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    08 Equatorial Vs Mayfair

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    Melody May Omelan Arguelles
    1. Carmelo & Bauermann owned land and buildings that were leased to Mayfair Theater for 20 years, with an option for Mayfair to purchase. However, within the lease term the properties were sold to Equatorial without offering to Mayfair. 2. Mayfair sued to rescind the sale to Equatorial. The courts rescinded the sale, finding that ownership was not transferred because Equatorial never took actual possession of the properties. 3. Rent from properties belongs to the owner. Since the sale to Equatorial was rescinded, Equatorial was not the owner and was not entitled to collect rent from Mayfair during the lease period.

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    08 Equatorial Vs Mayfair

    Uploaded by

    Melody May Omelan Arguelles
    69 views3 pages
    1. Carmelo & Bauermann owned land and buildings that were leased to Mayfair Theater for 20 years, with an option for Mayfair to purchase. However, within the lease term the properties were sold to Equatorial without offering to Mayfair. 2. Mayfair sued to rescind the sale to Equatorial. The courts rescinded the sale, finding that ownership was not transferred because Equatorial never took actual possession of the properties. 3. Rent from properties belongs to the owner. Since the sale to Equatorial was rescinded, Equatorial was not the owner and was not entitled to collect rent from Mayfair during the lease period.

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    08 Equatorial vs Mayfair

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    1. Carmelo & Bauermann owned land and buildings that were leased to Mayfair Theater for 20 years, with an option for Mayfair to purchase. However, within the lease term the properties were sold to Equatorial without offering to Mayfair. 2. Mayfair sued to rescind the sale to Equatorial. The courts rescinded the sale, finding that ownership was not transferred because Equatorial never took actual possession of the properties. 3. Rent from properties belongs to the owner. Since the sale to Equatorial was rescinded, Equatorial was not the owner and was not entitled to collect rent from Mayfair during the lease period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    69 views3 pages

    08 Equatorial Vs Mayfair

    Uploaded by

    Melody May Omelan Arguelles
    1. Carmelo & Bauermann owned land and buildings that were leased to Mayfair Theater for 20 years, with an option for Mayfair to purchase. However, within the lease term the properties were sold to Equatorial without offering to Mayfair. 2. Mayfair sued to rescind the sale to Equatorial. The courts rescinded the sale, finding that ownership was not transferred because Equatorial never took actual possession of the properties. 3. Rent from properties belongs to the owner. Since the sale to Equatorial was rescinded, Equatorial was not the owner and was not entitled to collect rent from Mayfair during the lease period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    EQUATORIAL V.

    MAYFAIR-
    While execution of a public instrument of sale is recognized by law as equivalent to the
    delivery of the thing sold, such constructive or symbolic delivery is merely presumptive.
    It is nullified by the failure of the vendee to take actual possession of the land sold.

    FACTS:

    Carmelo & Bauermann, Inc. owned a land, together with two 2-storey buildings at Claro
    M. Recto Avenue, Manila, and covered by TCT No. 18529.

    On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc. fpr
    20 years. The lease covered a portion of the second floor and mezzanine of a two-
    storey building with about 1,610 square meters of floor area, which respondent used as
    Maxim Theater.

    Two years later, on March 31, 1969, Mayfair entered into a second Lease with Carmelo
    for another portion of the latter’s property this time, a part of the second floor of the two-
    storey building, and two store spaces on the ground floor. In that space, Mayfair put up
    another movie house known as Miramar Theater. The Contract of Lease was likewise
    for a period of 20 years.

    Both leases contained a clause giving Mayfair a right of first refusal to purchase the
    subject properties. Sadly, on July 30, 1978 - within the 20-year-lease term -- the subject
    properties were sold by Carmelo to Equatorial Realty Development, Inc. for eleven
    million smackers, without their first being offered to Mayfair.

    As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint
    before the Regional Trial Court of Manila for the recission of the Deed of Absolute Sale
    between Carmelo and Equatorial, specific performance, and damages. RTC decided for
    Carmelo and Equatorial. Tsk tsk.
    CA reversed and ruled for Mayfair. The SC denied a petition questioning the CA
    decision. What happened is that the contract did get rescinded, Equatorial got its money
    back and asserted that Mayfair have the right to purchase the lots for 11 million bucks.
    Decision became final and executory, so Mayfair deposited with the clerk the 11M (less
    847grand withholding) payment for the properties (Carmelo somehow disappeared).
    Meanwhile, on Sept 18, 1997, barely five months after Mayfair submitted its Motion for
    Execution, Equatorial demanded from Mayfair backrentals and reasonable
    compensation for the Mayfair’s continued use of the subject premises after its lease
    contracts expired. Remember that Mayfair was still occupying the premises during all
    this hullabaloo.

    ISSUE:

    Whether or not Equatorial was the owner of the subject property and could thus enjoy
    the fruits and rentals.

    HELD:NO.

    Nor right of ownership was transferred from Carmelo to Equatorial since there was
    failure to deliver the property to the buyer. Compound this with the fact that the sale was
    even rescinded.

    The court went on to assert that rent is a civil fruit that belonged to the owner of the
    property producing it by right of accession. Hence, the rentals that fell due from the time
    of the perfection of the sale to petitioner until its rescission by final judgment should
    belong to the owner of the property during that period.

    We remember from SALES that in a contract of sale, “one of the contracting parties
    obligates himself to transfer ownership of and to deliver a determinate thing and the
    other to pay therefor a price certain in money or its equivalent.”

    Ownership of the thing sold is a real right, which the buyer acquires only upon delivery
    of the thing to him “in any of the ways specified in articles 1497 to 1501, or in any other
    manner signifying an agreement that the possession is transferred from the vendor to
    the vendee.” This right is transferred, not by contract alone, but by tradition or delivery.
    There is delivery if and when the thing sold “is placed in the control and possession of
    the vendee.”

    While execution of a public instrument of sale is recognized by law as equivalent to the


    delivery of the thing sold, such constructive or symbolic delivery is merely presumptive.
    It is nullified by the failure of the vendee to take actual possession of the land sold.

    For property to be delivered, we need two things. Delivery of property or title, and
    transfer of control or custody to the buyer.

    Possession was never acquired by the petitioner. It therefore had no rights to rent.

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