ALEJANDRA BUGARIN VDA. DE SARMIENTO, plaintiff-appellee,

vs.JOSEFA R. LESACA, defendant-appellant.

Juan R. Arbizo for appellee.Pastor de Castro for appellant. G.R. No. L-15385 June 30, 1960

BAUTISTA ANGELO, J. DOCTRINE Place of Delivery. When a contract of sale is executed the vendor is bound to deliver to the vendee the thing sold by placing the vendee in the control and possession of the subject-matter of the contract. However, if the sale is executed by means of a public instrument, the mere execution of the instrument is equivalent to delivery unless the contrary appears or is clearly to be inferred from such instrument. (Arts. 14611 & 14622) FACTS January 18, 1949 Alejandra bought from Josefa two parcels of land for P5,000. After the sale, Alejandra tried to take actual physical possession of the lands but was prevented from doing so by one Martin Deloso who claims to be the owner thereof. February 1, 1949 Alejandra instituted an action before the Tenancy Enforcement Division of the Department of Justice to oust said Martin Deloso from the possession of the lands, which action she later abandoned for reasons known only to her. December 12, 1949 Alejandra wrote Josefa asking the latter either to change the lands sold with another of the same kind and class or to return the purchase price together with the expenses she had incurred in the execution of the sale, plus 6% interest. Josefa did not agree on the terms of the letter.

1 ART. 1461. The vendor is bound to deliver and warrant the thing which is the subject-matter of the sale. 2 ART. 1462. The thing sold shall be deemed delivered when the vendee is placed in the control and possession thereof.

If the sale should be made by means of a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the subject-matter of the contract unless the contrary appears or is clearly to be inferred from such instrument.

Alejandra filed the present action before the CFI Zambales. CFI Zambales On April 11, 1957, it rendered judgment declaring the deed of sale entered into between Alejandra and Josefa rescinded, and ordering the latter to pay the former the sum of P5,000, representing the purchase price of the lands, plus the amount of P50.25 which Alejandra spent for the execution and registration of the deed of sale, with legal interest on both sums from January 18, 1949. Josefa appealed with the CA but the case was certified to the SC as it involved purely legal questions. ISSUES

1. WON Josefa did not intend to deliver outright the possession of the lands to the vendee.

2. WON there was delivery. 3. WON Alejandra can rescind the contract of sale in view of Josefa’s failure

to deliver the possession of the lands. HELD

1. NONE. On the contrary, it can be clearly seen therein that the vendor intended to place the vendee in actual possession of the lands immediately as can be inferred from the stipulation that the vendee "takes actual possession thereof ... with full rights to dispose, enjoy and make use thereof in such manner and form as would be most advantageous to herself." The possession referred to in the contract evidently refers to actual possession and not merely symbolical inferable from the mere execution of the document.

2. NONE. As provided in Article 1462, the thing sold shall be deemed delivered when the vendee is placed in the control and possession thereof, which situation does not here obtain because from the execution of the sale up to the present the vendee was never able to take possession of the lands due to the insistent refusal of Martin Deloso to surrender them claiming ownership thereof. And although it is postulated in the same article that the execution of a public document is equivalent to delivery, this legal fiction only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee.

3. YES. While Alejandra contends that rescission can be availed of only in the cases enumerated in Articles 1291 and 1292 of the old civil Code and being a subsidiary remedy (Article 1294) it can only be resorted to when no other remedy is available, yet we agree with Alejandra’s contention that this action is based on Article 1124 of the same Code.3

Undoubtedly in a contract of purchase and sale the obligation of

the parties is reciprocal, and, as provided by the law, in case one of the

parties fails to comply with what is incumbent upon him to do, the person

prejudiced may either exact the fulfillment of the obligation or rescind the

sale. Since Alejandra chose the latter alternative, it cannot be disputed that

her action is in accordance with law.

Wherefore the decision appealed from is affirmed, with costs against defendant-

appellant.

3 Art 1124. The right to resolve reciprocal obligations, in case one of the obligors should fail to comply with that which is incumbent upon him, is deemed to be implied.

The person prejudiced may choose between exacting the fulfillment of the obligation or its resolution with indemnity for losses and payment of interest in either case. He may also demand the resolution of the obligation even after having elected its fulfillment, should the latter be found impossible.

Perpetua Abuan vs Eustaquio Garcia | July 30, 1965 G.R. No. L-200091; Bengzon, C.J Facts: On August 7, 1953, petitioners sold a parcel of land to the respondents being evidenced by a public instrument, and hence TCT No. T-5486 was issued in their names. The former subsequently filed an action to recover the said land averring that the deed of sale entered between the parties was executed through fraud, without consideration. The parties, however entered in an “Agreement” dated February 28, 1955 in which the respondent undertakes to pay the purchase price of the land on or before April 30, 1955. Claiming that the full payment had been effected only sometime in May 1955, petitioner filed an action for legal redemption on March 4, 1960. Respondents, however averred that petitioners no longer had a cause of action for the five-year redemption had already expired. Issue: Whether or not petitioners are barred from exercising the right of redemption due to prescription. Held: The Court held in the AFFIRMATIVE. The law states that the right of redemption must be exercised five years after the date of conveyance. Conveyance means the transfer of ownership. Article 1477 of the New Civil Code provides that ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. 1498 states that when a sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract. In the present case, the deed of sale between the parties was executed on August 27, 1953 which was superseded by the “Agreement” of February 28, 1955. The latter did not operate to revest the ownership to the petitioners. Because of this, petitioners are now barred from exercising their right of redemption since they only exercised such right on March 4, 1960 which is already beyond the period of redemption.

Hence, petitioners are barred from exercising the right of redemption.

Norkis Distributors Inc. vs. Court of Appeals| February 1991 G.R. No. 91029 | GRIÑO-AQUINO, J. Facts:

On September 20, 1979, private respondent Alberto Nepales bought from the Norkis Distributors, Inc. (Norkis) in its Bacolod branch a brand new Yamaha Wonderbike motorcycle Model YL2DX with Engine No.L2-329401K Frame No.NL2-0329401, color maroon, which was then on display in the Norkis showroom. The Branch Manager Avelino Labajo agreed to accept the P7,500.00 price payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP), Kabankalan. Hence, credit was extended to Nepales, and as security for the loan, he executed a chattel mortgage on the motorcycle in favor of DBP. Labajo issued the Norkis Sales Invoice No. 0120 perfecting the contract of sale, and Nepales signed the same to conform to the terms of the sale, while the unit remained in Norkis' possession. On November 6, 1979, it was registered under Alberto Nepales’ name in the Land Transportation Commission.

On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter denies it. The record shows, however, that Alberto and Julian Nepales presented the unit to DBP's Appraiser-Investigator Ernesto Arriesta at the DBP offices in Kabankalan, Negros Occidental Branch. On February 3, 1980, the motorcycle met an accident at Binalbagan, Negros Occidental while being driven by a certain Zacarias Payba. The unit was a total wreck, was returned, and stored inside Norkis' warehouse.

On March 20, 1980, DBP released the proceeds of private respondent's motorcycle loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of P328 and demanded the delivery of the motorcycle. Norkis failed to deliver the unit, and Nepales filed an action for specific performance with damages in the RTC of Himamaylan, Negros Occidental. Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, he should bear the risk of loss or damage as owner of the unit. The lower court ruled in favor of Nepales, and the Court of Appeals affirmed the decision but deleted the award of damages "in the amount of P50.00 a day from February 3, 1980 until payment of the present value of the damaged vehicle." Norkis concedes that there was no "actual" delivery of the vehicle, but insists that there was constructive delivery of the unit upon the issuance of the sales invoice, upon the registration of the unit in Nepales’ name, and upon the issuance of the official receipt.

Issue: WoN Norkis should bear the loss. Held:

Yes. The purpose of the execution of the sales invoice dated September 20, 1979 and the registration of the vehicle in the name of Alberto Nepales with the Land Registration Commission was not to transfer the ownership and dominion over the motorcycle to him, but only to comply with the requirements of the DBP for processing private respondent's motorcycle loan. The circumstances in the case itself more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action.

LEGAL BASIS

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.

Place of Delivery G.R. No. 109410 August 28, 1996

CLARA M. BALATBAT v. COURT OF APPEALS and Spouses JOSE REPUYAN and AURORA REPUYAN

TORRES, JR. , J.: FACTS: Aurelio A. Roque filed a complaint for partition against Corazon Roque, Alberto de los Santos, Feliciano Roque, Severa Roque and Osmundo Roque before the then Court of First Instance (CFI). Defendants therein were declared in default and plaintiff presented evidence ex-parte. The trial court rendered a decision in favor of plaintiff Aurelio A. Roque. The lot in question was acquired by plaintiff Aurelio Rogue and Maria Mesina during their conjugal union and the house constructed thereon was likewise built during their marital union. Out of their union, plaintiff and Maria Mesina had four children, who are the defendants in this case. When Maria Mesina died, the only conjugal properties left are the house and lot above stated of which plaintiff herein, as the legal spouse, is entitled to one-half share pro-indiviso thereof. With respect to the one-half share pro-indiviso now forming the estate of Maria Mesina, plaintiff and the four children, the defendants here, are each entitled to one-fifth (1/5) share pro-indiviso. Aurelio A. Rogue sold his 6/10 share to spouses Aurora Tuazon-Repuyan and Jose Repuyan as evidenced by a "Deed of Absolute Sale." Aurora Tuazon Repuyan caused the annotation of her affidavit of adverse claim. Aurelio A. Roque filed a complaint for "Rescission of Contract" against spouses Aurora Tuazon-Repuyan and Jose Repuyan. The complaint is grounded on spouses Repuyan's failure to pay the balance of the purchase price. A deed of absolute sale was executed between Aurelio S. Roque, Corazon Roque, Feliciano Roque, Severa Roque and Osmundo Roque and Clara Balatbat, married to Alejandro Balatbat. Petitioner Clara Balatbat filed a motion to intervene in the complaint for the "Rescission of Contract" filed by Aurelio A. Roque against spouses Aurora Tuazon-Repuyan and Jose Repuyan. However, Clara Balatbat failed to file her complaint in intervention. Consequently, having failed to prove with sufficient preponderance his action, the relief prayed for had to be denied. The contract of sale denominated as "Deed of Absolute Sale" was held valid and enforceable. Petitioner Clara Balatbat and her husband, Alejandro Balatbat filed the instant complaint for delivery of the owners duplicate copy against private respondents

Jose Repuyan and Aurora Repuyan. The Regional Trial Court (RTC) rendered a decision dismissing the complaint. The Court of Appeals (CA) affirmed the RTC's decision with the modification as to the awards. Petitioner asseverates that the respondent Court of Appeals committed grave abuse of discretion tantamount to lack or excess of jurisdiction in affirming the appealed judgment considering that the alleged sale in favor of the private respondents Repuyan was merely executory for the reason that there was no delivery of the subject property. ISSUE: Whether the sale was already consummated. HELD: YES. With respect to the non-delivery of the possession of the subject property to the private respondent, suffice it to say that ownership of the thing sold is acquired only from the time of delivery thereof, either actual or constructive. Article 1498 of the Civil Code provides that — when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be inferred. The execution of the public instrument, without actual delivery of the thing, transfers the ownership from the vendor to the vendee, who may thereafter exercise the rights of an owner over the same. 30 In the instant case, vendor Roque delivered the owner's certificate of title to herein private respondent. It is not necessary that vendee be physically present at every square inch of the land bought by him, possession of the public instrument of the land is sufficient to accord him the rights of ownership. Thus, delivery of a parcel of land may be done by placing the vendee in control and possession of the land (real) or by embodying the sale in a public instrument (constructive). The provision of Article 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument.

Gonzalez v. Haberer | G.R. No. L-22604 February 3, 1925 |OSTRAND, J. Facts: Plaintiffs, Guadalupe Gonzalez and Luis Gomez, entered into a contract of sale of a tract of land with E.J. Haberer. Plaintiffs seek to recover the sum of 34,260 pesos plus damages alleged to be due the plaintiffs from the defendant upon a written agreement for the sale. The defendant in his answer admits that of the purchase price stated in the agreement a balance of P31,000 remains unpaid, but by way of he alleges that at the time of entering into the contract the plaintiffs through false representations lead him to believe that they were in possession of the land and that the title to the greater portion thereof was not in dispute; that on seeking to obtain possession he found that practically the entire area of the land was occupied by adverse claimants and the title thereto disputed; that he consequently has been unable to obtain possession of the land; and that the plaintiffs have made no efforts to prosecute the proceedings for the registration of the land. He therefore asks that the contract be rescinded, that 30,000 pesos he has paid the plaintiffs be returned plus damages. Plaintiffs concede that the defendant never obtained actual or physical possession of the land, but it is argued that under the contract quoted the plaintiffs were under no obligation to place him in possession. The salient provision of the contract reads: “That said Mr. E.J. Haberer shall have the right to take possession of the aforesaid land immediately after the execution of this document together with all the improvements now existing on the same land, such as palay plantation and others.” In essence, the plaintiffs contend that hat the symbolic delivery effected by the execution and delivery of the agreement was a sufficient delivery of the possession of the land. Issue: Can the contract of sale be rescinded? Held: Yes. Contentions of the plaintiffs that the contract did obligate them place Haberer in possession of land cannot be sustained. Aforementioned provision of the contract gave the defendant the right to take possession of the land immediately upon the execution of the contract and necessarily created the obligation on the part of the plaintiffs to make good the right thus granted; it was one of the essential conditions of the agreement and the failure of the plaintiffs to comply with this condition, without fault on the part of the defendant, is in itself sufficient ground for the rescission, even in the absence of any misrepresentation on their part. The contention of the appellants that the symbolic delivery effected by the execution and delivery of the agreement was a sufficient delivery of the possession of the land, is also without merit. The possession referred to in the contract is evidently physical; if it were otherwise it would not have been necessary to mention it in the contract. Judgement is rendered in favour of the defendant Haberer.

G.R. No. L-30056 MARCELO AGCAOILI, vs. GOVERNMENT SERVICE INSURANCE SYSTEM

Facts: Appellant Government Service Insurance System (GSIS) approved plaintiff Agcaoili’s application for purchase of a house and lot in the GSIS Housing Project at Nangka, Marikina Rizal subject to the condition that the latter should occupy the same within 3 days from receipt of notice. Otherwise, plaintiff’s application shall be considered automatically disapproved and said house and lot will be awarded to another applicant. Agcaoili tried to fulfill the condition to stay in it, however, he had to leave because the house was nothing more than a shell, in such a state of incompleteness that it is absolutely uninhabitable. Agcaoili asked a homeless friend, a certain Villanueva, to stay in the premises as a watchman, pending the completion of the construction of the house.

Appellant then asked plaintiff for the payment of the monthly amortization. Plaintiff only paid the first monthly installment and the other fees, but refused to make further payments until and unless GSIS completed the housing unit. GSIS cancelled the award and required plaintiff to vacate the premises. Plaintiff then filed for specific performance and damages.

The trial court ruled in favor of plaintiff, declaring the cancellation of award void and ordering defendant to complete the construction of the house to make it habitable.

Appellant prayed that judgment be reversed and argued that there was no contract of sale since the perfection of the contract was conditioned upon the plaintiff’s immediate occupancy, which the latter failed to fulfill.

Issue: Whether or not there is a perfected contract of sale

Held: Yes. The contract of sale was perfected upon the meeting of the minds upon the purchase by Agcaoili of a determinate house and lot in the GSIS Housing Project at Nangka, Marikina, Rizal at a definite price payable in amortizations at Php 31.56 per month. From that moment, the parties may reciprocally demand performance. The duty of GSIS, as a seller, was to deliver the thing sold in a condition suitable for enjoyment by the buyer for the purpose contemplated. Appellant failed to do so.

GSIS cannot invoke the suspension of amortization payments as cause to cancel the contract between them since in reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply with what is incumbent upon him.

The court sets aside the cancellation of award but since the completion of the house is no longer feasible in view of the time that had already elapsed (twenty years), plaintiff is ordered to pay the land on which the house stands and for the house itself, in its unfinished state.

DR. and MRS. MERLIN CONSING, petitioners, vs.

THE COURT OF APPEALS and CARIDAD SANTOS, respondents.

G.R. No. 78272 August 29, 1989

FACTS:

On October 4, 1971 private respondent Caridad Santos and the Consings entered into an agreement denominated as a "Contract of Sale" whereby the latter agreed to sell, transfer and convey to the former a house and lot. It is stipulated in said "Contract of Sale" that in consideration of the agreement to sell the buyer will pay the seller P 110,000.00 with interest at 12% per annum, payable as follows: P25,000.00 upon the signing of the contract and a monthly installment of P 1,020.14 payable on or before the fifth day of each month beginning December 1971 without necessity of demand until the amount of the purchase price and interest shall have been fully paid after which ownership would be transferred to the buyer.

Santos paid her monthly installments to the Consings. Starting May 1972, however, she defaulted in her payments. Consing sent her several letters of demand to which she did not reply. On June 28, 1974, counsel for the Consings sent a final demand letter to Santos asking her to settle her obligations which by then have accrued to Pl 2,818.61, otherwise, they shall be constrained to resort to court litigation.

Santos, represented by a lawyer, manifested her willingness to settle her obligations on the condition that the Consings comply with all the laws and regulations on subdivisions and after payment to her of damages as a consequence of the use of a portion of her lot, more or less 168 sq.m., as a subdivision road [Record, p. 13].

Subsequently, on July 26, 1974, the Consings filed an ejectment case against Santos. After trial, on November 4, 1974, judgment was rendered by Judge Gregorio de la Paz of the Municipal Court of Marikina in favor of the Consings.

Also borne out by the record is the criminal complaint filed by Santos against Merlin Consing charging him with the crime of Violation of Municipal Ordinance No. 7, Series of 1964 of Marikina for contracting to sell to her the two lots in question without first securing the approval of the Municipal Council of Marikina for his subdivision plan. On May 21, 1975 this complaint was dismissed by the fiscal on the grounds of lack of a prima facie case and prescription.

At about the same time, Consing submitted his subdivision plan to the Municipal Council of Marikina for approval. The council, noted that the "subdivision plan meets in general the requirements in the subdivision regulations xxx. It is therefore recommended that the existing roads should be indicated on the plan as road lots and the corresponding areas along the sides of the said roads as corrected, be reserved for future road widening and annotated in the title as such and should be excluded from the sale of the corresponding affected lots. . . ."

On August 28, 1981, the CFI rendered judgment finding that although the Consings may have "corrected the irregularities and/or [have] complied with the legal requirements for the operation of their subdivision, they cannot escape their liability to [Santos] for having sold to her portions of the roads or streets denominated as right-of-way. On this ground alone, this Court believes that [Santos] was fully justified in refusing to pay further her monthly amortizations. In the interest of justice, fair play and equity, this Court believes that there shall be a proportionate reduction of the purchase price of the two lots corresponding to the area of 168 square meters, more or less, used as a [right] of way."

ISSUE: Whether the fact that portions of the land sold to Santos which were being allotted to construct a right of way within the subdivision should result to deduction of the purchase price of said lots.

HELD:

YES. In the case at bar, in including as part of Santos' purchase price the value of the subdivision road, petitioners have shifted to her the burden of providing for an access to and from the subdivision. The Consings have thus failed in their duty as subdivision lot sellers and for such failure and consequent unfairness and injustice to Santos, the latter should be entitled to a proportionate reduction in her purchase price of the two lots. Moreover, as heretofore mentioned, petitioner-spouses constituted an alleged "right of way" over the two lots sold to private respondent which as the evidence on record reveals was intended to be a subdivision road occupying 168 sq. m. of the total 589 sq. m. of the lots sold. This conduct on the part of the petitioners clearly shows gross and evident bad faith, not to mention lack of fairness.

In the case at bar, in including as part of Santos' purchase price the value of the subdivision road, petitioners have shifted to her the burden of providing for an access to and from the subdivision. The Consings have thus failed in their duty as subdivision lot sellers and for such failure and consequent unfairness and injustice to Santos, the latter should be entitled to a proportionate reduction in her purchase price of the two lots. Moreover, as heretofore mentioned, petitioner-spouses constituted an alleged "right of way" over the two lots sold to

private respondent which as the evidence on record reveals was intended to be a subdivision road occupying 168 sq. m. of the total 589 sq. m. of the lots sold. This conduct on the part of the petitioners clearly shows gross and evident bad faith, not to mention lack of fairness.

Moreover, as heretofore stated, when the Municipal Council referred the Consings subdivision plan to the DLGCD the latter recommended that the existing roads within the subdivision should be indicated on the plan as road lots. In this same letter, Merlin Consing stated that "the road lots annotated in their corresponding titles ARE NOT INCLUDED in the sale of the property." However, the transfer certificates of title covering lot 25 and lot 26 clearly state the boundaries thereof and when compared to the Consings' subdivision plan would reveal that the seller sold that portion covered by the right of way to the buyer. Further, the "Contract of Sale" between the parties is specific that the property sold to Santos includes the voluntary right of way.

In Lim v. De los Santos [G.R. No. L-18137, August 31, 1963, 8 SCRA 798] the Court had occasion to state one duty of a subdivision lot seller. In said case the subdivision lot buyers instituted an action for specific performance with damages to compel the sellers to construct the necessary roads in the subdivision that would serve as outlets. After all, a seller's duty is to deliver the thing sold in a condition suitable for its enjoyment by the buyer for the purposes contemplated, and proper access to a residence is essential to its enjoyment. . . ."

CARLOS GABILA, petitioner vs. PABLO PEREZ, RAMON PEREZ &

MERCEDES PEREZ, respondents.

G.R. No. L-29541 January 27,1989

Facts: This is an appeal from a decision of the Court of First Instance of Davao dated January 21, 1961 dismissing plaintiff-appellant's complaint, which the Court of Appeals certified to this Court because only a question of law is involved.

On September 16, 1948, in the City of Davao, the respondents executed in favor of the petitioner a Deed of Sale of a parcel of land registered in the name of their deceased father Mariano Perez.

It was agreed also that pursuant to the sale, the respondents should execute an extrajudicial partition to settle the estate of their deceased father and pay the corresponding estate and inheritance taxes needed so that the title of the land subject of the contract could be cancelled and in its stead a new transfer Certificate of title be issued in favor of the Vendee.

The Deed of Sale was duly signed and ratified before Notary Public Isidro Bastida of Davao City on the same date, September 16, 1958, and possession of the land was immediately delivered to the petitioner. The monthly installments of the price of the sale were completely paid in due time. However, the respondents took no steps to comply with their promise so that the title to the land in question can be transferred to Gabila.

So, on August 28, 1958, Gabila filed an action praying that the defendants be ordered “To execute an extra-judicial partition of all the properties of their deceased father or otherwise settle his estate and pay the corresponding estate and inheritance taxes, and execute the requisite instruments for the registration and transfer of the title to him.”

On January 21, 1961, the trial court rendered the assailed decision, dismissing the complaint. It held that the defendants could not be ordered to execute an extrajudicial partition of all the properties of their deceased father because the land can no longer be partition due to the reason that it has been sold to the petitioner already. The dismissal provided no remedy to the petitioner’s claims.

Issue: Whether or not respondents should be compelled to transfer the certificate of title to petitioner’s name and pay the expenses (estate and inheritance taxes) necessary for its delivery.

Held: SC ruled to the affirmative.

The appeal is meritorious. This action is not one for specific performance of the sale of the property to the petitioner, for the sale had been consummated by the payment of the price to the vendors/respondents as stipulated in the deed, and by the delivery of the peaceful possession of the land to the former. What the petitioner seeks merely is the transfer of the title of the land in his name.

The trial court correctly observed that the respondents may no longer partition the land in question because they had already sold it. And being the legal heirs of their father, ownership was deemed transferred to them upon the latter’s death.

“WHEREFORE, the appealed decision is hereby set aside. The defendants-appellees (respondents), they have not done so yet, are ordered to surrender and/or deliver TCT No. 899 to the plaintiff-appellant (petitioner) in order that the latter may present it to the Register of Deeds of Davao for cancellation upon the registration of the Deed of Sale dated September 16, 1948 made in his favor by the appellees. The Register of Deeds of Davao shall thereupon cancel said TCT No. 899 of the late Mariano Perez and issue a new title in the name of the plaintiff-appellant Carlos Gabila, subject to a lien in favor of any deprived heirs under Rule 74 of the Rules of Court. The defendants-appellees (respondents)

are ordered to pay the estate and inheritance taxes, if any, and they should present proof of such payment to the Register of Deeds within sixty (60) days

after the finality of this decision.”

Quijada vs CA

Facts:

Plaintiffs-appellees are the children of the late Trinidad Corvera Vda, de Quijada.

Trinidad was one of the heirs of the late Pedro Corvera and inherited from the

latter the two-hectare parcel of land subject of the case, situated in the barrio of

San Agustin, Talacogon, Agusan del Sur.

On April 5, 1956, Trinidad Quijada together with her sisters Leonila Corvera

Vda. de Sequeña and Paz Corvera Cabiltes and brother Epapiadito Corvera

executed a conditional deed of donation of the two-hectare parcel of land subject

of the case in favor of the Municipality of Talacogon, the condition being that the

parcel of land shall be used solely and exclusively as part of the campus of the

proposed provincial high school in Talacogon.

Apparently, Trinidad remained in possession of the parcel of land despite the

donation. On July 29, 1962, Trinidad sold one (1) hectare of the subject parcel of

land to defendant-appellant Regalado Mondejar . Subsequently, Trinidad

verbally sold the remaining one (1) hectare to defendant-appellant Regalado

Mondejar without the benefit of a written deed of sale and evidenced solely by

receipts of payment. In 1980, the heirs of Trinidad, who at that time was already

dead, filed a complaint for forcible entry against defendant-appellant Regalado

Mondejar, which complaint was, however, dismissed for failure to prosecute .

In 1987, the proposed provincial high school having failed to materialize, the

Sangguniang Bayan of the municipality of Talacogon enacted a resolution

reverting the two (2) hectares of land donated back to the donors. In the

meantime, defendant-appellant Regalado Mondejar sold portions of the land to

defendants-appellants Fernando Bautista , Rodolfo Goloran, Efren Gudenand

Ernesto Goloran .

On July 5, 1988, plaintiffs-appellees filed an action against defendants-appellants

. In the complaint, plaintiffs-appellees alleged that their deceased mother never

sold, conveyed, transferred or disposed of the property in question to any person

or entity much less to Regalado Mondejar save the donation made to the

Municipality of Talacogon in 1956; that at the time of the alleged sale to Regalado

Mondejar by Trinidad Quijada, the land still belongs to the Municipality of

Talacogon, hence, the supposed sale is null and void. The court rendered

judgement in favor of plaintiffs-appellees.On appeal, the Court of Appeals

reversed and set aside the judgment ruling that the sale made by Trinidad

Quijada to respondent Mondejar was valid as the former retained an inchoate

interest on the lots by virtue of the automatic reversion clause in the deed of

donation

Held:

The Supreme Court affirmed the assailed decision of the Court of Appeals.

Condition valid in donation if not contrary to law, morals, good customs,

public order or public policy. The donation made on April 5, 1956 by Trinidad

Quijada and her brother and sisters was subject to the condition that the donated

property shall be “used solely and exclusively as a part of the campus of the

proposed Provincial High School in Talacogon.” The donation further provides

that should “the proposed Provincial High School be discontinued or if

the same shall be opened but for some reason or another, the same may in the

future be closed” the donated property shall automatically revert to the donor.

Such condition, not being contrary to law, morals, good customs, public order or

public policy was validly imposed in the donation.

Condition to construct school is a resolutory condition

The resolutory condition, in the present case, is the construction of the school. It

has been ruled that when a person donates land to another on the condition that

the latter would build upon the land a school, the condition imposed is not a

condition precedent or a suspensive condition but a resolutory one. So long as

the resolutory condition subsists and is capable of fulfillment, the donation

remains effective and the donee continues to be the owner subject only to the

rights of the donor or his successors-in-interest under the deed of donation. Since

no period was imposed by the donor on when must the donee comply with the

condition, the latter remains the owner so long as he has tried to comply with the

condition within a reasonable period. Such period, however, became irrelevant

herein when the donee manifested that it cannot comply with the condition

and the same was made known to the donor. Only then, when the non-

fulfillment of the resolutory condition was brought to the donor’s knowledge,

that ownership of the donated property reverted to the donor as provided in the

automatic reversion clause of the deed of donation

Sale, being a consensual contract, is perfected by mere consent; Seller need not

own property when sold but when delivered

Sale, being a consensual contract, is perfected by mere consent, which is

manifested the moment there is a meeting of the minds as to the offer and

acceptance thereof on three (3) elements: subject matter, price and terms of

payment of the price. Ownership by the seller on the thing sold at the time of the

perfection of the contract of sale is not an element for its perfection. What the law

requires is that the seller has the right to transfer ownership at the time the thing

sold is delivered. Perfection per se does not transfer ownership which occurs

upon the actual or constructive delivery of the thing sold. A perfected contract of

sale cannot be challenged on the ground of non-ownership on the part of the

seller at the time of its perfection; hence, the sale is still valid.

Seller’s title passes by operation of law to the buyer

The consummation of the perfected contract is another matter. It occurs upon the

constructive or actual delivery of the subject matter to the buyer when the seller

or her successors-in-interest subsequently acquires ownership thereof. In the

present case, such circumstance happened in this case when petitioners

(Trinidad’s heirs) became the owners of the subject property upon the reversion

of the ownership of the land to them. Consequently, ownership is transferred to

Mondejar and those who claim their right from him. Article 1434 of the New

Civil Code supports the ruling that the seller’s “title passes by operation of law

to the buyer.” This rule applies not only when the subject matter of the contract

of sale is goods, but also to other kinds of property, including real property.

UNION MOTOR CORP vs CA

FACTS:

On September 14, 1979, the respondent Bernal spouses purchased from petitioner Union Motor Corporation one Cimarron Jeepney for P37,758.60 to be paid in installments. For this purpose, the respondent spouses executed a promissory note and a deed of chattel mortgage in favor of the petitioner. Meanwhile, the petitioner entered into a contract of assignment of the promissory note and chattel mortgage with Jardine-Manila Finance, Inc. Through Manuel Sosmeña, an agent of the petitioner, the parties agreed that the respondent spouses would pay the amount of the promissory note to Jardine-Manila Finance, Inc., the latter being the assignee of the petitioner. To effectuate the sale as well as the assignment of the promissory note and chattel mortgage, the respondent spouses were required to sign a notice of assignment, a deed of assignment, a sales invoice, a registration certificate, an affidavit, and a disclosure statement. The respondent spouses were obliged to sign all these documents for the reason that, according to Sosmeña, it was a requirement of petitioner Union Motor Corporation and Jardine-Manila Finance, Inc. for the respondent spouses to accomplish all the said documents in order to have their application approved. Upon the respondent spouses’ tender of the downpayment worth Ten Thousand Thirty-Seven Pesos (P10,037.00), and the petitioner’s acceptance of the same, the latter approved the sale. Although the respondent spouses have not yet physically possessed the vehicle, Sosmeña required them to sign the receipt as a condition for the delivery of the vehicle.

The respondent spouses continued paying the agreed installments even if the subject motor vehicle remained undelivered inasmuch as Jardine-Manila Finance, Inc. promised to deliver the subject jeepney. The respondent spouses have paid a total of P7,507.00 worth of installments before they discontinued paying on account of non-delivery of the subject motor vehicle. According to the respondent spouses, the reason why the vehicle was not delivered was due to the fact that Sosmeña allegedly took the subject motor vehicle in his personal capacity.

ISSUES:

1. Whether there has been a delivery, physical or constructive, of the subject motor vehicle.

2. WON the petitioner should bear the loss of the subject motor vehicle.

HELD:

1. No delivery. Undisputed is the fact that the respondent Bernal spouses did not come into possession of the subject Cimarron jeepney that was supposed to be delivered to them by the petitioner. The registration certificate, receipt and sales invoice that the respondent Bernal spouses

signed were explained during the hearing without any opposition by the petitioner. According to testimonial evidence adduced by the respondent spouses during the trial of the case, the said documents were signed as a part of the processing and for the approval of their application to buy the subject motor vehicle. Without such signed documents, no sale, much less delivery, of the subject jeepney could be made. The documents were not therefore an acknowledgment by respondent spouses of the physical acquisition of the subject motor vehicle but merely a requirement of petitioner so that the said subject motor vehicle would be delivered to them.

We have ruled that 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.

The registration certificate signed by the respondent spouses does not conclusively prove that constructive delivery was made nor that ownership has been transferred to the respondent spouses. Like the receipt and the invoice, the signing of the said documents was qualified by the fact that it was a requirement of petitioner for the sale and financing contract to be approved. In all forms of delivery, it is necessary that the act of delivery, whether constructive or actual, should be coupled with the intention of delivering the thing. The act, without the intention, is insufficient. 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.

2. Yes. The act of signing the registration certificate was not intended to transfer the ownership of the subject motor vehicle to respondent Bernal spouses inasmuch as the petitioner still needed the same for the approval of the financing contract with Jardine-Manila Finance, Inc. The record shows that the registration certificate was submitted to Jardine-Manila Finance, Inc., which took possession thereof until Sosmeña requested the latter to hand over the said document to him. The fact that the registration certificate was still kept by Jardine-Manila Finance, Inc. and its unhesitating move to give the same to Sosmeña just goes to show that the respondent spouses still had no complete control over the subject motor vehicle as they did not even possess the said certificate of registration nor was their consent sought when Jardine-Manila Finance, Inc. handed over the said document to Sosmeña.

Inasmuch as there was neither physical nor constructive delivery of a determinate thing, (in this case, the subject motor vehicle) the thing sold

remained at the seller’s risk. The petitioner should therefore bear the loss

of the subject motor vehicle after Sosmeña allegedly stole the same.

San Lorenzo Development Corporation VS CA, Babasanta January 21, 2005 G.R. No. 124242, Tinga,J. FACTS: Respondents Miguel Lu and Pacita Zavalla (Spouses Lu) owned two parcels of land situated in Sta. Rosa Laguna. The spouses Lu sold purportedly sold the two parcels of land to respondent Pablo Babasanta, who made a downpayment of P50,000 evidenced by a memorandum receipt issued by Pacita Lu. Several other payments totaling P200,000 were made. Babasanta wrote a letter to Pacita Lu to demand execution of a final deed of sale in his favor so that he could effect full payment of the purchase price which the respondents allegedly refused. Respondent Babasanta filed a complaint for Specific Performance and damages against Spouses Lu, in which the latter filed an answer. Petitioner San Lorenzo Development Corporation filed a Motion for Intervention and alleged that it had legal interest in the subject matter. The disputed parcels of land 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 value and therefore it had a better right over the property in litigation. SLDC claims that it exercised its option to buy the lots subject of the complaint. Certificates of title over the property were delivered to it by the spouses clean and free from any adverse claims and/or notice of lis pendens. RTC rendered its decision upholding the sale of the property to SLDC by applying Art. 1544 of the Civil Code. The trial court ruled that both Babasanta and SLDC did not register the said sale therefore the ownership of the property should pertain to the buyer who first acquired possession of the property. The trial court held that the execution of a public instrument in favor of SLDC was sufficient delivery and that symbolic possession could be considered to have been transferred to SLDC and consequently ownership. CA set aside the judgment of the Trial court and declared the sale between Babasanta and Spouses Lu as valid and subsisting and ordered the spouses to execute the necessary deed of conveyance in favor of Babasanta. It further ruled that the Absolute Deed of Sale with Mortgage in favour of SLDC was null and void on the ground that SLDC was a purchaser in bad faith. Issue: Who between Babasanta and Spouses Lu has a better right over the two parcels of land? Held: SLDC. The Agreement between Babasanta and Spouses Lu is a contract to sell and not a contract of Sale. The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. There being an obligation to pay the price, Babasanta should have made the proper tender of payment and consignation of the price in court as required by law. Thus, Babasanta’s claim of ownership should nevertheless fail.

Nevertheless, a perfected contract of sale by itself does not transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers ownership. Ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Art. 1497-1501. The law recognized two modes of delivery: (a) actual delivery; and (b) Legal or constructive delivery. Actual delivery consists in placing the thing sold in the control and possession of the vendee. Legal or constructive delivery, on the other hand, may be had through any of the following ways: the execution of a public instrument evidencing the sale, symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept; traditio longa manu or by mere consent or agreement if the movable sold cannot yet be transferred to the possession of the buyer at the time of the sale; traditio brevi manu if the buyer already had possession of the object even before the sale; and traditio constitutum possessorium, where the seller remains in possession of the property in a different capacity. Respondent Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property for the agreement was not embodied in a public instrument. Hence, no constructive delivery of the lands could have been effected which is essential to transfer ownership of the property Petition is GRANTED. The decision of CA is hereby reversed and set aside and decision of RTC reinstated. Note: Article 1544 does not apply to a case where there was a sale to one party

of the land itself while the other contract was a mere promise to sell the land.

Flores vs. Lim G.R. No. 26844, September 27, 1927 Johns, J. Facts: On January 20, 1923, plaintiff’s 73-hectare land was sold at a sheriff’s sale to the defendant for P1, 603.78. The said property contained 164 coconut bearing trees, 300 buri trees and 1000 non-bearing trees. The usual certificate of sale was issued to defendant under the provisions of Sec. 463 of the Code of Civil Procedure. Prior to the one year redemption, plaintiff made a formal demand upon the defendant, under the provisions of Sec. 469 of the same Code, for an accounting of the fruits and profits derived by her from the land in order to have credit for the amount received on the amount required for redemption from the sale. Defendant refused to render an account of the fruits and profits, basing her inaction on the alleged fact that her rights of ownership over the land arose from a purchase made from the government which confiscated the same from plaintiff for delinquency in the payment of the land tax rather than from her acquisition of it at a public auction. Defendant further averred she has no obligation to render an accounting of the fruits, that plaintiff failed to exercise her right to redeem the land within the reglementary period, and that the offer to redeem was made out of time. The delayed redemption was consented to by defendant on the condition that plaintiff was going to pay the purchase price of the land, the value of the improvements, the amount of the land tax. Upon failure to reach an amicable settlement, the controversy was brought to the lower court, whose decision is now the subject of the present action. Issue: Is respondent entitled to be reimbursed for the expenses of the improvements? Ruling: The Supreme Court ruled in the NEGATIVE. Defendant was considered a trespasser because of her immediate entrance and possession of the subject property. In decided cases, a purchaser of real property at an ordinary execution sale is not entitled to possession at ordinary execution rents and profits until after the period of redemption has expired and the legal title to the land had become vested in him. With that being the case and under the express provision of Sec. 465 of the Code of Civil Procedure, the defendant cannot recover from the plaintiff any money which she expanded for the planting of the coconut trees.

AURORA TAMBUNTING, ANTONIO TAMBUNTING, JOSE P. TAMBUNTING and THE ACTING PROVINCIAL SHERIFF FOR THE

PROVINCE OF RIZAL, petitioners, vs.HON. COURT OF APPEALS, DAMASO R. CRUZ, and MONICA ANDRES, respondents.

Guadiz & Jimenez for petitioners. Salvador A. Navarro for respondents.

G.R. No. L-48278 November 8, 1988 PADILLA, J.

DOCTRINE Place of Delivery. The right of the debtor to demand for an accounting of the rents and profits received by a creditor during the period of redemption. Thus, while the Rules of Court allow the purchaser in an execution sale to receive the rentals if the purchased property is occupied by tenants, he is, however, accountable to the judgment debtor or mortgagor, as the case may be, for the amounts so received and the same will be duly credited against the redemption price when said debtor or mortgagor effects the redemption. FACTS December 16, 1959 Private respondents, spouses Damaso R. Cruz and Monica Andres (hereafter, the Cruzes) obtained a loan from petitioners, spouses Antonio and Aurora Tambunting (hereafter, the Tambuntings) in the amount of P3,600.00. The Tambuntings are engaged in the lending-pawnshop business using the name and style "Agencia de Tambunting", with co-petitioner Jose P. Tambunting as Manager. The loan was evidenced by a promissory note executed by the Cruzes, payable within four (4) months from 16 December 1959, with interest at 12% per annum. As security for payment of the loan, a Deed of Real Estate Mortgage was executed by the Cruzes in favor of the Tambuntings over a parcel of land belonging to the Cruzes, covered by Transfer Certificate of Title No. 59433, Register of Deeds of Rizal. Sps. Cruz failed to pay the loan obligation at maturity prompting Sps. Tambunting to file a petition for extrajudicial foreclosure of mortgage on March 17, 1967. July 4, 1967

A notice of sheriff's sale was posted announcing an auction sale on August 2, 1967 at 10:00 a.m. As shown by the affidavit of publication, the notice of sale was published in the Rizal Chronicle, a newspaper of general circulation in Rizal province, on July 12, 19 and 26, 1967. August 2, 1967 The Cruzes instituted an action against the Tambuntings for annulment of mortgage and damages with prayer for a writ of preliminary injunction before the CFI of Rizal.

A temporary restraining order was issued enjoining herein petitioners from proceeding with the scheduled sale and to suspend the same until further orders from the court. But on September 1, 1967, said TRO was dissolved and the proposed sale was moved to October 20, 1967. Postings of sheriff's notice of sale were made on September 15, 1967 with a re-publication of said notice in the Rizal Chronicle on September 4, 11 and 27, 1967. October 19, 1967 The scheduled sale was held in abeyance because of the motion for reconsideration filed by the Cruzes in regard to the lifting of the temporary restraining order. However, this was denied and the Tambuntings published in the Rizal Chronicle on December 20, 1967, the sheriff's notice of scheduled sale on January 16, 1968. The Cruzes, however, wanted to reschedule such sale to another date as they alleged that there was no compliance with the required notices on a letter addressed to the Provincial Sheriff of Rizal dated January 26, 1968. On the same date, a notice of lis pendens was filed informing the said sheriff for the annulment of the mortgage, upon the foreclosure of which the sale was to be conducted, and that such action affects title to the property. January 26, 1968 The mortgaged property was nonetheless auction publicly to the Tambuntings for P9,400.05. Thereafter, mortgagee-vendee Antonio Tambunting sold and transferred his ½ share in the property to his wife Aurora Tambunting. January 31, 1969 Aurora Tambunting executed an Affidavit of Consolidation of Title, for the issuance of a new title in her name which was issued. Aurora Tambunting then transferred the property to Tambunting Realty Corporation which obtained Transfer Certificate of Title No. 270972-Rizal in its name.

On or About August 24, 1970 The private respondents filed a supplemental complaint impleading Tambunting Realty Corporation, the Provincial Sheriff and the Register of Deeds of Rizal. The first, as the subsequent vendee of the property, the second, as the officer responsible for holding the extrajudicial foreclosure sale of 26 January 1968, and the third, for the subsequent transfers of the mortgaged property despite alleged non-compliance with the requirements of Act 3135, Sec. 3 (as amended by Act 4118) on posting and publication of the notice of foreclosure sale. CFI Rizal Decision

(a) The Real Estate Mortgage as well as the Promissory Note for P4,600.00 [sic.] valid until fully paid as hereunder provided;

(b) The Certificate dated April 25, 1963 was without force and effect, insofar as it states that the capital was increased from P3,000.00 [sic] to P5,000.00;

(c) Ordering the plaintiffs to pay the defendants Aurora Tambunting and Antonio Tambunting the sum of P3,600.00 plus 12% per annum from April 25, 1963 until the obligation shall have been duly paid as amended;

(d) Ordering plaintiffs to pay defendants Aurora Tambunting and Antonio Tambunting the sum equivalent to 10% of the amount of P3,600.00 by way of mitigated liquidated damages, plus attorney's fees in the amount of Pl,000.00; and finally,

(e) Declaring as null and void the Deed of Sale, Affidavit of Consolidation, Transfer Certificate of Title No. 239713, Absolute Deed of Sale, Transfer Certificate of Title No. 270972 and ordering the Register of Deeds to reinstate the Transfer Certificate Title No. 59433 in the name of the plaintiffs giving it therefore all force and effect as though it had not been cancelled. A motion for reconsideration. The trial court modified par. (c) of the

dispositive part of its judgment and ordered the Cruzes to pay the Tambuntings P3,600.00 plus 12% interest per annum from 25 April 1963 until the obligation is fully paid. The rest of the dispositive part of the judgment remained.

The Tambuntings appealed to the CA regarding the voiding of the

foreclosure sale. CA Decision

It upheld the CFI Rizal Decision for the Tambuntings failed to deviated from the posting and publication requirements of law, which rendered the notice of sale ineffective and voided the auction sale. The Cruzes thereafter filed a "petition for accounting of fruits and application of the same against amount of judgment with restraining order" to restrain the Tambuntings from continuing to collect rentals from tenants of the property in question, to render an accounting of rentals received, and to apply collected rentals to satisfy the judgment rendered against them, and to turn over to them the excess rentals. They also sought to suspend the running of interest on the P3,600.00 principal of the loan until the final accounting is submitted by the Tambuntings and necessary application (offset of accounts) has been made. This was granted. Hence, this petition.

ISSUE

1. WON the CA and CFI erred in nullifying and setting aside the auction sale for lack of compliance with the formalities of law, when the sale was purely a postponement of previously scheduled sales, notices of which had been posted and published as required by law.

2. WON the CA erred in granting the Cruzes' petition for accounting of fruits, etc. after judgment had been rendered which is tantamount to a modification of the trial court's judgment, and an appellee, who is not an appellant, cannot seek affirmative relief from the appellate court.

HELD

1. NO. Act. No. 3135 (governing extrajudicial foreclosure of real estate mortgage), as amended by Act No. 4118, reads:

SEC. 3. Notice shall be given by posting notices of the sale for not

less than twenty (20) days in at least three public places of the

municipality or city where the property is situated, and if such

property is worth more than four hundred pesos, such notice shall

also be published once a week for at least three consecutive weeks

in a newspaper of general circulation in the municipality or city.

The rule is that statutory provisions governing publication of notice

of mortgage foreclosure sales must be strictly complied with, and that

even slight deviations therefrom will invalidate the notice and render the

sale at least voidable.

In the case at bar, however, there is no such other proof of

publication. To show compliance, the published notices and certificate of

posting by the sheriff of the notice of sale of January 26, 1968 should have

been presented. They do not appear in the record. Neither can the sale be

considered as an adjournment of an earlier sale under Sec. 24 of Rule 39 of

the Rules of Court.

2. NO. Private respondents' petition for accounting, etc. did not really seek a

modification of the judgments of the trial court and the Court of Appeals. The remedy sought (accounting and offsetting of accounts) was a direct clear-cut consequence of an equally clear-cut decision which, in effect, held that the Cruzes were never divested of their ownership over the property in question. In other words, the accounting sought and granted is merely an incident of the declared respondents' right of ownership under the Civil Code.

Moreover, said petition for accounting, etc. is based on the rationale underlying a related rule in the Rules of Court. Sec. 34, Rule 39 of the Rules of Court provides:

SEC. 34. Rents and profits pending redemption. Statement thereof and credit thereof on redemption.—The purchaser, from the time of the sale until a redemption, and a redemptioner, from the time of his redemption until another redemption, is entitled to receive the rents of the property sold or the value of the use and occupation thereof when such property is in the possession of a tenant. But when any such rents and profits have been received by the judgment creditor or purchaser, or by a redemptioner, or by the assignee of either of them, from property thus sold preceding such redemption, the amounts of such rents and profits shall be a credit upon the redemption money to be paid; and, if a later redemptioner or the judgment debtor, before the expiration of the time allowed for such redemption demands in writing of such creditor, purchaser, or prior redemptioner, or his assigns, a written and verified statement of the amounts of the rents and profits thus received, the period of redemption is extended five (5) days after such demand is complied with and such sworn statement given to such later redemptioner or debtor. If such statement is not so given within one (1) month from and after such demand, such

redemptioner or debtor may bring an action to compel an accounting and disclosure of such rents and profits, and until fifteen (15) days from and after the final determination of such action, the right of redemption is extended to such redemptioner or debtor.

What clearly appears from this provision is the right of the debtor

to demand for an accounting of the rents and profits received by a creditor

during the period of redemption. Thus, while the Rules of Court allow the

purchaser in an execution sale to receive the rentals if the purchased

property is occupied by tenants, he is, however, accountable to the

judgment debtor or mortgagor, as the case may be, for the amounts so

received and the same will be duly credited against the redemption price

when said debtor or mortgagor effects the redemption.

WHEREFORE, the petition is DENIED. The decision and resolution of the Court of Appeals dated 13 December 1977 and 2 May 1978 in CA-G.R. No. 57714-R are hereby AFFIRMED. With costs against petitioners.

SO ORDERED.

Note: Issues though not specifically raised in the pleadings in the appellate court, may, in the interest of justice, be properly considered by said court in deciding a case, if they are questions raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or the lower court ignored.

SPOUSES VICENTE and LOURDES PINGOL, petitioners, vs. HON. COURT OF APPEALS and HEIRS OF FRANCISCO N. DONASCO, namely: MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS,

NATIVIDAD D. PELAYO, YOLANDA D. CACERES and MARY DONASCO, respondents.

Bernardo S. Chan for petitioners. Orlando A. Galope for respondents.

G.R. No. 102909 September 6, 1993 DAVIDE, JR., J.

DOCTRINE Place of Delivery NATURE OF PETITION This is a petition for review on certiorari on the CA decision. Originally, this is an action for specific performance and damages brought by the herein respondents against the spouses Pingol before the RTC Caloocan which rendered a decision in favor of the later. Upon appeal to the CA, it reversed the lower court’s decision. FACTS Petitioner Vicente Pingol is the owner of Lot No. 3223 of the Cadastral Survey of Caloocan, with an area of 549 square meters, located at Bagong Barrio, Caloocan City and more particularly described in Transfer Certificate of Title (TCT) No. 7435 of the Registry of Deeds of Caloocan City. On 17 February 1969, he executed a "DEED OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND," designated as Lot No. 3223-A, in favor of Francisco N. Donasco which was acknowledged before a notary public. The terms of the sale include the following:

Price : P20,530

Lot Size : 274.50 sq. m.

Partial Payment Made : P2,000

Remaining Balance : P18,530 to be paid within the first 5 days of each month for 6

years beginning January 1970

Monthly Payment : P257.36

Default in the payment of the installment due the same shall earn a legal rate of interest, and to which the VENDOR likewise agrees;

Monthly payments should be made at the residence of the VENDOR, payment to be made either directly to the VENDOR, his wife or his authorized representative or factor;

That in case of partition of the above-described property between herein VENDOR and VENDEE the same shall be divided into two (2) equal parts, the VENDOR gets the corner facing J. De Jesus and Malolos Avenue and the VENDEE shall get the portion with fifteen 15 meters frontage facing J. De Jesus Street only.

When Lot No. 3223-A was already segregated, Donasco built a house thereon. In January 1970, he started to pay the monthly installments but was only able to pay until 1972. By the time Donasco died on July 13, 1984, he had already paid P10,369.00. The balance to be paid was P10,161 only. Lot No. 3223-A remained with his heirs until the private respondents herein filed an action for "Specific Performance and Damages, with Prayer for Writ of Preliminary Injunction" against the spouses Vicente and Lourdes Pingol before the RTC of Caloocan City. They allege that when they offered to pay for the balance on the land with Vicente Pingol, he refused it and demanded for a bigger and unreasonable amount than what is due and demandable. Moreover, spouses Pingol were allegedly committing acts of “forcible entry and encroachment” upon their land and asked that a writ of preliminary injunction be issued to restrain the defendants from the acts complained of. RTC Decision It ruled in favor of spouses Pingol. The RTC dismissed the complaint and ordered the private respondents to pay the spouses P350.00 monthly rental from the filing of the complaint, P10,000 attorney’s fees and costs of suit. In detail:

(1) the deed of absolute sale in question is a contract to sell, not a contract of sale, since Vicente Pingol had no intention to part with the ownership of the loan unless the full amount of the agreed price had been paid;

(2) the contract was deemed to have been cancelled from the moment the late father of the plaintiffs defaulted in the payment of the monthly installments;

(3) title and ownership over the lot did not pass to Francisco Donasco and his heirs since the contract to sell was never consummated; and

(4) assuming, arguendo, that the plaintiffs have a cause of action for specific performance, such action had already prescribed since the complaint was filed only on October 19, 1988 or more than ten years from the time that they could have lawfully demanded performance.

Respondents herein appealed to the CA.

CA Decision It reversed the RTC decision. It ordered Vicente Pingol to accept the remaining balance price plus its legal interest from the date of institution of this on October 19, 1988 and upholding the validity of the contract of absolute sale. Therefore it acknowledged the ownership on Lot No. 3223-A by Francisco Domingo. Vicente Pingol’s intention was clear, i.e. to part with the ownership of the one-half portion of the land by way of an absolute sale; that the failure to fully pay the agreed price was not a ground for the cancellation of the sale; and that the plaintiffs' action is imprescriptible since it is akin to an action to quiet title to property in one's possession. Hence this petition. ISSUE WON the subject contract is a contract of sale or a contract to sell. HELD Contract of sale. A contract of sale, the title passes to the vendee upon the delivery of the thing sold, whereas in a contract to sell, by agreement, ownership is reserved in the vendor and is not to pass until the full payment of the price. In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded, whereas in a contract to sell, title is retained by the vendor until the full payment of the price, such payment being a positive suspensive condition, failure of which is not a breach but an event that prevented the obligation of the vendor to convey title from becoming effective. In the case, it is clear from the subject contract that it is that of sale from the plain tenor thereof as deduced from the title. From its contents, no stipulation was made that the vendor has a right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. What is merely stated therein is that "the VENDEE agrees that in case of default in the payment of the installments due the same shall earn a legal rate of interest, and to which the VENDOR likewise agrees." Moreover, the act of the parties, contemporaneous and subsequent to the contract, clearly show that an absolute deed of sale was intended by the parties.

The ownership of the subject lot was transferred to the buyer upon the actual and constructive delivery thereof. The constructive delivery of the subject

lot was made upon the execution of the deed of sale while the actual delivery was effected when the private respondents took possession of and constructed a house on Lot No. 3223-A.

The delivery of the object of the contract divested the vendor of the

ownership over the same and he cannot recover the title unless the contract is resolved or rescinded pursuant to Article 1592 of the New Civil Code.4

Since the delivery of possession of the land sold had consummated the

sale and transferred title to the purchaser, and that, actually, the action is one to quiet title, i.e., to remove the cloud upon the appellee's ownership by the refusal of the appellants to recognize the sale made by their predecessors. Despite the fact that the title had been transferred to them by the execution of the deed of sale and the delivery of the object of the contract, the petitioners adamantly refused to accept the tender of payment by the private respondents and steadfastly insisted that their obligation to transfer title had been rendered ineffective.

A vendee in an oral contract to convey land who had made part payment

thereof, entered upon the land and had made valuable improvements thereon, is entitled to bring suit to clear his title against the vendor who had refused to transfer the title to him. It is not necessary that the vendee has an absolute title, an equitable title being sufficient to clothe him with personality to bring an action to quiet title.

The owner of real property who is in possession thereof may wait until his possession is invaded or his title is attacked before taking steps to vindicate his right. A person claiming title to real property, but not in possession thereof, must act affirmatively and within the time provided by the statute. Possession is a continuing right as is the right to defend such possession. So it has been determined that an owner of real property in possession has a continuing right to invoke a court of equity to remove a cloud that is a continuing menace to his title. Such a menace is compared to a continuing nuisance or trespass which is treated as successive nuisances or trespasses, not barred by statute until continued without interruption for a length of time sufficient to affect a change of title as a matter of law.

4 In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time

agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act. After the demand, the court may not grant him a new term.

Private respondents shall, however, be liable to pay the legal rate of interest on the unpaid balance of the purchase price from the date default or on January 6, 1976, when the entire balance should have been paid.

WHEREFORE, except as above modified, the Decision appealed from is hereby AFFIRMED. As modified, the interest on the unpaid balance of P10,161.00, at the legal rate, shall be computed from 6 January 1976. Upon the payment by the private respondents to the petitioners of the said amount and the interest thereon, the latter are ordered to deliver Transfer Certificate of Title No. 7435 to the Register of Deeds of Caloocan City who shall cancel the same and issue two new transfer certificates of title in lieu thereof, one of which shall be in the name of the herein private respondents covering Lot No. 3223-A and the other in the name of the petitioners covering the remainder of the lot.

SO ORDERED.

G.R. No. L-36359 January 31, 1974 FELIX BUCTON AND NICANORA GABAR BUCTON, petitioners, vs. ZOSIMO GABAR, JOSEFINA LLAMOSO GABAR AND THE HONORABLE COURT OF APPEALS, respondents ANTONIO, J.: Facts: Plaintiff Nicanora Gabar Bucton (wife of her co-plaintiff Felix Bucton) is the sister of defendant Zosimo Gabar, husband of his co-defendant Josefina Llamoso Gabar. Sometime in 1946 defendant Josefina Llamoso Gabar bought the above-mentioned land from the spouses Villarin on installment basis, to wit, P500 down, the balance payable in installments. Josefina entered into a verbal agreement with her sister-in-law, plaintiff Nicanora Gabar Bucton, that the latter would pay one-half of the price (P3,000) and would then own one-half of the land. Pursuant to this understanding Nicanora on January 19, 1946 gave her sister-in-law Josefina the initial amount of P1,000, for which the latter signed a receipt marked as Exhibit A. Subsequently, on May 2, 1948 Nicanora gave Josefina P400. She later signed a receipt marked as Exhibit B. Meanwhile, after Josefina had received in January, 1946 the initial amount of P1,000 as above stated, plaintiffs took possession of the portion of the land indicated to them by defendants, had constructed apartments, and had established their residence therein until July, 1969 converting their portion of the land into a dormitory. In January, 1947 the spouses Villarin executed the deed of sale of the land abovementioned in favor of defendant Josefina Llamoso Gabar, Exhibit I, to whom was issued on June 20, 1947. Plaintiffs then sought to obtain a separate title for their portion of the land in question. Defendants repeatedly declined to accommodate plaintiffs. Their excuse: the entire land was still mortgaged with the Philippine National Bank as guarantee for defendants' loan of P3,500 contracted on June 16, 1947. Plaintiffs continued enjoying their portion of the land, planting fruit trees and receiving the rentals of their buildings, and at the same time plaintiffs continued to insist on obtaining their separate title. Yet their pleas remained unheard despite repeated demands and the employment of two lawyers to persuade the defendants. As such, this action for specific performance prays, inter-alia, that defendants-spouses be ordered to execute in favor of plaintiffs a deed of sale of the western half of a parcel of land having an area of 728 sq. m. covered by Torrens title.

Defendants raise as a defense their claim that there was no agreement to sell one half of the land to plaintiffs, and that the payments given to them were loans, based upon oral testimony. The trial court ruled in favour of the plaintiffs, to which the Court of Appeals reversed the same based on their supposition that their action had already prescribed under Article 1144 of the Civil Code, which provides that actions arising from written contracts must be brought within 10 years, and that since the current action, from January 19, 1946 to February 15, 1968, had already amounted to 22 years, the same has already prescriber. Hence the current appeal. Issue/s: (1) Whether or not a valid sale had been made, such that ownership has been vested in the plaintiffs. (2) Whether or not the action has prescribed. Ruling: (1) Yes. There is no question that petitioner Nicanora Gabar Bucton paid P1,500.00 to respondent Josefina Gabar as purchase price of one-half of the lot now covered by TCT No. II, for respondent Court of Appeals found as a fact "that plaintiffs really paid for a portion of the lot in question pursuant to their agreement with the defendants that they would own one-half (1/2) of the land." That sale, although not consigned in a public instrument or formal writing, is nevertheless valid and binding between petitioners and private respondents, for the time-honored rule is that even a verbal contract of sale or real estate produces legal effects between the parties. Although at the time said petitioner paid P1,000.00 as part payment of the purchase price on January 19, 1946, private respondents were not yet the owners of the lot, they became such owners on January 24, 1947, when a deed of sale was executed in their favor by the Villarin spouses. In the premises, Article 1434 of the Civil Code, which provides that "[w]hen a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee," is applicable. (2) No. The real and ultimate basis of petitioners' action is their ownership of one-half of the lot coupled with their possession thereof, which entitles them to a conveyance of the property. In Sapto, et al. v. Fabiana, this Court, speaking thru Mr. Justice J.B.L. Reyes, explained that, under the circumstances no enforcement of the contract is needed, since the delivery of possession of the land sold had consummated the sale and transferred title to the purchaser, and that, actually, the action for conveyance is one to quiet title, i.e., to remove the cloud upon the appellee's ownership by the refusal of the appellants to recognize the sale made by their predecessors. We held therein that "... it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are imprescriptible. Thus, the action at hand, not being one to enforce a particular written contract but rather one to quiet title, has not prescribed, the same being imprescriptible.