DE GARCIA VS.

CA 37 SCRA 129

FACTS: Private respondent Angelina D. Guevara, assisted by her spouse, Juan B.

Guevara, as plaintiffs, seek recovery of `one (1) lady's diamond ring and four (4) brills
which she bought from R. Rebullida, Inc. Plaintiff's evidence tends to show that around
October 11, 1953 plaintiff while talking to Consuelo S. de Garcia, owner of La Bulakea
restaurant recognized her ring in the finger of Mrs. Garcia and inquired where she
bought it, which the defendant answered from her comadre. Plaintiff explained that that
ring was stolen from her house in February, 1952. Defendant handed the ring to plaintiff
and it fitted her finger. Mr. Rebullida a examined the ring with the aid of high power lens
and after consulting the stock card thereon, concluded that it was the very ring that
plaintiff bought from him in 1947. The ring was returned to defendant who despite a
written request therefor failed to deliver the ring to plaintiff. Hence, this case. Later on
when the sheriff tried to serve the writ of seizure (replevin), defendant refused to deliver
the ring which had been examined by Mr. Rebullida, claiming it was lost.

On the other hand, defendant contends that the ring she bought could be similar to, but
not the same ring plaintiff purchased from Mr. Rebullida which was stolen; that
according to a pawn-shop owner the big diamond was before the trial never dismantled.
Plaintiff lost in the lower court. She elevated the matter to respondent Court of Appeals
with the judgment of the lower court being reversed. It is this decision now under review.

ISSUE:

HELD: There is no occasion to reverse respondent Court. It correctly applied the law to
the facts as found. The controlling provision is Article 559 of the Civil Code. It reads
thus:

"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 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."

Respondent Angelina D. Guevara, having been unlawfully deprived of the diamond ring
in question, was entitled to recover it from petitioner Consuelo S. de Garcia who was
found in possession of the same. The only exception the law allows is when there is
acquisition in good faith of the possessor at a public sale, in which case the owner
cannot obtain its return without reimbursing the price. Even on that assumption of
acquisition by good faith the owner can recover the same once she can show illegal
deprivation. The title of the possessor is not that of ownership, but is merely a
presumptive title sufficient to serve as a basis of acquisitive prescription.
DIZON VS. SUNTAY 47 SCRA 16

FACTS: Respondent Lourdes G. Suntay and one Clarita R. Sison entered into a
transaction wherein the Suntays three-carat diamond ring, valued at P5,500.00, was
delivered to Sison for sale on commission. Upon receiving the ring, Sison executed and
delivered to the receipt to Suntay. After the lapse of a considerable time without Clarita
R. Sison having returned to the ring to her, Suntay made demands on Clarita R. Sison
for the return of said jewelry. Clarita R. Sison, however, could not comply with Suntays
demands because on June 15, 1962, Melia Sison, niece of the husband of Clarita R.
Sison, evidently in connivance with the latter, pledged the ring with the petitioner
Dominador Dizon's pawnshop for P2,600.00 without Suntays knowledge. When Suntay
found out that Clarita R. Sison pledged the ring, she filed a case of estafa against the
latter with the fiscal's office. Subsequently, Suntay wrote a letter to Dizon on September
22, 1962 asking for the return of her ring which was pledged with the latters pawnshop
under its Pawnshop Receipt serial B No. 65606, dated June 15, 1962. Dizon refused to
return the ring, so Suntay filed an action for its recovery with the CFI of Manila, which
declared that she had the right to its possession. The Court of Appeals likewise affirmed
said decision.

ISSUE: Who has the right title over the subject property?

COURT RULING: The Supreme Court affirmed the decision of the lower courts. The
controlling provision is Article 559 of the Civil Code which provides that 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 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. The only exception the law allows is when there is acquisition in good
faith of the possessor at a public sale, in which case the owner cannot obtain its return
without, reimbursing the price. Hanging on to said exception as his basis, Dizon insisted
that the principle of estoppel should apply in this case but the Supreme Court ruled
otherwise.

In the present case not only has the ownership and the origin of the jewels
misappropriated been unquestionably proven but also that Clarita R. Sison, acting
fraudulently and in bad faith, disposed of them and pledged them contrary to agreement
with no right of ownership, and to the prejudice of Suntay, who was illegally deprived of
said jewels and who, as the owner, has an absolute right to recover the jewels from the
possession of whosoever holds them, which in this case is Dizons pawnshop.
EDCA PUBLISHING AND DISTRIBUTING CORP. VS. SANTOS

FACTS: A person identifying himself as Professor Jose Cruz placed an order by

telephone with the petitioner company for 406 books, payable on delivery. EDCA
prepared the corresponding invoice and delivered the books as ordered, for which Cruz
issued a personal check covering the purchase price of P8,995.65. Cruz sold 120 of the
books to private respondent Leonor Santos who, after verifying the seller's ownership
from the invoice he showed her, paid him P1,700.00.

Meanwhile, EDCA having become suspicious over a second order placed by

Cruz even before clearing of his first check, made inquiries with the De la Salle College
where he had claimed to be a dean and was informed that there was no such person in
its employ. Further verification revealed that Cruz had no more account or deposit with
the Philippine Amanah Bank, against which he had drawn the payment check. EDCA
then went to the police, which set a trap and arrested Cruz. Investigation disclosed his
real name as Tomas de la Pea and his sale of 120 of the books he had ordered from
EDCA to the private respondents. EDCA sought the assistance of the police, which
forced their way into the store of the private respondents and threatened Leonor Santos
with prosecution for buying stolen property. They seized the 120 books without warrant,
loading them in a van belonging to EDCA, and thereafter turned them over to the
petitioner. The private respondents sued for recovery of the books after demand for
their return was rejected by EDCA. A writ of preliminary attachment was issued and the
petitioner, after initial refusal, finally surrendered the books to the private respondents.

ISSUE: Whether the petitioner has been unlawfully deprived of the books because the
check issued by the impostor in payment therefor was dishonored.

HELD: No. The contract of sale is consensual and is perfected once agreement is
reached between the parties on the subject matter and the consideration. 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.

It would certainly be unfair now to make the private respondents bear the prejudice
sustained by EDCA as a result of its own negligence.

CHUA HAI VS. KAPUNAN 104 PHIL 110

FACTS: Roberto Soto purchased from Youngstown Hardware, owned by Ong Shu, 700
corrugated galvanized iron sheets and 249 pieces of round iron bar for P6,137.70, and
in payment thereof he issued a check drawn against the Security Bank and Trust
Company for P7,000.00, without informing Ong Shu that he had no sufficient funds in
said bank to answer for the same. When the check was presented for payment, it was
dishonored for insufficiency of funds. Soto sold 165 sheets in Pangasinan and 535
sheets in Calapan, Mindoro. Of those sold in Pangasinan, 100 were sold to petitioner
Chua Hai. When the case was filed in the Court of First Instance of Manila against
Roberto Soto, for estafa, the offended party filed a petition asking that the 700
galvanized iron sheets, which were deposited with the Manila Police Department, be
returned to him, as owner of the Youngstown Hardware.

Petitioner herein opposed the motion with respect to the 100 sheets that he had
bought from Soto. Notwithstanding the opposition, the court ordered the return of the
galvanized iron sheets to Ong Shu. Petitioner then presented a motion to reconsider the
order, alleging that by the return thereof to the offended party, the court had not only
violated the contract of deposit, because it was in that concept that petitioner had
delivered the 100 sheets to the Manila Police Department, and that said return to Ong
Shu amounted to a deprivation of his property without due process of law. The delivery
to the Manila Police Department was by virtue of the order of the court, because the
said sheets, were the subject of or are the instruments of the commission of the crime
of estafa, and the court had the power to order the return thereof to the owner after it
had satisfied itself of the ownership thereof by the offended party.
ISSUE: Whether petitioner has been illegally deprived of the 100 iron sheets which he
deposited with the Manila Police.

HELD: Yes.

We find the case meritorious, since petitioner's good faith is not questioned. To deprive
the possessor in good faith, even temporarily and provisionally, of the chattels
possessed, violates the rule of Art. 559 of the Civil Code. The latter declares that
possession of chattels in good faith is equivalent to title; i.e., that for all intents and
purposes, the possessor is the owner, until ordered by the proper court to restore the
thing to the one who was illegally deprived thereof. Until such decree is rendered, the
possessor, as presumptive owner, is entitled to hold and enjoy the thing; and "every
possessor has a right to be respected in his possession; and should he be disturbed
therein he shall be protected in or restored to said possession.

The decision of the court below, instead of conforming to Arts. 559 and 539 of the Civil
Code, directs possessor to surrender the chattel to the claimant Ong Shu before the
latter has proved that he was illegally deprived thereof, without taking into account that
the mere filing of a criminal action for estafa is no proof that estafa was in fact
committed. Instead of regarding the possessor as the owner of the chattel until illegal
deprivation is shown, the court below regards the possessor of the chattel not as an
owner, but as a usurper, and compels him to surrender possession even before the
illegal deprivation is proved.

And, assuming that the consent of Ong Shu to the sale in favor of Sotto was obtained
by the latter through fraud or deceit, the contract was not thereby rendered void ab
initio, but only voidable by reason of the fraud. Hence, until the contract of Ong Shu with
Sotto is set aside by a competent court (assuming that the fraud is established to its
satisfaction), the validity of appellant's claim to the property in question cannot be
disputed, and his right to the possession thereof should be respected.

That the acquirer and possessor in good faith, of a chattel or movable property is
entitled to be respected and protected in his possession, as if he were the true owner
thereof, until a competent court rules otherwise.