G.R. No. 133895.
October 2, 2001] said that if the reason for Salvador’s failure to control and possess the property was due to
ZENAIDA M. SANTOS, petitioner, vs. CALIXTO SANTOS, ALBERTO SANTOS, ROSA
SANTOS-CARREON and ANTONIO SANTOS, respondents.
DECISION
QUISUMBING, J.:
FACTS:
Petitioner Zenaida M. Santos is the widow of Salvador Santos, a brother of private
respondents Calixto, Alberto, Antonio, all surnamed Santos and Rosa Santos-Carreon.
The spouses Jesus and Rosalia Santos owned a parcel of land. On it was a four-door
apartment administered by Rosalia who rented them out. The spouses had five children,
Salvador, Calixto, Alberto, Antonio and Rosa.
On January 19, 1959, Jesus and Rosalia executed a deed of sale of the properties in favor of
their children Salvador and Rosa. Rosa in turn sold her share to Salvador on November 20,
1973. Despite the transfer of the property to Salvador, Rosalia continued to lease and
receive rentals from the apartment units.
On November 1, 1979, Jesus died. Six years after or on January 9, 1985, Salvador died,
followed by Rosalia who died the following month. Shortly after, petitioner Zenaida, claiming
to be Salvador’s heir, demanded the rent from Antonio Hombrebueno, a tenant of Rosalia.
When the latter refused to pay, Zenaida filed an ejectment suit against him with the
Metropolitan Trial Court of Manila, Branch 24, which eventually decided in Zenaida’s favor.
On January 5, 1989, private respondents instituted an action for reconveyance of property
with preliminary injunction against petitioner in the Regional Trial Court of Manila, where they
alleged that the two deeds of sale executed on January 19, 1959 and November 20, 1973
were simulated for lack of consideration. They were executed to accommodate Salvador in
generating funds for his business ventures and providing him with greater business flexibility.
In her Answer, Zenaida denied the material allegations in the complaint and as special and
affirmative defenses, argued that Salvador was the registered owner of the property, which
could only be subjected to encumbrances or liens annotated on the title; that the
respondents’ right to reconveyance was already barred by prescription and laches; and that
the complaint stated no cause of action.
On March 17, 1993, the trial court decided in private respondents’ favor. The trial court
reasoned that notwithstanding the deeds of sale transferring the property to Salvador, the
spouses Rosalia and Jesus continued to possess the property and to exercise rights of
ownership not only by receiving the monthly rentals, but also by paying the realty taxes.
Also, Rosalia kept the owner’s duplicate copy of the title even after it was already in the name
of Salvador. Further, the spouses had no compelling reason in 1959 to sell the property and
Salvador was not financially capable to purchase it. The deeds of sale were therefore
fictitious. Hence, the action to assail the same does not prescribe.
Upon appeal, the Court of Appeals affirmed the trial court’s decision. It held that in order for
the execution of a public instrument to effect tradition, as provided in Article 1498 of the Civil
Code, [5] the vendor shall have had control over the thing sold, at the moment of sale. It was
not enough to confer upon the purchaser the ownership and the right of possession. The
thing sold must be placed in his control. The subject deeds of sale did not confer upon
Salvador the ownership over the subject property, because even after the sale, the original
vendors remained in dominion, control, and possession thereof. The appellate court further
his acquiescence to his mother, in deference to Filipino custom, petitioner, at least, should
have shown evidence to prove that her husband declared the property for tax purposes in his
name or paid the land taxes, acts which strongly indicate control and possession.
ISSUE:
1. Whether the payments of realty taxes and retention of possession are indications of
continued ownership by the original owners
2. Whether a sale through a public instrument is tantamount to delivery of the thing sold
3. Whether the respondents’ cause of action has prescribed
4. Whether the petitioner can invoke the “Dead Man’s Statute
HELD:
1. It is true that neither tax receipts nor declarations of ownership for taxation purposes
constitute sufficient proof of ownership. They must be supported by other effective proofs.
These requisite proofs we find present in this case. As admitted by petitioner, despite the
sale, Jesus and Rosalia continued to possess and administer the property and enjoy its fruits
by leasing it to third persons. Both Rosa and Salvador did not exercise any right of ownership
over it. Before the second deed of sale to transfer her 1/2 share over the property was
executed by Rosa, Salvador still sought the permission of his mother. Further, after Salvador
registered the property in his name, he surrendered the title to his mother. These are clear
indications that ownership still remained with the original owners. In Serrano vs. CA, 139
SCRA 179, 189 (1985), we held that the continued collection of rentals from the tenants by
the seller of realty after execution of alleged deed of sale is contrary to the notion of
ownership.
Petitioner argues that Salvador, in allowing her mother to use the property even after the
sale, did so out of respect for her and out of generosity, a factual matter beyond the province
of this Court. Significantly, in Alcos vs. IAC, 162 SCRA 823, 837 (1988), we noted that the
buyer’s immediate possession and occupation of the property corroborated the truthfulness
and authenticity of the deed of sale. Conversely, the vendor’s continued possession of the
property makes dubious the contract of sale between the parties.
2. Nowhere in the Civil Code, however, does it provide that execution of a deed of sale is a
conclusive presumption of delivery of possession. The Code merely said that the execution
shall be equivalent to delivery. The presumption can be rebutted by clear and convincing
evidence. Presumptive delivery can be negated by the failure of the vendee to take actual
possession of the land sold.
In Danguilan vs. IAC, 168 SCRA 22, 32 (1988), we held that for the execution of a public
instrument to effect tradition, the purchaser must be placed in control of the thing sold. When
there is no impediment to prevent the thing sold from converting to 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 nor make use of it himself or through another in his
name, then delivery has not been effected.
As found by both the trial and appellate courts and amply supported by the evidence on
record, Salvador was never placed in control of the property. The original sellers retained
their control and possession. Therefore, there was no real transfer of ownership.
Moreover, in Norkis Distributors, Inc. vs. CA, 193 SCRA 694, 698-699 (1991), citing the land
case of Abuan vs. Garcia, 14 SCRA 759 (1965), we held that 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. In the instant case, although the spouses Jesus and Rosalia executed a deed of
sale, they did not deliver the possession and ownership of the property to Salvador and
Rosa. They agreed to execute a deed of sale merely to accommodate Salvador to enable
him to generate funds for his business venture.
3. In Lacsamana vs. CA, 288 SCRA 287, 292 (1998), we held that the right to file an action
for reconveyance on the ground that the certificate of title was obtained by means of a
fictitious deed of sale is virtually an action for the declaration of its nullity, which does not
prescribe. This applies squarely to the present case. The complaint filed by respondents in
the court a quo was for the reconveyance of the subject property to the estate of Rosalia
since the deeds of sale were simulated and fictitious. The complaint amounts to a
declaration of nullity of a void contract, which is imprescriptible. Hence, respondents’ cause
of action has not prescribed.
4. Lastly, petitioner in her memorandum seeks to expunge the testimony of Rosa Santos-
Carreon before the trial court in view of Sec. 23, Rule 130 of the Revised Rules of Court,
otherwise known as the “Dead Man’s Statute.” It is too late for petitioner, however, to invoke
said rule. The trial court in its order dated February 5, 1990, denied petitioner’s motion to
disqualify respondent Rosa as a witness. Petitioner did not appeal therefrom. Trial ensued
and Rosa testified as a witness for respondents and was cross-examined by petitioner’s
counsel. By her failure to appeal from the order allowing Rosa to testify, she waived her right
to invoke the dead man’s statute. Further, her counsel cross-examined Rosa on matters that
occurred during Salvador’s lifetime. In Goñi vs. CA, 144 SCRA 222, 231 (1986), we held that
protection under the dead man’s statute is effectively waived when a counsel for a petitioner
cross-examines a private respondent on matters occurring during the deceased’s lifetime.
The Court of Appeals cannot be faulted in ignoring petitioner on Rosa’s disqualification.
G.R. No. 92989 - July 8, 1991
PERFECTO DY, JR. petitioner, vs.
COURT OF APPEALS, GELAC TRADING INC., and ANTONIO V. GONZALES,
respondents.
Facts:
Perfecto and Wilfredo Dy are brothers. Sometime in 1979, Wilfredo purchased a truck and a
farm tractor through financing from Libra Finance, which were both mortgaged to Libra as
security for the loan.
Perfecto wanted to buy the farm tractor from his brother, so that he wrote a letter to Libra
requesting that he be allowed to purchase from Wilfredo the said tractor and assume the
mortgage debt of the latter, which letter was approved by Libra thru its manager, Cipriano
Ares. Thus, Wilfredo executed a deed of absolute sale in favor of Perfecto over the subject
tractor. However, said tractor was in the possession of Libra due to Wilfredo’s failure to pay
the amortizations. Despite the offer of full payment for the tractor, the immediate release
could not be effected because Libra insisted on full payment, not only for the tractor but also
for the truck as well.
Perfecto was able to convince their sister, Carol, to purchase the truck so that full payment
could be made for both the truck and tractor. Thus, a PNB check was issued (P22,000) in
favor of Libra settling in full the indebtedness of Wilfredo with Libra. The latter insisted that
the out-of-town check be cleared first before releasing the chattels in question.
Meanwhile, a collection case filed by Gelac Tracding against Wilfredo was pending in another
court, which issued an alias writ of execution. The provincial sheriff was able to seize and
levy on the tractor which was in the premises of Libra. The tractor was subsequently sold at
public auction where Gelac was the lone bidder, and later sold it to one of its stockholders,
Antonio Gonzales.
It was only when the PNB check was cleared that Perfecto learned about Gelac having
custody of the tractor. Consequently, he filed an action to recover the subject tractor against
Gelac with RTC-Cebu.
The RTC rendered judgment directing Gelac and Gonzales to return the same to the
petitioner, and to pay jointly and severally damages and expenses (for hiring a tractor).
On appeal, the CA reversed the decision of RTC and dismissed the complaint, holding that
the tractor in question still belonged to Wilfredo when it was seized and levied by the sheriff
by virtue of the alias writ of execution issued in favor of Gelac. Hence, the instant petition
Issue:
Whether or not the chattel mortgagor, Wilfredo, had the right to sell the property mortgaged
Ruling:
YES. 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. In a letter dated August 27, 1979, Libra allowed the petitioner to purchase the tractor
and assume the mortgage debt of his brother. The sale between the brothers was therefore
valid and binding as between them and to the mortgagee, as well.
Article 1496 of the Civil Code states that the ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to
1501 or in any other manner signing an agreement that the possession is transferred from
the vendor to the vendee. We agree with the petitioner that Articles 1498 and 1499 are
applicable in the case at bar.
Article 1498 states:
Art. 1498. 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.
xxx xxx xxx
Article 1499 provides:
Article 1499. The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the possession
of the vendee at the time of the sale, or if the latter already had it in his possession for any
other reason. (1463a)
In the instant case, actual delivery of the subject tractor could not be made. However, there
was constructive delivery already upon the execution of the public instrument pursuant to
Article 1498 and upon the consent or agreement of the parties when the thing sold cannot be
immediately transferred to the possession of the vendee. (Art. 1499)
Petition granted, RTC decision reinstated.
ADDISON V. FELIX (August 03, 1918)
FACTS:
Petitioner Addison sold four parcels of land to Defendant spouses Felix and Tioco located in
Lucena City. Respondents paid 3K for the purchase price and promised to pay the remaining
by installment. The contract provides that the purchasers may rescind the contract within one
year after the issuance of title on their name.
The petitioner went to Lucena for the survey designaton and delivery of the land but only 2
parcels were designated and 2/3 of it was in possession of a Juan Villafuerte.
The other parcels were not surveyed and designated by Addison.
Addison demanded from petitioner the payment of the first installment but the latter contends
that there was no delivery and as such, they are entitled to get back the 3K purchase price
they gave upon the execution of the contract.
ISSUE:
WON there was a valid delivery.
HELD:
The record shows that the plaintiff did not deliver the thing sold. With respect to two of the
parcels of land, he was not even able to show them to the purchaser; and as regards the
other two, more than two-thirds of their area was in the hostile and adverse possession of a
third person.
It is true that the same article declares that the execution of a public instruments is equivalent
to the delivery of the thing which is the object of the contract, but, in order that this symbolic
delivery may produce the effect of tradition, it is necessary that the vendor shall have had
such control over the thing sold that, at the moment of the sale, its material delivery could
have been made. It is not enough to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control. When there is no impediment
whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will
of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But
if there is an impediment, delivery cannot be deemed effected.
Danguilan vs IAC
Facts:
Apolonia Melad filed a complaint against Felix Daguilan with CFI Cagayan for recovery of a
farm lot and a residential lot which she claimed she had purchased from Domingo Melad in
1943 and were now being unlawfully withheld by the Danguilan. She claimed to be the
illegitimate daughter of Domingo and presented a deed of sale purportedly signed by the
latter. She only moved out in 1946 because Danguilan approached her and asked permission
to cultivate the land and to stay therein. She had agreed on condition that he would deliver
part of the harvest from the farm to her, which he did from that year to 1958. Deliveries later
stopped thus the complaint.
Danguilan, on the other hand, is the husband of Isidra Melad, Domingo's niece. He presented
a private instrument which Domingo Melad also purportedly signed, giving to him the farm in
1943 another private instrument in which Domigo also gave him the residential lot, on the
understanding that the Danguilan would take care of the grantor and would bury him upon his
death.
Lower court ruled in favor of Danguilan. Upon appeal, the IAC modified the deicision and
ruled that the conveyance of the real properties in question were null and void, as they were
donations of real property and as such should have been effected through a public
instrument.
Apolonia Melad alleges that the deed of sale was allegedly executed when the respondent
was only three years old and the consideration was supposedly paid by her mother, Maria
Yedan from her earnings as a wage worker in a factory. Danguilan, on the other hand, avers
that this contract was simulated and prepared after Domingo's death.
Issue:
WON Apolonia Melad can be considered as the owner of the disputed properties
Held:
Decision of trial court reinstated. Danguilan wins.
Based on the evidence adduced, it is clear that Domingo did intend to donate the properties
to Danguilan. The fact that the donation was executed in a private document is not material
because the donation was onerous- the properties were given to the Danguilan in exchange
for his obligation to take care of the donee for the rest of his life and provide for his burial.
Hence, it could not come under the operation of Article 749 requiring donations of real
properties to be effected through a public instrument.
As to the deed of sale executed between Domingo and Apolonia, the record shows that the
Apolonia Melad did not take possession of the disputed properties and indeed waited until
1962 to file this action for recovery of the lands from the Danguilan. If she did have
possession, she transferred the same to the petitioner in 1946, by her own sworn admission,
and moved out to another lot belonging to her step-brother. She thus failed to show that she
consummated the contract of sale by actual delivery of the properties to her and her actual
possession thereof in concept of purchaser-owner.
As consistently held by jurisprudence, ownership does not pass by mere stipulation but only
by delivery. That symbolic delivery was effected through the deed of sale, which was a public
instrument, Addison vs Felix controls:
"in order that this symbolic delivery may produce the effect of tradition, it is necessary that the
vendor shall have had such control over the thing sold that, at the moment of the sale, its
material delivery could have been made. It is not enough to confer upon the purchaser the
ownership and the right of possession. The thing sold must be placed in his control. When
there is no impediment whatever to prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic delivery through the execution of a public
instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser
cannot have the enjoyment and material tenancy of the thing and make use of it himself or
through another in his name, because such tenancy and enjoyment are opposed by the
interposition of another will, then fiction yields to reality—the delivery has not been effected."
(eventually, the Court said that both claims were weak, but the presumption is in favor of
Danguilan who is in possession)
POWER COMMERCIAL V. CA (June 20, 1997)
FACTS:
Petitioner asbestos manufacturer Power Commercial and industrial corporation bought the
property of spouses Reynaldo and Angelita Quiambao located in Makati City.
Since there are lessees occupying the subject land, part of the deed of sale is a warranty of
respondents that will defend its title and peaceful possession in favor of the petitioners.
The property is mortgage to PNP and as such, petitioners filed a request to assume
responsibility of the mortgage. Because of petitioners failure to produce the required papers,
their petition was denied.
Petitioners allege that the contract should be rescinded because of failure of delivery.
ISSUE:
WON the contract is recissible due to breach of contract.
HELD:
There is no breach of contact in this case since there is no provision in the contract that
imposes the obligation to the respondents to eject the people occupying the property.
There was also a constructive delivery because the deed of sale was made in a public
document. The contention of the petitioners that there could be no constructive delivery
because the respondents is not in possession of the property is of no merit. What matters in a
constructive delivery is control and not possession. Control was placed in the hands of the
petitioners that is why they were able to file an ejectment case. Prior physical delivery or
possession is not legally required and the execution of the deed of sale is deemed equivalent
to delivery.
TOMAS K. CHUA vs. COURT OF APPEALS and ENCARNACION VALDES-CHOY
G.R. No. 119255
April 9, 2003
FACTS:
Encarnacion Valdes-Choy advertised for sale her paraphernal house and lot in Makati. They
agreed on a purchase price of P10,800,000.00. Chua gave P100,000 to Valdes-Choy as
earnest money They agreed that the balance is payable on or before 15 July 1989. Failure to
pay balance on or before the said date forfeits the earnest money.
On July 13, 1989, Valdes-Choy as vendor and Chua as vendee signed two Deeds of
Absolute Sale. The first Deed of Sale covered the house and lot for the purchase price of
P8,000,000.00. The second Deed of Sale covered the furnishings, fixtures andmovable
properties contained in the house for the purchase price of P2,800,000.00. The parties also
computed the capital gains tax to amount to P485,000.00.
The next day, Valdes-Choy deposited the P485,000.00 manager's check to her account and
check to the counsel who undertook to pay the capitalgains tax. Chua showed to Valdes-
Choy a PBCom manager's check for P10,215,000.00 representing the balance of the
purchase price. Chua, however, did not give this PBCom manager's check to Valdes-Choy
because the TCT was still registered in the name of Valdes-Choy. Chua required that the
Property be registered first in his name before he would turn over the check to Valdes-Choy.
This angered Valdes-Choy who tore up the Deeds of Sale, claiming that what Chua required
was not part of their agreement. Valdes-Choy demanded the payment of the remaining
purchase balance be first deposited in her account before she transfers the title of the
property to him.
Chua filed a complaint for specific performance against Valdes-Choy.
ISSUE:
Can Chua (vendee) compel Valdes-Choy (vendor) to transfer the title of the property?
HELD:
NO. Chua’s condition that a new TCT should first be issued in his name, a found neither in
the law nor in the contract to sell as evidenced by the Receipt. Thus, at this point Chua was
not ready, able and willing to pay the full purchase price which is his obligation under the
contract to sell. Chua was also not in a position to assume the principal obligation of a
vendee in a contract of sale, which is also to pay the full purchase price at the agreed time.
Article 1582 of the Civil Code provides that –
Art. 1582. The vendee is bound to accept delivery and to pay the price of the thing sold at
the time and place stipulated in the contract.
In this case, the contract to sell stipulated that Chua should pay the balance of the purchase
price “on or before 15 July 1989.” The signed Deeds of Sale also stipulated that the buyer
shall pay the balance of the purchase price upon signing of the deeds. However, on the
agreed date, Chua refused to pay the balance of the purchase price as required by the
contract to sell, the signed Deeds of Sale, and Article 1582 of the Civil Code. Chua was
therefore in default and has only himself to blame for the rescission by Valdes-Choy of the
contract to sell.
Accordingly, since Chua refused to pay the consideration in full on the agreed date, which is
a suspensive condition, Chua cannot compel Valdes-Choy to consummate the sale of the
Property. Chua acquired no right to compel Valdes-Choy to transfer ownership of the
Property to him.
Vive Eagle Land Inc. vs Ca
Facts:
Sps Raul and Rosalie Flores (Spouses Flores) were the owners of 2 parcels of land with an
area of 1,026 and 2963 sqm, respectively. From these lots, there were 3 deed of sales
executed.
First, between the Spouses Flores and Tatic Square International Corporation. They
executed a MOA that the Spouses Flores obliged themselves to spend for and cause the
registration of the first deed of absolute sale, to cause the issuance of the torrens titles over
the property to and under the name of TATIC, as vendee, and to pay the capital gains tax on
the said sales. Tobias (the broker) and Tatic bound and obliged themselves for the eviction of
the tenants of the property, 60 days from the execution of the MOA, with the assistance of
Spouses Flores.
On the second deed which was executed between TATIC and the Petitioner Vive Eagle Land
Inc (VELI), TATIC obliged itself to spend for the registration of the second deed of absolute
sale and the issuance of the titles over the property to and under the name of petitioner VELI,
and to cause the eviction of the tenants/occupants from the property within sixty days from
April 12, 1988. TATIC did not bind itself to pay the capital gains tax for the said sale.
And on the third deed executed between VELI and the Respondent, petitioner VELI did not
oblige itself to spend for the registration of the said deed, to secure a torrens title over the
property to and under the name of the respondent, or to cause the eviction of the
tenants/occupants on the property.
The respondent counsel later demands VELI to pay for the capital gains tax, cause the
registration of the said deed and cause the eviction of squatters and occupants in the area in
which VELI in return rejected the demand.
The respondent then filed a complaint against the petitioner to transfer the title in their favor,
to cause the eviction of the squatters in the property and to pay the capital gains tax.
Petitioner VELI then alleged that being a juridical entity as a corporation, they are exempt
from paying capital gains tax, that Spouses Flores and Tobias were the ones liable for the
payment of the capital gains tax and that the same shall be responsible for the eviction of the
current settlers.
The trial court then rendered its decision in favor of the respondent. It was held that VELI is
liable for the payment of the capital gains tax as the respondents were not even the parties of
the deed executed by Spouses Flores and Tatic.
The petitioner appealed before CA. The court affirned trial court’s ruling with modification that
it is also the petitioner who shall cause for the registration of the title and the eviction of the
squatters.
The petitioner now appealed before the Supreme Court that CA erred in ruling the the
respondent is not bound by the deeds executed by the Spouses Flores, TATIC and Tobias,
and by TATIC and petitioner VELI simply because the respondent was not a party to the said
deeds. The petitioners insist that the respondent acquired the rights and interests of its
predecessors; and, being the vendee/owner of the property covered by TCT No. 241846, the
petitioners had the right to enforce the said contracts against its predecessors.
Issue:
Whether or not VELI is obliged to transfer the title to and under the respondent?
Held:
Yes.
Ruling:
Under Article 149518 of the New Civil Code, petitioner VELI, as the vendor, is obliged to
transfer title over the property and deliver the same to the vendee. While Article 149819 of
the New Civil Code provides that the execution of a notarized deed of absolute sale shall be
equivalent to the delivery of the property subject of the contract, the same shall not apply if,
from the deed, the contrary does not appear or cannot clearly be inferred. In the present
case, the respondent and petitioner VELI agreed that the latter would cause the eviction of
the tenants/occupants and deliver possession of the property. It is clear that at the time the
petitioner executed the deed of sale in favor of the respondent, there were tenants/occupants
in the property. It cannot, thus, be concluded that, through the execution of the third deed of
sale, the property was thereby delivered to the respondent.