PAYLAGO vs. JARABE G.R. No. L-20046, March 27, 1968  

FACTS

The entire lot involved in this suit was originally in the name of AnselmoLacatan. After the death of AnselmoLacatan, TCT No. T-728 was issued in the name of his two sons and heirs for such lot, Vidal and FlorentinoLacatan. After Vidal Lacatan died, his heirs executed a deed of sale in favor of the spouses Romeo Paylago and Rosario Dimaandal, over a portion of the entire lot. Months later, FlorentinoLacatan also died. His heirs likewise executed a deed of sale in favor of the same vendees over another portion of the same lot. The two deed of sale was registered, a new TCT was issued in favor of the Paylago spouses. A subsequent subdivision survey, however, disclosed that a portion (one half hectare) of the total area purchased and indicated in the sketch was being occupied by Jarabe. Hence, the action to recover possession and ownership of the said portion. The trial court and the Court of Appeals found that a portion of land in question is indicated in the sketch of subdivision plan; that the said portion of land was purchased by HilarioJarabe, late husband of defendant-respondent, from ApolonioLacatan, who in turn, bought the same in 1936 from AnselmoLacatan, the original registered owner; that the first deed of sale also unregistered, executed by AnselmoLacatan in favor of Apolonio was lost during the Japanese occupation; that defendant-respondent has been in possession of the said portion as owner from 1938 up to the present; and that the spouses Paylago and Dimaandal knew that Jarabe has been in possession of the premises since 1945. The trial court held that they were not purchasers in good faith and rendered judgment in favor of Jarabe declaring the latter as owner of the land in question with the right to retain possession of the same. The decision was affirmed in toto by the CA.

ISSUE

Who has better right in case of double sale of real property, the registered buyer or the prior but unregistered purchaser?

HELD

The general principle governing the matter: as between two purchasers, the one who has registered the sale in his favor, in good faith, has a preferred right over the other who has not registered his title, even if the latter is in the actual possession of the immovable property. Indeed, the foregoing principle find concrete bases in the pertinent provisions of the NCC, Art. 1544, providing that if the same immovable property should have been sold to different vendees, “the ownership shall belong to the person acquiring it who in good faith first recorded it in the registry of property.

While the spousedPaylago and Dimaandal have a registered title, it cannot be denied that their acquisition and subsequent registration were tainted with the vitiating element of bad faith. They should have inquired and made an investigation as to the possible defects of the title of the Lacatan heirs over the entire lot sold to them, granting that the latter’s certificate of title was clear. This, they failed to do. The Court finds that the appealed decision should be affirmed.

Digest Credit: Joseph Eric Pocholo Briones