De la Cena v. Briones
REITERATIONFacts
The Antecedents: The case involves a six-meter by nine-meter portion of a 1,011-square meter lot. Respondents, spouses Briones, rented a house on this portion from the Arevalos (parents of petitioner Caridad de la Cena) in 1969, bought the house five months later, and then bought the contested portion of the lot from the Arevalos on January 31, 1977, making a downpayment. Unknown to the Brioneses, the entire lot was mortgaged by the Arevalos to Albay Development Bank. Petitioners, spouses de la Cena, later acquired the whole lot, with TCT No. T-54600 issued in their name after they paid an unspecified amount to the Arevalos and the bank's outstanding loan balance. The de la Cenas then demanded that the Brioneses vacate the contested portion. After barangay conciliation failed, the de la Cenas filed a complaint for quieting of title, recovery of possession, and damages. Procedural History: The Regional Trial Court (RTC) ruled in favor of the de la Cenas, declaring the Brioneses' claim invalid and prejudicial to the de la Cenas' title, ordering the de la Cenas to pay the Brioneses ₱35,952.93 for expenses incurred on the property, and directing the Brioneses to vacate within 30 days from payment, leaving the house behind. The RTC found a perfected contract of sale but held it did not bind the de la Cenas because the acknowledgment receipt was not a public document and the sale was unregistered. The Court of Appeals (CA) reversed the RTC decision, granting the Brioneses' appeal. The CA held that there was a perfected and consummated contract of sale, and that the de la Cenas' registration was tainted with bad faith because petitioner Caridad de la Cena knew of the sale of the house and the contested portion to the Brioneses. The CA ordered a survey to determine the respective portions and directed the Register of Deeds to issue a new title to the Brioneses for their portion. The Petition: The de la Cenas filed a petition for review on certiorari, questioning the CA's findings on the existence of a perfected contract of sale and the de la Cenas' knowledge of the prior sale.
Issue(s)
Whether or not there existed a perfected contract of sale between the Arevalo spouses and the respondents. Whether or not the petitioners had knowledge of the prior sale to the respondents before the property was registered in their names.
Ruling
The petition is denied for lack of merit. Petitioners are ordered to reconvey to respondents the six-meter by nine-meter contested portion of the lot covered by Transfer Certificate of Title No. T-54600. The Register of Deeds of Albay shall then issue the corresponding transfer certificate of title for the reconveyed portion. All expenses for this purpose shall be shared equally by the parties. The remaining area covered by TCT No. T-54600 shall remain with petitioners.
Ratio Decidendi
On the existence of a perfected contract of sale: The Supreme Court affirmed the Court of Appeals' finding that a perfected contract of sale existed between the Arevalos and the Brioneses. The Court noted that petitioners did not appeal the trial court's finding on this matter, thus deeming it accepted. Furthermore, a contract of sale is perfected by mere consent, upon a meeting of the minds on the object and price. The acceptance of the ₱1,260 downpayment by the Arevalos signified their agreement to the sale. The Court emphasized that the contract of sale had already been consummated, not merely executory, thus it could not be barred by the Statute of Frauds. Evidence of consummation included the delivery of the contested portion, the downpayment received, the payment of the balance on installment, the offset of a debt against the price, the final installment payment, and the continued actual possession by the respondents. Ownership transfers upon actual or constructive delivery. On the petitioners' knowledge of the prior sale: The Supreme Court upheld the Court of Appeals' conclusion that the petitioners had knowledge of the prior sale. In cases of double sale of immovable property, ownership belongs to the one who first registered the sale in good faith. However, the petitioners failed to prove their good faith as second buyers because they were not ignorant of the first sale to the respondents at the time they acquired the whole lot. Petitioner Caridad de la Cena testified that the respondents were already staying on the contested portion when the de la Cenas acquired the lot. She also knew that the respondents renovated the house after they allegedly purchased it. Caridad admitted talking to the respondents after the de la Cenas purchased the property, and hearing stories even before they asked the respondents to vacate that the respondents had already purchased the property. The Court reiterated that a buyer of real property in the actual possession of another is duty-bound to inquire about the right of the possessor; failure to do so negates a claim of being a bona fide buyer. Registration in bad faith, even if first, does not confer ownership.
Main Doctrine
In a double sale of immovable property, ownership belongs to the person who in good faith first recorded the sale in the registry of property. However, if the second buyer registers the sale after acquiring knowledge of the first sale, such registration is in bad faith and does not confer ownership. Actual possession and knowledge of a prior sale, even without registration, can defeat the claim of a subsequent buyer who registers the sale in good faith.