When the double-sale rule is not applicable

The case stemmed from the sale of the same lot by different sellers to different buyers, one after the other. The sellers in both instances were co-owners of the lot. In 1983, one co-owner sold a portion of the parcel of land to spouse-buyers, the petitioners in this case. They took possession of the land but did not register the sale with the Register of Deeds.

Years later, the other co-owners, without the participation of the co-owner who sold the land in 1983, sold the same property to another buyer, also spouses. This time, the buyer registered the sale. Thereafter, the second buyer ordered the first buyer to vacate the property. The first buyer resisted, claiming legitimate ownership. With the parties at a stalemate, the second buyer sued the first buyer in court.

The first buyer argued that this was a case of double sale and that, as the first buyer, they should prevail. The trial court ruled in favor of the second buyer. Their appeal to the Court of Appeals proved futile, prompting the first buyer to elevate the matter to the Supreme Court for final resolution. The High Court sided with the second buyer and decreed that the rule on double sale was not applicable to the case.

Thus, the discussion went:

“Petitioners insist that this is a plain case of double sale. They argue that they bought in good faith the 500 sq.m. portion of Lot 1366-E in 1983, while respondents bought the subject property only in 1990. They stress that they have a better right over the property following the rules on double sale under Article 1544 of the New Civil Code. We disagree.

“Petitioners’ reliance on Article 1544 of the New Civil Code is misplaced. Article 1544 of the New Civil Code provides: 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.

“In Cheng v. Genato, the Court enumerated the requisites for Article 1544 to apply, viz.: (a) the two or more sales transactions must pertain to exactly the same subject matter and must be valid sales transactions; (b) the buyers must represent conflicting interests; and (c) the buyers must have bought from the very same seller.

“In fine, there is a double sale when the same thing is sold to different vendees by a single vendor. Article 1544 has no application where the sales involved were initiated not by one vendor but by several vendors.

“Here, petitioners and respondents acquired the subject property from different transferors. The Deed of Absolute Sale dated 20 November 1990 shows that all of the original co-owners, except Manuel and Serbio, who were already deceased, sold the subject lot to the respondents.

“On the other hand, the Receipt and Promissory Note, both dated 5 May 1983, reveal that only Manuel sold the lot to the petitioners. As found by the RTC and the CA, nothing in the records shows that Manuel was duly authorized by the other co-owners to sell the subject property in 1983.

“Evidently, there are two sets of vendors who sold the subject land to two different vendees. Thus, this Court upholds the findings of the trial court and the CA that the rule on double sale is not applicable in the instant case.”

The facts and redacted decision are from S.C. G.R. 222530 (16 October 2019).