longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.

Nor
[10] SABITSANA V. MUERTEGUI
can petitioners' registration of their purchase have any effect on Juanito's rights. The mere
registration of a sale in one's favor does not give him any right over the land if the vendor
GR No. 181359 | August 5, 2013 | Art. 1544 | Hazel D.
was no longer the owner of the land, having previously sold the same to another even if the
Petitioner: SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO earlier sale was unrecorded.
M. SABITSANA
Respondents: JUANITO F. MUERTEGUI, DOMINGO A. MUERTEGUI, JR.,

Recit-Ready: Garcia executed an unnotarized Deed of Sale in favor of Juanito Muertegui

over a parcel of unregistered land. Juanito’s father Domingo and brother Domingo Jr. took FACTS:
actual possession and planted thereon. They also paid real property taxes for years 1980- 1. On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized Deed of
1998. Garcia sold the lot to Muertegui family’s lawyer, Atty. Sabitsana, through a Sale in favor of respondent Juanito Muertegui (Juanito) over a 7,500-square meter
notarized deed of absolute sale. The sale was registered with the RD. Domingo Sr. passed parcel of unregistered land (the lot) located in Dalutan Island, Biliran, Leyte del
away, his hers applied for registration under Public Land Act or CA No.141. Atty. Norte covered by Tax Declaration (TD) No. 1996 issued in 1985 in Garcia's name.
Sabitsana wrote a letter to DENR CENRO opposing the application and claiming that he 2. Juanito's father Domingo Muertegui, Sr. (Domingo Sr.) and brother Domingo Jr.
was the true owner of the lot. Juanito filed a complaint for quieting of title against Atty. took actual possession of the lot and planted thereon coconut and ipil-ipil trees. They
Sabitsana and wife, claiming that Atty. Sabitsana and wife bought the lot in bad faith. also paid the real property taxes on the lot for the years 1980 up to 1998.
Issue (main) is w/n Art. 1544 applies considering that the land is unregistered. -NO 3. On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer, petitioner
Atty. Clemencio C. Sabitsana, Jr. (Atty. Sabitsana), through a notarized deed of
Doctrine: absolute sale. The sale was registered with the Register of Deeds on February 6,
The provision of Art. 1544 does not apply to sales involving unregistered land. The 1992. TD No. 1996 was cancelled and a new one, TD No. 5327, was issued in
issue of the buyer's good or bad faith is relevant only where the subject of the sale is Atty.Sabitsana's name. Although Domingo Jr. and Sr. paid the real estate taxes,
registered land, and the purchaser is buying the same from the registered owner whose title Atty. Sabitsana also paid real property taxes in 1992, 1993, and 1999. In 1996, he
to the land is clean. In such case, the purchaser who relies on the clean title of the introduced concrete improvements on the property, which shortly thereafter were
registered owner is protected if he is a purchaser in good faith for value. destroyed by a typhoon.
4. When Domingo Sr. passed away, his heirs applied for registration and coverage of
What applies in this case (for unregistered lands) is Act No. 3344, which provides for the lot under the Public Land Act or Commonwealth Act No. 141. Atty. Sabitsana,
the system of recording of transactions over unregistered real estate. Act No. 3344 in a letter addressed to the Department of Environment and Natural Resources'
expressly declares that any registration made shall be without prejudice to a third party CENRO/PENRO office opposed the application, claiming that he was the true owner
with a better right. The question to be resolved therefore is: who between petitioners and of the lot. He asked that the application for registration be held in abeyance until the
respondent has a better right to the disputed lot? issue of conflicting ownership has been resolved.
5. Juanito, through his attorney-in-fact Domingo Jr., filed Civil Case for quieting of
The Court ruled that the respondent has a better right to the lot. The sale to respondent title and preliminary injunction, against Atty. Sabitsana and his wife, Rosario,
Juanito was executed on September 2, 1981 via an unnotarized deed of sale, while the sale claiming that they bought the lot in bad faith and are exercising acts of possession
to petitioners was made via a notarized document only on October 17, 1991, or ten years and ownership over the same, which acts thus constitute a cloud over his title.
thereafter. Thus, Juanito who was the first buyer has a better right to the lot, while the 6. The Complaint prayed that the Sabitsana Deed of Sale, the letter, and TD No. 5327
subsequent sale to petitioners is null and void, because when it was made, the seller Garcia be declared null and void and of no effect; that petitioners be ordered to respect and
was no longer the owner of the lot. recognize Juanito's title over the lot; and that moral and exemplary damages,
The fact that the sale to Juanito was not notarized does not alter anything, since the sale attorney's fees, and litigation expenses be awarded to him.
between him and Garcia remains valid nonetheless. Notarization, or the requirement of a 7. In their Answer with Counterclaim, petitioners asserted mainly that the sale to
public document under the Civil Code, is only for convenience, and not for validity or Juanito is null and void absent the marital consent of Garcia's wife, Soledad Corto
enforceability. And because it remained valid as between Juanito and Garcia, the latter no (Soledad); that they acquired the property in good faith and for value; and that the
 Complaint is barred by prescription and laches. They likewise insisted that the registered land, and the purchaser is buying the same from the registered owner whose
Regional Trial Court (RTC) of Naval, Biliran did not have jurisdiction over the case, title to the land is clean. In such case, the purchaser who relies on the clean title of the
which involved title to or interest in a parcel of land the assessed value of which is registered owner is protected if he is a purchaser in good faith for value.
merely P1,230.00.
Act No. 3344 applies to sale of 
unregistered lands.
RTC: Ruled against Atty. Sabistana and held that petitioners are not buyers in good faith. What applies in this case is Act No. 3344, as amended, which provides for the system of
Applying Article 1544 of the Civil Code, the trial court declared that even though recording of transactions over unregistered real estate. Act No. 3344 expressly declares
petitioners were first to register their sale, the same was not done in good faith. And that any registration made shall be without prejudice to a third party with a better right.
because petitioners' registration was not in good faith, preference should be given to the The question to be resolved therefore is: who between petitioners and respondent has a
sale in favor of Juanito, as he was the first to take possession of the lot in good faith, and better right to the disputed lot?
the sale to petitioners must be declared null and void for it casts a cloud upon
the Muertegui title. MR was denied. Respondent has a better right to the lot.
CA: Denied the appeal and affirmed the trial court's Decision in toto. The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized
Hence, this petition. deed of sale, while the sale to petitioners was made via a notarized document only on
October 17, 1991, or ten years thereafter. Thus, Juanito who was the first buyer has a
ISSUES: better right to the lot, while the subsequent sale to petitioners is null and void, because
1. W/N the RTC has jurisdiction over the case in view of the fact that the assessed when it was made, the seller Garcia was no longer the owner of the lot. Nemo dat quod
value of the subject land was only P1,230.00 (and stated market value of only non habet.
P3,450.00). -YES
2. W/N ART. 1544 of the Civil Code applies instead of the property registration The fact that the sale to Juanito was not notarized does not alter anything, since the sale
decree (p.d. no. 1529) considering that the subject land was unregistered. -NO between him and Garcia remains valid nonetheless. Notarization, or the requirement of a
3. W/N the complaint was already barred by laches and the statute of limitations. -NO public document under the Civil Code, is only for convenience, and not for validity or
4. W/N attorney's fees and litigation expenses must be awarded to the respondent. - enforceability. And because it remained valid as between Juanito and Garcia, the latter
YES no longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.

RATIO: Nor can petitioners' registration of their purchase have any effect on Juanito's rights. The
mere registration of a sale in one's favor does not give him any right over the land if the
1. The Regional Trial Court has 
jurisdiction over the suit for
 quieting of title. vendor was no longer the owner of the land, having previously sold the same to another
It is clear under the Rules that an action for quieting of title may be instituted in the even if the earlier sale was unrecorded. Neither could it validate the purchase thereof by
RTCs, regardless of the assessed value of the real property in dispute. Under Rule 63 of petitioners, which is null and void. Registration does not vest title; it is merely the
the Rules of Court, an action to quiet title to real property or remove clouds therefrom evidence of such title. Our land registration laws do not give the holder any better title
may be brought in the appropriate RTC. than what he actually has.

It must be remembered that the suit for quieting of title was prompted by petitioners' Under Act No. 3344, registration of instruments affecting unregistered lands is 'without
letter-opposition to respondent's application for registration. Thus, in order to prevent a prejudice to a third party with a better right.' The aforequoted phrase has been held by
cloud from being cast upon his application for a title, respondent filed Civil Case to this Court to mean that the mere registration of a sale in one's favor does not give him
obtain a declaration of his rights. In this sense, the action is one for declaratory relief, any right over the land if the vendor was not anymore the owner of the land having
which properly falls within the jurisdiction of the RTC pursuant to Rule 63 of the Rules. previously sold the same to somebody else even if the earlier sale was unrecorded.

2. Article 1544 of the Civil Code does not
 apply to sales involving unregistered
 3. Petitioners' defense of prescription, laches and estoppel are unavailing
land. Their claim is based on a null and void deed of sale. The fact that the Muerteguis failed to
The provision does not apply to sales involving unregistered land. Suffice it to state that interpose any objection to the sale in petitioners' favor does not change anything, nor
the issue of the buyer's good or bad faith is relevant only where the subject of the sale is could it give rise to a right in their favor; their purchase remains void and ineffective as
far as the Muerteguis are concerned.

4. The award of attorney's fees and
litigation expenses is proper because
 of

petitioners' bad faith.
Petitioners' actual and prior knowledge of the first sale to Juanito makes them purchasers
in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as
counsel to the Muertegui family. Instead of advising the Muerteguis to register their
purchase as soon as possible to forestall any legal complications that accompany
unregistered sales of real property, he did exactly the opposite: taking advantage of the
situation and the information he gathered from his inquiries and investigation, he bought
the very same lot and immediately caused the registration thereof ahead of his clients,
thinking that his purchase and prior registration would prevail. The Court cannot tolerate
this mercenary attitude. Instead of protecting his client's interest,
Atty. Sabitsana practically preyed on him.

From the foregoing, it can be seen that petitioners are guilty of bad faith in pursuing the
sale of the lot despite being apprised of the prior sale in respondent's favor. Moreover,
petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the
Muerteguis, and by his acts, jeopardized their interests instead of protecting them. This
provides further justification for the award of attorney's fees, litigation expenses and costs
in favor of the respondent.