G.R. No. L-7909; March 24, 1914
GUTIERREZ HERMANOS, plaintiff-appellant, vs. ISABEL RAMIREZ, defendant-appellee.

FACTS:
Tomas Perez was the registered owner of a parcel of land. In 1894, he sold the land to Gregorio Patrocinio for P100, delivered possession, and issued a receipt for the purchase price, but the sale was not documented by a formal deed and was never registered. Patrocinio, and later his widow Isabel Ramirez (defendant), remained in possession. Perez died in 1897. In 1906, the administratrix of Perez’s estate, acting under a court order, executed a deed of sale for several parcels, including the subject land, to Gutierrez Hermanos (plaintiff). This deed was duly registered. Gutierrez Hermanos then filed an action to recover possession of the land from Ramirez.

ISSUE:
Whether the unrecorded sale of registered land in 1894, followed by long-term possession, prevails over a later recorded deed of sale executed by the estate’s administratrix under court authority.

RULING:
No. The Supreme Court reversed the trial court’s decision. Applying Article 1473 of the Civil Code, the Court held that for real property, ownership belongs to the person who first recorded the title in the registry. Since Gutierrez Hermanos duly registered its deed of sale in 1906, while the earlier sale to Patrocinio (through whom Ramirez claims) was never registered, the plaintiff’s registered title must prevail. The Court also found that the administratrix had proper authority under the law (Sections 722 and 723 of Act No. 190) to sell the estate’s real property under a court order, rendering the deed to the plaintiff valid. The defendant, as an occupant in good faith, was entitled to the rights afforded such occupants under the law.