G.R. No. L-32988 December 29, 1978
EVARISTO SALVORO and GAUDENCIA C. SALVORO, petitioners, vs. PABLO D. TAÑEGA and JOSEFA TAÑEGA, respondents.

FACTS

The spouses Evaristo and Gaudencia Salvoro (petitioners) owned a parcel of land in Tacloban City. On August 9, 1959, they executed a deed of absolute sale over the property in favor of the spouses Pablo and Josefa Tañega (respondents) for P35,000. The respondents immediately took possession of the land but did not register the sale. Subsequently, on August 26, 1960, the petitioners sold the same property to the spouses Juan and Dolores Tismo, who were able to register the sale and obtain a new Transfer Certificate of Title (TCT No. 848) in their names in December 1960. Prior to this second sale, however, the respondents had registered a notice of lis pendens on September 15, 1960, in relation to an annulment case (Civil Case No. 2826) filed by the petitioners against them. The petitioners sought to annul the 1959 sale, alleging the respondents’ failure to comply with certain resolutory conditions, primarily the assumption of the petitioners’ mortgage with the Development Bank of the Philippines.

ISSUE

The core issue is which of the two purchasers—the first buyers (Tañega spouses) who were first in possession but did not register, or the second buyers (Tismo spouses) who later registered their title—has a superior right to the property under Article 1544 of the Civil Code.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling in favor of the respondents, the Tañega spouses. The legal logic hinges on the application of Article 1544 of the Civil Code on double sales. The article provides a hierarchy of rights: for immovable property, ownership belongs to the person who in good faith first recorded it in the Registry. If there is no inscription, ownership pertains to the person who in good faith was first in possession. The Court found that the Tismo spouses, the second buyers, were registrants in bad faith because they registered their deed despite the existing notice of lis pendens annotated on the title, which served as constructive notice of the pending litigation over the property. Since their registration was tainted by bad faith, it is deemed legally ineffectual. Consequently, the situation is treated as if there was no valid registration at all. Applying the next rule under Article 1544, preference is given to the vendee who first took possession of the property in good faith. The respondents, the Tañega spouses, were undisputedly the first purchasers and had taken possession in 1959, and there was no evidence of bad faith on their part at the time of the sale and taking of possession. Therefore, their prior possession in good faith prevails. The Court also noted the petition was filed out of time, providing an independent ground for dismissal.