LAW ON SALES | CHENG VS. GENATO, 300 SCRA 722, DECEMBER 29, 1998

CHENG VS. GENATO, 

300 SCRA 722, DECEMBER 29, 1998

 

TOPIC/DOCTRINE

Art. 1544 of the Civil Code on double sales connotes that the following circumstances must concur: “(a) The two (or more) sales transactions in issue must pertain to exactly the same subject matter, and must be valid sales transactions; (b) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and (c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller.” These situations obviously are lacking in a contract to sell for neither a transfer of ownership nor a sales transaction has been consummated. The contract to be binding upon the obligee or the vendor depends upon the fulfillment or non-fulfillment of an event.

 

FACTS

Respondent Genato entered a contract to sell to spouses Da Jose pertaining to his property in Bulacan. The contract made in public document states that the spouses shall pay the down payment and 30 days after verifying the authenticity of the documents, they shall pay the remaining purchase price.

Da Jose spouses was not able to finish verifying the documents and as such asked for a 30 day extension. Pending the extension and without notice to the spouses, Genato made a document for the annulment of the contract.

Petitioner Cheng expressed interest over the property and paid 50K check with the assurance that the contract between Genato and the spouses Da Jose will be annulled. Da Jose spouses protested with the annulment and persuaded Genato to continue the contract. Genato returned the check to Cheng and hence, this petition.

 

ISSUE

Who has better right in the property?

 

RULING

Spouses Da Jose.

The court held that the provisions of Art. 1544 of the Civil Code on double sales connotes that the following circumstances must concur: “(a) The two (or more) sales transactions in issue must pertain to exactly the same subject matter, and must be valid sales transactions; (b) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and (c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller.” These situations obviously are lacking in a contract to sell for neither a transfer of ownership nor a sales transaction has been consummated. The contract to be binding upon the obligee or the vendor depends upon the fulfillment or non-fulfillment of an event. Notwithstanding this contrary finding with the appellate court, we are of the view that the governing principle of Article 1544, Civil Code, should apply in this situation.

Here, the court held that Art.1544 should apply because for not only was the contract between herein respondents first in time; it was also registered long before petitioner's intrusion as a second buyer (PRIMUS TEMPORE, PORTIOR JURE). (Spouses made annotation on the title of Genato). Jurisprudence38 teaches us that the governing principle is PRIMUS TEMPORE, PORTIOR JURE (first in time, stronger in right). For not only was the contract between herein respondents first in time; it was also registered long before petitioner’s intrusion as a second buyer. This principle only applies when the special rules provided in the aforecited article of the Civil Code do not apply or fit the specific circumstances mandated under said law or by jurisprudence interpreting the article. Since Cheng was fully aware, or could have been if he had chosen to inquire, of the rights of the Da Jose spouses under the Contract to Sell duly annotated on the transfer certificates of titles of Genato, it now becomes unnecessary to further elaborate in detail the fact that he is indeed in bad faith in entering into such agreement.https://www.instagram.com/lawyalstudent/

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