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 t defend its title and peaceful possession in fa!or of the petitioners. "he property is mortgage to P#P and as such petitioners filed a re$uest to assume responsibility of the mo %ecause of petitioners failure to produce the re$uired papers their petition was denied. Petitioners allege that the contract should be rescinded because of failure of deli!ery. ISSUE: &'# the contract is recissible due to breach of contract. HEL: "here is no breach of contact in this case since there is no pro!ision in the contract that imposes the obl respondents to eject the people occupying the property. "here was also a constructi!e deli!ery because the deed of sale was made in a public document. "he contenti the petitioners that there could be no constructi!e deli!ery because the respondents is not in possession o property is of no merit. &hat matters in a constructi!e deli!ery is control and not possession. Control was the hands of the petitioners that is why they were able to file an ejectment case. Prior physical deli!ery is not legally re$uired and the e(ecution of the deed of sale is deemed e$ui!alent to deli!ery. SUPERCARS MA!A"EME!T A! EVELOPME!T CORPORATIO! VS. FLORES F#$%&: Respondent )lores bought an *su+u Carter Crew Cab from petitioner. "he RC%C financed the balance of t purchase price. *ts payment was secured by a chattel mortgage of the same !ehicle. ,owe!er defects of the emerged when respondent was using it. "hese defects persuaded respondent )lores to rescind the contract wit petitioner and stop the payment of the balance for the aforesaid car. As a result RC%C bank opted to file -(trajudicial )oreclosure of Chattel Mortgage. "he car was then sold at a public auction and RC%C ac$uired same. *t was later sold to a third person. Petitioner contends that respondent has no right to rescind the sale because the motor !ehicle in $uestion is already in the hands of a third party. ,ence Article //0/ c be a!ailed of by the respondent. I&&ue: &hether or not Article //0/ can no longer be a!ailed of by respondent )lores. Ru' n : Article //0/ is applicable. Rescission is proper if one of the parties to a contract commits a subs breach of its pro!ision. *t creates an obligation to return the object of the contract. *t can be carried o one who demands rescission can return whate!er he may obliged to restore. Rescission abrogates the contract its inception and re$uires a mutual restitution of the benefits recei!ed. Respondent is not obliged to retu while petitioner is obliged to return what has been paid.
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.
FLORESFacts: 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.
