Formalización

Art. 1497. The thing sold shall be understood as de-livered, when it is placed in the control and possession of the vendee.

COMMENT:

(1) Real or Actual Delivery

Art. 1497 speaks of real or actual delivery (actual tradi-tion).

Smith, Bell & Co. v. Gimenez L-17167, Jun. 29, 1963

FACTS: The Municipal Treasurer of Panique, Tarlac, thru the Bureau of Supply ordered one typewriter from Smith, Bell & Co. The typewriter was received by the guard of the municipal Aug. 30, 1958. Ten days later, the municipal build-ing (as well as the typewriter) was totally burned. Shortly after, the seller sent a bill covering the cost of the typewriter.

The municipal council adopted a resolution requesting the Company to condone the payment of the machine, it having been burned after delivery. Petitioner Company denied the request; thereafter, the municipal treasurer submitted to the provincial treasurer a voucher covering the payment of the typewriter to the petitioner. The Auditor General disap-proved the same on the ground that there was no delivery, and that the typewriter was never presented for inspection and verifi cation as previously agreed upon. Issue: Was there a delivery of the typewriter?

HELD: Yes. This was testifi ed to by both the guard (who had personally received it and the Mayor who had seen the

delivery and ordered the taking of the machine to his offi ce).

Moreover, the request for condonation of payment shows be-yond doubt actual delivery of the machine.

(2) When Ownership is Not Transferred Despite Delivery The delivery of the sugar to the warehouse of the buyer transfers ownership provided that the sale had already been perfected (Ocejo Perez and Co. v. Int. Bank, 37 Phil. 631), but ownership is not transferred, although there has been perfec-tion and delivery, if it was intended that no such transfer of ownership will take place until full payment of the price. [See Art. 1478, Civil Code: “The parties may stipulate (expressly or implied) that ownership in the thing shall not pass to the purchaser until he has fully paid the price.”] (See Masiclat, et al. v. Centeno, L-8420, May 31, 1956).

Masiclat, et al. v. Centeno L-8420, May 31, 1956

FACTS: S was the owner of 15 sacks of rice offered for sale at her store situated on a street near the public market.

A certain person approached S and bought it from her at P26 per sack, which the buyer promised to pay as soon as he would receive the price of his adobe stones which were then being unloaded from a truck parked at the opposite side of the street. The seller believed this, and upon request of the buyer, the seller ordered the loading of the rice on the truck, the seller continually watching the loading, waiting for the buyer to give to her the purchase price. But the buyer did not show up. So the seller ordered the rice unloaded from the truck. She was therefore surprised when the truck caretaker objected on the ground that he himself had purchased the rice from an unnamed individual at P26 a sack, and being the owner now of the rice, he was entitled to its possession.

Nevertheless, the seller continued to unload the rice. The caretaker of the truck then sued her for the custody of the rice. Issue: Who is entitled to the rice?

HELD: The seller is entitled to the rice for the simple reason that she never lost ownership thereof. She could not have transferred the ownership to the unknown stranger

although there was delivery because she did not intend to transfer the ownership till after payment of the price. This intent is evident from the fact that the seller continually watched her rice and demanded its unloading as soon as the unknown purchaser was missing.

(NOTE: In the same case, the caretaker argued that he had a better title to the rice by virtue of the maxim that where one of two persons must suffer by a fraud admitted by a third person, he who made possible the injury and ena-bled the third person to do wrong must suffer the loss. The Supreme Court, however, held that the maxim cannot apply for the simple reason that the seller here was not guilty of any negligence at all in view of her continued watching of the rice.)

[NOTE: Another point of the caretaker was that Art. 1505 of the Civil Code must apply. Under said article, purchases made at a market are valid even if the seller was not yet the owner, and delivery of the same would transfer ownership because of the doctrine of ostensible ownership, namely, that the market seller appears to be the owner, and if he is not, the true owner is negligent for having allowed him to appear as the owner. The Court held that said provision cannot apply because the sale did not take place in the market but only on the street near it.]

(3) Meaning of Tradition

Tradition, or delivery, is a mode of acquiring ownership, as a consequence of certain contracts such as sale, by virtue of which, actually or constructively, the object is placed in the control and possession of the vendee.

Albert v. University Publishing Co.

L-9300, Sep. 17, 1958

FACTS: The plaintiff, author of a text in Criminal Law, promised to deliver the manuscript of his book to the defend-ant, his publisher, on or before Dec. 31, 1948. On Dec. 16, 1948, plaintiff wrote a letter to the company stating that the manuscript was already at its disposal, and ready for printing

should the company desire to publish it the next month; that he was however keeping the manuscript in his offi ce because of fear of loss, destruction, or copying by others, and because he desired to add new decisions of the Supreme Court that might be published from time to time before the manuscript would be actually sent to the printer. He also stated, however, that if the company insisted on having the manuscript right away, it should let him know because he would then actually deliver it immediately. Issue: Was there already delivery?

HELD: Yes, for the above-mentioned facts constitute a delivery of the manuscript. Delivery indeed does not necessarily mean physical or material delivery. It may be constructive, as when it is placed at the disposal of the other.

Roque v. Lapuz L-32811, Mar. 31, 1980

The fact that a formal deed of conveyance was not made indicates very strongly that the parties did not intend to im-mediately transfer the ownership. What they intended was to transfer ownership only after full payment of the price.

(4) Kinds of Delivery or Tradition

(a) Actual or real. (Art. 1497, Civil Code).

(b) Legal or constructive

1) legal formalities. (Art. 1498, Civil Code).

2) symbolical tradition or traditio simbolica (such as the delivery of the key of the place where the mov-able sold is being kept). (Art. 1498, par. 2, Civil Code).

3) traditio longa manu (by mere consent or agreement) if the movable sold cannot yet be transferred to the possession of the buyer at the time of the sale. (Art.

1499, Civil Code).

4) traditio brevi manu (if the buyer had already the possession of the object even before the purchase, as when the tenant of a car buys the car, that is, his possession as an owner). (Art. 1499, Civil Code).

5) traditio constitutum possessorium (opposite of tra-ditio brevi manu) possession as owner changed, for example, to possession as a lessee.

Example: I sold my car but continued to possess it as a lessee of the purchaser. (Art. 1500, Civil Code).

[NOTE: In the case of Tan Boon Dick v. Aparri Farmer’s Coop. Marketing Ass’n., Inc. (L-14154, Jun. 30, 1960), the Supreme Court held that in trad itio brevi manu (and by implication, also in traditio constitutum possessorium), there is not only constructive delivery, but also ACTUAL DELIVERY. In said case, the buyer was at the time of the sale already a lessee of the property.

The Court also held that the possession of the buyer as lessee was converted into that of an owner from the date of the execution of the contract. The rule applies even if the price has not been fully paid in the absence of course of any stipulation that the ownership of the thing shall not pass to the purchaser until he has fully paid the price. (Art. 1478, Civil Code).]

(c) Quasi-tradition — delivery of rights, credits, or incorpo-real property, made by:

1) placing titles of ownership in the hands of a law-yer;

2) or allowing the buyer to make use of the rights.

(Art. 1501, Civil Code).

(5) Case

Victorias v. Leuenberger and CA GR 31189, Mar. 31, 1987

Where there is no express provision that title shall not pass until payment of the price and the thing sold has been delivered, title passes from the moment the thing sold is placed in the possession and control of the buyer. Delivery produces its natural effects in law, the principal and most important of which being the conveyance of ownership without prejudice to the right of the vendor to claim payment of the price.

Art. 1498. When the sale is made through a public in-strument, 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 deposi-tory where it is stored or kept.

COMMENT:

(1) Two Kinds of Constructive Delivery (Thru Legal For-malities and Thru Traditio Simbolica)

Art. 1498 treats of two kinds of constructive delivery:

(a) by legal formalities (1st par.) applies to real and personal property since the law does not distinguish. (See Puatu v. Mendoza, 64 Phil. 457 and Buencamino v. Viceo, 13 Phil. 97).

(b) traditio simbolica. (2nd par.)

Power Commercial & Industrial Corp. v. CA, Spouses Reynaldo & Angelito R. Quimbao,

and PNB

GR 119745, Jun. 20, 1997 84 SCAD 67

Symbolic delivery, as species of constructive delivery, effects the transfer of ownership thru the execution of a public document. Its effi cacy can, however, be prevented if the vendor does not possess control over the thing sold, in which case this legal fi ction must yield to reality.

The key word is control, not possession of the land.

[NOTE: Constructive delivery requires three things before ownership may be transmitted:

1) The seller must have control over the thing; other-wise how can he put another in control? (Addison v.

Felix, 30 Phil. 404 and Masallo v. Cesar, 39 Phil.

134).

2) The buyer must be put under control. (Addison v.

Felix, supra and Masallo v. Cesar, supra).

3) There must be the intention to deliver the thing for purposes of ownership (not, for example, of merely allowing the inspection or examination of the keys, nor for the purpose of having said keys repaired).

(10 Manresa 132).]

(2) Rules on Constructive Delivery

(a) If a seller has no actual possession, he cannot transfer ownership by constructive delivery. (Masallo v. Cesar, 39 Phil. 134). The reason is that in every kind of delivery, the transferee should have control, but here control cannot be had since it is in the possession of another.

(Addison v. Felix, 38 Phil. 404 and Vda. de Sarmiento v. Lesaca, L-15385, Jun. 30, 1960).

CASES:

Addison v. Felix 38 Phil. 404

FACTS: S sold to B a parcel of land, 2/3 of which was in the possession of T who claimed to be the owner of said 2/3. The deed of sale between S and B was in a public instrument. Because B could not get control of the 2/3 of the land in the possession of T, B sued for the cancellation of the sale.

HELD: Cancellation is proper because the property was not delivered. It is true that ordinarily, the execu-tion of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but in order that this delivery may have the effect of tradition, it is essential that the vendor shall have had such control over the thing sold, that is, it could have been possible 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 posses-sion. It is also imperative that the thing sold must be

placed under his control. When there is no impediment whatever to prevent the thing sold from passing into the actual possession of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is suffi cient. 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 fi ction yields to reality — the delivery has not been effected. (See also Garchitorena v. Almeda, 48 O.G. No. 8, 3432 and Vda.

de Sarmiento v. Lesaca, L-15386, Jun. 30, 1960).

Roque v. Lapuz L-32811, Mar. 31, 1980

If in a purported sale, a deed of conveyance is not executed, this can mean that the parties did not intend to immediately transfer the ownership of the real property involved.

Vda. de Sarmiento v. Lesaca L-15385, Jun. 30, 1960

FACTS: A buyer in a public instrument of two pareels of land could not take actual physical possession thereof because a certain Deloso claimed to be the real if owner thereof. Under the terms of the document, the buyer was being given the actual possession of the lands so that he could use them in a manner most advantageous to him. Since, however, he could not take possession, he alleged that there was NO delivery. Hence, he asked for rescission or resolution of the sale.

HELD: Considering the facts of the case, there re-ally was NO delivery and, therefore, he can either ask for resolution with a return to him of the purchase price with interest and damages) or for specifi c fulfi llment of the obligation. Indeed, the legal fi ction that the execution of a public document is equivalent to delivery, holds true

only when there is no impediment that may prevent the turning over of the property.

Asuncion, et al. v. Hon. Plan GR 52359, Feb. 24, 1981

In an action for partition, defendants agreed to deliver to plaintiff 24 hectares of land. Plaintiff’s heirs then executed lease contracts involving said 24 hectares with certain persons, not parties in the partition case.

When the lessees failed to pay the rent, the plaintiff’s heirs moved for the issuance of an alias writ of execution in the partition case, asking in effect for the delivery to them of the 24 hectares. The motion cannot be granted, for by the execution of the lease contracts, the judgment in the partition case had already been executed. A new action is needed to out the lessees, since they were not parties in the partition case.

(b) There can be no constructive delivery by means of a public instrument if there is a stipulation to that effect.

Hence, the Supreme Court has held that if there is a clause to the effect that the buyer “will take possession after four months,” at the end of 4 months it cannot be said that there is an automatic delivery. At said time, there must still be a delivery. The same is true in a case of a sale by installment, where it is stipulated that title should not be transferred till after the payment of the last installment; or where the vendor reserves the right to use and enjoy their property until the gathering of the crops still growing. (Aviles, et al. v. Arcega, et al., 44 Phil. 924, citing 10 Manresa, p. 129).

(c) The Civil Code does not provide that the execution of the deed is a conclusive presumption of the delivery of possession. What it says is that the execution thereof shall be equivalent to delivery which means that the disputable presumption established can be rebutted by clear and convincing evidence, such as evidence of the fact that the buyer did not really obtain the material possession of the building. Hence, it may be said that the execution of the contract is only presumptive delivery.

(Montenegro v. Roxas de Gomez, 58 Phil. 723).

Norkis Distributors, Inc. v. CA GR 91029, Feb. 7, 1990

It is true that Art. 1498 declares that the execution of a public instrument 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 impendiment 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 suffi cient.

But if, notwithstanding the execution of the instru-ment, 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 an-other will, then fi ction yields to reality — the delivery has not been effected.

(3) Effect of Non-Payment of Price

Execution of the deed of sale, in the absence of any defect, transfers delivery, even if the selling price, in whole or in part has not yet been paid, for it is not payment that transfers ownership. (Puatu v. Mendoza and David, 64 Phil.

457).

Puatu v. Mendoza and David 64 Phil. 457

FACTS: Puatu sold a parcel of land to Mendoza for P39,000 in a public instrument. The amount of P14,200 was paid, leaving a balance of P24,800. The land was mortgaged to Puatu as security for the balance. Puatu sued for the bal-ance. Mendoza claimed that the sale was not absolute since not all the purchase price has been paid and that therefore he should be refunded what he had already paid.

HELD: The sale was consummated and absolute, and the efendant must now pay the balance. The plaintiff has done all he is required to do in the contract of sale. The land has already been delivered by the execution of the public instru-ment. The buyer must now comply with his obligation.

(4) Delivery Thru Execution of a Quedan

If the parties in a sale intended that the copra sold should be placed then and there under the control of the buyer by the issuance of a quedan, delivery is effected upon the execution of the quedan, and the subsequent loss of the thing sold should be borne by the purchaser. (North Negros Sugar Co. v. Cia Gen. de Tabacos, L-9277, Mar. 29, 1957).

(5) Bar

A has sold a piano to B by private instrument for P500, 000. Who had ownership of the piano at the moment next after B had paid the P500,000 to A? Explain your answer.

ANS.: At the moment next after B had paid the P500,000 to A, ownership over the piano still resided in A, the execution

ANS.: At the moment next after B had paid the P500,000 to A, ownership over the piano still resided in A, the execution