DEVELOPMENT BANK OF THE PHILIPPINES, PLAINTIFF AND APPELLANT, VS. LAZARO MANGAWANG, ET AL., DEFENDANTS AND APPELLEES.

This is an appeal from a decision of the Court of First Instance of
Bataan declaring the Mangawang brothers owners of Lot No. 1633 of the
Balanga cadastre.

It appears that Gavino Amposta applied with the Director of Lands
for the issuance of a homestead patent over a parcel of land situated
at Balanga, Bataan. Pending action on his application, cadastral
proceedings were instituted by the government in said municipality
wherein Amposta filed an answer praying for the adjudication of the
same land in his favor which was designated therein as Lot No. 1633. On
March 8, 1920, the cadastral court rendered decision awarding the land
to Amposta. Since Lands or to the Governor General, the latter on
November 2, 1920, issued in favor of Amposta Homestead Patent No. 2388
covering the same land, and on November 29, 1920, Original Certificate
of Title No. 100 was issued to him by the Governor General.

On
December 20, 1922, the cadastral court issued a decree of registration
of the land in favor of Amposta pursuant to the decision rendered in
the cadastral case, and on July 5, 1924, Original Certificate of Title
No. 2668 was issued to him covering the same property.

On
November 24, 1941, Amposta sold the land to Santos Camacho surrending
to him Original Certificate of Title No. 100, and because of this
transfer said title was cancelled and Transfer Certificate of Title No.
5506 was issued in the name of Camacho. On November 18, 1946, Santos
Camacho sold the land to Bonifacio Camacho as a result of which
Transfer Certificate of Title No. 218 was issued to the latter. On
April 28, 1948, Bonifacio Camacho mortgaged the land to the
Rehabilitation Finance Corporation (now Development Hank of the
Philippines), and having failed to pay the loan as agreed upon the land
was sold at public auction to said bank as the highest bidder. The
period of redemption having elapsed without Camacho being able to
redeem the property, a final deed of sale was executed in favor of the
bank, and Transfer Certificate of Title No. 6961 was issued in its name
on June 29, 1957.

Meanwhile, or on June 11, 1947, Gavino
Amposta again sold the same property to Lazaro and Arsenio Mangawang
for the sum of P2,500.00, the vendees executing a mortgage on the land
to secure the payment of the balance. On March 17, 1948, the vendees
paid the balance of the purchase price, and an absolute deed of sale
was executed in their favor. In connection with this transaction,
Amposta surrendered to the vendees the title that was issued to him in
the cadastral case, which was later substituted by Transfer Certificate
of Title No. 1098 issued in the name of the vendees.

As a
consequence of their purchase of the land, the Mangawang brothers took
possession thereof, and upon learning of this transfer, the Development
Bank of the Philippines, which as already stated became the owner of
the property, commenced the present action against them in the Court of
First Instance of Bataan to recover its possession and damages. In this
case, the parties submitted a stipulation of facts, and on the strength
thereof, the court a quo rendered decision awarding the land to the
Mangawang brothers. Seasonably, this bank appealed to this Court.

Appellees
contend that their right over the property in litigation should be
respected because the certificate of title they are holding is derived
from that issued pursuant to a decision rendered by a cadastral court,
while the title being held by appellant was merely based on the title
issued in an administrative proceeding, upon the theory that a judicial
title is deemed preferred to one issued administratively. They further
contend that since the decision which gave rise to their title was,
rendered on March 8, 1920, which become final thirty days thereafter,
their right over the land must be deemed vested on said date, whereas
the title of appellant is merely a derivation of the one issued to
Amposta on November 29, 1920, or seven months after the decision
rendered in the cadastral case.

There is no doubt that if the
two original certificates of title were issued on different occasions
to two different persons, the contention of appellees would be correct
it being in line with the several decisions rendered by this Court.^[1] But
the case at bar is different. Here two certificates of title were
issued to Gavino Amposta over the same parcel of land, one under the
Homestead Law and another under the Cadastral Act. Said titles were
regularly issued and on their face both appear to be valid, and under
such predicament it behooves Amposta to choose which of them hu would
prefer, as he could not validly make use of both of them. But this
Amposta did not do. On the contrary, he took advantage of the situation
by selling the land to two different persons surrendering to each
purchaser the pertinent certificate of title. The question then that
arises is: Who of the two buyers should be considered as the rightful
owner of the land?

On this score, it is important to consider
the facts that led to the sale of the land to the parties herein. Note
that Amposta first sold the land to Santos Camacho on the same date.
And seven years thereafter, or on March 17, 1018, Amposta again sold
the land to the Mangawang brothers, who also registered it in their
name on the same date. Since both purchasers apparently have acted in
good faith, as there is nothing in the evidence to show that they did
otherwise, We cannot hut conclude that the sale made by Amposta to
Santos Camacho is the valid one considering that when Amposta sold the
same land to the Mangawang brothers he had nothing more to sell even if
the title he surrendered to them is one issued covering the same
property. In legal contemplation, therefore, Amposta sold a property he
no longer owned, and hence the transaction is legally ineffective.

On
the other hand, the case under consideration can also be viewed under a
different angle. It can also be treated as one of double sale, where a
person sells the same land to two different persons who are unaware of
the flaw that lies in its title, and where the law adjudicates the
property to the purchaser who first registers the transaction in his
name in the registry of property.^[2]
And applying this principle, we cannot but conclude that the title
should likewise be adjudicated to appellant whose
predecessor-in-interest acquired and registered the property much ahead
in point of time than the appellees. Verily, the title acquired by the
latter is invalid and ineffective, contrary to the finding of the court
a quo.

WHEREFORE, the decision appealed from is reversed. We
hereby declare appellant owner of Lot No. 1633 of the Balanga cadastre
and uphold the validity of Transfer Certificate of Title No. 6961
issued in its favor. Transfer Certificate of Title No. 1098 issued in
the name of appellees is hereby ordered cancelled. No pronouncement as
to costs.

Bengzon, C. J., Padilla, Concepcion, Reyes J. B. L., Paredes, Regala, and Makalintal, JJ., concur.

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^[1] Government of
the Philippine Islands vs. Abural, 39 Phil. 996; De la Merced vs. Court
of Appeals, G.R. No. L-17737, May 30, 1962; Nieto vs. Quines, et. al.,
G.R. no. L-14643, September 29, 1962.

^[2] Article
1473, old Civil Code, now Article 1544, new Civil Code; Granados vs.
Monton, 47 O.G. 5607; Beatriz, et. al., vs. Cederia, et. al., G.R. No.
L-17703, February 28, 1962; Soriano, et., al. vs. Heirs of Magali, et.,
al. G.R. No. L-15133, July 31, 1963.