Constructive delivery has the same legal effect as actual delivery

The legal effects and consequences of actual delivery also apply equally to constructive delivery. For
example, when the sale is made through a public instrument, such as a notarized deed of sale, 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 be clearly inferred. Prior physical delivery or
possession is not required.

Such was the ruling in the case of Jose Dailisan v. CA. In this case, Jose Dailisan filed a Complaint for
Partition before the RTC of QC, alleging that he purchased ¼ of the land of Federico Pugao in Bago
Bantay, QC covered by a TCT. Jose Dailisan claims that he had paid Federico several installments
amounting to P6,000. Federico could not deliver the title to Jose because the property was still
mortgaged to a bank. When the mortgage was released, Jose demanded the execution of a deed of
absolute sale. Instead, Federico proposed to mortgage the property to petitioner as security for a lone
of P10,000, payable in 3 months, and upon payment of the loan, the deed of absolute sale would be
executed. The loan was paid and Federico executed a deed of absolute sale in favor of Jose. When
petitioner asked for the partition of the lot, Federico refused and even sent a notice of eviction against
petitioner.

According to Federico, he allowed Jose and his niece to occupy ¼ of his lot, He admitted that he
executed in favor of petitioner a deed of real estate mortgage but denied having voluntarily executed
the deed of absolute sale, and instead alleged that when he was seriously ill, Jose made him sign pages
of what the latter told him to be parts of the real estate mortgage. Federico filed a complaint for
falsification and ejectment against Jose.

The RTC found that herein respondents failed to disprove the validity of the deed of absolute sale. On
appeal, the CA reversed the decision and that petitioner should have filed an action for specific
performance to compel Federico to honor the deed of absolute sale; yet the right to file such action had
already expired. It further ruled that the sale was void because there’s no consent from Federico and
that there was no proof of payment of the price.

ISSUE: Whether or not delivery of the property was validly made

RULING: Yes. The notarized deed of absolute sale is a public document, and has in its favor the
presumption of regularity which may only be rebutted by evidence so clear, strong and convincing as to
exclude all controversy as to the falsity of the certificate. Ownership of the thing sold is acquired only
from the time of delivery thereof, either actual or constructive. Article 1498 of the Civil Code provides
that 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 be inferred. The Court notes that Federico had already delivered the portion he sold to
petitioner, subject of course to the execution of a technical survey, when he executed the deed of
absolute sale, which is a public instrument. In view of the delivery in law, coupled with petitioner's
actual occupation of the portion where his house stands, all that is needed is its segregation from the
rest of the property.

Take note however that the rule applies only when the instrument is public. If the sale is done in a
private instrument without actual physical delivery, title does NOT pass to the vendee.
Exceptions (when execution of public instrument does not produce effects of delivery)

1. When in the execution of a public instrument, there is a stipulation to the contrary.

- For example, in case of sale by installments, it is stipulated that until the last installment is
made, the title to the property should remain with the seller. In other words, devoid of
stipulation that “ownership in the thing shall not pass to the purchaser until he has fully paid
the price,” ownership in the thing shall pass from the seller to buyer upon actual or
constructive delivery even if the purchase price has not yet been fully paid.
2. When at the tome of the execution of the public instrument, the subject matter was not subject
to the control of the seller
- The execution of a public instrument is equivalent to actual delivery only when the thing
sold is subject to the control of the seller, so that at the moment of sale (consummation
stage), its “material delivery could have been made,” which talks of capacity rather than an
actual physical delivery. It is not enough to confer upon the vendee the ownership and right
of possession. The thing sold must be placed in his control. As such, the keyword is really
CONTROL, not POSSESSION

- If, notwithstanding the execution of the instrument, the purchase 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. In short, the
legal fiction that the execution of a public instrument is equivalent to delivery holds true
only when there is no impediment that may prevent the passing of the property from the
vendor to the vendee. For example, such impediment exists when the land sold is in the
possession of a third person who claims to be the owner thereof.

In the case of Leonardo v. Maravilla, Mariano Torres, predecessor-in-interest of respondents, owns a

parcel of land covered by a TCT. The said land was sold by Mariano to Eusebio Roxas but the latter was
not able to register the same due to a legal dispute between Mariano and a certain Francisco Fernandez.
Mariano eventually won that case.

Petitioner now buys the lot from Eusebio Roxas and asked that it be registered under his name. He was
not able to do so because the Owner’s Duplicate Certificate of Title (ODCT) was still in the hands of
respondents and that the Register of Deeds could not be retrieved or located in their office. Petitioner
files an adverse claim. The Register of Deeds found the original TCT of the land and annotated thereon
the adverse claim filed by petitioner. Petitioner asked the respondents to deliver possession of the
owners duplicate copy of said TCT. When the latter ignored his demand, petitioner filed a complaint for
“Delivery of Possession of Property, Owners Duplicate Certificate of Title, Rentals and Damages.”

Petitioner claims that he is the lawful owner of said land having purchased it from Eusebio Roxas and
having protected his rights through the annotation of adverse claim when the register of Deeds found
the Original TCT. Respondents countered that since 1938 up to the present, the lot in question has been
registered in the name of the late Mariano Torres, their predecessor-in-interest, and that they have
been in material possession thereof in the concept of owners. They maintain that they have been in
open and peaceful possession of the said property.

ISSUE: Whether or not petitioner is the lawful owner of the subject property

RULING: No. In this jurisdiction, the execution of a public document does not constitute sufficient
delivery where the property involved is in the actual and adverse possession of third persons. Even if
included in the contract, the ownership of the property in dispute did not pass. It is not disputed that
the lot in question was never delivered to petitioner notwithstanding the alleged execution of a deed of
absolute sale. From 1972 to 1993, petitioner neither had, nor demanded, material possession of the
disputed lot. It was the respondents who have been in control and possession thereof in the concept of
owners since 1938 up to the present. It follows that ownership of the lot was never transferred to
petitioner.

Under Article 1498 of the Civil Code, 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. Thus, the execution of the contract is
only a presumptive, not conclusive delivery which can be rebutted by evidence to the contrary, as when
there is failure on the part of the vendee to take material possession of the land subject of the sale in
the concept of a purchaser-owner.

Remember, however, that even if the property is in the actual and adverse possession of a third person,
if the vendee is aware of such possession in the hands of a third person, and he agreed to take the
necessary steps to take material possession of the thing, such agreement would perfectly be valid.