Lichauco vs. Berenguer

In a double sale of immovable property where neither instrument was registered, preference belongs to the vendee who first took possession, and possession by the vendor as lessee after the sale constitutes possession by the vendee; subsequent registration by the second vendee cannot defeat the first vendee's independent title acquired by prescription.

The plaintiffs are heirs of Cornelia Lauchangco, who purchased the land in question from Macario Berenguer in 1889. The defendants are Jose Berenguer, administrator of the estate of Macario Berenguer, and Anselmo Singian, who claims ownership through purchases made in 1882 and 1890 by his tutor Cristino Singian from Macario Berenguer. The dispute concerns a single parcel of land that Macario Berenguer sold multiple times with pacto de retro (right of repurchase) to different vendees, and the question of which sale should be preferred under the rules on double sale.

On July 26, 1882, Macario Berenguer sold by public instrument a parcel of land to Cristino Singian with right of repurchase for an indefinite period. On October 7, 1889, by another public instrument, Macario Berenguer sold the same land to Cornelia Lauchangco, also with right of repurchase, for a term of two years. The 1889 sale stipulated that Berenguer would take the land under a lease, paying annual rent either in cash or in sugar at Lauchangco's option, and that all fruits of the land would be stored in Lauchangco's enfraderia (sugar packing house) with proceeds applied to the repurchase price. This sale was registered in 1907.

On September 2, 1890, Macario Berenguer again sold the same land with pacto de retro to Cristino Singian, this time at a higher price, with the amount paid under the 1882 sale considered as part of the price. In the document, Cristino Singian accepted the purchase in the name and representation of Anselmo Singian, of whom he was tutor. The contract did not express a redemption period. It appears that after the 1882 sale, Berenguer received an additional ₱6,000 from Cristino Singian, which prompted the 1890 sale to aggregate that amount as part of the purchase price. Although the 1882 sale did not state that Cristino Singian acted as tutor of Anselmo Singian, it was established that the latter's money was used to pay the price in both transactions.

On February 20, 1904, Anselmo Singian sold the same land in absolute sale by public instrument back to Macario Berenguer, stating that the land had been acquired from Berenguer through the 1890 contract via his tutor Cristino Singian. The price was to be paid within eight years, with stipulation that if not fully paid upon expiration of the term, ownership would revert to Anselmo Singian. There is no evidence that any payment on account of this price was made, and since payment must be proved by the party obliged to pay, it was accepted as a fact that no payment was made.

The trial court found that Anselmo Singian, by himself and through a representative, took possession of the land from the time of the 1882 sale and had continued in possession up to the time of the decision. After the 1882 sale, the land was held under lease by Macario Berenguer until his death, and even after his death the administrator of his estate continued the lease under the same conditions until two years before the action was filed. When the land was sold to Lauchangco in 1889, she likewise did not take direct possession but agreed to lease it to Berenguer. The trial court absolved the defendants, declaring Anselmo Singian owner of the land, and the plaintiffs appealed.

• Priority of the 1890 Sale Over the 1889 Sale: Plaintiffs contended that the sale to defendant Anselmo Singian was effected only in 1890 and therefore was not anterior to the sale made to Cornelia Lauchangco in 1889, arguing that the 1882 and 1890 transactions were separate and distinct.
• Efficacy of the Registered Sale to Lauchangco: Plaintiffs prayed that the sale to Cornelia Lauchangco be declared absolute, or alternatively that defendant Jose Berenguer be obliged to pay the repurchase price of ₱3,000 with legal interest from October 7, 1891, plus rents due amounting to ₱9,236.86 and subsequent amounts, relying on the registration of the 1889 sale in 1907.

• Invalidity of the Sale to Lauchangco: Defendant Anselmo Singian argued that the sale of the land to Cornelia Lauchangco should be declared null and void and that he be declared absolute owner of the land.
• Right to Repurchase: Defendant Jose Berenguer prayed that he be absolved from the complaint and that the plaintiffs be obliged to execute in his favor the document of repurchase of the land.

• Priority Between Double Sales: Whether the 1882 sale to Cristino Singian (as tutor of Anselmo Singian) or the 1889 sale to Cornelia Lauchangco should be preferred, where neither instrument was initially registered.
• Effect of Constructive Possession Through Vendor-Lessee: Whether possession by the vendor as lessee after the sale constitutes possession by the vendee for purposes of determining priority under Article 1473 of the Civil Code.
• Effect of Subsequent Registration: Whether Lauchangco's registration of the 1889 sale in 1907 could defeat Singian's title, given his possession since 1882.
• Effect of the 1904 Resale to Berenguer: Whether the 1904 absolute sale by Anselmo Singian back to Macario Berenguer affected the ownership of the land.
• Nature of the 1890 Sale: Whether the 1890 sale to Cristino Singian was a new and independent sale or a continuation of the 1882 sale.

• Priority Between Double Sales: Yes, the 1882 sale to Singian is preferred. Under Article 1473 of the Civil Code, where neither instrument was inscribed, preference belongs to the purchaser who first took possession of the land.
• Effect of Constructive Possession Through Vendor-Lessee: Yes, possession by the vendor as lessee after sale constitutes possession by the vendee. When a buyer purchases land and leases it back to the vendor, the vendor's possession is deemed the vendee's possession for purposes of Article 1473.
• Effect of Subsequent Registration: No, the 1907 registration could not defeat Singian's title. By that date, twenty-five years of possession had already ripened into ownership by prescription, an independent title not destroyed by registration of another's sale.
• Effect of the 1904 Resale to Berenguer: No, the 1904 sale did not affect the merits. The price was not paid within the eight-year period, and ownership reverted to the vendor, Anselmo Singian.
• Nature of the 1890 Sale: The 1890 sale was not a new and independent sale but a continuation of the 1882 sale, made to aggregate the additional ₱6,000 as part of the purchase price, not to transmit ownership which had already been affected by the 1882 sale.

• Priority Between Double Sales: The land had been twice sold by Macario Berenguer — first in 1882 to Cristino Singian and second in 1889 to Cornelia Lauchangco. Both sales were executed by public instrument, but neither was inscribed at the time. Under Article 1473 of the Civil Code, where neither instrument is registered, preference belongs to the purchaser who first took possession. The trial court found, supported by evidence, that Anselmo Singian through his tutor Cristino Singian took possession from the 1882 sale and continued in possession to the present. There being no proof to the contrary, the first sale must be preferred.

• Effect of Constructive Possession Through Vendor-Lessee: After the 1882 sale, the land was held under lease by Macario Berenguer until his death, and thereafter by his estate administrator, until two years before the action. Similarly, after the 1889 sale, Lauchangco did not take direct possession but leased the land to Berenguer. The Court applied the doctrine from Bautista vs. Sioson that when a person buys land and leases it to the vendor, the vendor's possession after the sale is the vendee's possession, determining preference in favor of the one who first took possession. This doctrine applies with greater force here because the second vendee's possession, if any, was under the same conditions as the first's. Moreover, Lauchangco never truly had possession: Berenguer had no possession to transfer to her in 1889, as he was then merely a lessee of Cristino Singian, holding possession not for himself but in representation of the latter. Even if it were held that neither vendee took possession under Article 1473 (because both derived possession through the vendor-lessee), preference would still go to the prior sale — that of 1882 to Singian.

• Effect of Subsequent Registration: The registration of the 1889 sale to Lauchangco in 1907 did not alter the outcome. From the time Singian took possession in 1882 to the date of registration, twenty-five years had elapsed, during which Singian had acquired ownership by prescription. The effect given by law to registration of a sale in case of double sale, against the efficacy of an unregistered sale, does not extend to other titles the other vendee may have gained independently — such as the title of prescription. Even assuming the sale to Singian lost all efficacy as a title transferring ownership for lack of registration, the title of prescription remained intact and was not destroyed by registration to the contrary.

• Effect of the 1904 Resale to Berenguer: The 1904 sale from Anselmo Singian back to Macario Berenguer stipulated payment within eight years, with reversion of ownership to the vendor if the price was not fully paid. No evidence of payment was presented, and the burden of proving payment lay with the party obliged to pay. It was therefore accepted that no payment was made, and whatever effect the sale may have had during the eight-year period could not subsist after its expiration without payment. Ownership reverted to Anselmo Singian.

• Nature of the 1890 Sale: The plaintiffs contended that the sale to Anselmo Singian was made only in 1890 and was therefore not anterior to the 1889 sale to Lauchangco. The Court rejected this, finding that after the 1882 sale, Berenguer received an additional ₱6,000 from Cristino Singian, which prompted the 1890 sale to aggregate that amount as part of the price. The 1890 sale was not for the transmission of ownership — already affected by the 1882 sale — but to incorporate the additional amount into the purchase price. Both sales were made in favor of Anselmo Singian, using his money.

• Article 1473 of the Civil Code — Double Sale — In a double sale of immovable property, if both sales are executed by public instrument and neither is registered, preference belongs to the purchaser who first took possession. If neither vendee took possession, preference belongs to the purchaser who presents the older title. The Court applied this provision to determine that the 1882 sale to Singian was preferred over the 1889 sale to Lauchangco, as Singian first took possession and, in any event, held the older title.

• Constructive Possession Through Vendor-Lessee — When a person buys a piece of land and, instead of taking direct possession, gives it under lease to the vendor, the vendor's possession after the sale is deemed the vendee's possession. This possession, in case of a double sale, determines preference in favor of the vendee who first took possession, in the absence of inscription, in accordance with Article 1473 of the Civil Code. The Court relied on Bautista vs. Sioson for this doctrine and applied it with greater force where both vendees' possession was through the same vendor under the same conditions.

• Prescription as an Independent Title — A title acquired by prescription through long possession is independent of the title derived from the sale itself. Registration of a subsequent sale by another vendee can destroy the efficacy of the unregistered sale but cannot defeat the legal effects of possession that has already ripened into ownership by prescription. The Court held that Singian's twenty-five years of possession prior to Lauchangco's 1907 registration had already vested ownership by prescription, which registration could not defeat.

• "this court has held that when a person buys a piece of land and, instead of taking possession of it, give it under a lease to the vendor, possession therefore by the later after the sale is possession by the vendee, and such possession, in case of a double sale, determine the preference in favor of the one who first took possession of it, in the absence of inscription, in accordance with the provision of article 1473 of the Civil Code and notwithstanding the material and personal possession by the second vendee." — This passage articulates the doctrine of constructive possession through the vendor-lessee relationship as the controlling rule for priority in double sales, citing Bautista vs. Sioson.

• "The effect which the law gives to the registry of a sale, in case of a double sale, against the efficacy of the sale that was not registered does not extend to the other titles which the other vendee may have gained independently, as the title of prescription in this case." — This passage defines the limits of registration in double-sale cases: registration defeats only the efficacy of an unregistered sale, not independent titles such as prescription acquired through long possession.

• "What really appears is that the second sale was made with the object of aggregating, as part of the price, the amount of P6,000 received subsequently by Macario Berenguer for the purposes of the purchase and not for the transmission of the ownership which was already affected." — This passage explains why the 1890 sale was not an independent transaction but a continuation of the 1882 sale, defeating the plaintiffs' argument that Singian's title dated only from 1890.

• Bautista vs. Sioson — Cited as controlling authority for the doctrine that possession by the vendor as lessee after the sale constitutes possession by the vendee for purposes of determining priority under Article 1473 of the Civil Code in cases of double sale. The Court applied this doctrine with greater force where both vendees' possession was through the same vendor under the same conditions.

• Article 1473, Civil Code — Governs double sales of immovable property. Provides that if two or more sales of the same thing are made by the same vendor, and both are executed by public instrument, preference belongs to the purchaser who first registered it; if neither was registered, to the one who first took possession; if neither took possession, to the one with the oldest title. The Court applied this provision to prefer the 1882 sale to Singian over the 1889 sale to Lauchangco, based on priority of possession and, alternatively, priority of title.

Arellano, C.J., Torres, Johnson, Street, and Malcolm, JJ., concurred.