EFFECTS OF A PERFECTED CONTRACT OF

SALE
Estelita Villamar vs. Balbino Mangaoil
G.R. No.: G.R. No. 188661, April 11, 2012
FACTS:
Villamar, the registered owner of the property, entered
into an agreement with the respondent Mangaoil to
purchase and sale a parcel of land. The respondent
initially paid the petitioner P185,000.00 for the latter
to pay the loan obtained from the Rural Bank of
Cauayan and to cause the release from the said bank
of the certificate of title covering the subject property.
The rest of the amount shall be used to pay the
mortgages over the subject property which was
executed in favor of Lacaden and Parangan. After the
release of the TCT, a deed of sale shall be executed
and transfer shall be immediately effected so that the
title covering the subject property can be used as a
collateral for a loan the respondent will apply for, the
proceeds of which shall be given to the petitioner.
The parties executed a Deed of Absolute Sale whereby
Villamar transferred the subject parcel of land to
Mangaoil for and in consideration of [P]150,000.00.
However, the respondent Mangaoil informed the
petitioner that he will withdraw from the agreement
for the land was not yet free from incumbrances as
there were still tenants who were not willing to vacate
the land without giving them back the amount that
they mortgaged the land. Also, the petitioner failed
and refused, despite repeated demands, to hand over
the Certificate of Title.
Respondent Mangaoil demanded the refund of the
down payment that he had secured with the petitioner
and filed a complaint with the RTC to rescind the
contract of sale. In the response of the petitioner, she
averred that she had already complied with the
obligations and caused the release of the mortgaged
land and the delivery of the Certificate of Title will be
facilitated by a certain Atty. Pedro C. Antonio. The
respondent insisted that he can rescind the contract for
the petitioner had failed to deliver the Certificate of
Title.

The RTC and the CA dismissed the complaints

for upon the deed of absolute sale, there was already a
valid and constructive delivery.
ISSUES:
1. Whether or not the failure of delivery of the
Certificate of Title will constitute rescission of the
contract?
2. Whether or not the execution of the deed of sale of
real property is equivalent to a valid and constructive
delivery?
HELD:
1. No, the Court held that the failure of the petitioner
to comply with the obligation to deliver to the
respondent the possession of the property and the
certificate of the title.
Based on Article 1191 of the New Civil Code
of the Philippines, it is clear that the power to rescind
obligations is implied in reciprocal ones, in case one
of the obligors should not comply with what is
incumbent upon him. The respondent cannot be
deprived of his right to demand for rescission in view
of the petitioners failure to abide with item nos. 2 and
3 of the agreement. This remains true notwithstanding
the absence of express stipulations in the agreement
indicating the consequences of breaches which the
parties may commit. To hold otherwise would render
Article 1191 of the NCC as useless.
2. Article 1458 of the NCC obliges the seller to
transfer the ownership of and to deliver a determinate
thing to the buyer, who shall in turn pay therefor a
price certain in money or its equivalent. In addition
thereto, Article 1495 of the NCC binds the seller to
warrant the thing which is the object of the sale. On
the other hand, Article 1498 of the same code provides
that when the sale is made through a public
instrument, 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 clearly be inferred.

While Articles 1458 and 1495 of the NCC and the

doctrine enunciated in the case of Chua do not impose
upon the petitioner the obligation to physically deliver
to the respondent the certificate of title covering the
subject property or cause the transfer in the latter's
name of the said title, a stipulation requiring otherwise
is not prohibited by law and cannot be regarded as
violative of morals, good customs, public order or
public policy.
As a general rule, the execution of a public instrument
amounts to a constructive delivery of the thing subject
of a contract of sale. However, exceptions exist,
among which is when mere presumptive and not
conclusive delivery is created in cases where the buyer
fails to take material possession of the subject of sale.
A person who does not have actual possession of the
thing sold cannot transfer constructive possession by
the execution and delivery of a public instrument.
The execution of the deed of absolute sale does not
constitute a constructive delivery for this case falls
under to the exception since a mere presumption and
not conclusive delivery was created as the respondent
failed to take material possession of the subject
property. A person who does not have actual
possession of the thing sold cannot transfer
constructive possession by the execution and delivery
of a public instrument. Thus, the respondent can
rescind the contract.
The petition was denied and the petitioner is
bound return the down payment plus interest to the
respondent.
SPS. ONG and VERZANO vs. SPS. OLASIMAN
G.R. No. 162045
March 28, 2006
CARPIO MORALES, J.:
FACTS:
By Deed of Sale, Paula sold an unregistered parcel of
land covered by a Tax Declaration in her name to her
niece Bernandita. Bernandita took initial steps to
register the land but failed to complete the registration

process. Paula died single and without issue. She was

survived by her siblings, including herein petitioner
Verzano.
Verzano executed a public document entitled
"Extrajudicial Settlement by Sole Heir and
Sale" wherein he adjudicated exclusively unto himself
the questioned lot and sold it to petitioner Carmelita
Ong. Carmelita subsequently caused the cancellation
of Tax Declaration covering the questioned lot and the
issuance of Tax Declaration in her own name.
Bernandita, by Deed of Sale of even date, sold the
questioned lot to respondents Sps. Olasiman.
Respondents filed a Complaint against petitioners, for
annulment of the "Extrajudicial Settlement by Sole
Heir and Sale," quieting of title, and damages. The
trial court dismissed the respondents complaint. It
found that petitioners spouses Ong were be buyers in
good faith and the first to possess the questioned lot.
The Court of Appeals reversed the decision of the trial
court. The appellate court thus concluded that "the
second sale was invalid and of no effect because
Demetrio Verzano had nothing to convey and transfer
to appellees at the time of the second sale."
ISSUE:
Whether or not the second sale was valid
HELD: NO
When Paula sold to Bernandita by Deed of Absolute
Sale dated June 1, 1992 the parcel of land of which the
questioned lot formed part, ownership thereof was
transferred to the latter in accordance with Article
1496 in relation to Article 1498 of the Civil Code.
The Deed of Absolute Sale in favor of Bernandita
contains nothing contrary to an intent to transfer
ownership.When Paula died she no longer owned the
questioned lot and, therefore, her brother petitioner
Verzano could not have inherited it. The "Extrajudicial
Settlement by Sole Heir and Sale" did not thus confer
upon Verzano ownership of the questioned lot; hence,
he could not have conveyed it to petitioners spouses
Ong.

Parenthetically, the execution by Verzano of the

"Extrajudicial Settlement by Sole Heir and Sale" is
fraudulent, he having falsely stated therein that his
deceased sister Paula "left no known debts, neither has
she left any ascendants or descendants or any other
heirs, except myself being his [sic] brother" despite
the fact that other heirs his sister Victoria and the
four children of his deceased brother Isebero were
still alive.
Petitioners insistence that Article 1544 on double
sales should apply does not lie. Article 1544 applies
where the same thing is sold to different vendees by
the same vendor. It does not apply where the same
thing is sold to different vendees by different
vendors as in the case at bar.
Finally, petitioners claim of good faith does not lie
too as it is irrelevant:
[T]he issue of good faith or bad faith of the buyer is
relevant only where the subject of the sale
is registered landand the purchaser is buying the same
from the registered owner whose title to the land is
clean xxx in such case the purchaser who relies on the
clean title of the registered owner is protected if he is
a purchaser in good faith for value. Since the
properties
in
question
are unregistered lands,
petitioners as subsequent buyers thereof did so at their
peril. Their claim of having bought the land in good
faith, i.e., without notice that some other person has a
right to or interest in the property, would not protect
them if it turns out, as it actually did in this case, that
their seller did not own the property at the time of
the sale.

FACTS:
The petitioner, Perfecto Dy and Wilfredo Dy are
brothers. Wilfredo Dy purchased a truck and a farm
tractor through financing extended by Libra Finance
and Investment Corporation (Libra). Both truck and
tractor were mortgaged to Libra as security for the
loan.
Petitioner wrote a letter to Libra requesting that he be
allowed to purchase from Wilfredo Dy the said tractor
and assume the mortgage debt of the latter. Libra
approved the petitioner's request. Wilfredo Dy
executed a deed of absolute sale in favor of the
petitioner over the tractor in question.
The subject tractor was in the possession of Libra
Finance due to Wilfredo Dy's failure to pay the
amortizations. Despite the offer of full payment by the
petitioner to Libra for the tractor, the immediate
release could not be effected because Wilfredo Dy had
obtained financing not only for said tractor but also
for a truck and Libra insisted on full payment for both.
Petitioners sister issued a PNB check in favor of
Libra, thus settling in full the indebtedness of
Wilfredo Dy with the financing firm. Payment having
been effected through an out-of-town check, Libra
insisted that it be cleared first before Libra could
release the chattels in question.
Meanwhile, Civil Case entitled "Gelac Trading, Inc. v.
Wilfredo Dy", a collection case, was pending in
another court in Cebu. On the strength of an alias writ
of execution issued, the provincial sheriff was able to
seize and levy on the tractor which was in the
premises of Libra in Carmen, Cebu. The tractor was
subsequently sold at public auction where Gelac
Trading was the lone bidder. Later, Gelac sold the
tractor to one of its stockholders, Antonio Gonzales.

G.R. No. 92989 July 8, 1991

PERFECTO DY, JR. petitioner,
vs.
COURT OF APPEALS, GELAC TRADING INC.,
and ANTONIO V. GONZALES, respondents.

It was only when the check was cleared that the

petitioner learned about GELAC having already taken
custody of the subject tractor. Consequently, the
petitioner filed an action to recover the subject tractor
against GELAC Trading.

The RTC rendered judgment in favor of the petitioner.

It ruled that the plaintiff is the owner of the tractor,
subject matter of this case, and directing the
defendants Gelac Trading Corporation and Antonio
Gonzales to return the same to the plaintiff herein. On
appeal, the Court of Appeals reversed the decision of
the RTC and dismissed the complaint with costs
against the petitioner. The Court of Appeals held that
the tractor in question still belonged to Wilfredo Dy
when it was seized and levied by the sheriff by virtue
of the alias writ of execution.
ISSUE:
Whether the ownership of the farm tractor had already
passed to petitioner when said tractor was levied on by
the sheriff
HELD:
Yes, the ownership of said tractor had already
passed to herein petitioner.
In the case of Servicewide Specialists Inc. v.
Intermediate Appellate Court we stated that:
The rule is settled that the chattel mortgagor
continues to be the owner of the property, and
therefore, has the power to alienate the same;
however, he is obliged under pain of penal
liability, to secure the written consent of the
mortgagee. (Francisco, Vicente, Jr., Revised
Rules of Court in the Philippines, (1972), Volume
IV-B Part 1, p. 525). Thus, the instruments of
mortgage are binding, while they subsist, not only
upon the parties executing them but also upon
those who later, by purchase or otherwise, acquire
the properties referred to therein. The absence of
the written consent of the mortgagee to the sale of
the mortgaged property in favor of a third person,
therefore, affects not the validity of the sale but
only the penal liability of the mortgagor under the
Revised Penal Code and the binding effect of
such sale on the mortgagee under the Deed of
Chattel Mortgage.

The 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 the obligation to secure the
written consent of the mortgagee or he lays himself
open to criminal prosecution under the provision of
Article 319 par. 2 of the Revised Penal Code. And
even if no consent was obtained from the
mortgagee, the validity of the sale would still not be
affected.
Thus, we see no reason why Wilfredo Dy, as the
chattel mortgagor cannot sell the subject tractor. There
is no dispute that the consent of Libra Finance was
obtained in the instant case.
The sale between the brothers was therefore valid
and binding as between them and to the
mortgagee, as well.
While it is true that Wilfredo Dy was not in actual
possession and control of the subject tractor, his right
of ownership was not divested from him upon his
default. Neither could it be said that Libra was the
owner of the subject tractor because the mortgagee
cannot become the owner of or convert and
appropriate to himself the property mortgaged.
(Article 2088, Civil Code) Said property continues to
belong to the mortgagor. The only remedy given to the
mortgagee is to have said property sold at public
auction and the proceeds of the sale applied to the
payment of the obligation secured by the mortgagee.
(See Martinez v. PNB, 93 Phil. 765, 767 [1953]) There
is no showing that Libra Finance has already
foreclosed the mortgage and that it was the new owner
of the subject tractor. Undeniably, Libra gave its
consent to the sale of the subject tractor to the
petitioner. It was aware of the transfer of rights to the
petitioner.
Where a third person purchases the mortgaged
property, he automatically steps into the shoes of
the original mortgagor. (See Industrial Finance
Corp. v. Apostol, 177 SCRA 521 [1989]). His right of
ownership shall be subject to the mortgage of the
thing sold to him. In the case at bar, the petitioner was

fully aware of the existing mortgage of the subject

tractor to Libra. In fact, when he was obtaining Libra's
consent to the sale, he volunteered to assume the
remaining balance of the mortgage debt of Wilfredo
Dy which Libra undeniably agreed to.
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.
*The sale of the subject tractor was consummated
upon the execution of the public instrument on
September 4, 1979. At this time constructive delivery
was already effected. Hence, the subject tractor was
no longer owned by Wilfredo Dy when it was levied
upon by the sheriff in December, 1979. Well settled
is the rule that only properties unquestionably owned
by the judgment debtor and which are not exempt by
law from execution should be levied upon or sought to
be levied upon. For the power of the court in the
execution of its judgment extends only over properties
belonging to the judgment debtor. (Consolidated Bank
and Trust Corp. v. Court of Appeals, G.R. No. 78771,
January 23, 1991).

FILINVEST CREDIT vs. PHILIPPINE

ACETYLENE
G.R. No. L-50449 January 30, 1982

FACTS:
Philippine Acetylene Co. purchased from Alexander
Lim a motor vehicle described as Chevorlet 1969
model for P55K to be paid in installments. As
security for the payment of said promissory note, the
appellant executed a chattel mortgage over the same
motor vehicle in favor of said Alexander Lim. Then,
Lim assigned to the Filinvest all his rights, title, and
interests in the promissory note and chattel mortgage
by virtue of a Deed of Assignment.
Phil Acetylene defaulted in the payment of nine
successive installments. Filinvest sent a demand letter.
Replying thereto, Phil Acetylene wrote back of its
desire to return the mortgaged property, which return
shall be in full satisfaction of its indebtedness. So the
vehicle was returned to the Filinvest together with the
document Voluntary Surrender with Special Power of
Attorney To Sell. Filinvest failed to sell the motor
vehicle as there were unpaid taxes on the said vehicle.
Filinvest requested the appellant to update its account
by paying the installments in arrears and accruing
interest. Filinvest offered to deliver back the motor
vehicle to the appellant but the latter refused to accept
it, so appellee instituted an action for collection of a
sum of money with damages.
Appellant maintains that when it returned the
mortgaged motor vehicle to the appellee, said return
necessarily had the effect of extinguishing appellant's
obligation for the unpaid price to the appellee,
construing the return to and acceptance by the
appellee of the mortgaged motor vehicle as a mode of
payment, specifically, dation in payment or dacion en
pago which according to appellant, virtually made
appellee the owner of the mortgaged motor vehicle by
the mere delivery thereof, citing Articles 1232, 1245,
and 1497 of the Civil Code.
ISSUE:
Whether or not the return of the mortgaged motor
vehicle to the appellee constitutes transfer of
ownership so as to totally extinguish and/or cancel its
obligation to the appellee
HELD:

1. NO.
The mere return of the mortgaged motor vehicle by
the mortgagor, the herein appellant, to the mortgagee,
the herein appellee, does not constitute dation in
payment or dacion en pago in the absence, express or
implied of the true intention of the parties.
In its modern concept, what actually takes place
in dacion en pago is an objective novation of the
obligation where the thing offered as an accepted
equivalent of the performance of an obligation is
considered as the object of the contract of sale, while
the debt is considered as the purchase price. In any
case, common consent is an essential prerequisite, be
it sale or innovation to have the effect of totally
extinguishing the debt or obligation.
In the absence of clear consent of appellee to the
proferred special mode of payment, there can be no
transfer of ownership of the mortgaged motor vehicle
from appellant to appellee. An examination of the
language of the document (Surrender with Special
Power of Attorney To Sell) reveals that the possession
of the mortgaged motor vehicle was voluntarily
surrendered by the appellant to the appellee
authorizing the latter to look for a buyer and sell the
vehicle in behalf of the appellant who retains
ownership thereof, and to apply the proceeds of the
sale to the mortgage indebtedness, with the
undertaking of the appellant to pay the difference, if
any, between the selling price and the mortgage
obligation.
Under the law, the delivery of possession of the
mortgaged property to the mortgagee (appellee), can
only operate to extinguish appellant's liability if the
appellee had actually caused the foreclosure sale of
the mortgaged property when it recovered possession
thereof. It is worth noting that it is the fact of
foreclosure and actual sale of the mortgaged chattel
that bar the recovery by the vendor of any balance of
the purchaser's outstanding obligation not satisfied by
the sale.
As held by this Court, if the vendor desisted, on his
own initiative, from consummating the auction sale,

such desistance was a timely disavowal of the remedy

of foreclosure, and the vendor can still sue for specific
performance. This is exactly what happened in the
instant case.

De Leon vs. Ong

GR No. 170405, Feb. 2, 2010
Facts:
On March 10, 1993, petitioner De Leon sold 3 parcels
of land to Ong. The said properties were mortgaged to
Real Savings & Loan Association Inc. (RSLAI). The
parties then executed a notarized deed of absolute sale
with assumption of mortgage. De leon handed the
keys to Ong upon receipt of payment and De leon
wrote a letter to inform RSLAI that the mortgage will
be assumed by Ong. 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. Respondent,
on the other hand, asserts that they entered into a
contract of sale as petitioner already conveyed full
ownership of the subject properties upon the execution
of the deed
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:
1. Whether the parties entered into a contract of sale
or a contract to sell?
2. Was there a void or double sale?
HELD:
1. CONTRACT OF SALE
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 respondent.
*Settled is the rule that the seller is obliged to transfer
title over the properties and deliver the same to the
buyer. In this regard, Article 1498 of the Civil
Code provides that, as a rule, the execution of a
notarized deed of sale is equivalent to the delivery of a
thing sold.
In this instance, petitioner executed a notarized deed
of absolute sale in favor of respondent. Moreover, not
only did petitioner turn over the keys to the properties
to respondent, he also authorized RSLAI to receive
payment from respondent and release his certificates
of title to her. The totality of petitioners acts clearly
indicates that he had unqualifiedly delivered and
transferred ownership of the properties to respondent.
Clearly, it was a contract of sale the parties entered
into.
Furthermore, even assuming arguendo that the
agreement of the parties was subject to the condition
that RSLAI had to approve the assumption of

mortgage, the said condition was considered fulfilled

as petitioner prevented its fulfillment by paying his
outstanding obligation and taking back the certificates
of title without even notifying respondent. In this
connection, Article 1186 of the Civil Code provides:
The condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment.
2. This case involves a double sale as the disputed
properties were sold validly on two separate occasions
by the same seller to the two different buyers in good
faith. Art. 1544 clearly states that the rules on double
or multiple sales apply only to purchasers in good
faith. Needless to say, it disqualifies any purchaser in
bad faith.
A purchaser in good faith is one who buys the
property of another without notice that some other
person has a right to, or an interest in, such property
and pays a full and fair price for the same at the time
of such purchase, or before he has notice of some
other persons claim or interest in the property.
Respondent purchased the properties, knowing they
were encumbered only by the mortgage to RSLAI.
However, because petitioner surreptitiously paid his
outstanding obligation and took back her certificates
of title, petitioner himself rendered respondents
obligation to assume petitioners indebtedness to
RSLAI impossible to perform.Since respondents
obligation to assume petitioners outstanding balance
with RSLAI became impossible without her fault, she
was released from the said obligation. Moreover,
because petitioner himself willfully prevented the
condition vis--vis the payment of the remainder of
the purchase price, the said condition is considered
fulfilled pursuant to Article 1186 of the Civil Code.
Respondent was not aware of any interest in or a claim
on the properties other than the mortgage to RSLAI
which she undertook to assume. Moreover, Viloria
bought the properties from petitioner after the latter
sold them to respondent. Respondent was therefore a
purchaser in good faith. Hence, the rules on double
sale are applicable.

Vda. De Agatep vs Rodriguez and Vda De Lim

G.R. No. 170540, October 28, 2009
Peralta, J.
FACTS:
Lim mortgaged a parcel of land to PNB to secure a
loan. The mortgage contract was duly annotated on
the TCT. Lim was not able to pay her loan prompting
PNB to foreclose the property. Hence, the subject
parcel of land was sold at public auction to PNB as the
highest bidder. Lim failed to redeem the property.
After the expiration of the one-year redemption period
allowed by law, PNB consolidated its ownership over
the disputed land. As a consequence, a new certificate
of title was issued in the name of PNB.
While the mortgage was still in effect, Lim sold the
subject property to herein petitioner's husband, Isaac
Agatep. However, the sale was not registered and
neither did Lim deliver the title to petitioner or her
husband. Nonetheless, Agatep took possession of the
same, fenced it with barbed wire and introduced
improvements thereon. Subsequently, Agatep died.
Despite his death, his heirs, including herein
petitioner, continued to possess the property.
The subject lot was included among PNB's acquired
assets for sale. Later on, an invitation to bid was duly
published. The disputed parcel of land was sold to
Rodriguez, who is the daughter of respondent Lim. A
new title was issued in the name of Rodriguez.
Petitioner filed a Complaint for reconveyance and/or
damages against respondents. Later, the complaint
was amended to implead PNB as a party-defendant.
The RTC dismissed the amended complaint and
sustained the legality of the TCT in the name of
defendant Rodriguez. The CA affirmed the Decision
of the RTC.
Petitioner insists that PNB did not acquire ownership
over the disputed lot because the said property was not
delivered to it. Petitioner asserts that the execution of a
public document does not constitute sufficient delivery
to PNB, considering that the subject property is in the

adverse possession, under claim of ownership, of

petitioner and her predecessor-in-interest.
ISSUE:
Whether or not PNB acquired ownership over
the property in question
HELD: YES.
In Manuel R. Dulay Enterprises, Inc. v. Court of
Appeals:
It is settled that the buyer in a foreclosure sale
becomes the absolute owner of the
property purchased if it is not redeemed during
the period of one year after the registration of the
sale. As such, he is entitled to the possession of
the said property and can demand it at any time
following the consolidation of ownership in his
name and the issuance to him of a new transfer
certificate of title.
In Spouses Sabio v. The International Corporate
Bank, Inc:
Notwithstanding the presence of illegal
occupants on the subject property, transfer of
ownership by symbolic delivery under Article
1498 can still be effected through the execution
of the deed of conveyance. As we held in Power
Commercial and Industrial Corp. v. Court of
Appeals [274 SCRA 597, 610], the key word
is control, not possession, of the subject
property. Considering that the deed of
conveyance proposed by respondents did not
stipulate or infer that petitioners could not
exercise control over said property, delivery can
be effected through the mere execution of said
deed.
x x x It is sufficient that there are no legal
impediments to prevent petitioners from gaining
physical possession of the subject property. As
stated above, prior physical delivery or
possession is not legally required and the
execution of the deed of sale or conveyance is
deemed equivalent to delivery. This deed
operates as a formal or symbolic delivery of the

property sold and authorizes the buyer or

transferee to use the document as proof of
ownership. Nothing more is required.
Thus, the execution of the Deed of Sale in favor of
PNB, after the expiration of the redemption period, is
deemed equivalent to delivery.
Petitioner and her husband's possession of the
disputed lot is derived from their right as buyers of the
subject parcel of land. As buyers or transferees,
petitioner and her husband simply stepped into the
shoes of Lim, who, prior to selling the subject
property to them, mortgaged the same to PNB. As
Lim's successors-in-interest, their possession could
not be said to be adverse to that of Lim. Thus, they are
also bound to recognize and respect the mortgage
entered into by the latter. Their possession of the
disputed lot could not, therefore, be considered as a
legal impediment which could prevent PNB from
acquiring ownership and possession thereof.
Settled is the rule that a mortgage is an accessory
contract intended to secure the performance of the
principal obligation. One of its characteristics is that it
is inseparable from the property. It adheres to the
property regardless of who its owner may
subsequently be. This is true even in the case of a real
estate mortgage because, pursuant to Article 2126 of
the Civil Code, the mortgage directly and immediately
subjects the property upon which it is imposed,
whoever the possessor may be, to the fulfillment of
the obligation for whose security it was constituted.
It is inseparable from the property mortgaged as it is a
right in rem - a lien on the property whoever its owner
may be. It subsists notwithstanding a change in
ownership; in short, the personality of the owner is
disregarded. Thus, all subsequent purchasers must
respect the mortgage whether the transfer to them be
with or without the consent of the mortgagee, for such
mortgage until discharged follows the property.

ABUAN, ET AL. v. GARCIA, ET AL.

G.R. No. L-20091 July 30, 1965
Bengzon,C.J.
FACTS:
On August 7, 1953, petitioners Perpetua Abuan et al.
sold a parcel of rice land to defendants 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. 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.
The lower court dismissed the complaint, fixing the
starting date as February 28, 1955, when the
Agreement was entered into. CA certified the case to
SC.
ISSUE:
When did the five-year period (within which plaintiffs
may exercise their right of repurchase) begin to run?
HELD:
The law speaks of "five years from date of
conveyance."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).
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.
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.
But 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.

The circumstance that full payment was made only in

May, 1955, does not alter the fact that ownership of
the land passed to defendants upon the execution of
the agreement with the intention of letting them hold it
as owners. 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.

BOARD OF LIQUIDATORS vs. EXEQUIEL

FLORO, ET AL., oppositors-appellees.
G.R. No. L-15155
December 29, 1960
REYES, J.B.L., J.:
FACTS:
Malabanan entered into an agreement with the Board
of Liquidators for the salvage of surplus properties
sunk in territorial waters off the provinces of Mindoro,
La Union, and Batangas. By its terms, Malabanan was
to commence operations within 30 days from
execution of said contract, which was to be effective
for a period of 1 year from the start of operations.
Such contract was subsequently extended twice.
Four months previously, Malabanan had entered into
an agreement with Floro, in which it was agreed that
Floro would advance to Malabanan certain sums of
money, repayment, thereof being secured by quantities
of steel mattings which Malabanan would consign to
Floro.; that upon default in payment, Floro was,
authorized to sell whatever steel mattings were in his
possession under said contract, in amount sufficient to
satisfy the advances.
Malabanan was not able to repay Floro's advances. He
filed a petition for voluntary insolvency, attaching
thereto a Schedule of Accounts, in which the Board
and Floro were listed as creditors. Also attached was
an Inventory of Properties including the pieces of steel
mattings.
The Board, claiming to be the owner of the listed steel
matting, filed a petition to exclude them from the

inventory. It contends that Malabanan did not acquire

ownership over the steel mattings due to his failure to
comply with the terms of the contrac: payment of the
price; audit and check as to the nature, quantity and
value of properties salvaged; determination of the site
for storage; audit and verification of the recovery
reports by government auditors; and firing of
performance bond,etc.
The court below denied the Board's petition and
declared that Malabanan had acquired ownership over
the steel mattings under his contract with the Board
and that Exequiel Floro was properly authorized to
dispose of the steel mattings under Floro's contract
with Malabanan; and that the sale to Eulalio Legaspi
was valid and not contrary to the Insolvency Law.
ISSUE:
Whether or not Malabanan acquired ownership over
the steel mattings
HELD:
YES. The contract between Malabanan and the Board
had effect of vesting Malabanan with title to, or
ownership of the steel mattings in question as soon as
they were brought up from the bottom of the sea.
This is shown by pertinent provisions of the contract.
- That Malabanan was required under the
contract to post a bond of P10,000.00 to
guarantee compliance with the terms and
conditions of the contract; that the operation
for salvage were entirely at Malabanan's
expense and risks; that gold, silver, copper,
coins, currency, jewelry, precious stones, etc.
were excepted from the contract, and were
instead required to be turned over to the Board
for disposition; that the expenses for storage,
including guard service, were for Malabanan's
account all these circumstances indicated
that ownership of the goods passed to
Malabanan as soon as they were recovered or
salvaged (i.e., as soon as the salvor had gained
effective possession of the goods), and not
only after payment of the stipulated price. .

While there can be reservation of title in the seller

until full payment of the price (Article 1478, N.C.C.),
or, until fulfillment of a condition (Article 1505,
N.C.C.); and while execution of a public instrument
amounts to delivery only when from the deed the
contrary does not appear or cannot clearly be inferred
(Article 1498, supra), there is nothing in the said
contract which may be deemed a reservation of title,
or from which it may clearly be inferred that delivery
was not intended. While there was no physical
tradition, there was one by agreement (traditio longa
manu) in conformity with Article 1499 of the Civil
Code. As observed earlier, there is nothing in the
terms of the public instrument in question from which
an intent to withhold delivery or transfer of title may
be inferred.
Carbonell vs. CA
G.R. No. 29972, January 26, 1976
Makasiar, J
FACTS:
Respondent Jose Poncio was the owner of the parcel
of land located in Rizal. The said lot was subject to
mortgage in favor of the Republic Savings Bank.
Carbonell and respondent Emma Infante offered to
buy the said lot from Poncio. Poncio offered to sell his
lot to Carbonell excluding the house on which he and
his family stayed. Poncio accepted the price offered
by Carbonnel on the condition that from the purchase
price would come the money to be paid to the bank.
The parties executed a document in the Batanes
dialect which is translated as: CONTRACT FOR ONE
HALF LOT WHICH I (Poncio) BOUGHT FROM.
Carbonell asked a lawyer to prepare the deed of sale
and delivered the document, together with the balance
of P400, to Jose Poncio. (Note: Carbonell already paid
P200 for the mortgage debt of Poncio + obligated
herself to pay the remaining installments.)
However, when she went to Poncio, the latter
informed her that he could no longer proceed with the
sale as the lot was already sold to Emma Infante and

that he could not withdraw with the sale. In a private

memorandum agreement, Poncio bound to sell to
Infante the lot with Infante still assuming the
mortgage debt. (Note: The full amount of mortgage
debt was already paid by the Infantes)
A deed of sale was executed between Poncio and
Infante. Knowing that the sale to Infante has not been
registered,
Carbonell
filed
an
adverse
claim. Thereafter, the deed of sale was registered but it
has an annotation of the adverse claim of Carbonell.
Emma Infante took possession of the lot, built a house
and introduced some improvements.
Carbonell filed a complaint praying that she be
declared the lawful owner of the land, that the
subsequent sale to spouses Infante be declared null
and void, and that Jose Poncio be ordered to execute
the corresponding deed of conveyance of said land in
her favor
RTC ruled that the sale to spouses Infante was null
and void. After re-trial, it reversed its ruling. CA ruled
in favor of Carbonell but after a MfR, it reversed its
ruling and ruled in favor of the Infantes.
ISSUE:
1. Whether or not there was an existing contract of
sale between Poncio and Carbonell
2. Whether or not Carbonell has a superior right over
Emma Infante
HELD:
1. YES
There had been celebrated a sale of the property
excluding the house for the price of P9.50 per square
meter, so much so that on faith of that, Rosario had
advanced the sum of P247.26 and binding herself to
pay unto Jose the balance of the purchase price after
deducting the indebtedness to the Bank.
Since the wording of the private document goes so far
as to describe their transaction as one of sale, already
consummated between them, as can be noted with the
past tense used in the phrase, the lot sold by him to

me and going so far even as to state that from that day

onwards, vendor would continue to live therein, for
one year, during which time he will not pay anything
this can only mean that between Rosario and Jose,
there had been a true contract of sale, consummated
by delivery constitutum possessorium (Art.1500, New
Civil Code); vendors possession having become
converted from then on, as a mere tenant of vendee,
with the special privilege of not paying rental for one
year.
Being a valid consensual contract, the document
effectively transferred the possession of the lot to the
vendee Carbonell by constitutum possessorium
(Article 1500, New Civil Code); because thereunder
the vendor Poncio continued to retain physical
possession of the lot as tenant of the vendee and no
longer as owner thereof. More than just the signing of
the document by Poncio and Carbonell with
Constancio Meonada as witness to perfect the contract
of sale, the transaction was further confirmed when
Poncio agreed to the actual payment by Carbonell of
his mortgage arrearages to the bank on 27 January
1955 and by his consequent delivery of his own
mortgage passbook to Carbonell. If he remained
owner and mortgagor, Poncio would not have
surrendered his mortgage passbook to Carbonell.
a. Contract is consensual; Oral contract does not
invalidate sale but merely incapable of proof
Even if the document was not registered at all, it
was a valid contract nonetheless. Under the law, a
contract sale is consensual, perfected by mere
consent (Couto vs. Cortes, 8 Phil. 459). Under the
New Civil Code, while a sale of an immovable is
ordered to be reduced to a public document (Art.
1358), that mandate does not render an oral sale of
realty invalid, but merely incapable of proof.
Where still executory and action is brought and
resisted for its performance (1403, par. 2, 3); but
where already wholly or partly executed or where
even if not yet, it is evidenced by a memorandum,
in any case where evidence to further demonstrate
is presented and admitted, then the oral sale
becomes perfectly good, and becomes a good cause
of action not only to reduce it to the form of a

public document, but even to enforce the contract

in its entirety (Art. 1357).
b. There is sufficient description of the lot
referred to in the document executed by
Carbonell and Poncio
As none other than the parcel of lot occupied by the
defendant Poncio and where he has his
improvements erected. The Identity of the parcel of
land involved herein is sufficiently established by
the contents of the note. Moreover, it is not shown
that Poncio owns another parcel with the same area,
adjacent to the lot of his cousin Carbonell and
likewise mortgaged by him to the Republic Savings
Bank. The transaction therefore between Poncio
and Carbonell can only refer and does refer to the
lot involved herein. If Poncio had another lot to
remove his house, said document would not have
stipulated to allow him to stay in the sold lot
without paying any rent for one year and thereafter
to pay rental in case he cannot find another place to
transfer his house.
c. There was an adequate consideration or price for
the sale in favor of Carbonell
Poncio agreed to sell the same to Carbonell at
P9.50 per square meter, on condition that
Carbonell:
1. should pay (a) the amount of P400.00 to Poncio
and the arrears in the amount of P247.26 to the
bank
2. should assume his mortgage indebtedness.
The bank president agreed to the said sale with
assumption of mortgage in favor of Carbonell an
Carbonell accordingly paid the arrears of P247.26.
It is evident therefore that there was ample
consideration, and not merely the sum of P200.00,
for the sale of Poncio to Carbonell of the lot in
question.
2. YES
Article 1544 provides that for double sale of an
immovable property, the ownership shall belong to

the person who first acquired it in good faith and

recorded it in the Registry of Property
Article 1544, New Civil Code, which is decisive of
this case, recites:
If the same thing should have been sold to different
vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in
good faith, if it should movable property.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good
faith.
The buyer must act in good faith in registering the
deed of sale
It is essential that the buyer of realty must act in good
faith in registering his deed of sale to merit the
protection of the second paragraph of said Article
1544.
Unlike the first and third paragraphs of said Article
1544, which accord preference to the one who first
takes possession in good faith of personal or real
property, the second paragraph directs that ownership
of immovable property should be recognized in favor
of one "who in good faith first recorded" his right.
Under the first and third paragraph, good faith must
characterize the act of anterior registration.
Rule when there is inscription or not
If there is no inscription, what is decisive is prior
possession in good faith. If there is inscription, as in
the case at bar, prior registration in good faith is a precondition to superior title.
Carbonell was in good faith when she bought the
lot
When Carbonell bought the lot from Poncio on
January 27, 1955, she was the only buyer thereof and
the title of Poncio was still in his name solely

encumbered by bank mortgage duly annotated

thereon. Carbonell was not aware and she could not
have been aware of any sale of Infante as there was
no such sale to Infante then.
Hence, Carbonell's prior purchase of the land was
made in good faith. Her good faith subsisted and
continued to exist when she recorded her adverse
claim four (4) days prior to the registration of
Infantes's deed of sale.
Carbonells good faith did not cease when she was
informed by Poncio about the sale to Emma
Infante
After learning about the second sale, Carbonell tried
to talk to the Infantes but the latter refused.
(Exact words of the SC: With an aristocratic disdain
unworthy of the good breeding of a good Christian
and good neighbor, Infante snubbed Carbonell like a
leper and refused to see her.)
So Carbonell did the next best thing to protect her
right she registered her adversed claim on February
8, 1955. Under the circumstances, this recording of
her adverse claim should be deemed to have been
done in good faith and should emphasize Infante's bad
faith when she registered her deed of sale four (4)
days later on February 12, 1955.
The Infantes were in bad faith (5 indications of bad
faith listed below)
Bad faith arising from previous knowledge by Infante
of the prior sale to Carbonell is shown by the
following facts:
1. Mrs. Infante refused to see Carbonell. Her
refusal to talk to Carbonell could only mean that
she did not want to listen to Carbonell's story that
she (Carbonell) had previously bought the lot
from Poncio.
2. Carbonell was already in possession of
mortgage passbook and copy of the mortgage
contract. (Not Poncios saving deposit passbook.)
3. Emma Infante did not inquire why Poncio was
no longer in possession of the mortgage passbook
and why it was in Carbonells possession. The

fact that Poncio was no longer in possession of

his mortgage passbook and that the said mortgage
passbook was already in possession of Carbonell,
should have compelled Infante to inquire from
Poncio why he was no longer in possession of the
mortgage passbook and from Carbonell why she
was in possession of the same.
4. Emma Infante registered the sale under her
name after Carbonell filed an adverse claim 4
days earlier. Here she was again on notice of the
prior sale to Carbonell. Such registration of
adverse claim is valid and effective.
5. Infante failed to inquire to Poncio WON he
had already sold the property to Carbonell
especially that it can be shown that he was aware
of the offer made by Carbonell.
SAN LORENZO DEVELOPMENT
CORPORATION, petitioner, vs. COURT OF
APPEALS, PABLO S. BABASANTA, SPS.
MIGUEL LU and PACITA ZAVALLA LU,
respondents.
FACTS:
Respondents Sps. Lu owned two parcels of land
situated in Sta. Rosa, Laguna. They purportedly sold
the two parcels of land to respondent Babasanta, for
the price of (P15.00) per square meter. Babasanta
made a downpayment of (P50,000.00) as evidenced
by a memorandum receipt issued by Pacita Lu of the
same date. Several other payments were made by
Babasanta.
Sometime in May 1989, Babasanta wrote a letter to
Pacita Lu to demand the execution of a final deed of
sale in his favor so that he could effect full payment of
the purchase price. In the same letter, Babasanta
notified the spouses about having received
information that the spouses sold the same property to
another without his knowledge and consent. He
demanded that the second sale be cancelled and that a
final deed of sale be issued in his favor.
In response, Pacita Lu wrote a letter to Babasanta
wherein she acknowledged having agreed to sell the

property to him at fifteen pesos (P15.00) per square

meter. She, however, reminded Babasanta that when
the balance of the purchase price became due, he
requested for a reduction of the price and when she
refused, Babasanta backed out of the sale. Pacita
added that she returned the sum of (P50,000.00) to
Babasanta.
Respondent Babasanta filed a complaint. Petitioner
San Lorenzo Development Corporation (SLDC) filed
a Motion for Intervention before the trial court
alleging that the two parcels of land involved 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.
The RTC rendered its Decision upholding the sale of
the property to SLDC. The Court of Appeals set aside
the judgment of the trial court. It declared that the sale
between Babasanta and the Spouses Lu was valid and
subsisting and ordered the spouses to execute the
necessary deed of conveyance in favor of Babasanta,
and the latter to pay the balance of the purchase price.
The appellate court ruled that the Absolute Deed of
Sale with Mortgage in favor of SLDC was null and
void on the ground that SLDC was a purchaser in bad
faith.
Hence, this petition.
ISSUE:
Who between SLDC and Babasanta has a better right
over the two parcels of land subject of the instant case
in view of the successive transactions executed by the
Spouses Lu?
HELD: SLDC
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.
Contracts, in general, are perfected by mere consent,
which is manifested by the meeting of the offer and

the acceptance upon the thing which are to constitute

the contract. The offer must be certain and the
acceptance absolute.[20] Moreover, contracts shall be
obligatory in whatever form they may have been
entered into, provided all the essential requisites for
their validity are present.
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. Babasantas 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. Moreover, had the sellers intended to transfer
title, they could have easily executed the document of
sale in its required form simultaneously with their
acceptance of the partial payment, but they did not.
Doubtlessly, the receipt signed by Pacita Lu should
legally be considered as a perfected contract to sell
In a contract of sale, title passes to the vendee upon
the delivery of the thing sold; whereas in a contract to
sell, by agreement the ownership is reserved in the
vendor and is not to pass until the full payment of the
price. In a contract of sale, the vendor has lost and
cannot recover ownership until and unless the contract
is resolved or rescinded; whereas in a contract to sell,
title is retained by the vendor until the full payment of
the price, such payment being a positive suspensive
condition and failure of which is not a breach but an
event that prevents the obligation of the vendor to
convey title from becoming effective
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.
Mere sending of a letter by the vendee expressing the

intention to pay without the accompanying payment is

not considered a valid tender of payment.
Consignation of the amounts due in court is essential
in order to extinguish Babasantas obligation to pay the
balance of the purchase price. 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.
On the assumption that the transaction between
the parties is a contract of sale and not a contract
to sell, Babasantas claim of ownership should
nevertheless fail.
Sale, being a consensual contract, is perfected by mere
consent and from that moment, the parties may
reciprocally demand performance. The essential
elements of a contract of sale, to wit: (1) consent or
meeting of the minds, that is, to transfer ownership in
exchange for the price; (2) object certain which is the
subject matter of the contract; (3) cause of the
obligation which is established.
The perfection of a contract of sale should not,
however, be confused with its consummation. In
relation to the acquisition and transfer of ownership, it
should be noted that sale is not a mode, but merely a
title. A mode is the legal means by which dominion or
ownership is created, transferred or destroyed, but title
is only the legal basis by which to affect dominion or
ownership. Under Article 712 of the Civil Code,
ownership and other real rights over property are
acquired and transmitted by law, by donation, by
testate and intestate succession, and in consequence of
certain contracts, by tradition. Contracts only
constitute titles or rights to the transfer or acquisition
of ownership, while delivery or tradition is the mode
of accomplishing the same. Therefore, sale by itself
does not transfer or affect ownership; the most that
sale does is to create the obligation to transfer
ownership. It is tradition or delivery, as a consequence
of sale, that actually transfers ownership.
Explicitly, the law provides 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 specified in

Article 1497 to 1501.[30] The word delivered should
not be taken restrictively to mean transfer of actual
physical possession of the property. The law
recognizes two principal modes of delivery, to wit: (1)
actual delivery; and (2) legal or constructive delivery.
Actual delivery consists in placing the thing sold in
the control and possession of the vendee. Legal or
constructive delivery, on the other hand, may be had
through any of the following ways: the execution of a
public instrument evidencing the sale;symbolical
tradition such as the delivery of the keys of the place
where the movable sold is being kept; traditio longa
manu or by mere consent or agreement if the movable
sold cannot yet be transferred to the possession of the
buyer at the time of the sale;traditio brevi manu if the
buyer already had possession of the object even before
the sale; and traditio constitutum possessorium, where
the seller remains in possession of the property in a
different capacity
ALSO:
More fundamentally, given the superiority of the right
of SLDC to the claim of Babasanta the annotation of
the notice of lis pendens cannot help Babasantas
position a bit and it is irrelevant to the good or bad
faith characterization of SLDC as a purchaser.
Assuming ex gratia argumenti that SLDCs registration
of the sale had been tainted by the prior notice of lis
pendens and assuming further for the same nonce that
this is a case of double sale, still Babasantas claim
could not prevail over that of SLDCs.
In Abarquez v. Court of Appeals, this Court had the
occasion to rule that if a vendee in a double sale
registers the sale after he has acquired knowledge of a
previous sale, the registration constitutes a registration
in bad faith and does not confer upon him any right. If
the registration is done in bad faith, it is as if there is
no registration at all, and the buyer who has taken
possession first of the property in good faith shall be
preferred.
We would not hesitate to rule in favor of SLDC on the

basis of its prior possession of the property in good

faith. Be it noted that delivery of the property to
SLDC was immediately effected after the execution of
the deed in its favor, at which time SLDC had no
knowledge at all of the prior transaction by the
Spouses Lu in favor of Babasanta.

G.R. No. L-6389

Additional info also in this case:

FACTS:
Macario Amigo and Anacleta Cagalitan executed in
favor of their son, Marcelino, a power of attorney
granting to the latter, among others, the power "to
lease, let, bargain, transfer, convey and sell, remise,
release, mortgage and hypothecate, part or any of the
properties . . . upon such terms and conditions, and
under such covenants as he shall think fit."

It must be stressed that the juridical relationship

between the parties in a double sale is primarily
governed by Article 1544 which lays down the rules
of preference between the two purchasers of the same
property. It provides:
Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred
to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith
first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall
pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good
faith.
The principle of primus tempore, potior jure (first in
time, stronger in right) gains greater significance in
case of double sale of immovable property. When the
thing sold twice is an immovable, the one who
acquires it and first records it in the Registry of
Property, both made in good faith, shall be deemed the
owner.[38] Verily, the act of registration must be
coupled with good faith that is, the registrant must
have no knowledge of the defect or lack of title of his
vendor or must not have been aware of facts which
should have put him upon such inquiry and
investigation as might be necessary to acquaint him
with the defects in the title of his vendor.

November 29, 1954

PASTOR AMIGO and JUSTINO

petitioners,
vs.
SERAFIN TEVES, respondent.

AMIGO,

Marcelino, in his capacity as attorney-in-fact,

executed a deed of sale of a parcel of land for a price
of P3,000 in favor of Serafin Teves stipulating therein
that the vendors could repurchase the land within a
period of 18 months from the date of the sale. In the
same document, it was also stipulated that vendors
would remain in possession of the land as lessees for a
period of 18 months subject certain terms and
conditions one of which (d) in case of failure to pay
any rental as agreed upon, the lease shall
automatically terminate and the right of ownership of
vendee shall become absolute.
Sps. Macario Amigo and Anacleta Cagalitan donated
to their sons Justino Amigo and Pastor Amigo several
parcels of land including their right to repurchase the
land in litigation.The vendors-lessees paid the rental
corresponding to the first six months, but not the
rental for the subsequent semester. Serafin Teves, the
vendee-lessor,
executed
an
"Affidavit
of
Consolidation of Title" in view of the failure of the
lessees to pay the rentals as agreed upon, and
registered said affidavit in the Office of the Register of
Deeds who issued to Serafin Teves the corresponding
transfer of title over the land in question.
Justino Amigo and Pastor Amigo, as donees of the
right to repurchase the land in question, offered to
repurchase the land from Serafin Teves by tendering
to him the payment of the redemption price but the
latter refused on the ground that the ownership had

already been consolidated in him as purchaser a

retro. Hence, on April 26, 1940, before the expiration
of the 18th-month period stipulated for the redemption
of the land, the donees instituted the present action.

of title evidencing ownership of the units. Petitioner

then sent to respondent, for the latters signature,
documents denominated as Deeds of Absolute Sale for
the two condominium units.

ISSUE:
Whether or not ownership has been transfered to the
vendee?

Upon examination of the deed of absolute sale of Unit

No. 2405 and the identical document for Unit No.
2406, respondent was distressed to find that the stated
floor area is only 127 square meters contrary to the
area indicated in the price list which was 155 square
meters.

HELD:
Yes, the lease that a vendor executes on the property
may be considered as a means of delivery or tradition
by constitutum possessorium. Where the vendor a
retro continues to occupy the land as lessee, by fiction
of law, the possession is deemed to be constituted in
the vendee by virtue of this mode of tradition. We may
say therefore that this covenant regarding the lease of
the land sold is germane to the contract of sale with
pacto de retro.
While the lease covenant may be onerous or may
work hardship on the vendor because of its clause
providing for the automatic termination of the period
of redemption, however, the same is not contrary to
law, morals, or public order, which may serve as basis
for its nullification. Rather than obnoxious are
oppressive , it is a clause common in a sale with pacto
de retro, and as such it received the sanction of our
courts.
CEBU WINLAND VS ONG SIAO
G.R. No. 173215, May 21, 2009
FACTS:
While the Cebu Winland Tower Condominium was
under construction, petitioner offered to sell to
respondent condominium units at promotional prices.
Respondent accepted the offer of petitioner and
bought two condominium units. On October 10, 1996,
possession of the subject properties was turned over to
respondent.
After the purchase price was fully paid, respondent
requested petitioner for the condominium certificates

Petitioner refused to refund the said amount to

respondent. Consequently, respondent filed a
Complaint in the Regional Office of the Housing and
Land Use Regulatory Board (HLURB) in Cebu City,
praying for the refund of the amount he paid including
the suspension of petitioners. The HLURB arbiter
rendered a decision dismissing the complaint.
Thereafter, the Board modified the decision. It found
that there was a mistake regarding the object of the
sale constituting a ground for rescission based on
Articles 1330 and 1331[14] of the Civil Code.
ISSUES:
1. Whether or not the transfer of possession of the
subject properties on October 10, 1996 to respondent
can be considered as delivery within the purview of
Article 1543 of the Civil Code.
2. Whether the sale in the case at bar is one made with
a statement of its area or at the rate of a certain price
for a unit of measure and not for a lump sum. (art
1539 vs 1542)
HELD:
1. NO. Under the Civil Code, ownership does not pass
by mere stipulation but only by delivery. Manresa
explains, the delivery of the thing . . . signifies that
title has passed from the seller to the buyer."
According to Tolentino, the purpose of delivery is not
only for the enjoyment of the thing but also a mode of
acquiring dominion and determines the transmission
of ownership, the birth of the real right. The delivery
under any of the forms provided by Articles 1497 to
1505 of the Civil Code signifies that the transmission

of ownership from vendor to vendee has taken place.

1543 of the Civil Code.

Article 1497 above contemplates what is known as

real or actual delivery, when the thing sold is placed in
the control and possession of the vendee. Article 1498,
on the one hand, refers to symbolic delivery by the
execution of a public instrument. It should be noted,
however, that Article 1498 does not say that the
execution of the deed provides a conclusive
presumption of the delivery of possession. It confines
itself to providing that the execution thereof is
equivalent to delivery, which means that the
presumption therein can be rebutted by means of clear
and convincing evidence. Thus, the presumptive
delivery by the execution of a public instrument can
be negated by the failure of the vendee to take actual
possession of the land sold

In the case at bar, it appears that respondent was

already placed in possession of the subject properties.
However, it is crystal clear that the deeds of absolute
sale were still to be executed by the parties upon
payment of the last installment. This fact shows that
ownership of the said properties was withheld by
petitioner. Following case law, it is evident that the
parties did not intend to immediately transfer
ownership of the subject properties until full payment
and the execution of the deeds of absolute sale.
Consequently, there is no delivery to speak of in this
case since what was transferred was possession only
and not ownership of the subject properties.

Delivery has been described as a composite act, a

thing in which both parties must join and the minds of
both parties concur. It is an act by which one party
parts with the title to and the possession of the
property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery
means something in addition to the delivery of
property or title; it means transfer of possession. In the
Law on Sales, delivery may be either actual or
constructive, but both forms of delivery contemplate
"the absolute giving up of the control and custody of
the property on the part of the vendor, and the
assumption of the same by the vendee
In light of the foregoing, delivery as used in the Law
on Sales refers to the concurrent transfer of two
things: (1) possession and (2) ownership. This is the
rationale behind the jurisprudential doctrine that
presumptive delivery via execution of a public
instrument is negated by the reality that the vendee
actually failed to obtain material possession of the
land subject of the sale. In the same vein, if the vendee
is placed in actual possession of the property, but by
agreement of the parties ownership of the same is
retained by the vendor until the vendee has fully paid
the price, the mere transfer of the possession of the
property subject of the sale is not the delivery
contemplated in the Law on Sales or as used in Article

2. If the sale was made for a price per unit of measure

or number, the consideration of the contract with
respect to the vendee, is the number of such units, or,
if you wish, the thing purchased as determined by the
stipulated number of units. But if, on the other hand,
the sale was made for a lump sum, the consideration
of the contract is the object sold, independently of its
number or measure, the thing as determined by the
stipulated boundaries, which has been called in law a
determinate object.
In the case at bar, it is undisputed by the parties that
the purchase price of the subject properties was
computed based on the price list prepared by
petitioner, or P22,378.95 per square meter. Clearly, the
parties agreed on a sale at a rate of a certain price per
unit of measure and not one for a lump sum. Hence, it
is Article 1539 and not Article 1542 which is the
applicable law. Accordingly, respondent is entitled to
the relief afforded to him under Article 1539, that is,
either a proportional reduction of the price or the
rescission of the contract, at his option.

PLACE OF DELIVERY
G.R. No. L-15385
June 30, 1960
VDA. DE SARMIENTO vs.
LESACA
FACTS:
Plaintiff bought from defendant two parcels of land
for P5,000; that after the sale, plaintiff tried to take
actual physical possession of the lands but was
prevented from doing so by one Martin Deloso who
claims to be the owner thereof; that plaintiff instituted
an action before the Tenancy Enforcement Division of
the Department of Justice to oust said Martin Deloso
from the possession of the lands, which action she
later abandoned for reasons known only to her; that on
December 12, 1949, plaintiff wrote defendant asking
the latter either to change the lands sold with another
of the same kind and class or to return the purchase
price together with the expenses she had incurred in
the execution of the sale; and that since defendant did
not agree to this proposition as evidenced by her letter
dated December 21,1949, plaintiff filed the present
action.
The trial court rendered judgment declaring the deed
of sale entered into between plaintiff and defendant
rescinded.
ISSUE:
Whether the execution of the deed of sale in a public
document is equivalent to delivery of possession of
the lands sold to appellee thus relieving her of the
obligation to place appellee in actual possession
thereof.
HELD:
Articles 1461 and 1462 of the old Civil Code provide:
ART. 1461. The vendor is bound to deliver and
warrant the thing which is the subject-matter of the
sale.
ART. 1462. The thing sold shall be deemed delivered
when the vendee is placed in the control and
possession thereof.

If the sale should be made by means of a public

instrument, the execution thereof shall be equivalent
to the delivery of the thing which is the subject-matter
of the contract unless the contrary appears or is clearly
to be inferred from such instrument.
From the above it is clear that when a contract of sale
is executed the vendor is bound to deliver to the
vendee the thing sold by placing the vendee in the
control and possession of the subject-matter of the
contract. However, if the sale is executed by means of
a public instrument, the mere execution of the
instrument is equivalent to delivery unless the
contrary appears or is clearly to be inferred from
such instrument.
It can be clearly seen therein that the vendor intended
to place the vendee in actual possession of the lands
immediately as can be inferred from the stipulation
that the vendee "takes actual possession thereof ...
with full rights to dispose, enjoy and make use thereof
in such manner and form as would be most
advantageous to herself." The possession referred to in
the contract evidently refers to actual possession and
not merely symbolical inferable from the mere
execution of the document.
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 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 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.
Can the plaintiff ask for recission?
Undoubtedly in a contract of purchase and sale the
obligation of the parties is reciprocal, and, as provided
by the law, in case one of the parties fails to comply
with what is incumbent upon him to do , the person
prejudiced may either exact the fulfillment of the
obligation or rescind the sale. Since plaintiff chose the
latter alternative, it cannot be disputed that her action
is in accordance with law.
G.R. No. L-15385

June 30, 1960

ALEJANDRA BUGARIN VDA. DE SARMIENTO

vs. JOSEFA R. LESACA,
FACTS:
Paintiff bought from defendant two parcels of land for
P5,000; that after the sale, plaintiff tried to take actual
physical possession of the lands but was prevented
from doing so by one Martin Deloso who claims to be
the owner thereof; that on February 1, 1949, plaintiff
instituted an action before the Tenancy Enforcement
Division of the Department of Justice to oust said
Martin Deloso from the possession of the lands, which
action she later abandoned for reasons known only to
her; that on December 12, 1949, plaintiff wrote
defendant asking the latter either to change the lands
sold with another of the same kind and class or to
return the purchase price together with the expenses
she had incurred in the execution of the sale, plus 6
per cent interest; and that since defendant did not
agree to this proposition as evidenced by her letter
dated December 21,1949, plaintiff filed the present
action.
ISSUE:
Whether or not the execution of the deed of sale in a
public document) is equivalent to delivery of
possession of the lands.
HELD:

YES
When a contract of sale is executed the vendor is
bound to deliver to the vendee the thing sold by
placing the vendee in the control and possession of the
subject-matter of the contract. However, if the sale is
executed by means of a public instrument, the mere
execution of the instrument is equivalent to
delivery unless the contrary appears or is clearly to
be inferred from such instrument.
The question that now arises is: Is there any
stipulation in the sale in question from which we can
infer that the vendor did not intend to deliver outright
the possession of the lands to the vendee? We find
none. On the contrary, it can be clearly seen therein
that the vendor intended to place the vendee in actual
possession of the lands immediately as can be inferred
from the stipulation that the vendee "takes actual
possession thereof ... with full rights to dispose, enjoy
and make use thereof in such manner and form as
would be most advantageous to herself." The
possession referred to in the contract evidently refers
to actual possession and not merely symbolical
inferable from the mere execution of the document.

G.R. No. L-20091

July 30, 1965

PERPETUA ABUAN, ET AL., vs. EUSTAQUIO S.

GARCIA, ET AL., .
FACTS:
Acquired by Laureano Abuan the homestead passed
after his death to his legal heirs, the plaintiffs herein.
Consequently, the Original Certificate of Title in his
name was cancelled, and in lieu thereof, Transfer
Certificate of Title No. T-5486 was issued in their
names.

August 7, 1953Plaintiffs sold the parcel of land to

defendants, the sale being evidenced by a public
instrument entitled "Deed of Absolute Sale"; and by
virtue thereof, Transfer Certificate of Title No. T-5906
was issued to defendants.
Later, plaintiffs filed an action to recover the land,
alleging that the deed of absolute sale had been
executed through fraud, without consideration.
However, the case was subsequently settled amicably,
when the parties entered into an "Agreement" dated
February 28, 1955, under the terms of which
defendants paid P500.00 on that day as partial
payment of the purchase price of the land, and
promised to pay the balance of P1,500.00 on or before
April 30, 1955, with a grace period of thirty days. The
parties also stipulated in said Agreement that it "shall
supersede all previous agreements or contracts
heretofore entered into and executed by and between
plaintiff and defendants, involving the same parcel of
riceland ... .
Claiming that full payment had been effected only
sometime in May, 1955, 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.

the date that defendants acquired ownership of the

land. Now, when did defendants legally acquire
ownership over the land?
Art. 1477 of the New Civil Code provides that
ownership of the thing sold shall be transferred to the
vendee upon the actual or constructive delivery
thereof; and Art. 1496 points out that ownership of the
thing sold is acquired by the vendee from the moment
it is delivered to him in any of the ways specified in
articles 1497 to 1501. 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. 3 This manner of delivery
of the thing through the execution of a public
document is common to personal as well as real
property. 4
It is clear, therefore, that defendants acquired
ownership to the land in question upon the execution
of the deed of sale. The deed of sale was executed on
August 7, 1953, which was "superseded" by the
Agreement of February 28, 1955, as to the terms and
conditions of payment of the purchase price. The latter
agreement did not operate to revest the ownership of
the land in the plaintiffs. 5

ISSUE:
G.R. No. 91029

February 7, 1991

The sole question is: When did the five-year period

(within which plaintiffs may exercise their right of
repurchase) begin to run?

NORKIS DISTRIBUTORS, INC vs. THE COURT

OF APPEALS & ALBERTO NEPALES

HELD:

FACTS:

DATE OF CONVEYANCE (Transfer or Ownership)

Private respondent Alberto Nepales bought from the

Norkis-Bacolod branch a brand new Yamaha
Wonderbike The price of P7,500.00 was payable by
means of a Letter of Guaranty from the Development.
Hence, credit was 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

The law speaks of "five years from date of

conveyance." Conveyance means transfer of
ownership; it means the date when the title to the land
is transferred from one person to another. 2 The fiveyear period should, therefore, be reckoned with from

favor of DBP. Branch Manager Labajo issued Norkis

Sales Invoice No. 0120 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 registered in the Land
Transportation Commission in the name of Alberto
Nepales. A registration certificate in his name was
issued by the Land Transportation Commission. The
registration fees were paid by him, evidenced by an
official receipt.
The motorcycle was delivered to a certain Julian
Nepales who was allegedly the agent of Alberto
Nepales but the latter denies it. The record shows that
Alberto and Julian Nepales presented the unit to
DBP's Appraiser-Investigator Ernesto Arriesta at the
DBP. The motorcycle met an accident. An
investigation conducted by the DBP revealed that the
unit was being driven by a certain Zacarias Payba at
the time of the accident. The unit was a total wreck,
was returned, and stored inside Norkis' warehouse.
DBP released the proceeds of private respondent's
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
and demanded the delivery of the motorcycle. When
Norkis could not deliver, he filed an action for specific
performance with damages against Norkis. He alleged
that Norkis failed to deliver the motorcycle which he
purchased, thereby causing him damages.

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 private respondent, Norkis did not intend yet
to transfer the title or ownership to Nepales, 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 prerequisite 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.
In other words, 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
G.R. No. 109410 August 28, 1996

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.

CLARA M. BALATBAT vs. COURT OF

APPEALS and Spouses JOSE REPUYAN and
AURORA REPUYAN

ISSUE:

FACTS:

Whether or not there had already been a transfer of

ownership of the motorcycle to private respondent at
the time it was destroyed.

The lot in question covered by Transfer Certificate of

Title No. 51330 was acquired by plaintiff Aurelio
Rogue and Maria Mesina during their conjugal union
and the house constructed thereon was likewise built

during their marital union. Out of their union, plaintiff

and Maria Mesina had four children, who are the
defendants in this case. When Maria Mesina died on
August 28, 1966, the only conjugal properties left are
the house and lot above stated of which plaintiff
herein, as the legal spouse, is entitled to one-half
share pro-indiviso thereof. With respect to the one-half
share pro-indiviso now forming the estate of Maria
Mesina, plaintiff and the four children, the defendants
here, are each entitled to one-fifth (1/5) share proindiviso. The deceased wife left no debt.
Aurelio A. Rogue sold his 6/10 share in T.C.T. No.
135671 to spouses Aurora Tuazon-Repuyan and Jose
Repuyan as evidenced by ."Deed of Absolute Sale." 6
Later, a deed of absolute sale was executed between
Aurelio S. Roque, Corazon Roque, Feliciano Roque,
Severa Roque and Osmundo Roque and Clara
Balatbat, married to Alejandro Balatbat.
ISSUE:
Wheter or not there is a delivery of the object of the
sale.
HELD:

physically present at every square inch of the land

bought by him, possession of the public instrument of
the land is sufficient to accord him the rights of
ownership. Thus, delivery of a parcel of land may be
done by placing the vendee in control and possession
of the land (real) or by embodying the sale in a public
instrument (constructive). The provision of Article
1358 on the necessity of a public document is only for
convenience, not for validity or enforceability. It is not
a requirement for the validity of a contract of sale of a
parcel of land that this be embodied in a public
instrument. 31
A contract of sale being consensual, it is perfected by
the mere consent of the parties. 32 Delivery of the thing
bought or payment of the price is not necessary for the
perfection of the contract; and failure of the vendee to
pay the price after the execution of the contract does
not make the sale null and void for lack of
consideration but results at most in default on the part
of the vendee, for which the vendor may exercise his
legal remedies. 33
G.R. No. L-22604

February 3, 1925

GUADALUPE GONZALEZ and LUIS GOMEZ

vs. E.J. HABERER

YES
FACTS:
With respect to the non-delivery of the possession of
the subject property to the private respondent, suffice
it to say that ownership of the thing sold is acquired
only from the time of delivery thereof, either actual or
constructive.28 Article 1498 of the Civil Code provides
that when the sale is made through a public
instrument, 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 inferred. 29 The execution of the public
instrument, without actual delivery of the thing,
transfers the ownership from the vendor to the vendee,
who may thereafter exercise the rights of an owner
over the same. 30 In the instant case, vendor Roque
delivered the owner's certificate of title to herein
private respondent. It is not necessary that vendee be

This action is brought to recover the sum of P34,260

alleged to be due the plaintiffs from the defendant
upon a written agreement for the sale of a tract of land
situated in the Province of Nueva Ecija. The plaintiffs
also ask for damages in the sum of P10,000 for the
alleged failure of the defendant to comply with his
part of the agreement.
The defendant in his answer admits that of the
purchase price stated in the agreement a balance of
P31,000 remains unpaid, but by way of special
defense, cross-complaint and counter-claim alleges
that at the time of entering into the contract the
plaintiffs through false representations lead him to
believe that they were in possession of the land and

that the title to the greater portion thereof was not in

dispute; that on seeking to obtain possession he found
that practically the entire area of the land was
occupied by adverse claimants and the title thereto
disputed; that he consequently has been unable to
obtain possession of the land; and that the plaintiffs
have made no efforts to prosecute the proceedings for
the registration of the land. He therefore asks that the
contract be rescinded; that the plaintiffs be ordered to
return to him the P30,000 already paid by him to them
and to pay P25,000 as damages for breach of the
contract.
ISSUE:
Wheter or not theres a valid delivery made to the
vendde/
HELD:
NO
It is conceded by the plaintiffs that the defendant
never obtained actual or physical possession of the
land, but it is argued that under the contract quoted the
plaintiffs were under no obligation to place him in
possession. This contention cannot be sustained.
Cause 3 of paragraph 3 of the contract gave the
defendant the right to take possession of the land
immediately upon the execution of the contract and
necessarily created the obligation on the part of the
plaintiffs to make good the right thus granted; it was
one of the essential conditions of the agreement and
the failure of the plaintiffs to comply with this
condition, without fault on the part of the defendant, is
in itself sufficient ground for the rescission, even in
the absence of any misrepresentation on their part.
The contention of the appellants that the symbolic
delivery effected by the execution and delivery of the
agreement was a sufficient delivery of the possession
of the land, is also without merit. The possession
referred to in the contract is evidently physical; if it
were otherwise it would not have been necessary to
mention it in the contract.

G.R. No. L-30056 August 30, 1988

MARCELO AGCAOILI vs. GOVERNMENT
SERVICE INSURANCE SYSTEM
FACTS:
The appellant Government Service Insurance System,
(GSIS, for short) having approved the application of
the appellee Agcaoili for the purchase of a house and
lot in the GSIS Housing Project at Nangka Marikina,
Rizal, subject to the condition that the latter should
forthwith occupy the house, a condition that Agacoili
tried to fulfill but could not for the reason that the
house was absolutely uninhabitable; Agcaoili, after
paying the first installment and other fees, having
thereafter refused to make further payment of other
stipulated installments until GSIS had made the house
habitable; and appellant having refused to do so,
opting instead to cancel the award and demand the
vacation by Agcaoili of the premises; and Agcaoili
having sued the GSIS for specific performance with
damages.
ISSUE:
Wheter or not theres a valid delivery to the vendee
(Agcaoli) by vendor (GSIS).
HELD:
NO
There was then a perfected contract of sale between
the parties; there had been a meeting of the minds
upon the purchase by Agcaoili of a determinate house
and lot in the GSIS Housing Project at Nangka
Marikina, Rizal at a definite price payable in
amortizations at P31.56 per month, and from that
moment the parties acquired the right to reciprocally
demand performance. 13 It was, to be sure, the duty of
the GSIS, as seller, to deliver the thing sold in a
condition suitable for its enjoyment by the buyer for
the purpose contemplated , 14 in other words, to deliver

the house subject of the contract in a reasonably

livable state. This it failed to do.
It sold a house to Agcaoili, and required him to
immediately occupy it under pain of cancellation of
the sale. Under the circumstances there can hardly be
any doubt that the house contemplated was one that
could be occupied for purposes of residence in
reasonable comfort and convenience. There would be
no sense to require the awardee to immediately
occupy and live in a shell of a house, a structure
consisting only of four walls with openings, and a
roof, and to theorize, as the GSIS does, that this was
what was intended by the parties, since the contract
did not clearly impose upon it the obligation to deliver
a habitable house, is to advocate an absurdity, the
creation of an unfair situation. By any objective
interpretation of its terms, the contract can only be
understood as imposing on the GSIS an obligation to
deliver to Agcaoili a reasonably habitable dwelling in
return for his undertaking to pay the stipulated price.
Since GSIS did not fulfill that obligation, and was not
willing to put the house in habitable state, it cannot
invoke Agcaoili's suspension of payment of
amortizations as cause to cancel the contract between
them. It is axiomatic that "(i)n reciprocal obligations,
neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner
with what is incumbent upon him." 15

G.R. No. 78272 August 29, 1989

DR. and MRS. MERLIN CONSING vs. THE
COURT OF APPEALS and CARIDAD SANTOS
FACTS:
Private respondent Caridad Santos and the Consings
entered into an agreement denominated as a "Contract
of Sale" whereby the latter agreed to sell, transfer and
convey to the former a house and lot.
Santos paid her monthly installments to the Consings.
Starting May 1972, however, she defaulted in her

payments. Consing sent her several letters of demand

to which she did not reply. On June 28, 1974, counsel
for the Consings sent a final demand letter to Santos
asking her to settle her obligations which by then have
accrued to Pl 2,818.61, otherwise, they shall be
constrained to resort to court litigation.
Santos, represented by a lawyer, manifested her
willingness to settle her obligations on the condition
that the Consings comply with all the laws and
regulations on subdivisions and after payment to her
of damages as a consequence of the use of a portion of
her lot, more or less 168 sq.m., as a subdivision road.
ISSUE:
Whether or not there was a delivery of the object of
the sale.
HELD:
NO
The evidence on record negates the Consings'
assertion that the portions subject to the voluntary
easement of right of way are not roads. It is
undisputed that the Consings' subdivision plan was
approved by the LRC as a simple subdivision which
indicated no streets or roads. However, this does not
preclude the need for them within the subdivision. An
examination of the Consings' subdivision plan reveals
that the land is subdivided into 38 lots with the socalled voluntary right of way cutting across lots 2 and
3, 7 and 6, 8 and 9,13 and 12,14 and 15, 19 and 18, 20
and 21, 25 and 24, 26 and 27, 31 and 30, 32 and 33.
The relative position of this "right of way" vis-a-vis
the lots shows that it is in fact a road without which
the subdivision lot buyers would have no means of
access to and from the subdivision.
Moreover, as heretofore stated, when the Municipal
Council referred the Consings subdivision plan to the
DLGCD the latter recommended that the existing
roads within the subdivision should be indicated on
the plan as road lots. In turn, the Municipal Council of
Marikina passed Resolution No. 70 approving the

subdivision plan of Mearle Homes, Inc. subject,

however, to several conditions one of which is the
subdivision owner's compliance with the
recommendation of the DLGCD. On May 19, 1975,
Merlin Consing wrote a letter addressed to the
Municipal Mayor and Municipal Council of Marikina
wherein he admitted that "the road lots as shown in
the plan originally approved by the Land Registration
Commission are the Right-of-way which are annotated
in the corresponding transfer Certificate of Titles,
copies of which were supplied or forwarded to your
office. These are the road lots
mentioned. ..."[Exh."24"].

CARLOS GABILA vs. PABLO PEREZ, RAMON

PEREZ & MERCEDES PEREZ
FACTS:
On September 16, 1948, in the City of Davao,
defendants-appellees Pablo, Ramon and Mercedes, all
surnamed Perez, executed in favor of plaintiffappellant Carlos Gabila, a Deed of Sale of a parcel of
land registered in the name of their deceased father
Mariano Perez under Transfer Certificate of Title No.
899 of the Registry of Deeds of Davao, which they
inherited upon his demise.

In this same letter, Merlin Consing stated that "the

road lots annotated in their corresponding titles ARE
NOT INCLUDED in the sale of the property."
However, the transfer certificates of title covering lot
25 and lot 26 clearly state the boundaries thereof and
when compared to the Consings' subdivision plan
would reveal that the seller sold that portion covered
by the right of way to the buyer. Further, the "Contract
of Sale" between the parties is specific that the
property sold to Santos includes the voluntary right of
way [See Exh. "11" pertinent portion quoted in p. 2 of
this decision].

The Deed of Sale was duly signed and ratified before

Notary Public Isidro Bastida of Davao City on the
same date, September 16, 1958, and possession of the
land was immediately delivered to the vendee. The
monthly installments of the price of the sale were
completely paid in due time. However, the vendors
took no steps to comply with their promise to execute
an extrajudicial partition of their father's properties so
that his title to the land in question can be transferred
in their names and from them, to the vendee Gabila.

In the case at bar, in including as part of Santos'

purchase price the value of the subdivision road,
petitioners have shifted to her the burden of providing
for an access to and from the subdivision. The
Consings have thus failed in their duty as subdivision
lot sellers and for such failure and consequent
unfairness and injustice to Santos, the latter should be
entitled to a proportionate reduction in her purchase
price of the two lots.

Whether or not theres a valid delivery of the object of

contract of sale.

G.R. No. L-29541 January 27,1989

ISSUE:

HELD:
YES
It is indubitable that the appellant, as vendee of the
land, has a right to receive, and the appellees the
corresponding obligation to transfer to him, not only
the possession and enjoyment of the land but also the
certificate of title. The trial court recognized that right
of the appellant, but it professed to be helpless to
enforce it. In dismissing his complaint and, in effect,
denying him a remedy, the trial court forgot a maxim
which is as old as the law itself. Ubi jus ibi remedium.
Where there is a right, there is a remedy (Ballentine's
Law Dictionary, 1948 Ed., p. 1307).

The defendants-appellees, as the only legal heirs of

their father, the deceased Mariano Perez, became the
owners of the property in question upon his demise.
The rights to the succession were transmitted to them
from the moment of his death (Art. 77, Civil Code).
Their sale to the appellant of the property described in
TCT No. 899, which they inherited from their father
put an end to their co-ownership over it (Art. 1082
Civil Code). Consequently there is no further need for
them to partition it, the purpose of partition being to
separate, divide, and assign a thing held in common
among those to whom it may belong (Art. 1079, Civil
Code). The trial court correctly observed that the
defendants-appellees may no longer partition the land
in question because they had already sold it.

G.R. No. 126444 December 4, 1998

ALFONSO QUIJADA, CRESENTE QUIJADA,
REYNELDA QUIJADA, DEMETRIO QUIJADA,
ELIUTERIA QUIJADA, EULALIO QUIJADA,
and WARLITO QUIJADA
vs.
COURT OF APPEALS, REGALADO
MONDEJAR, RODULFO GOLORAN,
ALBERTO ASIS, SEGUNDINO RAS, ERNESTO
GOLORAN, CELSO ABISO, FERNANDO
BAUTISTA, ANTONIO MACASERO, and
NESTOR MAGUINSAY

executed a conditional deed of donation of the twohectare parcel of land subject of the case in favor of
the Municipality of Talacogon, the condition being
that the parcel of land shall be used solely and
exclusively as part of the campus of the proposed
provincial high school in Talacogon.
On July 29, 1962, Trinidad sold one (1) hectare of the
subject parcel of land to defendant-appellant Regalado
Mondejar.
Subsequently, Trinidad verbally sold the remaining
one (1) hectare to defendant-appellant (respondent)
Regalado Mondejar without the benefit of a written
deed of sale and evidenced solely by receipts of
payment.
In 1980, the heirs of Trinidad, who at that time was
already dead, filed a complaint for forcible entry
against defendant-appellant (respondent) Regalado
Mondejar, which complaint was, however, dismissed
for failure to prosecute.
In 1987, the proposed provincial high school having
failed to materialize, the Sangguniang Bayan of the
municipality of Talacogon enacted a resolution
reverting the two (2) hectares of land donated back to
the donors.
In the meantime, defendant-appellant (respondent)
Regalado Mondejar sold portions of the land to
defendants-appellants (respondents) Fernando
Bautista, Rodolfo Goloran, Efren Guden and Ernesto
Goloran.

FACTS:
ISSUE:
Plaintiffs-appellees (petitioners) are the children of the
late Trinidad Corvera Vda, de Quijada. Trinidad was
one of the heirs of the late Pedro Corvera and
inherited from the latter the two-hectare parcel of land
subject of the case, situated in the barrio of San
Agustin, Talacogon, Agusan del Sur.

Whether or not there was valid delivery of the contract

of sale to respondent Mondejar.
HELD:
YES

On April 5, 1956, Trinidad Quijada together with her

sisters Leonila Corvera Vda. de Sequea and Paz
Corvera Cabiltes and brother Epapiadito Corvera

When the Municipality's acceptance of the donation

was made known to the donor, the former became the

new owner of the donated property donation being

a mode of acquiring and transmitting ownership 11
notwithstanding the condition imposed by the donee.
The donation is perfected once the acceptance by the
donee is made known to the donor. 12 According,
ownership is immediately transferred to the latter and
that ownership will only revert to the donor if the
resolutory condition is not fulfilled.
In this case, that resolutory condition is the
construction of the school. It has been ruled that when
a person donates land to another on the condition that
the latter would build upon the land a school, the
condition imposed is not a condition precedent or a
suspensive condition but a resolutory one. 13 Thus, at
the time of the sales made in 1962 towards 1968, the
alleged seller (Trinidad) could not have sold the lots
since she had earlier transferred ownership thereof by
virtue of the deed of donation. So long as the
resolutory condition subsists and is capable of
fulfillment, the donation remains effective and the
donee continues to be the owner subject only to the
rights of the donor or his successors-in-interest under
the deed of donation. Since no period was imposed by
the donor on when must the donee comply with the
condition, the latter remains the owner so long as he
has tried to comply with the condition within a
reasonable period. Such period, however, became
irrelevant herein when the donee-Municipality
manifested through a resolution that it cannot comply
with the condition of building a school and the same
was made known to the donor. Only then when the
non-fulfillment of the resolutory condition was
brought to the donor's knowledge that ownership of
the donated property reverted to the donor as provided
in the automatic reversion clause of the deed of
donation.
The consummation, however, of the perfected contract
is another matter. It occurs upon the constructive or
actual delivery of the subject matter to the buyer when
the seller or her successors-in-interest subsequently
acquires ownership thereof. Such circumstance
happened in this case when petitioners who are
Trinidad Quijada's heirs and successors-in-interest
became the owners of the subject property upon the

reversion of the ownership of the land to them.

Consequently, ownership is transferred to respondent
Mondejar and those who claim their right from him.
Article 1434 of the New Civil Code supports the
ruling that the seller's "title passes by operation of
law to the buyer." 21 This rule applies not only when
the subject matter of the contract of sale is
goods, 22 but also to other kinds of property, including
real property. 2

G.R. No. 117187

July 20, 2001

UNION MOTOR CORPORATION vs. THE

COURT OF APPEALS, JARDINE-MANILA
FINANCE, INC., SPOUSES ALBIATO BERNAL
and MILAGROS BERNAL
FACTS:
Respondent Bernal spouses purchased from petitioner
Union Motor Corporation one Cimarron. For this
purpose, the respondent spouses executed a
promissory note and a deed of chattel mortgage in
favor of the petitioner. Meanwhile, the petitioner
entered into a contract of assignment of the
promissory note and chattel mortgage with JardineManila Finance, Inc. Through Manuel Sosmea, an
agent of the petitioner, the parties agreed that the
respondent spouses would pay the amount of the
promissory note to Jardine-Manila Finance, Inc., the
latter being the assignee of the petitioner.
To effectuate the sale as well as the assignment of the
promissory note and chattel mortgage, the respondent
spouses were required to sign a notice of assignment,
a deed of assignment, a sales invoice, a registration
certificate, an affidavit, and a disclosure statement.
The respondent spouses were obliged to sign all these
documents for the reason that, according to Sosmea,
it was a requirement of petitioner Union Motor
Corporation and Jardine-Manila Finance, Inc. for the
respondent spouses to accomplish all the said
documents in order to have their application approved.
Upon the respondent spouses' tender of the
downpayment worth Ten Thousand Thirty-Seven
Pesos (P10,037.00), and the petitioner's acceptance of
the same, the latter approved the sale. Although the
respondent spouses have not yet physically possessed
the vehicle, Sosmea required them to sign the receipt
as a condition for the delivery of the vehicle.
The respondent spouses continued paying the agreed
installments even if the subject motor vehicle
remained undelivered inasmuch as Jardine-Manila
Finance, Inc. promised to deliver the subject jeepney.

The respondent spouses have paid a total of Seven

Thousand Five Hundred Seven Pesos (P7,507.00)
worth of installments before they discontinued paying
on account of non-delivery of the subject motor
vehicle. According to the respondent spouses, the
reason why the vehicle was not delivered was due to
the fact that Sosmea allegedly took the subject motor
vehicle in his personal capacity.
ISSUE:
Whether or not there has been a delivery, physical or
constructive, of the subject motor vehicle.
HELD:
NO
Undisputed is the fact that the respondent Bernal
spouses did not come into possession of the subject
Cimarron jeepney that was supposed to be delivered to
them by the petitioner. The registration certificate,
receipt and sales invoice that the respondent Bernal
spouses signed were explained during the hearing
without any opposition by the petitioner. According to
testimonial evidence adduced by the respondent
spouses during the trial of the case, the said
documents were signed as a part of the processing and
for the approval of their application to buy the subject
motor vehicle. Without such signed documents, no
sale, much less delivery, of the subject jeepney could
be made. The documents were not therefore an
acknowledgment by respondent spouses of the
physical acquisition of the subject motor vehicle but
merely a requirement of petitioner so that the said
subject motor vehicle would be delivered to them.
We have ruled that 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. 6
The registration certificate signed by the respondent
spouses does not conclusively prove that constructive
delivery was made nor that ownership has been

transferred to the respondent spouses. Like the receipt

and the invoice, the signing of the said documents was
qualified by the fact that it was a requirement of
petitioner for the sale and financing contract to be
approved. In all forms of delivery, it is necessary that
the act of delivery, whether constructive or actual,
should be coupled with the intention of delivering the
thing. The act, without the intention, is
insufficient.7 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
Inasmuch as there was neither physical nor
constructive delivery of a determinate thing (in this
case, the subject motor vehicle), the thing sold
remained at the seller's risk.10 The petitioner should
therefore bear the loss of the subject motor vehicle
after Sosmea allegedly stole the same.
Petitioner's reliance on the Chattel Mortgage Contract
executed by the respondent spouses does not help its
assertion that ownership has been transferred to the
latter since there was neither delivery nor transfer of
possession of the subject motor vehicle to respondent
spouses. Consequently, the said accessory contract of
chattel mortgage has no legal effect whatsoever
inasmuch as the respondent spouses are not the
absolute owners thereof, ownership of the mortgagor
being an essential requirement of a valid mortgage
contract.

G.R. No. 124242

January 21, 2005

SAN LORENZO DEVELOPMENT

CORPORATION vs. COURT OF APPEALS,
PABLO S. BABASANTA, SPS. MIGUEL LU and
PACITA ZAVALLA LU
FACTS:
Spouses Lu purportedly sold the two parcels of land to
respondent Pablo Babasanta, (hereinafter, Babasanta)
for the price of fifteen pesos (P15.00) per square
meter. Babasanta 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.
Sometime in May 1989, Babasanta wrote a letter to
Pacita Lu to demand the execution of a final deed of
sale in his favor so that he could effect full payment of
the purchase price. In the same letter, Babasanta
notified the spouses about having received
information that the spouses sold the same property to
another without his knowledge and consent. He
demanded that the second sale be cancelled and that a
final deed of sale be issued in his favor.
In response, Pacita Lu wrote a letter to Babasanta
wherein she acknowledged having agreed to sell the
property to him at fifteen pesos (P15.00) per square
meter. She, however, reminded Babasanta that when
the balance of the purchase price became due, he
requested for a reduction of the price and when she
refused, Babasanta backed out of the sale. Pacita
added that she returned the sum of fifty thousand
pesos (P50,000.00) to Babasanta through Eugenio
Oya.
Petitioner San Lorenzo Development Corporation
(SLDC) filed a Motion for Intervention6 before the
trial court. SLDC alleged that it had legal interest in
the subject matter under litigation because 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.7 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 subject of the instant case
in view of the successive transactions executed by the
Spouses Lu.
HELD:
SLDC
Contracts, in general, are perfected by mere
consent,19 which is manifested by the meeting of the
offer and the acceptance upon the thing which are to
constitute the contract. The offer must be certain and
the acceptance absolute.20 Moreover, contracts shall be
obligatory in whatever form they may have been
entered into, provided all the essential requisites for
their validity are present.21
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 situated in Sta. Rosa, Laguna. 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.
Admittedly, SLDC registered the sale with the
Registry of Deeds after it had acquired knowledge of
Babasantas claim. Babasanta, however, strongly
argues that the registration of the sale by SLDC was
not sufficient to confer upon the latter any title to the
property since the registration was attended by bad
faith. Specifically, he points out that at the time SLDC
registered the sale on 30 June 1990, there was already
a notice of lis pendens on the file with the Register of

Deeds, the same having been filed one year before on

2 June 1989.
Did the registration of the sale after the annotation of
the notice of lis pendens obliterate the effects of
delivery and possession in good faith which
admittedly had occurred prior to SLDCs knowledge
of the transaction in favor of Babasanta?
We do not hold so.
It must be stressed that as early as 11 February 1989,
the Spouses Lu executed the Option to Buy in favor of
SLDC upon receiving P316,160.00 as option money
from SLDC. After SLDC had paid more than one half
of the agreed purchase price of P1,264,640.00, the
Spouses Lu subsequently executed on 3 May 1989
a Deed of Absolute Sale in favor or SLDC. At the time
both deeds were executed, SLDC had no knowledge
of the prior transaction of the Spouses Lu with
Babasanta. Simply stated, from the time of execution
of the first deed up to the moment of transfer and
delivery of possession of the lands to SLDC, it had
acted in good faith and the subsequent annotation
of lis pendens has no effect at all on the consummated
sale between SLDC and the Spouses Lu.
G.R. No. 26844

September 27, 1927

ISABEL FLORES vs.TRINIDAD LIM

FACTS:
January 20, 1923, plaintiffs land was sold at sheriff's
sale to the defendant for P1,603.78, it is the barrio of
Pinaninding, municipality of Laguimanoc formerly
Atimonan Province of Tayabas, and is about
seventy-three hectares, on which were 164 coconut
bearing trees and 1,000 non-bearing and about 300
buri trees. The usual certificate of sale was issued to
the defendant under the provisions of section 463 of
the Code of Civil Procedure. Prior to the one year
period of redemption, plaintiff made a formal demand
upon the defendant, under the provisions of section
469 of the same Code, for an accounting of the fruits
and profits derived by her from the land, so that the

plaintiff might have credit for the amount received on

the money required for redemption from the sale
The instant case is brought by the plaintiff to redeem,
and it is alleged that at the time of the sale, the
defendant took the actual, physical possession of the
property, and has refused and still refuses to render an
account of fruits, profits, to plaintiff's damage in the
sum of P1,000 and she prays judgment that the
defendant be ordered to render an itemized account,
the amount of which should be deducted from the
price of the redemption; that plaintiff have the right to
redeem; and that defendant pay her P1,000 as
damages and costs.
For answer the defendant makes a general and specific
denial, and as a special defense alleges that her rights
of ownership over the land arise rather from a
purchase made from the Government which had
confiscated the land for a delinquency in the payment
of the land tax than from her acquisition of it at public
auction. That the plaintiff has not repurchased the land
within one year, and the offer to redeem was made out
of time.
ISSUE:
Whether or not there was a valid delivery to the
respondent Lim by having actual possession of the
land in question within the redemption period.
HELD:
NO
The record shows that immediately after the sale, the
defendant took the actual, physical possession of the
property and drove off the employees of the plaintiff.
A purchaser of real property at an ordinary execution
sale is not entitled to possession at an ordinary
execution rents and profits until after the period of
redemption has expired and the legal title to the land
had become vested in him.

The defendant had no legal right to possession of the

land in question and, hence, she was a trespasser from
the time she took possession during the whole period
of redemption. Being such a trespasser, and under the
provisions of section 465 of the Code of Civil
Procedure, the defendant cannot recover from the
plaintiff any money which she expended for the
planting of the coconut trees.
It is claimed that after the sale the plaintiff had said
that she would not redeem, and that the defendant
expended the money relying upon that statement. The
evidence of that nature was verbal and is more or less
hearsay, and to say the least, it is not clear or
convincing. We are dealing with real property, the title
to which is passed by written conveyance, judicial
sale, will or descent, and it would be very dangerous
to hold that the right of redemption can be waived by
parol testimony. Be that as it may, the evidence should
be both clear and convincing and free from any doubt.
Suffice it to say that upon that point, there is a failure
of proof. It is possible that a case could arise where
the purchaser at a sheriff's sale pending the period for
redemption might be forced to make certain
improvements for the preservation of the property, and
in equity and good conscience, he would then be
entitled to receive the reasonable cost of such
improvements as a condition precedent to the right of
redemption. But that is not this case, and is a matter
wholly outside of the record. The alleged improperty,
and were apparently made for the sole purpose or
preventing redemption. Defendant's contention would
nullify the express provisions of the statute, and would
put it beyond the power of the judgment debtor to
redeem any real property sold on execution. It is the
policy of the law to aid rather than to defeat the right
of redemption.

G.R. No. L-48278 November 8, 1988

AURORA TAMBUNTING, ANTONIO
TAMBUNTING, JOSE P. TAMBUNTING and
THE ACTING PROVINCIAL SHERIFF FOR
THE PROVINCE OF RIZAL
vs.
HON. COURT OF APPEALS, DAMASO R.
CRUZ, and MONICA ANDRES
FACTS:
On 16 December 1959, private respondents, spouses
Cruz ) obtained a loan from petitioners, spouses
Tambunting in the amount of P3,600.00. The
Tambuntings are engaged in the lending-pawnshop
business using the name and style "Agencia de
Tambunting. As security for payment of the loan, a
Deed of Real Estate Mortgage was executed by the
Cruzes in favor of the Tambuntings over a parcel of
land belonging to the Cruzes.
Due to debtors' failure to pay the loan obligation at
maturity, a petition for extrajudicial foreclosure of
mortgage was filed by the creditors on 17 March
1967. On 4 July 1967, a notice of sheriff's sale was
posted announcing an auction sale on 2 August 1967
at 10:00 o'clock in the morning. As shown by the
affidavit of publication, the notice of sale was
published in the Rizal Chronicle, a newspaper of
general circulation in Rizal province, on 12, 19, and
26 July 1967.
A temporary restraining order was issued by the court
enjoining herein petitioners from proceeding with the
scheduled sale and to suspend the same until further
orders from the court.
When the temporary restraining order was dissolved
on 1 September 1967, the proposed sale was moved to
20 October 1967. Postings of sheriff's notice of sale
were made on 15 September 1967 with a republication of said notice in the Rizal Chronicle on 27
September, 4 & 11 October, 1967. However, on 19
October 1967, petitioners were again directed by the
court to hold the scheduled sale in abeyance due to a

motion for reconsideration filed by the Cruzes in

regard to the lifting of the temporary restraining order.
Upon denial of the Cruzes 1 motion for
reconsideration, petitioners published in the Rizal
Chronicle on 20 December 1967, the sheriff's notice
of scheduled sale on 26 January 1968.
On 26 January 1968, the Cruzes thru counsel wrote
the Provincial Sheriff of Rizal asking that the auction
sale set for that day (26 January 1968) be postponed to
some other date considering that there was no
compliance with the notices required by law. On the
same date, the Cruzes again thru counsel sent the
sheriff a notice of lis pendens informing the latter that
Civil Case No. 10180 had been filed by them for the
annulment of the mortgage, upon the foreclosure of
which the sale was to be conducted, and that such
action affects title to the property.
The mortgage property was nonetheless sold at public
auction on 26 January 1968 to Aurora Tambunting and
Antonio Tambunting for P9,400.05. Thereafter,
mortgagee-vendee Antonio Tambunting sold and
transferred his share in the property to his wife
Aurora Tambunting.
ISSUE:
Whether or not there was a valid sale and delivery of
the object of sale to the petitioners.

HELD:
NO
Act. No. 3135 (governing extrajudicial foreclosure of
real estate mortgage), as amended by Act No. 4118,
reads:
SEC. 3. Notice shall be given by
posting notices of the sale for not less
than twenty (20) days in at least three
public places of the municipality or

city where the property is situated, and

if such property is worth more than
four hundred pesos, such notice shall
also be published once a week for at
least three consecutive weeks in a
newspaper of general circulation in the
municipality or city.
The rule is that statutory provisions governing
publication of notice of mortgage foreclosure sales
must be strictly complied with, and that even slight
deviations therefrom will invalidate the notice and
render the sale at least voidable. 4 Interpreting Sec.
457 of the Code of Civil Procedure (reproduced in
Sec. 18 (c) of Rule 39, Rules of Court and in Sec. 3 of
Act No. 3135) inCampomanes v. Bartolome and
German & Co., 5 this Court held that if a sheriff sells
without the notice prescribed by the Code of Civil
Procedure induced thereto by the judgment creditor,
and the purchaser at the sale is the judgment creditor,
the sale is absolutely void and no title passes. This is
regarded as the settled doctrine in this jurisdiction
whatever the rule may be elsewhere. 6
One issue of a newspaper of general circulation is not
substantial compliance with the required publication
of once (1) a week for at least three (3) consecutive
weeks. 8 Petitioners claim the publisher's affidavit of
publication is merely a customary proof, hence, it
should not be considered as the sole evidence of
publication. This may be so in the presence of equally
convincing evidence. In the case at bar, however, there
is no such other proof of publication. To show
compliance, the published notices and certificate of
posting by the sheriff of the notice of sale of 26
January 1968 should have been presented. They do
not appear in the record. Neither can the sale be
considered as an adjournment of an earlier sale under
Sec. 24 of Rule 39 of the Rules of Court. 9 As
correctly posed by the Court of Appeals, why was
there one (1) publication of the notice of sale
scheduled on 26 January 1968? 10 The presumption of
compliance with official duty 11 has been rebutted by
the failure to present proof of posting and publication
of the notice of sale of 26 January 1968

PINGOL V. COURT OF APPEALS

A vendee in an oral contract to convey land who had
made part payment thereof, entered upon the land and
had made valuable improvements thereon is entitled to
bring suit to clear his title against the vendor who had
refused to transfer the title to him. It is not necessary
that the vendee should have an absolute title, an
equitable title being sufficient to clothe him with
personality to bring an action to quiet title.
FACTS:
In 1969, Pingol, the owner of a lot (Lot No. 3223) in
Caloocan City, executed a DEED OF ABSOLUTE
SALE OF ONE-HALF OF AN UNDIVIDED
PORTION OF [his] PARCEL OF LAND in favor of
Donasco (private respondent), payable in 6 years.
In 1984, Donasco died and was only able to pay
P8,369 plus P2,000 downpayment, leaving a balance
of P10,161. The heirs of Donasco remained in
possession of such lot and offered to settle the balance
with Pingol. However, Pingol refused to accept the
offer and demanded a larger amount. Thus, the heirs
of Donasco filed an action for specific performance
(with Prayer for Writ of Prelim. Injunction, because
Pingol were encroaching upon Donascos lot). Pingol
averred that the sale and transfer of title was
conditional upon the full payment of Donasco
(contract to sell, not contract of sale). With Donascos
breach of the contract in 1976 and death in 1984, the
sale was deemed cancelled, and the heirs continuous
occupancy was only being tolerated by Pingol.
ISSUES:
(1) Whether or not Pingol can refuse to transfer title to
Donasco
(2) Whether or not Donasco has the right to quiet title
RULING:
(1) No. The contract between Pingol and Donasco is a
contract of sale and not a contract to sell. The acts of
the parties, contemporaneous and subsequent to the
contract, clearly show that the parties intended an
absolute deed of sale; the ownership of the lot was

transferred to the Donasco upon its actual (upon

Donascos possession and construction of the house)
and constructive delivery (upon execution of the
contract). The delivery of the lot divested Pingol of his
ownership and he cannot recover the title unless the
contract is resolved or rescinded under Art. 1592 of
NCC. It states that the vendee may pay even after the
expiration of the period stipulated as long as no
demand for rescission has been made upon him either
judicially or by notarial act. Pingol neither did so.
Hence, Donasco has equitable title over the property.
(2) Although the complaint filed by the Donascos was
an action for specific performance, it was actually an
action to quiet title. A cloud has been cast on the title,
since despite the fact that the title had been transferred
to them by the execution of the deed of sale and the
delivery of the object of the contract, Pingol
adamantly refused to accept the payment by Donascos
and insisted that they no longer had the obligation to
transfer the title.
Donasco, who had made partial payments and
improvements upon the property, is entitled to bring
suit to clear his title against Pingol who refused to
transfer title to him. It is not necessary that Donasco
should have an absolute title, an equitable title being
sufficient to clothe him with personality to bring an
action to quiet title.
Prescription cannot also be invoked against the
Donascos because an action to quiet title to property
in ONEs POSSESSION is imprescriptible.

their house as well as apartments thereon. Villarin

then issued a Deed of Sale to Josefina, but the latter
refused to execute the corresponding Deed of Sale to
Nicanora. Josefina claimed that the amounts paid by
Nicanora were in the concept of loans. Thus,
Nicanora filed a case for specific performance.
ISSUE: W/N there was a sale between Josefina
andNicanora
HELD: YES. Assuming that at the time when Josefina
sold the lot to Nicanora, she was not yet the owner
thereof. When Villarin executed the Deed of Sale in
her favor, title passed to Nicanora by operation of law.
Although the sale between Josefina and Nicanora was
verbal, it was as between them. Considering
thatNicanora has paid the purchase price, she became
owner of the lot. Likewise, although the complaint
was titled specific performance it was actually one
for quieting of title, which is imprescriptible so long
as the plaintiff is in possession of the lot.
ON SALE ON TRIAL/ SATISFACTION
Victoria R. Vallarta vs Court of Appeals
Facts:
Rosalinda Cruz and Victoria Vallarta are longtime
friends and business acquaintances. On 20 November
1968, Cruz entrusted to Vallarta 7 pieces of jewelry. In
December 1968, Vallarta decided to buy some items,
exchanged one item with another, and issued a post-

BUCTON v GABAR

dated check in the amount of P5,000 dated 30 January

1969. Cruz deposited said check with the bank.

FACTS: Josefina bought a parcel of land from

Villarin. Byverbal agreement, Josefina sold a
portion thereof to Nicanora for P3,000. Nicanora
paid P1,000 then P400allevidence by receipts
then she loaned Josefina P1,000and thereafter along
with her spouse, took possession of the lot and built

However,

upon

presentment,

the

check

was

dishonored and Cruz was informed that Vallartas

account had been closed. Cruz apprised Vallarta of the
dishonor and the latter promised to give another

check. Later, Vallarta pleaded for more time. Still

If ownership over the jewelry was not transmitted on

later, she started avoiding Cruz. Hence, the criminal

that date, then it could have been transmitted only in

action was instituted. Based on the foregoing facts,

December 1968, the date when the check was issued.

both the trial court and the Court of Appeals found

In which case, it was a "sale on approval" since

Vallarta guilty beyond reasonable doubt of the crime

ownership passed to the buyer. Vallarta, only when

of estafa.

she signified her approval or acceptance to the

Vallarta in her appeal to the SC to seek for acquittal

seller, Cruz, and the price was agreed upon.

stresses that the transaction between her and Cruz was

a sale or returnperfected and consummated on

It is still criminal fraud or deceit in the issuance of a

November 20, 1968 when the seven pieces of jewelry

check which is made punishable under the Revised

were delivered. The check issued in December 1968

Penal Code, and not the non-payment of the debt.

was therefore in payment of a pre-existing obligation.

Thus, even if it was dishonored, petitioner claims that

ON LOSS OF THE THING SOLD

she can only be held civilly liable, but not criminally

Roman vs Grimalt

liable under Art. 315 (2) (d), Revised Penal Code. She
also argues that at any rate, what prompted Cruz to

Facts:

deliver the jewelry was the social standing of

In between the 13th to the 23d of June, 1904,

petitioner Vallarta and not the postdated check.

petitioner Pedro Roman, the owner, and respondent

Andres Grimalt, the purchaser, verbally agreed upon

Issues:

the sale of the schooner (BOAT ITO) Santa Marina. In

WON the transaction is a sale or return

his letter on June 23, Grimalt agreed to buy the vessel

and offered to pay in three installments of P500 each

Ruling:

on July 15, September 15, and November 15, provided

The transaction is not a sale or return but a sale on

the title papers to the vessel were in proper form. The

approval or sale on acceptance.

title of the vessel, however, was in the name of one

When Cruz gave the jewelry to Villarta on November,

Paulina Giron and not in the name of Roman as the

the clear intention is to make the latter choose

alleged owner. Roman promised to perfect his title to

which item she wanted to buy. There was no meeting

the vessel, but failed so the papers he presented did

of the minds yet at this point and hence, it cannot be

not show that he was the owner of the vessel. On June

considered as delivery.

25, 1904, the vessel sank in the Manila harbor during

a severe storm, even before Roman was able to

produce for Grimalt the proper papers showing that

Jose De Leon, Et Al. vsAscuncion Soriano

the former was in fact the owner of the vessel in

question and not Paulina Giron. As a result, Grimalt

Facts:

refused to pay the purchase price when Roman made a

demand

on

June

30,

1904.

Jose de Leon, Cecilio de Leon and Albina de Leon,

petitioners herein, were natural children of Felix de

On July 2, 1904, Roman filed this complaint in the

CFI of Manila, which found that the parties had not
arrived at a definite understanding, and later dismissed
said complaint.

Leon, deceased, while Asuncion Soriano, respondent,

is his widow. In the administration and settlement of
the decedent's (FELIX) estate then pending in the
Court of First Instance, the said widow, on the one
hand, and the natural children, on the other, reached
on March 23, 1943 an agreement, approved by the

Issue:
Whether there was a perfected contract of sale and
who will bear the loss.

probate court, whereby the natural children obligated

themselves, among other things, as follows:
(This stipulation is part ng agreement between the
sons and widow of Felix, part of the probate of Felixs

Ruling:

estate)

There was no perfected contract of sale because the

purchase of which had not been concluded. The

At the end of each of agricultural year, by which shall

conversations had between the parties and the letter

understood for the purposes of this agreement the

written by defendant to plaintiff did not establish a

month of March of every year, the following amounts

contract sufficient in itself to create reciprocal rights

of palay shall be given to the party of the FIRST

between the parties.

PART (Asuncion Soriano) by the parties of the

If no contract of sale was actually executed by the

SECOND PART (De Leons):

parties the loss of the vessel must be borne by its

owner and not by the party who only intended to
purchase it and who was unable to do so on account of
failure on the part of the owner to show proper title to
the vessel and thus enable them to draw up contract of
sale.

In the month of March of the current year 1943; one

thousand two hundred (1,200) cavanes of palay
(macan);
In the month of March 1944, one thousand four
hundred (1,400) cavanes of palay (macan);

In the month March of 1945, one thousand five

1945 and 1946 was due to "the Huk troubles in

hundred (1,500) cavanes of palay (macan);

Central Luzon which rendered impossible full

compliance with the terms of the agreement;" and it

In the month of March 1946 and every succeeding

year thereafter, one thousand six hundred (1,600)
cavanes of palay (macan).
Delivery of the palay shall be made in the warehouse
required by the government, or if there be none such,
at the warehouse to be selected by the party of the

was contended that "inasmuch as the obligations of

the defendants to deliver the full amount of the palay
is depending upon the produce as this is in the nature
of an annuity, . . . the obligations of the petitioners
have been fully fulfilled by delivering in good faith all
that could be possible under the circumstances."

FIRST PART, in San Miguel, Bulacan, free from the

cost of hauling, transportation, and from any all taxes
or charges.

Issue:

It is expressly stipulated that this annual payment of

Whether or not petitioners should deliver the balance

palay shall cease upon the death of the party of the

of the palays that is due to the respondent?

FIRST PART and shall not be transmissible to her

heirs or to any other person, but during her lifetime
this obligation for the annual payment of the palay

Ruling:

hereinabove mentioned shall constitute a first lien

upon all the rice lands of the estate of Dr. Felix de

Article 1182 of the Civil Code which was in force at

Leon in San Miguel, Bulacan.

the time agreement in question was entered into,

provide that "Any obligation which consists in the

The petitioners made deliveries to the respondent of

1,200 cavanes of palay in 1934, 700 in 1944, 200 in
1945, and another 200 in 1946, a total of 2,300
cavanes which was 3,400 cavanes short of the 5,700
cavanes which should have been delivered up to and

delivery of a determinate thing shall be extinguished if

such thing should be lost or destroyed without fault on
the part of the debtor and before he is in default.
Inversely, the obligation is not extinguished if the
thing that perishes is indeterminate.

including 1946. It was to recover this shortage or its

value that this action was commenced.

Manresa explains the distinction between determinate

and generic,saying that the first is a concrete,

For answer, the petitioners averred that their failure to

pay the exact quantities of palay promised for 1944,

particularized

object,

indicated

by

its

own

individuality, while a generic thing is one of whose

Jeepney for Thirty Seven Thousand Seven Hundred

determination is confined to that of its nature, to the

Fifty Eight Pesos and Sixty Centavos (P37,758.60) to

genus (genero) to which it pertains, such as a horse, a

be paid in installments.

chair. These definitions are in accord with the popular

For this purpose, the respondent spouses executed a

meaning of the terms defined.

promissory note and a deed of chattel mortgage in

favor of the petitioner.

Except as to quality and quantity, the first of which is

itself generic, thecontract sets nobounds or limits to
the palay to be paid, nor was there even any
stipulation that the cereal was to be the produce of any
particular land. Any palay of the quality stipulated
regardless of origin on however acquired (lawfully)
would be obligatory on the part of the obligee to
receive and would discharge the obligation. Therefore
the alleged failure of crops through alleged
fortuitous cause did not excuse performance.
(Sinabi din ng court nahindi fortuitous event
yungmgapag attack ngHuks)

Meanwhile, the petitioner entered into a contract of

assignment of the promissory note and chattel
mortgage with Jardine-Manila Finance, Inc. through
Manuel Sosmea, an agent of the petitioner, the parties
agreed that the respondent spouses would pay the
amount of the promissory note to Jardine-Manila
Finance, Inc., the latter being the assignee of the
petitioner.
Although the respondent spouses have not yet
physically possessed the vehicle, Sosmea required
them to sign the receipt and other documents as a
condition for the delivery of the vehicle.
The respondent spouses continued paying the agreed
installments even if the subject motor vehicle

Union Motors Corporation vs The Court of

Appeals, Jardine-Manila Finance Inc., and Spouses
Bernal

remained undelivered inasmuch as Jardine-Manila

Finance, Inc. promised to deliver the subject jeepney.
The respondent spouses have paid a total of Seven
Thousand Five Hundred Seven Pesos (P7,507.00)
worth of installments before they discontinued paying
on account of non-delivery of the subject motor

Facts:
The respondent Bernal spouses purchased from
petitioner Union Motor Corporation one Cimarron

vehicle.

According to the respondent spouses, the reason why

the ownership of goods is transferred to the buyer; the

the vehicle was not delivered was due to the fact that

goods are at the buyers risk, because the spouses

Sosmea allegedly took the subject motor vehicle in

never came into possession of the subject motor

his personal capacity.

vehicle. It is but appropriate that they be reimbursed

by the petitioner of the initial payment which they

On September 11, 1981, Jardine-Manila Finance, Inc.,

made. The court ruled in favor of the respondent

filed a complaint for a sum of money, against the

Bernal spouses. The registration certificate, receipt

respondent Bernal spouses before the then Court of

and sales invoice that the respondent Bernal spouses

First Instance of Manila. This case was later on

signed were signed as a part of the processing and for

transferred to the Regional Trial Court of Makati,

the approval of their application to buy the subject

Branch 150 , the complaint was amended to include

motor vehicle. Without such signed documents, no

petitioner Union Motor Corporation as alternative

sale, much less delivery, of the subject jeepney could

defendant, the reason being that if the respondent

be made. The documents were not therefore an

spouses refusal to pay Jardine-Manila Finance, Inc.

acknowledgment by respondent spouses of the

was due to petitioners non-delivery of the unit, the

physical acquisition of the subject motor vehicle

latter should pay Jardine-Manila Finance, Inc. what

but merely a requirement of delivery. Issuance of a

has been advanced to the petitioner.

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

Issue:
Whether there has been a delivery, physical or
constructive, of the subject motor vehicle?

cost of the thing sold and has been considered not a

bill of sale. 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

Whether the Spouses Bernal must bear the loss of the

same article declares that the execution of a public

thing sold?

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, it is

Ruling:

necessary that the vendor shall have had control

over the thing sold that, at the moment of the sale,

The respondent Bernal spouses should not bear the

its material delivery could have been made. It is not

loss thereof in accordance with Article 1504 that when

enough to confer upon the purchaser the ownership

and the right of possession. The thing sold must be

Perfecto A. Tabora(buyer) bought from the Lawyers

placed in his control. When there is no impediment

Cooperative

whatever to prevent the thing sold passing into the

complete set of American Jurisprudence consisting of

tenancy of the purchaser by the sole will of the

48volumes with 1954 pocket parts, plus one set of

vendor, symbolic delivery through the execution of a

American Jurisprudence, General Index, consisting of

public

if,

4 volumes, for a total price of P1,675.50 which, in

notwithstanding the execution of the instrument,

addition to the cost of freight of P6.90, makes a total

the purchaser cannot have the enjoyment and

of P1,682.40. Taboramade a partial payment of

material tenancy of the thing and make use of it

P300.00, leaving a balance of P1,382.40. The

himself or through another in his name, because

bookswere duly delivered and receipted for by Tabora

such tenancy and enjoyment are opposed by the

on May 15, 1955 in his lawoffice in Naga City.

interposition of another will, then the delivery has

However, a big fire broke out in that locality which

not been effected.

destroyed and burned all the buildings standing on one

instrument

is

sufficient.

But

Publishing

Company(seller)

one

whole block including at the law office and library of

Tabora.
Inasmuch

as

there

was

neither

physical

nor

constructive delivery of a determinate thing the thing

sold remained at the sellers risk.

As a result, the books bought from the company as

above stated, together with Tabora's important
documents and papers, were burned during the
conflagration.
This unfortunate event was immediately reported by
Tabora to the company ina letter he sent on May 20,

The petitioner should therefore bear the loss of the

subject motor vehicle after Sosmea allegedly stole the
same.

1955. On May 23, the company replied and as atoken

of goodwill it sent to Tabora free of charge volumes
75, 76, 77 and 78 of the Philippine Reports.
As Tabora failed to pay he monthly installments
agreed upon on the balance of the purchase price

Lawyers Cooperative Publishing Company vs

notwithstanding the long time that had elapsed, the

Perfecto ATabora

company demanded payment of the installments due,

and having failed, to pay the same, it commenced the
present action before the CFI of Manila for the

Facts:

recovery of the balance of the obligation.

Defendant, in his answer, pleaded force majeure as a

Although the seller agreed that the ownership of the

defense. He alleged that the books bought from the

books shall remain with it until the purchase price

plaintiff were burned during the fire that broke out in

shall have been fully paid, such stipulation cannot

Naga City on May 15, 1955, and since the loss was

make the seller liable in case of loss not only because

due to force majeure he cannot be held responsible for

such was agreed merely to secure the performance by

the loss. Likewise he also stated that according with

the buyer of his obligation but in the very contract it

the

contract

Cooeprative

between
Publishing

him

and

the

Lawyers

was expressly agreed that the "loss or damage to the

Company

the

contract

books after delivery to the buyer shall be borne by the

stipulated that:

buyer."

Title to and ownership of the books shall remain with

Likewise, any such stipulation is sanctioned by Article

the seller until the purchase price shall have been fully

1504 of our Civil Code, which in part provides:

paid. Loss or damage to the books after delivery to the

1.) Where delivery of the goods has been made to the

buyer shall be borne by the buyer.

buyer or to a bailee for the buyer, in pursuance of the

Hence since ownership remains to the publishing

contract and the ownership in the goods has been

company it must be the one to bear the loss.

retained by the seller merely to secure performance

by the buyer of his obligations under the contract,

Issue:

the goods are at the buyer's risk from the time of

Who should bear the loss?

such delivery
Lastly, Force majeure will not exempt Tabora from his

Ruling:

liability. This is because this only holds true when the

It was provided in the contract that "title to and

obligation consists in the delivery of a determinate

ownership of the books shall remain with the seller

thing and there is no stipulation holding him liable

until the purchase price shall have been fully paid.

even in case of fortuitous event. Here these

Loss or damage to the books after delivery to the

qualifications are not present. The obligation does not

buyer shall be borne by the buyer."

refer to a determinate thing, but is pecuniary in nature

Under the general rule.the loss of the object of the

(money), and the obligor bound himself to assume the

contract of sale is borne by the owner, or in case of

loss after the delivery of the goods to him. Obligor

force majeure the one under obligation to deliver the

(Tabora) agreed to assume any risk concerning the

object is exempt from liability. But, this rule does not

goods from the time of their delivery.

apply in this case because the parties clearly agreed

to the abovementioned contrary stipulation.

Yu Tek Co. vs Gonzales

Facts:

Ruling:

A written contract was executed between Basilio

The contract in present case was merely an executory

Gonzalez and Yu Tek and Co., where Gonzales was

agreement. It was just only a promise of sale and not

obligated to deliver 600 piculs of sugar of the 1st and

a sale.

2nd grade to Yu Tek, within the period of 3 months (1

January-31 March 1912) at any place within the

The agreement upon the thing which was the object

municipality of Sta. Rosa, which Yu Tek& Co. or its

of the contract was not within the meaning of article

representative may designate; and in case, Gonzales

1450 (The sale shall be perfected between vendor and

does not deliver, the contract will be rescinded and

vendee and shall be binding on both of them, if they

Gonzales shall be obligated to return the P3,000

have agreed upon the thing which is the object of the

received and also the sum of P1,200 by way of

contract and upon the price, even when neither has

indemnity for loss and damages.

been delivered).

No sugar had been delivered to Yu Tek& Co. under

Sugar is one of the staple commodities of this country.

this contract nor had it been able to recover the

For the purpose of sale its bulk is weighed, the

P3,000. Yu Tek& Co. filed a complaint against

customary unit of weight being denominated a

Gonzales, and prayed for judgment for the P3,000 and

picul.

the additional P1,200. Judgment was rendered for

P3,000 only, and from this judgment both parties

There was no delivery under the contract because if

appealed.

called upon to designate the article sold, it is clear that

Gonzales could only say that it was sugar.

Gonzales in his appeal stated that the contract he

entered with Yu Tek represented a perfected contract

He could only use this generic name for the thing sold.

of sale and that by failure of his crop (sugar) he was

There was no appropriation of any particular lot of

relieved from complying with his undertaking by loss

sugar. Neither party could point to any specific

of the thing due.

quantity of sugar.( walang delivery ng specific

piculsng sugar)

Issue:
Whether or not Gonzales is liable to Yu Tek Co. for

Likewise, Gonzales is liable as per the stipulation of

the non-delivery of the sugar?

their contract with Yu Tek. For failing to deliver the

said sugars he was liable to return the 3000 pesos to

Yu Tek and pay the additional 1200 pesos as damages.

parang buy (kayvisayas) and sell (to el dorado)

Under the provisions of Article 1255 of the Civil Code

angginawani Bunge )

contracting parties are free to execute the contracts

Visayan Product contended that no contract of sale

that they may consider suitable, provided they are not

was perfected. If any, it was that signed by Vicente

in contravention of law, morals, or public order. In our

Kho, the manager and controlling stockholder in

opinion there is nothing in the contract under

Visayan Product Tacloban, but he was not authorized

consideration which is opposed to any of these

to sign a contract for Visayan Product Cebu. Kho

principles.

admitted that he signed the contract and tried his best

to deliver the copra but due to force majeure he failed

Bunge Corporation vs Elena Camenforte

to do so. ( ignorable issue, sinasabilangngmga

Facts:

defendant naibasivisayan product corp CEBU at

Plaintiff Bunge Corporation entered into a contract of

visayan product corp TACLOBAN)

sale with Visayan Products Company whereby the

Lower Court ordered for payment of damages by

latter sold to the former500 long tons of merchantable

Visayan Product to Bunge Corp.

Philippine copra on October 22, 1947. Visayan

Upon appeal, Visayan Product now admitted that a

Products Co. failed to deliver the copra as according

contract of sale of copra was entered into, alleging as

to the terms and conditions of the contract whereby

a defense that the copra they had gathered and stored

the vendor should ship the stipulated copra during the

for delivery to the appellees in Samar was destroyed

month of November or December 1947, to San

by force majeure which under the law has the effect of

Francisco, California, U.S.A. for delivery to the

exempting

vendee.

Consequently, Visayan now contends that the lower

Bunge Corp, however sold to El Dorado Oil Works

court erred in condemning them for damages despite

the quantity of copra it had purchased at the same

the fact that their failure to fulfill the contract is due to

price agreed upon; and that because of the failure of

force majeure.

them

from

liability

for

damages.

the Visayan Product to fulfill its contract to ship and

deliver the quantity of copra agreed upon within the

Issue:

period stipulated, the Bungee Corp has suffered

Whether or not Visayan Product is liable for failure to

damages.

deliver copra even if lost by force majeure?

ineexpectnibungena

mag

dedeliversivisayas corp. ng copra based sa contract,

kaya

binentaniyanayung copra kay el dorado

kahithindi pa nadedeliverkay Bunge yung copra,

Ruling:

The Court ruled that Visayan is liable because a

Philippine Virginia Tobacco Administration(PVTA) at

careful perusal of the contract shows that the subject

Agoo, La Union, as a result of which private

matter is Philippine copra. The sale is to be made by

respondents ( mga tobacco company, kasi may

weight, 500 long tons. It does not refer to any

agreement silanaibebentangmga tobacco company sa

particular or specific lot of copra, nor does it

PVTA angmga tobacco nanaproducenila) suffered

mention the place where the copra is to be

losses arising from the sale and delivery of tobacco to

acquired. No portion of the copra has been

Central Cooperative Exchange, Inc.(CCE) [ the CCE

earmarked or segregated. The vendor was at liberty

obligated itself to procure, redry and service Virginia

to acquire the copra from any part of the Philippines.

tobacco for the PVTA and to advance the payment of

The sale simply refers to 500 long tons of the

tobacco to the trading entities at the government price

Philippine copra. The subject-matter is, therefore,

support plus transportation, overhead and other

generic, not specific. Hence, the obligation cannot be

specified expense], the authorized agent of petitioner.

deemed

extinguished

by

the

destruction

or
The following events happened before a fire that

disappearance of the copra stored in San Ramon,

destroyed the redrying plant of PVTA.

Samar. Their obligation subsists as long as that

commodity is available. A generic obligation is not

extinguished by the loss of a thing belonging to

May and June 1963, several tobacco shipments were

made and delivered to the PVTA thru CCE.

particular genus. Genus nunquanperit

-

The tobacco shipments were unloaded and awaiting

inspection and grading.

the tobacco shipments.

Philippine Virginia Tobacco Administration vs De

los Angeles
Facts:

July 24,1963 the redrying plant was burned including

Private respondents made several demands from

PVTA that they be paid the price of the burned
tobacco shipments, buy PVTA refused to do so

The controversy that gave rise to this petition for

prompting the private respondents to file a collection

review by certiorari from a decision of the then

of sum of money against PVTA.

respondent Judge Walfrido de los Angeles, arose from

a fire that destroyed the redrying plant of petitioner

Issue:

Who should bear the loss for the tobacco shipments?

[ kaya may virtual control kasi based sa rules and

regulations ng PVTA , bagomoipapasokyung tobacco

Ruling:
The Court ruled that PVTA through its agent CCE has
virtual control of the shipments even at the plaintiffs'
stations and especially after they had been cleared and
sent to the CCE plant and unloaded for inspection at
the CCE ramps.

need ng clearance, pagnaipasokmonasaredrying plant

at

ilalabasmoulit

need

namanng

permit,

parangkumabaga owner naang PVTA samga tobacco

angkulangnalang is ma inspect ito at ma grade kung
gaanokagandangklaseangmga

tobacco

nadinalasaredrying plant, tska may unnecessary delay

sapag inspect ng tobacco kaya yun may virtual

It is reasonable to say that these shipments, pursuant

control ang PVTA samga tobacco shipment]

to the scheduling and priorities established by the

CCE, should have been inspected before July 24, 1963
since they were shipped to the CCE as early as May
and June 23, 1963, as shown in the shipping

Alliance

Tobacco

Corporation

vs

Philippine

Virginia Tobacco Corporation

documents. But they were not inspected early enough

and this evidently because of delays and suspension of
operations in the CCE plant.
Facts:
Their shipments which had long been in the ramps for
inspection were not inspected in due time and the
delay is traceable to the fault of the defendants,
whereas the private respondents themselves had done
everything that was required of them by the PVTA
regulations in order to have their tobacco inspected
and paid for.
The Court believes that the PVTA already had the
legal control and custody of said shipments and that it
should be considered as having accepted them as of
the fire and therefore should bear the loss.

The PVTA a government corporation created under

Republic Act No. 2265 to promote the tobacco
industry, entered into a contract of procuring, redrying
and servicing with the Farmer's Virginia Tobacco
Redrying Company (FVTR- contractee/agent ni PVTA
) for the1963 tobacco trading operation.
In June of that year, the PVTA also entered into a
merchandising loan agreement with the petitioner, a
duly incorporated and authorized tobacco trading
entity, whereby the PVTA agreed to lend P25,500 to
the petitioner for the purchase of flue-cured Virginia

tobacco from bona fide Virginia tobacco former-

no longer in the premises of defendant FVTR's

producers.

Redrying Plant, Manager Bananal told her that the

plaintiffs that the tobacco in question were considered

The following month, petitioner shipped to the FVTR

accepted.

96 bales of tobacco weighing 4,800 kilos covered by

Guia No. 1 and 167 bales weighing 8,350 kilos
covered by Guia No. 2.
The operations of defendant FVTR in Bauang,
After several days, the grading of the plaintiffs

stopped in October 1963. The plaintiff asked that its

tobacco took place but only 89 bales from Guia No. 2

ungraded and un-weighed tobacco be withdrawn from

were graded, weighed and accepted.

the Redrying Plant.

The remaining bales of tobacco in Guia No. 2 and the

The defendants PVTA and FVTR refused to allow the

whole of Guia No. I were not graded and weighed

plaintiffs request because according to them the

because after grading and weighing 89 bales of Guia

tobacco sought to be withdrawn were subject of a

No. 2, some officers and employees in the premises of

merchandising loan and owned by defendant, PVTA.

defendant FVTR asked money for the separate

grading and weighed off the un-graded and unweighed

tobacco

bales.(humihingingkotongmga

employee ng FVTR para i-inspect nilayungmga

tobacco)

Unfortunately, the remaining un-graded and unweighed 174 bales with a total value of P28,382 were
lost while they were in the possession of the FVTR
Having learned of such loss in 1965, petitioner
demanded for its value and the application of the same

Because the rest of the plaintiffs tobacco were not

to its merchandising loan with PVTA but both the

graded and weighed, Aldegunda Villanueva, Business

latter and the FVTR refused to heed said demands.

Manager of the plaintiff, saw the Branch Manager of

the defendant FVTR and asked him to have their
tobacco graded and weighed. Since the grading and
weighing of the plaintiffs tobacco was not resumed, in

Issue:
Who should bear the loss of the 174 un-graded and
un-weighedtobaccbo bales?

1965, said Business Manager personally called on

Atty. Eduardo Bananal, Manager of the defendant

Ruling:

PVTA in Manila and told the latter that some tobacco

of the plaintiff were not graded and weighed and were

The Supreme Court ruled that in this case, the lower

court established from the testimonies of witnesses the

fact that petitioner entrusted to the FVTR a total of

existing law to the contrary notwithstanding," the

263 bales of tobacco 89 bales of which were even

procedure is observed by everyone involved in the

actually weighed and graded in the redrying plant.

trade.

However, for reasons beyond the control of the

Verily, the tobacco trading procedure conceived and

petitioner, the FVTR refused to weigh and grade the

formulated by the PVTA is akin to a contract of

remaining 174 bales.

adhesion wherein only one party has a hand in the

determination of the terms. But observance of the

On top of this, the FVTR also refused to grant

petitioner's request to withdraw the un-weighed and
un-graded shipments. As it turned out later, said
shipments were lost while in the custody of FVTR
thereby placing the petitioner in a "no win" situation.
The Civil Code provides that ownerhip of the thing
sold shall be transferred to the vendee upon the actual
or constructive delivery thereof. There is delivery
when the thing sold is placed in the control and
possession of the vendee.
Indeed, in tobacco trading, actual delivery plays a
pivotal role. The peculiar procedure undergone in
trading, which procedure was set out at length in both
the Santiago and the PVTA vs. De los Angeles cases,
reveals that delivery seals the contract of sale because
the trader loses not only possession but also control
over the shipment.

procedure more often than not renders a trader at a

disadvantage. The moment the shipment is placed in
the hands of the PVTA or its representative and it is
lost, the trader is left empty-handed. While the flaw
may not really be in the procedure itself, the same
may be found in the persons charged with the
implementation of the procedure. Some personnel
mishandle the shipment to the detriment of the trader.
Some demand grease money to facilitate the trading
process. Sadly, this is what happened in this case.
Hence, while under an Ideal situation, we would have
found merit in respondent PVTA's contention that the
contract of sale could not have been perfected
pursuant to Article 1475 of the Civil Code because to
determine the price of the tobacco traded, the
shipment should first be inspected, graded and
weighed, we find said contention misplaced herein. A
strict interpretation of the provision of Article 1475

Outlined by the PVTA pursuant to its power "to take

may result in adverse effects to small planters who

over and assume, and therefore exclusively direct,

would not be paid for the lost products of their toil.

supervise and control, all functions and operations

Such situation was what the ruling in PVTA vs. De

with respect to the processing, warehousing, and

los Angeles sought to avoid.

trading of Virginia tobacco, the provisions of ally

Equity and fair dealing, the anchor of said case,

who later sold it to Pahati. However, the car was

must once more prevail. Since PVTA had virtual

impounded by the police, and the sale to Pahati was

control over the lost tobacco bales, delivery thereof

cancelled. Bulahan now contends that between 2

to the FVTR should also be considered effective

innocent parties (Bulahan and Cruz), the person who

delivery to the PVTA.

made possible the injury must bear the lossin this

case, supposedly Cruz.

Jose R. Cruz vs Reynaldo Pahati

Issue:
Whether or not Cruz may recover the car from
Facts:

Bulahan?

Jesusito Belizo is a second hand car dealer who sold

an automobile to Jose Cruz. After a year, Belizo
offered to sell the same car to a certain buyer. Cruz

Ruling:

agreed and since the certificate of registration was

missing, Cruz made a letter addressed to the Motor
Section of the Bureau of Public Works for the issuance
of a new certificate.

Cruz, the original owner has the better right for it

cannot be disputed that plaintiff had been illegally
deprived through ingenious schemes by Belizo and
that Art 559 and 1505 are applicable in this situation.

Cruz gave the letter to Belizo to be submitted to the

said office and he also gave the car on the latters
pretext that he was going to show it to a prospective
buyer.

1. Art 559 clearly indicates that the one who has lost
any movable or has been lawfully deprived thereof,
may recover it from the person in possession of the
same and the only defense is if the other party has

The letter was falsified, making it appear that a deed

acquired it in good faith and at a public sale.

of sale was executed in favor of Belizo, who then got

a certificate of registration on his name.
2. Art 1505 clearly says that in cases where a sale is
made not by owner and was made without authority,
Belizo was able to sell the car to respondent Bulahan

the buyer acquires no better right than that of the seller

unless the owner is estopped.

This prompted the hardware store to file a case of

estafa against Soto and prayed for the return of the
sheets.

Moreover, if Bulahan had been more diligent, he

This was opposed by Chua on the part of the 100

could have seen that the letter had an erased portion

sheets he purchased in good faith from Soto.

which couldve aroused his suspicion and made him

Notwithstanding this opposition, the court ordered for

conscious on making inquiries which he failed to do.

its return.

The contention of Bulahanan of the common law

principle that the one who has made the happening of
fraud possible should suffer the consequence cannot
be applied in this case since there is an express

Issue:
Whether or not petitioner has the right to retain
possession?

provision covering the case.

Ruling
Chua Hai vs Hon. RupertoKapunan and OngShu
The Supreme Court ruled that since petitioner's good
faith is not questioned. To deprive the possessor in
Facts:

good faith, even temporarily and provisionally, of the

chattels(iron sheets) possessed, violates the rule of

Soto purchased from Youngstown Hardware (owned

Art. 559 of the Civil Code.

by OngShu) 700 galvanized iron sheets and 249 round

iron bars. He issued as payment a check drawn against
Security Bank.

The latter declares that possession of chattels in good

faith is equivalent to title; i.e., that for all intents and
purposes, the possessor is the owner, until ordered by

Soto then sold 100 pcs of the galvanized iron sheets to

the proper court to restore the thing to the one who

Chua Hai.

was illegally deprived thereof.

Meanwhile, the check issued for payment was

dishonored due to insufficiency of funds.

Until such decree is rendered (and it cannot be

rendered in a criminal proceeding in which the

possessor is not a party), the possessor, as presumptive

b) forreconveyance of certain deeds of assignment

owner, is entitled to hold and enjoy the thing; and

which he had executed in favor of the private

"every possessor has a right to be respected in his

respondent.

possession; and should he be disturbed therein he shall

be protected in or restored to said possession
established by the means established by the laws and
the Rules of Court."(Art. 539, New Civil Code).
The acquirer and possessor in good faith, of a
chattel or movable property is entitled to be
respected and protected in his possession, as if he
were the true owner thereof, until a competent
court rules otherwise.

Respondent Central Bank filed a Motion to Dismiss

because of
a) alleged prescription and lachesregarding the
claim for damages and b) the alleged failure of the
complaint to state a cause of action against the Central
Bankregarding the action for reconveyance.
The Regional Trial Court of Makati, Metro Manila,
(Branch 134) denied the motion. However, on appeal,
the respondent Court of Appeals reversed the Regional
Trial Court in a decision dated April 5, 1989.

Vicente T. Tan vs The Court of Appeals and

Central Bank

Hence this petition for review filed by Vicente T. Tan,

et al. (who felt aggrieved) before Us purely on two (2)
questions of law:

Facts:

a) What is the period for prescription in an action for

damages filed against the Central Bank for alleged

Vicente T. Tan, one of the petitioners herein, was one

illegal closure of Continental Bank?; and

of the principal stockholders of the former Continental

Bank, located in Manila. At the time the Central Bank

b) Does the complaint in the Regional Trial Court for

closed the Continental Bank for alleged bankruptcy,

reconveyance state a cause of action against the

he was a stockholder of said Continental Bank.

Central Bank?

Because of the closure and incidents attendant thereto,

he, among others, filed on January 13, 1987 an action
in the Regional Trial Court of Makati asking:
a) for damages from the Central Bank; and

Issues:

What is the period for prescription in an action for

acquired in a public sale, fair, or market, or from a

damages filed against the Central Bank for alleged

merchant's store the provisions of articles 559 and

illegal closure of Continental Bank?; and

1505 of this Code shall be observed.

Acquisitive prescription sets in after uninterrupted
possession of four years, provided there is good faith,
and upon the lapse of eight years, if bad faith is
present. Where, however, the thing was acquired

Ruling:

through a crime, the offender can not acquire

ownership by prescription under Article 1133, which

The rule anent prescription on recovery of movables

(shares of stock in this case) is expressed in Article
1140 of the Civil Code, which we quote:
Art. 1140. Actions to recover movables shall prescribe
eight years from the time the possession thereof is
lost, unless the possessor had acquired the ownership
by prescription for a less period, according to article
1132, and without prejudice to the provisions of
articles 559, 1505, and 1133.
As it provides, Article 1140 is subject to the
provisions of Articles 1132 and 1133 of the Code,
governing acquisitive prescription, in relation to
Articles 559 and 1505 thereof. Under Article 1132:
Art. 1132. The ownership of movables prescribes
through uninterruped possession for four years in
good faith.
The ownership of personal property also prescribes

we quote:
Art. 1133. Movables possessed through a crime can
never be acquired through prescription by the
offender.
Please note that under the above Article, the
benefits of prescription are denied to the offender;
nonetheless, if the thing has meanwhile passed to a
subsequent holder, prescription begins to run (four
or eight years, depending on the existence of good
faith).
For purposes of existence prescriptionon movables,
we therefore understand the periods to be:
1. Four years, if the possessor is in good faith;
2. Eight years in all other cases, except where the loss
was due to a crime in which case, the offender can not
acquire the movable by prescription, and an action to
recover it from him is imprescriptible.

through uninterrupted possession for eight years,

without need of any other condition.
With regard to the right of the owner to recover
personal property lost or of which he has been
illegally deprived, as well as with respect to movables

It is evident, for purposes of the complaint in question,

that the petitioners had at most eight years within
which to pursue a reconveyance, reckoned from the
loss of the shares in 1977, when the petitioner Vicente

Tan executed the various agreements in which he

Dios, claiming to be a nephew of Vicente Marella,

conveyed the same in favor of the Executive

went to the Santos residence to answer the ad.

Consultants, Inc., Orobel Property Management, Inc.,

However, Teodoro was out during this call and only

and Antolum Trading Corporation.

the latters son, Irineo received and talked with De

Since the complaint was filed on January 13, 1987, ten

Dios. The latter told the young Santos that he had

years more or less after the petitioners transferred the

come in behalf of his uncle, Marella, who was

shares in question, it is clear that the petitioners have

interested to buy the advertised car.

come to court too late.

On being informed of the above, Teodoroinstructed
Side note: The dictatorial regime of Marcos was not

his son to see Marella the following day at his given

declared to be force majeure by the SC. Tan is

address: 1642 Crisostomo Street, Sampaloc, Manila.

contending that

that the period during which

And so, in the morning of 29 May 1959, Irineo went

authoritarian rule was in force had interrupted

to said address. At this meeting, Marella agreed to buy

prescription and that the same began to run only on

the car for P14,700.00 on the understanding that the

February 25, 1986, when the Aquino government took

price would be paid only after the car had been

power. It is true that under Article 1154 fortuitous

registered in his name. Irineo then fetched his father

events have the effect of tolling the period of

who, together with De Dios, went to the office of a

prescription. However, we can not say, as a universal

certain Atty. Jose Padolina where the deed of sale for

rule, that the period from September 21, 1972 through

the car was executed in Marellas favor.

February 25, 1986 involves a force majeure.

Art. 1154. The period during which the obligee was

The parties to the contract thereafter proceeded to the

prevented by a fortuitous event from enforcing s right

Motor Vehicles Office in Quezon City where the

is not reckoned against

registration of the car in Marellas name was effected.

Up to that stage of the transaction, the purchase

Jose B. Aznar vs Rafael Yapdiangco and Teodoro

price had not been paid. From the Motor Vehicles

Santos

Office, Teodoro returned to his house. He gave the

registration papers and a copy of the deed of sale to

Facts:

his son and instructed him not to part with them until

In May 1959, Teodoro Santos advertised in two

Marella shall have given the full payment for the car.

metropolitan papers the sale of his Ford Fairlane

500.In the afternoon of 28 May 1959, a certain L. De

Irineo and De Dios then proceeded to 1642

Crisostomo Street, Sampaloc in Manila where the

Whereupon, Ireneo rushed to 1642 Crisostomo to see

former demanded for the payment from Marella.

Marella. He found the house closed and Marellagone.

Marella said that the amount he had on hand then was

Finally, he reported the matter to his father who

short by some P2,000.00 and begged off to be allowed

promptly advised the police authorities. That very

to secure the shortage from a sister supposedly living

same day, Marella was able to sell the car in question

somewhere in Azcarraga Street, also in Manila.

to Jose B. Aznar, for P15,000.00. Aznar acquired the

Thereafter, he ordered De Dios to go to the said sister

said car from Marella in good faith, for a valuable

and suggested that Irineo to go with him.

consideration and without notice of the defect

appertaining to the vendors title. While the car was

At the same time, he requested for the registration

thus in the possession of Aznar and while he was

papers and the deed of sale from Ireneo on the

attending to its registration in his name, agents of the

pretext that he would like to show them to his

Philippine Constabulary seized and confiscated the

lawyers. Trusting the good faith of Marella, Ireneo

same in consequence of the report to them by Teodoro

handed over the same to the latter and thereupon, in

that the said car was unlawfully taken from him.

the company of De Dios and another unidentified

person, proceeded to the alleged house of Marellas

Issue:

sister.

Between Teodoro Santos and Jose Aznar, who has a

better right to the possession of the disputed

At a place in Azcarraga, Irineo and De Dios alighted

automobile?

from the car and entered a house, while their

unidentified companion remained in the car. Once

Ruling:

inside, De Dios asked Irineo to wait at the sala while

The Court ruled that Santos had been unlawfully

he went inside a room. That was the last that Ireneo

deprived of his personal property by Marella, from

saw of him. For, after a considerable length of time

whom Aznar traces his right. Consequently, although

waiting in vain for De Dios to return, Ireneo went

Aznar acquired the car in good faith and for a valuable

down to discover that neither the car nor their

consideration

unidentified companion was there anymore. Going

concluded, still Santos was entitled to its recovery

back to the house, he inquired from a woman he saw

on the mandate of Article 559 of the New Civil

for De Dios and he was told that no such name lived

Code which provides:

from

Marella,

the

said

decision

or was even known therein.

The possession of movable property acquired in good

faith is equivalent to title. Nevertheless, one who has

transferred by contract merely but by tradition or

lost any movable or has been unlawfully deprived

delivery. Contracts only constitute titles or rights to

thereof, may recover it from the person in

the transfer oracquisition of ownership, while delivery

possession of the same. If the possessor of a movable

or tradition is the mode of accomplishing the same.

lost or of which the owner has been unlawfully

deprived, has acquired it in good faith at a public sale,

For the legal acquisition and transfer of ownership and

the owner cannot obtain its return without reimbursing

other property rights, the thing transferred must be

the price paid therefor.

delivered,

inasmuch

as,

according

to

settled

jurisprudence the tradition of the thing is a necessary

Under Article 559, the rule is to the effect that if the

and

owner has lost the thing, or if he has been

indispensable requisite in the acquisition of said

unlawfully deprived of it, he has a right to recover

ownership by virtue of a contract. So long as property

it, not only from the finder, thief or robber, but also

is not delivered, the ownership over it is not

from the third person who may have acquired it in

transferred by contract merely but by delivery.

good faith from such finder, thief or robber.

Contracts only constitute titles or rights to the transfer

or acquisition of ownership, while delivery or

Important Side Notes:

tradition is the method of accomplishing the same, the

-Article 1506 provides: Where the seller of goods has

title and the method of acquiring it being different in

a voidable title thereto, been voided at the time of the

our law. In the present case, the car was never

sale, the buyer acquires a good title to the goods,

delivered to the vendee by the vendor as to complete

provided he buys them in good faith, for value, and

or consummate the transfer of ownership by virtue of

without notice of the sellers defect of title. Under the

the contract. It should be recalled that while there was

provision, it is essential that the seller should have a

indeed a contract of sale between Vicente Marella and

voidable title at least. It is very clearly inapplicable

Teodoro Santos, the former, as vendee, took

where the seller (Marella) had no title at all.

possession of the subject matter thereof by stealing the

- Under Article 712 of the Civil Code, ownership and

same while it was in the custody of the latters son.

other real rights over property are acquired and

transmitted by law, by donation, by testate and

- There is no adequate evidence on record as to

intestate succession, and in consequence of certain

whether Irineo Santos voluntarily delivered the key to

contracts, by tradition. As interpreted by this Court in

the car to the unidentified person who went with him

a host of cases, by this provision, ownership is not

and L. De Dios to the place in Azcarraga where a

sister of Marella allegedly lived. But even if Irineo

acquired in good faith by another, is based on his

Santos did, it was not the delivery contemplated by

being dispossessed without his consent. The common

Article 712 of the Civil Code. For then, it would be

law principle that where one of two innocent persons

indisputable that he turned it over to the unidentified

must suffer by a fraud perpetrated by another, the law

companion only so that he may drive Irineo Santos

imposes the loss upon the party who, by his misplaced

and De Dios to the said place in Azcarraga and not

confidence, has enabled the fraud to be committed,

vest the title to the said vehicle to him as agent of

cannot be applied in a case which is covered by an

Vicente Marella. Article 712 above contemplates

express provision of the new Civil Code, specifically

that the act be coupled with the intent of delivering

Article 559. Between a common law principle and a

the thing.

statutory provision, the latter must prevail in this

jurisdiction.

- Article 559 establishes two exceptions to the general

rule of irrevindicability to wit: when the owner (1) has

- No man can transfer to another a better title than he

lost the thing, or (2) has been unlawfully deprived

has himself.

thereof. In these cases, the possessor cannot retain the

thing as against the owner, who may recover it
without paying any indemnity, except when the
possessor acquired it in a public sale.
- The right of the owner to recover personal property