SALES DIGEST Consummation of Sale

8/19/2019 SALES DIGEST Consummation of Sale

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Santos vs. Santos (2001)

FACTS :

Spouses Jesus and Rosalia Santos owned a parcel of land, which had a four-door apartment administered

by Rosalia who rented them out.The spouses had 5 children, namely Salvador, Cali to, !lberto, !ntonio, and Rosa.The spouses e ecuted a deed of sale of the properties in favor of their children Salvador and Rosa. "a TCTwas issued#Rosa then sold her share to Salvador. "another TCT was issued#$espite the transfer of the property to Salvador, Rosalia continued to lease and receive rentals from theapartment units.%ater, Jesus died. Si years later, Salvador died. Shortly thereafter, Rosalia died.&etitioner 'enaida Santos, wife of Salvador, demanded rent from a tenant of Rosalia.Tenant refused, but 'enaida filed an e(ectment suit a)ainst him, which eventually decided in 'enaida*sfavor.&rivate Respondents, the Santos siblin)s, filed an action for reconveyance of property, alle)in) that:a the two deeds of sale were simulated, therefore void.b The two sales were e ecuted to accommodate Salvador in )eneratin) funds for his business ventures

and providin) him with )reater business fle ibility.

RTC: two deeds of sale are null and void for bein) fictitious or simulated.C!: affirmed decision.'enaida ar)ues:a !rt. + ownership of the thin) sold is transferred to the vendee upon its actual or constructive

delivery.b !rt. + /0 when the sale is made throu)h a public instrument, its e ecution is e1uivalent to the

delivery of the thin) sub(ect of the contract.c !pplyin) these provisions, Salvador became the owner of the sub(ect property by virtue of the 2

deeds of sale.

ISSUE : 3. 4 6 the e ecution of a public instrument is e1uivalent to delivery of the land.

HELD : 3. EXECUTION OF PUBLIC INST. NOT DELIVERY

+ 6owhere in the 6CC does it provide that e ecution of a deed of sale is a conclusive presumption of delivery of possession.

2 The 6CC merely said that the e ecution shall be e1uivalent to delivery. The presumption can berebutted by clear and convincin) evidence.

7 &resumptive delivery can be ne)ated by the failure of the vendee to ta8e actual possession of the landsold.!lthou)h the spouses e ecuted a deed of sale, they did not deliver the possession and ownership of the property to Salvador and Rosa.

5 The ori)inal sellers retained their control and possession. Therefore, there was no real transfer of ownership.

A !son vs F"#!$ an T!o%o (1&1')

FACTS :

!ddison sold to defendant 9eli and Tioco "her husband# parcels of land.nder the instrument e ecuted:

a 9eli is to pay &7;;; as downpayment.b To pay the balance of &2;;; on July +/+ , then &5;;; 7; days after the issuance to her of a

certificate of title.


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c To pay, within +; years, &+; for each cocoanut tree in bearin) and &5 for each such tree not inbearin), with the condition that the total price should not e ceed &05,;;;.

d 9eli was to deliver to !ddison 25< of the value of the products that she mi)ht obtain from the parcels of lands from the moment 9eli ta8es possession of the lands until a TCT has been issued inher favor.

e That within + year from the date of the TCT is issued in 9eli * favor, she may rescind the contract."everyone will return what they have )iven = interests#

!ddison filed a suit in C93 to compel 9eli to ma8e payment of the + st installment.9eli * defense:c !ddison had absolutely failed to deliver to her the lands that were the sub(ect matter of the sale.6>T?: !fter the e ecution of the deed of sale, !ddison desi)nated to a representative of 9eli only 2 of the parcels of land. !nd these 2 lands were in possession of a 7 rd person.

9eli filed an application for the re)istration of the parcels of land, which was dismissed forfailure to present the re1uired plans within the period re1uired.

RTC: ruled in favor of 9eli @ contract of sale be rescinded.!ddison ar)ues:d Ri)ht to rescind not only did not e ist from the moment of the e ecution of the contract up to + year

after the re)istration of the land, but does not accrue until the land is re)istered.e Ri)ht to rescind was sub(ect to a condition, namely the issuance of the title.

ISSUE : 3. 4 6 there was delivery of the thin) sold

HELD : 3. 6> $?%3A?R FELIX ON***

B 4ith respect to two of the parcels of land, !ddison was not even able to show them to the purchaser@and as re)ards the other two, more than 2 7 of their area was in the adverse possession of a 7 rd

person.The thin) is considered to be delivered when it is placed in the hands and possession of the vendee.D

0 3n order that symbolic delivery may produce the effect of tradition, it is necessary that the vendorshall have had such control over the thin) sold.

/ 3t is not enou)h to confer upon the purchaser the ownership and the ri)ht of possession. The thin)sold must be placed in his control.

+; The e ecution of a public instrument is sufficient for the purposes of the abandonment made by thevendor@ but it is not always sufficient.++ The mere e ecution of the instrument was not a fulfillment of the vendor*s obli)ation to deliver the

thin) sold, and that from such non-fulfillment arises purchaser*s ri)ht to demand, as 9eli demanded,the rescission of the sale and the return of the price.

Dan+,!#an v. IAC an -"#a (1&'')

- $omin)o Eelad owned 2 lots in Ca)ayan, a residential lot and a farm lot.- $an)uilan and !polonia Eelad both claim ri)hts over the said lots.- Eelad*s version: based on a Deed of Sale in +/ 7 si)ned by $omin)o. This sale was supposedly entered

into by her mother when she was (ust a 8id, the payment of 0; for such sale earned by her mother at theTabacalera 9actory. She also claimed that she was the ille)itimate dau)hter of Eelad, who lived w them tilhe died. "This was later on found to be very suspicious#She e plained that she vacated the place because Eelad as8ed her permission to cultivate the land as her

tenant who would deliver F of the harvest to her. Gut she filed a complaint since the deliveries have stopped.

- $an)uilan*s version: Donations in 2 private instruments were made by $omin)o to him and his wife"domin)o*s niece#, in e chan)e for ta8in) care of the old man, and cultivatin) his land and with theunderstandin) that he would bury him upon his death.

- 3t is important to note that the TC found that $an)uilan was in open and continuous poss*n of the lots in1uestion. Eelad*s version that she considered $an)uilan as a tenant was not )iven much wei)ht.


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1 /n t " " as a va#! onat!on +!v"n t at a onat!on 3,st 4" 3a " !n a 5,4#!% !nst ,3"nt- H?S. 4hile truly donations, the conveyances where onerous donations as the properties were )iven to thepetitioner in e chan)e for his obli)ation to ta8e care of the donee for the rest of his life and provide for hisburial. There was a fair e chan)e as $omin)o died really old, which means that $na)uilan practically farmedthe land by himself.

2 Ass,3!n+ t at t " " as a va#! sa#" to -"#a as t " %ont a%t %ons,33at" 6- 6>. ?ven assumin) the validity of the deed of sale, the record shows that the private respondent did not

ta8e possn of the disputed properties and indeed waited until +/B2 to file the action for recovery of thelands from the petitioner. 3f she did have poss*n, she transferred the same to $na)uilan in +/ B, by herown admission.

- She failed to show that she consummated the contract of sale by actual delivery of the properties to herand actual poss*n thereof in the concept of purchaser-owner.

- !s ro the ar)ument that symbolic delivery was effected throu)h the deed of sale, the Code imposes uponthe vendor the obli)ation to deliver the thin) sold and such is done when it is placed in the hands andposs*n of the vendee. 3n order that symbolic delivery may produce the effect of tradition, control over thethin) sold is necessary, and not (ust ownership and ri)ht of poss*n.

$an)uilan has a better ri)ht to the lots.

Pasa+,! vs. V!##a4#an%a (1&78)

FACTS :

&asa)ui bou)ht from co-defendants Gocar a parcel of a)ricultural land.! deed of sale was e ecuted, which was notariIed and re)istered in the Re)istry of $eeds.%ater, defendants Aillablanca too8 possession of the said property, harvestin) coconuts, thus deprivin)&asa)ui possession.Thus, this prompted &asa)ui to file a complaint with the C93 a)ainst the Aillablancas to surrenderpossession.Aillablancas moved to dismiss the complaint, alle)in) that since it was a complaint for forcible entry, C93had no (urisdiction.RTC: dismissed complaint. ETC has (urisdiction. "at that time, Justice of the &eace#

ISSUE : 3. 4 6 action of forcible entry should be )ranted

HELD : 3. S9OULDN:T BE ;RANTED PASA;UI NOT IN POSSESSION.

+2 Complaint does not alle)e that the plaintiffs were in physical possession of the land and have beendeprived of that possession throu)h force, intimidation, threat, strate)y or stealth.

+7 3t is true that the e ecution of the deed of absolute sale in a public instrument is e1uivalent to

delivery of the land sub(ect of the sale. This presumptive delivery only holds true when there is noimpediment that may prevent the passin) of the property from the hands of the vendor into those of the vendee. 3t can be ne)ated by the reality that the vendees actually failed to obtain materialpossession of the land sub(ect of the sale.

+ &asa)ui did not physical possession of the land since its purchase.+5 !s a matter of fact, their purpose in filin) the complaint is precisely to )et possession of the property.+B 9orcible entry should be denied because &asa)ui had no prior physical possession of the property.

DY


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+. 4ilfredo $y purchased a truc8 and a farm tractor throu)h financin) e tended by %ibra 9inance 3nvestment Corp.Goth truc8 and tractor were mort)a)ed to %ibra as security for the loan

2. &erfecto $H, his brother, wanted to buy the tractor. &erfecto then wrote a letter to %ibra for him to purchase suchand assume the mort)a)e. %ibra approved the re1uest. !nd 4ilfredo e ecuted a deed of absolute sale.

7. The tractor was withheld by %ibra because of 4ilfredo*s failure to pay amortiIations. $espite offer of &erfecto topay the full amount, it could not be effected because %ibra insisted also for the payment of the truc8. ! chec8 wasthen issued to %ibra to settle the full amount.

. ! civil case of 4ilfredo was also pendin) in Cebu to recover a sum of money. The provincial sheriff was able toseiIe and levy on the tractor. The tractor was sold at the pubic auction where elac tradin) was the lone bidder.

elac later sold it !ntonio onIales

5. 4hen the chec8 was cleared, it was only then &erfecto learned about the purchase of elac. Ke filed then anaction to recover the tractor a)ainst elac with the RTC of Cebu.

RTC: in favor of petitioner@ C!: reversed

3ssue: w n there was a valid sale to &erfecto

Keld: A!%3$

+. Eort)a)or who )ave the property as security under a chattel mort)a)e did not part with the ownership over thesame. Ke had the ri)ht to sell it althou)h he was under obli)ation to secure the written consent of the mort)a)ee.!nd even if no consent was obtained form the mort)a)ee, the validity of the sale would still be effected.

2. Court sees no reason why 4ilfredo cannot sell the sub(ect tractor. The consent of %ibra was even obtained in thiscase. The sale between the brothers was valid and bindin) even to the mort)a)ee.

7. !rt. + /B states that the ownership of the thin) sold is ac1uired by the vendee from the moment it is deliveredto him in any of the ways in + / to +5;+. 3n this case, actual delivery cannot be made. Kowever, there wasconstructive delivery already upon the e ecution of the public instrument and upon the consent and a)reement ofthe parties.

4hile it is true that 4ilfredo was not in actual possession and control of the sub(ect tractor, his ri)ht of ownershipwas not divested from his default. 6either could it be said that %ibra was the owner because the mort)a)ee can notbecome the owner or convert and appropriate himself the property mort)a)ed.

. 4hen a third person purchases the mort)a)ed property, he automatically steps into the shoes of the ori)inalmort)a)or.

5. The payment of the chec8 was actually intended to e tin)uish the mort)a)e obli)ation so that the tractor couldbe released to the petitioner. The sale of the sub(ect tractor was already consummated when it was levied upon theby the sheriff. elac even 8new of the transfer of the property to &erfecto when it received summons. ?ven withthat, they still continued to sell the sub(ect tractor to !ntonio.


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PO ER CO--ERCIAL vs. CA (1&&7)

+ &ower Commercial and 3ndustrial $evelopment Corporation, an industrial asbestos manufacturer, needed abi))er office space and warehouse for its products. 9or this, it entered into a contract of sale with thespouses Reynaldo and !n)elita Luiambao "private respondents#.

2 &etitioner assumed, as part of the purchase price, the e istin) mort)a)e on the land. 3n full satisfaction,

Reynaldo paid &6G around /8.7 June + - Spouses a)ain mort)a)ed said land to &6G to )uarantee a loan of which was paid to spouses.

&etitioner a)reed to assume the payment of the loan.June 2B $eed of !bsolute Sale with !ssumption of Eort)a)e was e ecuted by the parties. >n the samedate, the mana)er of &ower Commercial submitted to &6G said deed with formal application of theassumption of mort)a)e.

5 !lmost months after said sale, &6G informed spouses that &ower Commercial failed to submit papersnecessary for the approval of the mort)a)e. Thus application for assumption was withdrawn. Theoutstandin) balance deemed due and demandable. &ower Commercial paid and sent a letter to &6G thatthere are people who are physically occupyin) their lot and it is their desire to e(ect them immediately.4ith that, they re1uest that their assumption of mort)a)e be )iven favorable consideration. &6G repliedand as8ed that &ower Commercial remit payments to cover interest and at least part of the principal.

B &ower Commercial then filed a case for rescission and dama)es before the RTC. &etitioner demandedreturn of payments it made on the )round that its assumption of mort)a)e was never approved.Subse1uently, the mort)a)e was closed and was bou)ht by &6G in the public auction.TC: failure of respondent spouses to deliver actual possession to petitioner entitled the petitioner torescind the sale.

0 C!: reversed@ deed of sale did not obli)ate the spouses to e(ect the lessees from the land as a condition of the sale, nor was the occupation by said lessees a violation of the warranty a)ainst eviction@ nosubstantial breach to (ustify rescission

3ssue: was there an effective symbolic deliveryM "important issue for sales#

Keld:

+ There was no e press stipulation in the contract that spouses will be )uaranteein) e(ectment of theoccupants althou)h there was a proviso )uaranteein) the peaceful possession by the buyer of the land.

2 Eost authorities consider transfer of ownership as the primary purpose of sale, delivery remains anindispensable re1uisite as our law does not admit the doctrine of transfer of property by mere consent.Civil Code provides that delivery can either be actual "+ / # or constructive "+ /0-+5;+#. Symbolicdelivery as a species of constructive delivery, effects the transfer of ownership throu)h the e ecution of apublic document. Gut if, notwithstandin) the e ecution of the instrument, the purchaser cannot have theen(oyment and material tenancy of the tin) and ma8e use of it himself or throu)h another in his name,because such tenancy and en(oyment are opposed by the interposition of another will, then fiction yieldsto reality the delivery has not been effected.

7 3n this case, delivery was effected throu)h the e ecution of deed. The lot sold had been placed under thecontrol of petitioner@ thus, the filin) of the e(ectment suit was subse1uently done. 3t si)nified that its newowner intended to obtain for itself and to terminate said occupants actual possession thereof. &riorphysical delivery or possession is not le)ally re1uired and the e ecution of the deed of sale is deemede1uivalent to delivery. This deed operates as a formal or symbolic delivery of the property sold andauthoriIes the buyer to use the document as proof of ownership. 6othin) more is re1uired. &etitiondenied.

BE9N -EYER = CO. vs YAN;CO

• Gehn Eeyer N Han)co entered into a contract of sale of 0; drums of CarabaoD Caustic Soda for &+;,;B7.These were shipped from 6ew Hor8 on board the steamship Chinese &rince, w c was detained by Gritishauthorities N + drums of caustic soda were removed


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• Han)co refused to accept delivery of the / remainin) drums on the )round that they were in bad order Nalso refused the optional offer of Gehn "waitin) for remainder of the shipment until it arrived# or the offerto substitute the + drums of caustic soda of similar )rade from Gehn*s stoc8 "not of the CarabaoDbrand#.

• Gehn sold, for the account of Han)co, 0; drums of caustic soda realiIin) &B,752, w c was deducted fromthe sellin) price of &+;,;B7 ma8in) up the amount of dama)es claimed by Gehn for alle)ed breach ofcontract.

• TC: 9or Han)co.

3ssue on place of delivery:

• ! specification in a contract relative to the payment of frei)ht can be ta8en to indicate the intention of theparties in re)ard to the place of delivery. 3f the buyer is to pay the frei)ht, it is reasonable to suppose thathe does so because the )oods become his at the point of shipment. >n the other hand, if the seller is topay the frei)ht, it can be inferred that it is the duty of the seller to have the )oods transported to theirultimate destination N that title does not pass until the )oods have reached their destination.

Contract also provided for c.i.f. Eanila, pagadero a)ainst delivery of documents.D 4hat does this meanM

• 3n Gritish contracts, c.i.f.D stands for costs, insurance N frei)ht. They si)nify that the price fi ed coversnot only the costs of the )oods but the e pense of frei)ht N insurance to be paid by the seller.

• 3n !merican mercantile contracts, the letters 9.>.G.D stands for 9ree on Goard w c means that the sellershall bear all e penses until the )oods ae delivered where they are to be delivered 9>GD at the point ofshipment or at the point of destination determines the time when property passes. Goth the terms cifD N

9>GD merely ma8e rules of presumption w c yield o proof of contrary intention to be ascertained by aconsideration of all the circumstances.

• 3n this case, the world EanilaD in con(unction with c.i.f.D must mean that the contract price, coverin)costs, insurance N frei)ht, si)nifies that delivery was to be made at Eanila. 3f Gehn Eeyer had seriouslythou)ht that place of delivery was 6ew Hor8, it would not have )one throu)h the trouble of ma8in)fruitless attempts to substitute the )oods but would have permitted the entire loss of the shipment to fallupon Han)co.

3ssue on time of delivery: The contract provided: Embarque : Earch, +/+BD but the merchandise was shipped onlyon !pril +2, +/+B.

C>6C% S3>6: The contract was for 0; drums of CarabaoD caustic soda "costs, insurance N frei)ht to be included#to be shipped durin) Earch +/+B, to be delivered at Eanila N paid for on delivery of the documents. The sodaoffered by Gehn was not of the CarabaoD brand N the merchandise was not shipped on Earch but !pril. Gehn hasnot proved performance on its part of the conditions set forth in the contract as it failed to deliver the )oodscontracted for. TK S, Han)co was rescind the contract of sale because of a breach in substantial particulars )oin)to the essence of the contract and so, Han)co is not liable. The vendee can demand the fulfillment of the contractbut as this is shown to be impossible, is relieved of his obli)ation.

J $ E?6T !993RE?$.

Rudolf Lietz, Inc. vs CA, Agapito Buriol, Tiziana Turatello, Paola Sani(Jal)19 Dec 2005 – Tinga *land leased to Italians and subsequently sold; area lesst an ! at!as in t e contractFacts:

1" Agapito Buriol o ned a parcel of unregistered land in #ala!an"2"$n 15 %ug 19&' Buriol entered into a lease agree!ent it" Flavia Turatello,TizianaTuratello, and Paola Sani, all Italians involving # "ectare o t e ro erty"+ease agree,ent !as or 25 years rene!able or anot er 25 years"


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-"T e Italians t en too. ossession o t e land a ter aying a do!n ay,ent o /10 00 0" T e le aseagree,ent !as reduced into !riting in Jan 19& "

" $n 1 o3 19&' Buriol sold t"e land to Rudolf Lietz Inc" or /-0 000" T e Deed o %bsolute4ale states t at t e land !easured $ "ectares, !ore or less " It alsodescri%ed t"e %oundaries o t e land"5" Lietz later discovered t"at Buriol o ned onl& ' "ectares !it # !ore covered

%& t"elease agree,ent" ence onl& ( "ectares ere actuall& delivered "'"+iet6 t en 7led a co, laint or %nnul,ent o +ease !it 8eco3ery o #ossession againsturiol andt e Italians" e alleged t at uriol sold to i, t e lot in e3ident bad ait and

,alice .no!ing t at e o!ned only ectares not 5"" T e trial court dis!issed t e co, laint and t e counterclai, o t e Italians or

da,ages"&" T e CA a)r!ed t e dis,issal" It eld t at under Article #$'*, Lietz is no longerentitled toa reduction in price"9"+iet6 a eals" e contends t at e is entitled to reduction under %rticle 15-9"

Issue: Is +iet6 entitled to a reduction in t e urc ase rice o t e lot because o t e reducedarea o t e ro erty deli3ered to i,:+eld:

o" nder %rticle 15 2 t ere s all be no reduction in t e urc ase rice e3en i t earea deli3ered is less t an t at stated in t e contract"

ecision: %,ore or less? !itre erence to its area does not t ereby i so acto ta.e all ris. o quantity in t e land"

T"e use of !ore or less/ or si!ilar ords in designating 0uantit& covers onl&a reasona%le e1cess or de2cienc& "

" 3"at reall& de2nes a piece of ground is not t"e area !entioned in itsdescription, %ut t"e%oundaries t"erein laid do n

as enclosing t e land and indicating its li,its" In a contract o sale o land in a ,ass it is!ell establis ed t at t especi2c %oundaries stated in t"e contract !ustcontrol over an& state!ent it"respect to t"e areacontained !it in its boundaries"

5" In t"is case, t"e sale is one !ade for a lu!p su! " T e Deed o %bsolute 4ales o!s t at t e arties agreed on t e urc ase rice on a redeter,ined area o 5

ectares !it in t e s eci7edboundaries and not based on a articular rate er area"'" In accordance !it Article #$'*, t"ere s"all %e no reduction in t"e purc"ase

price even if t"earea delivered to Lietz is less t"an t"at stated in t"econtract " T e ar ea it"in t"e%oundaries as stated in t"e contract s"allcontrol over t"e area agreed upon "

" +iet6 ad an ocular ins ection rior to t e er ection o t e contract" T us e gaineda air esti,ate o t e area o t e ro erty sold to i," %lso is subscri tion to t eDeed o %bsolute 4ale indicates isassent to t e correct descri tion o t e boundarieso t e ro erty"

La :Art. #$(-


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" T e obligation to deli3er t e t ing sold includes t at o lacing in t e control o t e 3endeeallt at is ,entioned in t e contract in con or,ity !it t e ollo!ing rules@I t e sale o realestate s ould be ,ade !it a state,ent o its area at t e rate o a certain rice or aunit o ,easure or nu,ber t e 3endor s all be obliged to deli3er to t e 3endee i t e latters ouldde,and it all t at ,ay a3e been stated in t e contract; but s ould t is benot ossible t e 3endee,ay c oose bet!een a ro ortional reduction o t e rice and

t e rescission o t e contract ro3idedt at in t e latter case t e lac. in t e area be notless t an oneAtent o t at stated" = = =

SALES DIGEST Consummation of Sale

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