Smith, Bell & Co. v Sotelo Matti (1992)FACTS

Plaintiff Smith, Bell & Co and the defendant Mr. Vicente Sotelo entered into a contract. Plaintiff has to deliver (1) two steel tanks shipped from New York to Manila within three or four months , (2)two expellers shipped from San Francisco in the month of September 1918 or as soon as possible, and (3) two electric motors with approximate delivery within ninety days. This is not guaranteed.

The tanks arrived at Manila on 27 April 1919; the expellers on 26 October 1918; and the motors on 27 February 1919. Upon notification from plaintiff, defendant refused to receive any of the goods or to pay for their price.

Plaintiff alleged that the expellers and motors were in good condition. Plaintiff filed a complaint against the defendant. The defendant, Mr Sotelo and intervenor, Manila Oil Refining and By-Products Co., Inc., denied the plaintiff’s allegations.

They allege that due to plaintiff’s delay in the delivery of goods, the intervenor suffered damages. The lower court absolved the defendants from the complaint insofar as the tanks and the electric motors were concerned, but rendered judgment against them ordering them to receive expellers and pay the sum of P50,000, with legal interest and cost.

Both parties appealed to the Court.

ISSUE: What period was fixed for the delivery of the goods? Did the plaintiff incur delay in the delivery of goods?

HELDIn all these contracts, there is a final clause

as follows:The sellers are not responsible for

delays cause by fires, riots on land or on the sea, strikes or other causes known as force majeure, entirely beyond the control of the sellers or their representatives. Under these stipulations, it cannot be said that any definite date was fixed for the delivery of the goods.

xxx. From the record it appears that these contracts were executed at the time of the world war when there existed rigid restrictions on the export from the United States xxx;

hence clauses were inserted in the contracts, regarding ³Government regulations, railroading embargoes, lack of vessel space, the

exigencies of the requirements of the United States Government´ xxx.

At the time of the execution of the contracts, the parties were not unmindful of the contingency of the United States Government not allowing the export of the goods xxx.

We cannot but conclude that the term which parties attempted to fix is so uncertain that once cannot tell just whether, as a matter of fact, those articles could be brought to manila or not.

The obligation must be regarded as conditional.

The delivery was subject to a condition the fulfillment of which depended not only upon the effort of the plaintiff, but upon the will of third persons who could in no way be compelled to fulfill the condition. It is sufficiently proven in the record that the plaintiff has made all the efforts it could possibly be expected to make under the circumstances, to bring the goods in question to Manila, as soon as possible. Xxx

It is obvious that the plaintiff has complied with its obligation. When the time of delivery is not fixed in the contract, time is regarded unessential. In such cases, the delivery must be made within a reasonable time.

Xxx Reasonable time for the delivery of the goods by the seller is to be determined by circumstances attending the particular transactions. Whether of not the delivery of the machinery in litigation was offered to the defendant within a reasonable time, is a question to be determined by the court. Xxx The plaintiff has not been guilty of any delay in the fulfillment of its obligation.

CARMEN DEL PRADO, Petitioner, vs.SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, Respondents.G.R. No. 148225 March 3, 2010

NACHURA, J.:

FactsSeveral parcels of land, including Cadastral Lot

No. 11909, were adjudicated in favor of Spouses Antonio and Leonarda Caballero in 1985; hence, the court ordered for the issuance of the decree of registration and the corresponding titles of the lots in favor of the Caballeros.

On June 11, 1990, Spouses Caballero sold to Carmen del Prado, Cadastral Lot No. 11909 on the basis

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of the tax declaration covering the property. On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for Registration of Document Under PD 1529" in order that a certificate of title be issued in her name, covering the whole Lot No. 11909, which is in excess of the allotted area to be sold. In the petition, she alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum, in which case, the vendor was bound to deliver all that was included within said boundaries even when it exceeded the area specified in the contract.

IssueWON the petitioner’s recourse, by filing the

petition for registration in the same cadastral case, was proper.

RulingPetitioner’s recourse, by filing the petition for

registration in the same cadastral case, was improper. It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after one year from the date of entry of the decree of registration. Inasmuch as the petition for registration of document did not interrupt the running of the period to file the appropriate petition for review and considering that the prescribed one-year period had long since expired, the decree of registration, as well as the certificate of title issued in favor of respondents, had become incontrovertible.

In addition, what really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. However, numerical data are not the sole gauge of unreasonableness of the excess or deficiency in area. In the instant case, the parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, with the specified boundaries. Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. It is not a reasonable excess or deficiency that should be deemed included in the deed of sale.

Rules On Double Sale Of ImmovablesIn double sale of an immovable, the rules of preference are as follows:(a) the first registrant in good faith;(b) should there be no entry, the first in possession in good faith; and

(c) in the absence thereof, the buyer who presents the oldest title in good faith. (Martinez vs. CA, 358 SCRA 38 (2001); Art. 1544, NCC).

Prior registration of the subject property does not by itself confer ownership or a better right over the property. Article 1544 requires that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e., in ignorance of the first sale and of the first buyer’s rights) from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. (Uraca vs. CA, 344 Phil 253; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005).

One who purchases real property which is in actual possession of others should, at least, make some inquiry concerning the rights of those in possession. The actual possession by people other than the vendor should, at least, put the purchaser upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as a bona fide purchaser as against such possessions. (Rep. vs. CA, 102 SCRA 331; Conspecto vs. Fuerto, 31 Phil. 144). The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendor’s title takes all the risks and losses consequent to such failure. (Caram vs. Laureta, 103 SCRA 16 [1981]; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005; see also Sps. Mathay vs. Court of Appeals, 356 Phil. 870 [1998]).

Registration of the second buyer under Act 3344, providing for the registration of all instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System (Act 496), cannot improve the standing of a party since Act 3344 itself expresses that registration thereunder would not prejudice prior rights in good faith (see Carumba vs. Court of Appeals, 31 SCRA 558). Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith (see Arts. 708-709, Civil Code; see also Revilla vs. Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held to be inapplicable to execution sales of unregistered land, since the purchaser merely steps into the shoes of the debtor and acquires the latter’s interest as of the time the property is sold. (Carumba vs. Court of Appeals, 31 SCRA 558; see also Fabian vs. Smith, Bell & Co., 8 Phil. 496), (Remalante vs. Tibe, 158 SCRA 138; Sps. Noel & Julie Abrigo vs. De Vera, G. R. No. 154409, June 21, 2004).

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FRANCISCO H. LU, petitioner, vs. Spouses ORLANDO and ROSITA MANIPON, respondents.

The registration of a sale of real estate will not protect a buyer in bad faith, for the law cannot be used as a shield for fraud. On the other hand, the preferential right of a first registrant in a double sale is always qualified by good faith.

The CaseBefore us is a Petition for Review on Certiorari challenging the October 25, 2000 Decision and the February 9, 2001 Resolution of the Court of Appeals (CA) in CA-GR CV No. 55149. The assailed Decision disposed as follows:

"WHEREFORE, premises considered, the appealed Decision is hereby AFFIRMED with MODIFICATION in the sense that [petitioner] is directed to convey Lot 5582-B-7-D covered by TCT No. 171497 to [respondent] Rosita C. Manipon without being entitled to any payment from the latter."The assailed Resolution denied the Motion for Reconsideration.

The FactsThe facts of the case are summarized in the assailed Decision as follows:

“On May 9, 1981, Juan Peralta executed a [D]eed of [S]ale by installment in favor of spouses Orlando and Rosita Manipon [herein respondents]. Therein, Juan Peralta agreed to sell by installment to the said spouses 350 square meters of the 2,078 square-meter lot he owned, covered by Transfer Certificate of Title (TCT) No. 137911 and located at Barrio Dilan, Urdaneta, Pangasinan. The said [D]eed was not registered with the Registry of Deeds.

“On June 10, 1981, Juan Peralta mortgaged the aforesaid lot to Thrift Savings and Loan Association, Inc. (TSLAI).

He however failed to pay the loan he obtained for which the mortgage was constituted and so the same was judicially foreclosed and sold to TSLAI forP62,789.18 which was the highest bidder. The latter in turn sold the same on July 15, 1988 in the amount of P80,000.00 to the [petitioner].

Thereafter, on August 30, 1989, [petitioner] caused the subdivision of the said lot into five (5) lots, one of which is Lot 5582-B-7-D, with an area of 339 square meters

covering the lot which was earlier sold by installment to [respondents]. The said lot is now covered by TCT No. 171497.

In the interim, or on July 30, 1983, Juan Peralta executed a [D]eed of [S]ale in favor of [respondents] after the couple paid a total amount of P8,000.00 for the subject lot. The aforesaid [D]eed was however also not registered.

“On January 22, 1990, [petitioner] through counsel wrote the [respondents] regarding the presence of the latter’s house, which was also being occupied by them, on the lot in question. Efforts were apparently made by both parties to settle the brewing dispute but to [no] avail.

Hence, on February 26, 1990, [petitioner] filed the present action alleging therein that he is the owner of the lot in question including that which was being occupied by [respondents. Petitioner] further claims that his ownership was confirmed by the Regional Trial Court of Urdaneta, Pangasinan, Branch 49, in Civil Case No. U-4399.

He also averred that for reasons unknown to him, [respondents] were claiming ownership of Lot 5582-B-7-D and have constructed a house thereon on January 22, 1990.

“In the Answer filed by [respondents], they claim that [petitioner] is a buyer in bad faith because even before he bought the 2,078 square-meter lot, he knew for a fact that they already bought Lot 5582-B-7-D from the original owner of the said lot and have been residing therein since 1981.

[Respondents] also asserted that [petitioner] had knowledge of their claim over the said property because when the whole lot was foreclosed they shared the same problem as [petitioner] also bought a lot with the 2,078 square-meter lot of Juan Peralta.

“Trial ensued and thereafter, the trial court rendered the questioned judgment. x x x.”(Citations omitted)

Ruling of the Trial CourtThe trial court ruled that petitioner was not a buyer in good faith despite the fact that he was able to register his ownership of the disputed lot. He admitted knowing that respondents had constructed a house on the disputed lot in 1984, even before he purchased the property from the loan association in 1990. Indeed, he

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waited more than ten (10) years before contesting respondents’ occupation and possession of the land.

The RTC disposed as follows:“WHEREFORE, IN THE LIGHT OF THE FOREGOING, the Court renders judgment as follows:

“1). The [petitioner] is hereby ordered to convey to the herein [respondent] Rosita Manipon, (defendant Orlando Manipon is already dead) the lot consisting of 339 square meters denominated as Lot 5582-B-7-D and covered by Transfer Certificate of Title No. 171497 after paying the sum of P13,051.50 plus legal interest to the herein [petitioner] anytime after the finality of this decision.

“2). The third-party defendant, Juan Peralta, is ordered to refund to the defendants Manipons the amount of P18,000.00 paid by the latter to him;

“3). x x x no pronouncement as to damages in favor [of] or against either of the parties.”

Ruling of the Court of AppealsThe CA affirmed the Decision of the trial court with the modification that respondents would no longer be required to pay petitioner the value of the disputed portion in a “forced sale.”

The appellate court said that petitioner knew that Lot 5582-B-7-D had already been sold by Juan Peralta to respondents before the mother lot was mortgaged, foreclosed and eventually purchased. He bought the entire property from the foreclosing bank, because he feared that he might lose what he had earlier bought in 1981 -- a 350 square meter lot which also formed part of the mother lot.Hence, this Petition.

The IssuesIn his Memorandum, petitioner raises the following issues:“1. Who between petitioner and respondents have a better right of ownership over the lot in question, Lot 5582-B-7-D, with an area of 339 square meters?“2. Whether respondents’ claim over the lot can rise [above that of] their predecessor in interest Juan Peralta[.]

“3. Whether respondents are under estoppel to question petitioner’s ownership over the lot in question[.]

“4. Whether petitioner was in bad faith in the acquisition of the lot in question[.]

“5. And even assuming without admitting that petitioner is under obligation to convey the lot in question in favor of respondents, whether the consideration of the lot be paid by respondent is P2,000.00 per square meter[.]”

These issues can be summed up into three questions: (1) who has a better right to the disputed property? (2) was petitioner a purchaser in bad faith? and (3) what should be the purchase price of the disputed lot?

This Court’s RulingThe Petition is partly meritorious.

First Issue:Better Right to the Disputed Lot

Petitioner claims to have a better right to the disputed portion of the real property.

First, although respondents had bought it first, he was the first to register his purchase of the mother lot.

Second, respondents’ ownership follows that of their vendor who mortgaged to the bank his title to the mother lot and failed to redeem it.

Petitioner avers that, although respondents purchased the disputed lot by installment on May 9, 1981 and fully paid for it on May 30, 1983, they failed to register their sale with the Registry of Deeds. In the meantime, on June 18, 1981, Juan Peralta mortgaged the mother lot -- including the disputed portion -- to the Thrift Savings and Loan Association, Inc. (TSLAI). The mortgage was foreclosed and the property sold on July 10, 1988. Petitioner, on the other hand, bought the whole lot from the bank for P80,000 on July 15, 1988 and registered it in his name on September 23, 1988.

Third, petitioner claims that from the time respondents fully paid for the lot until they received a Notice to Vacate, they did not do anything to perfect their title thereto; hence, they are now estopped from questioning his ownership of it.

We are not convinced. In estoppel, a person who by deed or conduct induces another to act in a particular manner is barred from adopting an inconsistent position, attitude or course of conduct that thereby causes loss or injury to another. This equitable principle

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will not apply to respondents, because they exercised dominion over the property by occupying and building their house on it.

On the other hand, it was petitioner who, despite having knowledge of the existence of respondents’ house on the disputed portion, bought the whole lot. Before acquiring the mother lot from the bank, he knew of respondents’ claim of ownership and occupation. He cannot now pretend to be an innocent buyer in good faith.

Registration is not the equivalent of title. Under the Torrens system, registration only gives validity to the transfer or creates a lien upon the land. It was not established as a means of acquiring title to private land because it merely confirms, but does not confer, ownership.

Moreover, the RTC and the CA have correctly ruled that the preferential right of the first registrant of a real property in a case of double sale is always qualified by good faith under Article 1544 of the Civil Code. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the law cannot be used as a shield for fraud.

“When the registration of a sale is not made in good faith, a party cannot base his preference of title thereon, because the law will not protect anything done in bad faith. Bad faith renders the registration futile.

Thus, if a vendee registers the sale in his favor after he has acquired knowledge that there was a previous sale of the same property to a third party, or that

another person claims said property under a previous sale,

or that the property is in the possession of one who is not a vendor,

or that there were flaws and defects in the vendor’s title,

or that this was in dispute,

the registration will constitute x x x bad faith, and will not confer upon him any preferential right.

The situation will be the same as if there had been no registration, and the vendee who first took possession of the real property in good faith shall be preferred.”

Equally important, under Section 44 of the Property Registration Decree (Presidential Decree No. 1529), every registered owner receiving a certificate of title in

pursuance of a decree of registration and every subsequent purchaser of registered land taking such certificate for value and in good faith shall hold the same free from all encumbrances, except those noted on the certificate and enumerated therein.

Petitioner is evidently not a subsequent purchaser in good faith. Therefore, between the parties, respondents have a better right to the property based on the concurring factual findings of both the trial and the appellate courts.

We quote with approval the following ruling of the CA:“x x x We are persuaded that [petitioner] knew of the fact that Lot 5582-B-7-D was sold by Juan Peralta to [respondents] before Lot 5582-B-7, the mother lot of Lot 5582-B-7-D, was mortgaged, foreclosed, sold and [its ownership] transferred x x x to him. In fact, [w]e are convinced that the main reason why [petitioner] bought the entire lot from the TSLAI was his fear of losing the 350 square meter-lot he bought sometime in 1981 which also forms part of Lot 5582-B-7. Having been aware of the ‘defects’ in the title of TSLAI as far as Lot 5582-B-7-D is concerned, he cannot now claim to be a purchaser in good faith and for value even if he traces his ownership [to] TSLAI which [w]e believe was a purchaser in good faith - the latter not being aware of the sale that transpired between the [respondents] and Juan Peralta before Lot 5582-B-7 was sold to it in a public auction.

“One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or an interest therein.

Thus, even assuming arguendo that [petitioner] was not aware of the sale between Juan Peralta and the [respondents], still he cannot be considered as a purchaser in good faith because he had personal knowledge of [respondents’] occupation of the lot in question. This fact alone should have put him on guard before buying the land. But as he admitted during the trial, he was not interested in the [respondents’] reason for occupying the said lot[;] all that he was interested in was to buy the entire lot. This ‘devil-may-care’ attitude of [petitioner] has placed him where he is now. Consequently, he cannot be entitled to the relief he is seeking before this [c]ourt.

“True, the purchaser of a registered land is not required to go behind the title to determine the condition of the property.

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However, a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.

His mere refusal to believe that such defect exists, or his willful closing of his eyes to the possibility of the existence of a defect in his vendor’s title, will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with that measure of precaution which may reasonably be required of a prudent man in a like situation.”All told, the right of a buyer to rely upon the face of the title certificate and to dispense with the need of inquiring further is upheld only when the party concerned had no actual knowledge of facts and circumstances that should impel a reasonably cautious man to conduct further inquiry.Second Issue:Bad FaithPetitioner denies being a purchaser in bad faith. He alleges that the only reason he spoke to the respondents before he bought the foreclosed land was to invite them to share in the purchase price, but they turned him down. This, he argues, was not an indication of bad faith.

Petitioner’s contention is untenable. He might have had good intentions at heart, but it is not the intention that makes one an innocent buyer. A purchaser in good faith or an innocent purchaser for value is one who buys property and pays a full and fair price for it, at the time of the purchase or before any notice of some other person’s claim on or interest in it. One cannot close one’s eyes to facts that should put a reasonable person on guard and still claim to have acted in good faith. As aptly explained by Vitug:“The governing principle is prius tempore, potior jure (first in time, stronger in right).

Knowledge by the first buyer of the second sale cannot defeat the first buyer’s rights except when the second buyer first registers in good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33.)

Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No. 58530, 26 December 1984).

In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984; 129 SCRA 656), it was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. 95843, 02 September 1992).

“The registration contemplated under Art. 1544 has been held to refer to registration under Act 496 Land Registration Act (now PD 1529) which considers the act of registration as the operative act that binds the land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia vs. Rosabal, 73 Phil 694).

On lands covered by the Torrens System, the purchaser acquires such rights and interest as they appear in the certificate of title, unaffected by any prior lien or encumbrance not noted therein. The purchaser is not required to explore farther than what the Torrens title, upon its face, indicates. The only exception is where the purchaser has actual knowledge of a flaw or defect in the title of the seller or of such liens or encumbrances which, as to him, is equivalent to registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18 October 1988; Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court of Appeals, L-26677, 27 March 1981).”

By his own allegations, petitioner admits he was not a purchaser in good faith. A buyer of real property which is in the possession of another must be wary and investigate the rights of the latter. Otherwise, without such inquiry, the buyer cannot be said to be in good faith.

Basic is the rule that the factual findings of the appellate court are given great weight, even finality, when they affirm those of the trial court, unless they fall under the exceptions enumerated in Fuentes v. Court of Appeals. Petitioner has not shown that this case falls under any of those exceptions; hence, we find no cogent reason to depart from this general rule.Third Issue:Proper Purchase PricePetitioner protests respondents’ exemption from paying him P13,051.50 with legal interest for the conveyance of the disputed portion. Instead, he pleads that this Court modify the price to P2,000 per square meter.We are not persuaded. While neither party appealed the issue of the purchase price, petitioner did question the conveyance of Lot 5582-B-7-D to respondents upon payment of the said price. Hence, the payment was also effectively put in issue. It is well-settled that appellate courts have ample authority to rule on matters not

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specifically assigned as errors in an appeal, if these are indispensable or necessary to the just resolution of the pleaded issues.

However, the CA modification exempting respondents from paying petitioner is flawed, because the RTC had ordered Juan Peralta to refund the P18,000 paid to him by petitioner as the purchase price of the disputed lot. Thus, the trial court correctly ordered (1) respondents to pay petitioner P13,051.50 plus legal interest for Lot 5582-B-7-D and (2) the third-party defendant Peralta to refund to respondents the P18,000 they had paid for the lot. The CA ruling would unjustly enrich respondents, who would receive double compensation.

In short, the RTC ruling should have been affirmed in its entirety.WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision and Resolution are AFFIRMED without the MODIFICATION ordered by the CA. No pronouncement as to costs.

Gabriel vs Mabanta

FACTS:On October 25, 1975 spouses Mabanta mortgaged 2 parcels of land with the DBP as collateral for a P14,000 loan.

In 1980, they sold the lots to Susana Soriano with the right to repurchase the property within 2 years. They failed to do repurchase.

In 1984, they convinced petitioner Alejandro Gabriel to purchase the lot from Soriano as a result, DBP had to restructure the loan making Gabriel as the mortgagor.

In 1982 however, one lot was sold to Zenaida Tan-Reyes by the spouses Mabanta who in turn filed an intervention to the case after not being a party in the instant case.

As a result, the petitioners filed for damages, and specific performance which the trial court ruled in their favor holding that the sale between the spouses Mabanta and Tan-Reyes null and void. On appeal, the CA modified the trial court’s decision holding that the second sale was indeed valid.

ISSUE:Whether or not the second sale in 1982 to Tan-Reyes is valid.HELD:

Article 1544 of the Civil Code provides that should immovable property be sold to different vendees, the ownership shall belong to the first person in good faith to record it in the registry of property. Unfortunately, the registration made by Zenaida Tan-Reyes of her deed of sale was not in good faith, and for this reason in accordance with the same Article 1544, the land shall pertain to the person who in good faith was first in possession. There is no question that it is the Gabriels who are in possession of the land.

TANGLAO vs PARUNGAO [October 5, 2007]Sandoval-Gutierrez, J.Petition for review on Certiorari seeking to reverse the decision of the Court of Appeals

RATIO DECIDENDIUnder Article 1544, preferential rights shall be accorded to: (1) 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. In all of these cases, good faith is essential, being the basic premise of the preferential rights granted to the person claiming ownership of the immovable.

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

QUICK FACTS

FACTSBuyer 1: Lorenzo and Corazon ParungaoBuyer 2: Mariano and Corazon TanglaoSeller: Spring Homes Subdivision

In 1992, spouses Lorenzo and Corazon Parungao purchased several lots from Spring Homes Subdivision for a total price of P1,364,460.00. They made a down payment of P536,000, leaving a balance of P828,460.00, exclusive of interest.

Sometime in November 1992, they introduced improvements on the lots consisting of a concrete perimeter fence with cyclone wires on top, a heavy steel gate, and two fish breeding

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buildings. They also elevated the ground level of the lots by filling them with earth and “adobe.”

Under the terms of the Contracts to Sell signed by spouses Parungao and Spring Homes, the balance was to be paid by them within one year from its execution; and that should they apply for a loan as payment for the balance, they would continue to pay the monthly installment until their obligation is fully paid.

Spouses Parungao failed to pay the installments. They also failed to secure a loan because Spring Homes refused to deliver to them the TCTs required in their application for a loan secured by a real estate mortgage. Apparently, spouses Parungao had requested Spring Homes to furnish them copies of the Contracts to Sell, the TCTs, receipts of real estate taxes paid, tax declarations, and the survey and vicinity plans of the lots they purchased. However, Roy Madamba, salesman-representative of Spring Homes, gave respondents only copies of the Contracts to Sell. But respondents returned these copies to Spring Homes for correction of the lot numbers and the names of the vendees.

On April 1997, Spring Homes executed two separate Deeds of Absolute Sale in favor of Mariano and Corazon Tanglao, wherein the former sold to the latter two lots previously sold to Spouses Parungao.

In a letter dated September 1997, Spouses Parungao demanded that Spring Homes deliver to them the corrected Contracts to Sell, as well as the TCTs covering the lots they purchased.

Meanwhile, Spouses Tanglao took possession of the two lots they bought. They forcibly opened the steel gate as well as the doors of the buildings and entered the premises.

When informed of these events, Spouses Parungao demanded an explanation from Spring Homes. Bertha Pasic, its treasurer, apologized and promised she would settle the matter with petitioners. However, the controversy was not settled.

On July 15, 1999, Spouses Parungao filed with the Housing and Land Use Regulatory Board (HLURB) a complaint for annulment of deed of sale and/or return of investment for the seven lots and costs of improvements.

HLURB Arbiter Dismissed the complaint filed against Spouses

Tanglao for lack of merit

Ordered Spring Homes to pay complainants the refund of payments, among others

HLURB Board of Commissioners Reversed HLURB Arbiter’s decision Declared as valid and subsisting the contract to

sell between Spouses Parungao and Spring Homes

Directed Spouses Parungao to immediately update their account and directed Spring Homes to accept payment and to deliver title to complainants upon full payment of the purchase price

Declared as invalid the deed of absolute sale in favor of Spouses Tanglao

HLURB Board of Commissioners found that at the time of the sale of the two lots, the contracts between Spouses Parungao and Spring Homes were still subsisting. Moreover, the fence and existing structures erected on the premises should have forewarned Spouses Tanglao that there are adverse claimants of the two lots.

Court of Appeals Dismissed the appeal by Spouses Tanglao It held that there was a perfected contract to

sell between Spouses Parungao and Spring Homes as early as 1992. As this contract was subsisting at the time of the second sale, Spouses Parungao have a superior right over the lots in question.

ISSUE: Who has a better right to the lots in question?DECISION: Spouses Parungao

Spouses Parungao’s contention is the same as that of the HLURB Board of Commissioners and the Court of Appeals.

HELDIn double sales of immovable property, the governing principle is prius tempore, prius jure (first in time, stronger in right). Thus, in Payongayong vs. Court of Appeals, the Court held that under Article 1544, preferential rights shall be accorded to: (1) 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. In all of these cases, good faith is essential, being the basic premise of the

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preferential rights granted to the person claiming ownership of the immovable.

In Occena vs. Esponilla, the Court laid down the following rules in the application of Article 1544: (1) Knowledge by the first buyer of the second sale cannot defeat the first buyer’s rights except when the second buyer first registers in good faith the second sale; and (2) Knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith. Differently put, the act of registration by the second buyer must be coupled with good faith, meaning, the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.

Applying the foregoing doctrines, the pivotal question before us is whether petitioners Tanglao, the second buyers, are purchasers in good faith. A purchaser in good faith or innocent purchaser for value is one who buys property and pays a full and fair price for it at the time of the purchase or before any notice of some other person’s claim or interest in it.

In the case at bar, the HLURB Arbiter, the HLURB Commission, the Office of the President, and the Court of Appeals found that at the time of the second sale to Spouses Tanglao by Spring Homes, there were already occupants and improvements on the two lots in question. These facts should have put Spouses Tanglao on their guard. Settled is the rule that a buyer of real property in possession of persons other than the seller must be wary and should investigate the rights of those in possession, for without such inquiry, the buyer can hardly be regarded as a buyer in good faith and cannot have any right over the property.

As Spouses Tanglao cannot be considered buyers in good faith, they cannot rely upon the indefeasibility of their TCTs in view of the doctrine that the defense of indefeasibility of a torrens title does not extend to transferres who take the certificate of title in bad faith.

Considering that respondents Parungao who, in good faith, were first in possession of the subject lots, we rule that the ownership thereof pertains to them.

CRB vs. CA and HEIRS OF DELA CRUZ

FACTS: The Madrid brothers were the registered owners of Lot A situated in Isabela. Said lot was subdivided into several lots.

Rizal Madrid sold part of his share identified lot A-7 to Gamiao and Dayag by virtue of a Deed of Sale, to which his brothers offered no objection as evidenced by their Joint Affidavit .The deed of sale was not registered with the ORD of Isabela. However, Gamiao and Dayag declared the property in their names on a Tax Declaration.

Gamiao and Dayag sold the subject southern half of lot to Teodoro dela Cruz, and the northern half to Hernandez.

Thereupon, Teodoro dela Cruz and Hernandez took possession of and cultivated the portions of the property respectively sold to them (Later Restituto Hernandez donated the northern half to his daughter. The children of Teodoro dela Cruz continued possession of the southern half after their father’s death.)

In a Deed of Sale the Madrid brothers conveyed all their rights and interests over lot A-7 to Marquez which the former confirmed. The deed of sale was registered with the ORD of Isabela.

Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the same date, Marquez and his spouse, Mercedita Mariana, mortgaged 4 lots to the Consolidated Rural Bank, Inc. of Cagayan Valley (hereafter, CRB) to secure a loan.

These deeds of real estate mortgage were registered with the ORD.

As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its favor and the lots were sold to it as the highest bidder.

The Heirs-now respondents filed a case for reconveyance and damages for the southern portion of Lot No. 7036-A (hereafter, the subject property) against Marquez and CRB.

The RTC handed down a decision in favor of Marquez. The Heirs interposed an appeal with the CA, which upheld the claim of the Heirs. Hence, the instant CRB petition.

ISSUE: WON Art. 1544 of the Civil Code (double sale) applicable in this case HELD: NO.

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The petition is denied, and the decision as modified is affirmed. Like the lower court, the appellate court resolved the present controversy by applying the rule on double sale provided in Article 1544 of the Civil Code. They, however, arrived at different conclusions. The RTC made CRB and the other defendants win, while the Court of Appeals decided the case in favor of the Heirs.

Article 1544 of the Civil Code reads, thus: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 possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

The provision is not applicable in the present case. It contemplates a case of double or multiple sales by a single vendor. It cannot be invoked where the two different contracts of sale are made by two different persons, one of them not being the owner of the property sold. And even if the sale was made by the same person, if the second sale was made when such person was no longer the owner of the property, because it had been acquired by the first purchaser in full dominion, the second purchaser cannot acquire any right.

In the case at bar, the subject property was not transferred to several purchasers by a single vendor. In the first deed of sale, the vendors were Gamiao and Dayag whose right to the subject property originated from their acquisition thereof from Rizal Madrid with the conformity of all the other Madrid brothers. On the other hand, the vendors in the other or later deed were the Madrid brothers but at that time they were no longer the owners since they had long before disposed of the property in favor of Gamiao and Dayag.

In a situation where not all the requisites are present which would warrant the application of Art. 1544, the principle of prior tempore, potior jure or simply “he who is first in time is preferred in right, should apply.”

The only essential requisite of this rule is priority in time; in other words, the only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the time he bought the real property, there was still no sale to a second vendee.

In the instant case, the sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale by the Madrid brothers to Marquez.

The Heirs also had possessed the subject property first in time. Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject property.

Moreover, it is an established principle that no one can give what one does not have nemo dat quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can transfer legally. In this case, since the Madrid brothers were no longer the owners of the subject property at the time of the sale to Marquez, the latter did not acquire any right to it.

NOTES:In any event, assuming arguendo that Article 1544 applies to the present case, the claim of Marquez still cannot prevail over the right of the Heirs since according to the evidence he was not a purchaser and registrant in good faith.

In the instant case, the actions of Marquez have not satisfied the requirement of good faith from the time of the purchase of the subject property to the time of registration. Found by the Court of Appeals, Marquez knew at the time of the sale that the subject property was being claimed or “taken” by the Heirs. This was a detail which could indicate a defect in the vendor’s title which he failed to inquire into. Marquez also admitted that he did not take possession of the property and at the time he testified he did not even know who was in possession.

RADIOWEALTH FINANCE COMPANY vs. PALILEO

FACTS: Defendant spouses Castro sold to plaintiff-appellee Palileo (private respondent herein), a parcel of unregistered coconut land situated in Surigao del Norte. The sale is evidenced by a notarized Deed of Absolute Sale (Exh. “E”).

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The deed was not registered in the Registry of Property for unregistered lands. Since the execution of the deed of sale, appellee Palileo exercised acts of ownership over the land through his mother as administratrix or overseer.

Appellee has continuously paid the real estate taxes on said land from 1971 until the present.

A judgment was rendered against defendant Castro by the then CFI to pay herein defendant-appellant Radiowealth Finance Company (petitioner herein).

Upon the finality of the judgment, a writ of execution was issued. Pursuant to said writ, defendant provincial Sheriff levied upon and finally sold at public auction the subject land that defendant Enrique Castro had earlier sold to appellee Palileo. A certificate of sale was executed by the Provincial Sheriff in favor of defendant- appellant Radiowealth Finance Company, being the only bidder.

After the period of redemption has (sic) expired, a deed of final sale was also executed by the same Provincial Sheriff. Both the certificate of sale and the deed of final sale were registered with the RD.

Learning of what happened to the land, private respondent Palileo filed an action for quieting of title over the same. After a trial on the merits, the courta quo rendered a decision in his favor. On appeal, the decision of the trial court was affirmed. Hence, this petition for review on certiorari.

ISSUE: Who, as between two buyers of unregistered land, is the rightful owner—the first buyer in a prior sale that was unrecorded, or the second buyer who purchased the land in an execution sale whose transfer was registered in the RD

HELD: PALILEO HAS THE SUPERIOR RIGHT OVER THE LANDThere is no doubt that had the property in question been a registered land, this case would have been decided in favor of petitioner since it was petitioner that had its claim first recorded in the RD.It must be stressed however that this case deals with a parcel of unregistered land and a different set of rules applies. We affirm the decision of the CA.Under Act No. 3344, registration of instruments affecting unregistered lands is “without prejudice to a third party with a better right”. The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in one’s favor does not give him

any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded.Applying this principle, the CA correctly held that the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale.NOTES: Findings of fact of the CA are conclusive on this Court and will not be disturbed unless there is grave abuse of discretion. The finding of the CA that the property in question was already sold to private respondent by its previous owner before the execution sale is evidenced by a deed of sale. Said deed of sale is notarized and is presumed authentic. There is no substantive proof to support petitioner’s allegation that the document is fictitious or simulated. With this in mind, We see no reason to reject the conclusion of the CA that private respondent was not a mere administrator of the property. That he exercised acts of ownership through his mother also remains undisputed.

G.R. No. 170405 February 2, 2010RAYMUNDO S. DE LEON, Petitioner,vs.BENITA T. ONG. Respondent.

Facts:On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita T. Ong(respondent).

The said properties were mortgaged to a financial institution; Real Savings & Loan Association Inc. (RSLAI).

The parties then executed a notarized deed of absolute sale with assumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that the petitioner (de Leon) shall execute a deed of assumption of mortgage in favor of Ong (respondent) after full payment of the P415,000.

They also agreed that the respondent (Ong) shall assume the mortgage. The respondent then subsequently gave petitioner P415,000 as partial payment.

On the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the respondent took repairs and made improvements in the properties.

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Subsequently, respondent learned that the same properties were sold to a certain Viloria after March 10, 1993 and changed the locks, rendering the keys given to her useless.

Respondent proceeded to RSLAI but she was informed that the mortgage has been fully paid and that the titles have been given to the said person. Respondent then filed a complaint for specific performance and declaration of nullity of the second sale and damages.

The petitioner contended that respondent does not have a cause of action against him because the sale was subject to a condition which requires the approval of RSLAI of the mortgage. Petitioner reiterated that they only entered into a contract to sell. The RTC dismissed the case. On appeal, the CA upheld the sale to respondent and nullified the sale to Viloria. Petitioner moved for reconsideration to the SC.

Issue:Whether the parties entered into a contract of sale or a contract to sell?

Held:In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of the contract. The non-payment of the price is a negative resolutory condition. Contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price. In the present case, the deed executed by the parties did not show that the owner intends to reserve ownership of the properties. The terms and conditions affected only the manner of payment and not the immediate transfer of ownership.

It was clear that the owner intended a sale because he unqualifiedly delivered and transferred ownership of the properties to the respondent

LORENZO BERICO and VISITACION SANCHEZ, petitioners vs. THE HONORABLE COURT OF APPEALS

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 2 1/4 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.

On 14 December 1978, private respondents filed against the petitioners a complaint for "Annulment of Title" with the then Court of First Instance (now Regional Trial Court) of Masbate.

Issue:In the double sale of an immovable property under Article 1544 of the Civil Code, does prescription bar an action by the first vendees, who are in possession of the said property, against the second vendee for the annulment of a transfer certificate of title over the property procured by the latter who has knowledge of the first sale and who recognizes the first vendees' possession?

Held:Lorenzo Berico's act in causing the cancellation of Original Certificate of Title No. P-671 and securing a new Transfer Certificate of Title No. T-1346, knowing

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that his transfer certificate included a property not his but belonging to plaintiff Flores makes him a holder in bad faith of a certificate and is not to be accorded the protection of the law.WHEREFORE, judgment is hereby rendered annulling Transfer Certificate of Title No. T-1346 in the name of Lorenzo Berico, and ordering the Register of Deeds for the Province of Masbate to cancel said transfer certificate of title and in lieu thereof, issue a new transfer certificate of title in the name of Lorenzo Berico et. al.In a more real sense, and insofar as prescription is concerned, petitioners may only acquire ownership of the questioned property — assuming that they did not register the deed of sale in their favor — through extraordinary acquisitive prescription under Article 1137 of the Civil Code, and not by ordinary acquisitive prescription since they cannot claim just title or good faith.Finally, the complaint for annulment of title filed by the private respondents is substantially one for the quieting of title — to quiet their title against a cloud cast by the claim of the petitioners. It is settled that an action to quiet title does not prescribe. WHEREFORE, for lack of merit, the instant petition is DENIED, with costs against the petitioners.

IGNACIO CARDENTE VS. THE INTERMEDIATE APPELLATE COURT AND SPOUSES RUPERTO RUBIN AND PRIMITIVA C. RUBIN, RESPONDENTS.

D E C I S I O N

This is a simple case of a double sale of an immovable property. The trial court decided[1]in favor of the first vendee although the sale was by a private document. The then Intermediate Appellate Court reversed and set aside the decision[2] of the lower court. The public respondent appellate court ruled in favor of the second buyers, who registered their deed of sale. Hence, the present petition for review by certiorari.

The facts of the case are as simple as the central issue.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.

On February 18, 1977, the house of the petitioners was burned. As a consequence thereof, they lodged a complaint for arson with the P.C.-Integrated National Police at Malaybalay, Bukidnon, against Ruperto Rubin, whom they suspected of having committed the crime.

Apparently, in retaliation, on March 31, 1977, seventeen long years after their purchase, the private respondents filed a complaint with the then Court of First Instance of Bukidnon for quieting of title with damages, against the petitioners, claiming ownership over the whole property previously covered by O.C.T. No. P-1380, now registered in their names under T.C.T. No. 1173.

On July 9, 1979, the trial court dismissed the complaint of the Rubins and ordered them to "reconvey the one hectare in question to defendant (Cardente) at the expense of the latter."[3]

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The Rubin spouses appealed to the respondent court, which rendered the decision under review. The assailed decision decreed:xxx xxx xxxWHEREFORE, the decision appealed from is hereby set aside and judgment is rendered (1) declaring plaintiffs the absolute owners of subject property covered by Transfer Certificate of Title No. 1173; (2) ordering the defendants to vacate the one-hectare portion in contro-versy, and to restore plaintiffs in possession thereof; (3) quieting the title of plaintiffs over the one (1) hectare portion of land in controversy; and (4) ordering the defendants to pay the costs.SO ORDERED.[4]

xxx xxx xxxNow before us, the petitioners impute bad faith on the private respondents when the latter purchased the entire property and when they subsequently registered their title thereto. By reason of such bad faith, the petitioners' claim that insofar as the controverted one-hectare parcel of land is concerned the private respondents' title thereto is null and void.[5]

We agree with the petitioners. We grant the petition.

Admittedly, this case involves a double sale. While the private respondents allegedly bought from Isidro Palanay on August 18, 1960 the entire property comprising 9.2656 hectares and covered by O.C.T. No. P-1380, the petitioners, on the other hand, lay claim to one hectare thereof which they undeniably purchased from the same vendor earlier, in 1956. The conflict, therefore, falls under, and can be resolved by, Article 1544 of the CivilCode 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.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 thesale is not enough. Good faith must concur with the registration. Bad faith renders theregistration nothing but an exercise in futility. The law and jurisprudence are very clear on this score.[6]

The heart of the problem is 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. Inextricably, the inquiry must be directed on the knowledge, or lack of it, of the previous sale of the one-hectare portion on the part of the second buyers at the time of registration. The trial court found that the second vendees had such knowledge.

It is true that good faith is always presumed while bad faith must be proven by the party alleging it.[7] In this case, however, viewed in the light of the circumstances obtaining, we have no doubt that the private respondents' presumed good faith has been sufficiently overcome and their bad faith amply established.The "Confirmation Of A Deed Of Absolute Sale Of A Portion Of A Registered Agricultural Land" executed by the late Ignacio Palanay on December 9, 1972 and which was exhibited in the trial court below, admitted the sale of the one hectare portion to the petitioners sometime in 1956. The same deed likewise explicitly stated that the "fact of the previoussale, was well known and acknowledged by Mr. Ruperto Rubin (the private respondent)."[8]These recitals were further buttressed by Concepcion Salubo, a daughter of Isidro Palanay, who testified that she knew of the previous sale of the one-hectare portion to petitioner Ignacio Cardente and that private respondent Ruperto Rubin was properly informed of the said sale.[9] On this regard, no ill-motive had been attributed to the vendor Isidro Palanay and to his daughter Concepcion Salubo for testifying the way they did -- against the private respondents. They were disinterested persons who stood to gain nothing except, perhaps, the satisfaction of setting the record straight, or, in the words of the seller, "for the purpose of giving efficacy to the Deed of Sale I made to Ignacio Cardente which was made in a private document x x x."[10]

Further, the notorious and continuous possession and full enjoyment by petitioners of the disputed one-hectare property long (four years) before the private respondents purchased the same from Palanay bolsters the petitioners' position. That possession would have been enough to arouse the suspicion of the private respondents as to the ownership of the entire area which they were about to purchase. Their failure to inquire and to investigate the basis of the petitioners' actual occupation of the land forming a substantial part of what they were buying militates against their posited lack of knowledge of the first sale. "A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith under the belief that there was no defect in

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the title of the vendor."[11] We have warned time and again that a buyer of real property which is in the possession of persons other than the seller must be wary and should investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith.[12]

The private respondents' avowals that they had never known of the prior sale until the issues were joined at the trial court, for, before that, they merely tolerated the continued presence of the original occupants, Francisca and Eugenia Cardente, and Ignacio, in the premises, out of simple pity for the two old women,[13] is too pat to be believed. For if these were so, the reason why the private respondents' continued to tolerate the occupation by the petitioners of the contested property even after the demise of the two old women escapes us. Rubin's allegation that this was because they were still in good terms with the petitioners[14] is too lame an excuse to deserve even a scant consideration. The private respondents' total lack of action against the actual occupants of a good portion of the land described in their torrens title can only be construed as acceptance on their part of the existence of the prior sale and their resignation to the fact that they did not own the one-hectare portion occupied by the petitioners. Present these facts, the foisted ignorance of the respondents as to the first sale is an empty pretense. Their seventeen years of inaction and silence eloquently depict a realization of lack of right.WHEREFORE, the Decision dated November 19, 1985 and the Resolution dated January 10, 1986 of the former Intermediate Appellate Court are hereby REVERSED and SET ASIDE and the Decision dated July 9, 1979 of the Court of First Instance of Bukidnon in Civil Case No. 860, is hereby REINSTATED. Costs against the private respondents.SO ORDERED.

REV. FR. DANTE MARTINEZ, petitioner,vs.HONORABLE COURT OF APPEALS

This is a petition for review on certiorari of the decision, dated September 7, 1995, and resolution, dated January 31, 1996, of the Court of Appeals, which affirmed the decisions of the Regional Trial Court, Branches 25[1] and 28,[2] Cabanatuan City, finding private respondents spouses Reynaldo and Susan Veneracion owners of the land in dispute, subject to petitioner’s rights as a builder in good faith.

The facts are as follows:

Sometime in February 1981, private respondents Godofredo De la Paz and his sister Manuela De la Paz, married to MaximoHipolito, entered into an oral contract with petitioner Rev. Fr. Dante Martinez, then Assistant parish priest of Cabanatuan City, for the sale of Lot No. 1337-A-3 at the Villa Fe Subdivision in Cabanatuan City for the sum of P15,000.00. The lot is located along Maharlika Road near the Municipal Hall of Cabanatuan City. At the time of the sale, the lot was still registered in the name of Claudia De la Paz, mother of private respondents, although the latter had already sold it to private respondent Manuela de la Paz by virtue of a Deed of Absolute Sale dated May 26, 1976 (Exh. N/Exh.2-Veneracion).[3] Private respondent Manuela subsequently registered the sale in her name on October 22, 1981 and was issued TCT No. T-40496 (Exh. 9).[4] When the land was offered for sale to petitioner, private respondents De la Paz were accompanied by their mother, since petitioner dealt with the De la Pazes as a family and not individually. He was assured by them that the lot belonged to Manuela De la Paz. It was agreed that petitioner would give a downpayment of P3,000.00 to private respondents De la Paz and that the balance would be payable by installment. After giving the P3,000.00downpayment, petitioner started the construction of a house on the lot after securing a building permit from the City Engineer’s Office on April 23, 1981, with the written consent of the then registered owner, Claudia de la Paz (Exh. B/Exh, 1).[5] Petitioner likewise began paying the real estate taxes on said property (Exh. D, D-1, D-2).[6] Construction on the house was completed on October 6, 1981 (Exh. V).[7] Since then, petitioner and his family have maintained their residence there.[8]

On January 31, 1983, petitioner completed payment of the lot for which private respondents De la Paz executed two documents. The first document (Exh. A) read:

1-31-83AnghalagangLupasa Villa Fe Subdivision naipinagbilikay Fr. Dante Martinez ay P15,000.00napinangangakonaminnaibibigayang Deed of Sale sa ika-25 ngFebrero 1983.

[SGD.] METRINGHIPOLITO

[SGD.] JOSE GODOFREDO DE LA PAZ[9]

The second writing (Exh. O) read:Cabanatuan CityMarch 19, 1986TO WHOM IT MAY CONCERN:This is to certify that Freddie dela Paz has agreed to sign tomorrow (March

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20) the affidavit of sale of lot located at Villa Fe Subdivision sold to Fr. Dante Martinez.

[Sgd.] Freddie dela Paz

FREDDIE DELA PAZ[10]

However, private respondents De la Paz never delivered the Deed of Sale they promised to petitioner.

In the meantime, in a Deed of Absolute Sale with Right to Repurchase dated October 28, 1981 (Exh. 10),[11] private respondents De la Paz sold three lots with right to repurchase the same within one year to private respondents spouses Reynaldo and Susan Veneracion for the sum of P150,000.00. One of the lots sold was the lot previously sold to petitioner.[12]

Reynaldo Veneracion had been a resident of Cabanatuan City since birth. He used to pass along Maharlika Highway in going to the Municipal Hall or in going to and from Manila. Two of the lots subject of the sale were located along Maharlika Highway, one of which was the lot sold earlier by the De la Pazes to petitioner. The third lot (hereinafter referred to as the Melencio lot) was occupied by private respondents De la Paz. Private respondents Veneracion never took actual possession of any of these lots during the period of redemption, but all titles to the lots were given to him.[13]

Before the expiration of the one year period, private respondent Godofredo De la Paz informed private respondent Reynaldo Veneracion that he was selling the three lots to another person for P200,000.00. Indeed, private respondent Veneracion received a call from a Mr. Tecson verifying if he had the titles to the properties, as private respondents De la Paz were offering to sell the two lots along Maharlika Highway to him (Mr. Tecson) for P180,000.00 The offer included the lot purchased by petitioner in February, 1981. Private respondent Veneracion offered to purchase the same two lots from the De la Pazes for the same amount. The offer was accepted by private respondents De la Paz. Accordingly, on June 2, 1983, a Deed of Absolute Sale was executed over the two lots (Exh. I/Exh.5-Veneracion).[14] Sometime in January, 1984, private respondent Reynaldo Veneracion asked a certain Renato Reyes, petitioner’s neighbor, who the owner of the building erected on the subject lot was. Reyes told him that it was Feliza Martinez, petitioner’s mother, who was in possession of the property. Reynaldo Veneracion told private respondent Godofredo about the matter and was assured that Godofredo would talk to Feliza. Based on that assurance, private respondents Veneracion registered the lots with the Register of Deeds of Cabanatuan on

March 5, 1984. The lot in dispute was registered under TCT No. T-44612 (Exh. L/Exh.4-Veneracion).[15]

Petitioner discovered that the lot he was occupying with his family had been sold to the spouses Veneracion after receiving a letter (Exh. P/Exh. 6-Veneracion) from private respondent Reynaldo Veneracion on March 19, 1986, claiming ownership of the land and demanding that they vacate the property and remove their improvements thereon.[16] Petitioner, in turn, demanded through counsel the execution of the deed of sale from private respondents De la Paz and informed Reynaldo Veneracion that he was the owner of the property as he had previously purchased the same from private respondents De la Paz.[17]

The matter was then referred to the KatarungangPambarangay of San Juan, Cabanatuan City for conciliation, but the parties failed to reach an agreement (Exh. M/Exh. 13).[18] As a consequence, on May 12, 1986, private respondent Reynaldo Veneracion brought an action for ejectment in the Municipal Trial Court, Branch III, Cabanatuan City against petitioner and his mother (Exh. 14).[19]

On the other hand, on June 10, 1986, petitioner caused a notice of lispendens to be recorded on TCT No. T-44612 with the Register of Deeds of Cabanatuan City (Exh. U).[20]

During the pre-trial conference, the parties agreed to have the case decided under the Rules on Summary Procedure and defined the issues as follows:

1. Whether or not defendant (now petitioner) may be judicially ejected.

2. Whether or not the main issue in this case is ownership.

3. Whether or not damages may be awarded.[21]

On January 29, 1987, the trial court rendered its decision, pertinent portions of which are quoted as follows:With the foregoing findings of the Court, defendants [petitioner Rev. Fr. Dante Martinez and his mother] are the rightful possessors and in good faith and in concept of owner, thus cannot be ejected from the land in question. Since the main issue is ownership, the better remedy of the plaintiff [herein private respondents Veneracion] is AccionPubliciana in the Regional Trial Court, having jurisdiction to adjudicate on ownership.Defendants’ counterclaim will not be acted upon it being more than P20,000.00 is beyond this Court’s power to adjudge.WHEREFORE, judgment is hereby rendered, dismissing plaintiff’s complaint and ordering plaintiff to pay Attorney’s fee of P5,000.00 and cost of suit.SO ORDERED.[22]

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On March 3, 1987, private respondents Veneracion filed a notice of appeal with the Regional Trial Court, but failed to pay the docket fee. On June 6, 1989, or over two years after the filing of the notice of appeal, petitioner filed a Motion for Execution of the Judgment, alleging finality of judgment for failure of private respondents Veneracion to perfect their appeal and failure to prosecute the appeal for an unreasonable length of time.

Upon objection of private respondents Veneracion, the trial court denied on June 28, 1989 the motion for execution and ordered the records of the case to be forwarded to the appropriate Regional Trial Court. On July 11, 1989, petitioner appealed from this order. The appeal of private respondents Veneracion from the decision of the MTC and the appeal of petitioner from the order denying petitioner’s motion for execution were forwarded to the Regional Trial Court, Branch 28, Cabanatuan City. The cases were thereafter consolidated under Civil Case No. 670-AF.

On February 20, 1991, the Regional Trial Court rendered its decision finding private respondents Veneracion as the true owners of the lot in dispute by virtue of their prior registration with the Register of Deeds, subject to petitioner’s rights as builder in good faith, and ordering petitioner and his privies to vacate the lot after receipt of the cost of the construction of the house, as well as to pay the sum of P5,000.00 as attorney’s fees and the costs of the suit. It, however, failed to rule on petitioner’s appeal of the Municipal Trial Court’s order denying their Motion for Execution of Judgment.

Meanwhile, on May 30, 1986, while the ejectment case was pending before the Municipal Trial Court, petitioner Martinez filed a complaint for annulment of sale with damages against the Veneracions and De la Pazes with the Regional Trial Court, Branch 25, Cabanatuan City. On March 5, 1990, the trial court rendered its decision finding private respondents Veneracion owners of the land in dispute, subject to the rights of petitioner as a builder in good faith, and ordering private respondents De la Paz to pay petitioner the sum of P50,000.00 as moral damages and P10,000.00 as attorney’s fees, and for private respondents to pay the costs of the suit.

On March 20, 1991, petitioner then filed a petition for review with the Court of Appeals of the RTC’s decision in Civil Case No. 670-AF (for ejectment). Likewise, on April 2, 1991, petitioner appealed the trial court’s decision in Civil Case No. 44-[AF]-8642-R (for annulment of sale and damages) to the Court of Appeals. The cases were designated as CA G.R. SP. No. 24477 and CA G.R. CV No. 27791, respectively, and were subsequently consolidated. The Court of

Appeals affirmed the trial courts’ decisions, without ruling on petitioner’s appeal from the Municipal Trial Court’s order denying his Motion for Execution of Judgment. It declared the Veneracions to be owners of the lot in dispute as they were the first registrants in good faith, in accordance with Art. 1544 of the Civil Code. Petitioner Martinez failed to overcome the presumption of good faith for the following reasons:

1. when private respondent Veneracion discovered the construction on the lot, he immediately informed private respondent Godofredo about it and relied on the latter’s assurance that he will take care of the matter.

2. the sale between petitioner Martinez and private respondents De la Paz was not notarized, as required by Arts. 1357 and 1358 of the Civil Code, thus it cannot be said that the private respondents Veneracion had knowledge of the first sale.[23]

Petitioner’s motion for reconsideration was likewise denied in a resolution dated January 31, 1996.[24] Hence this petition for review. Petitioner raises the following assignment of errors:

I THE PUBLIC RESPONDENTS HONORABLE COURT OF APPEALS AND REGIONAL TRIAL COURT JUDGES JOHNSON BALLUTAY AND ADRIANO TUAZON ERRED IN HOLDING THAT PRIVATE RESPONDENTS REYNALDO VENERACION AND WIFE ARE BUYERS AND REGISTRANTS IN GOOD FAITH IN RESOLVING THE ISSUE OF OWNERSHIP AND POSSESSION OF THE LAND IN DISPUTE.

II THAT PUBLIC RESPONDENTS ERRED IN NOT RESOLVING AND DECIDING THE APPLICABILITY OF THE DECISION OF THIS HONORABLE COURT IN THE CASES OF SALVORO VS. TANEGA, ET AL., G.R. NO.L 32988 AND IN ARCENAS VS.DEL ROSARIO, 67 PHIL 238, BY TOTALLY IGNORING THE SAID DECISIONS OF THIS HONORABLE COURT IN THE ASSAILED DECISIONS OF THE PUBLIC RESPONDENTS.

III THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE PETITION FOR REVIEW IN CA G.R. SP. NO. 24477.

IV THAT THE HONORABLE COURT OF APPEALS IN DENYING PETITIONER’S PETITION FOR REVIEW AFORECITED INEVITABLY SANCTIONED AND/OR WOULD ALLOW A VIOLATION OF LAW AND DEPARTURE

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FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS BY PUBLIC RESPONDENT HONORABLE JUDGE ADRIANO TUAZON WHEN THE LATTER RENDERED A DECISION IN CIVIL CASE NO. 670-AF [ANNEX “D”] REVERSING THE DECISION OF THE MUNICIPAL TRIAL COURT JUDGESENDONDELIZO IN CIVIL CASE NO. 9523 [ANNEX “C”] AND IN NOT RESOLVING IN THE SAME CASE THE APPEAL INTERPOSED BY DEFENDANTS ON THE ORDER OF THE SAME COURT DENYING THE MOTION FOR EXECUTION.

V THAT THE RESOLUTION [ANNEX “B”] (OF THE COURT OF APPEALS) DENYING PETITIONER’S MOTION FOR RECONSIDERATION [ANNEX “I”] WITHOUT STATING CLEARLY THE FACTS AND THE LAW ON WHICH SAID RESOLUTION WAS BASED, (IS ERRONEOUS).

These assignment of errors raise the following issues:

1. Whether or not private respondents Veneracion are buyers in good faith of the lot in dispute as to make them the absolute owners thereof in accordance with Art. 1544 of the Civil Code on double sale of immovable property.

2. Whether or not payment of the appellate docket fee within the period to appeal is not necessary for the perfection of the appeal after a notice of appeal has been filed within such period.

3. Whether or not the resolution of the Court of Appeals denying petitioner’s motion for reconsideration is contrary to the constitutional requirement that a denial of a motion for reconsideration must state the legal reasons on which it is based.

First. It is apparent from the first and second assignment of errors that petitioner is assailing the findings of fact and the appreciation of the evidence made by the trial courts and later affirmed by the respondent court. While, as a general rule, only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court, review may nevertheless be granted under certain exceptions, namely: (a) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where there is a grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when the Court of Appeals, in making

its findings, went beyond the issue of the case and the same is contrary to the admissions of both appellant and appellee; (g) when the findings of the Court of Appeals are contrary to those of the trial court; (h) when the findings of fact are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents; (j) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record; and (k) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion.[25]

In this case, the Court of Appeals based its ruling that private respondents Veneracion are the owners of the disputed lot on their reliance on private respondent Godofredo De la Paz’s assurance that he would take care of the matter concerning petitioner’s occupancy of the disputed lot as constituting good faith. This case, however, involves double sale and, on this matter, Art. 1544 of the Civil Code provides that where immovable property is the subject of a double sale, ownership shall be transferred (1) to the person acquiring it who in good faith first recorded it to 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.[26] The requirement of the law, where title to the property is recorded in the Register of Deeds, is two-fold: acquisition in good faith and recording in good faith. To be entitled to priority, the second purchaser must not only prove prior recording of his title but that he acted in good faith, i.e., without knowledge or notice of a prior sale to another. The presence of good faith should be ascertained from the circumstances surrounding the purchase of the land.[27]

1. With regard to the first sale to private respondents Veneracion, private respondent Reynaldo Veneracion testified that on October 10, 1981, 18 days before the execution of the first Deed of Sale with Right to Repurchase, he inspected the premises and found it vacant.[28] However, this is belied by the testimony of Engr. Felix D. Minor, then building inspector of the Department of Public Works and Highways, that he conducted on October 6, 1981 an ocular inspection of the lot in dispute in the performance of his duties as a building inspector to monitor the progress of the construction of the building subject of the building permit issued in favor of petitioner on April 23, 1981, and that he found it 100 % completed (Exh. V).[29] In the absence of contrary evidence, he is to be presumed to have regularly performed his official duty.[30] Thus, as

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early as October, 1981, private respondents Veneracion already knew that there was construction being made on the property they purchased.

2. The Court of Appeals failed to determine the nature of the first contract of sale between the private respondents by considering their contemporaneous and subsequent acts.[31] More specifically, it overlooked the fact that the first contract of sale between the private respondents shows that it is in fact an equitable mortgage.

The requisites for considering a contract of sale with a right of repurchase as an equitable mortgage are (1) that the parties entered into a contract denominated as a contract of sale and (2) that their intention was to secure an existing debt by way of mortgage.[32] A contract of sale with right to repurchase gives rise to the presumption that it is an equitable mortgage in any of the following cases: (1) when the price of a sale with a right to repurchase is unusually inadequate; (2) when the vendor remains in possession as lessee or otherwise; (3) when, upon or after the expiration of the right to repurchase, another instrument extending the period of redemption or granting a new period is executed; (4) when the purchaser retains for himself a part of the purchase price; (5) when the vendor binds himself to pay the taxes on the thing sold; (6) in any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.[33] In case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage.[34]

In this case, the following circumstances indicate that the private respondents intended the transaction to be an equitable mortgage and not a contract of sale: (1) Private respondents Veneracion never took actual possession of the three lots; (2) Private respondents De la Paz remained in possession of the Melencio lot which was co-owned by them and where they resided; (3) During the period between the first sale and the second sale to private respondents Veneracion, they never made any effort to take possession of the properties; and (4) when the period of redemption had expired and private respondents Veneracion were informed by the De la Pazes that they are offering the lots for sale to another person for P200,000.00, they never objected. To the contrary, they offered to purchase the two lots for P180,000.00 when they found that a certain Mr. Tecson was prepared to purchase it for the same amount. Thus, it is clear from these circumstances that both private respondents never intended the first sale to be a contract of sale, but merely that of mortgage to secure a debt of P150,000.00.

With regard to the second sale, which is the true contract of sale between the parties, it should be noted that this Court in several cases,[35] has ruled that a purchaser who is aware of facts which should put a reasonable man upon his guard cannot turn a blind eye and later claim that he acted in good faith. Private respondent Reynaldo himself admitted during the pre-trial conference in the MTC in Civil Case No. 9523 (for ejectment) that petitioner was already in possession of the property in dispute at the time the second Deed of Sale was executed on June 1, 1983 and registered on March 4, 1984. He, therefore, knew that there were already occupants on the property as early as 1981. The fact that there are persons, other than the vendors, in actual possession of the disputed lot should have put private respondents on inquiry as to the nature of petitioner’s right over the property. But he never talked to petitioner to verify the nature of his right. He merely relied on the assurance of private respondent Godofredo De la Paz, who was not even the owner of the lot in question, that he would take care of the matter. This does not meet the standard of good faith.

3. The appellate court’s reliance on Arts. 1357 and 1358 of the Civil Code to determine private respondents Veneracion’s lack of knowledge of petitioner’s ownership of the disputed lot is erroneous.

Art. 1357[36] and Art. 1358,[37] in relation to Art. 1403(2)[38] of the Civil Code, requires that the sale of real property must be in writing for it to be enforceable. It need not be notarized. If the sale has not been put in writing, either of the contracting parties can compel the other to observe such requirement.[39] This is what petitioner did when he repeatedly demanded that a Deed of Absolute Sale be executed in his favor by private respondents De la Paz. There is nothing in the above provisions which require that a contract of sale of realty must be executed in a public document. In any event, it has been shown that private respondents Veneracion had knowledge of facts which would put them on inquiry as to the nature of petitioner’s occupancy of the disputed lot.

Second. Petitioner contends that the MTC in Civil Case No. 9523 (for ejectment) erred in denying petitioner’s Motion for Execution of the Judgment, which the latter filed on June 6, 1989, two years after private respondents Veneracion filed a notice of appeal with the MTC on March 3, 1987 without paying the appellate docket fee. He avers that the trial court’s denial of his motion is contrary to this Court’s ruling in the cases of Republic v. Director of Lands,[40] and Aranas v. Endona[41] in which it was held that where the appellate docket fee is not paid in full within the reglementary period, the decision of the MTC

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becomes final and unappealable as the payment of docket fee is not only a mandatory but also a jurisdictional requirement.

Petitioner’s contention has no merit. The case of Republic v. Director of Lands deals with the requirement for appeals from the Courts of First Instance, the Social Security Commission, and the Court of Agrarian Relations to the Court of Appeals. The case of Aranas v. Endona, on the other hand, was decided under the 1964 Rules of Court and prior to the enactment of the Judiciary Reorganization Act of 1981 (B.P. Blg. 129) and the issuance of its Interim Rules and Guidelines by this Court on January 11, 1983. Hence, these cases are not applicable to the matter at issue.

On the other hand, in Santos v. Court of Appeals,[42] it was held that although an appeal fee is required to be paid in case of an appeal taken from the municipal trial court to the regional trial court, it is not a prerequisite for the perfection of an appeal under §20[43] and §23[44] of the Interim Rules and Guidelines issued by this Court on January 11, 1983 implementing the Judiciary Reorganization Act of 1981 (B.P. Blg. 129). Under these sections, there are only two requirements for the perfection of an appeal, to wit: (a) the filing of a notice of appeal within the reglementary period; and (b) the expiration of the last day to appeal by any party. Even in the procedure for appeal to the regional trial courts,[45] nothing is mentioned about the payment of appellate docket fees.

Indeed, this Court has ruled that, in appealed cases, the failure to pay the appellate docket fee does not automatically result in the dismissal of the appeal, the dismissal being discretionary on the part of the appellate court.[46] Thus, private respondents Veneracions’ failure to pay the appellate docket fee is not fatal to their appeal.

Third. Petitioner contends that the resolution of the Court of Appeals denying his motion for reconsideration was rendered in violation of the Constitution because it does not state the legal basis thereof.

This contention is likewise without merit.Art. VIII, Sec. 14 of the Constitution provides that

“No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the basis therefor.” This requirement was fully complied with when the Court of Appeals, in denying reconsideration of its decision, stated in its resolution that it found no reason to change its ruling because petitioner had not raised anything new.[47] Thus, its resolution denying petitioner’s motion for reconsideration states:For resolution is the Motion for Reconsideration of Our Decision filed by the petitioners.

Evidently, the motion poses nothing new. The points and arguments raised by the movants have been considered and passed upon in the Decision sought to be reconsidered. Thus, We find no reason to disturb the same.WHEREFORE, the motion is hereby DENIED.SO ORDERED.[48]

Attorney’s fees should be awarded as petitioner was compelled to litigate to protect his interest due to private respondents’ act or omission.[49]

WHEREFORE, the decision of the Court of Appeals is REVERSED and a new one is RENDERED:(1) declaring as null and void the deed of sale executed by private respondents Godofredo and Manuela De la Paz in favor of private respondents spouses Reynaldo and Susan Veneracion;(2) ordering private respondents Godofredo and Manuela De la Paz to execute a deed of absolute sale in favor of petitioner Rev. Fr. Dante Martinez;(3) ordering private respondents Godofredo and Manuela De la Paz to reimburse private respondents spouses Veneracion the amount the latter may have paid to the former;(4) ordering the Register of Deeds of Cabanatuan City to cancel TCT No. T-44612 and issue a new one in the name of petitioner Rev. Fr. Dante Martinez; and(5) ordering private respondents to pay petitioner jointly and severally the sum of P20,000.00 as attorney’s fees and to pay the costs of the suit.

SO ORDERED.

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