Double Sales – Art.

1544

1. General Rule – Prius tempore, potior jure

Art. 1544 - Rules that pertain to the consummation stage in the life of a sale; they cover the effects and
consequences of tradition in a particular situation where the same seller has sold the same subject
property to two or more buyers who do not represent the same interests.

Article 1544 of the Civil Code provides that if the same thing should have been sold to different buyers,
the ownership shall be given:

(a) When subject matter is movable, to the buyer:

• Who may have first taken possession thereof in good faith;

(b) When subject matter is immovable, to the buyer:

• “Who in good faith first recorded [the sale] in the Registry of Property;”
• “Should there be no inscription, ... to the person who in good faith was first in the possession” of the
subject matter;
• “In the absence thereof, to the person who presents the oldest title, provided there is good faith.”

Prius tempore, potior jure - which means that the first buyer, having the oldest title in good faith, should be
preferred.

Carbonell v. CA 69 SCRA 99 (1976)

Doctrine: Good faith of the buyer of the realty is essential in registering his deed of sale (a.k.a. anterior
registration) to merit the protection in Art. 1544, per 2nd par. of the said article.5 If there’s no inscription
(registration), what is decisive is prior possession in good faith.

2. Requisites for Double Sale

(a) The two (or more) sales transactions must constitute valid sales;
(b) The two (or more) sales transactions must pertain to exactly the same subject matter;
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each
represent conflicting interests; and
(d) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have
bought from the very same seller.

Cheng v. Genato 300 SCRA 722 (1998)

Doctrine: We are of the view that the governing principle of Article 1544, Civil Code, should apply in this
situation. Jurisprudence teaches us that the governing principle of PRIMUS TEMPORE, PORTIOR JURE (first
in time, stronger in right).

For not only was the contract between herein respondents first in time; it was also registered long before
petitioner’s intrusion as second buyer. This principle only applies when the special rules provided in the
aforecited article of the Civil Code do not apply or fit the specific circumstances mandated under said law
or by jurisprudence interpreting the article.

3. Who is purchaser in good faith

DOCTRINE: GOOD FAITH:

Test: Good faith, or the lack of it, is in its last analysis a question of intention; but in ascertaining the
intention by which one is actuated on a given occasion, the Court is necessarily controlled by the
evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be
determined.
It is:
 "the honesty of intention," "the honest lawful intent," which constitutes good faith implies a
"freedom from knowledge and circumstances which ought to put a person on inquiry,"
 "Good faith, or the want of it, is not a visible, tangible fact that can be seen or touched, but
rather a state or condition of mind which can only be judged of by actual or fancied tokens or
signs." (Wilder v Gilman)

BAD FAITH:
 One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim
that he has acquired title thereto in good faith as against the true owner of the land or of an interest
therein; and the same rule must be applied to one who has knowledge of facts which should have put him
upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of
his vendor.

4. Priority of registration over possession

5. Sale of Movables – Arts. 1544, 1497 to 1501

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.

Art. 1497. The thing sold shall be understood as delivered, when it is placed in the control
and possession of the vendee.

Art. 1501. With respect to incorporeal property, the provisions of the first paragraph of
article 1498 shall govern. In any other case wherein said provisions are not applicable, the
placing of the titles of ownership in the possession of the vendee or the use by the vendee of
his rights, with the vendor's consent, shall be understood as a delivery.

Rivera v. Ong 37 Phil. 355 (1917)

Doctrine: Two different agents of the same owner successively negotiated sales to two different
purchasers, and under 1473 of the Civil Code, the second purchaser having acquired possession first must
be declared the true owner. Ong Che, was a purchaser of these articles in good faith. He acquired
possession by virtue of his purchase. He, undoubtedly has, under article 1473 of the Civil Code, a better
title than the first purchaser, who has never had possession at all.

6. Sale of Immovables

Art. 1544 par. 2 - 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.

Carbonell v. CA 69 SCRA 99 (1976)

Doctrine: In ruling for Buyer 1, the Court in the main decision held that when Buyer 1 bought the lot
from the Seller, she was the only buyer thereof and the title of Seller was still in his name solely
encumbered by a bank mortgage duly annotated thereon. Buyer 1 was not aware — and she could not
have been aware — of any sale to Buyer 2 as there was no such sale to Buyer 2 then.
Hence, Buyer 1’s prior purchase of the land was made in good faith. Buyer 1’s good faith subsisted and
continued to exist when she recorded her adverse claim prior to the registration of Buyer 2’s deed of sale. Nor did
Buyer 1’s good faith cease when she found out earlier of the subsequent sale to Buyer 2. Buyer 1’s recording of the
adverse claim should be deemed to have been done in good faith and should emphasize Buyer 2’s bad faith when
she registered her deed of sale thereafter.

A. Sale by virtue of execution and attachment – Art. 1544

The essence of the Carumba ruling is not that Article 1544 is wholly inapplicable to unregistered land, but
that the specific provision of now Section 33, Rule 39 of the 1997 Rules of Civil Procedure providing that
the purchaser at public auction “shall be substituted to and acquire all the rights, title, interest and claim
of the judgment obligor to the property as of the time of the levy.
Carumba v. CA 31 SCRA 558 (1970)

Doctrine: Carumba v. Court of Appeals,144 had distinguished the applicability of Article 1544 depending on
whether the land is registered under the Torrens system or is unregistered land. In Carumba, the first
buyer had a private deed of sale which was never registered, but he took possession of the land; whereas,
the second buyer was the highest bidder in the public auction of the same land, and the sale to him was
registered under Act No. 3344.

Carumba ruled that the provisions of Article 1544 granting priority to the buyer who registers in good
faith over the other buyer who takes possession in good faith are inapplicable to unregistered land
because “the purchaser of unregistered land at a sheriff’s execution sale only steps into the shoes of the
judgment debtor, and merely acquires the latter’s interest in the property sold as of the time the property
was levied upon.

Meaning of “Better Right”

- Better right is much more than the mere prior deed of sale in favor of the 1st vendee. It is the
prescriptive right that had supervened or other facts and circumstances exist which, in addition to his
deed of sale, the 1st vendee can be said to have better right than the 2nd purchaser.

Hanopol v. Pilapil 7 SCRA 452 (1963)

Doctrine: Held that the “better right” that cannot be prejudiced by the registration of a second sale of a
parcel of unregistered land, referred to in Act No. 3344, was considered to mean “more than a mere
prior deed of sale in favor of the first buyer. It involves facts and circumstances — in addition to a deed of
sale — which, combined, would make it clear that the first buyer has a better right than the second
purchaser,” such as acquisition of possession by the second buyer either by actual delivery or through the
execution of a public instrument.

Sale of Unregistered land – PD 1529 sec.113

- Pres. Decree No. 1529 provides that it is registration that is the operative act to convey or affect
registered lands; and therefore, the earlier unregistered sale, although coupled with possession, cannot
overturn the effect of the registration in good faith of the second judicial sale.

Dagupan v. Macam 14 SCRA 179 (1965)

The rules on registered and unregistered land cannot be applied because the situation obtaining here does
not fall strictly within the ambit of any of the two rules. Instead, we apply ROC – the buyer in a public sale
steps into the shoes of the judgment debtor. Since the judgment debtor had previously sold the land to
Macam, the buyer in the public sale had nothing to step into.
The Court considered the subsequent registration of the land as a technicality that could not cancel and
render ineffective the previous unregistered sale and conveyance of title and ownership in favor of the
first buyer, especially when the first buyer “took possession of the land conveyed as owner thereof, and
introduced considerable improvements thereon.”

7. When one sale is forgery

Espiritu v. Valerio 9 SCRA 761 (1963)

Doctrine: For Article 1544 test to even apply, both sales involved in the dispute must be valid, or at least
be voidable, sales. This is a critical requirement because the rules under Article 1544 being applications of
rules of delivery at consummation stage, can operate only from the premise that tradition was effected “as
a consequence of a valid sale.” Thus, in a case where one of the sales was void for having forged the
signature of the seller, the provisions of Article 1544 were held to be inapplicable.

Quimson v. Rosete 87 Phil 159 (1950)

Sanchez v. Ramos 40 Phil. 614 (1919)

Doctrine: Where both deeds of sale over the same registered parcel of land were not registered with the
Registry of Deeds, the buyer of the first deed of sale executed in a public instrument had a better right,
although the subsequent buyer took material possession thereof. It was ruled that since the sale to the
first buyer was in a public instrument it was clearly tantamount to a delivery of the land, resulting in the
material and symbolic possession thereof being transferred to the latter.

So that when subsequently the second buyer took material possession of the same land, he did so merely
as a detainer. Navera held that the possession mentioned in Article 1544 for determining who has better
right when the same piece of land has been sold several times by the same seller includes not only the
material but also the symbolic possession thereof.

8. Oldest title

Art. 1544 par. 3- Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.