DIGNOS vs CA
(contract of sale vs contract to sell)
It has been held that a deed of sale is absolute in nature although
denominated as a "Deed of Conditional Sale" where nowhere in the
contract in question is a proviso or stipulation to the effect that title
to the property sold is reserved in the vendor until full payment of
the purchase price, nor is there a stipulation giving the vendor the
right to unilaterally rescind the contract the moment the vendee
fails to pay within a fixed period.
A careful examination of the contract shows that there is no such
stipulation reserving the title of the property on the vendors nor
does it give them the right to unilaterally rescind the contract upon
non-payment of the balance thereof within a fixed period.
On the contrary, all the elements of a valid contract of sale under
Article 1458 of the Civil Code, are present, such as: (1) consent or
meeting of the minds; (2) determinate subject matter; and (3) price
certain in money or its equivalent. In addition, Article 1477 of the
same Code provides that "The ownership of the thing sold shall be
transferred to the vendee upon actual or constructive delivery
thereof."
While it may be conceded that there was no constructive delivery of
the land sold in the case at bar, as subject Deed of Sale is a private
instrument, it is beyond question that there was actual delivery
thereof.
TAN vs BENORILAO
(conditional sale vs contract to sell)
A contract is what the law defines it to be, taking into consideration
its essential elements, and not what the contracting parties call it.
Article 1485 of the Civil Code defines a contract of sale.
The very essence of a contract of sale is the transfer of ownership in
exchange for a price paid or promised.
In contrast, a contract to sell is defined as a bilateral contract
whereby the prospective seller, while expressly reserving the
ownership of the property despite delivery thereof to the
prospective buyer, binds himself to sell the property exclusively to
the prospective buyer upon fulfillment of the condition agreed, i.e.,
full payment of the purchase price. A contract to sell may not even
be considered as a conditional contract of sale where the seller may
likewise reserve title to the property subject of sale until the
fulfillment of a suspensive condition, because in a conditional
contract of sale, the first element of consent is present, although it
is conditioned upon the happening of a contingent event which may
or may not occur.
*Jurisprudence has established that where the seller promises to
execute a deed of absolute sale upon the completion by the buyer
of the payment of the price, the contract is only a contract to sell.
Thus, while the contract is denominated as a Deed of Conditional
Sale, the presence of the above-quoted provision identifies the
contract as being mere contract to sell.
ARTES vs URBI
(example of illicit per accidenshomestead lnads cant be sold)
As thus prescribed by law (Sec 118 of CA 141), for a period of five
years from the date of the government grant, lands acquired by free
or homestead patent shall not only be incapable of being
encumbered or alienated except in favor of the government itself or
any of its institutions or of duly constituted banking corporations,
but also, they shall not be liable to the satisfaction of any debt
contracted within the said period, whether or not the indebtedness
shall mature during or after the prohibited time. This provision
against the alienation or encumbrance of public lands granted
within five years from the issuance of the patent, it has been held, is
mandatory; a sale made in violation thereof is null and void and
produces no effect whatsoever. Though it may be a limitation on
the right of ownership of the grantee, the salutary purpose of the
provision cannot be denied: it is to preserve and keep for the
homesteader or his family the land given to him gratuitously by the
State, so that being a property owner, he may become and remain a
contented and useful member of our society.
The execution sale in this case being null and void, the possession of
the land should be returned to the owners, the herein appellants.
There would be no need to order appellee Urbi to execute a deed of
reconveyance thereof to the owners. It appears that what was
issued here to the judgement creditor/purchaser was only the
sheriffs provisional certificate, under which he derived no definite
title or right until the period for redemption has expired, without a
redemption has expired, without a redemption having been made,
or issuance of a final deed or certificate of sale. In other words, the
purchaser herein has not acquired an absolute ownership or title in
fee over the land that would necessitate a deed of reconveyance to
revert ownership back to the appellant spouses.
HERIS OF ENRIQUE ZAMBALES vs CA
(why did the court still invalidated the sale)
The sale of a homestead lot within the five-year prohibitory period
is illegal and void. The law does not distinguish between executory
and consummated sales.
In the compromise agreement executed between the parties, (1)
the Zambaleses promised to sell and the Corporation agreed to buy
the disputed lot at P5,000,00 per hectare, the contract to be
reciprocally demandable and enforceable on September 10, 1960;
and as a substitute procedure, (2) an irrevocable agency was
constituted in favor of the Corporation as attorney-in-fact to sell the
land to any third person on said date or any time thereafter.
The bilateral promise to buy and sell the homestead lot at a price
certain, which was reciprocally demandable, was entered into
within the five-year-prohibitory period and is therefore, illegal and
void. Further, the agency to sell the homestead lot to a third party
was coupled with an interest inasmuch as a bilateral contract was
dependent on it and was not revocable at will by any of the parties.
TO all intents and purposes, therefore, there was an actual
executory sale perfected during the period of prohibition except
that it was reciprocally demandable thereafter and the agency the
sell to any third party was deferred until the expiration of the
prohibitory period. The rentals were ostensibly to be paid during
the five-year-prohibitory period, and the agency to sell made
effective only after the lapse of the said period, was merely a devise
to circumvent the prohibition.
We, hold therefore, that the bilateral promise to buy and sell, and
the agency to sell, entered into within five years from the date of
the homestead patent, was in violation of Section 118 of the Public
Land Law, although the executed sale was deferred until after the
expiration of the five-year-prohibitory period.
As the contract is void from the beginning, for being expressly
prohibited by law the action for the declaration of its inexistence
does not prescribe. Being absolutely void, it is entitled to no
authority or respect, the sale may be impeached in a collateral
proceeding by any one whose rights and interest it conflicts. There
is no presumption of its validity. The approval of the sale by the
Secretary of Agriculture and Natural Resources after the lapse of
five years from the date of the patent would neither legalize the
sale.
QUIROGA vs PARSONS
(contract of agency to sell vs contract of purchase and sale)
In order to classify a contract, due regard must be given to its
essential clauses. In the contract in question, what was essential, as
constituting its cause and subject matter, is that the plaintiff was to
furnish the defendant with the beds which the latter might order, at
the price stipulated, and that the defendant was to pay the price in
the manner stipulated. The price agreed upon was the one
determined by the plaintiff for the sale of these beds in Manila, with
a discount of from 20 to 25 per cent, according to their class.
Payment was to be made at the end of sixty days, or before, at the
plaintiffs request, or in cash, if the defendant so preferred, and in
these last two cases an additional discount was to be allowed for
prompt payment.
These are precisely the essential features of a contract of purchase
and sale. There was the obligation on the part of the plaintiff to
supply the beds, and, on the part of the defendant, to pay their
price. These features exclude the legal conception of an agency or
order to sell whereby the mandatory or agent received the thing to
sell it, and does not pay its price, but delivers to the principal the
price he obtains for the sale of the thing to a third person, and if he
does not succeed in selling it, he returns it. By virtue of the contract
between the plaintiff and the defendant, the latter, on receiving the
beds, was necessarily obliged to pay their price within the term
fixed, without any other consideration and regardless as to whether
he had or had not sold the beds.
CONCRETE AGGREGATES INC vs CTA
(test to determine whether contract for a piece of work or contract
of sale)
We have had the occasion to construe Section 205 of the Tax Code
in Commissioner of Internal Revenue vs CTA, et al, where we
reiterated the test as to when one may be considered a contractor
within its context, thus;
The word contractor has come to be used with special
reference to a person who, in the pursuit of the
independent business, undertakes to do a specific job or
piece of work for other persons, using his own means and
methods without submitting himself to control as to the
petty details. The true test of a contractor as was held in the
cases of Luzon Stevedoring Co. vs. Trinidad and La Carlota
Sugar Central vs. Trinidad, would seem to be that he
renders service in the course of an independent occupation,
representing the will of his employer only as to the result of
 his work, and not as to the means by which it was
accomplished.
Petitioner posits that it has passed the test of a contractor under
Article 1467 under the Civil Code. However the court ruled that the
facts and circumstances in that case cited by petitioner support that
Engineering is a contractor rather than a manufacturer.
It is still good law that a contract to make is a contract of sale if the
article is already substantially in existence at the time of the order
and merely requires some alteration, modification or adaptation to
the buyers wishes or purposes. A contract for the sale of an article
which the vendor in the ordinary course of his business
manufactures or procures for the general market, whether the
same is on hand at the time or not is a contract for the sale of
goods.
PEOPLES HOMESITE & HOUSEING CORP vs CA
TOYOTA SHAW INC vs CA
SAMPAGUITA PICTURES vs JALWINDOR MANUFACTURERS, INC
(how did SC determine that Sampaguita had rights?
improvementsagreement)
When the glass and wooden jalousies in question were delivered
and installed in the leased premises, Capitol become the owner
thereof. Ownership is not transferred by perfection of the contract
but by delivery, either actual or constructive. This is true even if the
purchase has been made on credit, as in the case at bar. Payment of
the purchase price is not essential to the transfer of ownership as
long as the property sold has been delivered. Ownership is acquired
from the moment the thing sold was delivered to vendee, as when
it is placed in his control and possession. (Arts. 1477, 1496 and
1497, Civil Code of the Phil.)
Capitol entered into a lease Contract with Sampaguita in 1964, and
the latter became the owner of the items in question by virtue of
the agreement in said contract that all permanent improvements
made by lessee shall belong to the lessor and that said
improvements have been considered as part of the monthly
rentals. When levy or said items was made on July 31, 1965,
Capitol, the judgement debtor, was no longer the owner debtor.
SOUTHWESTERN MOTORS, INC. vs MOSCOSO
(ruling of SC on option money)
...there should have been an option money. Par 2. Of 1479 option
contract. Promisor not bound to fulfill promise.
(1484; 1st remedy was chosen, why not the 3rd remedy?)
SAMPLEX ANSWER:
The SC held that the creditor exercised the first remedy given in
Article 1484 which is specific performance and that the attachment
of the trucks which was the thing sold was merely incidental in the
execution for specific performance. The SC held that the sale of the
truck did not amount to extrajudicial foreclosure thus did not bar
the creditor, Southern motors, to seek or to file an action further
against the debtor to recover the paid amount.
ATKINS, KROLL & CO., INC., vs CUA HIAN TEK
(not an option contract but a contract of saleSC ruling)
Petitioner, however, insists the offer was a mere offer to option,
because the firm offer Exh. A was a continuing offer to sell until
September 23, and an option is nothing more than a continuing
offer for a specified time. In our opinion, an option implies more
than that: it implies the legal obligation to keep the offer open for
the time specified. Yet the letter Exh. A did not by itself produce the
legal obligation of keeping the offer open up to September 23. It
could be drawn before acceptance, because it is admitted, there
was no consideration for it.
Furthermore, an option is unilateral: a promise to sell at the price
fixed whenever the offeree should decide to exercise his option
within the specified time. After accepting the promise and before
he exercises his option. In this case, however, upon accepting herein
petitioners offer a bilateral promise to sell and to buy ensued, and
the respondent ipso facto assumed the obligations of a purchaser.
He did not just get the right subsequently to buy or not to buy. It
was not a mere option then; it was bilateral contract of sale.
If the option is given without a consideration, it is a mere offer of a
contract of sale, which is not binding until accepted. If, however,
acceptance was made before a withdrawal, it constitutes a binding
contract of sale, even though the option was not supported by a
sufficient consideration...
We must therefore hold, as the lower courts have held that there
was a contract of sale between the parties.
SPOUSES NATINO vs IAC
(assuming there was no vitiation, could it be different?)
The bank was not bound by the promise made by Mrs. Brodeth not
only because it was not approved or ratified by the Board of
Directors but also because, and more decisively, it was a promise
unsupported by a consideration distinct from the re-purchase price.
The second paragraph of Article 1479 of the Civil Code expressly
provides: An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding upon the promissor
if the promise is supported by a consideration distinct from the
price. Thus in Rural Bank of Paranaque vs Remolado, a
commitment by the bank to resell a property, within a specified
period, although accepted by the party in whose favor it was made,
was considered an option not supported by a consideration distinct
from the price and, therefore, not binding upon the promissor.
Pursuant to Southwestern Sugar and Molasses Co. vs Atlantic Gulf
and Pacific Company, it was void.
EQUATORIAL REALTY DEVELOPMENT, INC. & CARMELO $
BAUERMANN, INC., vs MAYFAIR THEATER, INC.,
(right of first refusal)
We agree with the respondent CA that the aforecited contractual
stipulation provides for a right of first refusal in favor of Mayfair. It
is not an option clause or an option contract. It is a contract of a
right of first refusal.
An option is a contract granting a privilege to buy or sell within an
agreed time and at a determined price. It is separate and distinct
contract from that which the parties may enter in to upon the
consummation of the option. It must be supported by
consideration.
In the instant case, the right of first refusal is an integral part of the
contracts of lease. The consideration is built into the reciprocal
obligations of the parties. To rule that a contractual stipulation as
that found in paragraph 8 of the contracts is governed by Article
1324 on withdrawal of the offer or Article 1479 on promise to buy
and sell would render ineffectual or inutile the provisions on right
of first refusal so commonly inserted in leases of real estate
nowadays.
It is no also correct to say that there was no consideration in an
agreement of right of first refusal. The stipulation is part and parcel
of the entire contract of lease. The consideration for the lease
include the consideration for the right of first refusal.
SERRA vs CA
(what is the consideration that the court chose as option money?)
A promise to buy and sell a determinate thing for a price certain is
reciprocally demandable. An accepted unilateral promise to buy or
to sell a determinate thing for a price certain is binding upon the
promisor if the promise is supported by a consideration distinct
from the price. (Art 1479, NCC) The first is a mutual promise and
each has the right to demand from the other the fulfillment of the
obligation. While the second is merely an offer of one to another,
which if accepted, would create an obligation to the offeror to make
good his promise, provided the acceptance is supported by a
consideration distinct from the price.
Art 1324 of the CC provides that when an offeror has allowed the
offeree a certain period to accept, the offer may be withdrawn at
anytime before acceptance by communicating such withdrawal,
except when the option is founded upon consideration, as
something paid or promised. On the other hand, Art 1479 of the CC
provides that an accepted unilateral promise to buy and sell a
determinate thing for a price certain is binding upon the promisor if
the promise is supported by a consideration distinct from the price.
In a unilateral promise to sell, where the debtor fails to withdraw
the promise before the acceptance by the creditor, the transaction
becomes a bilateral contract to sell and to buy, because upon
acceptance by the creditor of the offer to sell by the debtor, there is
already a meeting of the minds of the parties as to the thing which
is determinate and the price which is certain. In which case, the
parties may then reciprocally demand performance.
Jurisprudence has taught us that an option contract is a privilege
existing only in one party the buyer. For a separate consideration
paid, he is given the right to decide to purchase or not, a certain
merchandise or property, at any time within the agreed period, at a
fixed price. This being his prerogative, he may not be compelled to
exercise the option to buy before the time expires.
ROMAN vs GRIMALT
(no perfected contract; condition not check)
The court below found that the parties had not arrived at a definite
understanding.
A sale shall be considered perfected and binding as between vendor
and vendee when they have agreed as to the thing which is the
object of the contract and as to the price, even though neither has
been actually delivered. (Art 1450 of the CC)
Ownership is not considered transmitted until the property is
actually delivered and the purchaser has taken possession of the
value and paid the price agreed upon, in which case the sale is
considered perfected.
When the sale is made by means of a public instrument the
execution thereof shall be equivalent to the delivery of the thing
which is the object of the contract. (Art 1462 of CC)
NORKIS DISTRIBUTORS INC vs CA
(Norkis bears the loss; invoked 1504)
Artile 1496 of the CC which provides that in the absence of an
express assumption of risk by the buyer, the things sold remain at
sellers risk until the ownership thereof is transferred to the buyer,
is applicable to this case, for there was neither an actual nor
constructive delivery of the things sold, hence, the risk of loss
should be borne by the seller, Norkis, which was still the owner and
possessor of the motorcycle when it was wrecked. This is in
accordance with the well-known doctrine of res perit domino.
RIDAD vs FILIPINAS INVESTMENT AND FINANCE
(What if taxi franchise was first foreclosed?other securities first
before the thing sold?)
Article 1484, the vendor of personal property the purchase price of
which is payable in installments, has the right, should the vendee
default in the payment of two or more of the agreed installments,
to exact fulfillment by the purchaser of the obligation, or to cancel
the sale, or to foreclose the mortgage on the purchased personal
property, if one was constituted. Whichever right the vendor elects,
he cannot avail of the other, these remedies being alternative, not
cumulative. Furthermore, if the vendor avails himself of the right to
foreclosure his mortgage, the law prohibits him from further
bringing an action against the vendee for the purpose of recovering
whatever balance of the debt secured not satisfied by the
foreclosure sale.
In the instant case, defendant corporation elected to foreclose its
mortgage upon default by the plaintiffs in the payment of the
agreed installments. Having chose to foreclose the chattel
mortgage, and bought the purchased vehicles at the public auction
as the highest bidder, it submitted itself to the consequences of the
law as specifically mentioned, by which it is deemed to have
renounced any and all rights which it might otherwise have under
the promissory note and the chattel mortgage as well as the
payment of the unpaid balance.
PASCUAL vs UNIVERSAL MOTORS CORP
...what Article 1484 withholds from the vendor is the right to
recover any deficiency from the purchaser after the foreclosure of
the chattel mortgage and not a recourse to the additional security
put up by a third party to guarantee the purchasers performance of
his obligation. A similar argument has been answered by this Court
in the wise To sustain appellants argument is to overlook the fact
that if the guarantor should be compelled to pay the balance of the
purchase price, the guarantor will in turn be entitled to recover
what she has paid from the debtor vendee (Art 2066, CC); so that
ultimately, it will be the vendee who will be made to bear the
payment of the balance of the price, despite the earlier foreclosure
of the chattel mortgage given by him. Thus, the protection given by
Article 1484 would be indirectly subverted, and public policy
overturned.
SPS DE LA CRUZ vs ASIAN CONSUMER AND INDUSTRIAL FINANCE
CORPORTION & CA
It is not disputed that the instant case is covered by the so-called
Recto Law, now Art 1484 of NCC.
In this jurisdiction, the three remedies provided for in the Recto
Law are alternative and not cumulative; the exercise of one would
preclude the other remedies. Consequently, should the vendee-
mortgagor default in the payment to avail of any of these three
remedies: either to exact fulfillment of the obligation, to cancel the
sale, or to foreclose the mortgage on the purchased chattel, if one
was constituted.
The records show that while ASIAN eventually succeeded in taking
possession of the mortgaged vehicle, it did not pursue the
foreclosure of the mortgage as shown by the fact that no auction
sale of the vehicle was ever conducted.
Consequently, in the case before us, there being no actual
foreclosure of the mortgaged property, ASIAN is correct in resorting
to an ordinary action for collection of the unpaid balance of the
purchase price.
AGUSTIN vs CA
(justification of the SC for allowing repossession expenses
exception to 1484repossession expenses may be recovered by
vendorno included in any unpaid balance)
At any rate, even if we were to brush aside the law of the case
doctrine we find the award for repossession expenses still proper. In
Filipinas...vs Ridad, the court recognized an exception to the rule
stated under Article 1483 (3) upon which petitioner relies. Thus:
...where the mortgagor plainly refuses to deliver the
chattel subject of the mortgage upon his failure to pay two
or more installments, or if he conceals the chattel to place it
beyond the reach of the mortgagee... it logically follows as a
matter of common sense, that the necessary expenses
incurred in the prosecution by the mortgagee of the action
for replevin so that he can regain possession of the chattel,
should be borne by the mortgagor. Recoverable expenses
would, in our view, include expenses properly incurred in
effecting seizure of the chattel and reasonable attorneys
fees in prosecuting the action for replevin.
BORBON II vs SERVICEWIDE SPECIALISTS INC
(liquidated damages & attys feeswaiver on right to foreclosure
mortgage on the thing sold if chose to foreclose other securities
first)
In alternative remedies, the choice generally becomes conclusive
only upon the exercise of the remedy. For instance, it is only when
there has been a foreclosure of the chattel mortgage that the
vendee-mortgagor would be permitted to escape from a deficiency
liability. Thus, if the case is one for specific performance, even when
this action is selected after the vendee has refused to surrender the
mortgaged property to permit an extrajudicial foreclosure, that
property may still be levied on execution and an alias writ may be
issued if the proceeds thereof are insufficient to satisfy the
judgement credit. So, also, a mere demand to surrender the object
which is not heeded by the mortgagor will not amount to a
foreclosure, but the repossession thereof by the vender-mortgagee
would have the effect of foreclosure.
Under Article 1484 of the CC, the vendor-mortgagee or its assignees
loses any right to recover any unpaid balance of the price and any
agreement to the contrary (would be) void. In Filipinas... vs Ridad
while we reiterated and expressed our agreement on the basic
philosophy behind Article 1484, we stressed, nevertheless, that the
protection given to the buyer-mortgagor should not be considered
to be without circumscription or as being preclusive of all other laws
or legal principles. Hence, where the mortgagor unjustifiably
refused to surrender the chattel subject of the mortgage upon
failure of two or more installments, or if he concealed the chattel to
place it beyond the reach of the mortgagee, that thereby
constrained the latter to seek court relief, the expenses incurred for
the prosecution of the case, such as attorneys fees, could rightly be
awarded.
FILINVEST CREDIT CORPORATION vs CA
(1485; repossessing the rock crusher is tantamount to foreclosure?)
Indubitably, the device contract of lease with option to buy is at
times resorted to as a means to circumvent Article 1484,
particularly paragraph (3) thereof. Through the set-up, the vendor,
by retaining ownership over the property in the guise of being the
lessor, retains, likewise, the right to repossess the same, without
going through the process of foreclosure, in the event the vendee-
lessee defaults in the payment of the installments. There arises
therefore no need to constitute a chattel mortgage over the
movable sold. More important, the vendor, after repossessing the
property and, in effect, canceling the contract of sale, gets to keep
all the installments-cum-rentals already paid. It is thus for these
reasons that Art 1485 of the NCC provides that...
FIESTAN & ARCONADO vs CA
(1491 par (2))
The nullity of the extrajudicial foreclosure sale in the instant case is
further sought by petitioners on the ground that the DBP cannot
acquire by purchase the mortgaged property at the public auction
sale by virtue of par. (2) of Article 1491 and par. (7) of Article 1409
of the CC which prohibits agents from acquiring by pruchase, even
at a public or judicial auction either in person or through the
mediation of another, the property whose administration or sale
may have been entrusted to them unless the consent of the
principal has been given.
The contention is erroneous.
The prohibition mandated by par. (2) of Article 1491 in relation to
Article 1409 of the CC does not apply in the instant case where the
sale of the property in dispute was made under a special power
inserted in or attached to the real estate mortgage pursuant to Act
No. 3135, as amended. It is a familiar rule of statutory construction
that, as between a specific statute and general statute, the former
must prevail since it evinces the legislative intent more clearly than
a general statute does.
Under Act No. 3135, as amended, a mortgagee-creditor is allowed
to participate in the bidding and purchase under the same
conditions as any other bidder. In other words, it creates and is
designed to create an exception to the general rule that a
mortgagee or trustee in a mortgage or deed of trust which contains
a power of sale on default may not become the purchaser, either
directly or through the agency of a third person, at a sale which he
himself makes under the power. Under such an exception, the title
of the mortgagee-creditor over the property cannot be impeached
or defeated on the ground that the mortgagee cannot be a
purchaser at his own sale.
LAYUG vs IAC
(was there a valid rescission of the case?)
In the case at bar, Layug had paid two annual installments... He is
deemed therefore, in the words of the law, to have paid at least
two years of installments. He therefore had a grace period of two
months. That he made no payment within this grace period is plain
from the evidence. He has thus been left only with the right to a
refund of the cash surrender value of the payments on the
property equivalent to fifty percent of the total payments made.
Such refund will be the operative act to make effective the
cancellation of the contract by Gabuya, conformably with the terms
of the law. The additional formality of a demand on Gabuyas part
for rescission by notarial act would appear, in the premises, to be
merely circuitous and consequently superfluous.
SC ruled that CAs decision is affirmed particularly in so far as it
authorizes and sanctions the cancellation by private respondent
Gabuya of his contract of sale with petitioner Layug, but is modified
only in the sense that such cancellation shall become effective and
fully operative only upon payment to the latters satisfaction of the
cash surrender value of his paymnts..
ADDISON vs FELIX
(legal impediment1498 not apply)
The Code imposes upon the vendor the obligation to deliver the
thing sold. The thing is considered to be delivered when it is placed
in the hands and possession of the vendee. (Art 1462) It is true
that the same article declares that the execution of a public
instrument is equivalent to the delivery of the thing which is the
object of the contract, but, in order that this symbolic delivery may
produce the effect of tradition, it is necessary that the vendor shall
have had such control over the thing sold that, at the moment of
the sale, its material delivery could have been made. It is not
enough to confer upon the purchaser the ownership and the right
of possession. The things 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 thought 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 yield to reality the
deliver has not been effected.
TEN FORTY REALTY AND DEVELOPMENT CORP vs MARINA CRUZ
(1498 only a presumption can be rebutted by contrary evidence
actual possession)
In a contract of sale, the buyer acquires the thing sold only upon its
delivery in any of the ways specified in Articles 1497 to 1501, or in
any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee. With respect to
incorporeal property, Article 1498 lays down the general rule: the
execution of a public instrument shall be equivalent to the delivery
of the thing that is the object of the contract if, from the deed, the
contrary does not appear or cannot be clearly inferred. However,
ownership is transferred not by contract but by tradition or delivery.
Nowhere in the Civil Code is provided that the execution of a Deed
of Sale is conclusive presumption of delivery of possession of a
piece of real estate. This Court has held that the execution of a
public instrument gives rise only to a prima facie presumption of
delivery. Such presumption is destroyed when the delivery is not
effected because of a legal impediment... In the case at bar it is
undisputed that petitioner did not occupy the property from the
time it was allegedly sold to it on December 5, 1996 or at any time
thereafter.
POWER CORP vs CA
(1498 applied)
The Civil Code provides that delivery can either be (1) actual
(Article1497) or (2) constructive (Articles1498-1501). Symbolic
delivery (Article 1498), as a species of constructive delivery, effects
the transfer of ownership through the execution of a public
document. Its efficacy can, however, be prevented if the vendor
does not possess control over the thing sold, in which case this legal
fiction must yield to reality. The Court has consistently held that: In
order that this symbolic delivery may produce the effect of
tradition, it is necessary that the vendor shall have had control over
the thing sold that... 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 place 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 yield to reality the
delivery has not been effected.
Considering that the deed of sale between the parties did not
stipulate or infer otherwise, delivery was effected through the
execution of said deed. The lot sold had been placed under the
control of petitioner; thus, the filing of the ejectment suit was
subsequently done. It signified that its new owner intended to
obtain for itself and to terminate said occupants actual possession
thereof. Prior physical delivery or possession is not legally required
and the execution of the deed of sale is deemed equivalent to
delivery. This deed operates as a formal or symbolic delivery of the
property sold and authorizes the buyer to use the document as
proof of ownership. Nothing more is required.
DIZON vs SUNTAY
(Art 559how was Suntay unlafully deprived? Crime? Estafa.)
Respondent-owner Suntay has in her favor the protection accorded
by Art 559 of the CC which provides that: The possession of
movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner
cannot obtain its return without reimbursing the price therefore.
EDCA vs SANTOS
(EDCA cannot recover anymore from Santos; why? Not unlawfully
deprived; negligentdeliveryownership is transferred)
The contract of sale is consensual and is perfected once agreement
is reached between the parties on the subject matter and
consideration. Arts 1475, 1477 and 1478. It is clear from these
provisions, particularly the last one, that ownership in the thing sold
shall not pass to the buyer until full payment of the purchase price
only if there is a stipulation to that effect. Otherwise, the rule is that
ownership shall pass from the vendor to the vendee upon the actual
or constructive delivery of the thing sold even if the purchase price
has not yet been paid.

Actual delivery of the books having been made, Cruz acquired

ownership over the books which he could then validly transfer to
the private respondents. The fact that he had not yet paid for them
to EDCA was a matter between him and EDCA and did not impair
the title acquired by the private respondents to the books.

It bears repeating that in the case before us, Santos took care to
ascertain first that the books belonged to Cruz before she agreed to
purchase them. The EDCA invoice Cruz showed her assured her that
the books had been paid for on delivery. By contrast, EDCA was less
than cautious in fact, too trusting in dealing with the impostor.
Although it had never transacted with him before, it readily
delivered the books he had ordered (by telephone) and as readily
accepted his personal check in payment. It did not verify his identity
although it was easy enough to do this. It did not wait to clear the
check of this unknown drawer. Worse, it indicated in the sales
invoice issued to him, by the printed items thereon, that the books
had been paid for on delivery, thereby vesting ownership in the
buyer.