Spouses ABRIGO vs. DE VERA G.R. No. 154409 June 21, 2004 

FACTS: Villafania sold a house and lot locatedPangasinan and Tigno-Salazar and Cave-Gocovered by a tax declaration. „Unknown,however to Tigno-Salazar and a Cave-Go,Villafania obtained a free patent over the parcelof land involved. The said free patent was lateron cancelled by a TCT.„On Oct 16, 1997, Tigno-Salazar and Cave-Go,sold the house and lot to the Spouses Abrigo.„On Oct 23, 1997, Villafania sold the samehouse and lot to de Vera. De Vera registered thesale and as a consequence a TCT was issued inher name.De Vera filed an action for Forcible Entry andDamages against Spouses Abrigo before theMTC.Spouses Abrigo filed a case with the RTC forthe annulment of documents, injunction,preliminary injunction, restraining order anddamages Villafania.The parties submitted a Motion for Dismissal inview of their agreement in the instant (RTC)case that neither of them can physically takepossession of the property in question until theinstant case is terminated. Hence the ejectmentcase was dismissed.The RTC rendered judgment approving theCompromise Agreement submitted by theparties. In the said Decision, Villafania was givenone year from the date of the CompromiseAgreement to buy back the house and lot, andfailure to do so would mean that the previoussale in favor of Tigno-Salazar and Cave-Go shallremain valid and binding and the plaintiff shallvoluntarily vacate the premises without need ofany demand. Villafania failed to buy back thehouse and lot, so the [vendees] declared the lotin their nameThe RTC rendered the assailed Decisionawarding the properties to Spouses Abrigo aswell as damages. Moreover, Villafania wasordered to pay [petitioners and privaterespondent] damages and attorney‟s fees. Not contented with the assailed Decision, bothparties [appealed to the CA].In its original Decision, the CA held that a voidtitle could not give rise to a valid one and hencedismissed the appeal of Private Respondent deVera.

 Since Villafania had already transferred

ownership to Rosenda Tigno-Salazar and RositaCave-Go, the subsequent sale to De Vera wasdeemed void.The CA also dismissed the appeal

of Petitioner-Spouses Abrigo and found nosufficient basis to award them moral andexemplary damages and attorney‟s fees. On reconsideration found Respondent De Verato be a purchaser in good faith and for value.The appellate court ruled that she had relied ingood faith on the Torrens title of her vendor andmust thus be protected.Hence, this Petition.

9 

ISSUE: Who between petitioner-spouses andrespondent has a better right to the property.

HELD: DE VERA

The petition is denied, and the assailed decisionaffirmed. The present case involves what in legalcontemplation was a double sale. GloriaVillafania first sold the disputed property toTigno-Salazar and Cave-Go, from whompetitioners, in turn, derived their right.Subsequently a second sale was executed byVillafania with Respondent de Vera.Article 1544 of the Civil Code states the law ondouble sale thus:“Art. 1544. If the same thing should have beensold to different vendees, the ownership shall betransferred to the person who may have firsttaken possession thereof in good faith, if itshould be movable property.“Should it be immovable property, the ownershipshall belong to the person acquiring it who ingood faith first recorded it in the Registry ofProperty.“Should there be no inscription, the ownershipshall pertain to the person who in good faith wasfirst in the possession; and, in the absencethereof, to the person who presents the oldesttitle, provided there is good faith.” There is no ambiguity in the application of thislaw with respect to lands registered under theTorrens system.In the instant case, both Petitioners Abrigo andrespondent registered the sale of the property.Since neither petitioners nor their predecessors(Tigno-Salazar and Cave-Go) knew that theproperty was covered by the Torrens system,they registered their respective sales under Act3344 For her part, respondent registered thetransaction under the Torrens system

 because,

during the sale, Villafania had presented thetransfer certificate of title (TCT) covering theproperty.Soriano v. Heirs of Magali 

23 held that registration

must be done in the proper registry in order tobind the land. Since the property in dispute in

 

the present case was already registered underthe Torrens system, petitioners‟ registration ofthe sale under Act 3344 was not effective forpurposes of Article 1544 of the Civil Code.More recently, in Naawan Community RuralBank v. Court of Appeals,

24 the Court upheld the

right of a party who had registered the sale ofland under the Property Registration Decree, asopposed to another who had registered a deedof final conveyance under Act 3344. In that case,the “priority in time” principle was not

applied, because the land was already coveredby the Torrens system at the time theconveyance was registered under Act 3344. Forthe same reason, inasmuch as the registration ofthe sale to Respondent De Vera under theTorrens system was done in good faith, this salemust be upheld over the sale registered underAct 3344 to Petitioner-Spouses Abrigo.

NAAWAN COMMUNITY RURAL BANK INC vCA

FACTS:Comayas offered to sell to the Lumo Spouses ahouse and lot. The property was alreadyregistered under the Torrens System that timeand they made appropriate inquiries with theRD; they found out that it was mortgaged forP8,000, paid Comayas to settle the mortgage,and the release of the adverse claim wasannotated in the title. Thereafter, they executedan Absolute Deed of Sale over the subjectproperty and registered the same. However, itturns out that it was already previously sold toNaawan Community Rural Bank; it was thenunregistered. The Bank foreclosed on theproperty, purchased the same, and registered itunder Act 3344. Thus, the Bank sought to ejectthe spouses. However, the latter countered withan action for quieting of title.

ISSUE: Who has a better title, Naawan or Lumospouses?

HELD: LUMO SPOUSES.Where a person claims to have superior propertyrights by virtue of a sheriff‟s sale, the benefit ofArt. 1544 applies favorably only if the property isregistered under the Torrens System—not underAct 3344. Registration under the TorrensSystem is the operative act that gives validity tothe transfer and creates lien upon the land. Thespouses acquired their titles under the TorrensSystem and they acted in good faith by

exercising due diligence; thus, they have abetter right to the said property