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LORENZO BERICO AND VISITACION SANCHEZ, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS (FORMER NINTH DIVISION), CIRIACO FLORES AND FELISA BAREJA, RESPONDENTS.

[ G.R. No. 96306, August 20, 1993 ]

Facts:           

            A certain Jose de los Santos owned a 98,254 square-meter parcel of land designated as Lot No. 785, PLs-32 located at Balo­-Andang, San Ramon, San Pascual (now Claveria), Masbate; the property is specifically described in Original Certificate of Title (OCT) No. P-671 issued on 31 May 1956. On 31 October 1961, Jose sold, in a private document a 2¼ hectare portion thereof to the private respondents. On 26 November 1963, however, he executed another deed of sale which he acknowledged before a notary public. Private respondents took possession of the portion sold to them immediately after the 1961 sale and declared the same for taxation purposes in the name of private respondent Ciriaco Flores private respondents likewise paid the taxes thereon.

            On 3 January 1963, Jose de los Santos sold one-half of Lot No. 785 to petitioner Lorenzo Berico. Thereafter, or on 30 March 1963, Jose's minor children sold to the same petitioner the remaining half. Jose de los Santos represented his children in this transaction.

Petitioner Berico was aware of the 1961 sale of a portion of the lot to the private respondents and of the latter's possession thereof.

Despite such knowledge and recognition of the sale in favor of and the possession of the property by the private respondents, petitioner Berico registered on 5 June 1968 the two deeds of sale in his favor and caused the cancellation of OCT No. P-671; the latter also secured the issuance in his name of Transfer Certificate of Title (TCT) No. T-1346. He paid the appropriate taxes thereon only from 1973 to 1986. It appears, however, that he declared the property for taxation purposes in his wife's name in 1968.

On the other hand, it was only on 8 November 1978 that the private respondents registered the deed of sale in their favor after discovering the cancellation of OCT No. P-671 and issuance in favor of petitioner Berico of TCT No. T-1346.

Issues:

                 (a) Whether or not the action of the private respondents is barred by prescription

     (b) Whether or not the acquisition by the petitioners of Jose de los Santos' land was      tainted with bad faith.

Ruling:

A.    Petitioners cannot seek refuge in the theory of implied or constructive trust and its corresponding rule on prescription. No trust, be it express or implied, is involved in the instant case. It cannot be inferred, as the petitioners suggest, from the fraudulent inclusion of the private respondents' property in TCT No. T-1346. Such a position probably stems from the petitioners' erroneous reading of Article 1456 of the new Civil Code which provides:

"ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes."

                        It is to be emphasized that the private respondents never parted with the ownership and possession of that portion of Lot No. 785 which they had purchased from Jose de los Santos; nor did the petitioners ever enter into possession thereof

B.  Yes. The acquisition by the petitioners of Jose de los Santos' land was tainted with bad faith when he  was aware of the 1961 sale of a portion of the lot to the private respondents and of the latter's possession thereof.

Since the petitioners had prior knowledge of the sale of the questioned portion to the private respondents and even recognized and respected the latter's possession thereof, they acted with gross and evident bad faith in registering the deed of sale and in obtaining TCT No. T-1346 in their favor. Thus, the registration of the deed of sale was ineffectual and vested upon them no preferential rights to the property in derogation of the rights of the private respondents.

The instant petition is DENIED.

IGNACIO CARDENTE AND ANASTACIA T. CARDENTE, PETITIONERS, VS. THE INTERMEDIATE APPELLATE COURT AND SPOUSES RUPERTO RUBIN AND PRIMITIVA C. RUBIN, RESPONDENTS.
[ G.R. No. 73651, November 27, 1987 ]

Facts:

            Sometime in 1956, Francisca Cardente, for and on behalf of her grandson, petitioner Ignacio Cardente, who was then a minor, and now married to his co-petitioner, purchased from Isidro Palanay one hectare of land.  The property purchased is a part of a 9.2656-hectare parcel of land covered by Original Certificate of Title (O.C.T., for short) No. P-1380 in Palanay's name.  Immediately after the purchase, the Cardentes took possession of the land and planted various crops and trees thereon.  They have been in continuous possession ever since, adverse to the whole world.  Unfortunately, however, the private document evidencing the sale of the one-hectare lot to petitioner Ignacio Cardente was lost and never found despite diligent efforts exerted to locate the same.

            Some four years later, on August 18, 1960, Isidro Palanay sold the entire property covered by O.C.T. No. P-1380, including the one-hectare portion already sold to Cardente, this time to the private respondents, Ruperto Rubin and his wife.  The deed of sale was registered and a new title, Transfer Certificate of Title (T.C.T., for short) No. 1173, was issued in favor of the Rubin spouses.  Notwithstanding the second sale, or because of it, Isidro Palanay, with the written conforme of his wife, Josepha de Palanay, on December 9, 1972, executed a public document in favor of petitioner Ignacio Cardente confirming the sale to him (Cardente) in 1956 of the one hectare portion.  The deed of confirmation likewise states that the subsequent vendee, respondent Ruperto Rubin, was informed by Palanay of the first sale of the one-hectare portion to Cardente.

           

Issue:

            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. 

Ruling:

            This case involves a double sale.

           

            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 conflict, therefore, falls under, and can be resolved by, Article 1544 of the Civil Code which sets the rules on double sales.

           

            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.