DECISION AFFIRMED
CONSUMMATION AND PERFECTION
Santos vs. Santos (2001) FACTS:
Spouses Jesus and Rosalia Santos owned a parcel of land, which had a four-door apartment administered by Rosalia who rented them out.
The spouses had 5 children, namely Salvador, Calixto, Alberto, Antonio, and Rosa.
The spouses executed a deed of sale of the properties in favor of their children Salvador and Rosa. (a TCT was issued)
Rosa then sold her share to Salvador. (another TCT was issued)
Despite the transfer of the property to Salvador, Rosalia continued to lease and receive rentals from the apartment units.
Later, Jesus died. Six years later, Salvador died. Shortly thereafter, Rosalia died.
Petitioner Zenaida Santos, wife of Salvador, demanded rent from a tenant of Rosalia. Tenant refused, but Zenaida filed an ejectment suit against him, which eventually decided in Zenaida’s favor.
Private Respondents, the Santos siblings, filed an action for reconveyance of property, alleging that:a.
the two deeds of sale were simulated, therefore void.b.
The two sales were executed to accommodate Salvador in generating funds for his business ventures and providing him with greater business flexibility. RTC: two deeds of sale are null and void for being fictitious or simulated.
CA: affirmed decision.
Zenaida argues:
a.
Art. 1477 – ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery.b.
Art. 1498 – when the sale is made through a public instrument, its execution is equivalent to the delivery of the thing subject of the contract.c.
Applying these provisions, Salvador became the owner of the subject property by virtue of the 2 deeds of sale.ISSUE: I. W/N the execution of a public instrument is equivalent to delivery of the land.
HELD: I. EXECUTION OF PUBLIC INST. NOT DELIVERY
1. Nowhere in the NCC does it provide that execution of a deed of sale is a conclusive presumption of delivery of possession.
2. The NCC merely said that the execution shall be equivalent to delivery. The presumption can be rebutted by clear and convincing evidence.
3. Presumptive delivery can be negated by the failure of the vendee to take actual possession of the land sold.
4.
Although the spouses executed a deed of sale, they did not deliver the possession and ownership of the property to Salvador and Rosa.5. The original sellers retained their control and possession. Therefore, there was no real transfer of ownership.
Addison vs Felix and Tioco (1918) FACTS:
Addison sold to defendant Felix and Tioco (her husband) 4 parcels of land. Under the instrument executed:
a. Felix is to pay P3000 as downpayment.
b. To pay the balance of P2000 on July 1914, then P5000 30 days after the issuance to her of a certificate of title.
c.
To pay, within 10 years, P10 for each cocoanut tree in bearing and P5 for each such tree not in bearing, with the condition that the total price should not exceed P85,000.d.
Felix was to deliver to Addison 25% of the value of the products that she might obtain from the 4 parcels of lands from the moment Felix takes possession of the lands until a TCT has been issued in her favor.e. That within 1 year from the date of the TCT is issued in Felix’ favor, she may rescind the contract.
(everyone will return what they have given + interests)
Addison filed a suit in CFI to compel Felix to make payment of the 1st installment. Felix’ defense:
a.
Addison had absolutely failed to deliver to her the lands that were the subject matter of the sale.NOTE: After the execution of the deed of sale, Addison designated to a representative of Felix only 2 of the 4 parcels of land. And these 2 lands were in possession of a 3rd person.
Felix filed an application for the registration of the 4 parcels of land, which was dismissed for failure to present the required plans within the period required.
RTC: ruled in favor of Felix; contract of sale be rescinded.
Addison argues:a. Right to rescind not only did not exist from the moment of the execution of the contract up to 1 year after the registration of the land, but does not accrue until the land is registered.
b. Right to rescind was subject to a condition, namely the issuance of the title.
ISSUE: I. W/N there was delivery of the thing sold HELD: I. NO DELIVER; FELIX WON!!!
1.
With respect to two of the parcels of land, Addison was not even able to show them to the purchaser; and as regards the other two, more than 2/3 of their area was in the adverse possession of a 3rd person.2. The thing is considered to be delivered when it is placed “in the hands and possession of the vendee.”
3. In order that symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold.
4. 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.
5. The execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is not always sufficient.
6.
The mere execution of the instrument was not a fulfillment of the vendor’s obligation to deliver the thing sold, and that from such non-fulfillment arises purchaser’s right to demand, as Felix demanded, the rescission of the sale and the return of the price.Danguilan v. IAC and Melad (1988)
– Domingo Melad owned 2 lots in Cagayan, a residential lot and a farm lot.
– Danguilan and Apolonia Melad both claim rights over the said lots.
–
Melad’s version : based on a Deed of Sale in 1943 signed by Domingo. This sale was supposedly entered into by her mother when she was just a kid, the payment of 80 for such sale earned by her mother at the Tabacalera Factory. She also claimed that she was the illegitimate daughter of Melad, who lived w/ them til he died. (This was later on found to be very suspicious)She explained that she vacated the place because Melad asked her permission to cultivate the land as her tenant who would deliver ½ of the harvest to her. But she filed a complaint since the deliveries have stopped.
–
Danguilan’s version : Donations in 2 private instruments were made by Domingo to him and his wife (domingo’s niece), in exchange for taking care of the old man, and cultivating his land and with the understanding that he would bury him upon his death.–
It is important to note that the TC found that Danguilan was in open and continuous poss’n of the lots in question. Melad’s version that she considered Danguilan as a tenant was not given much weight.1. w/n there was a valid donation, given that a donation must be made in a public instrument - YES. While truly donations, the conveyances where onerous donations as the properties were given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. There was a fair exchange as Domingo died really old, which means that Dnaguilan practically farmed the land by himself.
2. Assuming that there was a valid sale to Melad, was the contract consummated?
– NO. Even assuming the validity of the deed of sale, the record shows that the private respondent did not take possn of the disputed properties and indeed waited until 1962 to file the action for recovery of the lands from the petitioner. If she did have poss’n, she transferred the same to Dnaguilan in 1946, by her own admission.
– She failed to show that she consummated the contract of sale by actual delivery of the properties to her and actual poss’n thereof in the concept of purchaser-owner.
–
As ro the argument that symbolic delivery was effected through the deed of sale, the Code imposes upon the vendor the obligation to deliver the thing sold and such is done when it is placed in the hands and poss’n of the vendee. In order that symbolic delivery may produce the effect of tradition, control over the thing sold is necessary, and not just ownership and right of poss’n.Danguilan has a better right to the lots.
Pasagui vs. Villablanca (1975) FACTS:
Pasagui bought from co-defendants Bocar a parcel of agricultural land.
A deed of sale was executed, which was notarized and registered in the Registry of Deeds.
Later, defendants Villablanca took possession of the said property, harvesting coconuts, thus depriving Pasagui possession.
Thus, this prompted Pasagui to file a complaint with the CFI against the Villablancas to surrender possession.
Villablancas moved to dismiss the complaint, alleging that since it was a complaint for forcible entry, CFI had no jurisdiction.
RTC: dismissed complaint. MTC has jurisdiction. (at that time, Justice of the Peace) ISSUE: I. W/N action of forcible entry should be granted
HELD: I. SHOULDN’T BE GRANTED; PASAGUI NOT IN POSSESSION.
1. Complaint does not allege that the plaintiffs were in physical possession of the land and have been deprived of that possession through force, intimidation, threat, strategy or stealth.
2. It is true that the execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject of the sale. This presumptive delivery only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into
those of the vendee. It can be negated by the reality that the vendees actually failed to obtain material possession of the land subject of the sale.
3. Pasagui did not physical possession of the land since its purchase.
4. As a matter of fact, their purpose in filing the complaint is precisely to get possession of the property.
5. Forcible entry should be denied because Pasagui had no prior physical possession of the property.
DY, JR. vs. CA (1991)
1. Wilfredo Dy purchased a truck and a farm tractor through financing extended by Libra Finance Investment Corp. Both truck and tractor were mortgaged to Libra as security for the loan
2. Perfecto DY, his brother, wanted to buy the tractor. Perfecto then wrote a letter to Libra for him to purchase such and assume the mortgage. Libra approved the request. And Wilfredo executed a deed of absolute sale.
3. The tractor was withheld by Libra because of Wilfredo’s failure to pay amortizations. Despite offer of Perfecto to pay the full amount, it could not be effected because Libra insisted also for the payment of the truck. A check was then issued to Libra to settle the full amount.
4. A civil case of Wilfredo was also pending in Cebu to recover a sum of money. The provincial sheriff was able to seize and levy on the tractor. The tractor was sold at the pubic auction where Gelac trading was the lone bidder. Gelac later sold it Antonio Gonzales
5. When the check was cleared, it was only then Perfecto learned about the purchase of Gelac. He filed then an action to recover the tractor against Gelac with the RTC of Cebu.
RTC: in favor of petitioner; CA: reversed Issue: w/n there was a valid sale to Perfecto Held: VALID
1. Mortgagor who gave the property as security under a chattel mortgage did not part with the ownership over the same. He had the right to sell it although he was under obligation to secure the written consent of the mortgagee. And even if no consent was obtained form the mortgagee, the validity of the sale would still be effected.
2. Court sees no reason why Wilfredo cannot sell the subject tractor. The consent of Libra was even obtained in this case. The sale between the brothers was valid and binding even to the mortgagee.
3. Art. 1496 states that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways in 1497 to 1501. In this case, actual delivery cannot be made. However, there was constructive delivery already upon the execution of the public instrument and upon the consent and agreement of the parties.
While it is true that Wilfredo was not in actual possession and control of the subject tractor, his right of ownership was not divested from his default. Neither could it be said that Libra was the owner because the mortgagee can not become the owner or convert and appropriate himself the property mortgaged.
4. When a third person purchases the mortgaged property, he automatically steps into the shoes of the original mortgagor.
5. The payment of the check was actually intended to extinguish the mortgage obligation so that the tractor could be released to the petitioner. The sale of the subject tractor was already consummated when it was levied upon the by the sheriff. Gelac even knew of the transfer of the property to Perfecto when it received summons. Even with that, they still continued to sell the subject tractor to Antonio.
POWER COMMERCIAL vs. CA (1997)
1. Power Commercial and Industrial Development Corporation, an industrial asbestos manufacturer, needed a bigger office space and warehouse for its products. For this, it entered into a contract of sale with the spouses Reynaldo and Angelita Quiambao (private respondents).
2. Petitioner assumed, as part of the purchase price, the existing mortgage on the land. In full satisfaction, Reynaldo paid PNB around 79k.
3. June 1 - Spouses again mortgaged said land to PNB to guarantee a loan of which was paid to spouses.
Petitioner agreed to assume the payment of the loan.
4. June 26 – Deed of Absolute Sale with Assumption of Mortgage was executed by the parties. On the same date, the manager of Power Commercial submitted to PNB said deed with formal application of the assumption of mortgage.
5. Almost 7 months after said sale, PNB informed spouses that Power Commercial failed to submit papers necessary for the approval of the mortgage. Thus application for assumption was withdrawn.
The outstanding balance deemed due and demandable. Power Commercial paid and sent a letter to PNB that there are people who are physically occupying their lot and it is their desire to eject them immediately. With that, they request that their assumption of mortgage be given favorable
consideration. PNB replied and asked that Power Commercial remit payments to cover interest and at least part of the principal.
6. Power Commercial then filed a case for rescission and damages before the RTC. Petitioner demanded return of payments it made on the ground that its assumption of mortgage was never approved.
Subsequently, the mortgage was closed and was bought by PNB in the public auction.
7. TC: failure of respondent spouses to deliver actual possession to petitioner entitled the petitioner to rescind the sale.
8. CA: reversed; deed of sale did not obligate the spouses to eject the lessees from the land as a condition of the sale, nor was the occupation by said lessees a violation of the warranty against eviction; no substantial breach to justify rescission
Issue: was there an effective symbolic delivery? (important issue for sales) Held:
1. There was no express stipulation in the contract that spouses will be guaranteeing ejectment of the occupants although there was a proviso guaranteeing the peaceful possession by the buyer of the land.
2.
Most authorities consider transfer of ownership as the primary purpose of sale, delivery remains an indispensable requisite as our law does not admit the doctrine of transfer of property by mere consent. Civil Code provides that delivery can either be actual (1497) or constructive (1498-1501).Symbolic delivery as a species of constructive delivery, effects the transfer of ownership through the execution of a public document. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the ting 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.
3.
In this case, delivery was effected through the execution of deed. The lot sold had been placed under the control of petitioner; thus, the filing of the ejectment suit was subsequently done. It signified that its new owner intended to obtain for itself and to terminate said occupants actual possession thereof.Prior physical delivery or possession is not legally required and the execution of the deed of sale is deemed equivalent to delivery. This deed operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use the document as proof of ownership. Nothing more is required.
Petition denied.
BEHN, MEYER & CO. vs YANGCO
•
Behn Meyer & Yangco entered into a contract of sale of 80 drums of “Carabao” Caustic Soda for P10,063. These were shipped from New York on board the steamship Chinese Prince, w/c was detained by British authorities & 71 drums of caustic soda were removed• Yangco refused to accept delivery of the 9 remaining drums on the ground that they were in bad order
& also refused the optional offer of Behn (waiting for remainder of the shipment until it arrived) or the offer to substitute the 71 drums of caustic soda of similar grade from Behn’s stock (not of the
“Carabao” brand).
•
Behn sold, for the account of Yangco, 80 drums of caustic soda realizing P6,352, w/c was deducted from the selling price of P10,063 making up the amount of damages claimed by Behn for alleged breach of contract.• TC: For Yangco.
Issue on place of delivery:
• A specification in a contract relative to the payment of freight can be taken to indicate the intention of the parties in regard to the place of delivery. If the buyer is to pay the freight, it is reasonable to suppose that he does so because the goods become his at the point of shipment. On the other hand, if the seller is to pay the freight, it can be inferred that it is the duty of the seller to have the goods transported to their ultimate destination & that title does not pass until the goods have reached their destination.
Contract also provided for “c.i.f. Manila, pagadero against delivery of documents.” What does this mean?
• In British contracts, “c.i.f.” stands for costs, insurance & freight. They signify that the price fixed covers not only the costs of the goods but the expense of freight & insurance to be paid by the seller.
• In American mercantile contracts, the letters “F.O.B.” stands for Free on Board w/c means that the seller shall bear all expenses until the goods ae delivered where they are to be delivered “FOB” at the point of shipment or at the point of destination determines the time when property passes. Both the terms “cif” & “FOB” merely make rules of presumption w/c yield o proof of contrary intention to be ascertained by a consideration of all the circumstances.