Power Commercial and Industrial Corp. vs.

Court of Appeals
G.R. No. 119745. June 20, 1997
Doctrine:
There is an effective constructive (symbolic) delivery through the execution of a public
document. Presence of lessees does not constitute as an impediment in the delivery of the
subject property.
Facts:
Petitioner Power Commercial & Industrial Corp. entered into a contract of sale with
spouses Quiambao, herein private respondents. Contract involved a 612 sq. meter parcel of
land located at the corner of Bagtican and Saint Paul streets in Makati. Parties agreed that
petitioner was to assume the mortgages of private respondent on the subject land with
Philippine National Bank (PNB). A Deed of Absolute Sale with Assumption of Mortgages was
executed. Petitioner Power Commercial Corp. failed to settle the outstanding mortgage debt
contracted by the spouses on the land, thus it failed to undertake proper action to evict lessees
on the lot after it filed a suit for ejectment.
Petitioner filed in the RTC of Pasig, a civil case against the private respondent spouses
for recission of the contract of sale as well as damages demanding the return of payment it
made on the ground that assumption of mortgage was never approved and there was a failure
to deliver subject parcel of land. While the case was pending, subject lot was foreclosed and
bought by PNB at a public auction. Trial court ruled in favor of petitioner obliging PNB to return
the payments made by petitioner. On appeal by respondent spouses and PNB, CA reversed the
RTCs decision. Hence, this petition. Petitioner alleged that private respondents failed to deliver
subject parcel of land due to the presence of occupants on the said lot.
Issue: Whether or not the contract of sale was recissible for failure to deliver subject lot by the
private respondents?
Held:
SC upheld the decision of the CA disagreeing with petitioners allegation that the
respondent spouses failed to deliver the lot sold. There was an effective symbolic delivery or
transfer of ownership of the property sold through the execution of a public document (Deed of
Absolute Sale). Prior physical possession is not required. Presence of lessees does not
constitute an encumbrance of the land, nor does it deprive petitioner of its control thereof.