IGNACIO CARDENTE AND ANASTACIA T. CARDENTE, PETITIONERS, VS. THE INTERMEDIATE APPELLATE COURT AND SPOUSES RUPERTO RUBIN AND PRIMITIVA C. RUBIN, RESPONDENTS.

Cardente versus Rubin

The Case

This is the case of Cardente versus Rubin, a simple but enduring lesson on the double sale of an immovable property. Ignacio Cardente and his wife Anastacia sued to protect a one-hectare parcel they had bought in 1956, when Ignacio was still a minor, from Isidro Palanay. Four years later, Palanay sold the entire titled estate, including that one hectare, to Ruperto Rubin and his wife, who registered their deed. The Rubins then sued to quiet their title. The case matters because it shows that the race under the double-sale rule is not won by the first to register, but by the first to register in good faith — and that a buyer who closes his eyes to occupants on the land cannot claim that good faith.

Procedural History

The Rubins filed a complaint for quieting of title with damages before the then Court of First Instance of Bukidnon. The trial court dismissed the complaint and ordered the Rubins to reconvey the one hectare to Cardente, at Cardente's expense. The Rubins appealed to the then Intermediate Appellate Court, which reversed the trial court. It declared the Rubins absolute owners under their transfer certificate of title, ordered the Cardentes to vacate the one-hectare portion and restore possession, quieted the Rubins' title, and ordered the Cardentes to pay costs. The Cardentes then came to the Supreme Court by a petition for review by certiorari.

Facts

Sometime in 1956, Francisca Cardente, acting for her grandson Ignacio, then a minor, bought one hectare from Isidro Palanay. The lot was part of a larger parcel of more than nine hectares covered by a certificate of title in Palanay's name. The Cardentes immediately took possession, planted crops and trees, and remained in possession adverse to the whole world. The private document evidencing their purchase, however, was lost and never found.

On August 18, 1960, Palanay sold the entire property, including the one hectare already sold, to Ruperto Rubin and his wife. Their deed was registered, and a new transfer certificate of title was issued in their names. On December 9, 1972, Palanay, with his wife's written conforme, executed a public document confirming the 1956 sale to Ignacio Cardente. That deed of confirmation stated that Rubin had been informed of the first sale.

On February 18, 1977, the Cardentes' house burned, and they filed an arson complaint against Rubin, whom they suspected. On March 31, 1977, seventeen years after their purchase, the Rubins filed the complaint for quieting of title.

Issues

• Whether or not the private respondents, as second buyers, acquired ownership of the one-hectare portion by registering their deed of sale ahead of the first buyer.
• Whether or not the private respondents acted in good faith when they bought the property and registered their title.

Applicable Provisions

Article 1544 of the Civil Code provides:

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

This is the rule that governs the conflict, and its second paragraph makes good faith a condition of ownership by registration.

Ruling

On the first issue, the Court held that mere registration of the sale is not enough. Good faith must concur with the registration, and bad faith renders the registration nothing but an exercise in futility. The Court therefore did not stop at the fact that the Rubins registered first; it examined whether they registered in good faith.

On the second issue, the Court found bad faith sufficiently established, overcoming the presumption of good faith. The deed of confirmation executed by Palanay in 1972 expressly stated that the fact of the previous sale was well known and acknowledged by Ruperto Rubin. Palanay's daughter, Concepcion Salubo, testified that Rubin was properly informed of the sale, and no ill motive was attributed to these disinterested witnesses. The Court also relied on the notorious and continuous possession of the Cardentes for four years before the second sale, which should have aroused the Rubins' suspicion. As the Court put it:

A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.

The Court rejected as too pat the Rubins' claim that they merely tolerated the old women out of pity, and found their seventeen years of inaction and silence a realization of lack of right.

Doctrine

In a double sale of immovable property, the second buyer who first registers the deed acquires ownership only if he registers in good faith. Registration without good faith transfers nothing. Good faith is presumed, but the presumption yields to proof of knowledge of the prior sale. A buyer of land in the possession of persons other than the seller must inquire into their rights; failure to do so defeats good faith.

Disposition

The Court granted the petition, reversed and set aside the appellate court's decision and resolution, and reinstated the trial court's decision of July 9, 1979, with costs against the private respondents.

Remember This

Memorize this line: registration under Article 1544 must be in good faith, and bad faith renders registration an exercise in futility. Examiners use this case to test the double-sale rule against a buyer who registers first but knew, or should have known, of a prior sale and of occupants on the land.