Quimson vs. Rosete

In a double sale of immovable property where neither sale is recorded in the registry, the vendee who first acquired possession in good faith has the better right, and "possession" for this purpose includes symbolic possession acquired by the execution of a public instrument of sale, not merely material or physical occupation.

Dionisio Quimson was the original owner of a parcel of land in Zambales. On June 7, 1932, he executed a notarial deed of sale (Exhibit A) conveying the land to his daughter, Tomasa Quimson, for P250, but he remained in physical possession and enjoyment of the property. On May 3, 1935, Dionisio sold the same land to the spouses Magno Agustin and Paulina Manzano under pacto de retro with a six-year repurchase period. On April 5, 1937, after repurchasing the land from the Agustin spouses using money advanced by Francisco Rosete, Dionisio sold the property to Rosete, also under pacto de retro for five years, by means of a notarial deed (Exhibit 1). Rosete thereupon entered into peaceful possession of the land. Dionisio died on June 6, 1939. In January 1943, Tomasa Quimson sought the intervention of the Justice of Peace of San Marcelino, Zambales, to arrange a settlement with Rosete over the land; the attempt failed, prompting a race to the Registry of Deeds in Iba, Zambales, to register the competing deeds. Tomasa arrived first at 9:30 a.m. on February 17, 1943, while Rosete arrived at 10:30 a.m. the same day.

Dionisio Quimson originally owned a parcel of land in Zambales. On June 7, 1932, he executed a notarial deed of sale (Exhibit A) conveying the property to his daughter, Tomasa Quimson, for P250, which the deed expressly stated was received as consideration. Despite the conveyance, Dionisio remained in physical possession and enjoyment of the land.

On May 3, 1935, Dionisio sold the same property to the spouses Magno Agustin and Paulina Manzano under a pacto de retro with a six-year repurchase period. Less than two years later, on April 5, 1937, Dionisio repurchased the land from the Agustin spouses using money lent to him by Francisco Rosete, and on the same occasion sold the property to Rosete, also under pacto de retro for a term of five years, executing the notarial deed of sale (Exhibit 1). From that point onward, Rosete took peaceful and quiet possession of the land.

Dionisio Quimson died on June 6, 1939. In January 1943, Tomasa Quimson went to the Justice of Peace of San Marcelino, Zambales, to seek an arrangement with Rosete regarding the property. The negotiation failed, and both parties rushed to Iba, the capital of Zambales, to register their respective deeds. Tomasa arrived first at 9:30 a.m. on February 17, 1943, while Rosete arrived one hour later at 10:30 a.m. the same day.

The trial court found that a valid sale had been made by Dionisio in favor of Tomasa, as evidenced by Exhibit A, which categorically stated that the vendor received P250 as consideration and acknowledged before the notary public that the instrument was executed of his own free will. The trial court awarded damages at P180 per agricultural year for 1943-44, 1944-45, and 1945-46, and P60 per year thereafter until possession was restored. The Court of Appeals reversed, finding that the registration of Tomasa's deed had no effect and that Rosete was prior in possession. The Supreme Court accepted the trial court's factual findings, which had not been reversed by the Court of Appeals, including the finding that the deed to Tomasa constituted a valid sale.

• Validity of the First Sale: Petitioners maintained that the execution of the notarial deed of sale (Exhibit A) by Dionisio Quimson in favor of his daughter Tomasa constituted a valid sale and delivery of the property, vesting in Tomasa symbolic possession from the date of execution.
• Priority of Possession Under Article 1473: Petitioners argued that under Article 1473 of the Civil Code, possession acquired through the execution of a public instrument—symbolic possession—should be reckoned as possession for purposes of determining priority in a double sale of immovable property, and that Tomasa, having acquired such possession in 1932, was first in possession ahead of Rosete, who only took material possession in 1937.

• No Valid Sale to Tomasa: Respondent's counsel denied that the land was sold to Tomasa Quimson or that the Court of Appeals so found, contending that all the appellate court acknowledged was that a deed was executed by Dionisio on June 7, 1932, without necessarily concluding that a sale occurred.
• Material Possession Required: Respondent relied on the Court of Appeals' interpretation of Article 1473, under which "possession" meant only material or physical possession, and since Rosete was the first to take material possession of the land, he had the better right.

• Effect of Registration: Whether the registration of the plaintiff's deed had any legal effect in determining priority between the two vendees.
• Nature of Possession Under Article 1473: Whether "possession" under Article 1473 of the Civil Code, for purposes of determining ownership in a double sale of immovable property with no inscription, includes symbolic possession acquired by the execution of a public instrument, or is limited to material or physical possession.

• Effect of Registration: The Court found it unnecessary to rule on this issue, having resolved the case on the possession question.
• Nature of Possession Under Article 1473: Yes. Possession under Article 1473 includes symbolic possession acquired by the execution of a public instrument of sale, not merely material possession. The first vendee who acquired the property by means of a public instrument was deemed first in possession and thus had the superior right.

• Effect of Registration: The Court expressly declined to pass upon the effect of registration, stating that it was unnecessary in light of the resolution of the possession issue. The question of whether Tomasa's prior registration of her deed conferred any additional right was thus left unresolved, as the disposition turned entirely on who was first in possession.

• Nature of Possession Under Article 1473: The Court reasoned that Article 1462 of the Civil Code provides that when a sale is made by means of a public instrument, the execution thereof is equivalent to delivery of the thing sold, unless the contrary appears from the instrument itself. This constructive or symbolic delivery vests in the vendee possession of the property. Article 438 of the Civil Code defines possession as acquired by material occupancy, by subjection of the thing to one's will, or by appropriate acts and legal formalities established for acquiring possession. Because Article 1473 does not specify which kind of possession it refers to, it must be understood to encompass all kinds, including symbolic possession acquired through execution of a public instrument. The Court found this interpretation more consonant with principles of justice: once a sale of realty is consummated by execution of a public instrument, the vendee has acquired everything and the vendor is a stranger to the thing sold. If the vendor continues in material possession, it is merely by the vendee's tolerance, and the vendor's possession is in fact the vendee's possession. A subsequent sale by the vendor transmits nothing to the second vendee, and if the second vendee takes material possession, he does so as a mere detainer. The Court relied on Sanchez vs. Ramon (40 Phil., 614), which was "almost on all fours" with the case, where the first vendee under a notarial pacto de retro who never took material possession was held to have superior right over a second vendee who immediately entered the land. The Court also cited Buencamino vs. Viceo (13 Phil., 97) and Florendo vs. Foz (20 Phil., 388) for the proposition that execution of a public instrument is equivalent to delivery. The Court distinguished Cruzado vs. Escaler (34 Phil., 17), relied upon by the Court of Appeals, as involving a sham sale and where the second purchaser had already acquired title by prescription—circumstances absent in the present case. The observation in Cruzado that physical possession is essential to consummation of a sale was dismissed as obiter dictum. The Court further noted that Manresa and the Supreme Court of Spain shared the same interpretation, and that under both Spanish and Philippine rules of interpretation, the spirit and intent of the law prevail over its letter. Applying these principles, Tomasa Quimson acquired symbolic possession upon execution of Exhibit A on June 7, 1932, which was prior to Rosete's material possession beginning April 5, 1937. Tomasa was therefore first in possession and had the better right under Article 1473.

• Symbolic Possession in Double Sales (Article 1473, Civil Code) — In a double sale of immovable property where neither sale is recorded in the registry, ownership belongs to the person who in good faith was first in possession. "Possession" for this purpose includes not only material or physical possession but also symbolic possession acquired by the execution of a public instrument of sale. Under Article 1462, the execution of a public instrument of sale is equivalent to delivery of the thing sold, unless the contrary appears from the instrument. Thus, a first vendee who obtains a notarial deed of sale acquires possession upon execution of that instrument, even without material occupation, and this possession is superior to the material possession later acquired by a second vendee from the same vendor. The vendor who remains in physical possession after executing a notarial sale does so merely by tolerance of the vendee, and any subsequent sale by the vendor transmits nothing to the second purchaser.

• "We are of the opinion that the possession mentioned in the article 1473 (for determining who has better right when the same piece of land has been sold several times by the vendor) includes not the materials but also the symbolic possession, which is acquired by the execution of a public instrument." — This is the ratio decidendi of the case, establishing that symbolic possession through a notarial deed satisfies the possession requirement of Article 1473 in double-sale disputes.

• "Upon a sale of real estate the execution of a notarial document of sale is a sufficient delivery of the property sold." — Quoted from Buencamino vs. Viceo (13 Phil., 97), this passage articulates the principle of constructive delivery under Article 1462, foundational to the Court's holding that symbolic possession vests upon execution of a public instrument.

• "The execution of the public instrument is equivalent to the delivery of the realty sold (art. 1462, Civil Code) and its possession by the vendee (art. 438). Under these conditions the sale is considered consummated and completely transfers to the vendee all of the thing." — This passage explains why the vendor retains nothing to transmit to a second vendee, grounding the justice-based rationale for preferring the first vendee's symbolic possession.

• Sanchez vs. Ramon, 40 Phil., 614 — Controlling precedent, described as "almost on all fours" with the present case. There, a first sale under pacto de retro by public instrument, without material possession or registration, was held superior to a second sale by private document where the second vendee immediately entered the land. The Court adopted its reasoning that possession under Article 1473 includes symbolic possession acquired by execution of a public instrument.
• Buencamino vs. Viceo, 13 Phil., 97 — Followed for the proposition, stated through Justice Willard, that execution of a notarial document of sale is a sufficient delivery of real estate sold, pursuant to Article 1462.
• Florendo vs. Foz, 20 Phil., 388 — Followed for the rule, articulated by Chief Justice Arellano, that execution of a public instrument of sale is tantamount to conveyance of the subject matter unless the contrary appears from the instrument itself.
• Cruzado vs. Escaler, 34 Phil., 17 — Distinguished and partially rejected. The Court of Appeals relied on this case for the proposition that physical possession is essential to consummation of a sale of real estate. The Supreme Court held that this statement was obiter dictum, because the sale in that case was found to be a sham and the second purchaser had already acquired title by prescription—circumstances not present in the case at bar.

• Article 1462, Civil Code (Spain) — Provides that the thing sold is deemed delivered when placed in the control and possession of the vendee, and that when a sale is made by means of a public instrument, the execution thereof is equivalent to delivery unless the contrary appears from the instrument. The Court relied on this provision to establish that execution of Exhibit A constituted symbolic delivery and possession to Tomasa Quimson.
• Article 1473, Civil Code (Spain) — Governs double sales: if the same immovable is sold to different vendees, ownership belongs to the person who first recorded it in the registry; if there is no inscription, to the person who in good faith was first in possession; and in the absence of both, to the person who represents the oldest title, provided there is good faith. The Court interpreted "possession" in this provision to include symbolic possession acquired by execution of a public instrument.
• Article 438, Civil Code (Spain) — Defines possession as acquired by material occupancy of the thing, by subjection of the thing to one's will, or by appropriate acts and legal formalities established for acquiring possession. The Court used this provision to support the conclusion that Article 1473's reference to possession encompasses all kinds of possession, including symbolic.

Moran, C.J., Ozaeta, Pablo, Bengzon, and Montemayor, JJ., concurred.