For review on certiorari are the Decision^[1] dated November 25, 2002 of the Court of Appeals in CA-G.R. CV No. 43335, and its Resolution dated October 16, 2003, denying the motion for reconsideration. The appellate court reversed the decision dated July 27, 1993 of the Regional Trial Court of Legazpi City, Branch 6, in Civil Case No. 8248 for quieting of title, recovery of possession and damages.

The facts are as follows:

Involved in this case is a six-meter by nine-meter portion of a 1,011-square meter lot located at Bagumbayan, Daraga, Albay. The whole lot is now registered under Transfer Certificate of Title (TCT) No. T-54600 in the name of petitioners, spouses Adiel de la Cena and Caridad Arevalo de la Cena (the de la Cenas).^[2] It was previously owned by the spouses Antonio and Josefa Arevalo (the Arevalos), parents of petitioner Caridad Arevalo de la Cena.

Sometime in 1969, the respondents, spouses Jose and Herminia Briones (the Brioneses), rented from the Arevalos, a house constructed on the contested portion of the aforementioned lot. Five months later, respondents bought the house. Then on January 31, 1977, respondents also bought the contested portion of said lot from the Arevalos. They paid P1,260 as downpayment.^[3]

Unknown to the Brioneses, the whole lot had been mortgaged by the Arevalos to Albay Development Bank. On April 24, 1979, TCT No. T-54600 was issued to petitioners, who paid an unspecified amount to the Arevalos for the whole lot and P9,000 to the bank representing the balance of the loan obtained by the Arevalos.^[4]

Thereafter, petitioners de la Cenas demanded that respondents Brioneses vacate the contested portion. When respondents refused and after a barangay conciliation failed, petitioners filed before the Regional Trial Court of Legazpi City a complaint for quieting of title, recovery of possession, and damages against respondents.

The trial court decided in favor of petitioners de la Cenas, disposing of the case as follows:

WHEREFORE, premises considered, decision is hereby rendered:

1) Declaring the claim of ownership of defendants [respondents herein] upon the property in question based upon exhibit "1" as invalid and ineffec[t]ive and is prejudicial to the title of the plaintiffs [petitioners herein] and casting a cloud upon said title which cloud is hereby ordered removed and the plaintiffs' title hereby ordered quieted.

2) The plaintiffs are hereby ordered to pay the defendants P35,952.93 as reimbursement for the value of the expenses incurred by the defendants in renovating or repairs inuring to plaintiffs benefits.

3) Within thirty (30) days from the payment of the aforesaid P35,952.93 by the plaintiffs to the defendants, the defendants shall vacate the property in question leaving the house behind.

4) Costs against both plaintiffs and defendants.

SO ORDERED.^[5]

While the trial court found that there was a perfected contract of sale of the contested portion between respondents Brioneses and the Arevalos, it said that the sale did not bind petitioners de la Cenas because, (1) the acknowledgment receipt^[6] issued by the Arevalos of the downpayment of respondents was not a public document under Article 1358 (1)^[7] of the Civil Code; and (2) the sale was unregistered. The trial court further noted that petitioners de la Cenas were unaware of the previous sale of the contested portion to the Brioneses. Nonetheless, it faulted petitioners de la Cenas for not ascertaining the nature of respondents Brioneses' possession of the contested portion, since the former were aware that the Brioneses had purchased the house that stood thereon.

Upon respondents' appeal, the Court of Appeals reversed the trial court's decision. Thus,

WHEREFORE, the appeal is GRANTED. The assailed decision is REVERSED and SET ASIDE. The parties shall, at their expense share and share alike, cause a SURVEY to determine their respective portions of Lot No. 2 consistent with this decision. Thereafter, in accordance with the said survey, the Register of Deeds of Albay shall ISSUE a new transfer certificate of title to defendants-appellants [respondents herein] for the portion pertaining to them, while the remaining portion of Lot No. 2 shall continue to pertain to plaintiffs-appellees [petitioners herein] under their TCT No. T-54600.

SO ORDERED.^[8]

The appellate court similarly held that there was a perfected contract of sale of the contested portion based on the receipt acknowledging the downpayment.^[9] The appellate court found that the sale had been consummated and it took note of respondents' full payment of the purchase price of P6,000 on installment basis, as testified to by respondent Herminia Briones.^[10] The appellate court also concluded that petitioner Caridad Arevalo de la Cena had known of the sale of the house and the contested portion to respondents. Thus, the appellate court ruled that even if petitioners were first to register the sale, their registration was tainted with bad faith.

The appellate court denied petitioners' motion for reconsideration.

Hence, the instant petition raising the following issues:

1. WHETHER OR NOT THERE EXISTED A PERFECTED CONTRACT OF SALE BETWEEN PETITIONERS' PREDECESSORS-IN-INTEREST, THE AREVALO SPOUSES AND THE RESPONDENTS; AND
   
   
2. ASSUMING THAT THERE WAS SUCH A PERFECTED CONTRACT OF SALE, WHETHER OR NOT THE PETITIONERS HAD KNOWLEDGE THEREOF PRIOR TO THE REGISTRATION OF THE PROPERTY IN THEIR NAMES.^[11]
   

We will resolve the issues in the order presented. Petitioners contend that the Court of Appeals erred in ruling that there was a perfected contract of sale based on the receipt acknowledging the downpayment. Petitioners also contend that the receipt neither stated the portion sold, nor the price, nor the buyer. They aver that there had yet been no meeting of the minds upon the object of the contract and the price.

Respondents counter that a contract of sale is perfected by mere agreement of the parties; even without the receipt acknowledging the downpayment, there could still be a perfected contract of sale.

At this juncture, we note that petitioners did not appeal the trial court's finding that there was a perfected contract of sale of the contested portion to respondents. By not appealing, petitioners are deemed to have accepted the trial court's factual findings and conclusions of law on this matter.^[12]

In addition, a contract of sale is perfected by mere consent, upon a meeting of the minds on the object of the contract and the price.^[13] When the Arevalos accepted the P1,260 as downpayment, they had agreed to the sale of the contested portion to respondents. In fact, the contract of sale had already been consummated. Hence, its enforcement cannot be barred by the Statute of Frauds, which applies only to an executory agreement.^[14]

We note that the Arevalos delivered the contested portion to respondents; the respondents had paid the P1,260 as downpayment; the downpayment was received; the respondents had paid on installment the balance of the full purchase price of P6,000;^[15] some installments were paid weekly as demanded by the Arevalos who did not issue receipts;^[16] P400 owed by the Arevalos to respondent Herminia Briones's mother, was also used to offset the price;^[17] respondents paid the last installment in 1980;^[18] and respondents continued their actual possession. Moreover, ownership of the thing sold was transferred to the buyer upon actual or constructive delivery.^[19]

Petitioners also contend that the Court of Appeals erred in concluding that they knew of the sale between the Arevalos and respondents. They insist that they had no knowledge of the sale of the contested portion to respondents. Hence, they claim they were buyers in good faith who had also in good faith first registered the sale.

In a double sale of immovable property, as in this case, ownership belongs to the person who in good faith first recorded it in the registry of property.^[20] The requirement is two-fold: acquisition in good faith and registration in good faith. But here, petitioners failed to show that they were in good faith because as second buyers they were not ignorant of the first sale to respondents from the time petitioners acquired the whole lot until the title was transferred to them.^[21]

The records reveal that petitioner Caridad Arevalo de la Cena had testified on direct examination that at the time they acquired the whole lot from her parents, respondents were already staying on the contested portion, thus:

q Now, at the time you acquired the property way back in 1979 were the [respondents] already staying in the property in question?

a Yes, sir, they were already staying in the property.^[22](Emphasis supplied.)

Further, Caridad knew of respondents' claim that they bought the house from the former's parents. She also knew that respondents renovated the house after they bought it, as revealed by the testimony of Caridad on additional direct examination:

q [Do] you have any knowledge when the [respondents] started renovating the house?

a It was long time but the renovation was gradual. They have started the renovation when they allegedly purchased it.^[23] (Emphasis supplied.)

The records also reveal that Caridad testified on cross-examination that she talked to respondents only after herein petitioners had bought the whole lot, to wit:

q I am asking you whether you talked to [respondents] when you bought the property?

a I talked to them after we purchased the property.^[24] (Emphasis supplied.)

Thus, Caridad's testimony belie petitioners' contention that their "knowledge of respondents' claims over the [contested] portion arose only after, not before, the lot had been titled or registered in their name" or "only after the demand to vacate was received by"^[25] respondents. On direct examination, Caridad testified:

q Did [respondents] comply with your demands?

a They did not.

q Why? Do you know the reason why they refused?

a I have been hearing stories because they have been telling people that they have already purchased the property.

q When was that[?] When did you learn of such allegation of the [respondents]?

a Even before we asked them to vacate we have been hearing stories already.^[26] (Emphasis supplied.)

Patently, petitioners made no efforts to clarify the true nature of respondents' possession, despite knowing of the latter's claim of ownership and actual, visible and public possession of the contested portion. One who buys real property in actual possession of another should at least inquire as to the right of the ones in possession. Absent such inquiry, petitioners cannot be regarded as bona fide buyers as against respondents, the ones in possession of the contested portion.^[27] The rule is that if a buyer in a double sale registers the sale after he has acquired knowledge that there was a previous sale of the same property to a third party or that another person claims said property in a previous sale, the registration will constitute a registration in bad faith and will not confer on him any right.^[28]

WHEREFORE, the petition is DENIED for lack of merit. Petitioners are ORDERED to reconvey to respondents the six-meter by nine-meter contested portion of the lot covered by Transfer Certificate of Title No. T-54600. Thereafter, the Register of Deeds of Albay shall issue the corresponding transfer certificate of title of the reconveyed portion. All expenses for the purpose shall be shared equally by the parties. The remaining area covered by TCT No. T-54600 shall remain with petitioners.

Costs against petitioners.

SO ORDERED.

Carpio, Carpio Morales, Tinga, and Velasco, Jr., JJ., concur.

---

^[1] Rollo, pp. 36-49.

^[2] Records, pp. 79-79-A.

^[3] Id. at 74-75.

^[4] TSN, Caridad Arevalo de la Cena (on cross-examination), May 5, 1992, pp. 28-29.

^[5] Rollo, p. 58.

^[6] Record, p. 115. The acknowledgment receipt marked as Exhibit "1" reads:

x x x x

THIS IS TO CERTIFY that WE, MR. ANTONIO AREVALO AND (MRS.) JOSEFA L. AREVALO, husband and wife, both of legal age, both residents of Daraga, Albay, has received the amount of ONE THOUSAND AND TWO HUNDRED AND SIXTY PESOS ONLY (P1,260.00) as [downpayment] for the sale of a portion of land located between P. Burgos Street and Lotivio Street and at Jones Street, Daraga, Albay; between the lots of Mr. and Mrs. Crispin Amaranto and Mr. and Mrs. Anecito Monreal.

It is further certified that this Certification is valid and binding as receipt of said payment and in the final preparation of the Contract of Sale of said portion of land.

Given this 31^st of January, 1977.


x x x x

^[7] Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405;

x x x x

^[8] Rollo, p. 49.

^[9] Id. at 39-40; Supra note 6.

^[10] Id.; TSN, respondent Herminia Briones (on examination by the court), October 27, 1992, p. 21.

^[11] Id. at 89.

^[12] Sps. Carrion v. CA, 329 Phil. 698, 703 (1996).

^[13] Civil Code, Article 1475; Alcantara-Daus v. De Leon, G.R. No. 149750, June 16, 2003, 404 SCRA 74, 79.

^[14] Ainza v. Padua, G.R. No. 165420, June 30, 2005, 462 SCRA 614, 619.

^[15] Supra note 10.

^[16] TSN, respondent Herminia Briones (on redirect examination), October 27, 1992, pp. 12-13.

^[17] Id. at 18 and 21.

^[18] Id. at 21.

^[19] civil code, Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.

^[20] Id., Art. 1544.

^[21] Gabriel v. Mabanta, G.R. No. 142403, March 26, 2003, 399 SCRA 573, 580-581.

^[22] TSN, May 5, 1992, p. 10.

^[23] Id. at 23.

^[24] Id. at 32.

^[25] Rollo, pp. 99-100.

^[26] Supra note 22, at 15.

^[27] Gonzales Vda. de Toledo v. Toledo, G.R. No. 149465, December 8, 2003, 417 SCRA 260, 267-268.

^[28] Gabriel v. Mabanta, supra note 21, at 583.