RAYMUNDO S. DE LEON, Petitioner, vs. BENITA T. ONG. Respondent.

G.R. No. 170405

February 2, 2010

Facts:

On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita T. Ong(respondent). The
said properties were mortgaged to a financial institution; Real Savings & Loan Association Inc. (RSLAI). The
parties then executed a notarized deed of absolute sale with assumption of mortgage. As indicated in the deed of
mortgage, the parties stipulated that the petitioner (de Leon) shall execute a deed of assumption of mortgage in favor
of Ong (respondent)after full payment of the P415,000. They also agreed that the respondent (Ong) shall assume the
mortgage. The respondent then subsequently gave petitioner P415,000 as partial payment.

On the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to inform RSLAI that the mortgage
will be assumed by Ong. Thereafter, the respondent took repairs and made improvements in the properties.
Subsequently, respondent learned that the same properties were sold to a certain Viloria after March 10, 1993 and
changed the locks, rendering the keys given to her useless. Respondent proceeded to RSLAI but she was informed
that the mortgage has been fully paid and that the titles have been given to the said person. Respondent then filed a
complaint for specific performance and declaration of nullity of the second sale and damages. The petitioner
contended that respondent does not have a cause of action against him because the sale was subject to a condition
which requires the approval of RSLAI of the mortgage. Petitioner reiterated that they only entered into a contract to
sell. The RTC dismissed the case. On appeal, the CA upheld the sale to respondent and nullified the sale to Viloria.
Petitioner moved for reconsideration to the SC.

Issue:

Whether or not the transaction is a void sale or a double sale?

Held:

Petitioner sold the same properties to two buyers, first to respondent and then to Viloria on two separate occasions.
However, the second sale was not void for the sole reason that petitioner had previously sold the same properties to
respondent. On this account, the CA erred. This case involves a double sale as the disputed properties were sold
validly on two separate occasions by the same seller to the two different buyers in good faith.

Article 1544 of the Civil Code provides:

Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good faith, if it should be movable property.

This provision clearly states that the rules on double or multiple sales apply only to purchasers in good faith.
Respondent purchased the properties, knowing they were encumbered only by the mortgage to RSLAI. Petitioner
surreptitiously paid his outstanding obligation and took back her certificates of title, petitioner himself rendered
respondents obligation to assume petitioners indebtedness to RSLAI impossible to perform.

Since respondents obligation to assume petitioners outstanding balance with RSLAI became impossible without her
fault, she was released from the said obligation. Moreover, because petitioner himself willfully prevented the
condition vis--vis the payment of the remainder of the purchase price. Respondent was not aware of any interest in
or a claim on the properties other than the mortgage to RSLAI which she undertook to assume. Moreover, Viloria
bought the properties from petitioner after the latter sold them to respondent. Respondent was therefore a purchaser
in good faith. Hence, the rules on double sale are applicable.