Alcantara-Daus vs.

De Leon

G.R. No. 149750 June 16, 2003

Panganiban, J.:

Facts:

Respondent Hermoso De Leon owned a parcel of land which he inherited from his father Marcelino.
Sometime in the early 1960s, respondents engaged the services of the late Atty. Florencio Juan to take
care of the documents of the properties of his parents. Atty. Juan let them sign voluminous documents.
After the death of Atty. Juan, some documents surfaced and most revealed that their properties had
been conveyed by sale or quitclaim to Hermoso’s brothers and sisters, to Atty. Juan and his sisters, when
in truth and in fact, no such conveyances were ever intended by them. His signature in the Deed of
Extra-judicial Partition with Quitclaim made in favor of Rodolfo de Leon was forged. They discovered
that the land in question was sold by Rodolfo de Leon to Aurora Alcantara. Hermoso and his spouse thus
filed an action to annul the sale between Rodolfo and Aurora claiming that they are the owners of the
property. Aurora however asserted that she acquired the subject property in good faith and thus, it
belongs to her. The RTC ruled in favour of herein petitioner but the CA reversed the ruling of the lower
court.

Issue: Whether or not the sale of the property to petitioner is binding?

Held:

No. A contract of sale is consensual. It is perfected by mere consent, upon a meeting of the minds on the
offer and the acceptance thereof based on subject matter, price and terms of payment. At this stage, the
seller’s ownership of the thing sold is not an element in the perfection of the contract of sale. The
contract, however, creates an obligation on the part of the seller to transfer ownership and to deliver
the subject matter of the contract. It is during the delivery that the law requires the seller to have the
right to transfer ownership of the thing sold. In general, a perfected contract of sale cannot be
challenged on the ground of the seller’s non-ownership of the thing sold at the time of the perfection of
the contract. Further, even after the contract of sale has been perfected between the parties, its
consummation by delivery is yet another matter. It is through tradition or delivery that the buyer
acquires the real right of ownership over the thing sold. Undisputed is the fact that at the time of the
sale, Rodolfo de Leon was not the owner of the land he delivered to petitioner. Thus, the consummation
of the contract and the consequent transfer of ownership would depend on whether he subsequently
acquired ownership of the land. The court however found that the signature of respondent Hermoso in
the Deed of Extra-judicial Partition was forged by Rodolfo. Thus, the latter acquired no ownership over
the property and he could not have transferred the same to petitioner Aurora. Hence, the SC affirmed
the CA decision.
 Sampaguita Pictures vs. Jalwindor Manufacturing

G.R. No. L-43059 October 11, 1979

De Castro, J.:

Facts:

Plaintiff-Appellant Sampaguita Pictures was the owner of a building located at Cubao, Quezon City. Said
property was leased by Capitol 300 Inc. The lease agreement between them included a provision that
the improvements made by the lessee to the property would redound to the benefit of the lessor
without the need to reimburse the former for the expenses therefor. Capitol 300 later contracted with
Defendant-Appellee Jalwindor for the jalousies to be installed to the building. However, Capitol 300
defaulted in the payment of the jalousies, which led to the filing of a complaint by Jalwindor and the
submission of a compromise agreement between them. They also failed to pay the rentals of the
building to its lessor which caused the latter to file an action for ejectment against them. When Capitol
300 neglected in its compromise agreement, the sheriff levied the jalousies in question. Sampaguita
Pictures thereafter tried to prevent the execution of the levy but the same pushed through and
Jalwindor successfully acquired the property in the auction. Plaintiff-Appellant later commenced an
action for preliminary injunction to prevent Jalwindor from detaching the jalousies. The trial court later
ruled in favour of herein defendant-appellant.

Issue: Who between the parties have the better right over the subject jalousies?

Held:

The Plaintiff-Appellant. When the glass and wooden jalousies in question were delivered and installed in
the leased premises, Capitol became 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 judgment debtor, was no longer the owner thereof.
 Phil. National Bank vs. Lo (Ling)

G.R. No. L-26937 October 5, 1927

Villamor, J.:

Facts:

In September 1916, Severo Eugenio Lo and Ling, together with Ping, Hun, Lam and Peng formed a
commercial partnership under the name of “Tai Sing and Co.,” with a capital of P40,000 contributed by
said partners. The firm name was registered in the mercantile registrar in the Province of Iloilo. Ping, in
the articles of partnership, was assigned as the general manager. However, in 1917, he executed a
special power of attorney in favor of A.Y. Kelam to act in his behalf as the manager of the firm.
Subsequently, Kelam obtained a loan from PNB – the loan was under the firm’s name. In the same year,
Ping died in China. From 1918 to 1920, the firm, via GM Lam, incurred other loans from PNB. The loans
were not objected by any of the partners. Later, PNB sued the firm for non-payment. Lo, in his defense,
argued that he cannot be liable as a partner because the partnership, according to him, is void; that it is
void because the firm’s name did not comply with the requirement of the Code of Commerce that a firm
name should contain the “names of all of the partners, of several of them, or only one of them”. Lo also
argued that the acts of Lam after the death of Ping is not binding upon the other partners because the
special power of attorney shall have already ceased.

ISSUE: Whether or not Lo is correct in both arguments.

HELD:

No. The anomalous adoption of the firm name above noted does not affect the liability of the general
partners to third parties under Article 127 of the Code of Commerce. The object of the Code of
Commerce in requiring a general partnership to transact business under the name of all its members, of
several of them, or of one only, is to protect the public from imposition and fraud; it is for the protection
of the creditors rather than of the partners themselves. It is unenforceable as between the partners and
at the instance of the violating party, but not in the sense of depriving innocent parties of their rights
who may have dealt with the offenders in ignorance of the latter having violated the law; and that
contracts entered into by a partnership firm defectively organized are valid when voluntarily executed
by the parties, and the only question is whether or not they complied with the agreement. Therefore, Lo
cannot invoke in his defense the anomaly in the firm name which they themselves adopted. Lo was not
able to prove his second argument. But even assuming arguendo, his second contention does not
deserve merit because (a) Lam, in acting as a GM, is also a partner and his actions were never objected
to by the partners, and (b) it also appeared from the evidence that Lo, Lam and the other partners
authorized some of the loans.
 Norkis Distributors vs. Court of Appeals

G.R. No. 91029 February 7, 1991

Griño-Aquino, J.:

Facts:

Private respondent Alberto Nepales purchased from petitioner Norkis a brand new motorcycle. It was to
be paid by Nepales through the Development Bank of the Philippines (DBP) by a letter of guarantee. In
turn, the he would secure a loan from DBP secured by a chattel mortgage on the motorcycle. Avelino
Labajo, as branch manager of Norkis, issued a sales invoice for the motorcycle showing perfection of the
contract of sale and which was signed by Nepales. Later on, the motorcycle met an accident while it was
driven by one Zacarias Payba. Hence, being a total wreck, the motorcycle was returned to Norkis.
Nepales demanded the delivery of the motorcycle. When Norkis could not deliver, he filed an action for
specific performance with damages against Norkis. Norkis answered that the motorcycle had already
been delivered to private respondent before the accident, hence, the risk of loss or damage had to be
borne by him as owner of the unit. The RTC ruled in favour of Nepales, and the same was affirmed by
the CA. In its petition to the SC, Norkis, while admitting the lack of actual delivery of the vehicle,
contended that there was a constructive delivery of the motorcycle through: (1) the issuance of the
Sales Invoice No. 0120 in the name of the private respondent and the affixing of his signature thereon;
(2) the registration of the vehicle on November 6, 1979 with the Land Transportation Commission in
private respondent's name; and (3) the issuance of official receipt for payment of registration fees.

Issue: Whether or not there was delivery of the motorcycle?

Held:

No/None. 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.

In the case of Addison vs. Felix and Tioco (38 Phil. 404, 408), this Court held:
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." (Civil Code, 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 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 riot been effects.

In view of the foregoing, the court affirmed the CA ruling.