Short answer. By a document or by conduct, since there is nothing to hand over. For incorporeal property the Civil Code accepts the execution of a public instrument as delivery, and where that does not apply, placing the titles of ownership in the buyer's possession, or the buyer's use of the rights with the seller's consent, counts as delivery.
What the law says
With respect to incorporeal property, the provisions of the first paragraph of article 1498 shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's consent, shall be understood as a delivery.
Civil Code, Article 1501 — Delivery of Incorporeal Property. Read the full provision →
What the law says
When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
Civil Code, Article 1498 — Constructive Delivery by Public Instrument. Read the full provision →
Why delivery matters at all
In Philippine law a contract of sale does not by itself transfer ownership — delivery does. Until the thing is delivered, the buyer has a right to demand it but is not yet the owner. That is easy enough with a car or a sack of rice, and impossible with incorporeal property: a credit, a share in a business, a right of way, an interest under a contract. There is nothing to place in anyone's hands. Article 1501 solves the problem by nominating substitutes for physical handing over, so that the moment ownership passes can still be pinned to an identifiable event.
The public instrument route
The first substitute is documentary. Article 1501 sends you to the first paragraph of Article 1498, under which the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. So a deed of assignment executed as a public instrument ordinarily delivers the right on the spot. Note the escape clause the article itself builds in. If the deed shows the parties meant delivery to happen later — on full payment, on a condition, on a fixed date — then the instrument does not deliver, because the contrary appears from the document.
Titles of ownership, or use with consent
Where no public instrument was executed, the article offers two more routes. The first is the placing of the titles of ownership in the possession of the vendee — turning over the certificates, the loan documents, the contract folder, the evidence of the right. The second is the use by the vendee of his rights, with the vendor's consent: the buyer begins to collect on the credit, to exercise the passage, to draw the benefit, and the seller does not object. Consent is the hinge. A buyer who simply starts using the right over the seller's protest has not received delivery, and a seller who wants to keep the point alive should object promptly and in writing.
What the article does not settle
Delivery between seller and buyer is not the same as effectiveness against everyone else. A person who owes the assigned credit is not bound to pay the new creditor until he knows of the assignment, so notice to the debtor remains essential in practice. Rights recorded in a registry, and shares in a company with its own transfer requirements, carry further formalities that Article 1501 does not replace, and third parties who deal in good faith with what the registry or the books show may be protected. Finally, no form of delivery can pass a right the seller never had. If a right you paid for is being disputed, gather the deed, the transfer documents and the correspondence, and take advice early; a consultation can be booked with the firm.
Related provisions
- Civil Code, Article 1501 — Delivery of Incorporeal Property
- Civil Code, Article 1498 — Constructive Delivery by Public Instrument