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EQUATORIAL V. MAYFAIR- Sale

of Land (/law-library/civillaw/property/1842-equatorial-vmayfair-sale-of-land.html)
Property, Ownership And Its Modifications (/Law-Library/Civil-Law/Property.Html)

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EQUATORIAL V. MAYFAIR- Sale

of Land

While execution of a public instrument of sale is recognized by law as equivalent to the delivery of the thing
sold, such constructive or symbolic delivery is merely presumptive. It is nullified by the failure of the
vendee to take actual possession of the land sold.

FACTS:
Carmelo & Bauermann, Inc. owned a land, together with two 2-storey buildings at Claro M. Recto
Avenue, Manila, and covered by TCT No. 18529.
On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc. fpr 20 years. The
lease covered a portion of the second floor and mezzanine of a two-storey building with about 1,610
square meters of floor area, which respondent used as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second Lease with Carmelo for another
portion of the latters property this time, a part of the second floor of the two-storey building, and two
store spaces on the ground floor. In that space, Mayfair put up another movie house known as
Miramar Theater. The Contract of Lease was likewise for a period of 20 years.
Both leases contained a clause giving Mayfair a right of first refusal to purchase the subject
properties. Sadly, on July 30, 1978 - within the 20-year-lease term -- the subject properties were sold
by Carmelo to Equatorial Realty Development, Inc. for eleven million smackers, without their first
being offered to Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint before the
Regional Trial Court of Manila for the recission of the Deed of Absolute Sale between Carmelo and
Equatorial, specific performance, and damages. RTC decided for Carmelo and Equatorial. Tsk tsk.
CA reversed and ruled for Mayfair. The SC denied a petition questioning the CA decision. What
happened is that the contract did get rescinded, Equatorial got its money back and asserted that
Mayfair have the right to purchase the lots for 11 million bucks.
Decision became final and executory, so Mayfair deposited with the clerk the 11M (less 847grand
withholding) payment for the properties (Carmelo somehow disappeared).
Meanwhile, on Sept 18, 1997, barely five months after Mayfair submitted its Motion for Execution,
Equatorial demanded from Mayfair backrentals and reasonable compensation for the Mayfairs
continued use of the subject premises after its lease contracts expired. Remember that Mayfair was
still occupying the premises during all this hullabaloo.

ISSUE:
Whether or not Equatorial was the owner of the subject property and could thus enjoy the fruits and
rentals.

HELD:NO.
Nor right of ownership was transferred from Carmelo to Equatorial since there was failure to deliver
the property to the buyer. Compound this with the fact that the sale was even rescinded.
The court went on to assert that rent is a civil fruit that belonged to the owner of the property
producing it by right of accession. Hence, the rentals that fell due from the time of the perfection of
the sale to petitioner until its rescission by final judgment should belong to the owner of the property
during that period.
We remember from SALES that in a contract of sale, one of the contracting parties obligates himself
to transfer ownership of and to deliver a determinate thing and the other to pay therefor a price
certain in money or its equivalent.
Ownership of the thing sold is a real right, which the buyer acquires only upon delivery of the thing to
him in any of the ways specified in articles 1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the vendor to the vendee. This right is transferred,
not by contract alone, but by tradition or delivery. There is delivery if and when the thing sold is
placed in the control and possession of the vendee.
While execution of a public instrument of sale is recognized by law as equivalent to the delivery of the
thing sold, such constructive or symbolic delivery is merely presumptive. It is nullified by the failure
of the vendee to take actual possession of the land sold.
For property to be delivered, we need two things. Delivery of property or title, and transfer of control
or custody to the buyer.
Possession was never acquired by the petitioner. It therefore had no rights to rent.

House of Representatives
Electoral Tribunal C...

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