Buyer who registers sale has better right than one who does not

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Persida Acosta

Persida Acosta

Dear PAO,
Lino bought from Derick a 400-square meter farmland in Tabuk, Kalinga sometime in 2008. They executed a Deed of Absolute Sale but Lino failed to register the document before the Register of Deeds. Derick sold the same farmland to my friend Bitoy in 2012 and the Deed of Sale covering the transaction was registered at the Register of Deeds. Lino filed a complaint before the barangay where the property is situated and claimed that he had a better right over the property since he was the first buyer. Who has a better right in this case, my friend Bitoy or Lino?
Liza

Dear Liza,
Bitoy has a better right over the property he bought from Derick because he registered the Deed of Absolute Sale covering the sale. Lino failed to register the Deed of Sale that he and Derick executed in 2008, so the document does not bind third persons.

Section 51 of Presidential Decree (PD) 1529 states:

“An owner of registered land may convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make registration.


“The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies.”

Relative to the above-stated provision is Section 52 of the same law, which also provides that “[e]very conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.”
Bitoy is a buyer in good faith because he had no knowledge of the sale that took place between Lino and Derick, and he does not need to go beyond the title to determine if there are dealings affecting the property.

From the point of view of Bitoy and other persons, the sale between Lino and Derick does not exist. This is the effect of the failure of Lino to register the Deed of Sale that they executed in 2008. This finds support in the pronouncement of the Supreme Court in the case of Spouses Bulaong vs. Gonzales (G.R. No. 156318, September 5, 2011), where the Honorable Supreme Court Associate Justice Arturo D. Brion said:

“From the standpoint of third parties, a property registered under the Torrens system remains, for all legal
purposes, the property of the person in whose name it is registered, notwithstanding the execution of any deed of conveyance, unless the corresponding deed is registered. Simply put, if a sale is not registered, it is binding only between the seller and the buyer, but it does not affect innocent third persons.”

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net.

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