Is it legally safe to buy a property on the sole basis that the Tile is under the seller's name?

“When circumstances are present that should prompt a potential buyer to be on guard, it is expected that they inquire first into the status of the land.”


Case Title: Spouses German v. Spouses Santuyo

Date of Promulgation: January 22, 2020 | G.R. No. 210845

FACTS: The Bautista Spouses were the registered owners of a parcel of land. Since 1985, the German Spouses had been occupying the property as the lessees of the caretaker for the Mariano Spouses. On April 22, 1986, the Bautista Spouses sold the property to the Mariano Spouses. On the same day, the Mariano Spouses sold the property to the German Spouses on the condition that Helen Mariano would sign the Deed of Sale upon the German Spouses’ payment of the full purchase price.

The Santuyo Spouses filed a case for Unlawful Detainer against the German Spouses. The Santuyo Spouses claim that they and the Bautista Spouses entered into a sale of the property on December 27, 1991, and that they became the registered owners of the property.

On January 12, 2001, the German Spouses filed a case for Declaration of Nullity of Sale, Recovery of Ownership, Reconveyance with Damages against the Santuyo Spouses and Helen Mariano claiming that, despite their payment of the full purchase price in 1988, the Mariano Spouses failed to execute the final Deed of Sale. Instead, the property was sold to Helen Mariano’s sister, Editha Santuyo and her husband.

ISSUE: Who between the German Spouses and Santuyo Spouses are the rightful owners of the subject parcel of land?

RULING: The German Spouses are the rightful owners of the property.

The rule on double sales applies when the same thing is sold to multiple buyers by one seller, but not to sales of the same thing by multiple sellers.

Article 1544 of the Civil Code states that:

x x x

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 the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

There was a double sale in this case. The Bautista Spouses sold the same property: first, to the Mariano Spouses in 1986; and second, to the respondents Santuyo Spouses in 1991. Pursuant to Article 1544, ownership is transferred to the buyer who first registers it in the Registry of Property in good faith. The Santuyo Spouses were the ones who were able to register the property in their names with the Registry of Deeds. However, the Santuyo Spouses were not in good faith when they registered the property.

Generally, persons dealing with registered land may safely rely on the correctness of the certificate of title, without having to go beyond it to determine the property’s condition. However, when circumstances are present that should prompt a potential buyer to be on guard, it is expected that they inquire first into the status of the land. Once such circumstance is when there are occupants or tenants on the property, or when the seller is not in possession of it. In the present case, the German Spouses had continuously possessed the land even prior to the 1986 sales.

The claim of Santuyo Spouses that it is enough that the title is in the name of the seller is unavailing. To buy real property while having only a general idea of where it is and without knowing the actual condition and identity of the metes and bounds of the land to be bought, is negligent and careless. Failure to take such ordinary precautionary steps, which could not have been difficult to undertake for respondents Santuyo Spouses, as they were situated near where the property is located, precludes their defense of good faith in the purchase.

Thus, in accordance with Article 1544 of the Civil Code, it is the first buyer, namely the Mariano Spouses [who in turn sold the property to the German Spouses], who had a better right of ownership, and no ownership could pass on to the respondents Santuyo Spouses as a result.

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