TAGATAC VS JIMENEZ considering that they had a contract of sale (note: but
such sale is voidable for the fraud and deceit by Feist).
53 OG 3792
FACTS:
 Trinidad Tagatac bought a car for $4,500 in the
US. After 7 months, she brought the car to the
Philippines.
 Warner Feist, who pretended to be a wealthy
man, offered to buy Trinidad’s car for P15,000,
and Tagatac was amenable to the idea. Hnece, a
deed of sale was exceuted.
 Feist paid by means of a postdated check, and
the car was delivered to Feist. However, PNB
refused to honor the checks and told her that
Feist had no account in said bank.
 Tagatac notified the law enforcement agencies of
the estafa committed by Feist, but the latter was
not apprehended and the car disappeared.
 Meanwhile, Feist managed succeeded in having
the car’s registration certificate (RC) transferred
in his name. He sold the car to Sanchez, who was
able to transfer the registration certificate to his
name.
 Sanchez then offered to sell the car to defendant
Liberato Jimenez, who bought the car for
P10,000 after investigating in the Motor Vehicles
Office.
 Tagatac discovered that the car was in California
Car Exchange’s (place where Jimenez displayed
the car for sale), so she demanded from the
manager for the delivery of the car, but the latter
refused.
 Tagatac filed a suit for the recovery of the car’s
possession, and the sheriff, pursuant to a warrant
of seizure that Tagatac obtained, seized and
impounded the car, but it was delivered back to
Jimenez upon his filing of a counter-bond.
 The lower court held that Jimenez had the right of
ownership and possession over the car.
ISSUE: W/N Jimenez was a purchaser in good faith and
thus entitled to the ownership and possession of the car.
YES
HELD:
It must be noted that Tagatac was not unlawfully deprived
of his car
In this case, there is a valid transmission of ownership
from true owner [Tagatac] to the swindler [Feist],
The disputable presumption that a person found in
possession of a thing taken in the doing of a recent
wrongful act is the taker and the doer of the whole act
does NOT apply in this case because the car was not
stolen from Tagatac, and Jimenez came into possession
of the car two months after Feist swindled Tagatac.
Jimenez was a purchaser in good faith for he was not
aware of any flaw invalidating the title from the seller of
the car
In addition, when Jimenez acquired the car, he had no
knowledge of any flaw in the title of the person from whom
he acquired it. It was only later that he became fully aware
that there were some questions regarding the car, when
he filed a petition to dissolve Tagatac’s search warrant
which had as its subject the car in question.
The contract between Feist and Tagactac was a voidable
contract, it can be annulled or ratified
. . . The fraud and deceit practiced by Warner L. Feist
earmarks this sale as a voidable contract (Article 1390).
Being a voidable contract, it is susceptible of either
ratification or annulment. (If the contract is ratified, the
action to annul it is extinguished -Article 1392) and the
contract is cleansed from all its defects (Article 1396); if
the contract is annulled, the contracting parties are
restored to their respective situations before the contract
and mutual restitution follows as a consequence (Article
1398).
Being a voidable contract, it remains valid and binding
until annulled
However, as long as no action is taken by the party
entitled, either that of annulment or of ratification, the
contract of sale remains valid and binding. When plaintiff-
appellant Trinidad C. Tagatac delivered the car to Feist by
virtue of said voidable contract of sale, the title to the car
passed to Feist. Of course, the title that Feist acquired
was defective and voidable.
Nevertheless, at the time he sold the car to Felix Sanchez,
his title thereto had not been avoided and he therefore
conferred a good title on the latter, provided he bought the
car in good faith, for value and without notice of the defect
in Feist's title (Article 1506, N.C.C.). There being no proof
on record that Felix Sanchez acted in bad faith, it is safe
to assume that he acted in good faith.
NB: ART. 1506. Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the time of the sale,
the buyer acquires a good title to the goods provided he buys
them in good faith, for value, and without notice of the seller’s
defect of title.

EDCA PUBLISHING VS SPS. SANTOS
G.R. No. 80298, April 26, 1990
FACTS:
On October 5, 1981, a person identifying himself as Prof.
Jose Cruz ordered 406 books from EDCA Publishing.
EDCA Subsequently prepared the corresponding invoice
and delivered the books as ordered, for which Cruz issued
a personal check covering the purchase price of said
books. Subsequently on October 7, 1981, Cruz sold 120
of the books to Leonor Santos who, after verifying the
seller’s ownership from the invoice he showed her, paid
him P1,700.
Upon verification by EDCA, it was discovered that Cruz
was not employed as professor by De La Salle College
and that he had no more account or deposit with Phil.
Amanah Bank, the bank where he allegedly drawn the
payment check. Upon arrest of Cruz by the police, it was
revealed that his real name was Tomas dela Pena and
that there was a further sale of 120 books to Sps. Santos.
EDCA, through the assistance of the police forced their
way into the store of Sps. Santos and threatened Leonor
with prosecution for buying stolen property. The 120
books were seized and were later turned over to EDCA.
This resulted to Sps. Santos filing a case for recovery of
the books after their demand for the return of the books
was rejected.
ISSUE: W/N EDCA may retrieve the books from Santos.
NO (W/N EDCA has been unlawfully deprived of the
books because the heck issued by Cruz in payment
thereof was dishonored. NO.)
HELD:
EDCA argues that because Cruz, the impostor acquired
no title to the books, the latter could not have validly
transferred such to Sps. Santos. Its reason is that as the
payment check bounced for lack of funds, there was a
failure of consideration that nullified the contract of sale
between it and Cruz.
However, upon perusal of the provisions on the Law on
Sales, a contract of sale is consensual and is perfected
once agreement is reached between the parties on the
subject matter and the consideration. As provided in Art.
1478- Ownership in the thing sold shall not pass to the
buyer until full payment of the purchase only if there is a
stipulation to that effect. Otherwise, the rule is that such
ownership shall pass from the vendor to the vendee upon
the actual or constructive delivery of the thing sold even if
the purchase price has not yet been paid.
Non-payment only creates a right to demand payment or
to rescind the contract, or to criminal prosecution in the
case of bouncing checks. But absent the stipulation above
noted, delivery of the thing sold will effectively transfer
ownership to the buyer who can in turn transfer it to
another.
Actual delivery of the books having been made, Cruz
acquired ownership over the books which he could then
validly transfer to the private respondents. The fact that
he had not yet paid for them to EDCA was a matter
between him and EDCA and did not impair the title
acquired by the private respondents to the books.
Leonor Santos took care to ascertain first that the books
belonged to Cruz before she agreed to purchase them.
The EDCA invoice Cruz showed her assured her that the
books had been paid for on delivery. By contrast, EDCA
was less than cautious — in fact, too trusting in dealing
with the impostor. Although it had never transacted with
him before, it readily delivered the books he had ordered
(by telephone) and as readily accepted his personal
check in payment. It did not verify his identity although it
was easy enough to do this. It did not wait to clear the
check of this unknown drawer. Worse, it indicated in the
sales invoice issued to him, by the printed terms thereon,
that the books had been paid for on delivery, thereby
vesting ownership in the buyer.
Santos did not need to go beyond that invoice to satisfy
herself that the books being offered for sale by Cruz
actually belonged to him; yet she still did. Although the
title of Cruz was presumed under Article 559 by his mere
possession of the books, these being movable property,
Leonor Santos nevertheless demanded more proof
before deciding to buy them.
NB: Law on Property
Art. 559. The possession of movable property acquired in good
faith is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof, may recover
it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has
been unlawfully deprived has acquired it in good faith at a public
sale, the owner cannot obtain its return without reimbursing the
price paid therefor.