DOUBLE SALE, DOUBLE TROUBLE: WHO REALLY OWNS THE LOT?
By: Atty. Eugenio L. Riego II, LLB, MPA, REB
The Situation
Meet Henry — a man with a nice little house and lot in Manila. Life was fine until bills, tuition fees, and perhaps a questionable online shopping habit piled up. Desperate for funds, Henry decided to sell the property to Juan in 2016 through a Contract to Sell.
By 2017, Juan fully paid the purchase price, which Henry acknowledged. Being the “trustworthy seller” that he was, Henry promised to handle the transfer of title himself. In fact, he even requested two favors from Juan:
- Let Henry’s family stay in the house temporarily while he processes the paperwork.
- Hand over the owner’s duplicate title, because, of course, “the Registry of Deeds requires it.”
Juan, confident in Henry’s assurances (and perhaps too busy with his own business dealings), agreed.
Fast forward to 2018. Juan followed up with Henry about the transfer of title, but received only radio silence. Later, upon visiting the property, Juan was shocked to see that Henry’s family was gone, and in their place was a new occupant — Jingy.
“Who are you?” Juan asked, probably sounding like a telenovela character in mid-confrontation.
“I’m the new owner!” Jingy proudly declared, waving a freshly minted Transfer Certificate of Title and a Deed of Absolute Sale in his name.
Upon closer inspection, Juan discovered the sale to Jingy was dated after his own sale with Henry. Still, the property had already been transferred to Jingy’s name. To make matters worse, Henry stopped answering calls, texts, and even the occasional “seen-zoned” Facebook message.
Now Juan is left wondering:
a. Does Juan still have a legal right over the property, even if the title is already in Jingy’s name?
b. Or is Jingy, who claims to be a buyer in good faith, the rightful owner?
c. Does Juan have any remedy left against Henry, who seems to have mastered the art of disappearing?
Legal Answer
The issue boils down to the rules on double sales of immovable property under Article 1544 of the Civil Code. The provision states that:
“If the same immovable property is sold to different vendees, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.”
In simple terms: registration wins, provided the buyer is in good faith. If neither registers, then ownership goes to the one who first took possession. If neither registers nor possesses, ownership is determined by the date of the sale.
In this case:
- Juan bought first in 2016 and completed payment in 2017.
- However, Juan failed to register the sale. He also allowed Henry to keep possession and the duplicate title.
- Jingy, on the other hand, bought later but managed to register the sale and obtained a new title in his name.
If Jingy truly bought in good faith — meaning he did not know about Juan’s prior sale — then he has a stronger claim because of the Torrens system’s principle: “the one who registers first in good faith prevails.”
But Juan is not entirely without remedy. While he may lose ownership over the property, he can file an action against Henry for reconveyance of the purchase price, damages, and even estafa for double selling.
Ruling of the Supreme Court in a Similar Case
In Pryce Corporation v. Ponce, et al. G.R. No. 206863, the Supreme Court ruled:
“As 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… the act of registration must be coupled with good faith…”
Thus:
- Registration is the operative act that conveys ownership under the Torrens system.
- Between two buyers, the one who first registers in good faith wins, even if his sale came later in time.
- The first buyer’s remedy is not against the second buyer, but against the seller who duped him.
The Court upheld the right of the second buyer because he registered the sale without notice of the earlier transaction.
The Quick Advice
So, what’s the moral of the story? Aside from “never trust a seller who suddenly ghosts you,” the lesson here is clear:
- Register, register, register. In real estate, registration is king. Even if you buy first, if you don’t secure the title in your name, you risk being left out in the cold — or worse, out of your own house.
- Never surrender the owner’s duplicate title lightly. Handing it over is like giving someone your ATM card and PIN — except worse, because properties don’t have daily withdrawal limits.
- Do a background check. Before buying, always check the title with the Registry of Deeds. Look for annotations such as adverse claims, lis pendens, or other encumbrances. If something looks fishy, it probably is.
- Lawyer up early. A few thousand pesos in legal fees during due diligence can save you from losing millions later. Think of lawyers as the “anti-scam” vaccine for real estate transactions.
- If you’re the second buyer, don’t relax either. Make sure you really are in good faith. If you knew about the first sale and still pushed through, congratulations — you just bought yourself a lawsuit.
Buying land in the Philippines is not like buying fish in the palengke where you can haggle, walk away, and come back later. It’s a high-stakes game where diligence, caution, and timely registration spell the difference between becoming a proud landowner or just another cautionary tale in a legal newsletter like this one.
Or, as one witty lawyer once said:
“In real estate, early birds may get the worm, but only the bird that registers gets the nest.”
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