Salvoro v. Tañega
REITERATIONFacts
The Antecedents: Spouses Evaristo and Gaudencia Salvoro (plaintiffs) sold a parcel of land with improvements to spouses Pablo and Josefa Tañega (defendants) on August 9, 1959, for P35,000.00. The Tañega spouses immediately took possession of the property and made improvements. The sale was not registered. The Tañega spouses made payments towards a mortgage on the property to the Development Bank of the Philippines (DBP) in the name of the Salvoro spouses. The DBP foreclosed the mortgage on August 25, 1959, and became the highest bidder at the public auction. On August 26, 1960, the Salvoro spouses repurchased the property from the DBP for P28,197.87. On the same day, August 26, 1960, the Salvoro spouses executed a deed of sale over the same property in favor of spouses Juan and Dolores Tismo (defendants-in-counterclaim) for P40,000.00. The Tañega spouses, upon learning of the second sale, tendered payment of the repurchase price plus 2% but were refused by the Salvoro spouses. The Tañega spouses registered a notice of lis pendens on September 15, 1960. The Tismo spouses registered their deed of sale in December 1960 and obtained Transfer Certificate of Title No. 848, cancelling the previous title of the Salvoro spouses. Procedural History: The Salvoro spouses filed an action to annul the deed of sale to the Tañega spouses, alleging non-compliance with resolutory conditions. The Tañega spouses filed a counterclaim, impleading the Tismo spouses as second vendees and alleging bad faith. The trial court dismissed the Salvoro spouses' complaint and ordered the Tañega spouses to reimburse the Salvoro spouses P28,197.80 with legal interest. The Salvoro spouses appealed to the Court of Appeals. The Court of Appeals affirmed the trial court's decision and ordered the Register of Deeds to cancel TCT No. 848 in the name of the Tismo spouses and issue a new title in the name of the Tañega spouses. The Petition: The Salvoro spouses (petitioners) filed a petition for review on certiorari, assailing the Court of Appeals' decision, primarily arguing that the Tismo spouses were innocent purchasers for value and should be preferred under Article 1544 of the Civil Code.
Issue(s)
Whether the Tismo spouses, as second vendees, are entitled to the protection of Article 1544 of the Civil Code by virtue of their prior registration of the deed of sale. Whether registration made with knowledge of an adverse claim (lis pendens) and prior physical possession by a first buyer constitutes registration in bad faith.
Ruling
The petition is denied, and the decision of the Court of Appeals is affirmed. The respondents, spouses Pablo D. Tañega and Josefa Tañega, are declared the owners of the land in question. The Register of Deeds of Leyte is ordered to cancel Transfer Certificate of Title No. 848 in the name of Juan and Dolores Tismo and, in lieu thereof, to issue a new transfer certificate of title in the name of Pablo and Josefa Tañega.
Ratio Decidendi
On Issue 1: The Court held that for a second vendee to prevail in a double sale of immovable property, the registration of the title must be in good faith. Applying the ruling in Carbonell v. Court of Appeals, the Court emphasized that good faith must characterize the act of anterior registration. In the present case, while the Tismos may have been in good faith at the exact moment of the sale on August 26, 1960, they did not register the deed until December 1960. Between the sale and the registration, a notice of lis pendens was recorded by the Tañegas on September 15, 1960. This annotation served as notice to the Tismos of an adverse claim before they completed the registration process. Because they proceeded with the registration despite this knowledge, they cannot be considered registrants in good faith, and thus the preference under the second paragraph of Article 1544 does not apply to them. On Issue 2: The Court ruled that the Tismos were in bad faith because they ignored the open and peaceable possession of the Tañegas. Under the rule of caveat emptor, as applied in Dacasin v. Court of Appeals, a purchaser must be aware of the vendor's title and takes the risk if they fail to investigate why another party is in possession of the land. The Tañegas had been in possession since 1955, which constitutes constructive notice to the Tismos. Since the Tismos' registration was in bad faith, it is as if no registration occurred at all. Consequently, the third paragraph of Article 1544 applies, which stipulates that ownership belongs to the person who was first in possession in good faith. Since the Tañegas were the first vendees and took possession in good faith long before the second sale, their right is superior to that of the Tismos.
Main Doctrine
In cases of double sale of immovable property, ownership shall belong to the person who in good faith first recorded the sale in the Registry of Property. If there is no inscription, ownership pertains to the person who in good faith was first in possession. Registration in bad faith does not confer superior title.