Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 80298 April 26, 1990
EDCA PUBLISHING DISTRIBUTING CORP., petitioner,
vs.
THE SPOUSES LEONOR !"# GERARDO SANTOS, #oi"$ %&'i"('' &"#(r )*(
"!+( !"# '),l( o- .SANTOS BOO/STORE,. !"# THE COURT O0 APPEALS,
respondents.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B. Samson for petitioner.
Cendana Santos, Delmundo & Cendana for private respondents.

CRU1, J.:
The case before us calls for the interpretation of rticle !!" of the #ivil #ode and
raises the particular $uestion of %hen a person &a' be dee&ed to have been
(unla%full' deprived( of &ovable propert' in the hands of another. The article runs in
full as follo%s)
rt. !!". The possession of &ovable propert' ac$uired in *ood faith
is e$uivalent to a title. Nevertheless, one %ho has lost an' &ovable
or has been unla%full' deprived thereof, &a' recover it fro& the
person in possession of the sa&e.
If the possessor of a &ovable lost or of %hich the o%ner has been
unla%full' deprived has ac$uired it in *ood faith at a public sale, the
o%ner cannot obtain its return %ithout rei&bursin* the price paid
therefor.
The &ovable propert' in this case consists of boo+s, %hich %ere bou*ht fro& the
petitioner b' an i&postor %ho sold it to the private respondents. O%nership of the
boo+s %as reco*ni,ed in the private respondents b' the Municipal Trial #ourt,
1
%hich
%as sustained b' the Re*ional Trial #ourt,
2
%hich %as in turn sustained b' the #ourt
of ppeals.
2
The petitioner as+s us to declare that all these courts have erred and
should be reversed.
This case arose %hen on October !, -".-, a person identif'in* hi&self as Professor
/ose #ru, placed an order b' telephone %ith the petitioner co&pan' for 012 boo+s,
pa'able on deliver'.
3
3D# prepared the correspondin* invoice and delivered the
boo+s as ordered, for %hich #ru, issued a personal chec+ coverin* the purchase price
of P.,""!.2!.
4
On October 4, -".-, #ru, sold -51 of the boo+s to private respondent
6eonor Santos %ho, after verif'in* the seller7s o%nership fro& the invoice he sho%ed
her, paid hi& P-,411.11.
6
Mean%hile, 3D# havin* beco&e suspicious over a second order placed b' #ru,
even before clearin* of his first chec+, &ade in$uiries %ith the De la Salle #olle*e
%here he had clai&ed to be a dean and %as infor&ed that there %as no such person
in its e&plo'. Further verification revealed that #ru, had no &ore account or deposit
%ith the Philippine &anah 8an+, a*ainst %hich he had dra%n the pa'&ent chec+.
5

3D# then %ent to the police, %hich set a trap and arrested #ru, on October 4, -".-.
Investi*ation disclosed his real na&e as To&as de la Pe9a and his sale of -51 of the
boo+s he had ordered fro& 3D# to the private
respondents.
8
On the ni*ht of the sa&e date, 3D# sou*ht the assistance of the police in Precinct !
at the :N venue, %hich forced their %a' into the store of the private respondents and
threatened 6eonor Santos %ith prosecution for bu'in* stolen propert'. The' sei,ed the
-51 boo+s %ithout %arrant, loadin* the& in a van belon*in* to 3D#, and thereafter
turned the& over to the petitioner.
9
Protestin* this hi*h;handed action, the private respondents sued for recover' of the
boo+s after de&and for their return %as re<ected b' 3D#. %rit of preli&inar'
attach&ent %as issued and the petitioner, after initial refusal, finall' surrendered the
boo+s to the private respondents.
10
s previousl' stated, the petitioner %as
successivel' rebuffed in the three courts belo% and no% hopes to secure relief fro&
us.
To be*in %ith, the #ourt e=presses its disapproval of the arbitrar' action of the
petitioner in ta+in* the la% into its o%n hands and forcibl' recoverin* the disputed
boo+s fro& the private respondents. The circu&stance that it did so %ith the
assistance of the police, %hich should have been the first to uphold le*al and peaceful
processes, has co&pounded the %ron* even &ore deplorabl'. >uestions li+e the one
at bar are decided not b' police&en but b' <ud*es and %ith the use not of brute force
but of la%ful %rits.
No% to the &erits
It is the contention of the petitioner that the private respondents have not established
their o%nership of the disputed boo+s because the' have not even produced a receipt
to prove the' had bou*ht the stoc+. This is unacceptable. Precisel', the first sentence
of rticle !!" provides that (the possession of &ovable propert' ac$uired in *ood faith
is e$uivalent to a title,( thus dispensin* %ith further proof.
1
The ar*u&ent that the private respondents did not ac$uire the boo+s in *ood faith has
been dis&issed b' the lo%er courts, and %e a*ree. 6eonor Santos first ascertained the
o%nership of the boo+s fro& the 3D# invoice sho%in* that the' had been sold to
#ru,, %ho said he %as sellin* the& for a discount because he %as in financial need.
Private respondents are in the business of bu'in* and sellin* boo+s and often deal
%ith hard;up sellers %ho ur*entl' have to part %ith their boo+s at reduced prices. To
6eonor Santos, #ru, &ust have been onl' one of the &an' such sellers she %as
accusto&ed to dealin* %ith. It is hardl' bad faith for an' one in the business of bu'in*
and sellin* boo+s to bu' the& at a discount and resell the& for a profit.
8ut the real issue here is %hether the petitioner has been unla%full' deprived of the
boo+s because the chec+ issued b' the i&postor in pa'&ent therefor %as dishonored.
In its e=tended &e&orandu&, 3D# cites nu&erous cases holdin* that the o%ner %ho
has been unla%full' deprived of personal propert' is entitled to its recover' e=cept onl'
%here the propert' %as purchased at a public sale, in %hich event its return is sub<ect
to rei&burse&ent of the purchase price. The petitioner is be**in* the $uestion. It is
puttin* the cart before the horse. :nli+e in the cases invo+ed, it has 'et to be
established in the case at bar that 3D# has been unla%full' deprived of the boo+s.
The petitioner ar*ues that it %as, because the i&postor ac$uired no title to the boo+s
that he could have validl' transferred to the private respondents. Its reason is that as
the pa'&ent chec+ bounced for lac+ of funds, there %as a failure of consideration that
nullified the contract of sale bet%een it and #ru,.
The contract of sale is consensual and is perfected once a*ree&ent is reached
bet%een the parties on the sub<ect &atter and the consideration. ccordin* to the #ivil
#ode)
rt. -04!. The contract of sale is perfected at the &o&ent there is a
&eetin* of &inds upon the thin* %hich is the ob<ect of the contract
and upon the price.
Fro& that &o&ent, the parties &a' reciprocall' de&and
perfor&ance, sub<ect to the provisions of the la% *overnin* the for&
of contracts.
=== === ===
rt. -044. The o%nership of the thin* sold shall be transferred to the
vendee upon the actual or constructive deliver' thereof.
rt. -04.. The parties &a' stipulate that o%nership in the thin* shall
not pass to the purchaser until he has full' paid the price.
It is clear fro& the above provisions, particularl' the last one $uoted, that o%nership in
the thin* sold shall not pass to the bu'er until full pa'&ent of the purchase only if there
is a stipulation to that effect. Other%ise, the rule is that such o%nership shall pass fro&
the vendor to the vendee upon the actual or constructive deliver' of the thin* sold
even if the purchase price has not 'et been paid.
Non;pa'&ent onl' creates a ri*ht to de&and pa'&ent or to rescind the contract, or to
cri&inal prosecution in the case of bouncin* chec+s. 8ut absent the stipulation above
noted, deliver' of the thin* sold %ill effectivel' transfer o%nership to the bu'er %ho can
in turn transfer it to another.
In siatic #o&&ercial #orporation v. n*,
11
the plaintiff sold so&e cos&etics to
Francisco n*, %ho in turn sold the& to Tan Sit 8in. siatic not havin* been paid b'
n*, it sued for the recover' of the articles fro& Tan, %ho clai&ed he had validl'
bou*ht the& fro& n*, pa'in* for the sa&e in cash. Findin* that there %as no
conspirac' bet%een Tan and n* to deceive siatic the #ourt of ppeals declared)
?et the defendant invo+ed rticle 020
12
of the #ivil #ode providin*,
a&on* other thin*s that (one %ho has been unla%full' deprived of
personal propert' &a' recover it fro& an' person possessin* it.( @e
do not believe that the plaintiff has been unla%full' deprived of the
cartons of Aloco Tonic %ithin the scope of this le*al provision. It has
voluntaril' parted %ith the& pursuant to a contract of purchase and
sale. The circu&stance that the price %as not subse$uentl' paid did
not render ille*al a transaction %hich %as valid and le*al at the
be*innin*.
In Ta*atac v. /i&ene,,
12
the plaintiff sold her car to Feist, %ho sold it to Sanche,, %ho
sold it to /i&ene,. @hen the pa'&ent chec+ issued to Ta*atac b' Feist %as
dishonored, the plaintiff sued to recover the vehicle fro& /i&ene, on the *round that
she had been unla%full' deprived of it b' reason of Feist7s deception. In rulin* for
/i&ene,, the #ourt of ppeals held)
The point of in$uir' is %hether plaintiff;appellant Trinidad #. Ta*atac
has been unla%full' deprived of her car. t first blush, it %ould see&
that she %as unla%full' deprived thereof, considerin* that she %as
induced to part %ith it b' reason of the chicaner' practiced on her b'
@arner 6. Feist. #ertainl', s%indlin*, li+e robber', is an ille*al
&ethod of deprivation of propert'. In a &anner of spea+in*, plaintiff;
appellant %as (ille*all' deprived( of her car, for the %a' b' %hich
@arner 6. Feist induced her to part %ith it is ille*al and is punished
b' la%. 8ut does this (unla%ful deprivation( co&e %ithin the scope of
rticle !!" of the Ne% #ivil #odeB
=== === ===
2
. . . The fraud and deceit practiced b' @arner 6. Feist ear&ar+s this
sale as a voidable contract Crticle -D"1 N.#.#.E. 8ein* a voidable
contract, it is susceptible of either ratification or annul&ent. If the
contract is ratified, the action to annul it is e=tin*uished Crticle -D"5,
N.#.#.E and the contract is cleansed fro& all its defects Crticle
-D"2, N.#.#.EF if the contract is annulled, the contractin* parties are
restored to their respective situations before the contract and &utual
restitution follo%s as a conse$uence Crticle -D"., N.#.#.E.
Go%ever, as lon* as no action is ta+en b' the part' entitled, either
that of annul&ent or of ratification, the contract of sale re&ains valid
and bindin*. @hen plaintiff;appellant Trinidad #. Ta*atac delivered
the car to Feist b' virtue of said voidable contract of sale, the title to
the car passed to Feist. Of course, the title that Feist ac$uired %as
defective and voidable. Nevertheless, at the ti&e he sold the car to
Feli= Sanche,, his title thereto had not been avoided and he
therefore conferred a *ood title on the latter, provided he bou*ht the
car in *ood faith, for value and %ithout notice of the defect in Feist7s
title Crticle -!12, N.#.#.E. There bein* no proof on record that Feli=
Sanche, acted in bad faith, it is safe to assu&e that he acted in
*ood faith.
The above rulin*s are sound doctrine and reflect our o%n interpretation of rticle !!"
as applied to the case before us.
ctual deliver' of the boo+s havin* been &ade, #ru, ac$uired o%nership over the
boo+s %hich he could then validl' transfer to the private respondents. The fact that he
had not 'et paid for the& to 3D# %as a &atter bet%een hi& and 3D# and did not
i&pair the title ac$uired b' the private respondents to the boo+s.
One &a' %ell i&a*ine the adverse conse$uences if the phrase (unla%full' deprived(
%ere to be interpreted in the &anner su**ested b' the petitioner. person rel'in* on
the seller7s title %ho bu's a &ovable propert' fro& hi& %ould have to surrender it to
another person clai&in* to be the ori*inal o%ner %ho had not 'et been paid the
purchase price therefor. The bu'er in the second sale %ould be left holdin* the ba*, so
to spea+, and %ould be co&pelled to return the thin* bou*ht b' hi& in *ood faith
%ithout even the ri*ht to rei&burse&ent of the a&ount he had paid for it.
It bears repeatin* that in the case before us, 6eonor Santos too+ care to ascertain first
that the boo+s belon*ed to #ru, before she a*reed to purchase the&. The 3D#
invoice #ru, sho%ed her assured her that the boo+s had been paid for on deliver'. 8'
contrast, 3D# %as less than cautious H in fact, too trustin* in dealin* %ith the
i&postor. lthou*h it had never transacted %ith hi& before, it readil' delivered the
boo+s he had ordered Cb' telephoneE and as readil' accepted his personal chec+ in
pa'&ent. It did not verif' his identit' althou*h it %as eas' enou*h to do this. It did not
%ait to clear the chec+ of this un+no%n dra%er. @orse, it indicated in the sales invoice
issued to hi&, b' the printed ter&s thereon, that the boo+s had been paid for on
deliver', thereb' vestin* o%nership in the bu'er.
Surel', the private respondent did not have to *o be'ond that invoice to satisf' herself
that the boo+s bein* offered for sale b' #ru, belon*ed to hi&F 'et she did. lthou*h
the title of #ru, %as presu&ed under rticle !!" b' his &ere possession of the boo+s,
these bein* &ovable propert', 6eonor Santos nevertheless de&anded &ore proof
before decidin* to bu' the&.
It %ould certainl' be unfair no% to &a+e the private respondents bear the pre<udice
sustained b' 3D# as a result of its o%n ne*li*ence. @e cannot see the <ustice in
transferrin* 3D#7s loss to the Santoses %ho had acted in *ood faith, and %ith proper
care, %hen the' bou*ht the boo+s fro& #ru,.
@hile %e s'&pathi,e %ith the petitioner for its pli*ht, it is clear that its re&ed' is not
a*ainst the private respondents but a*ainst To&as de la Pe9a, %ho has apparentl'
caused all this trouble. The private respondents have the&selves been undul'
inconvenienced, and for &erel' transactin* a custo&ar' deal not reall' unusual in their
+ind of business. It is the' and not 3D# %ho have a ri*ht to co&plain.
@G3R3FOR3, the challen*ed decision is FFIRM3D and the petition is D3NI3D, %ith
costs a*ainst the petitioner.
3