CONSOLIDATION OF CASE DOCTRINES

for SALES FINALS EXAM

2014-2015

Class of 2L

1. Kadatuan- Carbonell vs CA

The recording of Carbonell’s adverse claim should be deemed to have been done in good faith and should emphasize Infante’s bad faith when the latter registered her deed of sale only 4 days after Catbonell’s registration of adverse claim.

2. Montero- Dagupan Trading vs Macam

Where one of two conflicting sales of a piece of land was executed before the land was registered, while the other was an execution sale in favor of the judgment creditor of the owner made after the same property had been registered, what should determine the issue are the provisions of the last paragraph of Section 35, Rule 39 of the Rules of Court to the effect that, upon the execution and delivery of the final certificate of sale in favor of the purchaser of land sold in an execution sale, such purchaser "shall be substituted to and acquire all the rights, title, interest and claim of the judgment debtor to the property as of the time of the levy."

Where for a considerable time prior to the levy on execution the interest of the owner of the land levied upon had already been conveyed to another who took possession thereof and introduced improvements therein, the aforesaid levy is void. The prior sale, albeit unregistered, cannot be deemed automatically cancelled upon the subsequent issuance of the Torrens title over

the land.

3. Recinto- David vs Bandin

The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases

an unregistered land does so at his peril. His claim of having bought the land in good faith would not protect him if it turns out that the

seller does not actually own the property.

4. Zapanta- Olivares vs Gonzales

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

5. Yan- Caram vs Laureta

The rule on caveat emptor requires the purchases to be aware of the supposed title of the vendor and one who buys without checking the vendor’s title takes all the risk and losses consequent to such failure.

6. Viloria- Cruz vs Cabana

Under Article 1544 (2), the ownership of an immovable property shall belong to the person acquiring it, who in good faith first recorded it in the Registry of Property. Before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout. The knowledge of the first sale Cruz had gained defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith.

7. Ujano- Valdez vs CA

The Petitioners acquired the lot in good faith and for valuable consideration from the Antes and such owners fenced the property taking possession thereof. Thus when Petitioners annotated their adverse claim in the Registry of Deeds they thereby established a superior right to the property in question as against Respondent Viernes

8. Tolentino- Nuguid vs CA

The private respondents cannot also honestly claim that they became aware of the spouses Nuguid’s title only in 1978, because ever since the latter bought the property in 1961, the spouse Nuguid have occupied the same openly, publicly, and continuously in

the concept of owners, even building their house thereon. For seventeen years they were in peaceful possession, with the respondents Guevarras occupying less than

one-half of the same property.

9. Soriano- Radiowealth Finance vs

Palileo

DOCTRINE: Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the latter was a buyer in good faith and even if this second sale was registered. It was explained that this is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of the judgment debtor, and merely acquires the latter's interest in the property sold as of the time the property was

levied upon.

10. Soliva- Tanedo vs CA

1544 (2) The ownership of an immovable shall belong to the person acquiring it who in good faith first recorded it in the Registry of

Property.

11. Secerio- Spouses Tomas and Silvina

Occena vs Esponilla

• What is material is whether the second buyer registers the second sale in good faith without knowledge of any defect in the title of

the property.

• The defense of indefeasibility of the Torrens title does not extend to a transferee who takes the certificate of title in bad faith, with

notice of flaw.

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

property.

• The general rule is that one who deals with a property registered under the Torrens System need not go beyond the same, but only has to rely on the title. He is charged with the notice only of such burdens and

claims as are annotated on the title. HOWEVER, such principle does not apply when the party has actual knowledge of facts and circumstances which would impel a reasonably cautious man to make such inquiry or when he has knowledge of a defect or lack of title in the vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation.

• The general rule is, registration under the Torrens system is the operative fact which gives validity to the transfer of the land. HOWEVER, it does not create or vest title especially where a party has actual knowledge of the claimant's actual, open and notorious possession of the property at the time of his registration.

12. Santos- Moles vs IAC

13. Quiñones- Engineering and Machinery Corp vs CA

14. Nonato- Sonny Lo vs CA

ARTICLE 1628 CIVIL CODE. In other words, the vendor or assignor is BOUND TO WARRANT the existence and legality of the

credit AT THE TIME OF THE SALE.

15. Natanauan- Catungal vs Rodriguez

While failure to comply with the condition imposed on the perfection of a contract results in the cancellation of a contract, failure to comply with the condition imposed merely on the performance of an obligation gives the other party the option to either refuse to proceed with the sale or to waive

the condition (Article 1545).

16. Manuel- Ramos vs CA

The true intention of the parties being that the transaction shall secure the payment of the debt, it shall be presumed to be an equitable mortgage. The existence of one circumstance is enough to create the

presumption.

17. Mahinay- De Leon vs Salvador

PRICE ON FORCED SALES DISTINGUISHED FROM PRICE ON ORDINARY SALES In ordinary sales, by reasons of equity, a transaction may be invalidated on the ground of inadequacy of price. In forced sales, as when a sale is made at a public auction, the owner has the right to redeem. When there is a right to redeem, inadequacy of price is immaterial because judgment debtor can better acquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained from

the auction sale.

18. Landicho- Flores vs So

19. Hernandez- Alonzo vs IAC

In this case, the co-heirs filed an action for redemption if their co-heir’s share only after 13 years had elapsed from the sale. The court held that they are deemed it have been actually informed thereof sometime during those years although no written notice of sale was given to them

20. Geronimo- Lao vs CA

The urgent need of money places the borrower at a disadvantage vis-a-vis the lender who can dictate the terms of the contract. The court in case of ambiguity deems the contract to be one which involves lesser transmission of rights and interests

over the property

21. Gernale- Lanuza vs De leon

Between an unrecorded deed, which the Court held to be an equitable mortgage, and a registered mortgage, the latter must be preferred. Preference of mortgage credits is determined by the priority of registration of the mortgages, following the maxim "Prior tempore potior jure" (He who is first in time is

preferred in right.)

22. Gaspi- Capulong vs CA

Existence of equitable mortgage is shown by the fact the petitioner remained in possession of the property and enjoyed the fruits thereof even after the execution of deed of sale. Also, as shown by the real intention of the parties that the series of loans obtained by Capulong was added in order to serve as a purchase price for the lot when in fact, there were no money transactions involved in the execution.

23. Gamboa- Solid Homes Inc vs CA

24. Diaz- Primary Structures Corp vs

Valencia

Whenever a piece of rural land not exceeding one hectare is alienated, the law grants to the adjoining owners a right of redemption except when the grantee or buyer does not own any other rural land. In order that the right may arise, the land sought to be redeemed and the adjacent property belonging to the person exercising the right of redemption must both be rural lands. If one or both are urban lands, the right cannot be invoked. (Article 1621 provides for another exception: This right is not applicable to adjacent lands which are separated by brooks, drains, ravines, roads and other apparent servitudes for the benefit of other

estates.)

The written notice of sale is mandatory. This Court has long established the rule that notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written

notice from the selling co-owner in order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy

and status.

(In comparison with Alonzo v IAC)

In Alonzo, the right of legal redemption was invoked several years, not just days or months, after the consummation of the contracts of sale. The complaint for legal redemption itself was there filed more than thirteen years after the sales were concluded. (The Alonzo Case is an exception to the general rule, in view of the

peculiar circumstances of said case.

25. De la Cuesta- Guzman Bocaling vs

Bonnevie

A purchaser in good faith and for value is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property. Good faith connotes an honest intention to abstain from taking unconscientious advantage of another. Tested by these principles, the petitioner cannot tenably claim to be a buyer in good faith as it had notice of the lease of the property by the Bonnevies and such knowledge should have cautioned it to look deeper into the agreement to determine if it involved stipulations that would prejudice its own interests. Petitioner’s insistence that it was not aware of the right of first priority granted by the Contract of Lease, If Guzman-Bocaling failed to inquire about the terms of the Lease Contract, which includes Par. 20 on priority right given to the Bonnevies, it had only itself to blame. Having known that the property it was buying was under lease, it behooved it as a prudent person to have required Reynoso or the broker toshow to it the Contract of Lease in which Par. 20 is contained

It is true that the acquisition by a third person of the property subject of the contract is an obstacle to the action for its rescission where it is shown that such third person is in lawful possession of the subject of the contract and that he did no tact in bad faith. However, this rule is not applicable in the case before us because the petitioner is not considered a third party in relation to the Contract of Sale nor may its possession of the subject property be regarded as acquired lawfully and in good faith. Petitioner was aware f the lease in favor of the Bonnevies, who were actually occupying the subject property at the time it was sold to it. Although the Contract of Lease was not annotated on the transfer certificate of title in the name of the late Jose Reynoso and Africa Reynoso, the petitioner cannot deny actual knowledge of such lease which was equivalent to and indeed more

binding than presumed notice by registration.

26. De Belen- Yek Seng Co vs CA

A. A lessee can only avail of the benefits under Article 1687 if the lease agreement is

of no definite term.

B. The power of the Courts to fix a longer term for lease is protestative or discretionary, "may" is the word — to be exercised or not in accordance with the particular circumstances of the case; a longer term to be granted where equities come into play demanding extension, to be denied where none appears, always with due deference to the parties' freedom to contract

27. Cerda- Clutario vs CA

One of the grounds for ejectment under BP no. 25 is non payment of rentals for three months. The acceptance of the payment of back rentals does not constitute waiver of the default in the payment of rentals as a valid cause of action for ejectment which have

been filed prior acceptance.

28. Carungay- Yap vs Cruz

In a lease that is month-to-month basis, it can be terminated at the end of the month after notice to vacate is given. In the case such

notice is absent thefore the lease with the respondent subsist and despite nonpayment of rental for the month of August, lease is not automatically terminated without the demand to pay and vacate. (Kailangan ng demand and notice tulad ng pangangailangan natin sa tunay na pagibig) <3

The new contract of petitioners and the landlord does not terminate the lease of respondent. They were indeed guilty of forcible entry.

29. Bautista- United Realty Corp vs CA

30. Baguilat- Legal Management and Realty Corp vs CA