POWER COMMERCIAL V.

CA (June 20, 1997)

FACTS:
Petitioner asbestos manufacturer Power Commercial and industrial corporation bought the property of spouses
Reynaldo and Angelita Quiambao located in Makati City.
Since there are lessees occupying the subject land, part of the deed of sale is a warranty of respondents that will
defend its title and peaceful possession in favor of the petitioners.
The property is mortgage to PNP and as such, petitioners filed a request to assume responsibility of the mortgage.
Because of petitioners failure to produce the required papers, their petition was denied.
Petitioners allege that the contract should be rescinded because of failure of delivery.
ISSUE:
WON the contract is recissible due to breach of contract.
HELD:
There is no breach of contact in this case since there is no provision in the contract that imposes the obligation to the
respondents to eject the people occupying the property.
There was also a constructive delivery because the deed of sale was made in a public document. The contention of
the petitioners that there could be no constructive delivery because the respondents is not in possession of the
property is of no merit. What matters in a constructive delivery is control and not possession. Control was placed in
the hands of the petitioners that is why they were able to file an ejectment case. Prior physical delivery or possession
is not legally required and the execution of the deed of sale is deemed equivalent to delivery.

SUPERCARS MANAGEMENT AND DEVELOPMENT CORPORATION VS. FLORES

Facts: Respondent Flores bought an Isuzu Carter Crew Cab from petitioner. The RCBC financed the balance of the
purchase price. Its payment was secured by a chattel mortgage of the same vehicle. However, defects of the car
emerged when respondent was using it. These defects persuaded respondent Flores to rescind the contract with
petitioner and stop the payment of the balance for the aforesaid car. As a result, RCBC bank opted to file a petition for
Extrajudicial Foreclosure of Chattel Mortgage. The car was then sold at a public auction and RCBC acquired the
same. It was later sold to a third person. Petitioner contends that respondent has "no right to rescind the contract of
sale" because the motor vehicle in question is already in the hands of a third party. Hence, Article 1191 can no longer
be availed of by the respondent.
Issue: Whether or not Article 1191 can no longer be availed of by respondent Flores.
Ruling: Article 1191 is applicable. Rescission is proper if one of the parties to a contract commits a substantial
breach of its provision. It creates an obligation to return the object of the contract. It can be carried out only when the
one who demands rescission can return whatever he may obliged to restore. Rescission abrogates the contract from
its inception and requires a mutual restitution of the benefits received. Respondent is not obliged to return the car;
while petitioner is obliged to return what has been paid.