Rules On Double Sale Of Immovables

Category: Sales

Rules On Double Sale Of Immovables

In double sale of an immovable, the rules of preference are as follows:

(a)       the first registrant in good faith;

(b)       should there be no entry, the first in possession in good faith; and

(c)        in the absence thereof, the buyer who presents the oldest title in good faith. (Martinez vs. CA, 358 SCRA 38 (2001); Art. 1544, NCC).

Prior registration of the subject property does not by itself confer ownership or a better right over the property. Article 1544 requires 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 buyer’s rights) from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. (Uraca vs. CA, 344 Phil 253; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005).

One who purchases real property which is in actual possession of others should, at least, make some inquiry concerning the rights of those in possession. The actual possession by people other than the vendor should, at least, put the purchaser upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as a bona fide purchaser as against such possessions. (Rep. vs. CA, 102 SCRA 331; Conspecto vs. Fuerto, 31 Phil. 144). The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendor’s title takes all the risks and losses consequent to such failure. (Caram vs. Laureta, 103 SCRA 16 [1981]; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005; see also Sps. Mathay vs. Court of Appeals, 356 Phil. 870 [1998]).

Registration of the second buyer under Act 3344, providing for the registration of all instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System (Act 496), cannot improve the standing of a party since Act 3344 itself expresses that registration thereunder would not prejudice prior rights in good faith (see Carumba vs. Court of Appeals, 31 SCRA 558). Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith (see Arts. 708-709, Civil Code; see also Revilla vs. Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held to be inapplicable to execution sales of unregistered land, since the purchaser merely steps into the shoes of the debtor and acquires the latter’s interest as of the time the property is sold. (Carumba vs. Court of Appeals, 31 SCRA 558; see also Fabian vs. Smith, Bell & Co., 8 Phil. 496), (Remalante vs. Tibe, 158 SCRA 138; Sps. Noel & Julie Abrigo vs. De Vera, G. R. No. 154409, June 21, 2004).