
the Notary, Mr. Vicente Malaya, was not then an authorized notary public in the place, as is neither recorded nor known to the execution purchaser prior to the levy; 2 but the land here in question
shown by Exh. 5. Besides, it has been expressly admitted by appellee that he is the is admittedly not registered under Act No. 496.
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. WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instance
affirmed. Costs against respondent Santiago Balbuena.
On January 21, 1957, a complaint (Exh. B) for a sum or money was filed by Santiago
Balbuena against Amado Canuto and Nemesia Ibasco before the Justice of the Peace Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Teehankee, Barredo and
Court of Iriga, Camarines Sur, known as Civil Case No. 139 and on April 15, 1967, a Villamor, JJ., concur.
decision (Exh. C) was rendered in favor of the plaintiff and against the defendants. On
October 1, 1968, the ex-officio Sheriff, Justo V. Imperial, of Camarines Sur, issued a
"Definite Deed of Sale (Exh. D) of the property now in question 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. The aforesaid property was declared for
taxation purposes (Exh. 1) in the name of Santiago Balbuena in 1958.
The Court of First instance, finding that after execution of the document Carumba had taken possession of
the land, planting bananas, coffee and other vegetables 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 Carumba's vendor, Amado Canuto; and nullified the sale in favor of the judgment
creditor, Santiago Balbuena. The Court, therefore, declared Carumba the owner of the litigated property
and ordered Balbuena to pay P30.00, as damages, plus the costs.
The Court of Appeals, 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 Balbuena's title was superior to that of his
G.R. No. L-18497 May 31, 1965
DAGUPAN TRADING COMPANY, petitioner,
vs.
RUSTICO MACAM, respondent.
DIZON, J.:
Appeal taken by the Dagupan Trading Company from the decision of the Court of Appeals affirming the
one rendered by the Court of First Instance of Pangasinan in Civil Case No. 13772, dismissing its
complaint.
On September 4, 1958, appellant commenced the action mentioned above against appellee Rustico
Macam, praying that it be declared owner of one-eighth portion of the land described in paragraph 2 of
the complaint; that a partition of the whole property be made; that appellee be ordered to pay it the
amount of P500.00 a year as damages from 1958 until said portion is delivered, plus attorney's fees and
costs.
Answering the complaint, appellee alleged, in the main, that Sammy Maron's share in the property
described in the complaint, as well as that of all his co-heirs, had been acquired by purchase by appellee
since June 19 and September 21, 1955, before the issuance of the original certificate of title in their name;
that at the time the levy in execution was made on Sammy Maron's share therein, the latter had no longer
any right or interest in said property; that appellant and its predecessor in interest were cognizant of the
facts already mentioned; that since the sales made in his favor, he had enjoyed uninterrupted possession
of the property and introduced considerable improvements thereon. Appellee likewise sought to recover
damages by way of counterclaim.
After trial upon the issue thus joined, the court rendered judgment dismissing the complaint, which, on
appeal, was affirmed by the Court of Appeals.
The facts of the case are not disputed.
In the year 1955, Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of
unregistered land located in barrio Parayao, Municipality of Binmaley, Pangasinan. While their application
for registration of said land under Act No. 496 was pending, they executed, on June 19 and September 21,
1955, two deeds of sale conveying the property to appellee, who thereafter took possession thereof and
proceeded to introduce substantial improvements therein. One month later, that is, on October 14, 1955,
Original Certificate of Title No. 6942 covering the land was issued in the name of the Maron's, free from all
liens and encumbrances.
On August 4, 1956, by virtue of a final judgment rendered in Civil Case No. 42215 of the Municipal Court
of Manila against Sammy Maron in favor of the Manila Trading and Supply Company, levy was made upon
whatever interest he had in the aforementioned property, and thereafter said interest was sold at public
auction to the judgment creditor. The corresponding notice of levy, certificate of sale and the Sheriff's
certificate of final sale in favor of the Manila Trading and Supply Co. because nobody exercised the right
of redemptions were duly registered. On March 1, 1958, the latter sold all its rights and title to the
property to appellant.
The question before Us now is: Who has the better right as between appellant Dagupan Trading Company,
on the one hand, and appellee Rustico Macam, on the other, to the one-eighth share of Sammy Maron in
the property mentioned heretofore?
If the property covered by the conflicting sales were unregistered land, Macam would undoubtedly have
the better right in view of the fact that his claim is based on a prior sale coupled with public, exclusive and
continuous possession thereof as owner. On the other hand, were the land involved in the conflicting
transactions duly registered land, We would be inclined to hold that appellant has the better right because,
as We have consistently held, in case of conveyance of registered real estate, the registration of the deed
of sale is the operative act that gives validity to the transfer. This would be fatal to appellee's claim, the
deeds of sale executed in his favor by the Maron's not having been registered, while the levy in execution
and the provisional certificate of sale as well as the final deed of sale in favor of appellant were registered.
Consequently, this registered conveyance must prevail although posterior to the one executed in favor of
appellee, and appellant must be deemed to have acquired such right, title and interest as appeared on the
certificate of title issued in favor of Sammy Maron, subject to no lien, encumbrance or burden not noted
thereon. (Anderson & Co. vs. Garcia, 64 Phil. 506; Reynes, et al. vs. Barrera, et al., 68 Phil. 656; Banco
Nacional, etc. vs. Camus, 70 Phil. 289)
The present case, however, does not fall within either, situation. Here the sale in favor of appellee was
executed before the land subject-matter thereof was registered, while the conflicting sale in favor of
appellant was executed after the same property had been registered. We cannot, therefore, decide the
case in the light of whatever adjudicated cases there are covering the two situations mentioned in the
preceding paragraph. It is our considered view that what should determine the issue are the provisions of
the last paragraph of Section 35, Rule 39 of the Rules of Court, to the effect that upon the execution and
delivery of the final certificate of sale in favor of the purchaser of land sold in an execution sale, such
purchaser "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." Now We ask: What was the interest and claim of Sammy Maron
on the one-eighth portion of the property inherited by him and his co-heirs, at the time of the levy? The
answer must necessarily be that he had none, because for a considerable time prior to the levy, his
interest had already been conveyed to appellee, "fully and retrievably as the Court of Appeals held.
Consequently, 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 (Buson vs.
Licuaco, 13 Phil. 357-358; Landig vs. U.S. Commercial Company, G.R. No. L-3597, July 31, 1951).
Needless to say, the unregistered sale and the consequent conveyance of title and ownership in favor of
appellee could not have been cancelled and rendered of no effect upon the subsequent issuance of the
Torrens title over the entire parcel of land. We cannot, therefore, but agree with the following statement
contained in the appealed decision:
... . Separate and apart from this however, we believe that in the inevitable conflict between a
right of ownership already fixed and established under the Civil Law and/or the Spanish Mortgage
Law which cannot be affected by any subsequent levy or attachment or execution and a new
law or system which would make possible the overthrowing of such ownership on admittedly
artificial and technical grounds, the former must be upheld and applied. 1wph1.t
But to the above considerations must be added the important circumstance that, as already stated before,
upon the execution of the deed of sale in his favor by Sammy Maron, appellee took possession of the land
conveyed as owner thereof, and introduced considerable improvements thereon. To deprive him now of
the same by sheer force of technicality would be against both justice and equity.
IN VIEW OF ALL THE FOREGOING, the decision appealed from is affirmed, with costs.
 [G.R. No. 154409. June 21, 2004]
Spouses NOEL and JULIE ABRIGO, petitioners, vs. ROMANA DE VERA, respondent.
DECISION
PANGANIBAN, J.:
Between two buyers of the same immovable property registered under the Torrens system, the law
gives ownership priority 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. This provision, however, does not
apply if the property is not registered under the Torrenssystem.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the
March 21, 2002 Amended Decision[2] and the July 22, 2002 Resolution[3] of the Court of Appeals (CA) in
CA-GR CV No. 62391. The Amended Decision disposed as follows:
WHEREFORE, the dispositive part of the original DECISION of this case, promulgated on November 19,
2001, is SET ASIDE and another one is entered AFFIRMING in part and REVERSING in part the
judgment appealed from, as follows:
1. Declaring [Respondent] Romana de Vera the rightful owner and with better right to possess
the property in question, being an innocent purchaser for value therefor;
2. Declaring Gloria Villafania [liable] to pay the following to [Respondent] Romana de Vera and
to [Petitioner-]Spouses [Noel and Julie] Abrigo, to wit:
As to [Respondent] Romana de Vera:
1. P300,000.00 plus 6% per annum as actual damages;
2. P50,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
As culled from the records, the following are the pertinent antecedents amply summarized by the trial
court:
On May 27, 1993, Gloria Villafania sold a house and lot located at Banaoang, Mangaldan, Pangasinan and
covered by Tax Declaration No. 1406 to Rosenda Tigno-Salazar and Rosita Cave-Go. The said sale became
a subject of a suit for annulment of documents between the vendor and the vendees.
On December 7, 1993, the Regional Trial Court, Branch 40 of Dagupan City rendered judgment approving
the Compromise Agreement submitted by the parties. In the said Decision, Gloria Villafania was given one
year from the date of the Compromise Agreement to buy back the house and lot, and failure to do so
would mean that the previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain
valid and binding and the plaintiff shall voluntarily vacate the premises without need of any demand. Gloria
Villafania failed to buy back the house and lot, so the [vendees] declared the lot in their name.
Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go, Gloria Villafania obtained a free patent
over the parcel of land involved [on March 15, 1988 as evidenced by OCT No. P-30522]. The said free
patent was later on cancelled by TCT No. 212598 on April 11, 1996.
On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot to the herein
[Petitioner-Spouses Noel and Julie Abrigo].
On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera x x x. Romana de
Vera registered the sale and as a consequence, TCT No. 22515 was issued in her name.
On November 12, 1997, Romana de Vera filed an action for Forcible Entry and Damages against [Spouses
Noel and Julie Abrigo] before the Municipal Trial Court of Mangaldan, Pangasinan docketed as Civil Case
No. 1452. On February 25, 1998, the parties therein submitted a Motion for Dismissal in view of their
agreement in the instant case that neither of them can physically take possession of the property in
question until the instant case is terminated. Hence the ejectment case was dismissed.[5]
Thus, on November 21, 1997, [petitioners] filed the instant case [with
the Regional Trial Court of Dagupan City] for the annulment of documents, injunction, preliminary
injunction, restraining order and damages [against respondent and Gloria Villafania].

4. P30,000.00 as attorneys fees; and After the trial on the merits, the lower court rendered the assailed Decision dated January 4, 1999,
awarding the properties to [petitioners] as well as damages. Moreover, x x x Gloria Villafania was ordered
5. Cost of suit. to pay [petitioners and private respondent] damages and attorneys fees.
As to [Petitioner-]Spouses [Noel and Julie] Abrigo: Not contented with the assailed Decision, both parties [appealed to the CA].[6]
1. P50,000.00 as moral damages; Ruling of the Court of Appeals
2. P50,000.00 as exemplary damages; In its original Decision promulgated on November 19, 2001, the CA held that a void title could not
3. P30,000.00 as attorneys fees; give rise to a valid one and hence dismissed the appeal of Private Respondent Romana de Vera. [7] Since
Gloria Villafania had already transferred ownership to Rosenda Tigno-Salazar and Rosita Cave-Go, the
4. Cost of suit.[4] subsequent sale to De Vera was deemed void.
The assailed Resolution denied reconsideration. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and found no sufficient basis to award
The Facts them moral and exemplary damages and attorneys fees.

Quoting the trial court, the CA narrated the facts as follows: On reconsideration, the CA issued its March 21, 2002 Amended Decision, finding Respondent De Vera
to be a purchaser in good faith and for value. The appellate court ruled that she had relied in good faith on
the Torrens title of her vendor and must thus be protected.[8]
 Hence, this Petition.[9]
Issues
Petitioners raise for our consideration the issues below:
1. Whether or not the deed of sale executed by Gloria Villafania in favor of [R]espondent Romana
de Vera is valid.
2. Whether or not the [R]espondent Romana de Vera is a purchaser for value in good faith.
3. Who between the petitioners and respondent has a better title over the property in question.[10]
In the main, the issues boil down to who between petitioner-spouses and respondent has a better
right to the property.
The Courts Ruling
The Petition is bereft of merit.
Main Issue:
Better Right over the Property
Petitioners contend that Gloria Villafania could not have transferred the property to Respondent De
Vera because it no longer belonged to her.[11] They further claim that the sale could not be validated, since
respondent was not a purchaser in good faith and for value.[12]
Law on Double Sale
The present case involves what in legal contemplation was a double sale. On May 27, 1993, Gloria
Villafania first sold the disputed property to Rosenda Tigno-Salazar and Rosita Cave-Go, from whom
petitioners, in turn, derived their right. Subsequently, on October 23, 1997, a second sale was executed by
Villafania with Respondent Romana de Vera.
Article 1544 of the Civil Code states the law on double sale thus:
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.
Otherwise stated, the law provides that a double sale of immovables 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.[13] There is no ambiguity in the application of this law with respect to
lands registered under the Torrens system.
This principle is in full accord with Section 51 of PD 1529[14] which provides that no deed, mortgage,
lease or other voluntary instrument -- except a will -- purporting to convey or affect registered land shall
take effect as a conveyance or bind the land until its registration.[15] Thus, if the sale is not registered, it is
binding only between the seller and the buyer but it does not affect innocent third persons. [16]
In the instant case, both Petitioners Abrigo and respondent registered the sale of the property. Since
neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was
covered by the Torrens system, they registered their respective sales under Act 3344.[17] For her part,
respondent registered the transaction under the Torrens system[18]because, during the sale, Villafania had
presented the transfer certificate of title (TCT) covering the property. [19]
Respondent De Vera contends that her registration under the Torrens system should prevail over that
of petitioners who recorded theirs under Act 3344. De Vera relies on the following insight of Justice
Edgardo L. Paras:
x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is
sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as
amended, such sale is not considered REGISTERED, as the term is used under Art. 1544 x x x. [20]
We agree with respondent. It is undisputed that Villafania had been issued a free patent registered as
Original Certificate of Title (OCT) No. P-30522.[21] The OCT was later cancelled by Transfer Certificate of
Title (TCT) No. 212598, also in Villafanias name.[22] As a consequence of the sale, TCT No. 212598 was
subsequently cancelled and TCT No. 22515 thereafter issued to respondent.
Soriano v. Heirs of Magali[23] held that registration must be done in the proper registry in order to
bind the land. Since the property in dispute in the present case was already registered under
the Torrens system, petitioners registration of the sale under Act 3344 was not effective for purposes of
Article 1544 of the Civil Code.
More recently, in Naawan Community Rural Bank v. Court of Appeals,[24] the Court upheld the right of
a party who had registered the sale of land under the Property Registration Decree, as opposed to another
who had registered a deed of final conveyance under Act 3344. In that case, the priority in time principle
was not applied, because the land was already covered by the Torrens system at the time the conveyance
was registered under Act 3344. For the same reason, inasmuch as the registration of the sale to
Respondent De Vera under the Torrens system was done in good faith, this sale must be upheld over the
sale registered under Act 3344 to Petitioner-Spouses Abrigo.
Radiowealth Finance Co. v. Palileo[25] explained the difference in the rules of registration under Act
3344 and those under the Torrens system in this wise:
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.
The case of Carumba vs. Court of Appeals[26] is a case in point. It was held therein that Article 1544 of the
Civil Code has no application to land not registered under Act No. 496. Like in the case at bar, Carumba
dealt with a double sale of the same unregistered land. The first sale was made by the original owners and
was unrecorded while the second was an execution sale that resulted from a complaint for a sum of
money filed against the said original owners. Applying [Section 33], Rule 39 of the Revised Rules of
Court,[27] this Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at
the execution sale though the latter was a buyer in good faith and even if this second sale was
registered. It was explained that this is because 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.
Applying this principle, x x x the execution sale of 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. [28]
Petitioners cannot validly argue that they were fraudulently misled into believing that the property
was unregistered. A Torrens title, once registered, serves as a notice to the whole world.[29] All persons
must take notice, and no one can plead ignorance of the registration. [30]
Good-Faith Requirement
We have consistently held that Article 1544 requires the second buyer to acquire the immovable in
good faith and to register it in good faith.[31] Mere registration of title is not enough; good faith must
concur with the registration.[32] We explained the rationale in Uraca v. Court of Appeals,[33] which we
quote:
Under the foregoing, the prior registration of the disputed property by the second buyer does not by itself
confer ownership or a better right over the property. Article 1544 requires that such registration must be
coupled with good faith. Jurisprudence teaches us that (t)he 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 Civil Code. Such knowledge of the first buyer does not bar her from availing of her
rights under the law, among them, to register first her purchase as against the second buyer. But
in converso, 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. This is the price
exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer; that
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 buyers rights) ---- from the time of acquisition
until the title is transferred to him by registration, or failing registration, by delivery of
possession.[34] (Italics supplied)
Equally important, under Section 44 of PD 1529, every registered owner receiving a certificate of title
pursuant to a decree of registration, and every subsequent purchaser of registered land taking such
certificate for value and in good faith shall hold the same free from all encumbrances, except those noted
and enumerated in the certificate.[35] Thus, a person dealing with registered land is not required to go
behind the registry to determine the condition of the property, since such condition is noted on the face of
the register or certificate of title.[36] Following this principle, this Court has consistently held as regards
registered land that a purchaser in good faith acquires a good title as against all the transferees thereof
whose rights are not recorded in the Registry of Deeds at the time of the sale. [37]
Citing Santiago v. Court of Appeals,[38] petitioners contend that their prior registration under Act 3344
is constructive notice to respondent and negates her good faith at the time she registered the
sale. Santiago affirmed the following commentary of Justice Jose C. Vitug:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the
first buyer of the second sale cannot defeat the first buyer's rights except when the second buyer first
registers in good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge
gained by the second buyer of the first sale defeats his rights even if he is first to register, since such
knowledge taints his registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No 58530, 26
December 1984) In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984; 129 SCRA 656), it was held that it is
essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act in
good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs.
CA, G.R. 95843, 02 September 1992).
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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 his
standing 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) or when there is only one sale ( Remalante vs. Tibe,
158 SCRA 138).[39] (Emphasis supplied)
Santiago was subsequently applied in Bayoca v. Nogales,[40] which held:
Verily, there is absence of prior registration in good faith by petitioners of the second sale in their favor. As
stated in the Santiago case, registration by the first buyer under Act No. 3344 can have the effect of
constructive notice to the second buyer that can defeat his right as such buyer. On account of the
undisputed fact of registration under Act No. 3344 by [the first buyers], necessarily, there is absent good
faith in the registration of the sale by the [second buyers] for which they had been issued certificates of
title in their names. x x x.[41]
Santiago and Bayoca are not in point. In Santiago, the first buyers registered the sale under
the Torrens system, as can be inferred from the issuance of the TCT in their names.[42]There was no
registration under Act 3344. In Bayoca, when the first buyer registered the sale under Act 3344, the
property was still unregistered land.[43] Such registration was therefore considered effectual.
Furthermore, Revilla and Taguba, which are cited in Santiago, are not on all fours with the present
case. In Revilla, the first buyer did not register the sale.[44] In Taguba, registration was not an issue.[45]
As can be gathered from the foregoing, constructive notice to the second buyer through registration
under Act 3344 does not apply if the property is registered under the Torrenssystem, as in this case.
We quote below the additional commentary of Justice Vitug, which was omitted in Santiago. This
omission was evidently the reason why petitioner misunderstood the context of the citation therein:
"The registration contemplated under Art. 1544 has been held to refer to registration under Act 496 Land
Registration Act (now PD 1529) which considers the act of registration as the operative act that binds the
land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia vs. Rosabal, 73 Phil 694). On lands covered by the
Torrens System, the purchaser acquires such rights and interest as they appear in the certificate of title,
unaffected by any prior lien or encumbrance not noted therein. The purchaser is not required to explore
farther than what the Torrens title, upon its face, indicates. The only exception is where the purchaser has
actual knowledge of a flaw or defect in the title of the seller or of such liens or encumbrances which, as to
him, is equivalent to registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18 October
1988; Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court of Appeals, L-26677, 27 March 1981),"[46]
Respondent
in Good Faith
The Court of Appeals examined the facts to determine whether respondent was an innocent
purchaser for value.[47] After its factual findings revealed that Respondent De Vera was in good faith, it
explained thus:
x x x. Gloria Villafania, [Respondent] De Veras vendor, appears to be the registered owner. The subject
land was, and still is, registered in the name of Gloria Villafania. There is nothing in her certificate of title
and in the circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that
she need[ed] to look beyond the title. She had no notice of the earlier sale of the land to [petitioners]. She
ascertained and verified that her vendor was the sole owner and in possession of the subject property by
examining her vendors title in the Registry of Deeds and actually going to the premises. There is no
evidence in the record showing that when she bought the land on October 23, 1997, she knew or had the
slightest notice that the same was under litigation in Civil Case No. D-10638 of
the Regional Trial Court of Dagupan City, Branch 40, between Gloria Villafania and [Petitioners]
Abrigo. She was not even a party to said case. In sum, she testified clearly and positively, without any
contrary evidence presented by the [petitioners], that she did not know anything about the earlier sale and
claim of the spouses Abrigo, until after she had bought the same, and only then when she bought the
same, and only then when she brought an ejectment case with the x x x Municipal Court of Mangaldan,
known as Civil Case No. 1452. To the [Respondent] De Vera, the only legal truth upon which she had to
rely was that the land is registered in the name of Gloria Villafania, her vendor, and that her title under
the law, is absolute and indefeasible. x x x.[48]
We find no reason to disturb these findings, which petitioners have not rebutted. Spouses Abrigo
base their position only on the general averment that respondent should have been more vigilant prior to
consummating the sale. They argue that had she inspected the property, she would have found petitioners
to be in possession.[49]
This argument is contradicted, however, by the spouses own admission that the parents and the
sister of Villafania were still the actual occupants in October 1997, when Respondent De Vera purchased
the property.[50] The family members may reasonably be assumed to be Villafanias agents, who had not
been shown to have notified respondent of the first sale when she conducted an ocular inspection. Thus,
good faith on respondents part stands.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.
Ynares-Santiago, J., on leave.