Double Sale:

Consolidated Rural Bank vs. CA, Teodoro. G.R. No. 132161. January 17, 2005

Requisites for the application of Art. 1544.

The essence of this case is that, Article 1544 of the NCC is not applicable when the
vendor is no longer the owner when the alleged second sale is made.

The provision is not applicable in the present case. It contemplates a case of double or
multiple sales by a single vendor. More specifically, it covers a situation where a single
vendor sold one and the same immovable property to two or more buyers.[42] According
to a noted civil law author, it is necessary that the conveyance must have been made by
a party who has an existing right in the thing and the power to dispose of it.[43] It cannot
be invoked where the two different contracts of sale are made by two different persons,
one of them not being the owner of the property sold.[44] And even if the sale was made
by the same person, if the second sale was made when such person was no longer the
owner of the property, because it had been acquired by the first purchaser in full
dominion, the second purchaser cannot acquire any right.[45]

In the case at bar, the subject property was not transferred to several purchasers by a
single vendor. In the first deed of sale, the vendors were Gamiao and Dayag whose right
to the subject property originated from their acquisition thereof from Rizal Madrid with
the conformity of all the other Madrid brothers in 1957, followed by their declaration of
the property in its entirety for taxation purposes in their names. On the other hand, the
vendors in the other or later deed were the Madrid brothers but at that time they were no
longer the owners since they had long before disposed of the property in favor of
Gamiao and Dayag.

Other principles involved:

Article 1544, in the double sale of an immovable, the rules of preference are:

(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.

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 buyers rights)from the time of acquisition until
the title is transferred to him by registration or failing registration, by delivery of
possession.

DE LEON vs. ONG G.R. No. 170405

This is a case of double sale, wherein De Leon sold the land to Ong with assumption of
mortgage, but before Ong could pay the mortgage, as she was (Ong) underwent credit
investigation, De Leon sold the same land to Villoria.
One of the allegations of De Leon was that the sale was a contract to sell. The condition
was the assumption of mortgage. But in this case, the court ruled that the sale was
absolute. There was no reservation as to the ownership over the land.

As to the issue of double sale:

Petitioner (De Leon) sold the same properties to two buyers, first to
respondent (Ong) and then to Viloria on two separate occasions.[20] However, the
second sale was not void for the sole reason that petitioner had previously sold the
same properties to respondent. On this account, the CA erred.

This case involves a double sale as the disputed properties were sold validly
on two separate occasions by the same seller to the two different buyers in good faith.

Article 1544 of the Civil Code provides:

Article 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. (emphasis supplied)

This provision clearly states that the rules on double or multiple sales apply only to
purchasers in good faith. Needless to say, it disqualifies any purchaser in bad faith.

A purchaser in good faith is one who buys the property of another without notice that
some other person has a right to, or an interest in, such property and pays a full and fair
price for the same at the time of such purchase, or before he has notice of some other
persons claim or interest in the property.[21] The law requires, on the part of the buyer,
lack of notice of a defect in the title of the seller and payment in full of the fair price at the
time of the sale or prior to having notice of any defect in the sellers title.

MARTINEZ vs. COURT OF APPEALS, G.R. No. 123547. May 21, 2001

This case, however, involves double sale and, on this matter, Art. 1544 of the Civil Code
provides that where immovable property is the subject of a double sale, ownership shall
be transferred (1) to the person acquiring it who in good faith first recorded it to the
Registry of Property; (2) in default thereof, to the person who in good faith was first in
possession; and (3) in default thereof, to the person who presents the oldest title.[26]
The requirement of the law, where title to the property is recorded in the Register of
Deeds, is two-fold: acquisition in good faith and recording in good faith. To be entitled to
priority, the second purchaser must not only prove prior recording of his title but that he
acted in good faith, i.e., without knowledge or notice of a prior sale to another. The
presence of good faith should be ascertained from the circumstances surrounding the
purchase of the land.

RADIOWEALTH V. PALILEO (May 20, 1991)

FACTS:
Spouses Castro sold a parcel of unregistered coconut land in Surigao del
Norte to Manuelito Palileo. The sale is evidenced by a notarized deed of
sale and Palileo exercised acts of ownership through his mother and also
paid real estate taxes.

Meanwhile, a judgment over a civil case was rendered against Enrique

Castro ordering him to pay 22K to Radiowealth Finance Co.

Pursuant to this, the provincial sheriff levied upon and sold in public
auction the subject land that was previously sold to Palileo. A certificate of
sale was issued in favor of Radiowealth being the lone bidder and after the
expiration of the period of redemption, a deed of final sale was also
executed in their favor and both deeds was registered to the Registry of
Deeds.

ISSUE:
WON the sale in public auction is valid.

HELD:
Had Art.1544 been applied, the judgment should be rendered in favor of
Radiowealth being the one who registered the land first. But since the
subject land is an unregistered land, a different rule should apply.

Under Act.3344 mere registration of a sale in one's 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.

Article 1544 of the Civil Code has no application to land not registered
under the torrens system. 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 latter's interest
in the property sold as of the time the property was levied upon. As such,
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.
Berico and Sanchez vs. CA, Flores, G.R. No. 96306 August 20, 1993

It therefore goes without saying that the rights conferred by Article 1473 of the
old Civil Code, now Article 1544 of the new Civil Code, "upon one of the two
purchasers of the same real property who has registered his title in the registry of
deeds, do not come into being if the registration is not made in good faith."
20
Otherwise stated, in order that a purchaser of realty may merit the protection of
the second paragraph of Article 1544, the said purchaser must act in good faith
in registering his deed of sale. 21Verily, good faith is the fundamental premise of
the preferential rights established in the said Article. 22Hence, mere registration is
not enough; good faith must concur with it.

CARDENTE vs. CA

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.

It is undisputed that the private respondents, the second vendees, registered the
sale in their favor whereas the petitioners, the first buyers, did not. But mere
registration of the sale is not enough. Good faith must concur with the
registration. Bad faith renders the registration nothing but an exercise in futility.
The law and jurisprudence are very clear on this score. 6

The heart of the problem is whether or not the private respondents acted in good
faith when they registered the deed of sale dated August 18, 1960 more than six
months later, on March 7, 1961. Inextricably, the inquiry must be directed on the
knowledge, or lack of it, of the previous sale of the one-hectare portion on the
part of the second buyers at the time of registration. The trial court found that the
second vendees had such knowledge.

It is true that good faith is always presumed while bad faith must be proven by
the party alleging it. 7 In this case, however, viewed in the light of the
circumstances obtaining, we have no doubt that the private respondents’
presumed good faith has been sufficiently overcome and their bad faith amply
established.cha