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Case Doctrine

Ten Forty Realty & Development Corp vs. Cruz

The execution of Deed of Sale is not sufficient as delivery.

Ownership is transferred not by contract but by tradition or
delivery. Nowhere in the Civil Code is it provided that the
execution of a Deed of Sale is a conclusive presumption of
delivery of possession of a piece of real estate. The
execution of a public instrument gives rise only to a prima
facie presumption of delivery. Such presumption is
destroyed when the delivery is not effected, because of a
legal impediment. Such constructive or symbolic delivery,
being merely presumptive, was deemed negated by the
failure of the vendee to take actual possession of the land
sold. Disqualification from Ownership of Alienable Public
a. Rent is a civil fruit that belongs to the owner of the
property producing it by right of accession.

Equitorial vs. Mayfair

Ridad vs. Filipinas Investment

b. Ownership of the thing sold is a real right, which the

buyer acquires only upon the delivery to him in any of
the ways specified by law or in any other manner
signifying an agreement that the possession is
transferred from the vendor to the vendee. While the
execution of a public instrument of sale is recognized
by law as equivalent to delivery of the thing sold,
such constructive or symbolic delivery, being merely
presumptive, is deemed negated by the failure of the
vendee to take actual possession of the land sold.
The vendor of personal property sold on the installment
basis is precluded, after foreclosing the chattel mortgage on
the thing sold from having a recourse against the additional
security put up by a third party to guarantee the purchasers
performance of his obligation on the theory that to sustain
the same would overlook the fact that if the guarantor
should be compelled to pay the balance of the purchase

price, said guarantor will in turn be entitled to recover what

he has paid from the debtor-vendee, and ultimately it will be
the latter who will be made to bear the payment of the of
the balance of the price, despite the earlier foreclosure of
the chattel mortgage given by him, thereby indirectly
subverting the protection given the latter.

Spouses Dela Cruz vs. CA

If the vendor under such circumstance is prohibited from

having a recourse against the additional security for reasons
therein stated, there is no ground why such vendor should
not likewise be precluded from further extrajudicially
foreclosing the additional security put up by the vendees
themselves, as in the instant case, it being tantamount to a
further action 5 that would violate Article 1484 of the Civil
Code, for then is actually no between an additional security
put up by the vendee himself and such security put up by a
third party insofar as how the burden would ultimately fall
on the vendee himself is concerned.
The instant case is covered by the so-called "Recto Law",
now Art. 1484 of the New Civil Code, which provides: "In a
contract of sale of personal property the price of which is
payable in installments, the vendor may exercise any of the
following remedies: (1) Exact fulfillment of the obligation,
should the vendee fail to pay; (2) Cancel the sale, should the
vendees failure to pay cover two or more installments; (3)
Foreclose the chattel mortgage on the thing sold, if one has
been constituted, should the vendees failure to pay cover
two or more installments. In this case, he shall have no
further action against the purchaser to recover any unpaid
balance of the price. Any agreement to the contrary shall be
void." In this jurisdiction, the three (3) remedies provided for
in the "Recto Law" are alternative and not cumulative; the
exercise of one would preclude the other remedies.
Consequently, should the vendee-mortgagor default in the
payment of two or more of the agreed installments, the
vendor-mortgagee has the option to avail of any of these

three (3) remedies: either to exact fulfillment of the

obligation, to cancel the sale, or to foreclose the mortgage
on the purchased chattel, if one was constituted.

Leovillo Agustin vs. CA

It is thus clear that while ASIAN eventually succeeded in

taking possession of the mortgaged vehicle, it did not
pursue the foreclosure of the mortgage as shown by the fact
that no auction sale of the vehicle was ever conducted. As
we ruled in Filinvest Credit Corp. v. Phil. Acetylene Co., Inc.
(G.R. No. 50449, January 1982, 111 SCRA 421) "Under the
law, the delivery of possession of the mortgaged property to
the mortgagee, the herein appellee, can only operate to
extinguish appellants liability if the appellee had actually
caused the foreclosure sale of the mortgaged property when
it recovered possession thereof (Northern Motors, Inc. v.
Sapinoso, 33 SCRA 356 [1970]; Universal Motors Corp. v. Dy
Hian Tat, 28 SCRA 161 [1969]; Manila Motors Co., Inc. v.
Fernandez, 99 Phil. 782 [1956]). It is worth noting that it is
the fact of foreclosure and actual sale of the mortgaged
chattel that bar recovery by the vendor of any balance of
the purchasers outstanding obligation not satisfied by the
sale (New Civil Code, par. 3, Article 1484). As held by this
Court, if the vendor desisted, on his own initiative, from
consummating the auction sale, such desistance was a
timely disavowal of the remedy of foreclosure, and the
vendor can still sue for specific performance" (Industrial
Finance Corp. v. Tobias, 78 SCRA 28 [1977]; Radiowealth,
Inc. v. Lavin, L-18563, April 27, 1963, 7 SCRA 804; Pacific
Commercial Co. v. dela Rama, 72 Phil. 380 [1941]).
Consequently, in the case before Us, there being no actual
foreclosure of the mortgaged property, ASIAN is correct in
resorting to an ordinary action for collection of the unpaid
balance of the purchase price.
Where the mortgagor plainly refuses to deliver the chattel
subject of the mortgage upon his failure to pay two or more
installments, or if he conceals the chattel to place it beyond

Layug vs. IAC

the reach of the mortgagee, he may be held liable to pay

expenses as a result of the enforcement of the foreclosure.
It logically follows as a matter of common sense, that the
necessary expenses incurred in the prosecution by the
mortgagee of the action for replevin so that he can regain
possession of the chattel, should be borne by the mortgagor.
Recoverable expenses would, in our view, include expenses
properly incurred in effecting seizure of the chattel and
reasonable attorneys fees in prosecuting the action for
RA 6552 provides that "in all transactions or contracts
involving the sale or financing of real estate on installment
apartments, ..., where the buyer has paid at least two years
of installments, the buyer is entitled to the following rights
in case he defaults in the payment of succeeding
Grace Period
(a) To pay, without additional interest, the unpaid
installments due within the total grace period earned by him
which is hereby fixed at the rate of one month grace period
for every year of installment payments made: Provided ,
That this right shall be exercised by the buyer only once in
every five years of the life of the contract and its extensions,
if any;
Refund of "Cash Surrender Value"
(b) If the contract is cancelled, the seller shall refund to the
buyer the cash surrender value of the payments on the
property equivalent to fifty percent of the total payments
made and, after five years of installments, an additional five
per cent every year but not to exceed ninety per cent of the
total payments made; Provided, That the actual cancellation

Power Commercial Industrial Corp vs. CA

of the contract shall take place after thirty days from receipt
by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act and upon full
payment of the cash surrender value to the buyer.
Although most authorities consider transfer of ownership as
the primary purpose of sale, delivery remains an
indispensable requisite as our law does not admit the
doctrine of transfer of property by mere consent.
in order that the symbolic delivery may produce the effect of
tradition, it is necessary that the vendor shall have had such
control over the thing sold tha its material delivery could
have been made. It is not enough to confer upon the
purchaser the ownership and the right of possession. The
thing sold must be placed in his control. When there is no
impediment whatever to prevent the thing sold passing into
the tenancy of the purchaser by the sole will of the vendor,
symbolic delivery through the execution of a public
instrument is sufficient. But if, notwithstanding the
execution of the instrument, the purchaser cannot have the
enjoyment and material tenancy of the thing and make use
of it himself or through another in his name, because such
tenancy and enjoyment are opposed by the interposition of
another will, then fiction yields to reality -- the delivery has
not been effected.