G.R. No. 27483, September 29, 1927
ENCARNACION RAMOS and LEON AYCO, plaintiffs-appellees, vs. JUSTO DUEÑO and VICENTE OTCEDA, defendants; VICENTE OTCEDA, appellant.

Ponente: JOHNSON, J.

FACTS

On May 27, 1919, Justo Dueño executed a public document (Exhibit A) obligating himself to sell a parcel of land (Lot No. 1212) to the plaintiffs, Encarnacion Ramos and Leon Ayco. The delivery of possession was deferred until November 1925 because the land was then occupied by a third party, Primitivo Toro. On September 25, 1925, Vicente Otceda purchased the same land from Dueño with full knowledge of the prior sale contract in favor of the plaintiffs. The plaintiffs filed an action seeking to annul the second sale to Otceda, compel Dueño to accept the purchase price (which they had deposited with the court), and require the defendants to execute the necessary documents to transfer the land to them.

ISSUE

What rights does a second purchaser acquire when, at the time of purchase, he had actual knowledge of a prior contractual obligation by his vendor to sell the same property to another person?

RULING

The Supreme Court AFFIRMED the decision of the lower court with modification regarding the disposition of the purchase price. The second sale to Vicente Otceda was declared null and void. Otceda, having purchased the land with full knowledge of his vendor’s prior obligation to the plaintiffs, merely “stepped into the shoes” of his vendor and acquired only the rights subject to that obligation. Consequently, he is bound to comply with the vendor’s duty to convey the property to the original buyers. The Court ordered the cancellation of the registration of the second sale and directed Otceda to execute the necessary documents to transfer the land to Ramos and Ayco. The modification ordered the clerk of court to deliver the deposited purchase price of P300 to Otceda (instead of to Dueño).