• What to do in case of a double sale

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    Persida Acosta

    Persida Acosta

    Dear PAO,
    A few years ago, I purchased a parcel of land in the province and immediately started cultivating it, though I was not able to immediately transfer the title in my name because of financial constraint.

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    Last week, I went to the Register of Deeds to finally transfer the title of the property in my name, but the clerk informed me that I cannot do that because the title of the seller was already cancelled. It turned out that the seller also sold the property to his brother after the property was sold to me, and the brother was able to transfer the title in his name. May I know my rights and legal recourse under the circumstances?
    Manny

    Dear Manny,
    Based on the information you provided, there is a double sale, meaning the same seller sold a property to two or more buyers with different interests. The law applicable to such a case is Article 1544 of the Civil Code which states that if the same immovable was 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. 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” (Article 1544, Civil Code). Thus, the person who is preferred by the law in case of double sale, in order of priority is: (1) the first person to register the sale in good faith; then (2) the first possessor in good faith; and lastly, (3) the buyer who in good faith presents the oldest title.

    In your case, you are the first possessor of the property, but the other claimant is the first registrant. At a glance, it would appear that the other claimant is preferred following the mentioned rule. However, a closer scrutiny of the law would reveal that you may question the right of the other claimant if you can show that he is not a registrant in good faith. Good faith in double sale cases means that the person must have bought the property without notice that some other person has a right or interest in such property and pays a full and fair price for the same before he has notice of the other person’s claim (Centeno vs. Sps.Viray, 440 Phil. 881).

    Concerning the registration of the sale, our Supreme Court categorically declared that knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith (Uraca vs. Court of Appeals, 344 Phil. 253). This means that the second buyer can no longer rely on the fact that he/she is the first to register the sale, and the first buyer is entitled to prove that he has a better right to the property.

    Based on the foregoing, it is evident that you have to investigate if the brother of the seller is a registrant in good faith. In the affirmative, the brother of the seller indeed has a better right to the property in accordance with Article 1544 of the Civil Code. In which case, your recourse is to sue the seller and demand rescission of the contract with damages. However, if you can show that the brother of the seller has knowledge of your claim or right to the property before he transferred the title in his name, then you may question his right to the property. Your recourse in such a case is to petition the court to cancel the title issued to the brother of the seller on account of his bad faith, and ask that the same be transferred in your name on the basis of the deed of sale executed by the seller in your favor.

    We hope we were able to sufficiently address your concern. Please bear in mind that the opinion given above is strictly based on the information you have provided and our appreciation of the same. Our opinion may vary if 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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