Case Doctrine

The first buyer who registered his adverse claim on the property prior to the transfer of the certificate of title
to the second buyer's name is deemed to be a buyer in good faith and has superior right to the land
Carbonell vs CA notwithstanding knowledge of the second sale at the time of registration of the adverse claim. The second
buyer is not deemed to be a buyer in good faith on account of the annotation of the adverse claim on his
certificate of title.
Where one of two conflicting sales of a piece of land was executed before the land was
registered, while the other was an execution sale in favor of the judgment creditor of the
Dagupan Trading vs
second buyer made after the same property had been registered, the first buyer of the unregistered has a
Macam
preferential right since ownership has already passed to him notwithstanding subsequent registration of the
second buyer
The defense of having purchased the property in good faith may be availed of only where registered land is
David vs Bandin involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases
an unregistered land does so at his peril.
When an unregistered land has been a subject of sale to two different vendees, justice and equity demands
Olivarez vs Gonzales that in a consolidation case instituted by the first buyer, the second buyer who registers the sale in good faith
must be included as a party defendant so that his side may be heard.
Knowledge of the agents of the second buyer of the existence of the first sale is deemed to be the knowledge
Caram vs Laureta of the second buyer himself so as to constitute him as a buyer in bad faith. Hence, the registration of the
second sale by the second buyer is void.
When the second buyer knew that the property which is the subject of the double sale is in the adverse
Cruz vs Cabana possession of the first buyer, he shall be considered as a buyer in bad faith and the first buyer is given the
preferred right over the property despite the registration by the second buyer.
In a double sale of a registered land, the title of the first buyer who registers his adverse claim over the
subject land prior to the registration of a deed of assignment over the same land by the second buyer is
Valdez vs CA
preferred. Moreover, knowledge by the second buyer of the adverse possession by the vendee constitutes
bad faith.
If the property sold is registered land, the purchaser in good faith has a right to rely on the certificate of title
and is under no duty to go behind it to look for flaws. Moreover, knowledge by the buyer of the fact that the
Nuguid vs CA
property is in the possession of others will not constitute him as buyer in bad faith if said possession is not in
the concept of ownership.
For sale of unregistered land, mere registration of an execution sale in favor of the judgment creditor does
Radiowealth Finance
not give him any right over the land if the judgment debtor was not anymore the owner of the land having
vs Palileo
previously sold the same to the first buyer even if the earlier sale was unrecorded.
In double sale of a registered land, as between two purchasers, the one who registered the sale in his favor
Tanedo vs CA has a preferred right over the other who has not registered his title, even if the latter is in actual possession of
the immovable property.
Although the general rule is that the buyer may rely on what appears on the face of the certificate of title, if
Sps Occena vs Esponilla there are facts and cisrcumstances that would have put the buyer on guard, he must make further inquiry so
as to constitute him as a buyer in goof faith, else he loses preferential right over the property.
In a sale of secondhand article, there is generally no implied warranty as to quality or fitness for the purpose
intended. By way of exception however, if a certification was made as to the type of the article, such being an
Moles vs IAC
indispensable condition for the release of a loan to be used as payment for the purchase price, then the
vendor is bound to comply with his warranty.
In a contract for a piece of work, the failure to follow the contract specifications resulting in the operational
Engineering & ineffectiveness of the system installed makes the contractor liable for damages arising from breach of
Machinery Corp vs CA contract and not for violation of warranty against hidden defects. Hence, the prescriptive period is 10 years
and not six months.
The condition in a conditional deed of sale that the buyer shall pay the balance of the purchase price when he
Rolando Catungal vs has successfully negotiated and secured a road right of way, is not a purely potestative condition as it is not
Rodriguez dependent on the sole will of the buyer but also on the will of third persons who own the adjacent land.
Hence, an option to rescind the sale on the ground of failure to secure the road right of way is valid.
Case Doctrine
The assignment of a credit is actually in the nature of a sale of personal property which produced the effects
of a dation in payment. Hence, as in any other contract of sale, the vendor or assignor is bound by his
Sonny Lo vs CA
warranty as to the existence and legality of the credit at the time of the sale or assignment.

Whenever it is clearly shown that a deed of sale with pacto de retro, regular on its face, is given as security for
Ramos vs CA a loan, it must be regarded as an equitable mortgage. To create a presumption of equitable mortagage under
Art 1602, the existence of one circumstance is enough.
Inadequacy of price is immaterial and not a ground to annul an auction sale because judgment debtor can
De Leon vs Salvador better acquire the property or also sell his right to redeem and thus recover the loss he claims to have
suffered by reason of the price obtained from the auction sale
Under the old Civil Code, absolute ownership is consolidated in the vendee a retro by operation of law upon
the failure of the vendor a retro to redeem the property subject of the pacto de retro sale within the period
Flores vs So
agreed upon. The requirement of the consolidation of ownership in the vendee a retro by a judicial order is
applicable only for pacto de retro sale entered during the time of the effectivity of the New Civil Code.

While the general rule is that a written notice of the sale given by the vendor to a co-owner is an indispensible
requirement before the 30 day period of redemption begins to run, an exception to said rule is adopted to
Alonzo vs IAC
that effect that a written notice may be dispensed with if the co-owner has actual knowledge of such sale
especially that thirteen years have already passed before they attempted to redeem.
When an agreement that purports to be a contract of sale with a right of repurchase showed that a) the
possession of the property remains with the vendor b) the vendor obtained a loan from the vendee and c) the
Lao vs CA option to repurchase the property has been extended twice, such agreement is to be deemed an equitable
mortgage. Hence, the vendee-mortgagee has no right to file an action for ejectment as he is not deemed the
absolute owner of the property.
When an unregistered deed of sale with a right to repurchase is entered into under circumstances that would
qualify it to be treated as an equitable mortgage and a subsequent mortgage was registered covering the
Lanuza vs De Leon
same property, the second mortgagee who registered his right has a preferential right over the property since
he who is first in time is preferred in right.

When two separate contracts (i.e., deed of sale and right to redeem contract) were prepared, signed, and
notarized on the same day, coupled withthe fact that the vendor remained in possession of the property, the
Capulong vs CA
agreement would still be deemed to be an equitable mortgage as the intent of the parties to circumvent the
provision discouraging pacto de retro sales is very apparent.
Article 1616 of the Civil Code is not restrictive or exclusive, barring additional amounts that the parties may
Solid Homes vs CA agree upon.Hence, the vendor must comply with the provisions of Article 1616 and other stipulations agreed
upon by the parties.
The mere statement in a deed of sale to the effect that the vendor has complied with the provisions of Article
Primary Structures
1623 does not comply with the required written notice where the holder of the right of pre-emption or
Corp vs Valencia
redemption is not a party to the deed of sale.
It is ‘of no moment’ that the notice of sale is given not by the vendor but by the vendees. ‘So long as the co-
Etcuban vs CA owner is informed in writing of the sale and the particulars thereof, the 30 days for redemption start running,
and the redemptioner has no cause to complain upon the lapse of said period.

When tenants in a lease contract were prejudiced by the sale of the leased property to third persons for a
Guzman Bocaling and lower price without recognizing their right of first priority under the Contract of Lease, the status of creditors
Co vs Bonnevie could be validly accorded to the said tenants for they had substantial interests therein. Hence, the sale may be
rescinded provided that the third person is not a buyer in good faith.
Case Doctrine
The mere occupancy of the premises for a number of years, by itself is not sufficient to justify the extension of
the lease term especially when it is not coupled with substantial improvements made on the leased premises
nor the difficulty of finding another place of business.
Yek Seng Co vs CA
An extension of the lease may be sought by the tenant before, not after the termination of the lease.
Moreover, the granting of extension is a matter of court discretion

The acceptance by the lessor of the payment by the lessee of the rentals in arrears does not constitute a
Clutario vs CA waiver of the default in the payment of rentals as a valid cause of action for ejectment especially when it is
shown that the parties did not enter into an amicable settlement.
A lease contract that is on a month-tomonth basis may be terminated at the end of any month after proper
notice or demand to vacate has been given. In the absence of such notice or demand, the lease continues to
Yap vs Cruz
be in force and can not be deemed to have automatically expired as of the end of the month notwithstanding
non-payment of rentals
When a lease conract provides for a stipulation that the lease period is from month to month and that the
United Realty vs CA lease may be terminated when either party gives a 5 days notice in writing, it is considered as a lease for a
definite period and not for an indefinite period.
Lease agreements with no specified period, but in which rentals are paid on a month-to- month basis are
Legar Mgt vs CA considered as leases with a definite period that expire after the last day of any given thirty-day period, upon
proper demand and notice by the lessor to vacate. The expiration of which is a valid ground for ejectment.