Facts:

The case involves Nicanora Bernas, Eligia Botor, Juana Botor, and Primo Botor as plaintiffs and appellees against Arcadio M. Bolo as the defendant and appellant, with Maria M. Paz et al. as third-party appellees. The events leading to this case began with the transfer of a parcel of land by its former owner, Lucio Botor, who is now deceased. On December 19, 1929, Lucio Botor sold the land to Arcadio M. Bolo through a private document of sale. However, ten years later, on April 29, 1939, Lucio Botor executed a deed of cession in favor of Simeon B. Paz, which was ratified before a notary public and subsequently registered in the Register of Deeds of Camarines Sur. The lower court rendered a decision on July 14, 1943, in favor of Simeon B. Paz, ruling that the deed of cession was valid due to its registration, while the earlier private sale to Arcadio M. Bolo could not be registered as it was not executed in a public document. Arcadio M. Bolo appealed this decision, arguing that...

Facts:

1. Ownership and Transfers of the Land:

• The land in question was originally owned by Lucio Botor, now deceased.
• Lucio Botor transferred the land twice:
  • First, to Arcadio M. Bolo on December 19, 1929, through a private document of sale.
  • Second, to Simeon B. Paz on April 29, 1939, through a deed of cession ratified before a notary public and registered in the Register of Deeds of Camarines Sur.

2. Lower Court Decision:

• On July 14, 1943, the lower court ruled in favor of Simeon B. Paz, as the deed of cession was registered in the Register of Deeds, while the 1929 deed of sale to Arcadio M. Bolo was not registered and could not be registered since it was a private document.

3. Allegations of Bad Faith:

• Arcadio M. Bolo, the appellant, argued that Simeon B. Paz acted in bad faith because Paz knew that the land had already been sold to Bolo in 1929.
• Evidence presented included a cross-complaint filed by Simeon B. Paz in a related case (Civil Case No. 6693), where Paz acknowledged that Lucio Botor had transferred the land to Arcadio M. Bolo in 1929 as payment for a debt.

4. Supporting Evidence:

• Simeon B. Paz, testifying as his own witness, confirmed the allegations in the cross-complaint.
• Exhibits N and O (letters from Simeon B. Paz to Arcadio M. Bolo) further supported the claim that Paz was aware of the prior sale to Bolo.

Issue:

1. Whether Simeon B. Paz acted in good faith when he acquired the land through the deed of cession on April 29, 1939, despite knowing of the prior sale to Arcadio M. Bolo in 1929.
2. Whether the registration of the deed of cession in favor of Simeon B. Paz gives him superior rights over Arcadio M. Bolo, who did not register the 1929 deed of sale.

Ruling:

The Supreme Court reversed the lower court's decision and ruled in favor of Arcadio M. Bolo. The Court held that Simeon B. Paz did not act in good faith when he acquired the land, as he was aware of the prior sale to Bolo. Consequently, the deed of cession in favor of Paz was null and void. Arcadio M. Bolo was declared the rightful owner of the land.

Ratio:

1. Good Faith as a Fundamental Requirement:

   • Article 1473 of the Civil Code establishes that the preferential right to ownership in cases of double sale depends on good faith.
   • Simeon B. Paz, knowing that the land had already been sold to Arcadio M. Bolo, acted in bad faith when he accepted the deed of cession from Lucio Botor.

2. Registration Does Not Cure Bad Faith:

   • While registration of a deed of sale is crucial for real property transactions, it does not confer rights if the purchaser acted in bad faith.
   • Since Simeon B. Paz was aware of the prior sale to Bolo, his registration of the deed of cession did not give him superior rights.

3. Priority of Possession and Good Faith:

   • The Court emphasized that the fundamental premise of Article 1473 is good faith. Without good faith, registration or possession cannot establish ownership.
   • Arcadio M. Bolo, having taken possession of the land in good faith under the 1929 deed of sale, had a superior claim over Simeon B. Paz.