Consolidated Rural Bank (Cagayan Valley) v. The Honorable Court of Appeals

Summary

This case involved a complex property ownership dispute over Lot No. 7036-A-7 in San Mateo, Isabela. The Madrid brothers, original owners, sold the property through Rizal Madrid to Gamiao and Dayag in 1957, who subsequently sold it to Teodoro dela Cruz in 1964. However, in 1976, the Madrid brothers sold the same property to Pacifico Marquez, who registered the sale and mortgaged it to Consolidated Rural Bank. When the bank foreclosed, the heirs of dela Cruz filed for reconveyance. The Supreme Court ruled in favor of the heirs, holding that Article 1544 on double sale was inapplicable because there were different vendors involved. Applying the principle that one cannot give what one does not have, the Court found that the Madrid brothers' 1976 sale was invalid since they had already disposed of the property in 1957. The decision emphasizes the importance of prior possession and the principle of good faith in property transactions, while rejecting the bank's claim based on its failure to exercise due diligence.