Delivery of the thing with fruits and accessions

Art 1537. The vendor is bound to deliver the thing sold and its accessions and accessories in the
condition in which they were upon the perfection of the contract

All the fruits shall pertain to the vendee from the day on which the contract was perfected.
(1468a)

Art 1163. Every person obliged to give something is also obliged to take care of it with the
proper diligence of a good father of a family, unless the law or the stipulation of the parties
requires another standard of care. (1094a)

Art 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver
it arises. However, he shall acquire no real right over it until the same has been delivered to him.
(1095a)

Art 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof. (n)

Art 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the
thing which is the object of the sale. (1461a)

Art 1521. Whether it is for the buyer to take possession of the goods or for the seller to send
them to the buyer is a question depending in each case on the contract, express or implied,
between the parties. Apart from any such contract, express or implied or usage of trade to the
contrary, the place of delivery is the seller’s place of business if he has one, and if not, his
residence; but in case of a contract of sale of specific goods, which to the knowledge of the
parties when the contract or the sale was made were in some other place, then that place is the
place of delivery.

Where by a contract of sale the seller is bound to send the goods to the buyer, but no time for
sending them is fixed, the seller is bound to send them within a reasonable time.

Where the goods at the time of sale are in the possession of a third person, the seller has not
fulfilled his obligation to deliver to the buyer unless and until such third person acknowledges to
the buyer that he holds the goods on the buyer’s behalf.

Demand or tender of delivery may be treated as ineffectual unless made at a reasonable hour.
What is a reasonable hour is a question of fact.

Unless otherwise agreed, the expenses of and incidental to putting the goods into a deliverable
state must be borne by the seller. (n)

1
 What to deliver (1537, Thing sold +
1164) Accessories Accessions Fruits (retroactive)
Who delivers to whom Vendor to vendee
How to deliver, Vendee to take possession Vendor to send to vendee
1. as stipulated in
contract, ex, im
2. as usage of
trade (1521)
Where to deliver, 1. vendor’s place of business, or if none
1. as stipulated in 2. vendor’s residence
contract, ex, im In case of sale of specific goods, place where they are when parties
2. as usage of agreed to contract
trade (1521)
When to deliver (1521) - If none stipulated, within a reasonable time (vor to vee)
- At a reasonable hour (question of fact)

1. Place, time, and manner of delivery

Art 1524. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him
the price, or if no period for the payment has been fixed in the contract

Art 1169. Those obliged to deliver or to do something incur in delay from the time the oblige
judicially or extra-judicially demands from them the fulfillment of their obligation

Art 1521. See previous page

Art 1523. (2) Unless otherwise authorized by the buyer, the seller must make such contract with
the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the
goods and the other circumstances of the case. If the seller omits to do so, and the goods are
lost or damaged in the course of transit, the buyer may decline to treat the delivery to the
carrier as a delivery to himself, or may hold the seller responsible in the damages.

(3) Unless otherwise agreed, where goods are sent by the seller to the buyer under
circumstances in which the seller knows or ought to know that it is usual to insure, the seller
must give such notice to the buyer as may enable him to insure them during their transit, and, if
the seller fails to do so, the goods shall be deemed to be at his risk during such transit. (n)

Art 1537. See previous page

Art 1164. See previous page

Art 443. He who receives the fruits has the obligation to pay the expenses made by a third
person in their production, gathering, and preservation. (356)

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 a. Reasonable time

Smith, Bell & Co, piff-ant v Vicente Sotelo Matti, def-ant (1922, Romualdez, Appeal, CFI)

- 1918 Aug: Sotelo and Smith contract

o Smith to sell
 Two steel tanks, 21 thou, delivery from NY to Mla within 3 or 4 mos
 Arrived 27 Apr 1919
 Two expellers, 50 thou at 25 thou each, SF to Mla in Sep or ASAP
 26 Oct 1918
 Two electric motors, 4 thou at 2 thou each, w/in 90 days, not geed
 27 Feb 1919
o Smith not responsible for delays caused by fires, riots, strikes, force majeure
beyond control of seller, reps
- Smith notified Sotelo of arrival
- Sotelo refused to receive and pay
- CFI: Smith v Sotelo: immediate notice of arrival, instructions as to delivery, Sotelo
refused. Goods in good condition
o Sotelo: denied allegations; was notified May 1919. Sotelo made contracts as
manager of intervenor Mla Oil Refining and By-Products. Counter-claim:
damages bc of delay
o Sotelo to receive expellers but not tanks and motors
- SC:
o No definite date fixed for delivery
 Contract stipulations: as soon as possible, not guaranteed; subj to US
gov’t requirements and confirmation of manufacturers; not responsible
for delays…
 Oral evidence do not establish fixing of definite date/pd
 Contracts executed at time of World War
 Rigid restrictions on export in US hence the clauses
 Parties knew of contingency of US not allowing export
o Therefore, obligation conditional
 Uncertainty consists in the arrival or non-arrival of the day
 Export in this case contingent upon will of third persons
 Certificate or priority and permission of US
 Obligor deemed to have sufficiently performed part of obligation if he
has done all that was in his power, even if the condition has not been
fulfilled in reality—fictitous performance not expressly authorized but
not expressly disallowed either || Manresa
 Efforts in this case proved. Even succeeded in importing
 Time not fixed, time not essential (immediate delivery not intended)
 BUT delivery must be made within a reasonable time
 When contract provides for delivery as soon as possible, seller
entitled to reasonable time, in view of all circumstances

3
 o Such as necessities of manufacture, putting goods in
condition for delivery
o Term does not mean immediately or that seller must
stop all other work and devote himself to that order
 But seller must nevertheless act with all
reasonable diligence or without unreasonable
delay
o As soon as possible = goods should be sent as soon as
seller could possibly send them
o Questions as to what is reasonable determined by
circumstances attending the particular transaction
 Such as character of goods, purpose for which
intended, ability of seller to produce goods,
facilities available, distance goods must be
carried, usual course of business in trade
 Reasonable time determined by court
o Here, consider that piff did all within its power to effect
delivery, and immediately notified def of arrival
o Therefore, delivery made within a reasonable time
o Sotelo solely and directly liable
 Contracts signed by Sotelo in his individual capacity and own name, not
as agent for intervenor
 No indication in contract
o Therefore, Smith entitled to relief
o Soto to accept and receive tanks, expellers, motors. Pay 96,000 plus int from
date of filing
o MODIFIED

b. When time is of the essence

Andres Soler, piff-ee v Edward Chesley, def-ant (1922, Romualdez, Appeal)

- 1918 March: Soler and Wm H Anderson & Co agreement

o Anderson to deliver coconut oil machinery
o Ordered by cable
o Soler to purchase coconut oil machinery
o Coconut oil machinery:
 4 Anderson oil expellers
 4 rotary oil pumps
 Six and nine inch metal conveyors for expellers
 1 vertical triplex pump
 1 bauer ball-bearing motor-driven attrition mill
 1 shriver filter press
 1 buckeys cooker

4
  Sufficient meters of standard chain elevator
o To be invoiced at manufacturers’ rpice + all other charges (freight, insurance,
int, arrester, landing, delivery, buying commission of 5%)
o 50% deposit to be made upon arrival of machinery; balance 90 days after
delivery of machinery
o If Soler fails to comply with terms, Anderson may terminate contract; payments
foreited.
o Title to machinery to remain with Anderson until full payment made
o Agreement contingent upon strikes, fire, accdients, extraordinary shipping,
other conditions on account of war and other causes unavoidable or beyond
control of Anderson
o Quotations approximated and subject to change without notice
 No guarantee as to price and delivery
 Shipment will be made by first possible opportunity
- 1918 November: Soler sold to Chesley all rts and int in contract of sale with Anderson in
a notarized document containing the ff:
o Description of machinery
o Part of machinery on the way to Manila
o Other part already in Manila
o Price yet to be determined
o Chesley to assume obligation to pay Anderson and Solar to be relieved
 Chesley subrogated into rights and obligations of Soler
o Anderson has knowledge of sale and subrogation, Anderson conforms
o Chesley to pay Soler difference bet amount of invoice and 100,000
(consideration of contract) upon arrival of machinery
 If any part of machinery lacking, Chesley may deduct from amount
received by Soler from Chesley
o Sgd by Anderson
- 1918 Nov: only filter press, cooker, chain in Manila. Most important parts—expellers,
mills, not yet in Manila
- Shipped 12 Dec; 1919 Feb, oil expellers arrived
- Jan; 1919 Mar, motors
- Jan; 1919 Apr, machinery
- Feb; 1919 Aug, grinding mills
- Chesley received and paid for them under protest for not having been delivered within
pds stipulated
- Chesley’s atty-in-fact wrote Soler: 1918 Nov contract rescinded
o Parts claimed in contract to be on their way not on their way
- CFI: Soler: Chesley to pay him difference in contract (30,000)
o Chesley: general denial. Contract stipulated part already in Mla, part on the
way. Was induced. Signed bc made to believe he will have machinery
immediately or within short time. Complied with contract and paid Anderson.
Suffered damages
o Chesley liable for difference plus int; Soler not liable

5
 - SC:
o Chesley: time essential element in agreement
o Arrival of machinery within reasonably short time one of the determining
elements of Chesley’s consent
 As evidenced by
 Piff’s consenting to contract because he himself believed that
the machinery would arrive in time
 Chesley’s insistence on guaranty as to arrival be stated in
contract
 Chesley’s repeated complaints and protests after payments
 Chesley’s letter
 The fact that the machinery were stated to be on the way
o CONDITION of the contract
 Chesley had no reason to doubt machinery on the way
 Fact that Soler had no control of prompt transpo does not relieve him
from making good contract guaranty
 Should have known that if rights not transferred, Soler himself
could not have charged Anderson who did not guarantee elivery
nor amount
 Soler bound himself in favor of Chesley for more than what
Anderson bound themselves in favor of Soler
o Although in good faith (letter of Anderson re: shipment)
o Still responsible for obligation from contract
 He who contracts and assumes obligation
presumed to know circumstances under which
said obligation can be complied with
 True, not stated in contract: specific date of arrival
 But taking into consideration that they were on the way
 Reasonable to expect arrival to be in January
o Since expellers arrived Feb when shipped Dec
o Others expected to arrive Jan when shipped Nov
 Soler relieved from obligation of paying price of machinery
 BUT SOLER NOT RELIEVED from obligation as to arrival of machinery
o Therefore, Soler failed to comply with obligation
 Therefore, no right to compel Chesley to pay sum in complaint
o No rescission may lie bc Chesley already sold machinery to Ph Refining Co
o REVERSED. Chesley not liable

Republic, piff-ee, v Litton & Co, Central Surety Co, def-ant (1953, Paras, appeal, CFI)

- Litton won bid for padlocks and supplies

o Circular proposal: articles for election purposes, bidder required to stated
shortest time of deliver which should not be later than Mar 1, 46. Deliveries
made before Mar 1 preferred
o Litton 12 Dec letter with bid: conditions: license and shipment

6
 o Litton informed that bid would be accepted if conditions deleted
o Litton 15 Dec letter to purchasing agent: arrival before Mar 1 (~Feb)
 Republic to give certification that padlocks urgently needed to warrant
early issuance of license
- Padlock contract:
o 22 Dec 1945: Republic and Litton contract
 Litton to deliver 96,000 padlocks, 1.87 each
 On or before 1946 March
o Padlocks to be used for elections, 23 Apr 46
o 3 Jan 46: Central Surety Co, Inc executed surety bond in favor of Republic to
guarantee and secure obligation, 35,904
o 8 Apr 1946: Litton delivered 34,200 padlocks. 61,800 undelivered
 Republic paid full for the delivered
 But deducted 1/10 of one percent per day of delay || contract, par 4:
important conditions
o Republic forced to make open market purchases; incurred 176,243.41loss and
damages (difference bet Litton amount and open market)
o Republic demanded payment but defs did not pay
- School supplies contract
o 26 Dec 45: Republic and Litton contract
 Litton to deliver indelible, lead pencils, ink, pen points, chalks, clips, etc
 For 25,979.55
 On or before 1946 March
o Also secured by 3 Jan agreement for 4,700
o Litton also failed to deliver
 Only 2,000 paper clips delivered
 So republic purchased in open market
o Republic claims loss and damages of 20,164.17
- Delayed bc: vessel deviated to Shanghai upon order of War Shippping Commission, one
arrived Apr 1, last stranded on Bonin Islands and cargo transferred reached Mla five mos
later
o Republic bought supplies from breakwater, at black market prices, therefore
expensive
- CFI: Republic v defs, solidarily: damages. Counterclaim be offset against damages
o Litton: contracts not real contracts and do not express real agreement.
Agreement was for Litton to deliver should it obtain shipping priority and
necessary export license to bring articles from US; Central agreed under same
terms; failure to deliver attributable to force majeure. Purchases made by
Republic of exorbitant prices
 Not liable. Delivered padlocks after elections. Republic did not pay
them. Counterclaim
o Central: not liable. Claim barred by date on bond
o Litton liable, but offset damages v counterclaim
o Litton obliged to obtain license and space; Republic only friendly assistance

7
- SC:
o Litton: obligation conditional as evidenced by letter with bid: shipment during
month of Jan, provided we are able to obtain export license and shipping space,
and provided that given award three days from today
o Litton undertook to deliver articles not later than Mar 1. Obligation not
conditional
 Evidenced by
 Circular Proposal: articles needed for elections. Deliveries on or
before Mar 1 preferred
 Dec 15 letter: certification to warrant early issuance
 Subsequent two performance bonds: delivery to be made not
later than Mar 1, 46
o Negates contingency contention
 Feb 28 letter: extension of time
 Paragraph 2 of important conditions in contract: the stipulated
delivery period shall not be exceeded. Should there be delay to
due to act of Gov’t or force majeure, agent may grant
reasonable time extension
o Republic not obliged to assist in securing license
 Assistance does not prove contract conditional
 That license issued in name of Republic does not show that it was its
obligation to secure same
 No delay as imputed by Litton
 Also, no export license required as to stationery. Only padlocks
o Republic free to impose penalty of percentage and open market purchase
 Percentage: delay of delivery
 Open market: delay and/or failure of delivery
o No mutual mistake as to failure to foresee impossibility of compliance for causes
beyond control
 Litton an experienced businessman and aware of difficulties and
restrictions in import, export
o Damages reduced bc Republic purchased at black market prices, over and above
ceiling rates fixed by Gov’t
 But reduction to no less than 90,000 bc Litton failed to minimize loss
and protect self by purchasing articles himself, at prices lower than
those paid for by Republic in open market purchases
o AFFIRMED. Modified as to amount of damages. Costs

8
 c. When vendor not bound to deliver

Art 1524. The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him
the price, or if no period for the payment has been fixed in the contract (1466)

Art 1536. The vendor is not bound to deliver the thing sold in case the vendee should lose the
right to make use of the term as provided in Art 1198. (1467a)

Art 1198. The dor shall lose every right to make use of the period:

(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a
guaranty or security for the debt;
(2) When he does not furnish to the cor the guaranties or securities which he has
promised;
(3) When by his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactory
(4) When the dor violates any undertaking, in consideration of which the cor agreed to the
period
(5) When the dor attempts to abscond

d. Acceptance not a condition to delivery

La Fuerza, Inc v CA, Associated Engrg Co, Inc (1968, review by certiorari, Concepcion)

- Associated Engrg engaged in manufacture and installation of conveyor belts

o Antonio Co, manager
- La Fuerza engaged in manufacture of wines
o Lim, pres, gen mgr
- Co called Lim. Told him of his visit of La Fuerza Rizal plant
o Impressed and told Lim that size needed conveyor belt for empty bottles from
storage to washers in production room
o Offered services to increase production of La Fuerza
- Lim asked Co to make offer in writing
- 4 Feb 1960 letter, not acted upon until
- 11 Feb 1960 Co inquiry. Lim sgd letter under word ‘confirmation’ and noted ‘all
specifications shall be in strict accordance with the approved plan made part of this
agreement hereof’
- Upon demand, Lim paid downpayment of 5,000
- Associated prepared premises, dug holes
o Delivered 110’26” of conveyor belt, 3750
o 190’, 4500
o Balance: 8,250, to be paid upon completion of installation
- Works finished May 1960, with five trial runs culminating July
o Trial runs found unsatisfactory. Bottles collided, jumped off belt, broken;
sluggish flow

9
 o Defects not remedied
- La Fuerza refused to pay upon billing due to non-remedy
- CFI: Associated: recovery of 8thou, fees
o La Fuerza: conveyors did not meet conditions & ‘”…warrantings” (warranties?)’;
counterclaim; rescind contract; refund
o Contract rescinded. Refund and costs. Remove conveyor
- CA: Affirmed
- CA MR: reversed and set aside
o La Fuerza’s right of action to rescind after delivery prescribed || 1571, CC: 6
mos. La Fuerza did not demand rescission until filing of complaint, ten mos after
installation of conveyor (Apr 61 v May 60)
- SC:
o La Fuerza:
 No delivery yet—delivery = conveyor to meet need of system that
would mechanically transport empty bottles from storage room to
bottle workers in production room thus increasing prod and efficiency
 If there was a delivery, 6 mo prescription in 1571 refers to pd within
which La Fuerza may bring acton to demand compliance of warranty
against hidden defects and not action for rescission
o Conveyor belts already delivered
 Conveyors already actually in possession and control
 La Fuerza’s failure to express whether they accept or reject conveyors
does not detract from fact in next preceding bullet
o Therefore, prescription in 1571 started to run
 1571 applicable || Art 1714: pertinent provisions on warranty of title
against hidden defect in contract of sale applicable to contract for a
piece of work
 1571 sales provision, therefore delivery in 1571 should be construed in
light of provisions on sales
 || 1497: delivery when thing placed in control and possession of
vee
 1566, 1567 covered by 1571 prescription: if thing sold has hidden faults,
defects, vor shall be responsible therefore and vee may elect bet
withdrawing from contract and demanding proportional reduction of
price, with damages
 Here, La Fuerza chose rescission
 BUT chose to rescind 10 mos later
o Beyond 1571 6 mos
 Prescription || public int: status of relations bet vor and vee be not left
in condition of uncertainty for an unreasonable length of time, which
would be the case if lifetime or fight to rescind were four years
o AFFIRMED

10
 2. Sale of goods

Art 1522. Where the seller delivers to the buyer a quantity of goods less than what he
contracted to sell, the buyer may reject them, but if the buyer accepts or retains the goods so
delivered, knowing that the seller is not going to perform the contract in full, he must pay for
them at the contract rate. If, however, the buyer has used or disposed of the goods delivered
before he knows that the seller is not going to perform his contract in full, the buyer shall not be
liable for more than the fair value to him of the goods so received.

Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the
buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the
whole of the so delivered, he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a
different description not included in the contract, the buyer may accept the goods which are in
accordance with the contract and reject the rest.

In the preceding two paragraphs, if the subject matter is indivisible, the buyer may reject the
whole of the goods.

The provisions of this article are subject to any usage of trade, special agreement, or course of
dealing between the parties. (n)

Art 1537. The vendor is bound to deliver the thing sold and its accessions and accessories in the
condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee from the day on which the contract was perfected

Art 1480. Any injury to or benefit from the thing sold, after the contract has been perfected,
from the moment of the perfection of the contract to the time of delivery shall be governed by
Articles 1163 to 1165, and 12621.

This rule shall apply to the sale of fungible things, made independently and for the single price,
or without consideration of their weight, number, or measure.

1
1163: Every person obliged to give something is also obliged to take care of it with the proper diligence
of a good father of a family, unless the law or the stipulation of the parties requires another standard of
care
1164: The cor has a right to the fruits of the thing from the time the obligation to deliver it arises.
However, he shall acquire no real right over it until the same has been delivered to him
1165: When what is to be delivered is a determinate thing, the cor, in addition to the rt granted to him by
1170 (damages in case of fraud, negligence, delay, tenor), may compel the dor to make the delivery
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of
the dor
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have
the same interest, he shall be responsible for fortuitous event until he has effected the delivery
1262: An obligation which consists in the delivery of a determinate thing shall be extinguished if it should
be lost or destroyed without the fault of the dor, and before he has incurred in delay
When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does not
extinguish the obligation, and he shall be responsible for damages. The same rule applies when the nature
of the obligation requires the assumption of risk (1182a)

11
Should fungible things be sold for a price fixed according to weight, number or measure, the
risk shall not be imputed to the vendee until they have been weighed, counted or measured,
and delivered, unless the latter has incurred in delay.

a. Delivery of wrong quantity

Art 1522.

Seller delivers less than what is contracted Buyer may reject

Buyer may accept Buyer may
and pay at contract accept/use/dispose
rate and not be liable for
IF he knows seller more than fair value
not to perform in full IF he does not know
seller not to perform
in full
Seller delivers more than what is contracted Buyer may accept contracted goods
and reject rest
Buyer may accept all
And pay at contract rate
If indivisible, buyer may reject all
Seller delivers mixed goods—contracted and Buyer may accept goods and reject the rest
not [Buyer may accept all and pay || contract]?
If indivisible, buyer may reject all

b. Delivery by installments

Art 1583. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof
by installments.

Where there is a contract of sale of goods to be delivered by stated installments, which are to
be separately paid for,
and the seller makes defective deliveries in respect of one or more installments,
or the buyer neglects or refuses without just cause to take delivery of or pay for one or more
installments
it depends in each case on the terms of the contract and the circumstances of the case, whether
the breach of the contract is so material as to justify the injured party in refusing to proceed
further and suing for damages for breach of the entire contract,
or whether the breach is severable,
giving rise to a claim for compensation but not a right to treat the whole contract as broken

3. Sale of immovable

Art 1471. If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.

12
Art 1543. The actions arising from Articles 15392 and 15423 shall prescribe in six months,
counted from the day of delivery.

Leodegario Azarraga, piff-ee, v Maria Gay, def-ant (1928, Villamor, Appeal)

- Azarraga sold to Gay two parcels of land

o In public document, 17 Jan 21
o For 47,000
o Payable in installments
 5,000 at time of signing
 20,000 upon delivery of Torrens of first parcel
 10,000 upon delivery of second
 12,000 a year after second title delivered
- Second delivered but no payment, not even a year after
o Gay: bought parcels believing they were not less than 200 ha
 But Azarraga knew parcel 2 60 ha only
 Azarraga made Gay believe it was 98 ha
 Was induced to pay 47,000 for two parcels
 Which Azarraga claimed to be not less than 200 ha
- Gay went to parcels in question to inspect them; made own calculations as to area
before execution of contract;
- Azarraga also delivered documents covering land he was trying to sell—70 ha
- Gay’s own lawyer prepared documents
- CFI: Azarraga: collection of sum of 22,000 plus int; sale made for lump sum, not per ha.
Claim for damages prescribed

2
The obligation to deliver the thing sold includes that of placing in the control of the vendee all that is
mentioned in the contract, in conformity with the following rules:
If the sale of real estate should be made with a statement of its are, at the rate of a certain price for a unit
of measure or number, the vor shall be obliged to deliver to the vendee, if the latter should demand it, all
that may have been stated in the contract; but should this be not possible, the vendee may choose
between a proportional reduction of the price and the rescission of the contract, provided that, in the
latter case, the lack in the area be not less than one-tenth of that stated.
The same shall be don, even when the area is the same, if any part of the immovable is not of the quality
specified in the contract
The rescission in this case shall only take place at the will of the vee, when the inferior value of the thing
sold exceeds one-tenth of the price agreed upon
Nevertheless, if the vee would not have bought the immovable had he known of its smaller area or
inferior quality, he may rescind the sale
3
In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure
or number, there shall be no increase or decrease of the price, although there be a greater or lesser areas
or number than that stated in the contract.
The same rule shall be applied when two or more immovable are sold for a single price; but if, besides
mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number
should be designated in the contract, the vendor shall be bound to deliver all that is included within said
boundaries, even when it exceeds the area or number specified in the contract; and should he not be able
to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number,
unless the contract is rescinded because the vendee does not accede to the failure to deliver what has
been stipulated (1471)

13
 o Gay: Azarraga misrepresented area of land, entitled to reduction in price in
proportion to area lacking (price must be 38,000 only); paid 4,000 other than
amts claimed; never refused to pay reduced price. Cross-complaint: 15thou
o Lump sum agreement. No fraud. Gay liable. Cross-complaint dismissed
- SC: through bill of exceptions
o Gay: was deceived, if not, at least mistaken
o No deception
 || evidence:
 Gay went to parcels in question to inspect them; made own
calculations as to area before execution of contract;
 Azarraga also delivered documents covering land he was trying
to sell—70 ha, 1920?
 Gay’s own lawyer prepared documents, 1924?
 No evidence that Azarraga made false representation as to area
o Even if there were such reps, Gay accepted such
representations at her own risk; only one responsible
for consequences of her inexcusable credulousness
 Law allows considerable latitude to seller’s
statements or dealer’s talk; experience teaches
that it is exceedingly risky to accept it at its face
value || Songco v Sellner
 Gay had opportunity to appraise self of
condition of land which she purchased
and was not prevented from doing so.
Knew of 70 ha area
o || Songco: when purchaser proceeds to make
investigations by himself, and the vor does nothing to
prevent such investigation from being as complete as
the former might wish, the purchaser cannot later
allege that the vendor made false reps
o || Shappirio v Goldberg: Misreps by a vor of real
property with reference to its area are not actionable,
where a correct description of the property was given in
the deed and recorded chain of title, which the
purhcaser’s agent undertook to investigate and report
upon, and the vor made no effort to prevent full
investigation
 Correspondence bet A and G: G acknowledges debt. Asks for
extensions. No allusion to lack of area nor any complaint as to
deceit
o Reduction of price due on second parcel, proportional price of area, not
sanctioned by law
 Parties agreed to lump sum payment
 Parcels defined by boundaries

14
 1471 applicable: in case of sale of real estate for a lump sum and not at
rate of specified price for each unit of measure, there shall be no
increase or decrease of the price even if the area found more or less
than that stated in contract…. (see footnote 3, p 13)
 Manresa:
o if sale made for price per unit, consideration of contract
is number of such units—thing purchased as
determined by stipulated number of units
o If sale made for lump sum, consideration: object sold,
independent of its number or measure—thing as
determined by stipulated boundaries. A determinate ob
o 1471 concerns difference of delivery of determinate
objects from delivery of things sold for price per unit of
measure
 Determinate obj delivery, 2 possible cases:
o Determinate obj delivered as
stipulated—everything within
boundaries bc entirety thereof
distinguishes the determinate
object
o Entirety impaired in delivery by
failing to deliver to purchaser
something included within
boundaries
 First case is dealt with by first
paragraph and first clause of second
paragraph of 1471.
 Second case a necessary consequence
of the first. Dealt with in second clause
of second paragraph
o Rule, first case: whether or not the object of sale be one
realty for a lump sum or two or more for a single price
also a lump sum, and consequently, not for so much per
unit of measure or number, there shall be no increase
or decrease in the price even if the area be found to be
more or less than that stated in the contract
o Rule, second case: whether or not the object of the sale
be one realty for a lump sum or two or more for a single
price also a lump sum, and consequently not at the rate
of a specified price for each unit of measure or number,
the vendor shall be bound to deliver everything that is
included within the boundaries stated, although it may
exceed the area or number expressed in the contract; in
case he cannot deliver it, the purchaser shall have the

15
 right to either reduce the price proportionately to what
is lacking of the area or to rescind contract at his option
 If vor has to deliver area greater than that in
contract, no excess of area, bc in excess of
what? Area not really taken into account in
entering into contract inasmuch as parties
made neither amt of price nor efficacy of
contract to depend on number of units
 Area written in to fulfil formal requisite
 Not condition essential to contract
 Remember nature of contract of sale of definite
object
 If whole within boundaries not delivered,
consideration not delivered. Therefore, may
rescind at his option (or reduce)
o Rules might have been easier to understand if not so
awkwardly split into such paragraphs now
o Price of determinate obj determined in relation to it and
not the number of units it contains; hence, the greater
or lesser area cannot influence the increase or decrease
of the price agreed upon
 Manresa on contrary view/diff interpretations by others: that
par 2 refers to vor failing to deliver all that is included in
boundary and suffering effects of either nullity or reduction
o Situation contemplated by others: property has more
area than stipulated, nothing can be claimed by vor who
loses value of excess; if less area, vor loses also bc either
price is reduced or contract annulled. Injustice
o Manresa on above: no injustice. So long as vor can
deliver and delivers all land included within boundaries,
no claim on either part may arise. Vor sold everything
within boundaries and this is all the purchaser has paid
or must pay for.
 Therefore, solution in article just and logical—
annul or reduce price
 Manresa’s rule on second paragraph, relied upon by Gay, inapplicable
inasmuch as all land included within boundaries of parcels sold
delivered in its entirety to Gay. No division of land
 Determinate obj already delivered in its entirety as obligated
o Therefore, no complaining, pls
o AFFIRMED

16
 a. Where price is at certain rate per unit of measure

Art 1539. The obligation to deliver the thing sold includes that of placing in the control of the
vendee all that is mentioned in the contract, in conformity with the following rules:

If the sale of real estate should be made with a statement of its are, at the rate of a certain price
for a unit of measure or number, the vor shall be obliged to deliver to the vendee, if the latter
should demand it, all that may have been stated in the contract; but should this be not possible,
the vendee may choose between a proportional reduction of the price and the rescission of the
contract, provided that, in the latter case, the lack in the area be not less than one-tenth of that
stated.

The same shall be done, even when the area is the same, if any part of the immovable is not of
the quality specified in the contract

The rescission in this case shall only take place at the will of the vee, when the inferior value of
the thing sold exceeds one-tenth of the price agreed upon

Nevertheless, if the vee would not have bought the immovable had he known of its smaller area
or inferior quality, he may rescind the sale

Art 1540. If, in the case of the preceding article, there is a greater area or number in the
immovable than that stated in the contract, the vee may accept the area included in the
contract, and reject the rest. If he accepts the whole area, he must pay for the same at the
contract rate. (1470a)

b. Sale for a lump sum

Art 1542. In the sale of real estate, made for a lump sum and not at the rate of a certain sum for
a unit of measure or number, there shall be no increase or decrease of the price, although there
be a greater or lesser areas or number than that stated in the contract.

The same rule shall be applied when two or more immovable are sold for a single price; but if,
besides mentioning the boundaries, which is indispensable in every conveyance of real estate,
its area or number should be designated in the contract, the vendor shall be bound to deliver all
that is included within said boundaries, even when it exceeds the area or number specified in
the contract; and should he not be able to do so, he shall suffer a reduction in the price, in
proportion to what is lacking in the area or number, unless the contract is rescinded because the
vendee does not accede to the failure to deliver what has been stipulated (1471)

Art 1471. If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract. (n)

Jose Santa Ana, Jr, Lourdes Sto Domingo v Rosa Hernandez (1966, Reyes, review)

- Sps Jose and Lourdes

o Owner of 115,850 sq m, Bulacan; sold same to diff people
o Sold portions separated by pilapil/dike to Hernandez
- Deed of sale:
o Boundaries and land area: 12,500 metros cuadrados, 26,500 humigit kumulang

17
 - Sps prepared subdivision plan approved by Dir of Lands
- Hernandez disagreed with subdivision and refused to execute agreement
o Refused to vacate land occupied
o Prepared another subdivision plan || occupied area, also approved by Dir
- CFI: Sps v Hernandez: Hernandez occupying excess of 17,000
o Hernandez: occupied land part of areas bought
o No lump sum sale. Hernandez bought land at rate of .29 per sq m
- CA: dismissed. Hernandez owner || 1542, CC. Notarial officer: Hernandez complained
that areas in contract less than actual areas being sold, so area stated in doc will not
prevail; boundaries will. Also other witnesses offered portions of land for lump sums of
12,000; conspicuous dike boundaries
- SC:
o Factual findings of CA stand. CA free to try facts
o Sale for lump sum, of definite and identified tract, corpus certum; not indef
 Area qualified by ‘humigit kululang’—an approximate
 To hold otherwise, must be made clear that sale was made by unit of
measure at a definite price for each unit
 || Goyena: if def intended to buy by the meter, he should have
so stated in the contract
o Registration and subdivision OK. Procedural lala
o AFFIRMED

Feliciano, Canuto, Justa, Angel, Fidela, Clara, Pedro Esguerra v Virginia,Primitiva Trinidad, Reg of
Deeds, Meycauayan, Bulacan (2007, Carpio-Morales, certiorari)

- Petitioners grandchildren of sps Felipe and Praxedes Esguerra

o Bought from grandparents:
 17thou sq m parcel (half of a bigger 35thou)
 24thou sq m
 23thou sq m
o Deed of sale executed 11 Aug 37, notarized by Abano
- Trinidad brothers (Eulalio, Julian) also grandchildren
o Bought from grandparents
 500 sq m
 7,048 sq m
 4thou sq m
 768 sq m
o Deed of sale executed 17 Aug 37, notarized by Abano
- 1958, notarized bilihang lupa: petitioners sold Eu and w 5,000 sq m (bahaging palayan)
from 23,000
- 1965, Respondents daughter of Eulalio T, to whom Eu sold share in properties
o Cadastral survey: 1,693
 Also found out 5,000 sq m actually 6,268 sq m
- CFI: Trinidad daughters applied for registration
o Awarded 1,693 sq m, 1967

18
 - CFI: Trinidad Eu also had 5,000 sq m lot actually 6thou registered in his name
- CFI: Esguerras: annul OCTs above bc procured through fraud, misrepresentation
o Dismissed
- CA: dismissed || 1542, no fraud, prescription, res judicata, violation of non-forum sh
- SC:
o Not only technically infirmed
o But also substantially—no fraud
 Not established by evidence
 In fact, Eu registered land
 OCT enjoys presumption of validity; indefeasible and
incontrovertible to property in favor of person whose name
appears therein
4
o Lump sum sale || 1542 (v Esguerras: only 5,000 sold. 1thou excess ours)
 || Rudolf Lietz, Inc v CA:
 in unit price contract, statement of area of immovable not
conclusive and price may be reduced or increased depending on
area actually delivered
 Where both area and boundaries declared, area covered within
boundaries prevails over stated area.
 What really defines a piece of ground is not the area but the
boundaries therein laid down as enclosing the land and
indicating its limits
 Not vital that deed should disclose area with mathematical
accuracy—sufficient if extent objectively indicted with sufficient
precision to enable one to identify it
o Obligation of vor is to deliver everything within
boundaries, inasmuch as it is the entirety thereof that
distinguishes the determinate obj
 Parties here agreed to 1,000 for the bahaging palayan, measured 5thou
sq m, more or less
 If intention was to sell only a portion, could have stated specific
area and not entire bahaging palayan
 What is controlling is the entire land included within boundaries,
regardless of area being smaller or larger
 Especially if agreement with ‘more or less/humigit kumulang’
o But not ipso facto exposes vee to risk of quantity
o Must only cover reasonable excess or deficiency
o And courts still to consider other factors
 Here, excess not unreasonable as land not yet technically
surveyed at time of sale; esguerras presumed to have acquired
good estimate of value and area of bahaging palayan
4. Inspection and Acceptance
4
In sales involving real estate, parties may choose bet two types of pricing agreement: (1) unit price
contract or (2) lump sum contract

19
 a. Right of inspection

Art 1584. (2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer,
he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods
for the purpose of ascertaining whether they are in conformity with the contract

(3) Where goods are delivered to a carrier by the seller, in accordance with an order from or
agreement with the buyer, upon the terms that the goods shall not be delivered by the carrier
to the buyer until he has paid the price, whether such terms are indicated by marking the goods
with the words ‘collect on delivery’, or otherwise, the buyer is not entitled to examine the goods
before the payment of the price, in the absence of agreement or usage of trade permitting such
examination. (n)

b. Manifestation of acceptance

Art 1585. The buyer is deemed to have accepted the goods when
he intimates to the seller that he has accepted them,
or when the goods have been delivered to him, and he does any act in relation to them which is
inconsistent with the ownership of the seller,
or when, after the lapse of a reasonable time, he retains the goods without intimating to the
seller that he has rejected them. (n)

c. Breach of warranty
Art 1586. In the absence of express or implied agreement of the parties, acceptance of the goods by the
buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any
promise or warranty in the contract of sale. But, if, after acceptance of goods, the buyer fails to give
notice to the seller of the breach in any promise of warranty within a reasonable time after the buyer
knows, or ought to know of such breach, the seller shall not be liable therefor. (n)

d. Refusal to accept

Art 1587. Unless otherwise agreed, where goods are delivered to the buyer, and he refuses to
accept them, having the right so to do, he is not bound to return them to the seller, but it is
sufficient if he notifies the seller that he refuses to accept them. If he voluntarily constitutes
himself a depositary thereof, he shall be liable as such. (n)

Art 1588. If there is no stipulation as specified in the first paragraph of 1523, when the buyer’s
refusal to accept the goods is without just cause, the title thereto passes to him from the
moment they are placed at his disposal (n)

Art 1589. The vendee shall owe interest for the period between the delivery of the thing and the
payment of the price, in the following three cases:

(1) Should it have been so stipulated

(2) Should the thing sold and delivered produce fruits or income
(3) Should he be in default from the time of judicial or extrajudicial demand for payment of
the price (1501a)

5. Kinds of delivery

20
 a. Real or actual

Art 1497. The thing sold shall be understood as delivered when it is placed in the control and
possession of the vendee (1462a)

Sps Godofredo, Carmen Alfredo, Sps Arnulfo, Editha Savellano, Danton Matawaran, Sps Delfin,
Estela Espiritu, Elizabeth Tuazon v Sps Armando, Adelia Borras (2003, Carpio, review)

- Sps Alfredo owner of 81,424 sq m, Bataan under homestead patent

- Sps Alfredo mortgaged land to DBP for 7,000
- Sps Alfredo sold land
o for 15,000
o to Sps Borras
o Sps Borras to pay loan and int to Bank. Balance to be paid to Alfredos
- Sps Borras paid; DBP released mortgage. Sps Alfredo delivered docs to Borras; Alfredos
introduced Borras as owners to tenants Natanawan; Borras took possession of land
- Sps Borras discovered persons entering premises to cut trees under instr of new owners
o Sps Alfredo re-sold portions to others
- Register of Deeds: Sps Borras: adverse claim
o Sps Alfredo had owner’s duplicate copy on ground that they lost theirs
o Sps Alfredo did not answer letter from Borras
- RTC: Sps Borras v Sps Alfredo, and subsequent buyers: Savellanos, Matawaran, Espiritus,
Tuazon: specific performance
o Sps Alfredo: statute of frauds—unenforceable sale with Borras; no written
instrument; objected to parole evidence. Subsequent buyers in gf, for value
o Deeds of sale to subsequent buyers null and void
o Sps Alfredo to deliver Deed of Absolute Sale in favor of Borras
o Contract of sale elements present
 Alfredos delivered to Borras the land
 Borras treated as their own tenants the tenants of Alfredos
 Alfredos turned over docs such as owner’s duplicate copy, tax
declaration, receipt of realty tax payments
 DBP cancelled mortgage upon payment of loan
 Receipt issued by Carmen = acknowledgment/ratification of verbal
 SoF not applicable as sale already perfected
o Weak evidence/testimony of Alfredos, et al: Calonso in bad faith
- CA: affirmed in toto. Handwritten receipt = memo in SoF. Non-issuance of title in name
of Borras justified by witnesses. Borras already in physical possession. No good faith on
part of subsequent buyers bc adverse claim annotated. Not prescribed. Treble costs
- SC:
o Sale bet Alfredos and Borras perfected contract—finding of fact binding
 Contract perfected once there is consent on object certain and on cause
 Obj: land
 Price certain: 15thou
 Meeting of minds OK
o Sale consummated

21
  Parties performed respective obligations
 Vor: transfer ownership, deliver thing
 Vee: pay price
 Physical delivery of land constituted transfer of ownership || Penalosa v
Santos
 || 1477: ownership transferred upon actual, constructive deli
 Documents of ownership also transferred
 Borras paid full purchase price as evidenced by receipt and DBP release
 SoF not applicable
 receipt = memorandum of sale, removing transaction from
scope of SoF
 applies only to executory contracts and not to contracts
partially or totally performed
o here consummated
o sale not void on ground of lack of marital consent
 FC not applicable
 CC is—disposition of conjugal without wife consent not void; merely
voidable
 Voidable contracts susceptible of ratification
 Contract here ratified by Godofredo himself when he
introduced Borras to tenants as new landlords
 24 years of possession formidable proof of Godof’s acquisence
 Pd to annul long prescribed
o Factual issue on acquisition of title
 Adelia obtained title from Julie, sister of Carmen
 Adelia’s own sister obtained title from father of Carment but gave title
to Julie as she was to leave for US
 Not necessary that seller himself deliver title bc thing sold understood
as delivered when it is placed in the control and possession of the vee
 Evidenced by introduction to tenants and possession
o Sale cannot be annulled on ground that Sec did not approve sale made within
25 years from issuance of title
 Lack of Sec approval does not ipso facto make sale void
o No prescription
 Caption of action specific performance but nature: reconveyance
 Possession lost when Natanawan tenants driven away by sb
 Fraud present in this case—trust constituted in favor of real owner
 Prescriptive period runs from possession—ten and not four years ||
fraud
 Implied constructive trust offspring of law, 1456
 Therefore 1144 applies
 No laches—failure or neglect for an unreasonable time to do that which,
by exercise of due diligence, could or should have been done earlier
o Subsequent sales not valid

22
  When ownership or title passes to buyer, seller ceases to have any title
to transfer to any third person
 1544 (unahan) applies only when there is good faith
 Here, not disputed that there was an adverse claim; no gf
o Fees sustained; were it not for unjustified refusal to heed demands of Borras,
Borras would not have had to go to court v Alfredos et al
o DENIED. CA AFFIRMED

b. Constructive
i. Symbolic delivery/delivery by public instrument

Art 1498. 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 clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of
the place or depository where it is stored is kept. (1463a)

Philippine Suburban Dev’t Corp v Auditor-General, Pedro Gimenez (1975, Antonio, certiorari)

- 1960 Jun 8: President approved People’s Homesite and Housing Corp’s

o Acquisition of unoccupied portion of Sapang Palay, Sta Maria, Bulacan
 Owned by Ph Suburban Dev’t
o For squatter relocation (floods)
 To be financed by bonds under PHHC charter, 4.5M
 Absorbed by GSIS
- Jun 10: PHHC Board auth purchase at .45 per sq m, subj to conditions precedent:
o Confirmation first be secured
o Protion to be acquired first be defined, delineated
o Pres of Ph to provide necessary funds
o Contract of sale first approved by Auditor General
o Vor to agree to dismissal with prejudice of CFI QC civil case: Phil Suburban Dev’t Corp v Ortiz, et al
- Jun 1960, PHHC already possessed property to construct roads
- Dec 29: Deed of Absolute Sale bet Ph Sub and PHHC; not registered bc PHHC no money
o Suburban to convey to Homesite two parcels of land under terms and conditions
 For and in consideration of 3.386M
 Manner of payment:
o PHHC negotiating with GSIS under Pres directive flotation of bonds
o 1.7M to be retained by vee to pay and clear lien annotated at back
of TCTs
 To be paid to mee, difference paid to vor
 First payment not less than 1M,700thou
o Vor to take charge of prep and reg of docs necessary in clearing
mortgage lien
o Vee to deduct 40thou from 1.7M as trust fund to answer for
remaining notice of lis pendens until such lien discharged or
cancelled, and to deliver 40 thou to successful party in notice of lis
pendens
o Remaining balance not covered by 1.7M payable immediately upon
vee’s obtaining sufficient funds from proceeds of bonds

23
  Made within 60 days from delivery of title in name of vee
 60 days extendable for another 60 by written request of
vee at least 5 days before expiry
- Pres approved DoAS 1961, Feb
o Despite objections from Auditor General—hacienda only assessed at 100thou
- 1961 Apr: Provincial Treas of Bulacan requested withholding of 30thou for realty tax, 61
o Was paid by Suburb under protest
 Requested refund from Sec of Finance
 No longer owner of land upon 1960 deed execution || 1498, CC
 Denied
o Contract executed Dec 1960
o Pres approved Feb 62,
o registered with Reg of Deeds Mar 61
- SC:
o Ph Sub: Auditor General should have allowed refund
 Property presumptively delivered by execution of deed of sale
 Possession of property was with PHHC prior sale
 Therefore, transmission of ownership OK
 No longer obliged to pay realty tax as it was no longer owner
o Auditor Gen: presumptive delivery under 1498 does not apply bc contract
required sale be first approved || EO, Pres. Registration of deed under new title
in name of vee before gov’t can pay
 Land covered by LRA, so until deed of sale registered, vor remains
owner and liable for realty tax
o Auditor General approval not necessary as Pres himself issued directive
o Ownership already transferred; Ph Sub not liable for tax
 Delivery may be
 actual or
 constructive
o When sale made in public instrument, execution
thereof = to delivery of thing or obj of contract, if from
deed the contrary does not appear or cannot clearly be
inferred (symbolic delivery)
 Here, vor already placed vee in possession and control of thing sold,
even before deed of sale
 Condition that sale must first be registered and title be issued in name
of vee does not preclude transmission of ownership
 In absence of express stipulation to contrary, payment of purchase price
of goods not condition precedent to transfer of title to buyer
 Title passes by delivery of goods
o Registration not necessary to make contract of sale valid and effective
 Registration intended to protect buyer against claims of third persons
 Not necessary to effect sale
 No rights of third persons involved in this case anyway
o REVERSED. Ph Sub entitled to refund of tax

24
Alejandra Bugarin Vda de Sarmiento, piff-ee, Josefa Lesaca, def-ant (1960, Bautista, Appeal)

- Lesaca sold Sarmiento

o Two parcels of land
o For five thou
o In public doc
- Sarmiento tried to take possession of land
o But was prevented by Deloso, claiming to be owner of lands
- Tenancy Enforcement Division, DOJ: Sarmiento: oust Deloso. But abandoned action
- Dec 49: Sarmiento to Lesaca: change lands sold with same kind or return purchase price
- CFI: Sarmiento v Lesaca: rescind contract of sale for failure of Lesaca to place Sarmiento
in actual possession of lands
o Rescinded
- CA: certified to SC
- SC:
o Was there delivery? None
 1461, 1462: when contract of sale executed, vor bound to deliver to vee
thing sold by placing vee in control and possession of subj matter
 BUT if sale executed by means of public instrument
 Execution of deed of sale in public doc equivalent to delivery of
possession
o UNLESS contrary appears or is clearly to be inferred
from such instrument
 Here, no stipulation to infer from that vor did not intend to deliver
outright the possession
 In fact, document stipulation: vee takes actual possession
thereof with ful rights to dispose, enjoy, make use thereof in
such manner and form as would be most advantageous
o Possession contemplated actual and not symbolic
 Obligation to deliver/commitment not complied with
 1462: control and possession required in delivery
 Sarmiento never able to poseess lands due to Deloso
 Legal fiction of delivery that public doc execution = delivery only holds
true when there is no impediment that may prevent passing of property
from vor to vee
 [fiction must yield to reality]
 Vor must have control over thing sold that at the moment of the
sale, material delivery could have been made
 Not enough to confer upon vee ownership and rt of possession
o Thing must be place in control of vee
 Otherwise, delivery not effected (Addison v Felix, Tioco)

o Sarmiento may rescind

 Contract of purchase and sale obligations reciprocal

25
  Therefore, || 1124: rt to resolve reciprocal obligations in case one of
the obligors should fail to comply with that which is incumbent upon
him, is deemed implied
o No fraud. Only non-fulfilment
o AFFIRMED. Costs

Zenaida Santos v Calixto, Alberto Santos, Rosa Santos-Carreon, Antonio Santos (2001,
Quisumbing, review)

- Jesus, Rosalia Santos

o Parents of respondents and deceased husband Salvador of petitioner
o owners of four-door apt on 154 sq m land in Sta Cruz
 Administered by Rosalia
o 1959: Sold properties in favor of children Salvador and Rosa
- 1973: Rosa sold share to Salvador
o New TCT, which Salvi still surrendered to mother Rosalia
o Rosalia continued to receive rentals from apartment
- 79 Nov, Jesus died
- 85 Jan, Salvador died
- Zenaida demanded rentals from Hombrebueno, Rosalia’s tenant
o MeTC: Zenaida: ejectment. Won
- 1989, RTC: respondents: reconveyance, prelim injunction. 59 and 73 deeds simulated,
no consideration. Only executed to accommodate Salvi in generating funds for business
flexibility
o Zenaida: Salvador registered owner
o Deeds declared null and void—fictitious, simulated, inexistent. Cancel TCTs
o Rosalia and Jesus continued to possess property and exercise rights of
ownership. Salvador financially incapable to purchase in 59. Deeds fictitious
therefore no prescription
- CA: affirmed. For execution of public instrument to effect tradition, vor shal have had
control over thing sold, at moment of sale. Not enough to confer upon purchaser
ownership and rt of possession; thing must be placed in his control. No realty tax
payment shown
- SC:
o Zenaida:
 tax declarations and retention of possession not conclusive evidence of
ownership; Salvi only allowed mother to possess property out of respect
 sale through public instrument tantamount todelivery of thing
 prescription; dead man’s statute
o ownership remained with Rosalia and Jesus
 tax declarations not conclusive evidence of ownership, must be
supported by other effective proofs
 which are present in this case
 Jesus and Rosalia continued to posess and enjoy property

26
 o || Serrano v CA: continued collection of rentals from
tenants by seller of realty after execution of alleged
deed of sale contrary to notion of ownership
 While Salvi and Zenaida did nothing
 Salvi also returned title to mom after registration
o Execution of deed of sale not conclusive presumption of delivery of possession
 Code merely said that the execution shall be equivalent to delivery
 Presumption can be negated by failure of vee to take actual possession
of land sold
 For execution of public instrument to effect tradition (Danguilan v IAC)
 Purchaser must be placed in control of thing sold
 When there is no impediment to prevent the thing sold from
converting to tenancy of the purchaser by the sole will of the
vor, symbolic delivery through the execution of public instr
sufficient
 BUT if notwithstanding exec of instrument, purchaser cannot
have the enjoyment and mat’l tenancy nor make use of it
himself or through another in his name, then no delivery
 || Norkis v CA, Abuan v Garcia: critical factor in different modes of
effecting delivery which gives legal effect to the act is the actual
INTENTION of the vor to deliver, and its acceptance by the vee
 No intention, no tradition
 Here, Salvi never placed in control of property. Sellers retained control
and possession. Transaction only to accommodate Salvi to generate
funds for business
 No real transfer of ownership
o Action for reconveyance on ground that cert of title obtained by means of
fictitious deed of sale an action for declaration of nullity
 Does not prescribe
 Also not barred by laches. Elements not proved. And only less than four
years from Zeny’s assertions to filing of complaint—not unreasonable
delay
o Too late to invoke dead man’s statute
o DENIED. AFFIRMED.

ii. Tradicion longa manu

Art 1498. See p 23

Art 1499. The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the possession of
the vendee at the time of the sale, or if the latter already had it in his possession for any other
reason (1463a)

27
Art 1513. A person to whom a negotiable document of title has been duly negotiated acquires
thereby:

(1) Such title to goods as the person negotiating the document to him had or had ability to
convey to a purchaser in good faith for value and also such title to the goods as the
person to whose order the goods were to be delivered by the terms of the document
had or had ability to convey to a purchaser in good faith for value; and
(2) The direct obligation of the baliee issuing the document to hold possession of the goods
for him according to the terms of the document as fully as if such bailee had contracted
directly with him (n)

Art 1514. A person to whom a document of title has been transferred, but not negotiated,
acquires thereby, as against the transferor, the title to the goods, subject to the terms of any
agreement with the transferor.

If the document is non-negotiable, such person also acquires the right to notify the bailee who
issued the document of the transfer thereof, and thereby acquire the direct obligation of such
baliee to hold possession of the goods for him according to the terms of the document

Prior to the notification to such bailee by the transferor or transferee of a non-negotiable

document of title, the title of the transferr to the goods and the right to acquire the obligation
of such bailee may be defeated by the levy of an attachment of execution upon the goods by a
creditor of the transferor, or by a notification to such bailee by the transferor or a subsequent
purchaser from the transferor of a subsequent sale of the goods by the transferor (n)

Board of Liquidators v Execquiel Floro, et al (1960, Reyes, Appeal, CFI)

- Board
oagency created under EO 372, 1950
o to take over functions of defunct Surplus Property Liquidating Committee
- Malabanan contracted with Board, 1952 Jun 14
o For salvage of sunken properties in waters off Mindoro, La Union, Batangas
o Malabanan to commence ops from execution of contract
o Effective for one year
o Extendible for 6 mos
- 10 Jun 53: Malabanan requested for one-year extension for Mindoro, Batangas
o Contract extended up to 30 Nov 53
- 18 Nov 53: Malabanan asked for another one-year extension for Occidental Mindoro
o Contract extended up to 31 Aug 54
- 31 Mar 54: Malabanan had agreement with Floro
o Floro to advance to Malabanan sum not exceeding 25thou
o Secured by steel mattings which Malabanan would consign to Floro
o Advances to be paid within certain pd
o Default during pd: Floro auth to sell mattings in possession to satisfy advances
- 26 Jul 54: Malabanan recovery report: 13,107 steel mattings recovered
- 4 Aug 54: Floro sold 11thou steel mattings to Legaspi for 24thou due to Malabanan’s
failure to pay

28
- 21 Aug 54: CFI: Malabanan: voluntary insolvency
o Board cor for 11thou
o Floro cor for 24thou
o Inventory list: 11thou steel mattings of 33thou value
o Board: petitioned to exclude steel matting from inventory; owner of matting
 Malabanan to pay for diff bet inventory count and report count
o Floro opposed Board—Legaspi already owns matting || contract with Ma
o Board petition denied. Malabanan owner of steel. Floro auth to dispose
- SC:
o Board:
 Malabanan did not acquire ownership
 Due to failure to comply with contract with conditions
precedent to transfer of title: payment of price, audit and check
of properties salvaged; weighing of salvaged; perf bond; storage
site determination
o Malabanan acquired ownership of steel mattings as soon as they were brought
up from the bottom of the sea
 Contract:
 Malabanan shall pay Gov’t 90 per ton for Gov’ts assignment of
all rights, title, and int in and to all surplus properties salvaged
by Malabanan to Malabanan
 10,000 bond was to guarantee compliance with contract; ops
were ate Malabanan’s expense and risk; gold, silver, coins, etc
excepted from contract and required to be turned over to
Board; exp for storage and guards were on Malabanan
 Contract circumstances indicate ownership passed to Malabanan as
soon as salvor gained effective possession and not only afterpayment of
price
 Nothing in contract which may be deemed a reservation of title or from
which it may clearly be inferred that delivery not intended
o There was delivery
 No physical tradition
 But there was traditio longa manu
 || 1499: delivery of movable may likewise be made by the mere
consent or agreement of contracting parties, …
o Lapse of bond did not extinguish contract between Ma and Board
 Bond mere guaranty for obligation which may exist independently of
bond
o No novation
o Sale by Floro to Legaspi not void
 Whether fraudulent or not up to lower court to decide
o AFFIRMED as to denial, without prejudice to question of fraud

29
 iii. Tradicion brevi manu

Art 1499. See p 27

Perpetua Abuan, et al v Eustaqio Garcia, et al (1965, Bengzon, Appeal, CFI)

- Abuans inherited homestead from Laureano

o OCT cancelled; TCT issued in name of Abuans
- 1953 Aug 7: Abuans sold land to Garcia
o || public instrument: deed of absolute sale; new TCT
- CFI: Abuans: action to recover; sale executed through fraud, without consideration
o Settled amicably through Agreement, Feb 55
 Garcias paid 500 partial payment of purchase price
 1,500 balance to be paid on or before Apr 30
 To supersede previous agreements (as to terms and conditions of
payment)
- 1955 May, full payment effected
- 1960 Mar: CFI: Abuans: redemption || 119, Public Land law: conveyance of land
acquired under free patent subj to repurchase by applicant, heirs, five years from date
of conveyance
o Garcia: action prescribed—sustained. Feb 55 agreement basis
- SC:
o When did prescriptive period start to run?
 Aug 53 contract
 Feb 55 agreement (CFI)
 May 55 full payment (Abuans)
o Prescriptive pd started to run from Aug 53 contract
 Law: five years from conveyance
 Conveyance: transfer of ownership; date when title to land
transferred from one person to another
 Garcias acquired ownership of land upon execution of deed of sale
 || 1477: ownership shall be transferred upon actual or
constructive delivery thereof
 || 1498: when sale made through public instrument, execution
thereof equivalent to delivery of thing if from deed the contrary
does not appear or cannot be clearly inferred
 1955 agreement only superseded terms and conditons of purchase
price; did not abrogate sale since it did not operate to revest ownership
of land in Abuans
o Assuming 53 contract null and void, Feb 55 agreement a private instrument and
still cannot be construed as constructive delivery
o Payment of price not condition precedent to transfer of ownership which passes
by delivery of thing to buyer

30
Heirs of Pedro Escanlar, Francisco Holgado, Sps Edwin, Elisa Jayme v CA, Generosa Martinez,
Carmen-Cari-an, Rodolfo Cari-an, Nelly Cari-an, guardian of son Leonell, Fredisminda C, Sps
Chua, Ney Sarrosa-Chua, Register of Deeds, Negros Occ (1997, Romero, review)

- Guillermo, h, died 1924

o Heirs: nephews, grandnephews, private respondents
- Victoriana Cari-an, w, died 1938
o Heirs: nephew Gregorio, died, wife Martinez and children (Leo passed away, so
wife Chua and children succeeded him) succeeded him
- G and V owned 29thou sq m and 461thou sq m lands
- Heirs executed Deed of Sale of Rights, Int, Participation
o For 275thou (50thou paid; each heir entitled to 55thou balance)
o Sell, cede, transfer, and convey by way of absolute sale, all the rights, interests,
participation of the vors as to half portion pro-indiviso of 1616, 1617 fishpond
o Contract to become effective only upon the approval by the CFI, Negros Occ
o In favor of vees,
- Holgado and Escanlar, Sep 78
o Lees of lots
o Paid only 50thou bc no money yet for 225thou
o Balance to be paid on or before May 79
o Unable to pay balance by May
o But paid after may
 Rodolfo fully paid by Jun; Martinez, Carmen, Fredis also fully paid ||
receipts
o Continued to possess lots and paid rent
- 1981: Escanlar and Holgado intervened in probate proceedings as buyers of lots and be
subrogated into heirs’ rights
o Probate proceedings terminated 87: no subrogation. Properties already
disposed of and transferred to Chuas. Summary proceeding only; no juris to
pass upon validity or invalidity of sale to third parties
- Sep 1982: Cari-ans sold shares in lots including 1616, 17 to Sps Chua for 1.85M and
motioned for approval of sale—approved 84, certificates issued
- CFI: Cari-ans v Escanlar, Holgado: cancel sale due to failure to pay by due date and only
received 133thou
o Escanlar, Holgado: Cari-ans already received payment; no rt to resell; Chuas in
bad faith; approval of sale to Chuas subj to own claim
o Chuas: gf, did not know of earlier sale
o 1983: Escanlar and Holgado sold rts and int to Jayme for 735thou and turned
over possession; Jayme impleaded
o 91 decision: declared null and void the sale in favor of E and H and E and H’s
subsequent sale to Jayme; Cari-an heirs’ contracts with Chuas valid
- CA: affirmed. 78 contract to sell, not sale
- SC:
o 78 agreement a contract of sale, not contract to sell
 No reservation as to ownership until full payment of balance;

31
  No stipulation of unilateral rescission in case of failure to pay
o H and E owners of property
 Upon sale
 Through traditio brevi manu, symbolic delivery
 || 1477: ownership of thing sold acquired by vee upon actual or
constructive delivery
 H and E lees and remained in possession
 Became possessors in concept of owner
o Contract valid despite lack of approval by court
 Stipulation only stated effectivity of contract, not validity
 Need for approval exists only where specific properties of estate are
sold and not when indivisible shares are disposed of
 || Dilena v CA: hereditary rights in an estate can be validly sold
without need of court approval
 Also, two factors militate against stipulation in question
 Acts of parties show intent to effect deed of sale without court
approval
o Receipt and acceptance of balance instalment
continued even after lapse of due date
o Only after sale to Chua did they file case to cancel 78
 Requisitee approval rendered impossible by Cari-ans
o Opposed motion for approval of sale filed by H and E
o Rescission not available
 || 1592: even though stipulated that rescission may take place upon
failure to pay price, vee may still pay after expiration of pd as long as no
demand for rescission made upon him
 Here, payments accepted even after
 No rescission demanded
 = waiver of right to rescind
 Payments fully paid
 Evidence/testimony weak
 Payment of rent sign that they respected the contract and not
to be construed as admission of not having fully paid
o GRANTED. REMANDED to determine portions owned by parties. Issue TCTs and
resolve rent payments

32
 iv. Tradition constitutum possessorium

Art 1500. There may also be tradition constitutum possessorium (n)

Pastor Amigo, Justino Amigo v Serafin Teves (1954, Bautista, certiorari)

- Marcelino Amigo granted power of atty

o by Macario and Anacleto
o to lease, bargain, transfer, convey, sell, release, mortgage, hypothecate upon
such terms and conditions as he shall deem fit
- Marcelino executed deed of sale, 38 Oc 30
o In favor of Teves
o Vor could repurchase land within 18 mos from date of sale
o Vor-lee to still pay rent every six mos
o Lease to terminate 30 Apr 40
o In case of failure to pay rental, lease automatically terminated, rt of ownership
of vee absolute
- Marcelino donated to Pastor and Justino (sons) parcels and right to repurchase in public
document
- Vor-lee paid first six mo rent but not for subsequent
- Teves: affidavit of consolidation of title and registered same with register of deeds
o TCT issued
- Mar 1940: offer to repurchase and tendered payment of redemption price
- Teves refused as ownership already consolidated in him as purchaser a retro
- CFI: Amigo v Teves: declare contract one of mortgage and not sale with right to
repurchase; if contract with rt to repurchase, rt exercised within pd; reconveyance and
restoration of property to Amigo
o In favor of Teves
- CA: affirmed. Modified as to fees. Powers of atty broad enough to justify execution of
any contract concerning lands covered by auth; in any case, they cannot impugn validity
of lease bc right devolves upon principals who alone can claim agent exceeded auth
- SC:
o Lease covenant within purview of powers granted to atty-in-fact
 No reason to depart from finding of CA
 “upon such terms and conditions and under such covenants as he shall
think fit”
 Nothing unusual in lease covenant in deed of sale
 Common in contracts involving sales of land with pacto de retro
 Lease that vendor executes on property may be considered as
means of delivery or tradition by constitutum possessorium
o Vor a retro continues to occupy land as lee, by fiction of
law, possession deemed constituted in vendee by virtue
of this mode of tradition
 Lease covenant not contrary to law, morals, public order
o || Dimatulac v Coronel: valid

33
 o Penal clause may be onerous but no remedy for Amigos
since Teves alert and exercised rt and consolidated
immediately
o Since contract a sale with pacto de retro, lower price during sale (3thou v 4thou
value) justified since in pacto de retro, vor expects to re-acquire or redeems
property sold. Also a question of fact no reason to probe
o AFFIRMED.

v. Delivery to common carrier

Art 1523. Where, in pursuance of a contract of sale, the seller is authorized or required to send
the goods to the buyer delivery of the goods to a carrier, whether named by the buyer or not,
for the purpose of transmission to the buyer, is deemed to be a delivery of the goods to the
buyer, except in cases provided for in 1503, first, second, third pars, or unless a contrary intent
appears.

Unless otherwise authorized by the buyer, the seller must make such contract with the carrier
on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the
other circumstances of the case. If the seller omits to do so, and the goods are lost or damaged
in the course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to
himself, or may hold the seller responsible in the damages.

Unless otherwise agreed, where goods are sent by the seller to the buyer under circumstances
in which the seller knows or ought to know that it is usual to insure, the seller must give such
notice to the buyer as may enable him to insure them during their transit, and, if the seller fails
to do so, the goods shall be deemed to be at his risk during such transit. (n)

Art 1503. Where there is a contract of sale of specific goods, the seller may, by the terms of the
contract, reserve the right of possession or ownership in the goods until certain conditions have
been fulfilled. The right of possession or ownership may be thus reserved notwithstanding the
delivery of the goods to the buyer or to a carrier or other bailee for the purpose of transmission
to the buyer.

Where goods are shipped, and by the bill of lading the goods are deliverable to the seller or his
agent, or to the order of the seller or of his agent, the seller thereby reserves the ownership in
the goods. But, if except for the form of the bill of lading, the ownership would have passed to
the buyer on shipment of the goods, the seller’s property in the goods shall be deemed to be
only for the purpose of securing performance by the buyer of his obligations under the contract

Where goods are shipped and by the bill of lading the goods are deliverable to order of the
buyer or of his agent, but possession of the bill of lading is retained by the seller or his agent,
the seller thereby reserves a right to the possession of the goods as against the buyer.

Where the seller of goods draws on the buyer for the price and transmits the bill of exchange
and bill of lading together to the buyer to secure acceptance or payment of the bill of exchange,
the buyer is bound to return the bill of lading if he does not honor the bill of exchange, and if he
wrongfully retains the bill of lading he acquires no added right thereby. If, however, the bill of

34
lading provides that the goods are deliverable to the buyer or to the order of the buyer, or is
indorsed in blank, or to the buyer by the consignee named therein, one who purchases in good
faith, for value, the bill of lading, or goods from the buyer will obtain the ownership in the
goods, although the bill of exchange has not been honored, provided that such purchaser has
received delivery of the bill of lading indorsed by the consignee named therein, or of the goods,
without notice of the facts making the transfer wrongful. (n)

Double Sale

Art 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should
be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in the possession; and in the absence thereof, to the person who presents the oldest title,
provided there is good faith. (1473)

Art 526. He is deemed a possessor in good faith who is not aware that there exists in his title or
mode of acquisition any flaw which invalidates it

He is deemed a possessor in bad faith who possesses in an case contrary to the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of good faith (433a)

Art 527. Good faith is always presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof (434)

Express Credit Financing Corp v Sps Morton, Juanita Velasco (Quisumbing, 2005, review)

- May 88: Sps Velasco purchased house and lot in QC from sps Garcia
o Deed of Absoulte Sale executed July 88
o On installment
o Garcias to deliver property free from all liens, encumbrances 15 days from full
payment
o But house still under construction
 Lot covered by mother title, no separate title
 Promised to give title after construction OK
- Aug 88: keys to property delivered to Velascos
o Moved in (caretakers), applied for phone, insured house
- Quezon City Hall razed by fire, title had to be reconstituted for separate title to issue
- No delivery of title despite demands
- Velascos went to Register of Deeds and
o discovered sps mortgaged property to Express
 For 250,000; Jun 15, 89, one year after property sold

35
- RTC, 90: Velascos v Garcias: quieting of title, specific performance
o Notice of lis pendens
o 92: Express foreclosed on property despite lis pendens; Garcias failed to redeem
o Express in good faith; conducted ocular, went beyond certificate; would not
have accepted mortgage if knew there was an encumbrance
o Dismissed. But Velascos have to be reimbursed by Express
- CA: Velascos: Express in bad faith and did not acquire good title; not incorporated in
dispositve: reimburse
o Reversed; Velascos purchaser for value, gf; mortgage, consolidation of no force,
effect; Garcias to pay Velascos damages
- SC:
o Express: double sale
 First: unregistered sale of property to Velasco
 Second: foreclosure of mortgaged property
o Mortgage void; foreclosure ineffectual
 || 1544
 Innocent purchaser for value
o Innocent lee, mee, enumbrancer for value
 Purchaser in good faith
o || Leung Yee v FL Strong Machinery: one who purchases
real estate with knowledge of defect or lack of title in
vor cannot claim that he has acquired title thereto in gf
as against true owner of land
 Same rule applies to one who has knowledge of
facts which should have put him upon such
inquiry and investigation as might be necessary
to acquaint him with defects in title of vor
 Here, Express not in good faith
 Nature of business
 Failed to consider occupation of Garcias—
engaged in constructioni and sale of
townhouses, masters in real estate transactions
 Express in the business of extending loands
o Express and Garcias have greater charge than ordinary
buyers or encumbrancers
 Express went to property
o Was informed by caretaker Cotoner of previous sale
 Purchaser cannot just close eyes to facts which should put
reasonable man upon his guard and claim that he acted in good
faith under belief that there was no defect in the title of the vor
o Mere refusal to believe that such defect exists, or his
willful closing of his eyes to possibility of existence of
defect will not make him innocent purchaser for value

36
 o Good faith a question of intention ascertainable by
courts through evidence as to conduct and outward acts
by which alone the inward motive may be determined
 Mortgage void as Garcias no longer had title to property
o That purchase was in public auction of no moment due to abovementioned
circumstances
o AFFIRMED

1. General rule: prior tempore, prior jure

Rosario Carbonell v CA, Jose Poncio, Emma Infante, Ramon Infante (1976, Makasiar, review)

- Poncio from Batanes owner of 195 sq m land in Rizal

o Mortgaged to Republic Savings for 1,500
- Carbonell, cousin and neighbor of Poncio
o With Infante, offered to buy lot from Poncio
- Poncio eventually offered to sell lot, excluding house, himself due to failure to pay
mortgage
- 27 Jan, Carbonell accepted,
o Purchase price to be paid to bank
- Bank President consented to Carbonell’s paying the arrears and to continue payment
- 1955 Jan, contract fo one half lot which I bought from Poncio:
o Poncio can start living on lot sold by him to me, Carbonell, until after one year
during which time he will not pay anything
o If after one year, no place, may continue to occupy but with rental payment
- Carbonell brought formal deed of sale and payment of 400 balance
- But Poncio told her that he could not proceed with sale
o Already gave lot to Infante
o Could not withdraw, even if he were to go to jail
- Carbonell annotated adverse claim; demand letters sent to Infante, Poncio
- Jan 31, 55: memo binding Poncio to sel to Emma Infante the property
- Feb 2: formal deed of sale; mortgage discharged
- Feb 8: adverse claim of Carbonell registered
- Feb 12: deed of sale registered. TCT issued with annotation of advserse claim
- Infante immediately possessed lot, fenced, garden, house constructed 1959 only;
pending trial
- RTC: Carbonell: adverse claim; be declared owner of land; Infante sale null and void;
execute deed of conveyance; damages
o Infante: unenforceable sale, SoF; motion to dismiss denied w/o prejudice
 Objected to parol evidence; sustained;
o Dismissed. memo presented does not satisfy requirements of law
- SC: SoF applicable only to executory contracts; not in partially performed ones as in the
sale bet Carb and Pon. Reversed and remanded
- RTC, remand: sale to Infante null and void; convey property
- Infantes motioned for new trial, granted

37
- RTC, new trial: Infante claim superior to Carbonell
- CA: reversed. Carbonell has superior right
- CA MR: granted. Annulled, set aside. With two dissenting opinions
- SC:
o On 1544:
 Essential that buyer of realty act in good faith in registering deed of sale
to merit 1544 protection
 Pars one and three: first possession
 Second par: first in good faith recorded right
 If no inscription, prior possession decisive
 If with inscription, prior registration in good faith a pre-condition to
superior title
o Applying 1544
 27 Jan 55: Carbonell bough lot from Poncio
 Unaware of sale to Infante as there was none at that time
 Therefore in good faith, evidenced by further acts
o With an aristocratic disdain unworthy of the good
breeding of a good Christian and good neighbor, Infante
snubbed Carbonell like a leper and refused to see her
 Infante in bad faith
 Refused to see carbonell
 Carbonell’s possession of mortgage passbook and mortgage
contract show lot already sold to Carbonell; bank must have
already informed Infante
o Should have compelled Infante to ask Poncio why
mortgage passbook no longer with him
 Registration of adverse claim by Carbonell valid
 Infante and Carbonell first offered to buy lot; should have put
her on guard as to whether Carbonell pushed through with sale
o Poncio answer: Infante: improved offer to which Poncio
agreed lalala
 Sale to carbonell established
 Memorandum shows sale of property in favor of Carbonell
already an accomplished act
 If Poncio never sold land to Carbonell, odd that he would sign a
slip permitting him to stay at lot and for a fee
o No intent to deceive. Contract drafted in Batanes lang
 Carbonell paid 247 mortgage
 Possession of mortgage passbook
o If Poncio remained owner, would not have given
passbook to Carbonell
 Memo only mentioned half of lot as lot was part of a bigger lot
 Trial judge still found that there was a 27 Jan purchase for 9.5
per sq m, though not reduecd in writing

38
  CA finding that testimony of Carbonell not disporved by Pncio
o Memo enough
 CA MR: existence of memo admitted; dissent: perfected sale
 There was adequate consideration in sale to Carbonell
 Transfer was constitutum possessorium
o Carbonell to refund to Infantes 1,500
o Improvements built by Carbonells governed by 546, 547 (bf)
o REVERSED. Carbonell has superior right

Sps Mariano, Corazon Tanglao v Sps Corazon, Lorenzo (deceased and substituted by et al)
Parungao (2007, Sandoval-Gutierrez, review)

- 1992, Sps Parungao

o Purchased from Spring Homes, Laguna
 Lots 1, 2, 3, 4, 486 sq m
 For 1350 per sq m
 Lots 7, 8, 9, 457 sq m
 For 1,550 per sq m
o Paid 536thou
o Balance of 828thou to be paid within a year from execution of CtS
- Sps Parungao made improvements
o But failed to pay installments; failed to procure loan, no TCTs bc returned for
correction; but not given back
- 1997 Apr 11, Spring Homes sold same to Sps Tanglao
- Sps Tanglao took possession of lots
o Forcibly opened steel gates, doors
- 99 Jul: Housing and Land Use Regulatory Board: Parungaos: annulment of deed of sale
and/or return of investment and costs of imporvements, int, damages
o Dismissed as to Tanglaos
o Spring Homes to refund Parungaos + damages
- HLURB Board of Commissioners review: reversed
o Valid CtS bet Parungaos, Spring Homes
o Spring Homes to accept payment
o Void sale bet Spring Homes and Tanglaos, SH to refund Tang
o Fence should have forewarned Tanglaos of adverse claimant
- Office of Pres: affirmed
- CA: affirmed. Perfected contract to sell
- SC:
o Parungaos have right of ownership over two lots
 || 1544
 Prius tempore, prius jure—first in time, stronger in right
 || Payongayong v CA: Preferential rights accorded to
o Person acquiring it who in good faith first recorded it in
Registry

39
 o In default of registry, person who in good faith was first
in possession
o In default thereof, person who presents the oldest title
provided there is good faith
 Good faith is essential, being the basic premis of the
preferential rights granted to the person claiming ownership of
the immovable
 || Occena v Esponilla: rules in application of 1544:
o Knowledge by first buyer of second sale cannot defeat
first buyer’s rights except when second buyer first
registers in good faith the second sale
o Knowledge gained by second buyer of first sale defeats
his rights even if he is first to register, sincesuch
knowledge taints his reg with bad faith
 Tanglaos not in good faith
 Good faith or innocent purchaser for value
o One who buys property and pays a full and fair price for
it at the time of the purchase or before any notice of
some other person’s claim or interest in it
o Burden of proof upon him who asserts status, and not
sufficient to invoke ordinary presumption
 There were already occupants in this case
o Buyer of real property in possession of persons other
than seller must be wary and should investigate rights
of those in possession for without such inquiry buyer
can hardly be regarded as buyer in good faith; no right
over property
o Indefeasibility of title defense does not extend to transferees in bad faith
o AFFIRMED

2. Requisites

Ricardo Cheng v Ramon Genato, Ernesto, Socorro Da Jose (1998, review, Martinez)

- Genato owner of two parcels, Paradise Farms, Bulacan

o Sep 6, 89: contract to sell with Da Jose sps, duly notarized
o TCTs annotated
o 80 per sq m; 50thou downpayment
o 30 days after execution and Da Joses’ verification of docs, vee to pay 950thou
full payment
- Da Joses did not finish verification; asked for another 30 days
o Genato: granted on condition that new set of docs made 7 days from 4 Oct
 Da Joses denied this
- Oct 13, 89. Pending effectivity of extension
o Genato executed affidavit to annul contract to sell: failure to pay within pd

40
 o Without notice to Da Joses
o Not annotated on titles
- Oct 24, 89: Cheng expressed interest in properties
o Genato showed copies of TCTs and annotations
o And affidavit to annul
- Cheng issued 50thou check upon assurance by Genato, issued receipt
- 25 Oct: Genato depoed; Cheng: annotate affidavit
- 26 Oct: Genato annotated affidavit
- 27 Oct: Da Joses met Genato by coincidence; discovered affidavit; shocked
o Genato reminded of 30 days
o Genato eventually agreed to continue with sale with Da Joses who were already
able to pay balance
o Conforme letter made
o Genato informed Cheng
- Cheng lawyer: comply with agreement; CtS already perfected
- Genato returned 50thou, which Cheng returned; CtS perfected
- 2 Nov: Cheng: adverse claim annotated
o Da Joses completed downpayment; delivered postdated checks
- 8 Dec, RTC: Cheng v Genato: sp performance, deed of sale; 50thou check partial
payment = earnest money therefore contract perfected
o Genato: option bid. No statement of partial payment, earnest money; was subj
to condition that contract with DJ will be cancelled
o Da Joses: superior right to property as first buyers; unilateral cancellation void;
Cheng bad faith
o Cheng sale valid; affidavit to annul validly rescinded CtS || 1191
- CA: reversed. Cheng receipt without force and effect due to failure to rescind prior
contract; damages bc Cheng in bad faith
- SC:
o No valid rescission
 In CtS, payment of purchase price positive suspensive condition
 No rescission if no obligation to begin with
 1191 inapplicable
 30-day pd not yet expired
 30-day extension granted as shown by Genato’s agreement to
accept settlement of purchase price
 Genato could have earlier annotated annulment affidavit but did not
 Genato did not notify Da Joses || UP v de los Angeles
 Genato in urgent need of money
o Cheng and Genato: contract to sell, not conditional contract of sale
 Evidenced by pleadings of Cheng
 But if it were a ccos, still not obligatory—condition being rescission of
prior contract which never happened
o 1544 not applicable
 1544 connotes that ff circumstances must occur

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 
Two or more sales transactions in issue must pertain to exactly
the same subject matter and must be valid sales transactions
 Two or more buyers at odds over the rightful ownership of the
subj matter must each represent conflicting interests; and
 Two or more buyers at odds over the rightful ownership of the
subject matter must each have bought from the very same
seller
 Situations above lacking in a CtS
 Where no transfer of ownership
 Nor sales transaction has been consummated
o But principle of primus tempore, portior jure should apply
 Contract with Da Joses first in time, and registered long before Cheng’s
intrusion as second buyer
 1544 rule for second buyer to displace first buyer
 That second buyer must show he acted in good faith from the
time of acquisition until title is transferred to him by reg or
failing reg, by delivery of possession
 Second buyer must show continuing good faith, innocence, lack
of knowledge of first sale until contract ripens into full
ownership through prior registration as provided by law
 Da Joses in good faith
 Annotation of CtS satisfies registration requirement
 Cheng not, ie in bad faith
o Damages OK
o DENIED. AFFIRMED
3. Purchaser in good faith

Art 526. See p 35

Art 527.

Art 528. Possession acquired in good faith does not lose this character except in the case and
from the moment facts exist which show that the possessor is not unaware that he possesses
the thing improperly or wrongfully (435a)

Romeo Paylago, Rosario Dimaandal v Ines Jarabe, CA (1968, Reyes, appeal by certiorari)

- Lacatan brothers inherited lot from father Anselmo

- 53 Mar: Sps Paylago bought 3 ha lot from Vidal Lacatan’s heirs
o described as bound by provincial road, Paylago property, Lacatan property,
provincial road
- 53 Dec: Florentino Lacatan heirs executed deed of sale in favor of sps over another
portion of same lot, 2.8 ha
- Deeds of sale registered, TCT issued; subdivision plan
- Jarabe occupied portions of land
o Late husband purchased portion from Apolonio Lacatan

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  Bound by provincial road, Apolonio, Anselmo, Valentin Lastica
 Unregistered deed of sale, 27 Nov 38; lost in Jap war
o Jarabes in continuous, public, peaceful, adverse possession since 45
o Admitted by piffs in deed of lease
- CFI: Paylago: action to recover possession and ownership of portion
o Paylagos not purchasers in good faith
o Jarabes owners
- CA: affirmed in toto
- SC:
o Jarabes owners
 As between two purchasers, one who has registered the sale in his
favor, in good faith, has a preferred right over the other who has not
registered his title, even if the latter is in actual possession of the
immovable
 ||1544 and jurisprudence
 Here, Paylago transaction registered; Jarabes not
 BUT Paylagos registered in bad faith
 || CFI, CA: Paylagos knew beforehand that land in question
owned by Jarabe
 As admitted in deed of lease, par 3
 Boundaries of lands Paylagos purchased well-defined
o Must have known that portion occupied by Jarabe
under claim of ownership and leased to them was
included in description
 Paylagos knew Jarabe purchased from Apolonio Lacatan
o Should have checked title of Lacatan heirs
o Purchaser who has knowledge of facts which should put
him upon inquiry and investigation as to possible
defects of title of vor and fails to make such inquiry and
investigation cannot claim that he is a purchaser in good
faith and acquired a valid title thereto
o + Leung Yee, p 36
 No preference if no good faith
 Destruction of document may be proved by any person knowing the
fact; loss may be shown by any person knowing the fact of its loss…
probability of loss sufficient
o AFFIRMED

Agricultural and Home Extensioni Dev’t Group v CA, Librado Cabautan (1992, Cruz, review)

- 29 Mar 72: sps Diaz sold 19 ha parcel in Las Pinas to Gundran; not registered bc of notice
of lis pendens on title
- 20 Nov 72: Gundran and AHED entered into JVA for subdivision of land; not annotated
- 30 Aug 76: sps Diaz sold property to Cabautan
- 3 Sep 76: CT issued to sps; lis pendens notices cancelled; DOS to Cabautan recorded

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 - CFI: Gundran: action for reconveyance and cancellation of TCT, new TCT in his name
o AHED intervened
o dismissed
- CA: Affirmed. Diaz to pay Gundran 90thou
- SC:
o AHED: Cabautan in bad faith; aware of lis pendens notice, sale to Gundran
o Cabautan preferred; owner of parcels
 Notice of lis pendens does not have the effect of establishing lien or
encumbrance on property
 Purpose: give notice to third persons and to whole world that
any int they might acquire in property pending litigation would
be subj to result of suit
 Cabautan took risk. And 3 days later, lis pendens cancelled
 Therefore, Cabautan acquired land free of lien, encumbrance
 TCT does not have any other annotation
 When property sold registered under Torrens, registration is the
operative act to convey or affect land insofar as third persons
are concerned
 Person dealing with registered land is only charged with notice
of burdens on property which are noted on the register or
certificate of title
o No one can sell what he does not own, but this is merely the general rule
 1544 is an exception, in a sense, by reason of public convenience
 But in another sense, reiterates the general rule in that insofar as
innocent third persons are concerned, the registered owner is still the
owner, with the power of disposition
o DENIED. AFFIRMED

4. Sale of movables

Art 1544. See p 35

Article 1497. The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee. (1462a)

Article 1498. 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 clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of
the place or depository where it is stored or kept. (1463a)

Article 1499. The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the possession of
the vendee at the time of the sale, or if the latter already had it in his possession for any other
reason. (1463a)

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Article 1500. There may also be tradition constitutum possessorium. (n)

Article 1501. With respect to incorporeal property, the provisions of the first paragraph of article
1498 shall govern. In any other case wherein said provisions are not applicable, the placing of
the titles of ownership in the possession of the vendee or the use by the vendee of his rights,
with the vendor's consent, shall be understood as a delivery. (1464)

Marciano Rivera v Ong Che (1917, Street, appeal, CFI)

- House of Lichauco: Faustino and Galo Lichauco

- 1912 Jan 8: Rivera purchased from Crisanto Lichauco
o Steam-boilders with chimneys
o Steam motor
o Rice hullers
o Feeding pump
o For 5,500
o Received receipt from Crisanto Lichauco
- Rivera did not take possession of property
- 9 Feb, Ong Che bought from Lichauco
o Old iron machinery, junk
o For 1,100
- Ong Che immediately took possession
- Rivera to take possession when he found out that accessories and auxiliaries were
missing—held by Ong Che
- CFI: Rivera: recovery
o In favor of Ong Che, purchaser in good faith
- SC:
o Ong Che owner of mat’ls
 || 1473
 Purchaser in good faith
 Has better title than first purchaser who has never had
possession at all
 Ong Che also presumed owner bc of his possession
 Incumbent upon Rivera to prove title in himself v Ong Che and he is not
to rely only on weakness of defendant’s title
 Rivera did not even appear as witness
o House of Lichauco had authority to sell machinery
 Crisanto not part of establishment
 But no proof that articles not owned by Galo or Faustino
o Case only a mistake by Lichauco in selling something already sold

5. Sale of immovable

Art 1544 (2). See p 35

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Consolidated Rural Bank, Cagayan Valley v CA, Heirs of Teodoro dela Cruz (2005, Tinga, review)

- Madrid brothers owners of lot in San Mateo, Isabela

- Lot subdivided into several lots under subdivision plan
o One resulting lot was 7036-A-7 of 5,958 sq m
- 15 Aug 57 Rizal Madrid sold part of share in above lot
o To Gamiao and Dayag
o Deed of Sale not objected to by other brothers || joint affidavit, 14 Aug
 Not registered with Register of Deeds
- Gamiao and Dayag declared property for taxation purposes, 1964 Mar
- 28 May 64, G and D sold
o southern half to dela Cruz
o northern to Hernandez
- dC and Hernandez cultivated land
o 28 Dec 86: Hernandez donated portion to daughter del Rosario
o Heirs/children of dC continued to possess portion
- 15 Jun 76: Madrid bothers conveyed rights and int over 7036-A-7 do Marquez
- 2 Mar 82: deed of sale registered
- Marquez subdivided lot into 8, A-H
o Mortgaged A to D to to Rural Bank for 100,000 loan
o A-E for another loan, 10,000 from RBC (did not appeal)
- Marquez defaulted; Bank foreclosed
- Marquez sold G to Calixto
- RTC: dela Cruz heirs: reconveyance, damages, nullify foreclosure, sale to Calixto
o Daughter del Rosario intervened
o Bank: mees in good faith. Had right to rely on Marquez’ title
o Dismissed. Marquez lawful owner
o D & G sale valid; Marquez also in good faith. But no annotation on title
o 1544 applies: Marquez in good faith, first to register. Owner
- CA: reversed, set aside
o Marquez admitted having knowledge that property being taken by heris at time
of sale and heirs possessed property
- SC:
o 1544 not applicable in present case
 Contemplates double or multiple sales
 Necessary that conveyance made by party who has existing
right in thing and power to dispose of it
 Cannot be invoked when two different contracts of sale are
made by two diff persons
o Even if sale made by same person, if second sale made
when person no longer owner of property, second
purchaser cannot acquire any right
 Manresa on 1473 (1544), Carpio v Exevea: in order that tradition may be
considered performed, it is necessary that the requisite which it implies
must have been fulfilled, and one of the indispensable requisites, accdg

46
 to the most exact Roman concept, is that the conveyor had the right
and the will to convey the thing. The intention to transfer is not
sufficient—only constitutes will. It is furthermore necessary that
conveyor could juridically perform act
 This is what 1473 failed to express—necessity for preexistence
of right on part of conveyor,
o Even so, it is understood that circumstances constitutes
one of assumptions upon which article is based
 Construction not repugnant to 1473—explains and justifies the
same
 Nemo dat quod non habet
 Here, Madrids sold to Marquez when they were no longer owners
 Even if 1544 should apply, nuh-uh
 Rules of preference:
o First registrant in good faith
o Should there be no entry, first in possession in good
faith
o In absence thereof, buyer who presents oldest title in gf
 Prior registration does not by itself confer ownership—must
first show good faith from time of acquisition until registration
or possession
 Marquez not in good faith
o One who purchases real property in actual possession
of others should at least make some inquiry concerning
the rights of those in possession. Actual possession by
people other than vendor should at least put purchaser
upon inquiry
 Absent such inquiry, cannot be regarded as
bona fide purchaser
 Caveat emptor: purchaser should be aware of
supposed title
 Esp if land in possession of another
o || CA: Marquez knew that property claimed by heirs
o Did not take possession bc did not know who was in
possession
o Did not even fight for possession of property
 Banks should be more diligent
 Title cannot be used to protect usurper from true owner,
perpetrate fraud, enrich one at the exp of another
o But if 1544 not applicable, principle of prior tempore, potior jure should apply
 He who is first in time is preferred in right
 Requisite: priority in time
 Only first vendee can invoke this
 First vendee undisputably in good faith bc there was still no sale

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  Here, first sale to G and D
 Who also possessed same
 Therefore, have superior right
o DENIED. CA Affirmed

6. Sale by virtue of execution or attachment

7. Unregistered land

PD 1529. Sec 113. Recording of instruments relating to unregistered lands. No deed,

conveyance, mortgage, lease, or other voluntary instrument affecting land not registered under
the Torrens system shall be valid, except as between the parties thereto, unless such instrument
shall have been recorded in the manner herein prescribed in the office of the Register of Deeds
for the province or city where the land lies.

(a) The Register of Deeds for each province or city shall keep a Primary Entry Book and a
Registration Book. The Primary Entry Book shall contain, among other particulars, the entry
number, the names of the parties, the nature of the document, the date, hour and minute it was
presented and received. The recording of the deed and other instruments relating to
unregistered lands shall be effected by any of annotation on the space provided therefor in the
Registration Book, after the same shall have been entered in the Primary Entry Book.

(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of Deeds
shall forthwith record the instrument in the manner provided herein. In case the Register of
Deeds refuses its administration to record, said official shall advise the party in interest in
writing of the ground or grounds for his refusal, and the latter may appeal the matter to the
Commissioner of Land Registration in accordance with the provisions of Section 117 of this
Decree. It shall be understood that any recording made under this section shall be without
prejudice to a third party with a better right.

(c) After recording on the Record Book, the Register of Deeds shall endorse among other things,
upon the original of the recorded instruments, the file number and the date as well as the hour
and minute when the document was received for recording as shown in the Primary Entry Book,
returning to the registrant or person in interest the duplicate of the instrument, with
appropriate annotation, certifying that he has recorded the instrument after reserving one copy
thereof to be furnished the provincial or city assessor as required by existing law.

(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to unregistered lands, if made in the form
sufficient in law, shall likewise be admissible to record under this section.

(e) For the services to be rendered by the Register of Deeds under this section, he shall collect
the same amount of fees prescribed for similar services for the registration of deeds or
instruments concerning registered lands.

Iluminado Hanopol v Perfecto Pilapil (Barrera, 1963, appeal, CFI Leyte)

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 8. First possession in good faith

9. Oldest title

Art 1544. (3) See p 35

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