CONCEPT OF DELIVERY OF A THING
#18
DAUS vs Sps De Leon GR 149750
FACTS: Respondent Hermoso de Leon inherited from his father Marcelino de
Leon the subject parcel of land by virtue of a Deed of Extra-judicial Partition.
Sometime in the early 1960s, respondents engaged the services of a certain
Atty. Florencio Juan to take care of the documents of the properties of his
parents. Atty. Juan let them sign voluminous documents. After the death of Atty.
Juan, some documents surfaced and most revealed that their properties had
been conveyed by sale or quitclaim to respondent Hermoso's brothers and
sisters, and to Atty. Juan and his sisters, when in truth and in fact, no such
conveyances were ever intended by them. Respondent's signature in the Deed
of Extra-judicial Partition with Quitclaim made in favor of Rodolfo de Leon was
forged and later discovered that the land in question was sold by Rodolfo to
petitioner Aurora Alcantara. The trial court ruled in favor of petitioner, holding
that respondent's claim was barred by laches, because more than 18 years had
passed since the land was sold. In reversing the RTC, the Court of Appeals held
that laches did not bar respondents from pursuing their claim. Hence, the
present petition. Petitioner argues that, having been perfected, the Contract of
Sale executed on December 6, 1975 was thus binding upon the parties thereto.
ISSUE: Whether or not the Perfected Sale brings about delivery (and ownership)
to Petitioner
HELD: A contract of sale is consensual. It is perfected by mere consent, upon a
meeting of the minds on the offer and the acceptance thereof based on subject
matter, price and terms of payment. At this stage, the seller's ownership of the
thing sold is not an element in the perfection of the contract of sale.
The contract, however, creates an obligation on the part of the seller to transfer
ownership and to deliver the subject matter of the contract. It is during the
delivery that the law requires the seller to have the right to transfer ownership
of the thing sold. In general, a perfected contract of sale cannot be challenged
on the ground of the seller's non-ownership of the thing sold at the time of the
perfection of the contract.
Further, even after the contract of sale has been perfected between the parties,
its consummation by delivery is yet another matter. It is through tradition or
delivery that the buyer acquires the real right of ownership over the thing sold.
Undisputed is the fact that at the time of the sale, Rodolfo de Leon was not the
owner of the land he delivered to petitioner. Thus, the consummation of the
contract and the consequent transfer of ownership would depend on whether
he subsequently acquired ownership of the land in accordance with Article 1434
of the Civil Code. Therefore, we need to resolve the issue of the authenticity and
the due execution of the Extrajudicial Partition and Quitclaim in his favor.
Without the corroborative testimony of the attesting witnesses, the lone
account of the notary regarding the due execution of the Deed is insufficient to
sustain the authenticity of this document.
#19
SAMPAGUITA PICTURES, INC vs. JALWINDOR MANUFACTURERS, INC.
Facts: Sampaguita Pictures (Sampaguita) is the owner of the Sampaguita
Pictures Building located in Quezon City. The roofdeck of the building and all
existing improvements thereon were leased by Sampaguita to Capitol; Inc.
(Capitol for short), and it was agreed, among other things, that the premises
shall be used by said club for social purposes exclusively for its members and
guests; that all permanent improvements made by the lessee on the leased
premises shall belong to the lessor without any obligation on the part of the
lessor to reimburse the lessee for the sum spent for said improvements; that the
improvements made by lessee have been considered as part of the
consideration of the monthly rental and said improvements belong to the lessor;
that any remodelling, alterations and/or addition to the premises shall be at the
expense of the lessee and such improvements belong to the lessor, without any
obligation to reimburse the lessee of any sum spent for said improvements.
Capitol purchased on credit from Jalwindor Manufacturers Inc (Jalwindor) glass
and wooden jalousies which were delivered and installed in the leased premises
by Jalwindor, replacing the existing windows. On June 1, 1964, Jalwindor filed
with the CFI of Rizal, Quezon City, an action for collection of a sum of money
with a petition for preliminary attachment against Capitol for its failure to pay its
purchases. The parties submitted to the trial court a Compromise Agreement
wherein Capitol acknowledged its indebtedness to Jalwindor and pending
liquidation of the said obligation, all the materials purchased by Capitol will be
considered as security for such undertaking. Subsequently, Capitol was not able
to pay rentals, water, electric, and telephone service to Sampaguita. Likewise,
Capitol failed to comply with the terms of the Compromise Agreement. On July
1965, Sheriff of Quezon City made levy on the glass and wooden jalousies in
question. Sampaguita filed a third-party claim alleging that it is the owner of said
materials and not Capitol. Jalwindor, however, filed an indemnity bond in favor
of the Sheriff and the items were sold at public auction on August 30, 1965 with
Jalwindor as the highest bidder. Sampaguita filed with CFI of Rizal, an action to
nullify the Sheriff;s Sale and for the issuance of a writ of preliminary injunction
against Jalwindor from detaching the glass and wooden jalousies.
Issue: Whether or not Capitol is deemed as the owner of the glass and wooden
jalousies
Held: YES. When the glass and wooden jalousies in question were delivered and
installed in the leased premises, Capitol became the owner thereof. Ownership
is not transferred by perfection of the contract but by delivery, either actual or
constructive. This is true even if the purchase has been made on credit, as in the
case at bar. Payment of the purchase price is not essential to the transfer of
ownership as long as the property sold has been delivered. Ownership is
acquired from the moment the thing sold was delivered to vendee, as when it is
placed in his control and possession. (Arts. 1477, 1496 and 1497, Civil Code of
the Phil.) Capitol entered into a lease contract with Sampaguita in 1964, and the
latter became the owner of the items in question by virtue of the agreement in
said contract "that all permanent improvements made by lessee shall
belong to the lessor and that said improvements have been considered as part
of the monthly rentals." When levy or said items was made on July 31,
1965, Capitol, the judgment debtor, was no longer the owner thereof.
#20
NORKIS DISTRIBUTORS, INC. v. CA ; ALBERTO NEPALES
Facts: Norkis Distributors, Inc. is the distributor of Yamaha motorcycles in
Negros Occidental. Avelino Labajo is the Branch Manager of its Bacolod office.
On September 20, 1979, Alberto Nepales bought from the Norkis- Bacolod
branch a brand new Yamaha Wonderbike motorcycle, then displayed in the
Norkis showroom. The price of P7,500.00 was payable by means of a Letter of
Guaranty from DBP-Kabankalan Branch, which Labajo agreed to accept. Credit
was then extended to Nepales for the price of the motorcycle payable by DBP
upon release of his motorcycle loan. As security for the loan, Nepales would
execute a chattel mortgage on the motorcycle in favor of DBP. Labajo issued a
Sales Invoice showing that the contract of sale of the motorcycle had been
perfected. Nepales signed the sales invoice to signify his conformity with the
terms of the sale. In the meantime, however, the motorcycle remained in
Norkis' possession. The motorcycle was thereafter registered in the Land
Transportation Commission in the name of Alberto Nepales. A registration
certificate was subsequently issued by the Land Transportation Commission
which registration fees were paid by him, as evidenced by an official receipt. The
motorcycle subsequently met an accident. An investigation conducted by the
DBP revealed that the unit was being driven by a certain Zacarias Payba at the
time. The unit was a total wreck, but it was returned and stored inside
Norkis' warehouse. On March 20, 1980, DBP released the proceeds of
Nepales' motorcycle loan to Norkis in the total sum of P7,500. As the price
of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the
difference of P328 and demanded the delivery of the motorcycle. When Norkis
could not deliver, he filed an action for specific performance with damages
against Norkis in the RTC. He alleged that Norkis failed to deliver the motorcycle
which he purchased, thereby causing him damages. Norkis answered that the
motorcycle had already been delivered to private respondent before the
accident, hence, the risk of loss or damage had to be borne by him as owner of
the unit. RTC ruled in favor of Nepales, ordering Norkis to deliver a new
motorcycle of the same, brand, kind, and quality. The Court of appeals affirmed
the ruling of the RTC.
Issue: Whether or not there had already been a transfer of ownership of the
motorcycle to Nepales at the time it was destroyed.
Held: NO. The issuance of a sales invoice does not prove transfer of ownership
of the thing sold to the buyer. An invoice is nothing more than a detailed
statement of the nature, quantity and cost of the thing sold and has been
considered not a bill of sale. In all forms of delivery, it is necessary that the act of
delivery whether constructive or actual, be coupled with the intention of
delivering the thing. The act, without the intention, is insufficient. When the
motorcycle was registered by Norkis in the name of Nepales, Norkis did not
intend yet to transfer the title or ownership to him, but only to facilitate the
execution of a chattel mortgage in favor of the DBP for the release of the
buyer's motorcycle loan. The Letter of Guarantee issued by the DBP,
reveals that the execution in its favor of a chattel mortgage over the purchased
vehicle is a pre-requisite for the approval of the buyer's loan. If Norkis
would not accede to that arrangement, DBP would not approve private
respondent's loan application and, consequently, there would be no sale.
The critical factor in the different modes of effecting delivery, which gives legal
effect to the act, is the actual intention of the vendor to deliver, and its
acceptance by the vendee. Without that intention, there is no tradition. The
Code imposes upon the vendor the obligation to deliver the thing sold. The thing
is considered to be delivered when it is placed in the hands and possession of
the vendee. (Civil Code, Art. 1462). It is true that the same article declares that
the execution of a public instrument is equivalent to the delivery of the thing
which is the object of the contract, but, in order that this symbolic delivery may
produce the effect of tradition, it is necessary that the vendor shall have had
such control over the thing sold that, at the moment of the sale, its material
delivery could have been made. It is not enough to confer upon the purchaser
the ownership and the right of possession. The thing sold must be placed in his
control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor,
symbolic delivery through the execution of a public instrument is sufficient. But
if notwithstanding the execution of the instrument, the purchaser cannot have
the enjoyment and material tenancy of the thing and make use of it himself or
through another in his name, because such tenancy and enjoyment are opposed
by the interposition of another will, then fiction yields to reality-- the delivery
has riot been effects . Article 1496 of the Civil Code which provides that in the
absence of an express assumption of risk by the buyer, the things sold remain at
seller's risk until the ownership thereof is transferred to the buyer, is
applicable to this case, for there was neither an actual nor constructive delivery
of the thing sold, hence, the risk of loss should be borne by the seller, Norkis,
which was still the owner and possessor of the motorcycle when it was wrecked.
This is in accordance with the well-known doctrine of res perit domino.
WAYS OF COLLECTING DELIVERY: CONSTRUCTIVE OR LEGAL *PUBLIC
INSTRUMENT
Addison vs. Felix
Facts: Four parcels of land as describe in a public instrument was subject of a
contract of sale between the petitioner and the defendant. Defendant paid 3000
upon the execution of deeds and promised to pay 2000 on July 15, 1914 and
another 5000 (30) days after the issuance of her certificate of title. The contract
was stipulated as follows:
That the defendant is to pay P10 within ten years for trees in bearing and P5 for
trees not in bearing with the condition that it will not exceed the amount of
P85,000.
That the purchaser shall deliver 25% of the value of the products "from the
moment she takes possession of them until the Torrens certificate of title be
issued in her favor."
Further stipulated was that "within one year from the date of the certificate of
title in favor of Marciana Felix, this latter may rescind the present contract of
purchase and sale, in which case Marciana Felix shall be obliged to return to me,
A. A. Addison, the net value of all the products of the four parcels sold, and I
shall obliged to return to her, Marciana Felix, all the sums that she may have
paid me, together with interest at the rate of 10 per cent per annum."
In 1915, Addison filed a suit to compel the defendant to pay him the P2000 with
interest as in the accordance of the terms of the contract. However, in a form of
special defense, Felix alleges that the petitioner failed to do his obligation of the
contract by failing to deliver the parcels of land. That out of the 4 parcels of land
only 2 of it where delivered and that 2/3 of the other half were in the possession
of a third person. She then filed for a declaration of the rescission of the
contract, whereby she prayed that petitioner return her P3000 plus interest and
indemnity Trial Court ruled in favor of defendants, on the grounds that the
plaintiff failed to deliver the lands and in accordance to their stipulation that ". .
. within one year from the date of the certificate of title in favor of Marciana
Felix, this latter may rescind the present contract of purchase and sale . . . ."
Appellate Court disagreed, alleging that the right to elect to rescind the contract
was subject to a condition, namely, the issuance of the title, which in this case
has not yet been fulfilled.
Issue: Whether or not delivery of a Public Instrument is equivalent to the
delivery of the subject matter of the sale.
Held: No. The Code imposes upon the vendor the obligation to deliver the thing
sold. The thing is considered to be delivered when it is placed "in the hands and
possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article
declares that the execution of a public instruments is equivalent to the delivery
of the thing which is the object of the contract, but, in order that this symbolic
delivery may produce the effect of tradition, it is necessary that the vendor shall
have had such control over the thing sold that, at the moment of the sale, its
material delivery could have been made. It is not enough to confer upon the
purchaser the ownership and the right of possession. The thing sold must be
placed in his control. When there is no impediment whatever to prevent the
thing sold passing into the tenancy of the purchaser by the sole will of the
vendor, symbolic delivery through the execution of a public instrument is
sufficient. But if, notwithstanding the execution of the instrument, the
purchaser cannot have the enjoyment and material tenancy of the thing and
make use of it himself or through another in his name, because such tenancy
and enjoyment are opposed by the interposition of another will, then fiction
yields to reality — the delivery has not been effected.
The execution of a public instrument is sufficient for the purposes of the
abandonment made by the vendor; but it is not always sufficient to permit of
the apprehension of the thing by the purchaser.
It is evident, then, in the case at bar, that the mere execution of the instrument
was not a fulfillment of the vendors' obligation to deliver the thing sold, and that
from such non-fulfillment arises the purchaser's right to demand, as she has
demanded, the rescission of the sale and the return of the price. (Civ. Code, arts.
1506 and 1124.)
Inasmuch as the rescission is made by virtue of the provisions of law and not by
contractual agreement, it is not the conventional but the legal interest that is
demandable.
TEN FORTY REALTY V. CRUZ| Panganiban
G.R. No. 151212 | September 10, 2003
• Petitioner filed an ejectment complaint against Marina
Cruz(respondent) before the MTC. Petitioner alleges that the land indispute was
purchased from Barbara Galino on December 1996, andthat said land was again
sold to respondent on April 1998;
• On the other hand, respondent answer with counterclaim that never
was there an occasion when petitioner occupied a portion of the premises. In
addition, respondent alleges that said land was a public land (respondent filed a
miscellaneous sales application with the Community Environment and Natural
Resources Office) and the action for ejectment cannot succeed where it appears
that respondent had been in possession of the property prior to the petitioner;
• On October 2000, MTC ordered respondent to vacate the land and
surrender to petitioner possession thereof. On appeal, the RTC reversed the
decision. CA sustained the trial court’s decision.
ISSUE/S: Whether or not petitioner should be declared the rightful owner of the
property.
HELD: No. Respondent is the true owner of the land.1) The action filed by the
petitioner, which was an action for “unlawful detainer”, is improper. As the bare
allegation of petitioner’s tolerance of respondent’s occupation of the premises
has not been proven, the possession should be deemed illegal from the
beginning. Thus, the CA correctly ruled that the ejectment case should have
been for forcible entry. However, the action had already prescribed because the
complaint was filed on May 12, 1999 – a month after the last day forfiling;2) The
subject property had not been delivered to petitioner; hence, it did not acquire
possession either materially or symbolically. As between the two buyers,
therefore, respondent was first in actual possession of the property.
As regards the question of whether there was good faith in the second buyer.
Petitioner has not proven that respondent was aware that her mode of
acquiring the property was defective at the time she acquired it from Galino. At
the time, the property — which was public land –had not been registered in the
name of Galino; thus, respondent relied on the tax declarations thereon. As
shown, the former’s name appeared on the tax declarations for the property
until its sale to the latter in 1998. Galino was in fact occupying the realty when
respondent took over possession. Thus, there was no circumstance that could
have placed the latter upon inquiry or required her to further investigate
petitioner’s right of ownership.
DOCTRINE/S: Execution of Deed of Sale; Not sufficient as delivery. Ownership is
transferred not by contract but by tradition or delivery. Nowhere in the Civil
Code is it provided that the execution of a Deed of Sale is a conclusive
presumption of delivery of possession of a piece of
real estate. The execution of a public instrument gives rise only to a prima facie
presumption of delivery. Such presumption is destroyed when the delivery is not
effected, because of a legal impediment. Such constructive or symbolic delivery,
being merely presumptive, was deemed negated by the failure of the vendee to
take actual possession of the land sold. Disqualification from Ownership of
Alienable Public Land.
Private corporations are disqualified from acquiring lands of the public domain,
as provided under Section 3 of Article XII of the Constitution. While corporations
cannot acquire land of the public domain, they can however acquire private
land. However, petitioner has not presented proof that, at the time it purchased
the property from Galino, the property had ceased to be of the public domain
and was already private land. The established rule is that alienable and
disposable land of the public domain held and occupied by a possessor —
personally or through predecessors-in-interest, openly, continuously, and
exclusively for 30 years — is ipso jure converted to private property by the mere
lapse of time.
RULING:
The Supreme Court DENIED the petition.
WAYS OF EFFECTING DELIVERY
Heirs of Arturo Reyes v. Socco-Beltran, G.R. No. 176474
Facts: Elena Socco-Beltran (Socco) filed an application for Lot No. 6-B, alleging
that it was adjudicated in her favor in the extra-judicial settlement of Constancia
Socco’s estate, before the Department of Agrarian Reform (DAR). The heirs of
Arturo Reyes opposed the application on the ground that Lot No. 6-B was sold
by Miguel R. Socco, brother of Socco, in favor of their father, Atty. Arturo Reyes,
as evidenced by the Contract to Sell.
Issue: Whether or not petitioners have a better right to the subject property
over the respondent’s?
Ruling: The Court ruled that the petitioner’s could not derive title of Lot No. 6-B
because Miguel R. Socco was not yet the owner of the said lot and was only
expecting to inherit the same. The contract was a conditional sale, conditioned
upon the event Miguel Socco would actually inherit and become the owner of
the said property. The Court, relying on Article 1459 of the Civil Code on
contracts of sale, said that, “The thing must be licit and the vendor must have
the right to transfer the ownership thereof at the time it is delivered.” The law
specifically requires that the vendor must have ownership of the property at the
time of it is delivered. Hence, there was no valid sale from which ownership of
the property could have transferred from Miguel Socco to Arturo Reyes, since,
at the time of the execution, the former was not yet the owner of the same and
was only expecting to inherit it. Furthermore, Arturo Reyes, not having acquired
ownership of the property, could not have conveyed the same to his heirs.
1. RUDOLF LIETZ V. CA G.R. No. 122463 December 19, 2005
FACTS: Respondent Agapito Buriol previously owned a parcel of unregistered
land situated at San Vicente, Palawan. On August 15, 1986, respondent Buriol
entered into a lease agreement with Flavia Turatello and respondents Turatello
and Sani, all Italian citizens, involving one (1) hectare of Buriol’s property. The
lease agreement was for a period of 25 years, renewable for another 25 years.
The lessees took possession of the land after paying respondent Buriol a down
payment of P10,000.00. The lease agreement, however, was reduced into
writing only in January 1987. On November 17, 1986, respondent Buriol sold to
petitioner Rudolf Lietz, Inc. the same parcel of land for the amount of
P30,000.00. Petitioner later discovered that respondent Buriol owned only four
(4) hectares, and with one more hectare covered by lease, only three (3)
hectares were actually delivered to petitioner. Thus, petitioner instituted a
complaint for Annulment of Lease with Recovery of Possession against
respondents and Flavia Turatello. The complaint alleged that with evident bad
faith and malice, respondent Buriol sold to petitioner five (5) hectares of land
when respondent Buriol knew for a fact that he owned only four (4) hectares
and managed to lease one more hectare to respondents Tiziana Turatello and
Paola Sani. Respondents filed separate answers raising similar defenses of lack
of cause of action and lack of jurisdiction over the action for recovery of
possession. Respondents Turatello and Sani also prayed for the award of
damages and attorneys fees. After trial, the court rendered judgment dismissing
both petitioners complaint and respondents counterclaim for damages.
Petitioner and respondents Turatello and Sani separately appealed, the CA
affirmed the dismissal of petitioners complaint and awarded respondents
Turatello and Sani damages and attorneys fees. Petitioner contends that it is
entitled to the corresponding reduction of the purchase price because the
agreement was for the sale of five (5) hectares although respondent Buriol
owned only four (4) hectares.
ISSUE: Whether or not petitioner is entitled to reduction of the purchase price?
HELD: NO. As correctly noted by the trial court and the Court of Appeals, the
sale between the petitioner and respondent Buriol involving the latter’s
property is one made for a lump sum. The Deed of Absolute Sale shows that the
parties agreed on the purchase price on a predetermined area of five hectares
within the specified boundaries and not based on a particular rate per area.
In accordance with Article 1542, there shall be no reduction in the purchase
price even if the area delivered to the petitioner is less than that stated in the
contract. In the instant case, the area within the boundaries as stated in the
contract shall control over the area agreed upon in the contract. However, the
discrepancy must not be substantial. A vendee of land, when sold in gross or
with the description “more or less” with reference to its area, does not thereby
ipso facto take all risk of quantity in the land. The use of such words in
designating quantity covers only a reasonable excess or deficiency.
RAYMUNDO S. DE LEON, vs. BENITA T. ONG
FACTS: On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of
land to Benita T. Ong(respondent). The said properties were mortgaged to a
financial institution; Real Savings
& Loan Association Inc. (RSLAI). The parties then executed a notarized
deed of absolute sale with
assumption of mortgage. As indicated in the deed of mortgage, the parties
stipulated that the petitioner (de Leon) shall execute a deed of assumption of
mortgage in favor of Ong (respondent)after full payment of the P415,000. They
also agreed that the respondent (Ong) shall assume the mortgage. The
respondent then subsequently gave petitioner P415,000 as partial payment. On
the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to
inform RSLAI that Ong will assume the mortgage. Thereafter, the respondent
took repairs and made improvements in the properties. Subsequently,
respondent learned that the same properties were sold to a certain Viloria after
March 10, 1993 and changed the locks, rendering the keys given to her useless.
Respondent proceeded to RSLAI but she was informed that the mortgage has
been fully paid and that the titles have been given to the said person.
Respondent then filed a complaint for specific performance and declaration of
nullity of the second sale and damages. The petitioner contended that
respondent does not have a cause of action against him because the sale was
subject to a condition, which requires the approval of RSLAI of the mortgage.
Petitioner reiterated that they only entered into a contract to sell. The RTC
dismissed the case. On appeal, the CA upheld the sale to respondent and
nullified the sale to Viloria. Petitioner moved for reconsideration to the SC.
ISSUE: Whether or not the parties entered into a contract of sale or a contract to
sell?
HELD: In a contract of sale, the seller conveys ownership of the property to the
buyer upon the perfection of the contract. The non-payment of the price is a
negative resolutory condition. Contract to sell is subject to a positive suspensive
condition. The buyer does not acquire ownership of the property until he fully
pays the purchase price. In the present case, the deed executed by the parties
did not show that the owner intends to reserve ownership of the properties. The
terms and conditions affected only the manner of payment and not the
immediate transfer of ownership. It was clear that the owner intended a sale
because he unqualifiedly delivered and transferred ownership of the properties
to the respondents.
Asset Privatization Trust vs. T.J. Enterprise
G.R. No. 167195 May 8, 2009
Facts:
Petitioner was a government entity created for the purpose to
conserve, to provisionally manage and to dispose assets of government
institutions. It had acquired assets consisting of machinery and refrigeration
equipment stored at the Golden City compound which was leased to and in the
physical possession of Creative Lines, Inc., (Creative Lines). These assets were
being sold on an as-is-where-is basis.
Petitioner and respondent entered into an absolute deed of sale over certain
machinery and refrigeration equipment wherein respondent paid the full
amount as evidenced by petitioner’s receipt. After two (2) days, respondent
demanded the delivery of the machinery it had purchased. Petitioner issued a
Gate Pass to respondent to enable them to pull out from the compound the
properties designated ; however, during the hauling of Lot No. 2 consisting of
sixteen (16) items, only nine (9) items were pulled out by respondent.
Respondent filed a complaint for specific performance and damages against
petitioner and Creative Lines. Upon inspection of the remaining items, they
found the machinery and equipment damaged and had missing parts. Petitioner
claimed that there was already a constructive delivery of the machinery and
equipment upon the execution of the deed of sale it had complied with its
obligation to deliver the object of the sale since there was no stipulation to the
contrary and it was the duty of respondent to take possession of the property.
The RTC ruled that petitioner is liable for breach of contract and should pay for
the actual damages suffered by respondent. It found that at the time of the sale,
petitioner did not have control over the machinery and equipment and, thus,
could not have transferred ownership by constructive delivery. The Court of
Appeals affirmed the judgment; hence, this petition.
Issue:
Whether or not the petitioner had complied with its obligations to make delivery
of the properties and failure to make actual delivery of the properties was not
attributable was beyond the control of petitioner?
Held:
No. There was no constructive delivery of the machinery and equipment upon
the execution of the deed of absolute sale or upon the issuance of the gate pass
since it was not the petitioner but Creative Lines which had actual possession of
the property. The presumption of constructive delivery is not applicable as it has
to yield to the reality that the purchaser was not placed in possession and
control of the property.
Petitioner also claims that its failure to make actual delivery was
beyond its control. It posits that the refusal of Creative Lines to allow the hauling
of the machinery and equipment was unforeseen and constituted a fortuitous
event. The matter of fortuitous events is governed by Art. 1174 of the Civil Code
which provides that except in cases expressly specified by the law, or when it is
otherwise declared by stipulation, or when the nature of the obligation requires
assumption of risk, no person shall be responsible for those events which could
not be foreseen, or which though foreseen, were inevitable. A fortuitous event
may either be an act of God, or natural occurrences such as floods or typhoons,
or an act of man such as riots, strikes or wars. However, when the loss is found
to be partly the result of a person’s participation whether by active intervention,
neglect or failure to act, the whole occurrence is humanized and removed from
the rules applicable to a fortuitous event. Thus, the risk of loss or deterioration
of property is borne by petitioner. Thus, it should be liable for the damages that
may arise from the delay.
SAN LORENZO DEVELOPMENT CORPORATION VS. CA
G.R. NO. 124242, January 21, 2005
Facts:
On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to
respondent Pablo Babasanta. The latter made a downpayment of fifty thousand
pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu
of the same date. Several other payments totaling two hundred thousand pesos
(P200,000.00) were made by Babasanta. He demanded the execution of a Final
Deed of Sale in his favor so he may effect full payment of the purchase price;
however, the spouses declined to push through with the sale. They claimed that
when he requested for a discount and they refused, he rescinded the
agreement. Thus, Babasanta filed a case for Specific Performance.
On the other hand, San Lorenzo Development Corporation (SLDC) alleged that
on 3 May 1989, the two parcels of land involved, namely Lot 1764-A and 1764-B,
had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it
was a buyer in good faith and for value and therefore it had a better right over
the property in litigation.
Issue:
Who between SLDC and Babasanta has a better right over the two parcels of
land?
Ruling:
An analysis of the facts obtaining in this case, as well as the evidence presented
by the parties, irresistibly leads to the conclusion that the agreement between
Babasanta and the Spouses Lu is a contract to sell and not a contract of sale.
The receipt signed by Pacita Lu merely states that she accepted the sum of fifty
thousand pesos (P50,000.00) from Babasanta as partial payment of 3.6 hectares
of farm lot. While there is no stipulation that the seller reserves the ownership
of the property until full payment of the price which is a distinguishing feature of
a contract to sell, the subsequent acts of the parties convince us that the
Spouses Lu never intended to transfer ownership to Babasanta except upon full
payment of the purchase price.
Babasanta’s letter dated 22 May 1989 was quite telling. He stated therein that
despite his repeated requests for the execution of the final deed of sale in his
favor so that he could effect full payment of the price, Pacita Lu allegedly
refused to do so. In effect, Babasanta himself recognized that ownership of the
property would not be transferred to him until such time as he shall have
effected full payment of the price. Doubtlessly, the receipt signed by Pacita Lu
should legally be considered as a perfected contract to sell.
The perfected contract to sell imposed upon Babasanta the obligation to pay the
balance of the purchase price. There being an obligation to pay the price,
Babasanta should have made the proper tender of payment and consignation of
the price in court as required by law. Glaringly absent from the records is any
indication that Babasanta even attempted to make the proper consignation of
the amounts due, thus, the obligation on the part of the sellers to convey title
never acquired obligatory force.
There was no double sale in this case because the contract in favor of Babasanta
was a mere contract to sell; hence, Art. 1544 is not applicable. There was neither
actual nor constructive delivery as his title is based on a mere receipt. Based on
this alone, the right of SLDC must be preferred.
G.R. No. L-20091 July 30, 1965 Bengzon, C.J.
PERPETUA ABUAN, ET AL. v. EUSTAQUIO S. GARCIA, ET AL.
• On August 7, 1953, petitioners Perpetua Abuan et al. sold a parcel of
rice land to defendants Eustaquio Garcia et al. through a Deed of Absolute Sale.
A TCT was issued to defendants.
• Later, petitioners filed an action to recover the land, alleging the sale
was tainted with fraud and was without consideration. Reaching an amicable
settlement, the parties entered into an "Agreement" dated February 28, 1955,
under which defendants paid P500 as partial payment of the purchase price of
the land, and promised to pay the balance of P1,500 on or before April 30, 1955,
with a grace period of 30 days. The Agreement also stated that it "shall
supersede all previous agreements or contracts heretofore entered into..."
• Plaintiffs instituted the present action on March 4, 1960. Defendants
moved to dismiss, on the ground that plaintiffs' right of action was already
barred, because the five-year redemption period had already expired. Section
119 of the Public Land Law provides:
o Every conveyance of land acquired under the free patient or homestead
provisions, when proper, shall be subject to re-purchase by the applicant, his
widow, or legal heirs, for a period of five years from the date of conveyance.
• Plaintiffs argue that the period should be counted from the date of full
payment (May 1965) since it was on this date that the contract was
consummated.
• CFI Nueva Vizcaya dismissed the complaint, fixing the starting date as
February 28, 1955, when the Agreement was entered into. CA certified the case
to SC.
• SC: "Conveyance" means transfer of ownership; it means the date
when the title to the land is transferred from one person to another. The 5-year
period should, therefore, be reckoned with from the date that defendants
acquired ownership.
When did defendants legally acquire ownership of the land?
⇒ Upon execution of the Deed of Absolute Sale (August 7, 1953).
Dismissal affirmed.
Under Art. 1498, When the sale is made through a public instrument, as in this
case, the execution thereof shall be equivalent to the delivery of the thing which
is the object of the contract, if from the deed the contrary does not appear or
cannot be clearly inferred. This manner of delivery is common to personal as
well as real property. It is clear, therefore, that defendants acquired ownership
to the land in question upon the execution of the Deed of Absolute on August 7,
1953. The Agreement of February 28, 1955, only superseded the deed as to the
terms and conditions of payment. The Agreement did not operate to revest the
ownership of the land in the plaintiffs.
Assuming arguendo that the Deed is null and void as petitioners allege, we can
consider the date of the Agreement at the latest, as the time within which
ownership is vested in the defendants. While it is a private instrument the
execution of which could not be construed as constructive delivery under Art.
1498, Art. 1496 explicitly provides that ownership of the thing sold is acquired
by the vendee from the moment it is delivered to him "in any other manner
signifying an agreement that the possession is transferred from the vendor to
the vendee." The intention to give possession (and ownership) is manifest in the
Agreement, especially considering the following circumstances: (1) the payment
of part of the purchase price, there being no stipulation in the agreement that
ownership will not vest in the vendees until full payment of the price; and (2)
the fact that the agreement was entered into in consideration of plaintiffs'
desistance, as in fact they did desist, in prosecuting their reivindicatory action,
thereby leaving the property in the hands of the then and now defendants — as
owners thereof, necessarily. This was delivery brevi manu permissible under
Articles 1499 and 1501 of the New Civil Code. In the absence of an express
stipulation to the contrary, the payment of the price is not a condition
precedent to the transfer of ownership, which passes by delivery of the thing to
the buyer.
PERFECTO DY, JR. petitioner, vs. COURT OF APPEALS, GELAC TRADING INC.,
and ANTONIO V. GONZALES, Respondents.
G.R. No. 92989 July 8, 1991
FACTS:
Whether or not there was a consummated sale between Petitioner and LIBRA?
HELD:
NO.
The payment of the check was actually intended to extinguish the mortgage
obligation so that the tractor could be released to the petitioner. It was never
intended nor could it be considered as payment of the purchase price because
the relationship between Libra and the petitioner is not one of sale but still a
mortgage. The clearing or encashment of the check which produced the effect
of payment determined the full payment of the money obligation and the
release of the chattel mortgage. It was not determinative of the consummation
of the sale. The transaction between the brothers is distinct and apart from the
transaction between Libra and the petitioner. The contention, therefore, that
the consummation of the sale depended upon the encashment of the check is
untenable.

Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also
mortgaged with the latter, as a security to the loan.

Petitioner, expresses his desire to purchased his brother’s tractor in a letter to

LIBRA which also includes his intention to shoulder its mortgaged. LIBRA
approved the request. At the time that Wilfredo Dy executed a deed of absolute
sale in favor of petitioner, the tractor and truck were in the possession of LIBRA
for his failure to pay the amortization.

When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would
only release the same only if he would also pay for the truck. In order to fulfill
LIBRA’s condition, petitioner convinced his sister to pay for the remaining truck,
to which she released a check amounting to P22,000. LIBRA however, insisted
that the check must be first cleared before it delivers the truck and tractor.

Meanwhile, another case penned “Gelac Trading Inc vs. Wilfredo Dy” was
pending in Cebu as a case to recover for a sum of money (P12,269.80). By a writ
of execution the court in Cebu ordered to seize and levy the tractor which was in
the premise of LIBRA, it was sold in a public auction to which it was purchased
by GELAC. The latter then sold the tractor to Antonio Gonzales.

RTC rendered in favor of petitioner.

CA dismissed the case, alleging that it still belongs to Wilfredo Dy.

ISSUE: