Yu vs.

Honrado
Facts: Subject of the case is the possession of
about forty-two metric tons of scrap engine
blocks (valued at more than forty thousand
pesos), part of a stock which Marcelo Steel
Corporation sold to an alleged swindler and which
scrap iron was allegedly purchased in good faith
by the Yu spouses from the swindler but retrieved
from the purchasers by Marcelo Steel Corporation
by means of a search warrant.
Marcelo sold to Refuerzo who paid through a
bouncing check.
Refuerzo sold to Soledad junk shop who paid in
GF (innocent purchaser) but items were seized by
police because court Judge (Honrado) declared it
to have been embezzled and returned to Marcelo
Steel Corp.
The fiscal filed a case of Estafa against Refuerzo
et.al. The case temporarily archived the case. But
resolution has to be rendered as to the conflicting
claims of the Soledad- Yu spouses and Marcelo
Steel Corporation with respect to the scrap
engine blocks.
The Yu spouses bought the scrap engine blocks in
good faith for 44,000 from the alleged swindler
without any notice that the same were obtained
under false pretenses or by means of a bouncing
check. The purchase by the Yu spouses of the
scrap engine blocks from Refuerzo, doing
business under the tradename C. C. Varried
Corporation, was covered by a sales invoice and
seemed to have been made in the ordinary
course of business
Held: Marcelo Steel Corporation contends that it
recovered the scrap engine blocks by means of a
valid warrant. The Yu spouses counter that the
search warrant was void because it was issued
without probable cause on the basis of Nuestro's
hearsay testimony.
The court held that the search warrant was
lawfully issued. Respondent Judge complied with
the requirements. But from the fact that the
search warrant was validly issued, it does not
follow that Marcelo Steel Corporation is entitled
to retain the same. There is as yet no decree of
restitution in the criminal case entitling Marcelo
Steel Corporation to recover the scrap iron from
the third person who bought it in good faith and
for value. Hence, in the absence of any
adjudication as to the civil liability, there is no
legal basis for allowing Marcelo Steel Corporation
to recover possession of the scrap engine blocks.

Since Marcelo Steel Corporation and the Yu
spouses acted in good faith, the question is which
of them should suffer the loss occasioned by the
acts of the alleged swindler?
The answer is found in the rule, enunciated by
Justice Holmes in Eliason vs. Wilborn, 281 U.S.
457 (applied here by analogy), that, "as between
two innocent persons, one of whom must suffer
the consequence of a breach of trust, the one
who made it possible by his act of confidence
must bear the loss"
Cordero vs. Cabral
Facts: Gregorio Z. Ocampo died and left widow
Felipa Cordero and her children all surnamed
Ocampo with a parcel of land which is a ricelandthe southern portion of which is occupied by
defendant Victoria Cabral who refused to
surrender and vacate said portion of lands
despite demands of Cordero.
Cabral claims that she and her predecessors in
interest have been in actual, adverse, peaceful
and continuous possession of this portion of land
for a period of more than 50 years. Plaintiffs
alleged that defendants’ predecessors in interest
never really acquired owner of said land from the
deceased Ocampo through a valid sale but only
as “prospective owner” because the sale did not
materialize. So Cabral’s possession can’t be
adverse nor continuous. Neither did she acquire
said land by prescription because the land is
titled and registered to Ocampo therefore,
'imprescriptible'.
Held: The defendants, by their own admission,
are in possession of the disputed land. There is
no evidence that they were possessors in bad
faith. However, their good faith ceased when they
were served with summons to answer the
complaint. (Art. 528, Civil Code; Tacas vs. Tobon,
53 Phil. 356 [1929].) As possessors in bad faith
from the service of the summons they "shall
reimburse the fruits received and those which the
legitimate possessor could have received, ... (Art.
549, Civil Code.

Fabie v. David G.R. No. L-123, December 12,
1945
FACTS:
Josefa Fabie is the usufructuary of the income of
certain houses located at 372-376Santo Cristo,
Binondo, and 950-956 Ongpin, Santa Cruz,
Manila, under the ninth clause of the will of the
deceased Rosario Fabie y Grey. The owner of
Santo Cristo property is the respondent Juan Grey.

would be to place the usufructuary entirely at his mercy. enforce. defendant made a written offer to plaintiff to compromise and settle the question of the amount of rent to be paid bydefendant but said plaintiff rejected the same for no valid reason whatever and instituted the present action. and insurance premiums thereon — were by court judgment vested in the usufructuary. and by agreement between her and said owner. beginning the month of April 1945. which he was using and had always used principally as a store and secondarily for living quarters. and fully enjoy it. It would place her in the absurd situation of having a certain indisputable right without the power to protect. alleging that the defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable in advance not later than the 5th of each month. and that his present lease due toexpire on December 31. in the usufructuary. with renewal option at the end of each period. that plaintiff has never had possession of said property.Litigation arose between Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors. without plaintiff’s consent andcontrary to their agreement. her only right as usufructuary of the income is to receive thewhole of such income. that plaintiff is merely the usufructuary of the income therefrom. the stipulation of the parties. had subleased to another Chinese. to dictate the conditions of the lease. The defendant answered alleging that he was and since 1908 had been a tenant of the premises in question. and to conserve the property by making all necessary repairs and paying all the taxes. that she is the administratrix and usufructuary of said premises. As long as the property is properly conserved and insured he can have no cause for complaint. but plaintiff refused. that defendant’s lease contract with the owner of the house is for 5-yearperiod. with his consent. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will. special assessments. THE BOARD OF ASSESSMENT APPEALS OF ZAMBOANGA DEL SUR VS. INC . Juan Grey. All the acts of administration — to collect the rents for herself. Headmitted that before said judgment he had been collecting the rents as agent of the usufructuary under an agreement with the latter. and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court abovementioned. 1945. SAMAR MINING COMPANY. that the defendant offered to pay P300 monthly rent payable in advance not later than the 5th of every month. ISSUE: Who is entitled to administer the property subject matter of this case and who should be the tenant? HELD: The usufructuary has the right to administer the property in question. as her house was burned by the Japanese on the occasion of the entry of the American liberators in the City. and she prayed for judgment of eviction and for unpaid rentals. basedon the fact that the plaintiff very badly needs the said house to live in. 1945. and to sue when the lessee fails to comply therewith. and the judgment of the court. In June 1945 Josefa Fabie commenced an action of unlawful detainer against Ngo BooSoo (who says that his correct name is Ngo Soo). involving the administration of the houses mentioned in clause 9 of the will referred to above. ignoring the fact that as usufructuary of the income of the property she has no right to lease the property. He cannot manage or administer the property after all the acts of management and administration have been vested by the court. To permit him to arrogate to himself the privilege to choose the tenant. but he refused. that on June 1. such right being in the owner and administrator of the house. for thesaid of premises including the one door which said defendant.that defendant was duly notified to leave the said premises. that he was renting it from its owner and administrator Juan Grey. that she has no right or authority to eject tenants. that the reason plaintiff desires to eject defendant from the property isthat she wishes to lease the same to other persons for a higher rent.