CONSOLIDATION OF CASE DOCTRINES

for SALES FINALS EXAM

2014-2015

an unregistered land does so at his peril. His

claim of having bought the land in good faith
would not protect him if it turns out that the
seller does not actually own the property.

Class of 2L

4. Zapanta- Olivares vs Gonzales

Knowledge by the first buyer of the second

1. Kadatuan- Carbonell vs CA
The recording of Carbonells adverse claim
should be deemed to have been done in
good faith and should emphasize Infantes
bad faith when the latter registered her deed
of sale only 4 days after Catbonells
registration of adverse claim.
2. Montero- Dagupan Trading vs Macam
Where one of two conflicting sales of a piece
of land was executed before the land was
registered, while the other was an execution
sale in favor of the judgment creditor of the
owner made after the same property had
been registered, 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 rights, title, interest and
claim of the judgment debtor to the property
as of the time of the levy."

sale cannot defeat the first buyers rights

except when the second buyer first registers
in good faith the second sale
5. Yan- Caram vs Laureta
The rule on caveat emptor requires the
purchases to be aware of the supposed title
of the vendor and one who buys without
checking the vendors title takes all the risk
and losses consequent to such failure.
6. Viloria- Cruz vs Cabana
Under Article 1544 (2), the ownership of an
immovable property shall belong to the
person acquiring it, who in good faith first
recorded it in the Registry of Property. Before
the second buyer can obtain priority over the
first, he must show that he acted in good faith
throughout. The knowledge of the first sale
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.

Where for a considerable time prior to the

levy on execution the interest of the owner of
the land levied upon had already been
conveyed to another who took possession
thereof and introduced improvements
therein, the aforesaid levy is void. The prior
sale, albeit unregistered, cannot be deemed
automatically
cancelled
upon
the
subsequent issuance of the Torrens title over
the land.

7. Ujano- Valdez vs CA

3. Recinto- David vs Bandin

8. Tolentino- Nuguid vs CA

The defense of having purchased the

property in good faith may be availed of only
where registered land is involved and the
buyer had relied in good faith on the clear title
of the registered owner. One who purchases

The private respondents cannot also

honestly claim that they became aware of the
spouses Nuguids title only in 1978, because
ever since the latter bought the property in
1961, the spouse Nuguid have occupied the
same openly, publicly, and continuously in

The Petitioners acquired the lot in good faith

and for valuable consideration from the
Antes and such owners fenced the property
taking possession thereof. Thus when
Petitioners annotated their adverse claim in
the Registry of Deeds they thereby
established a superior right to the property in
question as against Respondent Viernes

the concept of owners, even building their

house thereon. For seventeen years they
were in peaceful possession, with the
respondents Guevarras occupying less than
one-half of the same property.
9. SorianoPalileo

Radiowealth

Finance

vs

DOCTRINE: 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 latter's interest in the
property sold as of the time the property was
levied upon.
10. Soliva- Tanedo vs CA
1544 (2) The ownership of an immovable
shall belong to the person acquiring it who in
good faith first recorded it in the Registry of
Property.
11. Secerio- Spouses Tomas and Silvina
Occena vs Esponilla

claims as are annotated on the title.

HOWEVER, such principle does not apply
when the party has actual knowledge of facts
and circumstances which would impel a
reasonably cautious man to make such
inquiry or when he has knowledge of a defect
or lack of title in the vendor or of sufficient
facts to induce a reasonably prudent man to
inquire into the status of the title of the
property in litigation.
The general rule is, registration under the
Torrens system is the operative fact which
gives validity to the transfer of the land.
HOWEVER, it does not create or vest title
especially where a party has actual
knowledge of the claimant's actual, open and
notorious possession of the property at the
time of his registration.
12. Santos- Moles vs IAC

13. Quiones- Engineering and Machinery

Corp vs CA

What is material is whether the second

buyer registers the second sale in good faith
without knowledge of any defect in the title of
the property.

14. Nonato- Sonny Lo vs CA

The defense of indefeasibility of the Torrens

title does not extend to a transferee who
takes the certificate of title in bad faith, with
notice of flaw.

ARTICLE 1628 CIVIL CODE. In other words,

the vendor or assignor is BOUND TO
WARRANT the existence and legality of the
credit AT THE TIME OF THE SALE.

A buyer of real property in the possession

of persons other than the seller must be wary
and should investigate the rights of those in
possession. Without such inquiry, the buyer
can hardly be regarded as a buyer in good
faith and cannot have any right over the
property.

15. Natanauan- Catungal vs Rodriguez

The general rule is that one who deals with

a property registered under the Torrens
System need not go beyond the same, but
only has to rely on the title. He is charged
with the notice only of such burdens and

While failure to comply with the condition

imposed on the perfection of a contract
results in the cancellation of a contract,
failure to comply with the condition imposed
merely on the performance of an obligation
gives the other party the option to either
refuse to proceed with the sale or to waive
the condition (Article 1545).
16. Manuel- Ramos vs CA

The true intention of the parties being that the

transaction shall secure the payment of the
debt, it shall be presumed to be an equitable
mortgage.
The
existence
of
one
circumstance is enough to create the
presumption.
17. Mahinay- De Leon vs Salvador
PRICE
ON
FORCED
SALES
DISTINGUISHED FROM PRICE ON
ORDINARY SALES In ordinary sales, by
reasons of equity, a transaction may be
invalidated on the ground of inadequacy of
price. In forced sales, as when a sale is made
at a public auction, the owner has the right to
redeem. When there is a right to redeem,
inadequacy of price is immaterial because
judgment debtor can better acquire the
property or also sell his right to redeem and
thus recover the loss he claims to have
suffered by reason of the price obtained from
the auction sale.

Between an unrecorded deed, which the

Court held to be an equitable mortgage, and
a registered mortgage, the latter must be
preferred. Preference of mortgage credits is
determined by the priority of registration of
the mortgages, following the maxim "Prior
tempore potior jure" (He who is first in time is
preferred in right.)
22. Gaspi- Capulong vs CA
Existence of equitable mortgage is shown by
the fact the petitioner remained in
possession of the property and enjoyed the
fruits thereof even after the execution of
deed of sale. Also, as shown by the real
intention of the parties that the series of loans
obtained by Capulong was added in order to
serve as a purchase price for the lot when in
fact, there were no money transactions
involved in the execution.
23. Gamboa- Solid Homes Inc vs CA

18. Landicho- Flores vs So

19. Hernandez- Alonzo vs IAC

In this case, the co-heirs filed an action for
redemption if their co-heirs share only after
13 years had elapsed from the sale. The
court held that they are deemed it have been
actually informed thereof sometime during
those years although no written notice of sale
was given to them
20. Geronimo- Lao vs CA
The urgent need of money places the
borrower at a disadvantage vis-a-vis the
lender who can dictate the terms of the
contract. The court in case of ambiguity
deems the contract to be one which involves
lesser transmission of rights and interests
over the property

21. Gernale- Lanuza vs De leon

24. Diaz- Primary Structures Corp vs

Valencia
Whenever a piece of rural land not
exceeding one hectare is alienated, the law
grants to the adjoining owners a right of
redemption except when the grantee or
buyer does not own any other rural land. In
order that the right may arise, the land sought
to be redeemed and the adjacent property
belonging to the person exercising the right
of redemption must both be rural lands. If one
or both are urban lands, the right cannot be
invoked. (Article 1621 provides for another
exception: This right is not applicable to
adjacent lands which are separated by
brooks, drains, ravines, roads and other
apparent servitudes for the benefit of other
estates.)
The written notice of sale is mandatory. This
Court has long established the rule that
notwithstanding actual knowledge of a coowner, the latter is still entitled to a written

notice from the selling co-owner in order to

remove all uncertainties about the sale, its
terms and conditions, as well as its efficacy
and status.
(In comparison with Alonzo v IAC)
In Alonzo, the right of legal redemption was
invoked several years, not just days or
months, after the consummation of the
contracts of sale. The complaint for legal
redemption itself was there filed more than
thirteen years after the sales were
concluded. (The Alonzo Case is an
exception to the general rule, in view of the
peculiar circumstances of said case.
25. De la Cuesta- Guzman Bocaling vs
Bonnevie
A purchaser in good faith and for value is one
who buys the property of another without
notice that some other person has a right to
or 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 the claim
or interest of some other person in the
property. Good faith connotes an honest
intention
to
abstain
from
taking
unconscientious advantage of another.
Tested by these principles, the petitioner
cannot tenably claim to be a buyer in good
faith as it had notice of the lease of the
property by the Bonnevies and such
knowledge should have cautioned it to look
deeper into the agreement to determine if it
involved stipulations that would prejudice its
own interests. Petitioners insistence that it
was not aware of the right of first priority
granted by the Contract of Lease, If GuzmanBocaling failed to inquire about the terms of
the Lease Contract, which includes Par. 20
on priority right given to the Bonnevies, it had
only itself to blame. Having known that the
property it was buying was under lease, it
behooved it as a prudent person to have
required Reynoso or the broker toshow to it
the Contract of Lease in which Par. 20 is
contained

It is true that the acquisition by a third person

of the property subject of the contract is an
obstacle to the action for its rescission where
it is shown that such third person is in lawful
possession of the subject of the contract and
that he did no tact in bad faith. However, this
rule is not applicable in the case before us
because the petitioner is not considered a
third party in relation to the Contract of Sale
nor may its possession of the subject
property be regarded as acquired lawfully
and in good faith. Petitioner was aware f the
lease in favor of the Bonnevies, who were
actually occupying the subject property at the
time it was sold to it. Although the Contract
of Lease was not annotated on the transfer
certificate of title in the name of the late Jose
Reynoso and Africa Reynoso, the petitioner
cannot deny actual knowledge of such lease
which was equivalent to and indeed more
binding than presumed notice by registration.
26. De Belen- Yek Seng Co vs CA
A. A lessee can only avail of the benefits
under Article 1687 if the lease agreement is
of no definite term.
B. The power of the Courts to fix a longer
term for lease is protestative or discretionary,
"may" is the word to be exercised or not in
accordance
with
the
particular
circumstances of the case; a longer term to
be granted where equities come into play
demanding extension, to be denied where
none appears, always with due deference to
the parties' freedom to contract
27. Cerda- Clutario vs CA
One of the grounds for ejectment under BP
no. 25 is non payment of rentals for three
months. The acceptance of the payment of
back rentals does not constitute waiver of the
default in the payment of rentals as a valid
cause of action for ejectment which have
been filed prior acceptance.
28. Carungay- Yap vs Cruz
In a lease that is month-to-month basis, it can
be terminated at the end of the month after
notice to vacate is given. In the case such

notice is absent thefore the lease with the

respondent subsist and despite nonpayment
of rental for the month of August, lease is not
automatically terminated without the demand
to pay and vacate. (Kailangan ng demand
and notice tulad ng pangangailangan natin
sa tunay na pagibig) <3
The new contract of petitioners and the
landlord does not terminate the lease of
respondent. They were indeed guilty of
forcible entry.
29. Bautista- United Realty Corp vs CA

30. Baguilat- Legal Management and

Realty
Corp
vs
CA