G.R. No. 132161 – CONSOLIDATED RURAL BANK (CAGAYAN VALLEY), INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and HEIRS OF TEODORO DELA CRUZ, respondents.
TINGA, J.
Rule Synopsis
The rules on double sales as provided under Art. 1544 does not apply when the sales were executed by two different persons, one not being the owner of the property. For instance, one sale by the owner, and another by the latter’s agent.
Facts
Five Madrid brothers co-owned a parcel of lot. One of them, Rizal, sold his share to Gamiao and Dayag with the consent of the four co-owners; this sale was not registered. Subsequenty, Gamiao and Dayag sold the same property to Dela Cruz and Hernandez; the latter took possession thereof. The respondents were heirs of Dela Cruz.
Meanwhile, the four-co-owners also conveyed their rights and interest over the subject property to one Marquez; the latter registered the sale. He then mortgaged portion of subject property to Consolidated Rural Bank (CRB; petitioner), which was later foreclosed.
The respondents thus filed a complaint for the reconveyance of the subject property.
As defense, Marquez argued that he had better right over the subject land being the first registrant in good faith and for value; and the that sale to Gamiao and Dayag was not binding upon him, the same being unregistered.
The RTC dismissed the complaint, holding that Marquez had better right for being the first to register in good faith. The CA reversed, finding Marquez in bad faith; the mortgage constituted on the subject property were likewise nullified. The SC affirmed.
Issue
Who had better right over the subject property?
Ruling and Discussion
The Dela Cruz heirs (respondents), the first vendees have better right over the subject property.
The rule on double sales was not applicable in the case at bar. The said rule 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. In this case, the vendors of the first sale were Gamiao and Dayag; of the second, the four Madrid borthers 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 (they consented to Rizal’s sale). Thus, the Court held that the sale to Gamiao and Dayag were consummated already at the time that a subsequent sale to Marquez was effected.
The Court said that the applicable rule was prior tempore, potior jure or simply “he who is first in time is preferred in right.” It also found Gamiao and Dayag to be purchasers in good faith. Furthermore, nothing was transferred to Marquez for at the time of sale, the Madrid brothers had already disposed of their rights under the subject property. Nemo dat quod non habet.
Finally, the SC said that assuming arguedo that Art. 1544 was applicable, Marquez still cannot claim better right since the registration was not made in good faith. Marquez then know that the property was being claimed or “taken” by the Heirs (respondents). For CRB’s failure to observe due diligence in making further inquiry, it was likewise held not a mortgagee in good faith.
Dispositive
Petition denied. Decision affirmed.