NAVAL vs.

COURT OF APPEALS ET AL
G.R. No. 167412
February 22, 2006

FACTS: In 1969, Ildefonso Naval sold a parcel of land located in Camarines Sur to Galarosa. The sale was recorded
in the RD pursuant to Act No. 3344, the law governing registrations of all instruments on unregistered lands.
Subsequently, Galarosa sold portions of the land to respondents Balilla, Nacion,

spouses Moya, and Camalla. All
buyers occupied the portion they bought, built improvements thereon, and paid the taxes due thereto.
The controversy arose when petitioner Juanita Naval, the great granddaughter of Ildefonso, was issued by the RD an
OCT covering a portion of the subject land. She claimed that she bought the subject land from Ildefonso in 1972.
Petitioner Juanita filed a complaint for recovery of possession against Aguirre, Balila,

Moya, and Nacion. However, the
case was dismissed without prejudice for failure to prosecute the action for an unreasonable length of time.
Almost 20 years later petitioner re-filed the complaint for recovery of possession with damages before the MCTC,
against Camalla, Balila, Aguirre, Nacion and Moya. After trial, the MCTC rendered its decision in favor of the plaintiff
and against defendants, declaring: the plaintiff to be the legal owner of the land, ordering defendants Camalla,
Balila, Balila, Aguirre and Nacion to vacate the property in question and to deliver its possession to the plaintiff, and
ordering Moya to vacate the land occupied by her and to relinquish its possession to the plaintiff;
Aggrieved, respondents appealed the decision to the RTC of Naga City, which affirmed in toto the assailed decision.
Respondents thereafter elevated the case to the CA. Finding the prior registration of the deed of sale between
Ildefonso and Galaura with the RD as a constructive notice to subsequent buyers, the appellate court reversed the
decision of the RTC. Hence, this petition for review.

ISSUE: Who has the superior right to a parcel of land sold to different buyers at different times by its former owner.

HELD: RESPONDENTS
The petition is DENIED. The Decision of the CA and the denial of the motion for reconsideration are AFFIRMED.

a. It is not disputed that the subject land belonged to Ildefonso and that it was not registered under the Torrens
System when it was sold to Gregorio in 1969 and to the petitioner in 1972. Further, the deed of sale between
Ildefonso and Gregorio was registered with the RD of Camarines Sur pursuant to Act No. 3344.

In holding that respondents have a better right to possess the subject land in view of the bona fide registration of the
sale with the RD of Camarines Sur by Ildefonso and Gregorio, the CA applied Article 1544 of the Civil Code.
While we agree with the appellate court that respondents have superior right over the petitioner on the subject
property, we find Article 1544 inapplicableto the case at bar since the subject land was unregistered at the time of
the first sale. The registration contemplated under this provision has been held to refer to registration
under the Torrens System, which considers the act of registration as the operative act that binds the land. Thus,
in Carumba v. Court of Appeals, we held that Article 1544 of the Civil Code has no application to land not registered
under Torrens System.
The law applicable therefore is Act No. 3344, which provides for the registration of all instruments on land neither
covered by the Spanish Mortgage Law nor the Torrens System. Under this law, registration by the first buyer is
constructive notice to the second buyer that can defeat his right as such buyer in good faith; it binds third person
who may subsequently deal with the same property.

b. Even if petitioner argues that she purchased and registered the subject land in good faith and without knowledge
of any adverse claim thereto, respondents still have superior right over the disputed property. We held in Rayos v.
Reyes
32
that:
[T]he issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered
land and the purchaser is buying the same from the registered owner whose title to the land is clean x x x in such
case the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith
for value. Since the properties in question are unregistered lands, petitioners as subsequent buyers thereof did so at
their peril. Their claim of having bought the land in good faith, i.e., without notice that some other person has a right
to or interest in the property, would not protect them if it turns out, as it actually did in this case, that their seller did
not own the property at the time of the sale.

c. It is an established principle that no one can give what one does not have, nemo dat quod non habet. Accordingly,
one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can
transfer legally.In the case at bar, since Ildefonso no longer owned the subject land at the time of the sale to the
petitioner, he had nothing to sell and the latter did not acquire any right to it.

d. Even if we apply Article 1544, the facts would nonetheless show that respondents and their predecessors-in-
interest registered first the source of their ownership and possession, i.e., the 1969 deed of sale, and possessed the
subject land at the earliest time. Applying the doctrine of priority in time, priority in rights or prius tempore, potior
jure, respondents are entitled to the ownership and possession of the subject land.

e. True, Section 32 of Presidential Decree No. 1529 provides that [u]pon the expiration of said period of one year,
the decree of registration and the certificate of title shall become incontrovertible. However, it does not deprive an
aggrieved party of a remedy in law. What cannot be collaterally attacked is the certificate of title and not the title or
ownership which is represented by such certificate. Ownership is different from a certificate of title. The fact that
petitioner was able to secure a title in her name did not operate to vest ownership upon her of the subject land.
Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property
described therein. It cannot be used to protect a usurper from the true owner; nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in favor of a
particular person does not foreclose the possibility that the real property may be co-owned with persons not named
in the certificate, or that it may be held in trust for another person by the registered owner.
As correctly held by the Court of Appeals, notwithstanding the indefeasibility of the Torrens title, the registered
owner may still be compelled to reconvey the registered property to its true owners. The rationale for the rule is that
reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of Lands. In an action for
reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer
of the property or its title which has been wrongfully or erroneously registered in another persons
name, to its rightful or legal owner, or to the one with a better right.
Finally, the Court of Appeals correctly held that an action for reconveyance does not prescribe when the plaintiff is in
possession of the land to be reconveyed, as in this case. The reason for this is that one who is in actual possession of
a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a
continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a
third party and its effect on his own title, which right can be claimed only by one who is in possession.
We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any
certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse
to his own, and it is only then that the statutory period of prescription commences to run against such possessor.