Ricardo Cheng v. Ramon B. Genato

Summary

This case involves competing claims over land purchase rights between two sets of buyers. Genato first contracted to sell land to Da Jose spouses in September 1989, with the contract properly annotated on the titles. While Da Jose spouses were still within their extended verification period, Genato attempted to rescind their contract and made a new agreement with Cheng, who had knowledge of the existing contract. The Supreme Court affirmed that the first contract was not validly rescinded since no default occurred, and applied the principle of 'first in time, stronger in right.' Cheng was found to have acted in bad faith due to his knowledge of the prior annotated contract, which defeated his claim even though he might have registered first under Article 1544 of the Civil Code. The Court emphasized that in contracts to sell, payment serves as a suspensive condition, and there can be no rescission of obligations that have not yet become binding due to non-fulfillment of conditions.