TEN FORTY REALTY AND DEVELOPMENT CORPORATION

vs
MARINA CRUZ
DOCTRINE: The execution of public instrument gives rise only to a prima facie
presumption of delivery, presumption is destroyed when the delivery is not effected
because of a legal impediment of failure to take actual possession of the property
sold.
FACTS: An ejectment suit was filed by petitioner Ten Forty against Marina Cruz
alleging that the former is the true and absolute owner of a parcel of land and
residential house located in #71 18th St., E.B.B. Olongapo City with an area of 324
square meters having acquired said property from Barbara Galino by virtue of Deed
of Absolute Sale. After few years, petitioner Ten Forty learned that same property
was sold to Cruz who immediately occupied the property. Failure to arrive at an
amicable settlement, a demand letter was sent to respondent Cruz to vacate and
pay reasonable amount for the occupation of the same, however, Cruz refused to
vacate the premises. A counterclaim was submitted by respondent contending that
petitioner is not qualified to the property being a public land, that Galino did not sell
the property to petitioner but merely obtained a loan from Veronica Lorenzana,
president of the corporation, no allegation as to the prior possession of petitioner of
the subject land wherein Galino was the actual possessor when it was sold and
vacated the premises in favor of the respondent. MTCC ruled in favor of petitioner
and ordered respondent to vacate the property and surrender the possession
thereof to Ten Forty. RTC reversed MTCCs decision and ruled that the execution of
Deed of Absolute Sale in favor of petitioner Ten Forty without actual transfer of the
physical possession did not have the effect of making the petitioner the owner of
the property because there was no delivery of the object of the sale. An appeal was
submitted to Court of Appeals which sustained the ruling of RTC.
ISSUE: Whether or not delivery occurred upon the execution of Deed of Sale to
warrant possession over the subject land.
HELD: Art. 1498 lays down the rule that an execution of public instrument shall be
equivalent to the delivery of the thing that is the object of the contract if, from the
deed, the contrary does not appear or cannot be clearly inferred. Ownership is
transferred not by contract but by actual delivery, Civil Code did not indicate that
the execution of Deed of Sale is a conclusive presumption of delivery of possession
of real estate. Supreme Court held that the execution of public instrument is a prima
facie presumption of delivery and may be destroyed when actual delivery is not
effected because of a legal impediment. Petitioner Ten Forty never acquired the
property from the time it was sold to the corporation since Galino remained in
possession of the subject land and later vacated it after the second sale to Cruz,
hence, it remained under the control and possession of Galino and was never

transferred to petitioner. Tax declarations of Galino and Cruz represented an

adverse claim over the unregistered property and derogated its claim of control and
possession of the subject land.