In Cabalhin v. Lansuela, the Supreme Court clarified that the mere execution of a deed of sale does not automatically transfer land ownership. Ownership is transferred upon actual or constructive delivery of the property to the buyer, not just through a signed document. This means that even with a deed of sale, if the buyer doesn’t take possession or control of the land, they don’t truly own it. This case underscores the critical importance of physically taking control of property and registering the sale to fully secure ownership rights.

Possession vs. Paper: Who Truly Owns the Disputed Land?

This case revolves around a parcel of agricultural land originally registered under the name of Isidoro Cabalhin. After Isidoro’s death, his son, Isabelo Cabalhin, filed a complaint to recover possession of the land from Spouses Bonifacio and Isidra Lansuela. The Lansuelas claimed ownership based on a series of unregistered deeds of sale, starting from a sale by Isidoro to Enrique Perales, and eventually to Bonifacio Lansuela. The central legal question is whether these unregistered sales, without actual transfer of possession, were sufficient to transfer ownership of the land.

The Regional Trial Court (RTC) initially ruled in favor of Isabelo Cabalhin, emphasizing that the certificate of title served as an indefeasible proof of ownership. The RTC also noted the Lansuelas’ failure to register the series of deeds of sale, suggesting they did not truly believe themselves to be the owners. However, the Court of Appeals (CA) reversed this decision, stating that an unrecorded deed of sale is binding between the parties and their privies, and that registration is not a mode of acquiring ownership.

The Supreme Court, in reversing the CA’s decision, focused on the critical element of delivery in the transfer of ownership. The Court cited Articles 1496, 1497, 1498, and 1501 of the Civil Code, which stipulate that ownership is acquired by the buyer from the moment the thing sold is delivered to them. Delivery can be actual or constructive, but it always requires the vendor to relinquish control and custody of the property, and the vendee to assume the same.

In this case, the Court found that Manaay, the Lansuelas’ seller, was never in possession of either the land or the title. Therefore, Manaay could not have effected a constructive delivery of the land to the Lansuelas by executing the Deed of Absolute Sale. The Supreme Court referenced Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., emphasizing that delivery is a composite act requiring both parties’ concurrence and the absolute giving up of control by the vendor and assumption by the vendee.

Delivery has been described as a composite act, a thing in which both parties must join and the minds of both parties concur. It is an act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the possession of the same. In its natural sense, delivery means something in addition to the delivery of property or title; it means transfer of possession.

Building on this principle, the Supreme Court then cited Cebu Winland Development Corporation v. Ong Siao Hua which reiterated that ownership does not pass by mere stipulation but only by delivery.

the delivery of the thing [x x x] signifies that title has passed from the seller to the buyer… The delivery under any of the forms provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission of ownership from vendor to vendee has taken place.

The Supreme Court also cited Spouses Santiago v. Villamor, reinforcing the principle that a person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument.

In this case, no constructive delivery of the land transpired upon the execution of the deed of sale since it was not the spouses Villamor, Sr. but the respondents who had actual possession of the land. The presumption of constructive delivery is inapplicable and must yield to the reality that the petitioners were not placed in possession and control of the land.

Given this precedent, the court placed significant weight on the fact that none of the alleged vendees, including the Lansuelas, had ever taken possession of the land.

The court highlighted the Lansuelas’ failure to investigate why Isabelo Cabalhin remained in possession of the land despite the alleged prior sales. This inaction, along with the unexplained failure to register the sales for over 30 years, indicated that the purported vendees did not truly regard themselves as owners. As stated in Mahilum v. Spouses Ilano it is uncharacteristic of a conscientious buyer of real estate not to cause the immediate registration of his deed of sale, as well as the issuance of a new certificate of title in his name. In summary, the Supreme Court underscored that mere payment of real property taxes, without actual delivery of the property, is insufficient to establish ownership.

FAQs

What was the key issue in this case?	The key issue was whether unregistered deeds of sale, without actual transfer of possession, were sufficient to transfer ownership of the land.
What does the Civil Code say about the transfer of property ownership?	The Civil Code states that ownership of the thing sold is transferred to the buyer upon actual or constructive delivery, not merely by signing a deed of sale.
What is “constructive delivery”?	Constructive delivery occurs when the seller relinquishes control and custody of the property, and the buyer assumes the same, even without physical transfer. However, one must have possession to transfer possession via constructive delivery.
Why was the failure to register the deeds of sale significant?	The failure to register the deeds of sale for a long period suggested that the alleged vendees did not truly believe themselves to be the owners. It’s uncharacteristic for a buyer to neglect registering a sale.
What is the effect of paying real property taxes on claiming ownership?	Paying real property taxes alone is not sufficient to prove ownership; there must also be actual or constructive delivery of the property.
What did the Court rule about the Lansuelas’ claim of ownership?	The Court ruled that the Lansuelas did not acquire ownership of the land because their seller, Manaay, never had possession or control of the property to begin with.
Who had the stronger claim to the land in this case?	Isabelo Cabalhin had the stronger claim because he possessed both the land and the original certificate of title, and there was no valid transfer of possession to the Lansuelas or their predecessors.
What is the practical implication of this ruling for land buyers?	This ruling emphasizes the importance of taking actual possession and registering the sale to secure ownership rights fully; a deed of sale alone is not enough.

The Supreme Court’s decision underscores the importance of both possession and registration in establishing land ownership in the Philippines. While a deed of sale is a crucial document, it is not the sole determinant of ownership. Actual or constructive delivery of the property, coupled with diligent registration, is necessary to fully secure one’s rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Cabalhin v. Lansuela, G.R. No. 202029, February 15, 2022