GR 117014; (August, 1995) (Digest)
G.R. No. 117014 August 14, 1995
SPS. HONORIO SANTIAGO and ESTRELITA SANTIAGO, petitioners, vs. THE COURT OF APPEALS, THE REGIONAL TRIAL COURT, BRANCH 134, MAKATI, AQUILINO AREVALO AND THE REGISTER OF DEEDS OF MAKATI, respondents.
FACTS
The petitioners, Spouses Santiago, purchased a 100-square-meter lot from Evelyn Mercado, acting as attorney-in-fact for her siblings, through a contract of sale executed on July 30, 1979. They made installment payments, received the owner’s duplicate certificate of title, and eventually registered the deed of sale on April 16, 1982, resulting in the issuance of a new Transfer Certificate of Title (TCT No. 113462) in their names. However, on February 11, 1982, before the Santiagos’ registration, Evelyn Mercado sold the same property to respondent Aquilino Arevalo for an identical price. Arevalo did not immediately register his sale but filed an affidavit of adverse claim with the Register of Deeds only on July 27, 1983.
Arevalo filed a complaint for specific performance and cancellation of the Santiagos’ title. The Santiagos, in turn, filed actions for quieting of title and damages. The cases were consolidated. The trial court ruled in favor of Arevalo, ordering the surrender of the lot to him and the cancellation of the Santiagos’ title. The Court of Appeals affirmed this decision. The Santiagos appealed to the Supreme Court, asserting their superior right as the first buyers and first registrants in good faith.
ISSUE
Who has a superior right to the disputed property, the first buyer who registered the sale, or a subsequent buyer who did not register?
RULING
The Supreme Court reversed the Court of Appeals and ruled in favor of the petitioner Spouses Santiago. The legal logic is anchored on Article 1544 of the Civil Code, which governs double sales of immovable property. The article establishes that ownership shall belong to the person who in good faith first recorded the sale in the Registry of Property.
The Court found that the Santiagos were unquestionably the first buyers. More critically, they were the first and only parties to register the sale, resulting in the issuance of a new Torrens title in their names. Their actions—taking possession of the owner’s duplicate certificate, making payments, and securing registration—were all indicative of good faith. In contrast, Arevalo, the second buyer, failed to register his deed of sale at all; his mere filing of an adverse claim long after the Santiagos’ registration did not constitute registration that could vest ownership under Article 1544. Since the Santiagos acquired the property in good faith and recorded their sale first, their registered title became indefeasible and superior to any unregistered claim by Arevalo. The Court thus upheld TCT No. 113462 in the names of the Santiagos.