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ISSUE(S):
1) Whether or not the option to buy given to the Baptist Church is founded upon a consideration that
would render the option contract valid and binding.
HELD:
NO.
An option contract, to be valid and binding, needs to be supported by a separate consideration. The
consideration need not be monetary but could consist of other things or undertakings. However, if the
consideration is not monetary, these must be things or undertakings of value, in view of the onerous
nature of the contract of option. Furthermore, when a consideration for an option contract is not
monetary, said consideration must be clearly specified as such in the option contract or clause.
First, this Court cannot find that petitioner Baptist Church parted with anything of value, aside from
the amount of P84,000 which was in fact eventually utilized as rental payments. Second, there is no
document that contains an agreement between the parties that petitioner Baptist Church supposed
rescue of the mortgaged property was the consideration which the parties contemplated in support of
the option clause in the contract. As previously stated, the amount advanced had been fully utilized as
rental payments over a period of one year. While the Villanuevas may have them to thank for extending
the payment at a time of need, this is not the separate consideration contemplated by law.
This Court also notes that in the present case both the Regional Trial Court and the Court of Appeals
agree that the option was not founded upon a separate and distinct consideration and that, hence,
respondents Villanuevas cannot be compelled to sell their property to petitioner Baptist Church.
Consolidated Rural Bank vs. CA and Heirs of dela Cruz [G.R. No. 132161]
FACT(S):
The Madrid brothers were the registered owners lot which was subdivided into several lots. Rizal
Madrid sold part of his share to Gamiao and Dayag by virtue of a Deed of Sale, to which his brothers
offered no objection as evidenced by their Joint Affidavit .The deed of sale was not registered with the
ORD of Isabela. However, Gamiao and Dayag declared the property in their names on a Tax Declaration.
Gamiao and Dayag sold the subject southern half of lot to Teodoro dela Cruz, and the northern half to
Hernandez. Thereupon, Teodoro dela Cruz and Hernandez took possession of and cultivated the
portions of the property respectively sold to them (Later Restituto Hernandez donated the northern
half to his daughter. The children of Teodoro dela Cruz continued possession of the southern half after
their fathers death.)
In a Deed of Sale the Madrid brothers conveyed all their rights and interests over to Marquez which the
former confirmed. The deed of sale was registered with the ORD of Isabela.
Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the same date, Marquez and his
spouse, Mercedita Mariana, mortgaged 4 lots to the Consolidated Rural Bank, Inc. of Cagayan Valley
(hereafter, CRB) to secure a loan. These deeds of real estate mortgage were registered with the ORD.
As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its
favor and the lots were sold to it as the highest bidder.
The Heirs-now respondents filed a case for reconveyance and damages for the southern portion of Lot
No. 7036-A (hereafter, the subject property) against Marquez and CRB.
The RTC handed down a decision in favor of Marquez. The Heirs interposed an appeal with the CA,
which upheld the claim of the Heirs. Hence, the instant CRB petition.
ISSUE(S):
Whether or not Art. 1544 of the Civil Code (double sale) applicable in this case
HELD:
NO.
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.
The provision is not applicable in the present case. It contemplates a case of double or multiple sales
by a single vendor. It cannot be invoked where the two different contracts of sale are made by two
different persons, one of them not being the owner of the property sold. And even if the sale was made
by the same person, if the second sale was made when such person was no longer the owner of the
property, because it had been acquired by the first purchaser in full dominion, the second purchaser
cannot acquire any right.
In a situation where not all the requisites are present which would warrant the application of Art.
1544, the principle of prior tempore, potior jure or simply he who is first in time is preferred in right,
should apply. The only essential requisite of this rule is priority in time; in other words, the only one
who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the
time he bought the real property, there was still no sale to a second vendee. In the instant case, the
sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale
by the Madrid brothers to Marquez. The Heirs also had possessed the subject property first in time.
Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject
property.
ISSUE(S):
Who, as between two buyers of unregistered land, is the rightful ownerthe first buyer in a prior sale
that was unrecorded, or the second buyer who purchased the land in an execution sale whose transfer
was registered in the Register of Deeds
HELD:
PALILEO HAS THE SUPERIOR RIGHT OVER THE LAND
There is no doubt that had the property in question been a registered land, this case would have been
decided in favor of petitioner since it was petitioner that had its claim first recorded in the RD.
It must be stressed however that this case deals with a parcel of unregistered land and a different set
of rules applies. We affirm the decision of the CA.
Under Act No. 3344, registration of instruments affecting unregistered lands is without prejudice to a
third party with a better right. The aforequoted phrase has been held by this Court to mean that the
mere registration of a sale in ones favor does not give him any right over the land if the vendor was
not anymore the owner of the land having previously sold the same to somebody else even if the
earlier sale was unrecorded.
Applying this principle, the CA correctly held that the execution sale of the unregistered land in favor
of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time
of the said execution sale.