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Case Report by: Palad, Nolibelle Anne P.

Equatorial Realty Development, Inc. vs. Mayfair Theater, Inc.
G.R. No. 133!", Novem#er $1, $%%1
Panganiban, J.
Doctrine& Rent is a civil fruit that belongs to the owner of the property
producing it by right of accession. Consequently and ordinarily, the rentals that fell
due from the time of the perfection of the sale to petitioner until its rescission by fnal
judgment should belong to the owner of the property during that period.||
'acts& Mayfair Theater, nc. was a lessee of portions of a building owned by
Car!elo " #auer!ann, nc. Their lease contracts contained a provision
granting Mayfair a right of first refusal to purchase the sub$ect properties.
%owever, before the contracts ended, the sub$ect properties were sold by
Car!elo to &'uatorial Realty (evelop!ent, nc. which pro!pted Mayfair to
file a case for the annul!ent of the (eed of Absolute )ale between Car!elo
and &'uatorial, specific perfor!ance and da!ages. n *++,, the Court ruled
in favor of Mayfair. #arely five !onths after Mayfair had sub!itted its Motion
for &-ecution, &'uatorial filed an action for collection of su! of !oney
against Mayfair clai!ing pay!ent of rentals or reasonable co!pensation for
the defendant.s use of the sub$ect pre!ises after its lease contracts had
e-pired. The lower court debun/ed the clai! of &'uatorial for unpaid bac/
rentals, holding that the rescission of the (eed of Absolute )ale in the
!other case did not confer on &'uatorial any vested or residual propriety
rights, even in e-pectancy. t further ruled that the Court categorically
stated that the (eed of Absolute )ale had been rescinded sub$ecting the
present co!plaint to res judicata. %ence, &'uatorial filed the present
Issue& 0hether &'uatorial is entitled to bac/ rentals.
(el)& N1. Theoretically, a rescissible contract is valid until rescinded. However,
this general principle is not decisive to the issue of whether Equatorial ever
acquired the right to collect rentals. What is decisive is the civil law rule that
ownership is acquired, not by mere agreement, but by delivery. Under the factual
environment of this controversy as found by this Court in the mother
case, Equatorial was never put in actual and efective control or possession of
the property because of Mayfair's timely objection. In the mother case, this Court
categorically denied the payment of interest, a fruit of ownership. By the same
token, rentals, another fruit of ownership, cannot be granted without mocking this
Court's en banc Decision, which had long become fnal.||