Spouses Abrigo vs. De Vera

Registration of a sale under Act 3344 does not constitute constructive notice and is ineffective to bind land already registered under the Torrens system; thus, a second buyer in good faith who registers under the Torrens system prevails over a first buyer who registered under Act 3344.

Gloria Villafania obtained a free patent over a parcel of land, evidenced by Original Certificate of Title (OCT) No. P-30522, later cancelled by Transfer Certificate of Title (TCT) No. 212598. On May 27, 1993, Villafania sold the property to Rosenda Tigno-Salazar and Rosita Cave-Go. This sale became the subject of a suit for annulment, which was resolved via a Compromise Agreement giving Villafania one year to repurchase the property; her failure to do so validated the sale to Tigno-Salazar and Cave-Go. Unbeknownst to these vendees, Villafania had already obtained a free patent over the land. The sale to Tigno-Salazar and Cave-Go was registered under Act 3344. On October 16, 1997, Tigno-Salazar and Cave-Go sold the property to petitioners Spouses Abrigo, who also registered the conveyance under Act 3344. On October 23, 1997, Villafania sold the same property to respondent Romana de Vera, presenting her TCT. De Vera registered the sale under the Torrens system, resulting in the issuance of TCT No. 22515 in her name.

• Original Sale and Compromise Agreement: On May 27, 1993, Gloria Villafania sold a house and lot to Rosenda Tigno-Salazar and Rosita Cave-Go. A subsequent suit for annulment resulted in a Compromise Agreement approved by the RTC on December 7, 1993, giving Villafania one year to repurchase the property. Villafania failed to repurchase, and the vendees declared the lot in their names.
• Concealed Torrens Title: Unknown to Tigno-Salazar and Cave-Go, Villafania had obtained a free patent over the land on March 15, 1988, as evidenced by OCT No. P-30522, which was cancelled by TCT No. 212598 on April 11, 1996.
• Sale to Petitioners: On October 16, 1997, Tigno-Salazar and Cave-Go sold the property to petitioners Spouses Abrigo. This sale was registered under Act 3344 on October 30, 1997, as neither the vendors nor the vendees knew the property was covered by the Torrens system.
• Sale to Respondent: On October 23, 1997, Villafania sold the same property to respondent Romana de Vera, presenting her TCT. De Vera registered the sale under the Torrens system, and TCT No. 22515 was issued in her name.
• Subsequent Litigation: On November 12, 1997, De Vera filed an action for forcible entry against the Abrigos, which was dismissed based on an agreement that neither party would take physical possession until the main case was resolved. On November 21, 1997, the Abrigos filed the instant case for annulment of documents, injunction, and damages.

• Validity of Subsequent Sale: Petitioners argued that the deed of sale executed by Villafania in favor of De Vera was invalid because Villafania no longer owned the property at the time of the sale.
• Lack of Good Faith: Petitioners maintained that De Vera was not a purchaser in good faith, contending that she should have been more vigilant and inspected the property, which would have revealed the Abrigos' possession.
• Constructive Notice: Petitioners asserted that their prior registration under Act 3344 constituted constructive notice to De Vera, negating her claim of good faith.

• Proper Registration: Respondent countered that registration under the Torrens system prevails over registration under Act 3344, relying on the principle that a sale of Torrens-titled land registered under Act 3344 is not considered "registered" under Article 1544.
• Good Faith: Respondent argued that she was a purchaser in good faith, having relied on the Torrens title presented by Villafania, and had no notice of the prior sale or litigation.

• Validity of Sale: Whether the deed of sale executed by Gloria Villafania in favor of respondent Romana de Vera is valid.
• Good Faith: Whether respondent Romana de Vera is a purchaser in good faith and for value.
• Better Right: Who between the petitioners and respondent has a better title over the property in question.

• Validity of Sale: The sale to De Vera was upheld. While Villafania had previously sold the property, the legal framework of double sale under Article 1544 applies. Because the property was registered under the Torrens system, the sale to the first buyers (and subsequently to petitioners) registered only under Act 3344 was ineffective to bind the land.
• Good Faith: De Vera was a purchaser in good faith. She relied on the face of the Torrens title, which is the only legal truth upon which a buyer of registered land must rely. Registration under Act 3344 does not constitute constructive notice when the property is already covered by the Torrens system. Furthermore, petitioners' claim that De Vera should have discovered their possession was contradicted by their own admission that Villafania's parents and sister were the actual occupants at the time of the sale.
• Better Right: Respondent has a better right to the property. Under Article 1544, ownership of immovable property sold to different vendees belongs to the person acquiring it who in good faith first records it in the Registry of Property. De Vera's registration under the Torrens system prevails over the petitioners' registration under Act 3344.

• Double Sale (Article 1544) — In a double sale of immovable property, ownership is transferred to: (1) the first registrant in good faith; (2) the first possessor in good faith; and (3) the buyer who in good faith presents the oldest title. This hierarchy applies strictly to lands registered under the Torrens system.
• Registration under Torrens System vs. Act 3344 — If land is registered under the Torrens system, a subsequent sale registered under Act 3344 is not considered "registered" for purposes of Article 1544. Registration must be done in the proper registry to bind the land. Consequently, registration under Act 3344 does not constitute constructive notice to a subsequent buyer who registers under the Torrens system.
• Good Faith in Double Sale — Article 1544 requires the second buyer to acquire the immovable in good faith and to register it in good faith. A person dealing with registered land is not required to go behind the certificate of title to determine the condition of the property.

• "Between two buyers of the same immovable property registered under the Torrens system, the law gives ownership priority to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title. This provision, however, does not apply if the property is not registered under the Torrens system." — Articulates the hierarchy of rights in a double sale of immovable property under the Torrens system.
• "If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED, as the term is used under Art. 1544..." — Defines the incompatibility of Act 3344 registration with Torrens-titled land for purposes of double sale.
• "As can be gathered from the foregoing, constructive notice to the second buyer through registration under Act 3344 does not apply if the property is registered under the Torrens system, as in this case." — Clarifies that Act 3344 registration does not provide constructive notice against a subsequent Torrens system purchaser.

• Soriano v. Heirs of Magali, 8 SCRA 489 (1963) — Followed for the principle that registration must be done in the proper registry in order to bind the land.
• Naawan Community Rural Bank v. Court of Appeals, 395 SCRA 43 (2003) — Followed for the rule that the "priority in time" principle does not apply when land is covered by the Torrens system but the conveyance is registered under Act 3344.
• Radiowealth Finance Co. v. Palileo, 274 Phil. 516 (1991) — Followed for the distinction between registration under Act 3344 and the Torrens system; registration under Act 3344 is without prejudice to a third party with a better right.
• Santiago v. Court of Appeals, 247 SCRA 336 (1995) — Distinguished. In Santiago, the first buyer registered under the Torrens system, not Act 3344, making the rule on constructive notice inapplicable to the present facts.
• Bayoca v. Nogales, 340 SCRA 154 (2000) — Distinguished. In Bayoca, the property was still unregistered land when the first buyer registered under Act 3344, rendering such registration effectual.
• Uraca v. Court of Appeals, 344 Phil. 253 (1997) — Followed for the requirement that the second buyer must act in good faith from the time of acquisition until registration to displace the first buyer.

• Article 1544, Civil Code — Governs double sales, providing the hierarchy of priority for ownership of immovable property: first registrant in good faith, first possessor in good faith, and oldest title in good faith. Applied to determine that De Vera, as the first to register in good faith under the proper registry, had a better right.
• Section 51, PD 1529 (Property Registration Decree) — Provides that no deed purporting to convey registered land shall take effect as a conveyance or bind the land until its registration. Applied to emphasize that unregistered sales bind only the parties but not innocent third persons.
• Section 44, PD 1529 — States that every purchaser of registered land taking a certificate for value and in good faith holds the same free from all encumbrances except those noted on the certificate. Applied to protect De Vera, who relied on the face of the Torrens title.
• Section 113, PD 1529 — Governs the recording of instruments relating to unregistered lands (Act 3344). Applied to show that petitioners' registration was ineffective because the land was already registered under the Torrens system.

Davide, Jr., Ynares-Santiago, Carpio, Azcuna