G.R. No. 194846 – HOSPICIO D. ROSAROSO,** ANTONIO D. ROSAROSO, MANUEL D. ROSAROSO, ANGELICA D. ROSAROSO, and CLEOFE R. LABINDAO, petitioners, vs. LUCILA LABORTE SORIA, SPOUSES HAM SOLUTAN and LAlLA*** SOLUTAN, and MERIDIAN REALTY CORPORATION, respondents.
MENDOZA, J.
Rule Synopsis
Contracts are presumed to be with sufficient consideration, the party who claims otherwise has the burden of proof. Under the rules on double sale, to be preferred, the registration of the sale must be in good faith.
Facts
Two contracts of sale were executed regarding the same property belonging to one Luis Rosaroso. The first was made in favor of several of his children from his first marriage (petitioners), the second in favor of Meridian Realty Corporation (Meridian). The second sale was executed by one Luis’ children, Lucila, and her daughter on the strength of a Special Power of Attorney (SPA) allegedy issued by Luis. Lucila, her daughter and the latter’s husband and Meridian were respondents in this case.
The petitioners filed an action for the declaration of nullity of the documents as regards the second sale, alleging that Luis was, among other, not of sound mind when the SPA was issued, and that in any case, the second sale was void as the property had already been sold to them.
As defense, the respondents said that the petitioners were estopped from questioning the Second Sale in favor of Meridian because they failed not only in effecting the necessary transfer of the title, but also in annotating their interests on the titles of the questioned properties. Meridian claimed that it had better right over the property being the first to register in good faith under Art. 1544 of the Civil Code.
The RTC ruled in favor of petitioners. The CA reversed. The SC reversed.
Issues
- Was the first Deed of Sale in favor of petitioners valid?
- Was Meridian in good faith and had better right to the subject property given that it had them first recorded in the Registry of Property?
Ruling and Discussion
- Yes. The first Deed of Sale in favor of petitioners valid.
The fact of the execution of the first Deed of Sale was never contested by the respondent. Though they claim it to be simulated for lack of valid consideration. Under the Rules of Court, it is presumed that there was sufficient consideration for a contract. The respondents failed to dispense with their burden of proof to show otherwise. Even assuming that there was no actual delivery of the consideration, the seller would have no right to sell again what he no longer owned. His remedy would be to rescind the sale for failure on the part of the buyer to perform his part of their obligation pursuant to Art. 1191. The non-payment of the price does not revest the ownership of the thing sold to the seller, unless the contract was duly rescinded. - No. Meridian was not in good faith and had better right to the subject property given that it had them first recorded in the Registry of Property.
The requirement of the Art. 1544, in case of double sale of an immovable property is two-fold: acquisition in good faith and registration in good faith. Good faith must concur with the registration. If it would be shown that a buyer was in bad faith, the alleged registration they have made amounted to no registration at all. The Court held that, the buyer who has failed to know or discover that the land sold to him is in adverse possession of another is a buyer in bad faith, where circumstances are present which should have placed the a reasonable person in his guard and inquire further, as in this case, when the subject property is in actual possession of a person other than the seller.
Dispositive
Petition granted, judgment and resolution reversed and set aside.