EDCA vs.

SPS Santos

FACTS:
 One Professor Jose Cruz ordered 406 books from petitioner over the phone, which was
payable upon delivery.
 Petitioner delivered said books and Cruz issued a check covering the purchase price
 Cruz then sold 120 books to Leonor Santos, who after verifying the seller’s ownership
from the invoice from EDCA, paid him the purchase price
 EDCA then became suspicious since Cruz made another order over the phone even before
the clearing of his first check
 EDCA then found out upon making inquiries that De la Salle College had no employee
named Prof. Jose Cruz and that Cruz also did not have an account with the Phil Amanah
Bank, against which the check has been drawn
 EDCA now is trying to obtain the books from Santos claiming that respondent obtained
said books in bad faith and that EDCA was unlawfully deprived of them hence ART. 559 of
the civil code will apply, which will allow them to recover the books.
 MTC, RTC, and CA all ruled that ownership of the books is with Santos.

ISSUE:
 Whether or not EDCA has been unlawfully deprived of the books due to the fact that the
check issued by the impostor in payment therefor was dishonored.

HELD:
 Petitioner argues that it was unlawfully deprived of the books because the impostor
acquired no title to the books that would allow him to validly transfer the same to the
private respondents. It claims that since the check was dishonored for lack of funds, there
was a failure of consideration that nullified the contract of sale between it and Cruz.
 SC stated that this contention is incorrect. SC cited article 1477 of the CC, which provides
the rule that 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 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 Santos to the books.