Sales: Double Sales G.R. No. 179641 DOLORITA C. BEATINGO, Petitioner, - versus LILIA BU GASIS, Respondent. NACHURA, J.

: DECISION February 9, 2011

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals[1] (CA) Resolutions dated June 27, 2007[2] and August 13, 2007[3] in CA-G.R. CEB-CV No. 01624. This petition stemmed from the following facts: Petitioner Dolorita Beatingo filed a Complaint for Annulment and Cancellation of Sale, Reconveyance, Delivery of Title and Damages[4] against respondent Lilia Bu Gasis before the Regional Trial Court (RTC) of Iloilo City. The case was raffled to Branch 31 and docketed as Civil Case No. 00-26171. Petitioner alleged that, on May 19, 1998, she bought a piece of land, denominated as Lot No. 7219 (hereafter referred to as the subject property), from Flora G. Gasis (Flora). The subject property was registered in the name of Floras predecessor -in-interest. The sale was evidenced by a notarized Deed of Absolute Sale. On October 18, 1999, petitioner went to the Register of Deeds to have the sale registered. She, however, failed to obtain registration as she could not produce the owners duplicate certificate of title. She, thus, filed a petition for the issuance of the owners duplicate certificate of title but was opposed by r espondent, claiming that she was in possession of the Original Certificate of Title (OCT) as she purchased the subject property from Flora on January 27, 1999, as evidenced by a Deed of Sale. This prompted petitioner to file the Complaint, insisting that she is the rightful owner of the subject property. She also maintained that respondent had been keeping the OCT despite knowledge that petitioner is the rightful owner. She further accused respondent of inducing Flora to violate the contract with her, which caused her damage, prejudice, mental anguish, and serious anxiety.[5] On the other hand, respondent claimed that she purchased the subject property from Flora without knowledge of the prior sale of the same subject property to petitioner, which makes her an innocent purchaser for value. Respondent denied having induced Flora to violate her contract with petitioner as she never knew the existence of the alleged first contract. Lastly, respondent declared that, upon payment of the purchase price, she immediately occupied the subject property and enjoyed its produce. On December 29, 2005, the RTC rendered a decision,[6] the dispositive portion of which reads: WHEREFORE, on the basis of the testimonial and documentary evidence, the court finds that preponderant evidence has been established by the defendant as against the plaintiff, hence, JUDGMENT is therefore rendered in favor of the defendant. Consequently, the complaint is DISMISSED and the defendant is hereby declared to be the lawful owner of the property in question. Further the plaintiff is hereby ordered to pay the defendant P30,000.00 in attorneys fees, litigation expenses of P10,000.00 and the costs of the suit. SO ORDERED.[7] The RTC considered the controversy as one of double sale and, in resolving the issues raised by the parties, it applied the rules laid down in Article 1544 of the Civil Code. As opposed to petitioners admission that she did not pay the purchase price in full and that she did not acquire possession of the subject property because of the presence of tenants on it, the court gave more weight to respondents evidence showing that she immediately acquired possession of the subject property and enjoyed its produce upon f ull payment of the purchase price. Since the two sales that of petitioner and that of respondent were not registered with the Registry of Property, the RTC held that whoever was in possession had the better right. Hence, it decided in favor of respondent. Aggrieved, petitioner filed a Motion for New Trial and Reconsideration[8] on the ground that she was in possession of the subject property actually and constructively. The motion, however, was denied by the RTC in an Order[9] dated April 5, 2006. Undaunted, petitioner elevated the matter to the CA via a Notice of Appeal. On December 20, 2006, the CA required petitioner to file an Appellants Brief within forty-five (45) days from receipt of the notice.[10] However, due to pressures of work in equally important cases with other clients, counsel for petitioner requested for an extension of ninety (90) days within which to file the brief.[11] In a Resolution dated March 9, 2007, the CA granted the motion. The Resolution is quoted below for easy reference: As prayed for, the plaintiff-appellant is hereby granted the maximum extension of ninety (90) days from 19 February 2007 or until 20 May 2007, within which to file an Appellants Brief.[12] Instead of filing the Appellants Brief within the extended period, petitioner twice moved for extension of time to file the brief, covering an additional period of sixty (60) days for the same reasons as those raised in the first motion for extension. [13] In a Resolution[14] dated June 27, 2007, the CA denied the motions for extension to file brief. Thus, for failure to file the Appellants Brief, the appellate court dismissed the appeal. In a Resolution [15] dated August 13, 2007, the CA denied petitioners motion for reconsideration. Hence, the instant petition on the following grounds: A. THE RESPONDENT COURT OF APPEALS ERRED IN NOT REVIEWING ON THE MERITS THE APPEAL OF THE PETITIONER, CONSIDERING THAT, THE DECISION OF THE REGIONAL TRIAL COURT OF ILOILO IS SO
1 Beatingo v. Gasis

Sales: Double Sales HORENDOUSLY WRONG WHEN THE SAID COURT DECIDED IN FAVOR OF THE PRIVATE RESPONDENT, WHICH IF NOT REVIEWED, OR REVERSED, WILL CAUSE INJUSTICE TO TRIUMPH AS AGAINST WHAT IS RIGHT AND LEGAL, SACRIFICING SUBSTANTIAL JUSTICE IN FAVOR OF TECHNICALITIES, CONSIDERING THAT: a. buyer; b. c. Deeds; Petitioner was the first buyer of the property while the private respondent is only the second It is petitioner who is in possession of the said property and that; Private respondent was not able to have her own deed of sale registered with the Register of

B. THE RESPONDENT COURT OF APPEALS SHOULD HAVE EXERCISED ITS DISCRETION, IN FAVOR OF SUBSTANTIAL JUSTICE, BY ADMITTING THE APPELLANTS BRIEF OF THE PETITIONER TAKING INTO CONSIDERATION THAT PETITIONER IN GOOD FAITH HAS FILED THE NEEDED MOTIONS FOR EXTENSIONS (sic) TO FILE BRIEF, AND THE BRIEF WAS IN FACT FILED WITHIN THE PERIOD OF THE REQUESTED EXTENSIONS.[16] Petitioner insists that the appeal should not have been dismissed because her failure to file the Appellants Brief was not deliberate and intended for delay. She claims that prior to the expiration of the 90-day extension within which to file the brief, she again asked for two more extensions. She explains that the counsel could not prepare the Appellants Brief because the law firm was swamped with numerous cases and election related problems which needed his attention. We find petitioners arguments bereft of merit. Section 7, Rule 44 of the Rules of Court provides: Sec. 7. Appellants Brief. It shall be the duty of the appellant to file with the court, within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral and documentary, are attached to the record, seven (7) copies of his legibly typewritten, mimeographed or printed brief, with proof of service of two (2) copies thereof upon the appellee. In a Resolution dated December 20, 2006, the CA required petitioner to file the Appellants Brief. The notice was received by petitioner on January 5, 2007. However, instead of filing the required brief, petitioner requested for additional time to prepare due to pressures of work in equally important cases, plus court appearances, preparation of memoranda, conference with other clients . The CA granted the request and specifically stated that the same was the maximum extension. This notwithstanding, instead of complying with the courts directive, petitioner again filed two motions for extension, for a total period of sixty (60) days . This time, the CA denied the motions and eventually dismissed the appeal in accordance with Section 1(e),[17] Rule 50 of the Rules of Court. Evidently, petitioners counsel was negligent in failing to file the required brief not only within 45 days from receipt of the notice but also within the extended period of ninety (90) days granted by the appellate court. He, however, explains that he could not comply with the courts directive because he had to attend to other cases that he considered more important and urgent than the instant case. Regrettably, such excuse is unacceptable.[18] An attorney is bound to protect his clients interest to the best of his ability and with utmost diligence. Failure to file brief certainly constitutes inexcusable negligence, more so if the delay results in the dismissal of the appeal.[19] Every member of the Bar should always bear in mind that every case that a lawyer accepts deserves his full attention, diligence, skill, and competence, regardless of its importance, whether he accepts it for a fee or for free.[20] Unfortunately, petitioner is bound by the negligence of her counsel. The failure to file the Appellants Brief, though not jurisdictional, results in the abandonment of the appeal which may be the cause for its dismissal. It is true that it is not the ministerial duty of the CA to dismiss the appeal. The appellate court has the discretion to do so, and such discretion must be a sound one, to be exercised in accordance with the tenets of justice and fair play, having in mind the circumstances obtaining in each case.[21] The question of whether or not to sustain the dismissal of an appeal due to petitioners failure to file the Appellants Brie f had been raised before this Court in a number of cases. In some of these cases, we relaxed the Rules and allowed the belated filing of the Appellants Brief. In other cases, however, we applied the Rules strictly and considered the appeal abandoned, which thus res ulted in its eventual dismissal. In Government of the Kingdom of Belgium v. Court of Appeals,[22] we revisited the cases which we previously decided and laid down the following guidelines in confronting the issue of non-filing of the Appellants Brief: (1) The general rule is for the Court of Appeals to dismiss an appeal when no appellants brief is filed within the reglementary period prescribed by the rules; (2) The power conferred upon the Court of Appeals to dismiss an appeal is discretionary and directory and not ministerial or mandatory; (3) The failure of an appellant to file his brief within the reglementary period does not have the effect of causing the automatic dismissal of the appeal; (4) In case of late filing, the appellate court has the power to still allow the appeal; however, for the proper exercise of the courts leniency[,] it is imperative that: (a) the circumstances obtaining warrant the courts liberality; (b) that strong considerations of equity justify an exception to the procedural rule in the interest of substantial justice; (c) no material injury has been suffered by the appellee by the delay; (d) there is no contention that the appellees cause was prejudiced; (e) at least there is no motion to dismiss filed.

2 Beatingo v. Gasis

Sales: Double Sales (5) In case of delay, the lapse must be for a reasonable period; and

(6) Inadvertence of counsel cannot be considered as an adequate excuse as to call for the appellate courts indulgence except: law; (a) where the reckless or gross negligence of counsel deprives the client of due process of when application of the rule will result in outright deprivation of the clients liberty or where the interests of justice so require.

(b) property; or (c)

In this case, we find no reason to disturb the appellate courts exercise of sound discretion in dismissing the appeal. We mu st emphasize that the right to appeal is not a natural right but a statutory privilege, and it may be exercised only in the manner and in accordance with the provisions of law.[23] The Court cannot say that the issues being raised by petitioner are of such importance that would justify the appellate court to exempt her from the general rule, and give due course to her appeal despite the late filing of her Appellants Brief.[24] Nevertheless, in our desire to put an end to the present controversy, we have carefully perused the records of this case and reached the conclusion that the decision dated December 29, 2005 of the RTC is in perfect harmony with law and jurisprudence.[25] The present controversy is a clear case of double sale, where the seller sold one property to different buyers, first to petitioner and later to respondent. In determining who has a better right, the guidelines set forth in Article 1544 of the Civil Code apply. Article 1544 states: Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. Admittedly, the two sales were not registered with the Registry of Property. Since there was no inscription, the next question is who, between petitioner and respondent, first took possession of the subject property in good faith. As aptly held by the trial court, it was respondent who took possession of the subject property and, therefore, has a better right. Petitioner insists that, upon the execution of the public instrument (the notarized deed of sale), she already acquired possession thereof, and thus, considering that the execution thereof took place ahead of the actual possession by respondent of the subject property, she has a better right. We do not agree. Indeed, the execution of a public instrument shall be equivalent to the delivery of the thing that is the object of the contract. However, the Court has held that the execution of a public instrument gives rise only to a prima facie presumption of delivery. It is deemed negated by the failure of the vendee to take actual possession of the land sold. [26] In this case, though the sale was evidenced by a notarized deed of sale, petitioner admitted that she refused to make full payment on the subject property and take actual possession thereof because of the presence of tenants on the subject property. Clearly, petitioner had not taken possession of the subject property or exercised acts of dominion over it despite her assertion that she was the lawful owner thereof.[27] Respondent, on the other hand, showed that she purchased the subject property without knowledge that it had been earlier sold by Flora to petitioner. She had reason to believe that there was no defect in her title since the owners duplicate copy of the OCT was delivered to her by the seller upon full payment of the purchase price. She then took possession of the subject property and exercised acts of ownership by collecting rentals from the tenants who were occupying it. Hence, the RTC is correct in declaring that respondent has a better right to the subject property. WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Resolutions dated June 27, 2007 and August 13, 2007 in CA-G.R. CEB-CV No. 01624 are AFFIRMED. SO ORDERED.
[1] [15] [16] [17]

Cebu City Station. [2] Penned by Associate Justice Isaias P. Dicdican, with Associate Justices Antonio L. Villamor and Stephen C. Cruz, concurring; rollo, pp. 125-126. [3] Id. at 214-215. [4] Id. at 48-53. [5] Id. at 72-74. [6] Penned by Judge Rene S. Hortillo; id. at 72-86. [7] Id. at 85-86. [8] Id. at 87-107. [9] Id. at 111-112. [10] Id. at 113. [11] Id. at 114-115. [12] Id. at 117. [13] Id. at 118-123. [14] Supra note 2.

Supra note 3. Rollo, p. 21. Section 1. Grounds for dismissal of appeal. An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds: xxxx (e) Failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by these Rules.
[18]

No. 164150, April 14, 2008, 551 SCRA 223, 241, citing Carco Motor Sales, Inc. v. Court of Appeals, No. L-44609, August 31, 1977, 78 SCRA 526. [22] Supra, at 241-242. [23] Cario v. Espinoza, G.R. No. 166036, June 19, 2009, 590 SCRA 43, 48.
[24]

Government the Kingdom of Belgium v.

Court

of

of Appeals,

Jetri Construction Corporation v. Bank of the Philippine Islands, G.R. No. 171687, June
8, 2007, 524 SCRA 522, 530.
[19]

supra note 21, at 242. [25] See Jetri Construction Corporation v. Bank of the Philippine Islands, supra note 18, at 530.
[26]

692, 696 (2004). [20] Id. at 697.

[21]

Barbuco v. Atty. Beltran, 479 Phil.

Ten Forty Realty and Development Corporation v. Cruz, 457 Phil. 603, 615 (2003). [27] See San Lorenzo Development Corporation v. Court of Appeals, 490 Phil. 7
(2005).

Government of the Kingdom of Belgium v. Court of Appeals, G.R.

3 Beatingo v. Gasis

Sales: Double Sales G.R. No. 176308 May 8, 2009 ANGEL M. PAGADUAN, AMELIA P. TUCCI, TERESITA P. DEL MONTE, ORLITA P. GADIN, PERLA P. ESPIRITU, ELISA P. DUNN, LORNA P. KIMBLE, EDITO N. PAGADUAN, and LEO N. PAGADUAN, Petitioners, - versus SPOUSES ESTANISLAO & FE POSADAS OCUMA, Respondents. DECISION TINGA, J.: In this Petition for Review,[1] petitioners assail the Decision[2] of the Court of Appeals dated September 18, 2006 which ruled that petitioners action for reconveyance is barred by prescription and consequently reversed the dec ision[3] dated June 25, 2002 of the Regional Trial Court (RTC) of Olongapo City. Petitioners Angel N. Pagaduan, Amelia P. Tucci, Teresita P. del Monte, Orlita P. Gadin, Perla P. Espiritu, Elisa P. Dunn, Lorna P. Kimble, Edito N. Pagaduan and Leo N. Pagaduan are all heirs of the late Agaton Pagaduan. Respondents are the spouses Estanislao Ocuma and Fe Posadas Ocuma. The facts are as follows: The subject lot used to be part of a big parcel of land that originally belonged to Nicolas Cleto as evidenced by Certificate of Title (C.T.) No. 14. The big parcel of land was the subject of two separate lines of dispositions. The first line of dispositions began with the sale by Cleto to Antonio Cereso on May 11, 1925. Cereso in turn sold the land to the siblings with the surname Antipolo on September 23, 1943. The Antipolos sold the property to Agaton Pagaduan, father of petitioners, on March 24, 1961. All the dispositions in this line were not registered and did not result in the issuance of new certificates of title in the name of the purchasers. The second line of dispositions started on January 30, 1954, after Cletos death, when his widow Ruperta Asuncion as his sole heir and new owner of the entire tract, sold the same to Eugenia Reyes. This resulted in the issuance of Transfer Certificate of Title (TCT) No. T-1221 in the name of Eugenia Reyes in lieu of TCT No. T-1220 in the name of Ruperta Asuncion. On November 26, 1961, Eugenia Reyes executed a unilateral deed of sale where she sold the northern portion with an area of 32,325 square meters to respondents for P1,500.00 and the southern portion consisting of 8,754 square meters to Agaton Pagaduan for P500.00. Later, on June 5, 1962, Eugenia executed another deed of sale, this time conveying the entire parcel of land, including the southern portion, in respondents favor. Thus, TCT No. T -1221 was cancelled and in lieu thereof TCT No. T-5425 was issued in the name of respondents. On June 27, 1989, respondents subdivided the land into two lots. The subdivision resulted in the cancellation of TCT No. T-5425 and the issuance of TCT Nos. T-37165 covering a portion with 31,418 square meters and T-37166 covering the remaining portion with 9,661 square meters. On July 26, 1989, petitioners instituted a complaint for reconveyance of the southern portion with an area of 8,754 square meters, with damages, against respondents before the RTC of Olongapo City. On June 25, 2002, the trial court rendered a decision in petitioners favor. Ruling that a constructive trust over the property was created in petitioners favor, the court below ordered respondents to reconvey the disputed southern portion and to pay attorneys fees as well as litigation expenses to petitioners. The dispositive portion of the decision reads: WHEREFORE, foregoing premises considered, judgment is hereby rendered: 1. Ordering the defendants to reconvey to the plaintiffs, a portion of their property originally covered by Certificate of Title No. T-54216[4] now TCT Nos. 37165 and 37166 an area equivalent to 8,754 square meters. 2. Ordering the defendant to pay plaintiffs P15,000.00 as attorneys fees and P5,000.00 for litigation expenses. 3. Defendants counterclaims are dismissed. SO ORDERED.[5] Dissatisfied with the decision, respondents appealed it to the Court of Appeals. The Court of Appeals reversed and set aside the decision of the trial court; with the dispositive portion of the decision reading, thus: WHEREFORE, premises considered, the appeal is granted. Accordingly, prescription having set in, the assailed June 25, 2002 Decision of the RTC is reversed and set aside, and the Complaint for reconveyance is hereby DISMISSED. SO ORDERED.[6] The Court of Appeals ruled that while the registration of the southern portion in the name of respondents had created an implied trust in favor of Agaton Pagaduan, petitioners, however, failed to show that they had taken possession of the said portion. Hence, the appellate court concluded that prescription had set in, thereby precluding petitioners recovery of the disputed p ortion. Unperturbed by the reversal of the trial courts decision, the petitioners come to this Court via a petition for review on certiorari.[7] They assert that the Civil Code provision on double sale is controlling. They submit further that since the incontrovertible evidence on record is that they are in possession of the southern portion, the ten (10)-year prescriptive period for actions for reconveyance should not apply to them.[8] Respondents, on the other hand, aver that the action for reconveyance has prescribed since the ten (10)-year period, which according to them has to be reckoned from the issuance of the title in their name in 1962, has elapsed long ago.[9] The Court of Appeals decision must be reversed and set aside, hence the petition succeeds. An action for reconveyance respects the decree of registration as incontrovertible but seeks the transfer of property, which has been wrongfully or erroneously registered in other persons' names, to its rightful and legal owners, or to those who claim to have a better right. However, contrary to the positions of both the appellate and trial courts, no trust was created under Article 1456 of the new Civil Code which provides:

1 Pagaduan v. Ocuma

Sales: Double Sales Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. (Emphasis supplied) The property in question did not come from the petitioners. In fact that property came from Eugenia Reyes. The title of the Ocumas can be traced back from Eugenia Reyes to Ruperta Asuncion to the original owner Nicolas Cleto. Thus, if the respondents are holding the property in trust for anyone, it would be Eugenia Reyes and not the petitioners. Moreover, as stated in Berico v. Court of Appeals,[10] Article 1456 refers to actual or constructive fraud. Actual fraud consists in deception, intentionally practiced to induce another to part with property or to surrender some legal right, and which accomplishes the end designed. Constructive fraud, on the other hand, is a breach of legal or equitable duty which the law declares fraudulent irrespective of the moral guilt of the actor due to the tendency to deceive others, to violate public or private confidence, or to injure public interests. The latter proceeds from a breach of duty arising out of a fiduciary or confidential relationship. In the instant case, none of the elements of actual or constructive fraud exists. The respondents did not deceive Agaton Pagaduan to induce the latter to part with the ownership or deliver the possession of the property to them. Moreover, no fiduciary relations existed between the two parties. This lack of a trust relationship does not inure to the benefit of the respondents. Despite a host of jurisprudence that states a certificate of title is indefeasible, unassailable and binding against the whole world, it merely confirms or records title already existing and vested, and it cannot be used to protect a usurper from the true owner, nor can it be used for the perpetration of fraud; neither does it permit one to enrich himself at the expense of others.[11] Rather, after a thorough scrutiny of the records of the instant case, the Court finds that this is a case of double sale under article 1544 of the Civil Code which reads: ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof; to the person who presents the oldest title, provided there is good faith. Otherwise stated, where it is an immovable property that is the subject of a double sale, ownership shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith. The requirement of the law then is two-fold: acquisition in good faith and registration in good faith.[12] In this case there was a first sale by Eugenia Reyes to Agaton Pagaduan and a second sale by Eugenia Reyes to the respondents.[13] For a second buyer like the respondents to successfully invoke the second paragraph, Article 1544 of the Civil Code, it must possess good faith from the time of the sale in its favor until the registration of the same. Respondents sorely failed to meet this requirement of good faith since they had actual knowledge of Eugenias prior sale of the southern portion property to the petitioners, a fact antithetical to good faith. This cannot be denied by respondents since in the same deed of sale that Eugenia sold them the northern portion to the respondents for P1,500.00, Eugenia also sold the southern portion of the land to Agaton Pagaduan for P500.00.[14] It is to be emphasized that the Agaton Pagaduan never parted with the ownership and possession of that portion of Lot No. 785 which he had purchased from Eugenia Santos. Hence, the registration of the deed of sale by respondents was ineffectual and vested upon them no preferential rights to the property in derogation of the rights of the petitioners. Respondents had prior knowledge of the sale of the questioned portion to Agaton Pagaduan as the same deed of sale that conveyed the northern portion to them, conveyed the southern portion to Agaton Pagaduan. [15] Thus the subsequent issuance of TCT No. T-5425, to the extent that it affects the Pagaduans portion, conferred no better right than the registration which was the sou rce of the authority to issue the said title. Knowledge gained by respondents of the first sale defeats their rights even if they were first to register the second sale. Knowledge of the first sale blackens this prior registration with bad faith. [16] Good faith must concur with the registration.[17] Therefore, because the registration by the respondents was in bad faith, it amounted to no registration at all. As the respondents gained no rights over the land, it is petitioners who are the rightful owners, having established that their successor-in-interest Agaton Pagaduan had purchased the property from Eugenia Reyes on November 26, 1961 and in fact took possession of the said property. The action to recover the immovable is not barred by prescription, as it was filed a little over 27 years after the title was registered in bad faith by the Ocumas as per Article 1141 of the Civil Code. [18] WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated January 25, 2006 and its Resolution dated May 5, 2006 are hereby REVERSED and SET ASIDE. The Decision of the Regional Trial Court is hereby REINSTATED. SO ORDERED.
*

Acting Chairperson as replacement of Justice Leonardo A. Quisumbing who is on official leave per Special Order No. 618. ** Additional member of the Second Division per Special Order No. 619. [1] Rollo, pp. 10-29, with annexes. [2] Id. at 36-49; Penned by Justice Rosmari D. Carandang and concurred in by Justices Renato C. Dacudao and Estela M. Perlas-Bernabe. [3] Id. at 30-35. [4] The correct number is T-5425. [5] Id. at 35. [6] Id. at 48-49. [7] Id. at 10-29.

Id. at 21-26. Id. at 58-63. G.R. No. 96306, August 20, 1993, 469 SCRA 225.
[9] [10] [11] Consolidated Rural Bank (Cagayan Valley), Inc., v. Court of Appeals, G.R. No. 132161, January 17, 2005, 448 SCRA 347, 368; Bayoca v. Nogales, 394 Phil. 465, 481 (2000); Suntay v. Court of Appeals, 251 SCRA 430 (1995). [12] Gabriel v. Spouses Mabanta, 447 Phil. 717, 726

[8]

[15] [16]

(2003).

[13] Fudot v. Cattleya Land Inc., G.R. 171008, September 13, 2007, 533 SCRA 350. [14] Rollo, p. 44.

No.

Ulep v. Court of Appeals, G.R. No. 125254, 11 October 2005, 472 SCRA 241, 253, citing Uraca v. Court of Appeals, 278 SCRA 702 (1997). [17] Uraca v. Court of Appeals, 344 Phil. 253, 265 (1997); Gabriel v. Mabanta, 447 Phil. 717, 729 (2003). [18] Article 1141. Real actions over immovables prescribe after thirty years. This provision is without prejudice to what is established for the acquisition of ownership and other real rights by prescription.

Id. at 43.

2 Pagaduan v. Ocuma

Sales: Double Sales [G.R. No. 123547. May 21, 2001] REV. FR. DANTE MARTINEZ, petitioner, vs. HONORABLE COURT OF APPEALS, HONORABLE JUDGE JOHNSON BALLUTAY, PRESIDING JUDGE, BRANCH 25, REGIONAL TRIAL COURT OF CABANATUAN CITY, HONORABLE JUDGE ADRIANO TUAZON, JR., PRESIDING JUDGE, BRANCH 28, REGIONAL TRIAL COURT OF CABANATUAN CITY, SPOUSES REYNALDO VENERACION and SUSAN VENERACION, SPOUSES MAXIMO HIPOLITO and MANUELA DE LA PAZ and GODOFREDO DE LA PAZ, respondents. DECISION MENDOZA, J.: This is a petition for review on certiorari of the decision, dated September 7, 1995, and resolution, dated January 31, 1996, of the Court of Appeals, which affirmed the decisions of the Regional Trial Court, Branches 25 [1] and 28,[2] Cabanatuan City, finding private respondents spouses Reynaldo and Susan Veneracion owners of the land in dispute, subject to petitioners rights as a buil der in good faith. The facts are as follows: Sometime in February 1981, private respondents Godofredo De la Paz and his sister Manuela De la Paz, married to Maximo Hipolito, entered into an oral contract with petitioner Rev. Fr. Dante Martinez, then Assistant parish priest of Cabanatuan City, for the sale of Lot No. 1337-A-3 at the Villa Fe Subdivision in Cabanatuan City for the sum of P15,000.00. The lot is located along Maharlika Road near the Municipal Hall of Cabanatuan City. At the time of the sale, the lot was still registered in the name of Claudia De la Paz, mother of private respondents, although the latter had already sold it to private respondent Manuela de la Paz by virtue of a Deed of Absolute Sale dated May 26, 1976 (Exh. N/Exh. 2-Veneracion).[3] Private respondent Manuela subsequently registered the sale in her name on October 22, 1981 and was issued TCT No. T-40496 (Exh. 9).[4] When the land was offered for sale to petitioner, private respondents De la Paz were accompanied by their mother, since petitioner dealt with the De la Pazes as a family and not individually. He was assured by them that the lot belonged to Manuela De la Paz. It was agreed that petitioner would give a downpayment of P3,000.00 to private respondents De la Paz and that the balance would be payable by installment. After giving the P3,000.00 downpayment, petitioner started the construction of a house on the lot after securing a building permit from the City Engineers Office on April 23, 1981, with the written consent of the then registered owner, Claudia de la Paz (Exh. B/Exh, 1).[5] Petitioner likewise began paying the real estate taxes on said property (Exh. D, D-1, D-2).[6] Construction on the house was completed on October 6, 1981 (Exh. V).[7] Since then, petitioner and his family have maintained their residence there.[8] On January 31, 1983, petitioner completed payment of the lot for which private respondents De la Paz executed two documents. The first document (Exh. A) read: 1-31-83 Ang halaga ng Lupa sa Villa Fe Subdivision na ipinagbili kay Fr. Dante Martinez ay P15,000.00 na pinangangako namin na ibibigay ang Deed of Sale sa ika-25 ng Febrero 1983. [SGD.] METRING HIPOLITO [SGD.] JOSE GODOFREDO DE LA PAZ[9] The second writing (Exh. O) read: Cabanatuan City March 19, 1986 TO WHOM IT MAY CONCERN: This is to certify that Freddie dela Paz has agreed to sign tomorrow (March 20) the affidavit of sale of lot located at Villa Fe Subdivision sold to Fr. Dante Martinez. [Sgd.] Freddie dela Paz FREDDIE DELA PAZ[10] However, private respondents De la Paz never delivered the Deed of Sale they promised to petitioner. In the meantime, in a Deed of Absolute Sale with Right to Repurchase dated October 28, 1981 (Exh. 10), [11] private respondents De la Paz sold three lots with right to repurchase the same within one year to private respondents spouses Reynaldo and Susan Veneracion for the sum of P150,000.00. One of the lots sold was the lot previously sold to petitioner.[12] Reynaldo Veneracion had been a resident of Cabanatuan City since birth. He used to pass along Maharlika Highway in going to the Municipal Hall or in going to and from Manila. Two of the lots subject of the sale were located along Maharlika Highway, one of which was the lot sold earlier by the De la Pazes to petitioner. The third lot (hereinafter referred to as the Melencio lot) was occupied by private respondents De la Paz. Private respondents Veneracion never took actual possession of any of these lots during the period of redemption, but all titles to the lots were given to him.[13] Before the expiration of the one year period, private respondent Godofredo De la Paz informed private respondent Reynaldo Veneracion that he was selling the three lots to another person for P200,000.00. Indeed, private respondent Veneracion received a call from a Mr. Tecson verifying if he had the titles to the properties, as private respondents De la Paz were offering to sell the two lots along Maharlika Highway to him (Mr. Tecson) for P180,000.00 The offer included the lot purchased by petitioner in February, 1981. Private respondent Veneracion offered to purchase the same two lots from the De la Pazes for the same amount. The offer was accepted by private respondents De la Paz. Accordingly, on June 2, 1983, a Deed of Absolute Sale was executed over the two lots (Exh. I/Exh. 5-Veneracion).[14] Sometime in January, 1984, private respondent Reynaldo Veneracion asked a certain Renato Reyes, petitioners neighbor, who the owner of the building erected on the subject lot was. Reyes told him that it was Feliza Martinez, petitioners mother, who was in possession of the property. Reynaldo Veneracion told private respondent Godofredo about the matter and was assured that Godofredo would talk to Feliza. Based on that assurance, private respondents Veneracion registered the lots with the Register of Deeds of Cabanatuan on March 5, 1984. The lot in dispute was registered under TCT No. T-44612 (Exh. L/Exh. 4Veneracion).[15] Petitioner discovered that the lot he was occupying with his family had been sold to the spouses Veneracion after receiving a letter (Exh. P/Exh. 6-Veneracion) from private respondent Reynaldo Veneracion on March 19, 1986, claiming ownership of the land and demanding that they vacate the property and remove their improvements thereon. [16] Petitioner, in turn, demanded through counsel the execution of the deed of sale from private respondents De la Paz and informed Reynaldo Veneracion that he was the owner of the property as he had previously purchased the same from private respondents De la Paz. [17] The matter was then referred to the Katarungang Pambarangay of San Juan, Cabanatuan City for conciliation, but the parties failed to reach an agreement (Exh. M/Exh. 13).[18] As a consequence, on May 12, 1986, private respondent Reynaldo Veneracion brought an action for ejectment in the Municipal Trial Court, Branch III, Cabanatuan City against petitioner and his mother (Exh. 14).[19] On the other hand, on June 10, 1986, petitioner caused a notice of lis pendens to be recorded on TCT No. T-44612 with the Register of Deeds of Cabanatuan City (Exh. U).[20] During the pre-trial conference, the parties agreed to have the case decided under the Rules on Summary Procedure and defined the issues as follows:
1 Martinez v. CA

Sales: Double Sales 1. Whether or not defendant (now petitioner) may be judicially ejected. 2. Whether or not the main issue in this case is ownership. 3. Whether or not damages may be awarded.[21] On January 29, 1987, the trial court rendered its decision, pertinent portions of which are quoted as follows: With the foregoing findings of the Court, defendants [petitioner Rev. Fr. Dante Martinez and his mother] are the rightful possessors and in good faith and in concept of owner, thus cannot be ejected from the land in question. Since the main issue is ownership, the better remedy of the plaintiff [herein private respondents Veneracion] is Accion Publiciana in the Regional Trial Court, having jurisdiction to adjudicate on ownership. Defendants counterclaim will not be acted upon it being more than P20,000.00 is beyond this Courts power to adjudge. WHEREFORE, judgment is hereby rendered, dismissing plaintiffs complaint and ordering plaintiff to pay Attorneys fee of P5,0 00.00 and cost of suit. SO ORDERED.[22] On March 3, 1987, private respondents Veneracion filed a notice of appeal with the Regional Trial Court, but failed to pay the docket fee. On June 6, 1989, or over two years after the filing of the notice of appeal, petitioner filed a Motion for Execution of the Judgment, alleging finality of judgment for failure of private respondents Veneracion to perfect their appeal and failure to prosecute the appeal for an unreasonable length of time. Upon objection of private respondents Veneracion, the trial court denied on June 28, 1989 the motion for execution and ordered the records of the case to be forwarded to the appropriate Regional Trial Court. On July 11, 1989, petitioner appealed from this order. The appeal of private respondents Veneracion from the decision of the MTC and the appeal of petitioner from the order denying petitioners motion for execution were forwarded to the Regional Trial Court, Branch 28, Cabanatuan City. The cases were thereafter consolidated under Civil Case No. 670-AF. On February 20, 1991, the Regional Trial Court rendered its decision finding private respondents Veneracion as the true owners of the lot in dispute by virtue of their prior registration with the Register of Deeds, subj ect to petitioners rights as builder in good faith, and ordering petitioner and his privies to vacate the lot after receipt of the cost of the construction of the house, as well as to pay the sum of P5,000.00 as attorneys fees and the costs of the suit. It, however, failed to rule on petitioners appeal of the Municipal Trial Courts order denying their Motion for Execution of Judgment. Meanwhile, on May 30, 1986, while the ejectment case was pending before the Municipal Trial Court, petitioner Martinez filed a complaint for annulment of sale with damages against the Veneracions and De la Pazes with the Regional Trial Court, Branch 25, Cabanatuan City. On March 5, 1990, the trial court rendered its decision finding private respondents Veneracion owners of the land in dispute, subject to the rights of petitioner as a builder in good faith, and ordering private respondents De la Paz to pay petitioner the sum of P50,000.00 as moral damages and P10,000.00 as attorneys fees, and for private respondents to pay the costs of the suit. On March 20, 1991, petitioner then filed a petition for review with the Court of Appeals of the RTCs decision in Civil Case No. 670-AF (for ejectment). Likewise, on April 2, 1991, petitioner appealed the trial courts decision in C ivil Case No. 44-[AF]-8642-R (for annulment of sale and damages) to the Court of Appeals. The cases were designated as CA G.R. SP. No. 24477 and CA G.R. CV No. 27791, respectively, and were subsequently consolidated. The Court of Appeals affirmed the trial courts decisions, without ruling on petitioners appeal from the Municipal Trial Courts order denying his Motion for Execution of Judgment. It declared the Veneracions to be owners of the lot in dispute as they were the first registrants in good faith, in accordance with Art. 1544 of the Civil Code. Petitioner Martinez failed to overcome the presumption of good faith for the following reasons: 1. when private respondent Veneracion discovered the construction on the lot, he immediately informed private respondent Godofredo about it and relied on the latters assurance that he will take care of the matter. 2. the sale between petitioner Martinez and private respondents De la Paz was not notarized, as required by Arts. 1357 and 1358 of the Civil Code, thus it cannot be said that the private respondents Veneracion had knowledge of the first sale. [23] Petitioners motion for reconsideration was likewise deni ed in a resolution dated January 31, 1996.[24] Hence this petition for review. Petitioner raises the following assignment of errors: I THE PUBLIC RESPONDENTS HONORABLE COURT OF APPEALS AND REGIONAL TRIAL COURT JUDGES JOHNSON BALLUTAY AND ADRIANO TUAZON ERRED IN HOLDING THAT PRIVATE RESPONDENTS REYNALDO VENERACION AND WIFE ARE BUYERS AND REGISTRANTS IN GOOD FAITH IN RESOLVING THE ISSUE OF OWNERSHIP AND POSSESSION OF THE LAND IN DISPUTE. II THAT PUBLIC RESPONDENTS ERRED IN NOT RESOLVING AND DECIDING THE APPLICABILITY OF THE DECISION OF THIS HONORABLE COURT IN THE CASES OF SALVORO VS. TANEGA, ET AL., G.R. NO. L 32988 AND IN ARCENAS VS. DEL ROSARIO, 67 PHIL 238, BY TOTALLY IGNORING THE SAID DECISIONS OF THIS HONORABLE COURT IN THE ASSAILED DECISIONS OF THE PUBLIC RESPONDENTS. III THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE PETITION FOR REVIEW IN CA G.R. SP. NO. 24477. IV THAT THE HONORABLE COURT OF APPEALS IN DENYING PETITIONERS PETITION FOR REVIEW AFORECITED INEVITABLY SANCTIONED AND/OR WOULD ALLOW A VIOLATION OF LAW AND DEPARTURE FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS BY PUBLIC RESPONDENT HONORABLE JUDGE ADRIANO TUAZON WHEN THE LATTER RENDERED A DECISION IN CIVIL CASE NO. 670-AF [ANNEX D] REVERSING THE DECISION OF THE MUNICIPAL TRIAL COURT JUDGE SENDON DELIZO IN CIVIL CASE NO. 9523 [ANNEX C] AND IN NOT RESOLVING IN THE SAME CASE THE APPEAL INTERPOSED BY DEFENDANTS ON THE ORDER OF THE SAME COURT DENYING THE MOTION FOR EXECUTION. V THAT THE RESOLUTION [ANNEX B] (OF THE COURT OF APPEALS) DENYING PETITIONERS MOTION FOR RECONSIDERATION [ANNEX I] WITHOUT STATING CLEARLY THE FACTS AND THE LAW ON WHICH SAID RESOLUTION WAS BASED, (IS ERRONEOUS). These assignment of errors raise the following issues: 1. Whether or not private respondents Veneracion are buyers in good faith of the lot in dispute as to make them the absolute owners thereof in accordance with Art. 1544 of the Civil Code on double sale of immovable property. 2. Whether or not payment of the appellate docket fee within the period to appeal is not necessary for the perfection of the appeal after a notice of appeal has been filed within such period. 3. Whether or not the resolution of the Court of Appeals denying petitioners motion for reconsideration is contrary to the constitutional requirement that a denial of a motion for reconsideration must state the legal reasons on which it is based. First. It is apparent from the first and second assignment of errors that petitioner is assailing the findings of fact and the appreciation of the evidence made by the trial courts and later affirmed by the respondent court. While, as a general rule, only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court, review may nevertheless be granted under certain exceptions, namely: (a) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where there is a grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when the Court of Appeals, in
2 Martinez v. CA

Sales: Double Sales making its findings, went beyond the issue of the case and the same is contrary to the admissions of both appellant and appellee; (g) when the findings of the Court of Appeals are contrary to those of the trial court; (h) when the findings of fact are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; (j) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record; and (k) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion.[25] In this case, the Court of Appeals based its ruling that private respondents Veneracion are the owners of the disputed lot on their reliance on private respondent Godofredo De la Pazs assurance that he would take care of the matter concerning petitioners occupancy of the disputed lot as constituting good faith. This case, however, involves double sale and, on this matter, Art. 1544 of the Civil Code provides that where immovable property is the subject of a double sale, ownership shall be transferred (1) to the person acquiring it who in good faith first recorded it to the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title. [26] The requirement of the law, where title to the property is recorded in the Register of Deeds, is two-fold: acquisition in good faith and recording in good faith. To be entitled to priority, the second purchaser must not only prove prior recording of his title but that he acted in good faith, i.e., without knowledge or notice of a prior sale to another. The presence of good faith should be ascertained from the circumstances surrounding the purchase of the land.[27] 1. With regard to the first sale to private respondents Veneracion, private respondent Reynaldo Veneracion testified that on October 10, 1981, 18 days before the execution of the first Deed of Sale with Right to Repurchase, he inspected the premises and found it vacant.[28] However, this is belied by the testimony of Engr. Felix D. Minor, then building inspector of the Department of Public Works and Highways, that he conducted on October 6, 1981 an ocular inspection of the lot in dispute in the performance of his duties as a building inspector to monitor the progress of the construction of the building subject of the building permit issued in favor of petitioner on April 23, 1981, and that he found it 100 % completed (Exh. V). [29] In the absence of contrary evidence, he is to be presumed to have regularly performed his official duty.[30] Thus, as early as October, 1981, private respondents Veneracion already knew that there was construction being made on the property they purchased. 2. The Court of Appeals failed to determine the nature of the first contract of sale between the private respondents by considering their contemporaneous and subsequent acts.[31] More specifically, it overlooked the fact that the first contract of sale between the private respondents shows that it is in fact an equitable mortgage. The requisites for considering a contract of sale with a right of repurchase as an equitable mortgage are (1) that the parties entered into a contract denominated as a contract of sale and (2) that their intention was to secure an existing debt by way of mortgage.[32] A contract of sale with right to repurchase gives rise to the presumption that it is an equitable mortgage in any of the following cases: (1) when the price of a sale with a right to repurchase is unusually inadequate; (2) when the vendor remains in possession as lessee or otherwise; (3) when, upon or after the expiration of the right to repurchase, another instrument extending the period of redemption or granting a new period is executed; (4) when the purchaser retains for himself a part of the purchase price; (5) when the vendor binds himself to pay the taxes on the thing sold; (6) in any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.[33] In case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage. [34] In this case, the following circumstances indicate that the private respondents intended the transaction to be an equitable mortgage and not a contract of sale: (1) Private respondents Veneracion never took actual possession of the three lots; (2) Private respondents De la Paz remained in possession of the Melencio lot which was co-owned by them and where they resided; (3) During the period between the first sale and the second sale to private respondents Veneracion, they never made any effort to take possession of the properties; and (4) when the period of redemption had expired and private respondents Veneracion were informed by the De la Pazes that they are offering the lots for sale to another person for P200,000.00, they never objected. To the contrary, they offered to purchase the two lots for P180,000.00 when they found that a certain Mr. Tecson was prepared to purchase it for the same amount. Thus, it is clear from these circumstances that both private respondents never intended the first sale to be a contract of sale, but merely that of mortgage to secure a debt of P150,000.00. With regard to the second sale, which is the true contract of sale between the parties, it should be noted that this Court in several cases,[35] has ruled that a purchaser who is aware of facts which should put a reasonable man upon his guard cannot turn a blind eye and later claim that he acted in good faith. Private respondent Reynaldo himself admitted during the pre-trial conference in the MTC in Civil Case No. 9523 (for ejectment) that petitioner was already in possession of the property in dispute at the time the second Deed of Sale was executed on June 1, 1983 and registered on March 4, 1984. He, therefore, knew that there were already occupants on the property as early as 1981. The fact that there are persons, other than the vendors, in actual possession of the disputed lot should have put private respondents on inquiry as to the nature of petitioners right over the prope rty. But he never talked to petitioner to verify the nature of his right. He merely relied on the assurance of private respondent Godofredo De la Paz, who was not even the owner of the lot in question, that he would take care of the matter. This does not meet the standard of good faith. 3. The appellate courts reliance on Arts. 1357 and 1358 of the Civil Code to determine private respondents Veneracions lack of knowledge of petitioners ownership of the disputed lot is erroneous. Art. 1357[36] and Art. 1358,[37] in relation to Art. 1403(2)[38] of the Civil Code, requires that the sale of real property must be in writing for it to be enforceable. It need not be notarized. If the sale has not been put in writing, either of the contracting parties can compel the other to observe such requirement.[39] This is what petitioner did when he repeatedly demanded that a Deed of Absolute Sale be executed in his favor by private respondents De la Paz. There is nothing in the above provisions which require that a contract of sale of realty must be executed in a public document. In any event, it has been shown that private respondents Veneracion had knowledge of facts which would put them on inquiry as to the nature of petitioners occupancy of the disputed lot. Second. Petitioner contends that the MTC in Civil Case No. 9523 (for ejectment) erred in denying petitioners Motion for Execution of the Judgment, which the latter filed on June 6, 1989, two years after private respondents Veneracion filed a notice of appeal with the MTC on March 3, 1987 without paying the appellate docket fee. He avers that the trial courts denial of his motion is contrary to this Courts ruling in the cases of Republic v. Director of Lands,[40] and Aranas v. Endona[41] in which it was held that where the appellate docket fee is not paid in full within the reglementary period, the decision of the MTC becomes final and unappealable as the payment of docket fee is not only a mandatory but also a jurisdictional requirement. Petitioners contention has no merit. The case of Republic v. Director of Lands deals with the requirement for appeals from the Courts of First Instance, the Social Security Commission, and the Court of Agrarian Relations to the Court of Appeals. The case of Aranas v. Endona, on the other hand, was decided under the 1964 Rules of Court and prior to the enactment of the Judiciary Reorganization Act of 1981 (B.P. Blg. 129) and the issuance of its Interim Rules and Guidelines by this Court on January 11, 1983. Hence, these cases are not applicable to the matter at issue. On the other hand, in Santos v. Court of Appeals,[42] it was held that although an appeal fee is required to be paid in case of an appeal taken from the municipal trial court to the regional trial court, it is not a prerequisite for the perfection of an appeal under 20[43] and 23[44] of the Interim Rules and Guidelines issued by this Court on January 11, 1983 implementing the Judiciary Reorganization Act of 1981 (B.P. Blg. 129). Under these sections, there are only two requirements for the perfection of an appeal, to
3 Martinez v. CA

Sales: Double Sales wit: (a) the filing of a notice of appeal within the reglementary period; and (b) the expiration of the last day to appeal by any party. Even in the procedure for appeal to the regional trial courts,[45] nothing is mentioned about the payment of appellate docket fees. Indeed, this Court has ruled that, in appealed cases, the failure to pay the appellate docket fee does not automatically result in the dismissal of the appeal, the dismissal being discretionary on the part of the appellate court.[46] Thus, private respondents Veneracions failure to pay the appellate docket fee is not fatal to their appeal. Third. Petitioner contends that the resolution of the Court of Appeals denying his motion for reconsideration was rendered in violation of the Constitution because it does not state the legal basis thereof. This contention is likewise without merit. Art. VIII, Sec. 14 of the Constitution provides that No petition for review or motion for reconsideration of a decision of t he court shall be refused due course or denied without stating the basis therefor. This requirement was fully complied with w hen the Court of Appeals, in denying reconsideration of its decision, stated in its resolution that it found no reason to change its ruling because petitioner had not raised anything new.[47] Thus, its resolution denying petitioners motion for reconsideration states: For resolution is the Motion for Reconsideration of Our Decision filed by the petitioners. Evidently, the motion poses nothing new. The points and arguments raised by the movants have been considered and passed upon in the Decision sought to be reconsidered. Thus, We find no reason to disturb the same. WHEREFORE, the motion is hereby DENIED. SO ORDERED.[48] Attorneys fees should be awarded as petitioner was compelled to litigate to protect his interest due to private respondents act or omission.[49] WHEREFORE, the decision of the Court of Appeals is REVERSED and a new one is RENDERED: (1) declaring as null and void the deed of sale executed by private respondents Godofredo and Manuela De la Paz in favor of private respondents spouses Reynaldo and Susan Veneracion; (2) ordering private respondents Godofredo and Manuela De la Paz to execute a deed of absolute sale in favor of petitioner Rev. Fr. Dante Martinez; (3) ordering private respondents Godofredo and Manuela De la Paz to reimburse private respondents spouses Veneracion the amount the latter may have paid to the former; (4) ordering the Register of Deeds of Cabanatuan City to cancel TCT No. T-44612 and issue a new one in the name of petitioner Rev. Fr. Dante Martinez; and (5) ordering private respondents to pay petitioner jointly and severally the sum of P20,000.00 as attorneys fees and to pay the costs of the suit. SO ORDERED. Bellosillo, (Chairman), Buena and De Leon, Jr., JJ., concur. Quisumbing, J., on leave.
[1]

Per Judge Johnson L. Ballutay. [2] Per Judge Adriano I. Tuason. [3] Records (Civil Case No. 44-AF-8642-R), pp. 146-147. [4] Id., p. 190. [5] Id., pp. 132, 180. [6] Id., pp. 134-136. [7] Id., p. 217; TSN (Engr. Felix D. Minor), p. 10-11, Feb. 23, 1989. [8] TSN (Fr. Dante Martinez), pp. 4, 6-9, 12-16, 45, Dec. 11, 1987. [9] Records (Civil Case No. 44-AF-8642-R), p. 131; TSN (Fr. Dante Martinez), p. 9, Dec. 11, 1987. [10] Records (Civil Case No. 44-AF-8642-R), p. 148. [11] Id., pp. 193-194. [12] TSN (Reynaldo Veneracion), pp. 3-8, Sept. 28, 1988. [13] Id., pp. 18-19, Nov. 3, 1988. [14] Records (Civil Case No. 44-AF-8642-R), p. 183. [15] TSN (Reynaldo Veneracion), pp. 10-17, 16-17, Sept. 28, 1988; Records (Civil Case No. 44-AF-8642-R), p. 144. [16] TSN (Fr. Dante Martinez), pp. 25-28, Dec. 11, 1987; Records (Civil Case No. 44-AF-8642-R), 149, 184. [17] Records (Civil Case No. 44-AF-8642-R), pp. 151-152. [18] Id., p. 145, 197. [19] Id., p. 198. [20] Id., p. 155. [21] Id., p. 140; Order, p. 1. [22] CA Rollo (CA-G.R. SP. No. 24477), p. 42; MTC Judgment, p. 5. [23] Rollo, pp. 56-61; CA Decision, pp. 6-11. [24] Id., p. 63; Resolution, p. 1. [25] Lacanilao v. Court of Appeals, 262 SCRA 486 (1996); Philippine Home Assurance Corp. v. Court of Appeals, 257 SCRA 468 (1996); Floro v. Llenado, 244 SCRA 715 (1995). [26] Balatbat v. Court of Appeals, 261 SCRA 128 (1996). [27] Bautista v. Court of Appeals, 230 SCRA 446 (1994). [28] TSN (Reynaldo Veneracion), p. 16, Sept. 28, 1988. [29] TSN (Engr. Felix D. Minor), pp. 10-11, Feb. 23, 1989; Records (Civil Case No. 44-AF-8642-R), p. 217. [30] Celeste v. Court of Appeals, 209 SCRA 79 (1992). [31] Matanguihan v. Court of Appeals, 275 SCRA 380 (1997).
[32] [33] [34]

.... (e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; [39] Heirs of Amparo del Rosario v. Santos, 108 SCRA 43 (1981). [40] 71 SCRA 450 (1976). [41] 117 SCRA 753 (1982). [42] 253 SCRA 632 (1996). [43] Sec. 20. Procedure for taking appeal. - An appeal from the metropolitan trial courts, municipal trial courts or municipal circuit trial courts to the regional trial courts, and from the regional trial courts to the Intermediate Appellate Court in actions or proceedings originally filed in the former shall be taken by filing a notice of appeal with the court that rendered the judgment or order appealed from. [44] Sec. 23. Perfection of appeal. - In cases where appeal is taken, the perfection of the appeal shall be upon the expiration of the last day to appeal by any party. [45] INTERIM RULES AND GUIDELINES, 21. [46] Fontanar v. Bonsubre, 145 SCRA 663 (1986); Del Rosario and Sons Logging Enterprises, Inc. v. NLRC, 136 SCRA 669 (1985). [47] Borromeo v. Court of Appeals, 186 SCRA 1 (1990). [48] Rollo, p. 63; Resolution, p. 1. [49] CIVIL CODE, Art. 2208 (2).

CIVIL CODE, Art. 1602. Id., Art. 1603. [35] De la Cruz v. Intermediate Appellate Court, 157 SCRA 660 (1988); Bautista v. Court of Appeals, 230 SCRA 446 (1994); Balatbat v. Court of Appeals, 261 SCRA 128 (1996). [36] Art. 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the following article, the contracting parties may compel each other to observe that form, once the contract has been perfected. This right may be exercised simultaneously with the action upon the contract. [37] Art. 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405; [38] Art. 1403. The following contracts are unenforceable, unless they are ratified: 4 Martinez v. CA

Id.

Sales: Double Sales G.R. NO. 145470 December 9, 2005 SPS. LUIS V. CRUZ and AIDA CRUZ, Petitioners, - versus SPS. ALEJANDRO FERNANDO, SR., and RITA FERNANDO, Respondents. DECISION AUSTRIA-MARTINEZ, J.: For resolution is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision [1] dated October 3, 2000 of the Court of Appeals (CA) in CA-G.R. CV No. 61247, dismissing petitioners appeal and affirming the decision of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 79, in Civil Case No. 877-M-94. The antecedent facts are as follows: Luis V. Cruz and Aida Cruz (petitioners) are occupants of the front portion of a 710-square meter property located in Sto. Cristo, Baliuag, Bulacan. On October 21, 1994, spouses Alejandro Fernando, Sr. and Rita Fernando (respondents) filed before the RTC a complaint for accion publiciana against petitioners, demanding the latter to vacate the premises and to pay the amount of P500.00 a month as reasonable rental for the use thereof. Respondents alleged in their complaint that: (1) they are owners of the property, having bought the same from the spouses Clodualdo and Teresita Glorioso (Gloriosos) per Deed of Sale dated March 9, 1987; (2) prior to their acquisition of the property, the Gloriosos offered to sell to petitioners the rear portion of the property but the transaction did not materialize due to petitioners failure to exercise their option; (3) the offer to sell is embodied in a Kasunduan dated August 6, 1983 executed before the Barangay Captain; (4) due to petitioners failure to buy the allotted portion, respondents bought the who le property from the Gloriosos; and (5) despite repeated demands, petitioners refused to vacate the property.[2] Petitioners filed a Motion to Dismiss but the RTC dismissed it for lack of merit in its Order dated March 6, 1995. [3] Petitioners then filed their Answer setting forth the affirmative defenses that: (1) the Kasunduan is a perfected contract of sale; (2) the agreement has already been partially consummated as they already relocated their house from the rear portion of the lot to the front portion that was sold to them; (3) Mrs. Glorioso prevented the complete consummation of the sale when she refused to have the exact boundaries of the lot bought by petitioners surveyed, and the existing survey was made without their knowledge and participation; and (4) respondents are buyers in bad faith having bought that portion of the lot occupied by them (petitioners) with full knowledge of the prior sale to them by the Gloriosos.[4] After due proceedings, the RTC rendered a Decision on April 3, 1998 in favor of respondents. The decretal portion of the decision provides: PREMISES CONSIDERED, the herein plaintiffs was able to prove by preponderance of evidence the case of accion publiciana, against the defendants and judgment is hereby rendered as follows: 1. Ordering defendants and all persons claiming under them to vacate placefully (sic) the premises in question and to remove their house therefore (sic); 2. Ordering defendants to pay plaintiff the sum of P500.00 as reasonable rental per month beginning October 21, 1994 when the case was filed before this Court and every month thereafter until they vacate the subject premises and to pay the costs of suit. The counter claim is hereby DISMISSED for lack of merit. SO ORDERED.[5] Petitioners appealed the RTC decision but it was affirmed by the CA per its Decision dated October 3, 2000. Hence, the present petition raising the following issues: 1. Whether the Honorable Court of Appeals committed an error of law in holding that the Agreement (Kasunduan) between the parties was a mere offer to sell, and not a perfected Contract of Purchase and Sale? 2. Whether the Honorable Court of Appeals committed an error of law in not holding that where the parties clearly gave the petitioners a period of time within which to pay the price, but did not fix said period, the remedy of the vendors is to ask the Court to fix the period for the payment of the price, and not an accion publiciana? 3. Whether the Honorable Court of Appeals committed an error of law in not ordering respondents to at least deliver the back portion of the lot in question upon payment of the agreed price thereof by petitioners, assuming that the Regional Trial Court was correct in finding that the subject matter of the sale was said back portion, and not the front portion of the property? 4. Whether the Honorable Court of Appeals committed an error of law in affirming the decision of the trial court ordering the petitioners, who are possessors in good faith, to pay rentals for the portion of the lot possessed by them?[6] The RTC dwelt on the issue of which portion was being sold by the Gloriosos to petitioners, finding that it was the rear portion and not the front portion that was being sold; while the CA construed the Kasunduan as a mere contract to sell and due to petitioners failure to pay the purchase price, the Gloriosos were not obliged to deliver to them (petitioners) the portion being sold. Petitioners, however, insist that the agreement was a perfected contract of sale, and their failure to pay the purchase price is immaterial. They also contend that respondents have no cause of action against them, as the obligation set in the Kasunduan did not set a period, consequently, there is no breach of any obligation by petitioners. The resolution of the issues in this case principally is dependent on the interpretation of the Kasunduan dated August 6, 1983 executed by petitioners and the Gloriosos. The Kasunduan provided the following pertinent stipulations:
1 Cruz v. Fernando

Sales: Double Sales a. Na pumayag ang mga maysumbong (referring to the Gloriosos) na pagbilhan ang mga ipinagsumbong (referring to petitioners) na bahagi ng lupa at ang ipagbibili ay may sukat na 213 metrong parisukat humigit kumulang sa halagang P40.00 bawat metrong parisukat; Na sa titulong papapanaugin ang magiging kabuuang sukat na mauukol sa mga ipinagsusumbong ay 223 metrong parisukat at ang 10 metro nito ay bilang kaloob ng mga maysumbong sa mga Ipinagsusumbong na bahagi ng right of way; Na ang right of way ay may luwang na 1.75 meters magmula sa daang Lopez Jaena patungo sa likuran ng lote na pagtatayuan ng bahay ng mga Ipinagsusumbong na kanyang bibilhin; Na ang gugol sa pagpapasukat at pagpapanaog ng titulo ay paghahatian ng magkabilang panig na ang panig ay magbibigay ng halagang hindi kukulanging sa halagang tig-AAPAT NA DAANG PISO (P400.00); Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa bahaging kanilang nabili o mabibili sa buwan ng Enero 31, 1984;[7] (Emphasis supplied)

b.

c. d. e.

Under Article 1458 of the Civil Code, a contract of sale is a contract by which one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. Article 1475 of the Code further provides that the contract of sale is perfected at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold, as distinguished from a contract to sell where ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price.[8] Otherwise stated, in a contract of sale, the vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded; whereas, in a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective. The Kasunduan provides for the following terms and conditions: (a) that the Gloriosos agreed to sell to petitioners a portion of the property with an area of 213 meters at the price of P40.00 per square meter; (b) that in the title that will be caused to be issued, the aggregate area is 223 square meters with 10 meters thereof serving as right of way; (c) that the right of way shall have a width of 1.75 meters from Lopez Jaena road going towards the back of the lot where petitioners will build their house on the portion of the lot that they will buy; (d) that the expenses for the survey and for the issuance of the title will be divided between the parties with each party giving an amount of no less than P400.00; and (e) that petitioners will definitely relocate their house to the portion they bought or will buy by January 31, 1984. The foregoing terms and conditions show that it is a contract to sell and not a contract of sale. For one, the conspicuous absence of a definite manner of payment of the purchase price in the agreement confirms the conclusion that it is a contract to sell. This is because the manner of payment of the purchase price is an essential element before a valid and binding contract of sale can exist.[9] Although the Civil Code does not expressly state that the minds of the parties must also meet on the terms or manner of payment of the price, the same is needed, otherwise there is no sale. [10] As held in Toyota Shaw, Inc. vs. Court of Appeals,[11] a definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. The Kasunduan does not establish any definite agreement between the parties concerning the terms of payment. What it merely provides is the purchase price for the 213-square meter property at P40.00 per square meter. For another, the telltale provision in the Kasunduan that: Na pumayag ang mga maysumbong na pagbilhan ang mga ipinagsumbong na bahagi ng lupa at ang ipagbibili ay may sukat na 213 metrong parisukat humigit kumulang sa halagang P40.00 bawat metrong parisukat, simply means that the Gloriosos onlyagreed to sell a portion of the property and that the portion to be sold measures 213 square meters. Another significant provision is that which reads: Na ang ipinagsusumbong ay tiyakang ililipat ang bahay sa bahaging kanilang nabili o mabibili sa buwan ng Enero 31, 1984. The foregoing indicates that a contract of sale is yet to be consummated and ownership of the property remained in the Gloriosos. Otherwise, why would the alternative term mabibili be used if indeed the property had already been sold to petitioners. In addition, the absence of any formal deed of conveyance is a strong indication that the parties did not intend immediate transfer of ownership.[12] Normally, in a contract to sell, the payment of the purchase price is the positive suspensive condition upon which the transfer of ownership depends.[13] The parties, however, are not prohibited from stipulating other lawful conditions that must be fulfilled in order for the contract to be converted from a contract to sell or at the most an executory sale into an executed one.[14] In the present case, aside from the payment of the purchase price, there existed another suspensive condition, i.e.: that petitioners will relocate their house to the portion they bought or will buy by January 31, 1984. Petitioners failed to abide by the express condition that they should relocate to the rear portion of the property being bought by January 31, 1984. Indeed, theKasunduan discloses that it is the rear portion that was being sold by the Gloriosos, and not the front portion as petitioners stubbornly claim. This is evident from the provisions establishing a right of way from Lopez Jaena road going towards the back of the lot, and requiring them to relocate their house to the portion being sold by January 31, 1984. Petitioners are presently occupying the front portion of the property. Why the need for a right of way and for petitioners to relocate if the front portion on which their house stands is the portion being sold?

2 Cruz v. Fernando

Sales: Double Sales This condition is a suspensive condition noncompliance of which prevented the Gloriosos from proceeding with the sale and ultimately transferring title to petitioners; and the Kasunduan from having obligatory force.[15] It is established by evidence that the petitioners did not transfer their house located in the front portion of the subject property to the rear portion which, under the Kasunduan, they intended to buy. Thus, no obligation arose on the part of the Gloriosos to consider the subject property as having been sold to petitioners because the latters non-fulfillment of the suspensive condition rendered the contract to sell ineffective and unperfected. Petitioners admit that they have not paid a single centavo to the Gloriosos. However, petitioners argue that their nonpayment of the purchase price was due to the fact that there is yet to be a survey made of the property. But evidence shows, and petitioners do not dispute, that as early as August 12, 1983, or six days after the execution of the Kasunduan, a survey has already been made and the property was subdivided into Lot Nos. 565-B-1 (front portion) and 565-B-2 (rear portion), with Lot No. 565-B-2 measuring 223 square meters as the portion to be bought by petitioners. Petitioners question the survey made, asserting that it is a table survey made without their knowledge and participation. It should be pointed out that theKasunduan merely provides that the expenses for the survey will be divided between them and that each party should give an amount of no less than P400.00. Nowhere is it stated that the survey is a condition precedent for the payment of the purchase price. Petitioners further claim that respondents have no cause of action against them because their obligation to pay the purchase price did not yet arise, as the agreement did not provide for a period within which to pay the purchase price. They argue that respondents should have filed an action for specific performance or judicial rescission before they can avail of accion publiciana. Notably, petitioners never raised these arguments during the proceedings before the RTC. Suffice it to say that issues raised for the first time on appeal and not raised timely in the proceedings in the lower court are barred by estoppel. [16] Matters, theories or arguments not brought out in the original proceedings cannot be considered on review or appeal where they are raised for the first time. To consider the alleged facts and arguments raised belatedly would amount to trampling on the basic principles of fair play, justice and due process.[17] Moreover, it would be inutile for respondents to first petition the court to fix a period for the performance of the contract. In the first place, respondents are not parties to the Kasunduan between petitioners and the Gloriosos, and they have no standing whatsoever to seek such recourse. In the second place, such recourse properly pertains to petitioners. It was they who should have sought the courts intercession. If petitioners believed that they have an actionable contract for the sale of the property, prudence and common sense dictate that they should have sought its enforcement forthwith. Instead, petitioners whiled away their time. Furthermore, there is no need for a judicial rescission of the Kasunduan for the simple reason that the obligation of the Gloriosos to transfer the property to petitioners has not yet arisen. There can be no rescission of an obligation that is nonexistent, considering that the suspensive conditions therefor have not yet happened.[18] Hence, petitioners have no superior right of ownership or possession to speak of. Their occupation of the property was merely through the tolerance of the owners. Evidence on record shows that petitioners and their predecessors were able to live and build their house on the property through the permission and kindness of the previous owner, Pedro Hipolito, who was their relative,[19] and subsequently, Teresita Glorioso, who is also their relative. They have no title or, at the very least, a contract of lease over the property. Based as it was on mere tolerance, petitioners possession could neither ripen into ownership nor operate to bar any action by respondents to recover absolute possession thereof. [20]

Appeals:

There is also no merit to petitioners contention that respondents are buyers in bad faith. As explained in Coronel vs. Court of In a contract to sell, there being no previous sale of the property, a third person buying such property despite the fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is no double sale in such case. Title to the property will transfer to the buyer after registration because there is no defect in the owner-sellers title per se, but the latter, of course, may be sued for damages by the intending buyer.[21] (Emphasis supplied)

A person who occupies the land of another at the latter's forbearance or permission without any contract between them is necessarily bound by an implied promise that he will vacate upon demand.[22] Considering that petitioners continued possession of the property has already been rendered un lawful, they are bound to pay reasonable rental for the use and occupation thereof, which in this case was appropriately pegged by the RTC at P500.00 per month beginning October 21, 1994 when respondents filed the case against them until they vacate the premises. Finally, petitioners seek compensation for the value of the improvements introduced on the property. Again, this is the first time that they are raising this point. As such, petitioners are now barred from seeking such relief.[23] WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated October 3, 2000 in CA-G.R. CV No. 61247 is AFFIRMED. SO ORDERED.
[1] [10]

Penned by Associate Justice Wenceslao I. Agnir, Jr. (ret.) with Associate Justices Fermin A. Martin, Jr. (ret.) and Oswaldo D. Agcaoili (ret.), concurring. [2] Records, pp. 1-3. [3] Id., pp. 37-38. [4] Id., pp. 40-42. [5] Id., p. 288. [6] See Rollo, p. 8. [7] Records, p. 184, Exhibit Z (Court). [8] Chua vs. Court of Appeals, G.R. No. 119255, April 9, 2003, 401 SCRA 54. [9] Limketkai Sons Milling, Inc. vs. Court of Appeals, G.R. No. 118509, March 29, 1996, 255 SCRA 626.

San Miguel Properties, Inc. vs. Spouses Huang, G.R. No. 137290, July 31, 2000, 336 SCRA 737. [11] G.R. No. 116650, May 23, 1995, 244 SCRA 320, 328, citing Velasco vs. Court of Appeals, G.R. No. L-31018, June 29, 1973, 51 SCRA 439. [12] Chua vs. Court of Appeals, G.R. No. 119255, April 9, 2003, 401 SCRA 54. [13] Gomez vs. Court of Appeals, G.R. No. 120747, September 21, 2000, 340 SCRA 720. [14] PNB vs. Court of Appeals, G.R. No. 119580, September 26, 1996, 262 SCRA 464.
[15] [16]

[18]

Padilla vs. Paredes, G.R. No. 124874, March 17, 2000, 328 SCRA

434.
[19]

TSN, May 5, 1997, p. 3. [20] Heirs of Gamos vs. Heirs of Frando, G.R. No. 149117, December 16, 2004, 447 SCRA 136.
[21]

2005.
[22]

Cited in Ursal vs. Court of Appeals, G.R. No. 142411, October 14,

Philippine Banking Corporation vs. Court of Appeals, G.R. No. 127469, January 15, 2004, 419 SCRA 487. [17] De Rama vs. Court of Appeals, G.R. No. 131136, February 28, 2001, 353 SCRA 94.

Ibid.

Macasaet vs. Macasaet, G.R. Nos. 154391-92, September 30, 2004, 439 SCRA 625. [23] See notes 16 and 17.

3 Cruz v. Fernando