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PERPETUA ABUAN, ET AL. v. EUSTAQUIO S. GARCIA, ET AL.

On August 7, 1953, petitioners Perpetua Abuan et al. sold a parcel


of rice land to defendants Eustaquio Garcia et al. 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. Section 119 of the Public Land Law provides: o
Every conveyance of land acquired under the free patient or
homestead provisions, when proper, shall be subject to re-purchase
by the applicant, his widow, or legal heirs, for a period of five years
from the date of conveyance .
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.
CFI Nueva Vizcaya dismissed the complaint, fixing the starting
date as February 28, 1955, when the Agreement was entered into.
CA certified the case to SC.
SC: "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). Dismissal affirmed. 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 on August 7, 1953. 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, 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. 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.

Filinvest Credit Corporation v. Philippine Acetylene Co., Inc. L-50449


January 30, 1982
MARCH 16, 2014LEAVE A COMMENT

The mere return of the mortgaged motor vehicle by the mortgagor

return shall be in full satisfaction of its indebtedness pursuant to

does not constitute dation in payment in the absence, express or

Article 1484 of the New Civil Code. Lim subsequently returned the

implied of the true intention of the parties. Dacion en pago is the

vehicle.

transmission of the ownership of a thing by the debtor to the creditor


as an accepted equivalent of the performance of obligation.

Issue: Whether or not the return of the vehicle bars the foreclosure of

Facts: Philippine Acetylene Co., Inc., purchased from one Alexander

the chattel mortgage

Lim, as evidenced by a Deed of Sale marked as Exhibit G, a motor


vehicle described as Chevorlet, 1969 model with Serial No.

Held: No. Filinvest did not consented, or at least intended, that the

136699Z303652 for P55,247.80 with a down payment of P20,000.00

mere delivery to, and acceptance by him, of the mortgaged motor

and the balance of P35,247.80 payable, under the terms and

vehicle be construed as actual payment, more specifically dation in

conditions of the promissory note thirty-four (34) monthly

payment or dacion en pago. The fact that the mortgaged motor

installments. As security for the payment of said promissory note, the

vehicle was delivered to Filinvest does not necessarily mean that

appellant executed a chattel mortgage over the same motor vehicle

ownership thereof, as juridically contemplated by dacion en pago,

in favor of Alexander Lim. Subsequently, on November 2, 1971.

was transferred from appellant to appellee.

Alexander Lim assigned to the Filinvest Finance Corporation all his


rights, title, and interests in the promissory note and chattel

The mere return of the mortgaged motor vehicle by the mortgagor

mortgage by virtue of a Deed of Assignment.

does not constitute dation in payment in the absence, express or


implied of the true intention of the parties. Dacion en pago is the

Thereafter, the Filinvest Finance Corporation, as a consequence of

transmission of the ownership of a thing by the debtor to the creditor

its merger with the Credit and Development Corporation assigned to

as an accepted equivalent of the performance of obligation.

the new corporation, the herein plaintiff-appellee Filinvest Credit


Corporation, all its rights, title, and interests on the aforesaid

In the absence of clear consent of appellee to the proferred special

promissory note and chattel mortgage.

mode of payment, there can be no transfer of ownership of the


mortgaged motor vehicle from appellant to appellee. If at all, only

Upon failing to pay, Filinvest Credit Corporation sent a demand letter

transfer of possession of the mortgaged motor vehicle took place, for

instructing the mortgagor that return the mortgaged property, which

it is quite possible that appellee, as mortgagee, merely wanted to

secure possession to forestall the loss, destruction, fraudulent


transfer of the vehicle to third persons, or its being rendered

WON the William Dy is still the owner of the tractor when it was
obtained through the writ of execution.

valueless if left in the hands of the appellant.


DY V. CA (July 08, 1991)
FACTS:
Wilfredo Dy bought a truck and tractor from Libra Finance
Corporation. Both truck and tractor was also mortgage to Libra as
security for a loan and as such, they took possession of it. Brother of
Wilfredo, Perfecto Dy and sister Carol Dy-Seno requested Libra that
they be allowed to buy the property and assume the mortgage debt.
Libra agreed to the request.

Meanwhile, a collection suit was filed against Wilfredo Dy by Gelac


Trading Inc. On the strength of a writ of execution, the sheriff was
able to obtain the tractor on the premises of Libra. It was sold in a
public auction in which Gelac Trading was the lone bidder. Gelac
subsequently sold it to one of their stockholders.

The respondents claim that at the time of the execution of the deed
of sale, no constructive delivery was effected since the
consummation of the sale depended upon the clearance and
encashment of the check which was issued in payment of the subject
tractor

ISSUE:

HELD:
The tractor was not anymore in possession of William Dy when it
was obtained by the sheriff because he already sold it to his brother.

William Dy has the right to sell his property even though it was
mortgage because in a mortgage, the mortgagor doesnt part with
the ownership over the property. He is allowed to sell the property as
long as there is consent from the mortgagee such as in this case.
But even if there is no consent given, the sale would still be valid
without prejudice to the criminal action against the mortgagor.

When William Dy sold the tractor, he already transferred the


ownership of it because NCC states that the ownership of the thing
sold is acquired by the vendee from the moment it is delivered to him
or in any other manner signing an agreement that the possession is
transferred from the vendor to the vendee. In the instant case, actual
delivery of the subject tractor could not be made but there was
constructive delivery already upon the execution of a public
instrument which in this case is a deed of sale.

The payment of the check was actually intended to extinguish the


mortgage obligation.

Visayan vs CA

value and therefore it had a better right over the property in


litigation

N/A
SAN LORENZO DEVELOPMENT CORPORATION, petitioner,
vs.
COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU
and PACITA ZAVALLA LU, respondents

G.R. No. 124242

January 21, 2005

Respondent Babasanta, however, argued that SLDC could


not have acquired ownership of the property because it
failed to comply with the requirement of registration of the
sale in good faith. He emphasized that at the time SLDC
registered the sale in its favor on 30 June 1990, there was
already a notice of lis pendens annotated on the titles of the
property made as early as 2 June 1989. Hence, petitioners
registration of the sale did not confer upon it any right.

ISSUE:

FACTS

On 20 August 1986, the Spouses Lu purportedly sold two


parcels of land to respondent Pablo Babasanta, for the price
of fifteen pesos (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.

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 response, Pacita
Lu wrote a letter to Babasanta wherein she 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

herein petitioner San Lorenzo Development Corporation


(SLDC) filed a Motion for Intervention. SLDC alleged that it
had legal interest in the subject matter under litigation
because on 3 May 1989, 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

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?

HELD:NO

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, 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.

favor of SLDC had long been consummated insofar as the


obligation of the Spouses Lu to transfer ownership over the
property to SLDC is concerned.
Balatifico vs Rodirguez

A purchaser in good faith is one who buys property of


another without notice that some other person has a right to,
or 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 the claim or interest of some other person in the
property.
We rule that SLDC qualifies as a buyer in good faith since
there is no evidence extant in the records that it had
knowledge of the prior transaction in favor of Babasanta. At
the time of the sale of the property to SLDC, the vendors
were still the registered owners of the property and were in
fact in possession of the lands.
In assailing knowledge of the transaction between him and
the Spouses Lu, Babasanta apparently relies on the principle
of constructive notice incorporated in Section 52 of the
Property Registration Decree (P.D. No. 1529) which reads,
thus:

Sec. 52. Constructive notice upon registration. Every


conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall, if registered, filed,
or entered in the office of the Register of Deeds for the province or
city where the land to which it relates lies, be constructive notice to
all persons from the time of such registering, filing, or entering.

N/A

G.R. No. 170405 February 2, 2010


RAYMUNDO S. DE LEON, Petitioner,
vs.
BENITA T. ONG. Respondent.
Facts:
On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3
parcels of land to Benita T. Ong(respondent). The said properties
were mortgaged to a financial institution; Real Savings & Loan
Association Inc. (RSLAI). The parties then executed a notarized
deed of absolute sale with assumption of mortgage. As indicated in
the deed of mortgage, the parties stipulated that the petitioner (de
Leon) shall execute a deed of assumption of mortgage in favor of
Ong (respondent)after full payment of the P415,000. They also
agreed that the respondent (Ong) shall assume the mortgage. The
respondent then subsequently gave petitioner P415,000 as partial
payment. On the other hand, de Leon handed the keys to Ong and
de Leon wrote a letter to inform RSLAI that the mortgage will be
assumed by Ong. Thereafter, the respondent took repairs and made

However, the constructive notice operates as such by the


express wording of Section 52 from the time of the
registration of the notice of lis pendens which in this case
was effected only on 2 June 1989, at which time the sale in

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. 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:
Whether the parties entered into a contract of sale or a contract to
sell?
Held:
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

NFF INDUSTRIAL CORPORATION vs. G & L ASSOCIATED


BROKERAGE, and/or GERARDO TRINIDAD G.R. No. 178169 12
JANUARY 2015
Facts: Petitioner is engaged in the business of manufacturing bulk
bags while respondent is among its custumers. Respondent Gerardo
Trinidad is the general manager of respondent company. Petitioner
alleges that on July 20, 1999, respondent company ordered 1,000
pieces of bulk bags from petitioner at Php 380.00 per piece or for a
total of Php 380,000.00 payable within 30 days from delivery covered
by Purchase Order No. 97-002 dated 29 July 1999 and to be
delivered to the company c/o Hi-Cement Corporation, Norzagaray,
Bulacan. Shortly therafter, respondent company ordered an
additional 1,000 pieces of bulk bags for a total of 2,000 pieces.
Accordingly, petitioner made delivery of the bulk bags to Hi-Cement
Corporation on various dates and were duly acknowledged by the
representatives of respondent company and that all deliver receipts
were rubber stamped, dated and signed by the security guard-onduty as well as other representatives of respondent company and
were all covered by sales invoices amounting to Php 760,000.00.
Respondent contended that the bulk bags were not delivered to
respondent company, the same not having been received by the
authorized representative in conformity with the terms of the
Purchase Order. Thirty (30) days elapsed but no payment was made
by respondent company prompting petitioner to send a demand
letter. Respondent company failed to respond to the demand letter,
petitioner followed up its claim through a series of telephone calls but
to no avail. Petitioner sent another demand letter and final demand
letter and as the demand remained unheeded, petitioner filed a
complaint for sum of money against respondents. The RTC rendered
a decision in favor of the petitioners. The respondents appealed
before the CA and reversed the RTCs decision. The Petitioner filed a
Motion for Reconsideration but was denied. Hence, the petition for
review on certiorari.
Issue: Whether or not there was a valid delivery on the part of the
petitioner in accordance with law, which would give rise to an

obligation to pay on the part of respondent for the value of the bulk
bags.

Specific performance case (RTC and CA):


o RTC ruled that the issuance of the deed of registration of San
Jacinto Bank in favor of spouses Villamor was done in good faith.

Held: The Supreme Court ruled in favor of the petitioner. It held that
the petitioner has actually delivered the bulk bags to respondent
company, albeit the same was not delivered to the person named in
the Purchase Order. In addition, by allowing petitioners employee to
pass through the guard on duty, who allowed the entry of delivery
into the premises of Hi-Cement, which is the designated delivery site,
respondents have effectively abandoned whatever infirmities may
have attended the delivery of the bulk bags. As a matter of fact, if
respondents were wary about the manner of delivery, such issue
should have been brought up immediately after the first delivery was
made.

In 1994 (Before the action for specific performance was


filed), spouses Villamor sold the land to petitioner-spouses Santiago
for P150k.

When the children of spouses VIllamor refused to vacate the


land after spouses Santiagos demand, the latter also filed an action
for quieting of title.

Spouses Santiago vs. Villamor (2012)


Monday, September 8, 2014

o CA reversed RTC ruling saying that the children of Spouses


Villamor did not act as representatives of their parents.

Facts:

Spouses Villamor are the parents of respondents Mancer,


Carlos and Domingo Jr. (respondents) and the grandparents of
respondent John Villamor.

In January 1982: Spouses Villamor mortgaged their 4.5hectare coconut land in Masbate to the San Jacinto Bank as security
for a P10,000.00 loan.

For failure to pay the loan, the property was extra-judicially


foreclosed by the bank. Spouses Villamor failed to redeem the
property so San Jacinto Bank obtained a final deed of sale in its
favor in 1991. The San Jacinto Bank then offered the land for sale to
any interested buyer.

The children of spouses Villamor agreed to buy the property.

The San Jacinto Bank agreed with the respondents and


Catalina (one of the sisters of the respondents) to a P65,000.00 sale,
payable in installments.

Upon full payment of the children of spouses Catalina, San


Jacinto bank refused to issue the deed of conveyance. Hence, they
filed an action for specific performance

Quieting of Title case (RTC and CA):


o RTC ruled that spouses Villamor were purchasers in good faith,
hence they are the legal owners. RTC also said that the notarized
deed of sale in their favor resulted in constructive delivery of the
land.
o CA ruled that spouses Villamors action for quieting of title cannot
prosper for they have no legal or equitable title over the land.

Spouses Villamor that the deed of sale executed in their


favor was equivalent to delivery of the land under Article 1498 of the
CC and that they are purchasers in good faith since they had no
knowledge of the supposed transaction between the San Jacinto
Bank and the respondents and Catalina.

The children of Spouses Villamor (respondents) hold that


they have a legal title to the land since they perfected the sale with
the San Jacinto Bank as early as November 4, 1991, the first
installment payment, and are in actual possession of the land; and
that petitioners-spouses Santiago are not purchasers in good faith
because they failed to show why they are not in possession of the
property.

Issue: WON Spouses Santiago has a legal title over the property. NO
Relevance: If they have legal title, they can file for action for quieting
of title and for reconveyance.

Held:

The Court said that spouses Santiago failed to prove that they have
any legal or equitable title over the disputed land.

Execution of the deed of sale only a prima facie presumption of


delivery
Article 1477 of the Civil Code recognizes that the "ownership of the
thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof."
Related to this article is Article 1497 which provides that "the thing
sold shall be understood as delivered, when it is placed in the control
and possession of the vendee."

"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."
With respect to incorporeal property, Article 1498 of the Civil Code
lays down the general rule: the execution of a public instrument
"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." However, the execution of a public instrument
gives rise only to a prima facie presumption of delivery, which is

negated by the failure of the vendee to take actual possession of the


land sold.

No constructive delivery of the land in favor of spouses


Santiago
In this case, no constructive delivery of the land transpired upon the
execution of the deed of sale since it was not the spouses Villamor,
Sr. but the respondents who had actual possession of the land. The
presumption of constructive delivery is inapplicable and must yield to
the reality that the petitioners were not placed in possession and
control of the land.

Spouses Santiago were not purchasers in good faith


In this case, the spouses Villamor, Sr. were not in possession of the
land. The petitioners, as prospective vendees, carried the burden of
investigating the rights of the respondents who were then in actual
possession of the land. The petitioners cannot take refuge behind the
allegation that, by custom and tradition in San Jacinto, Masbate, the
children use their parents' property, since they offered no proof
supporting their bare allegation.

The burden of proving the status of a purchaser in good faith lies


upon the party asserting that status and cannot be discharged by
reliance on the legal presumption of good faith. The petitioners failed
to discharge this burden.

VILLAMAR vs MANGAOIL

Facts: Villamar sold a parcel of land to Mangaoil. Part of the down


payment is to be used to pay the loan obtained by the seller from the

bank and to cause the release from the said bank of the certificate of
title covering the subject property. The amount left shall be used to
pay the mortgages. After the release of the TCT, a deed of sale was
executed and there shall be transferof the title covering the subject
property to be used as a collateral for a loan. However, the buyer
backed out from the sale for the failure of the seller to deliver to the
former the certificate of title and the possession over the land.

Issue: Whether or not there can be rescission of contract.

Held: The agreement executed by the parties is means that there


should be physical delivery of the TCT for how else can the buyer
use it as collateral to obtain a loan if the title remains in the sellers
possession. While the agreement does not expressly impose upon

the seller the obligation to eject the mortgagors of the property, the
said undertaking is necessarily implied because cessation of
occupancy of the subject property is logically expected from the
mortgagors upon payment by the seller of the amounts due to them.
Notwithstanding the absence of stipulations in the agreement and
absolute deed of sale entered into by the seller and the buyer
expressly indicating the consequences of the seller's failure to
deliver the physical possession of the subject property and the
certificate of title covering the same, the buyer is entitled to demand
for the rescission of their contract pursuant to Article 1191 of the
New Civil Code which provides 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.