G.R. No. L-13125; February 11, 1919
ROSALIO BAUTISTA, plaintiff-appellee, vs. FRANCISCO SIOSON, ET AL., defendants; RAYMUNDO DE LA CRUZ, appellant.

FACTS:
On September 4, 1912, spouses Francisco Sioson and Lorenza de la Cruz sold a camarin (warehouse) and a house to Rosalio Bautista under a pacto de retro sale for P400, with a two-year redemption period. On the same date, Bautista leased the properties back to the spouses for two years at an annual rent of P100. Lorenza de la Cruz died on June 12, 1913. Before the redemption period expired, on August 5, 1914, Francisco Sioson sold the same camarin under a pacto de retro to Raymundo de la Cruz for P422, with a six-month redemption period. Neither sale was registered in the Registry of Property. When Sioson failed to redeem the property from Bautista after the two-year period, Bautista filed an action to consolidate his ownership. The trial court ruled in favor of Bautista, ordering de la Cruz to deliver the camarin and Sioson to pay unpaid rent. De la Cruz appealed.

ISSUE:
Who has a better right to the camarinthe first buyer, Rosalio Bautista, or the second buyer, Raymundo de la Cruzwhen both sales were unregistered and the seller (Sioson) remained in physical possession as a lessee after the first sale?

RULING:
The Supreme Court affirmed the trial court’s decision, ruling in favor of the first buyer, Rosalio Bautista. Applying Article 1473 of the Civil Code, the Court held that when the same property is sold to different vendees, ownership shall belong to the person who first took possession in good faith, if there is no inscription. The Court found that Bautista first took constructive possession of the camarin through symbolic delivery (constitutum possessorium) upon the execution of the deed of sale and the simultaneous contract of lease on September 4, 1912. This constituted a valid tradition, whereby Bautista, as owner, was recognized as the possessor, and Sioson remained in physical possession merely as a lessee. Consequently, when Sioson sold the property to de la Cruz in 1914, he was no longer the owner and could not transmit any ownership rights or lawful possession. De la Cruz’s subsequent physical possession was therefore unlawful and did not confer a better right. The Court deemed it unnecessary to resolve other ancillary issues. The dissenting opinion argued that the possession contemplated in Article 1473 should be real, physical possession to protect innocent subsequent purchasers.