A person granted his rights in the land as an irrevocable gift and even entered into an agreement and an irrevocable power of attorney for the benefit of the beneficiaries. However, the beneficiaries did not record a cautionary note and after about two years the same person sold the same rights to a third party against consideration and this transaction was also not recorded.
The Court held that the sale transaction prevails over the gift transaction. When a person undertakes to make a real estate transaction but before it was recorded, he committed to another person, the first transaction is preferable unless the second is made in good faith, in consideration and ended in recording. However, when one of the transactions is a sale transaction and the other is a gift transaction, the power of the buyer's interest is greater than that of the recipient of the gift, as the purchaser paid for the right he purchased. Thus, when the first transaction is a gift transaction, the sale transaction should be preferred to the extent that it was made in good faith and against consideration, even when the sale transaction did not end in recording. Here, both the gift transaction and the sale transaction did not end in recording, but because the purchaser paid the consideration, his interest is preferable to that of the beneficiaries of the gift transaction and therefore the sale transaction supersedes the gift transaction.