CivRev 2 Subject: Sales

Topic: Double Sale

MARIANO BALADIA y ESPLAGO and MARIETTA BALADIA-DADOR, petitioners, vs.

G.R. No. 221206, June 16, 2021

Doctrine: Ownership of an immovable property which is the subject of a double sale shall be
transferred: (1) to the person acquiring it who in good faith first recorded it in 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, provided there is good faith. There is
no ambiguity in the application of this law with respect to lands registered under the Torrens
system.

Facts: Respondents filed a complaint for Nullity of Sale, Cancellation of Certificate of Title, and
damages against the petitioners and other defendants. Respondents and one of the defendants
were involved in a previous case for Sum of Money, which was decided in favor of the
respondents. Julieta was ordered to pay respondents the amount of P75,625.00. The decision
attained finality and respondents moved for execution of judgment. The MTC granted the motion
and issued a writ of execution to satisfy the final judgment in the case.

On February 12, 1998, a Provisional Certificate of Sale was issued in favor of respondents. On
October 16, 1998, during the effectivity of the redemption period, petitioners, together with
Julieta and Rosa, sold the property to spouses Ca eso. On March 23, 1999, Julieta failed to
redeem the property and a Definite Certificate of Sale was executed in favor of respondents.
However, when respondents tried to transfer the title of the property in their name, they
discovered that the same had been sold to spouses Ca eso, who were able to obtain a Free Patent
Certificate of Title.

Petitioners claimed that they were not aware that Julieta mortgaged the property to Rosalind and
that the latter obtained a favorable decision. They further contended that the sheriff should not
have sold the property as the title thereto was still in the name of Simeona Baladia.

Meanwhile, spouses Ca eso claimed that before purchasing the property, they exerted earnest
efforts to determine its real owner. The Office of the Municipal Assessor of Nabua, Camarines
Sur and the Office of the Provincial Assessor confirmed that the property was registered in
Simeona Baladia's name. On October 16, 1998, the heirs of Simeona Baladia sold the property to
them and executed a Deed of Extrajudicial Settlement of Estate with Sale. The spouses Ca eso
immediately took possession of the property and transferred the title to their name. They paid the
estate taxes and capital gains tax, and caused the publication of the Extrajudicial Settlement of
Estate. They then applied for a Free Patent before the Community of Environment and Natural
Resources Office of Iriga City, and obtained the Original Certificate of Title No. 19063. They
asserted that they are innocent purchasers for value.

ISSUE: Whether the subject property belongs to the respondents, Spouses Bersabe or the
subsequent buyers, the spouses Ca eso.
CivRev 2 Subject: Sales
Topic: Double Sale

Ruling: The property belongs to Spouses Bersabe.

The Court applied Article 1544 of the Civil Code, which governs double sales. Ownership of an
immovable property sold to different buyers shall be transferred to the person who, in good faith,
first recorded it in the Registry of Property. However, this provision only applies to double sales
of registered lands under the Torrens system. Ownership of an immovable property which is the
subject of a double sale shall be transferred: (1) to the person acquiring it who in good faith first
recorded it in 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, provided
there is good faith. There is no ambiguity in the application of this law with respect to lands
registered under the Torrens system.

In the present case, where the property was unregistered, the Court applied Act No. 3344, which
provides for the registration of instruments affecting unregistered lands. Under Act No. 3344,
registration of instruments is without prejudice to a third party with a better right. The execution
sale in favor of the respondents, which preceded the subsequent sale to the spouses Ca eso,
created a better right that is protected by Act No. 3344.

Registration of a sale in one's favor does not give him any right over the land if the vendor was
not the owner of the land at the time of the sale. The execution sale to the respondents created a
better right to the property, which was protected by Act No. 3344. The subsequent sale to the
spouses Ca eso, made during the redemption period, could not defeat the earlier sale to the
respondents. The Court found that the heirs of Baladia fraudulently sold the property to the
spouses Ca eso. Therefore, the respondents were declared as the lawful owners of the property.