Outline in “Double
Sales”
Article 1544, New
Civil Code
By: Atty. Ed Reyes III
(For
Section 4-c. Univ. of San Agustin
School
of Law, SY 2015-2016 2nd sem,
Civil
Law Review II)
I.Main
Rule
Primus tempore,
potior jure (First in time, priority in right).
Corollary
to Legal truism that: “You cannot give what you do not have”.
II.
Article 1544;
Rules
only apply when the following requisites concur:
a)
The two (or more)
sales transactions must constitute valid sales
b)
The two (or more)
sales transactions must pertain to exactly the same subject matter
c)
The two (or more)
buyers at odds over the rightful ownership of the subject matter must each
represent conflicting interests; and
d)
The two (or more)
buyers at odds over the rightful ownership of the subject matter must each have
bought from the very same seller[1]
III.
Two Sales Must be Valid Transactions
3.1.
Espiritu v. Valerio, 9 SCRA 761 (1963)- Where
one sale involved a forged signature of the seller, Art. 1544 does not apply.
- Art 1544 applies to
Conditional Deeds of Sale (Because fulfillment of condition retroacts)
BUT NOT TO Contracts
to Sell
- Remedy when a
property was subject of contract to sell but sold via absolute sale is for
damages
IV.
Same Subject matter
4.1.
Sale v. Right of Redemption
V.
Same seller
-
Buyer
1 bought the thing from Mr. X who in turn bought it from Mr. Seller, while
Buyer 2 bought the same subject matter from Mr. Seller, Art. 1544 DOES NOT
APPLY- Rule on successors-in-interest and predecessors-in-interest have no
place in Art. 1544[4]
VI.
Registration v. Actual Possession
-
“As
between two purchasers, the one who has registered the sale in his favor, has a
preferred right over the other who has not registered his title, even if the
latter is in actual possession of the immovable property”.[5]
6.1.
Registration; Meaning
-
Tolentino: Deed of sale must be
inscribed in the registry of property, and the register of deeds made a
memorandum upon said document to the effect that “the foregoing instrument
annotated, etc.” and another note to the same effect was made thereon about
five months later, a marginal memorandum of the said annotations being made on
the original document itself, it was held that what was done with respect to
said entries or annotations and marginal notes amounted to a registration of
the sale”.[6]
-
Villanueva- “Registration” means
any entry made in the books of the registry, including both registration in its
ordinary and strict sense, and cancellation, annotation, and even marginal
notes. It is the entry made in the registry which records solemnly and
permanently the right of ownership and other real rights”.[7]
VII.
Purchaser in Good Faith; Concept
6.1.
Burden of proof or onus is on person
asserting that he is a purchaser in good faith. Mere reliance on presumption of
good faith is not enough. [8]
6.2.
Requisite of Full payment – “payment of 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”.[9]
6.3.
Obligation to Investigate Known Facts.
-
Mirror principle circumscribed
6.4.
Length of time required for buyer to keep good faith pristine
-“ 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. ignorance of the first sale and of the first
buyer’s rights)- from the time of acquisition until the tile is transferred to
him by registration or failing registration, by delivery of possession). The
second buyer must show CONTINUING good faith and innocence or lack of knowledge
of the first sale until his contract ripens into full ownership through prior
registration as provided by law”.[10]
VIII.
Does Art. 1544 contemplate of a race to the ROD between 1st and 2nd
buyers?
7.1.
Does “bad faith” on the part of the first buyer foreclose his right to register
the first sale?
-“The governing principle here is prius
tempore, potior jure (first in time, stronger in right). Knowledge gained by
the first buyer of the second sale cannot defeat the first buyer’s rights
except only as provided the Civil Code and that is where the second buyer first
registers in good faith the second sale ahead of first buyer. 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”[11].
IX.
First buyer is winner of the race without doing anything but only by the fact
that he is the first buyer.
Reasons:
a)
First
in time, priority in right
b) Knowledge by second
buyer of the first sale is equivalent to registration in favor of first buyer
c)
Knowledge
of the first sale makes the second buyer one in bad faith, and only good faith
second buyer is qualified to run the race[12]
X.
First buyer can practically watch the second buyer: 1. Transact, haggle with
same seller; 2. make installment payments; 3. Same seller to execute deed of
sale; and 4. Second buyer to bring the deed of sale to Register of Deeds. AND
YET STILL, second buyer cannot dislodge the first buyer. Until and unless, the
second buyer goes through the entire process of REGISTRATION and maintains
innocence or good faith all throughout. Then and only then is the first buyer
defeated.
-END
of Story.
[1]
Cesar Villanueva, Law on Sales p. 277, Cheng v. Genato, 300 SCRA 722 (1988)
[2] 69
SCRA 99 (1976)
[3] 263
SCRA 15 (1996)
[4]
Cesar Villanueva, p. 282, ibid.
[5]
Tolentino, Civil Code of the Philippines, Volume V p. 97 citing Mendiola v.
Pacalda, 10 Phil. 705
[6] P.
98 Tolentino, Id.
[7] P.
295 Villanueva, Id. Citing Cheng v.
Genato, 300 SCRA 722 (1998)
[8]
Mathay v. Court of Appeals, 295 SCRA 556 (1998)
[9] Ibid.
[10] Carbonel
v. Court of Appeals, Ibid
[11] Id.
[12]
Villanueva, Ibid.
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