Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-12342            August 3, 1918

A. A. ADDISON, plaintiff-appellant,
vs.
MARCIANA FELIX and BALBINO TIOCO, defendants-appellees.

Thos. D. Aitken for appellant.

FISHER, J.:

By a public instrument dated June 11, 1914, the plaintiff sold to the defendant Marciana Felix, with the consent of her
husband, the defendant Balbino Tioco, four parcels of land, described in the instrument. The defendant Felix paid, at
the time of the execution of the deed, the sum of P3,000 on account of the purchase price, and bound herself to pay
the remainder in installments, the first of P2,000 on July 15, 1914, and the second of P5,000 thirty days after the
issuance to her of a certificate of title under the Land Registration Act, and further, within ten years from the date of
such title P10, for each coconut tree in bearing and P5 for each such tree not in bearing, that might be growing on
said four parcels of land on the date of the issuance of title to her, with the condition that the total price should not
exceed P85,000. It was further stipulated that the purchaser was to deliver to the vendor 25 per centum of the value
of the products that she might obtain from the four parcels "from the moment she takes possession of them until the
Torrens certificate of title be issued in her favor."

It was also covenanted that "within one year from the date of the certificate of title in favor of Marciana Felix, this
latter may rescind the present contract of purchase and sale, in which case Marciana Felix shall be obliged to return
to me, A. A. Addison, the net value of all the products of the four parcels sold, and I shall obliged to return to her,
Marciana Felix, all the sums that she may have paid me, together with interest at the rate of 10 per cent per annum."

In January, 1915, the vendor, A. A. Addison, filed suit in Court of First Instance of Manila to compel Marciana Felix to
make payment of the first installment of P2,000, demandable in accordance with the terms of the contract of sale
aforementioned, on July 15, 1914, and of the interest in arrears, at the stipulated rate of 8 per cent per annum. The
defendant, jointly with her husband, answered the complaint and alleged by way of special defense that the plaintiff
had absolutely failed to deliver to the defendant the lands that were the subject matter of the sale, notwithstanding
the demands made upon him for this purpose. She therefore asked that she be absolved from the complaint, and
that, after a declaration of the rescission of the contract of the purchase and sale of said lands, the plaintiff be
ordered to refund the P3,000 that had been paid to him on account, together with the interest agreed upon, and to
pay an indemnity for the losses and damages which the defendant alleged she had suffered through the plaintiff's
non-fulfillment of the contract.

The evidence adduced shows that after the execution of the deed of the sale the plaintiff, at the request of the
purchaser, went to Lucena, accompanied by a representative of the latter, for the purpose of designating and
delivering the lands sold. He was able to designate only two of the four parcels, and more than two-thirds of these
two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts so occupied
by him. The plaintiff admitted that the purchaser would have to bring suit to obtain possession of the land (sten.
notes, record, p. 5). In August, 1914, the surveyor Santamaria went to Lucena, at the request of the plaintiff and
accompanied by him, in order to survey the land sold to the defendant; but he surveyed only two parcels, which are
those occupied mainly by the brothers Leon and Julio Villafuerte. He did not survey the other parcels, as they were
not designated to him by the plaintiff. In order to make this survey it was necessary to obtain from the Land Court a
writ of injunction against the occupants, and for the purpose of the issuance of this writ the defendant, in June, 1914,
filed an application with the Land Court for the registration in her name of four parcels of land described in the deed
of sale executed in her favor by the plaintiff. The proceedings in the matter of this application were subsequently
dismissed, for failure to present the required plans within the period of the time allowed for the purpose.
The trial court rendered judgment in behalf of the defendant, holding the contract of sale to be rescinded and
ordering the return to the plaintiff the P3,000 paid on account of the price, together with interest thereon at the rate of
10 per cent per annum. From this judgment the plaintiff appealed.

In decreeing the rescission of the contract, the trial judge rested his conclusion solely on the indisputable fact that up
to that time the lands sold had not been registered in accordance with the Torrens system, and on the terms of the
second paragraph of clause (h) of the contract, whereby it is stipulated that ". . . within one year from the date of the
certificate of title in favor of Marciana Felix, this latter may rescind the present contract of purchase and sale . . . ."

The appellant objects, and rightly, that the cross-complaint is not founded on the hypothesis of the conventional
rescission relied upon by the court, but on the failure to deliver the land sold. He argues that the right to rescind the
contract by virtue of the special agreement not only did not exist from the moment of the execution of the contract up
to one year after the registration of the land, but does not accrue until the land is registered. The wording of the
clause, in fact, substantiates the contention. The one year's deliberation granted to the purchaser was to be counted
"from the date of the certificate of title ... ." Therefore the right to elect to rescind the contract was subject to a
condition, namely, the issuance of the title. The record show that up to the present time that condition has not been
fulfilled; consequently the defendant cannot be heard to invoke a right which depends on the existence of that
condition. If in the cross-complaint it had been alleged that the fulfillment of the condition was impossible for reasons
imputable to the plaintiff, and if this allegation had been proven, perhaps the condition would have been considered
as fulfilled (arts. 1117, 1118, and 1119, Civ. Code); but this issue was not presented in the defendant's answer.

However, although we are not in agreement with the reasoning found in the decision appealed from, we consider it to
be correct in its result. The record shows that the plaintiff did not deliver the thing sold. With respect to two of the
parcels of land, he was not even able to show them to the purchaser; and as regards the other two, more than two-
thirds of their area was in the hostile and adverse possession of a third person.

The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered
when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article
declares that the execution of a public instruments is equivalent to the delivery of the thing which is the object of the
contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor
shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been
made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must
be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of
the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is
sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and
enjoyment are opposed by the interposition of another will, then fiction yields to reality — the delivery has not been
effected.

As Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries on article 1604 of the French Civil code, "the
word "delivery" expresses a complex idea . . . the abandonment of the thing by the person who makes the delivery
and the taking control of it by the person to whom the delivery is made."

The execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is
not always sufficient to permit of the apprehension of the thing by the purchaser.

The supreme court of Spain, interpreting article 1462 of the Civil Code, held in its decision of November 10, 1903,
(Civ. Rep., vol. 96, p. 560) that this article "merely declares that when the sale is made through the means of a public
instrument, the execution of this latter is equivalent to the delivery of the thing sold: which does not and cannot mean
that this fictitious tradition necessarily implies the real tradition of the thing sold, for it is incontrovertible that, while its
ownership still pertains to the vendor (and with greater reason if it does not), a third person may be in possession of
the same thing; wherefore, though, as a general rule, he who purchases by means of a public instrument should be
deemed . . . to be the possessor in fact, yet this presumption gives way before proof to the contrary."

It is evident, then, in the case at bar, that the mere execution of the instrument was not a fulfillment of the vendors'
obligation to deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she
has demanded, the rescission of the sale and the return of the price. (Civ. Code, arts. 1506 and 1124.)
Of course if the sale had been made under the express agreement of imposing upon the purchaser the obligation to
take the necessary steps to obtain the material possession of the thing sold, and it were proven that she knew that
the thing was in the possession of a third person claiming to have property rights therein, such agreement would be
perfectly valid. But there is nothing in the instrument which would indicate, even implicitly, that such was the
agreement. It is true, as the appellant argues, that the obligation was incumbent upon the defendant Marciana Felix
to apply for and obtain the registration of the land in the new registry of property; but from this it cannot be concluded
that she had to await the final decision of the Court of Land Registration, in order to be able to enjoy the property
sold. On the contrary, it was expressly stipulated in the contract that the purchaser should deliver to the vendor one-
fourth "of the products ... of the aforesaid four parcels from the moment when she takes possession of them until the
Torrens certificate of title be issued in her favor." This obviously shows that it was not foreseen that the purchaser
might be deprived of her possession during the course of the registration proceedings, but that the transaction rested
on the assumption that she was to have, during said period, the material possession and enjoyment of the four
parcels of land.

Inasmuch as the rescission is made by virtue of the provisions of law and not by contractual agreement, it is not the
conventional but the legal interest that is demandable.

It is therefore held that the contract of purchase and sale entered into by and between the plaintiff and the defendant
on June 11, 1914, is rescinded, and the plaintiff is ordered to make restitution of the sum of P3,000 received by him
on account of the price of the sale, together with interest thereon at the legal rate of 6 per annum from the date of the
filing of the complaint until payment, with the costs of both instances against the appellant. So ordered.

Torres, Johnson, Street, Malcolm and Avanceña, JJ., concur.

FACTS 

Petitioner Addison sold four parcels of land to Defendant spouses Felix and Tioco located in LucenaCity. Respondents paid
P3,000.00 for the purchase price and promised to pay the remaining by installment. The contract provides that the purchasers
may rescind the contract within one year after the issuance of title on their name.

The petitioner went to Lucena for the survey designaton and delivery of the land but only 2 parcels were designated and 2/3 of
it was in possession of a Juan Villafuerte.

The other parcels were not surveyed and designated by Addison.

Addison demanded from petitioner the payment of the first installment but the latter contends that there was no delivery and
as such, they are entitled to get back the 3K purchase price they gave upon the execution of the contract.

ISSUE

WON there was a valid delivery.

HELD

The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was not even
able to show them to the purchaser; and as regards the other two, more than two-thirds of their area was in the hostile and
adverse possession of a third person.

It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing
which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary
that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have
been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be
placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if
there is an impediment, delivery cannot be deemed effected.
Facts:

By a public instrument dated June 11, 1914, the plaintiff sold to the defendant Marciana Felix, four parcels of land. The
defendant Felix paid, at the time of the execution of the deed, the sum of P3,000 on account of the purchase price, and bound
herself to pay the remainder in installments.

In January, 1915, the vendor, A. A. Addison, filed suit in Court of First Instance of Manila to compel Marciana Felix to make
payment of the first installment. The defendant, jointly with her husband, answered the complaint and alleged by way of
special defense that the plaintiff had absolutely failed to deliver to the defendant the lands that were the subject matter of the
sale, notwithstanding the demands made upon him for this purpose.

Issue:

Whether or not, Marciana Felix acquires real right from the mere payment of the first installment of the contract of sale.

Ruling:

The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is
placed “in the hands and possession of the vendee.” (Civ. Code, art. 1462.) It is true that the same article declares that the
execution of a public instruments is equivalent to the delivery of the thing which is the object of the contract, but, in order that
this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the
thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the
purchaser the ownership and the right of possession. The thing sold must be placed in his control.