An ordinary donee of a land who causes the donation to be recorded in the Mortgage Law Register in bad faith or with notice of the rights of an adverse claimant requires no additional rights against such claimant through the inscription in the registry.

FACTS:

Eugenio and Felix Cagaoan are sons of Gregorio Cagaoan. In 1915, Gregorio executed a deed of gift of 4 parcels of land in Pangasinan in favor of Felix (without delivery of actual possession) and in 1918 in favor of Eugenio (who immediately took possession) over a parcel of land, which is the same as parcel no. 4 in the deed of gift in favor of Felix.

Immediately, Eugenio took possession of the land donated, but failed to have the donation recorded with the RD. However, Felix’s deed was registered in 1919 and took possession of Parcel Nos. 1, 2 and 3 since 1915. He has never had possession of Parcel No. 4.

After Eugenio had taken possession, Felix had caused his title to be recorded in the Mortgage Law Register, having full notice of the donation made to Eugenio.

Eugenio instituted an action to declare him the owner of the parcel of land donated to him and to set aside the donation in favor of Felix on the ground of fraud. RTC ruled in favor of Felix ordered Eugenio to surrender possession of the land to him.

ISSUE: Who owns the parcel of land in dispute?

HELD: EUGENIO.

It clearly appears the Felix had full notice of the Eugenio’s claim to the land before he had his deed of gift recorded with the RD. Thus, he may not be considered a third person within the meaning of Art. 34 of the Mortgage Law, and his position was in no wise improved by the inscription of his document. Eugenio, having first taken possession in good faith, must therefore be considered to have a better right to the land in question

CAGAOAN VS. CAGAOAN- Donation in Good Faith