Cruz Cabana,: LTD - Module 7-By MBC

5. CRUZ vs. CABANA.
docx 1
LTD - Module 7- by MBC

5. Abelardo CRUZ (deceased) substituted by Heirs Consuelo C. Cruz, Claro C. Cruz and
Stephen C. Cruz, per resolution, petitioners,
vs. Leodegaria Cabana, Teofilo Legaspi, Iluminada CABANA, Court of Appeals,
respondents.
G.R. No. 56232, 1984 June 22
FACTS:
This is a simple case of double sale of real property.
On June 1, 1965, Leodegaria Cabana sold the land in question with right of
repurchase to respondents-spouses Teofilo Legaspi and Iluminada Cabana. The said
document 'Bilihang Muling Mabibili' stipulated that the land can be repurchased by the
vendor within one year from December 31, 1966. The said land was not repurchased
and in the meantime, respondents-spouses Teofilo Legaspi and Iluminada Cabana took
possession of the land.
On October 21, 1968, defendant Leodegaria Cabana sold the land by way of
absolute sale to the respondents-spouses Teofilo Legaspi and Iluminada Cabana.
Defendants spouses Legaspi attempted to register the deed of sale but was not
accomplished because they could not present the owner’s duplicate of title which was
at that time in the possession of Philippine National Bank as mortgage. However, on
November 29, 1968 defendant Leodegaria sold the same property to petitioner
Abelardo Cruz and was able to register it under his name.
ISSUE:
Whether or not Cruz (petitioner), being the first to register the land creates right
of ownership and title of the land in question against spouses Teofilo Legaspi and
Iluminada Cabana (respondents) notwithstanding his knowledge of the first sale.
HELD:
NO. Under the foregoing circumstances, the right of ownership and title to the
land must be resolved in favor of the respondent spouses Teofilo Legaspi and
Illuminada Cabana on three counts.
1. Petitioner Cruz was not in good faith in registering the title in his name. "A
purchaser who has knowledge of fact which would put him upon inquiry and
investigation as to possible defects of the title of the vendor and fails to make such
inquiry and investigation, cannot claim that he is a purchaser in good faith. Knowledge
of a prior transfer of a registered property by a subsequent purchaser makes him a
purchaser in bad faith and his knowledge of such transfer vitiates his title acquired by
virtue of the latter instrument of conveyance which creates no right as against the first
purchaser.
5. CRUZ vs. CABANA.docx 2
2. The defendants-spouses registered the deed of absolute sale ahead of plaintiff-

appellant. Said spouses were not only able to obtain the title because at that time, the
owner's duplicate certificate was still with the Philippine National Bank.
3. The defendants-spouses have been in possession all along of the land in

question. If immovable property is 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; and should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession.
PRINCIPLES AND ANALYSIS:
Article 1544 of Civil Code:
Article 1544. “If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.”
"Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.”
"Should there be no inscription, the ownership shall pertain to the person who in
good faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith."
Cf. Cruz vs. Cabana
There is no question that respondents spouses Teofilo Legaspi and Iluminada

Cabana were the first buyers, first on June 1, 1965 under a sale with right of repurchase
and later on October 21, 1968 under a deed of absolute sale and that they had taken
possession of the land sold to them; there is no question either that respondents
spouses were the first and the only ones to be in possession of the subject property.
Principle of Primus Tempore, Potior Jure:
The principle primus tempore, potior jure (first in time, stronger in right) gains
greater significance in case of double sale of immovable property. When the thing sold
twice is an immovable, the one who acquires it and first records it in the Registry of
Property, both made in good faith, shall be deemed the owner.
Knowledge gained by the first buyer of the second sale cannot defeat the first
buyer’s right except only as provided by the Civil Code and that is where the second
buyer first registers in good faith the second sale ahead of the first. Such knowledge of
5. CRUZ vs. CABANA.docx 3
the first buyer does not bar her from availing of her rights under the law, among them
to register first her purchase as against the second buyer. But in converso knowledge
gained by the second sale, since such knowledge taints his prior registration with bad
faith. This is the price exacted by Article 1544 of the Civil Code of the second buyer
being able to displace the first buyer; that before the second buyer can obtain priority
over the first, he must show that he acted in good faith throughout- from the time of
acquisition until the title is transferred to him by registration or failing registration, by
delivery of possession. The second buyer must show continuing good faith and
innocence or lack of knowledge of the first sale until his contract ripens into full
ownership through prior registration as provided by law.
Between two buyers of the same immovable property registered under the
Torrens system, the law gives ownership priority to: (1) the first registrant in good
faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good
faith presents the oldest title. This rule, however, does not apply if the property is not
registered under the Torrens system.
Cf. Cruz vs. Cabana
Spouses Teofilo Legaspi and Iluminada Cabana were the first to register the sale
with right of repurchase in their favor on May 13,1965 under Primary Entry No. 210113
of the Register of Deeds but they could not register the absolute deed of sale because
the duplicate certificate was still with the bank.
Rule in Case of Double Sale:
a. When two or more transfer certificates of title are issued to different persons for
the same lots due to the fact that original title was not cancelled when the first transfer
certificates of title were issued to replace the original title.
b. Where two certificates of title purport to include the same land, the earlier in
date prevails.
Cf. Cruz vs. Cabana
Petitioner Cruz was the second buyer under a deed of sale dated November 29,
1968, which to all indications, contrary to the text, was a sale with right of repurchase
for 90 days. There is no question either that respondents spouses Legaspi were the first
and the only ones to be in possession of the property.

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5. CRUZ vs. CABANA.

LTD - Module 7- by MBC

2. The defendants-spouses registered the deed of absolute sale ahead of plaintiff-

3. The defendants-spouses have been in possession all along of the land in

PRINCIPLES AND ANALYSIS:

Article 1544 of Civil Code:

"Should it be immovable property, the ownership shall belong to the person

Cf. Cruz vs. Cabana

There is no question that respondents spouses Teofilo Legaspi and Iluminada

Principle of Primus Tempore, Potior Jure:

Cf. Cruz vs. Cabana

Rule in Case of Double Sale:

Cf. Cruz vs. Cabana

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