On double sale of real property
Generally, it is the first purchaser who has a better right over a property sold again to another in line with the principle of prius tempore, potior jure (first in time, stronger in right). However, there may be instances where his or her right may be defeated
Published in Daily Tribune on January 29, 2021
by: Migmar Bernped S. Francisco
Consider this scenario: Daniel purchased a parcel of land from Clara.
The following day, unbeknownst to Daniel, Clara also sold the same property to Sophie, who, without having knowledge of the prior sale between Clara and Daniel, was able to register the sale of the property ahead of Daniel.
The issue now is to whom the rightful ownership of the land belongs. For a defining resolution, we refer to Article 1544 of the Civil Code.
Article 1544 applies to instances where there is double or multiple sales of the same property.
For immovable or real property, the law provides that if the same real property is sold to different purchasers, the ownership of the property shall belong to the person acquiring it in good faith and who first recorded the sale in the Registry of Property.
If the sale is not recorded, then ownership shall belong to the purchaser first in possession and in good faith.
Lastly, in the absence of both registration and possession, ownership shall belong to the one who presents the oldest title, in good faith.
Simply put, the rules of preference as to whom the ownership of the real property sold will belong shall be in the following order of priority: First, the registrant of the purchased property in good faith; and second, the possessor in good faith; and third, the purchaser with the oldest title in good faith.
To be precise, the Supreme Court in one case held that Article 1544 applies only to valid sales pertaining to exactly the same subject matter.
In addition, the two buyers who are at odds over ownership of the property sold must have conflicting interests and must have bought the property from the very same seller.
Notably, all the rules require good faith. As explained by the Supreme Court, a purchaser in good faith is one who buys the property without knowledge that another has a right or interest over the property and pays the full and fair price at the time of purchase or before he has notice of the claim or interest of another.
For the second purchaser, it is not enough that he or she acted in good faith at the time of the acquisition but must also prove the existence of good faith at the time of registration.
For immovable or real property, the law provides that if the same real property is sold to different purchasers, the ownership of the property shall belong to the person acquiring it in good faith and who first recorded the sale in the Registry of Property.
By registration, jurisprudence clarifies that it must pertain to any entry made in the books of the Registry of Property, which records solemnly and permanently the right of ownership and other real rights.
In another case, it was explained that since the law does not make any distinction, possession is interpreted to mean actual or constructive delivery. There is actual delivery when the thing sold is placed under the control and possession of the purchaser.
On the other hand, constructive possession may be acquired by the execution of a public instrument, the execution thereof is equivalent to delivery of the thing sold.
Applying the cited provision to the scenario presented earlier, it is Sophie who is the rightful owner of the parcel of land.
This notwithstanding the fact that Daniel has the older title, having purchased the parcel of land ahead of Sophie. While both Daniel and Sophie are purchasers in good faith, more credit is given to the one who made the prior registration.
Generally, it is the first purchaser who has a better right over a property sold again to another in line with the principle of prius tempore, potior jure (first in time, stronger in right). However, there may be instances where his or her right may be defeated, such as in the scenario presented. Thus, in purchasing real property, one must not only purchase in good faith but must also have the diligence in securing and maintaining the property. It may not be enough to have only complied with the obligation of executing the contract and paying the purchase price without having it registered. Between two innocent purchasers of the same property, the law puts a premium on the one who acts with prudence.
