A.A. Addison vs.

Felix
38 Phil 404
August 1918
FACTS: The defendants-appellees Spouses Maciana Felix and Balbino Tioco
purchased from plaintiff-appellant A.A. Addison four parcels of land to which
Felix paid, at the time of the execution of the deed, the sum of P3,000 on
account of the purchase price. She likewise bound herself to the remainder in
installments, the first of P2,000 on July 15, 1914, the second of P5,000 thirty
days after the issuance to her of a certificate of title under the Land
Registration Act, and further, within ten years from the date of such title, P10
for each cocoanut tree in bearing and P5 for each such tree not in bearing
that might be growing on said parcels of land on the date of the issuance of
title to her, with the condition that the total price should not exceed P85,000.
It was further stipulated that Felix was to deliver to the Addison 25% of the
value of the products that she might obtain from the four parcels "from the
moment she takes possession of them until the Torrens certificate of title be
issued in her favor," and that within 1 year from the date of the certificate of
title in her favor, Marciana Felix may rescind the contract of purchase and
sale.
In January 1915, Addison , filed suit in the CFI of Manila to compel Felix to
pay the first installment of P2,000, demandable, in accordance with the
terms of the contract of sale. The defendants Felix and her husband Tioco
contended that Addison had absolutely failed to deliver the lands that were
the subject matter of the sale, notwithstanding the demands they made
upon him for this purpose. The evidence adduced shows Addison was able to
designate only two of the four parcels, and more than two-thirds of these two
were found to be in the possession of one Juan Villafuerte, who claimed to be
the owner of the parts he so occupied. The trial court held the contract of
sale to be rescinded and ordered Addison to return to Felix the P3,000 paid
on account of the price, together with interest thereon at the rate of 10% per
annum.
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.

Sampaguita Pictures, Inc. vs. Jalwindor Manufacturers, Inc.

93 SCRA 420
October 1979

FACTS: Both the plaintiff-appellant Sampaguita Pictures Inc. (Sampaguita)

and defendant-appellee Jalwindor Manufacturers Inc. (Jalwindor) were
domestic corporations duly organized under the Philippine laws. Sampaguita
leased to Capitol 300 Inc. (Capitol) the roof deck of its building with the
agreement that all permanent improvements Capitol will make on said
property shall belong to Sampaguita without any part on the latter to
reimburse Capitol for the expenses of said improvements. Shortly, Capitol
purchased on credit from Jalwindor glass and wooden jalousies, which the
latter itself delivered and installed in the leased premises, replacing the
existing windows.
On June 1, 1964, Jalwindor filed with the CFI of Rizal, Quezon City an action
for collection of a sum of money with a petition for preliminary attachment
against Capitol for its failure to pay its purchases. Later, Jalwindor and
Capitol submitted to the trial court a Compromised Agreement wherein
Capitol acknowledged its indebtedness of P9,531.09, payable in monthly
installments of at least P300.00 a month beginning December 15,1964 and
that all the materials that Capitol purchased will be considered as security for
such undertaking. Meanwhile, Sampaguita filed a complaint for ejectment

and for collection of a sum of money against Capitol for the latters failure to
pay rentals from March 1964 to April 1965, and the City Court of Quezon City
ordered Capitol on June 8, 1965 to vacate the premises and to pay
Sampaguita.
On the other hand, Capitol likewise failed to comply with the terms of the
Compromise Agreement, and on July 31, 1966, the Sheriff of Quezon City
made levy on the glass and wooden jalousies. Sampaguita filed a third-party
claim alleging that it is the owner of said materials and not Capitol, but
Jalwindor filed an idemnity bond in favor of the Sheriff and the items were
sold at public auction on August 30, 1966, with Jalwindor as the highest
bidder for P6,000.00. Sampaguita filed with the CFI of Rizal, Quezon City an
action to nullify the Sheriff's sale and for an injunction to prevent Jalwindor
from detaching the glass and wooden jalousies. Jalwindor was ordered to
maintain the status quo pending final determination of the case, and on
October 20, 1967, the lower court dismissed the complaint and ordered
Sampaguita to pay Jalwindor the amount of P500.00 as attorney's fees.
ISSUE: WON there was delivery and a transfer of ownership of the thing sold.
HELD: The Supreme Court reversed the decision of the lower court declaring
Sampaguita as declared the lawful owner of the disputed glass and wooden
jalousies, permanently enjoining Jalwindor from detaching said items from
the roof deck of the Sampaguita Pictures Building, and ordered Jalwindor to
pay Sampaguita the sum of P1,000.00 for and as attorney's fees.
When a property levied upon by the sheriff pursuant to a writ of execution is
claimed by a third person in a sworn statement of ownership thereof, as
prescribed by the rules, an entirely different matter calling for a new
adjudication arises. The items in question were illegally levied upon since
they do not belong to the judgment debtor. The power of the Court in
execution of judgment extends only to properties unquestionably belonging
to the judgment debtor. The fact that Capitol failed to pay Jalwindor the
purchase price of the items levied upon did not prevent the transfer of
ownership to Capitol and, later, to Sampaguita by virtue of the agreement in
their lease contract. Therefore, the complaint of Sampaguita to nullify the
Sheriff's sale is well founded, and should prosper.

Ten Forty Realty vs Cruz

G.R. No. 151212 September 10, 2003

FACTS
-Ten Forty Realty filed a complaint of ejectment against Marina Cruz who has
allegedly occupied the residential lot in Olongapo City, which they bought
from Barbara Galino, by virtue of a Deed of Absolute Sale. It appears that
Barbara sold the same lot to Marina who immediately occupied the land. Ten
Forty is saying the occupation by Marina was merely tolerated by them.
-Marinas defense:
(1) Ten Forty, being a corporation, isnot qualified to own the property
which is a public land.
(2) Barbara Galino did not sell her property to Ten Forty but merely
obtained a loan.
(3) Ten Forty never occupied the property before she did. Barbara
Galino was in possession at the time of the sale, and vacated the lot in
favor of Marina.
(4) She was the one who caused the cancellation of the tax declaration
in the name of Barbara and a new one was issued in her name.
(5) Ten Forty only obtained its tax declaration 7 months after she did.MTCC ruled in favor of Ten Forty and ordered Marina to vacate.
- RTC reversed. The RTC ruled as follows:
1) respondents entry into the property was not by mere tolerance of
petitioner, but by virtue of a Waiver and Transfer of Possessory Rights
and Deed of Sale in her favor;
2) the execution of the Deed of Sale without actual transfer of the
physical possession did not have the effect of making petitioner the
owner of the property, because there was no delivery of the object of
the sale as provided for in Article 1428 of the Civil Code; and 3) being a
corporation, petitioner was disqualified from acquiring the property,
which was public land.
-CA affirmed: Case cannot be unlawful detainer because there has been no
prior contract between the parties. Neither can it be forcibly entry because
there is no showing that there was prior physical possession by the
petitioner.
ISSUE: WON Marina may be validly ejected from the property.

HELD: NO
1. In a contract of sale, the buyer acquires the thing sold only upon its
delivery. The execution of a public instrument gives rise to a presumption of
delivery, but this presumption is destroyed when delivery is not effected
because of a legal impediment. Constructive delivery is deemed negated
upon failure of vendee to take actual possession of the land. Ten Forty was
not able to take possession and the SC found it highly unlikely that they
allowed occupation of Marina by mere tolerance.
2. In cases of double sale, the person who first recorded it in the Registry of
Property shall be considered the lawful owner. In this case, however,
petitioner was unable to establish that the Deed was recorded in the Registry
of Deeds of Olongapo. An unverified notation on the Deed is not equivalent
to a registration. In the absence of this requirement, the law gives
preferential right to the buyer who in good faith is first in possession.
3. To determine who is first in possession, the following parameters have
been established:
a. Possession includes not only material but also symbolic possession
b. Possessors in good faith are not aware of any flaw in their title or
mode of acquisition
c. Buyers of property that is in possession of persons other than the
seller must be wary they must investigate
d. Good faith is always presumed. Burden of proof rests on the one
alleging bad faith.
Property has not been delivered, hence Ten Forty did not acquire
possession either materially or symbolically. Petitioner has not proven
that respondent was aware of any defect to her title. At the time, the
property had not been registered which was why Marina relied on tax
declarations. Galino was actually occupying the property when
respondent took possession. Thus, there was no circumstance that
could have required her to investigate further.
4. Private corporations are disqualified from acquiring lands of public domain.
At the time of the sale, there is no evidence that the property had already
ceased to be of public domain.

ROMAN vs. GRIMALT

G. R. No. 2412, April 11, 1906
FACTS: Pedro Roman, the owner of the schooner Sta. Maria and Andres
Grimalt had been negotiating for several days for the purchase of the
schooner. They agreed upon the sale of the vessel for the sum of P1500
payable on three installments, provided the title papers to the vessel were in
proper form. The sale was not perfected and the purchaser did not consent
to the execution of the deed of transfer for the reason that the title of the
vessel was in the name of one Paulina Giron and not in the name of Pedro
Roman. Roman promised however, to perfect his title to the vessel but he
failed to do so. The vessel was sunk in the bay in the afternoon of June 25,
1904 during a severe storm and before the owner had complied with the
condition exacted by the proposed purchaser. On the 30th of June 1904,
plaintiff demanded for the payment of the purchase price of the vessel in the
manner stipulated and defendant failed to pay.
ISSUE: Whether there was a perfected contract of sale and who will bear the
loss.
HELD: There was no perfected contract of sale because the purchase of
which had not been concluded. The conversations had between the parties
and the letter written by defendant to plaintiff did not establish a contract
sufficient in itself to create reciprocal rights between the parties.
If no contract of sale was actually executed by the 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.

Norkis Distributors, Inc. v. CA

193 SCRA 694 ; February 1991

Facts: Petitioner Norkis Distributors, Inc. is the distributor of Yamaha

motorcycles in Negros Occidental. Alberto Nepales bought from the Norkis
Bacolod branch a brand new Yamaha Wonderbike motorcycle. The price of
P7,500 was payable by means of a Letter of Guaranty from the DBP, which
Norkis Branch Manager Labajo agrred to accept. 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 favor of DBP. Branch Manager Labajo issued
Norkis Sales Invoice No. 0120 (Exh.1) 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 then registered in the Land Transportation Commission
in the name of Alberto Nepales. The motorcycle was delivered to a certain
Julian Nepales who was allegedly the agent of Alberto Nepales but the latter
denies it. The motorcycle met an accident and 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 thetotal sum of P7,500. As the price of the motorcycle later increased to
P7,828 in March, 1980, Nepalespaid the difference of P328 and demanded
the delivery of the motorcycle. When Norkis could not deliver,he filed an
action for specific performance with damages against Norkis in the RTC of
Negros Occidental.He alleged that Norkis failed to deliver the motorcycle
which he purchased, thereby causing himdamages. Norkis answered that the
motorcycle had already been delivered to private respondent beforethe
accident, hence, the risk of loss or damage had to be borne by him as owner
of the unit.
Issue: WON there had already been a transfer of ownership of the motorcycle
to Alberto Nepales at the time it was destroyed
Held: No. The issuance of a sales invoice does not prove transfer of
ownership of the thing sold to the buyer. An invoice is nothing more than a
detailed statement of the nature, quantity and cost of the thing sold and has
been considered not a bill of sale. In all forms of delivery, it is necessary that
the act of delivery whether constructive or actual, be coupled with the
intention of delivering the thing. The act, without the intention, is insufficient.

When the motorcycle was registered by Norkis in the name of 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 (Exh. 5) issued by the DBP, reveals that the execution in its favor
of a chattel mortgage over the purchased vehicle is a pre-requisite for the
approval of the buyer's loan. If Norkis would not accede to that arrangement,
DBP would not approve private respondent's loan application and,
consequently, there would be no sale.
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.
Article 1496 of the Civil Code which provides that "in the absence of an
express assumption of risk by the buyer, the things sold remain at seller's
risk until the ownership thereof is transferred to the buyer," is applicable to
this case, for there was neither an actual nor constructive delivery of the
thing sold, hence, the risk of loss should be borne by the seller, Norkis, which
was still the owner and possessor of the motorcycle when it was wrecked.
This is in accordance with the well-known doctrine of res perit domino.

SOUTHERN MOTORS, INC. vs. MOSCOSO

2 SCRA 168G.R. No. L-14475, May 30, 1961

FACTS: Plaintiff Southern Motors, Inc. sold to defendant Angel Moscoso one
Chevrolet truck on installment basis, for P6,445.00. Upon making a down
payment, the defendant executed a promissory note for the sum of
P4,915.00, representing the unpaid balance of the purchase price to secure
the payment of which, a chattel mortgage was constituted on the truck in
favor of the plaintiff. Of said account, the defendant had paid a total of
P550.00, of which P110.00 was applied to the interest and P400.00 to the
principal, thus leaving an unpaid balance of P4,475.00. The defendant failed
to pay 3 installments on the balance of the purchase price. Plaintiff filed a
complaint against the defendant, to recover the unpaid balance of the
promissory note. Upon plaintiff's petition, a writ of attachment was issued by
the lower court on the properties of the defendant. Pursuant thereto, the said
Chevrolet truck, and a house and lot belonging to defendant, were attached
by the Sheriff and said truck was brought to the plaintiff's compound for safe
keeping. After attachment and before the trial of the case on the merits,
acting upon the plaintiff's motion for the immediate sale of the mortgaged
truck, the Provincial Sheriff of Iloilo sold the truck at public auction in which
plaintiff itself was the only bidder for P1,OOO.OO. The trial court condemned
the defendant to pay the plaintiff the amount of P4,475.00 with interest at
the rate of 12% per annum from August 16, 1957,until fully paid, plus 10%
thereof as attorneys fees and costs. Hence, this appeal by the defendant.

ISSUE: WON the attachment caused to be levied on the truck and its
immediate sale at public auction, was tantamount to the foreclosure of the
chattel mortgage on said truck.

HELD: No. Article 1484 of the Civil Code provides that in a contract of sale of
personal property the price of which is payable in installments, the vendor
may exercise any of the following remedies: (I) Exact fulfillment of the
obligation, should the vendee fail to pay; (2) Cancel the sale, should the
vendee's failure to pay cover two or more installments; and (3) Foreclose the
chattel mortgage on the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments. In this case, he shall
have no further action against the purchaser to recover any unpaid balance
of the price. Any agreement to the contrary shall be void. The plaintiff had
chosen the first remedy. The complaint is an ordinary civil action for recovery
of the remaining unpaid balance due on the promissory note. The plaintiff
had not adopted the procedure or methods outlined by Sec. 14 of the Chattel

Mortgage Law but those prescribed for ordinary civil actions, under the Rules
of Court. Had the plaintiff elected the foreclosure, it would not have
instituted this case in court; it would not have caused the chattel to be
attached under Rule 59, and had it sold at public auction, in the manner
prescribed by Rule 39. That the plaintiff did not intend to foreclose the
mortgage truck, is further evinced by the fact that it had also attached the
house and lot of the appellant at San Jose, Antique.We perceive nothing
unlawful or irregular in plaintiff's act of attaching the mortgaged truck itself.
Since the plaintiff has chosen to exact the fulfillment of the appellant's
obligation, it may enforce execution of the judgment that may be favorably
rendered hereon, on all personal and real properties of the latter not exempt
from execution sufficient to satisfy such judgment. It should be noted that a
house and lot at San Jose, Antique were also attached. No one can
successfully contest that the attachment was merely an incident to an
ordinary civil action. The mortgage creditor may recover judgment on the
mortgage debt and cause an execution on the mortgaged property and may
cause an attachment to be issued and levied on such property, upon
beginning his civil action.