Aramis B. Aguilar v. Court of Appeals

Summary

This case involves a 25-year lease agreement where petitioner Aguilar sought specific performance claiming non-delivery of leased property, while respondent lessors sought rescission for non-payment of rentals. The Supreme Court affirmed that constructive delivery occurred upon execution of the lease contract, applying Article 1498 of the Civil Code analogously to lease agreements. Despite existing occupants, Aguilar took actual possession as evidenced by his construction of structures, subleasing activities, and assignment of rights. The Court upheld rescission due to Aguilar's material breach - failing to construct the required commercial building and pay rentals for over eight years despite continuous possession and profitable use of the premises. The decision was modified to deduct rental value of the area occupied by lessors to prevent unjust enrichment, establishing important precedent on constructive delivery in lease contracts and grounds for rescission.