1. G.R. No. 77266 July 19, 1989ARTHUR PAJUNAR and INVENCIA PAJUNAR,petitioners,vs.HON. COURT OF APPEALS, MAURO ELUNA and TEOFILA ELUNA,respondents.PARAS,J.:This is a petition for review oncertiorariseeking to set aside the decision of the Second Division of the Court of Appeals**in C.A. G.R. No. SP. 02247 (UDK 7544), entitled "Arthur & Invencia Pajunar v. Hon. Pedro Gabaton, Judge, RTC, Branch XLI, Negros Oriental, Mauro Eluna and Teofila Eluna" for Recovery of Personal Property with Writ of Replevin which affirmed the Order of the aforenamed Regional Trial Court of Negros Oriental***which reads:This is a case of Recovery of Personal Property with a Writ of Replevin filed by one Arthur and Invencia Pajunar as plaintiffs, against one Mauro and Teofila Eluna as defendants, tried and decided by the Municipal Court of Siaton.The decision is in favor of the defendants and against the plaintiffs apparently based primarily on the preponderance of evidence and prescription.Upon close reading of the exhaustive memorandum submitted by each of the parties in this case and a close perusal of all the evidences on record and checking them against the decision itself appealed, this court is of the opinion and so holds that the grounds upon which this decision is based are well taken, so that there is nothing that this court can add neither can deduct for the same conforms to the thinking of this court.WHEREFORE, premises considered, the appealed decision of the above-entitled case rendered by the Municipal Court of Siaton is hereby affirmed. (Rollo, p. 9)The facts of the case as found by public respondent Court of Appeals are as follows:Sometime in 1969, respondent Mauro Eluna bartered his three-year old male cow for one year old female carabao then in the possession of Aurelio Enopia. The female carabao, which is the one in question, bore the brand "ART" in her front and hind legs at the time she was acquired by Mauro. Although the animal was branded, said respondent did not or could not register the transfer to him.In March, 1980, petitioner Arthur Pajunar learned that the disputed carabao was in the possession of respondent Eluna. Claiming that he was the original owner of the carabao which got lost in 1974, petitioner demanded her return. He demanded also the delivery to him of the two offsprings of the carabao which were five years and eight months old at the time they were registered in 1980. When Eluna refused to do so despite repeated demands, petitioner went to court to recover possession (Rollo, pp. 10-11).From the adverse order of the Regional Trial Court, plaintiff appealed to public respondent Court of Appeals.In its decision dated October 30, 1986, the Court of Appeals affirmed the decision of the lower court, with appellate tribunal declaring:Consequently, since respondent Eluna had possessed the carabao since 1969, that is, for more than ten (10) years, he acquired ownership by prescription under Article 1132 of the Civil Code.ART. 1132. The ownership of movables prescribes through uninterrupted possession for four years in good faith.The ownership of personal property also prescribes through uninterrupted possession for eight years, without need of any other condition.With regard to the right of the owner to recover personal property lost or of which he has been illegally deprived, as well as with respect to movables acquired in a public sale, fair or market, or from a merchant's store, the provisions of articles 559 and 1505 of this Code shall be observed. (1955a).On March 23, 1987, the Court resolved, after considering the pleadings filed by both respondent and petitioner, to give due course to the petition.The three assignments of error raised by the petitioner (Rollo, p. 4) in this case, may be reduced to one main issue:Whether or not the findings of the lower court which were affirmed by the Court of Appeals are supported by substantial evidence.Petitioner contends that private respondent Eluna has failed to establish his ownership of the mestisa carabao found in his possession. Since the female carabao bears the brand "ART" on the fore and hind legs of the animal as branded by petitioners before it got lost (Rollo, p. 4), failure of defendant Mauro Eluna to register in his name the said carabao, constitutes a flaw in his ownership as required by law (Rollo, pp. 10-11).Private respondents claim that the female carabao has been in their possession for more than ten (10) years as the subject carabao was acquired by the defendants now respondents through barter from one Aurelio Enopia in 1969. The incident was discovered by the plaintiffs only in March, 1980. Hence respondents acquired ownership of said carabao by prescription under Article 1132 of the Civil Code (Rollo, p. 12) as found by public respondent Court of Appeals.The trial court's findings of facts carry great weight for having the advantage of having examined the deportment and demeanor of the witnesses. The only exception to the rule is when the trial court plainly overlooked certain facts and circumstances of weight and influence which, if considered, will materially alter the result of the case (People v. Ramos, 153 SCRA 276 [1987]; People v. Camay, 152 SCRA 401 [1987]).A careful examination of the records shows that there are circumstances of substance and value which were overlooked and which affect the result of the case.This can be gleaned from the decision of the Court of Appeals, when it stated:In issuing the foregoing order, the respondent Judge apparently relied on the findings of fact and conclusions of law made by the Municipal Court of Siaton, Negros Oriental. Unfortunately, the decision of theMunicipal Court was wanting in many respects particularly in its findings. It failed, for instance, to make a determination of certain factual matters which could have helped in the faster disposition of the case. Instead of general statements explaining why he was adopting the decision of the Municipal Court, it would have been better if the respondent Judge had made his own finding and analysis of the evidence on record. This was called for because the respondent Judge was acting in the exercise of the appellate jurisdiction of his court.(Emphasis supplied) (Rollo, p. 10)Well-settled is the rule that findings of facts of the Appellate Court are generally binding on this Court (People v. Atanacio, 128 SCRA 22 [1984] Aguirre v. People, 155 SCRA 337 [1987]; Cue Bie v. Intermediate Appellate Court, 154 SCRA 599 [1987]). However, there are exceptions to the general rule that findings of facts of the Court of Appeals are binding upon the Supreme Court as when the Court of Appeals clearly misconstrued and misapplied the law, drawn from incorrect conclusions of fact established by evidence and otherwise at certain conclusions which are based on misapprehension of facts and pure conjectures, and made inferences which are manifestly mistaken and absurd (Chase v. Buencamino, Jr., 136 SCRA 365 [1985]; Baliwag Transit, Inc. v. CA, 147 SCRA 82 [1987]; International Harvester, Inc. v. Joson & CA, 149 SCRA 641 [1987]; Maclan v. Santos, 156 SCRA 542 [1987]; Mendoza v. CA, 156 SCRA 597 [1987]).From the records it is clear that although the animal was branded "ART" in her front and hind legs at the time she was acquired by respondent Mauro, said respondent did not or could not register the transfer to him in accordance with Section 529 of the Revised Administrative Code (Rollo, p. 11).Section 529 of the Revised Administrative Code provides:Registration necessary to validity of transfer. No transfer shall be valid unless the same is registered and a certificate of transfer obtained as herein provided, but the large cattle under two years of age may be registered and branded gratis for the purpose of effecting a valid transfer, if the registration and transfer are made at the same time.The records show that respondents did not comply with this requirement (Petition, p. 2; Rollo, p. 3). Respondents are not possessors in good faith, as a possessor in good faith is one not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Furthermore, failure of a party to exercise precaution to acquaint himself with the defects in the title of his vendor precludes him claiming possession in good faith (Caram v. Laureta, 103 SCRA [1981] cited in Manotok Realty, Inc. v. Court of Appeals, 134 SCRA 325 [1985]).This duty to make a closer inquiry into the certificate of registration of the female carabao which was the subject of the barter, defendant Mauro Eluna should have performed but did not. Thus, his being in bad faith, in acquiring the carabao from his vendor, Aurelio Enopia.Thus, as has been stressed by this Court:A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his willful closing of the eyes to the possibility of the existence of a defect in his vendor's title will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective and it appears that he had such notice of the defect would have led to its discovery had he acted with the measure of precaution which may reasonably be required of a prudent man in a like situation. (Leung Lee v. Strong, 37 Phil. 644, see also Emos v. Zusuarregui, 53 Phil. 197, cited in Francisco v. Court of Appeals, 153 SCRA 330).It is clear from the foregoing that possession in good faith for four (4) years is not applicable, neither can possession in bad faith of eight (8) years benefit respondents, for when the owner of a movable has lost or has been illegally deprived of his property he can recover the same without need to reimburse the possessor, as provided in Art. 559 of the Civil Code which states: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. (464a)Neither can Art. 716 of the Civil Code apply, for this article evidently refers to a possessor in good faith. Art. 716 say:The owner of a swarm of bees shall have a right to pursue them to another's land, indemnifying the possessor of the latter for the damage. If the owner has not pursued the swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the same. The owner of domesticated animals may also claim them within twenty days to be counted from their occupation by another person. This period having expired, they shall pertain to him who has caught and kept them. (612a)PREMISES CONSIDERED, the decision of the Court of Appeals in CA-G.R. SP No. 02247 is REVERSED and SET ASIDE and petitioners Arthur Pajunar and Invencia Pajunar are declared the owners of the carabaos in question. SO ORDERED2. G.R. No. 80298 April 26, 1990EDCA PUBLISHING & DISTRIBUTING CORP.,petitioner,vs.THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and style of "SANTOS BOOKSTORE," and THE COURT OF APPEALS,respondents.CRUZ,J.:The case before us calls for the interpretation of Article 559 of the Civil Code and raises the particular question of when a person may be deemed to have been "unlawfully deprived" of movable property in the hands of another. The article runs in full as follows: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.The movable property in this case consists of books, which were bought from the petitioner by an impostor who sold it to the private respondents. Ownership of the books was recognized in the private respondents by the Municipal Trial Court,1which was sustained by the Regional Trial Court,2which was in turn sustained by the Court of Appeals.3The petitioner asks us to declare that all these courts have erred and should be reversed.This case arose when on October 5, 1981, a person identifying himself as Professor Jose Cruz placed an order by telephone with the petitioner company for 406 books, payable on delivery.4EDCA prepared the corresponding invoice and delivered the books as ordered, for which Cruz issued a personal check covering the purchase price of P8,995.65.5On October 7, 1981, 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 P1,700.00.6Meanwhile, 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.7EDCA then went to the police, which set a trap and arrested Cruz on October 7, 1981. 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.8On the night of the same date, EDCA sought the assistance of the police in Precinct 5 at the UN Avenue, 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.9Protesting this high-handed action, 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.10As previously stated, the petitioner was successively rebuffed in the three courts below and now hopes to secure relief from us.To begin with, the Court expresses its disapproval of the arbitrary action of the petitioner in taking the law into its own hands and forcibly recovering the disputed books from the private respondents. The circumstance that it did so with the assistance of the police, which should have been the first to uphold legal and peaceful processes, has compounded the wrong even more deplorably. Questions like the one at bar are decided not by policemen but by judges and with the use not of brute force but of lawful writs.Now to the meritsIt is the contention of the petitioner that the private respondents have not established their ownership of the disputed books because they have not even produced a receipt to prove they had bought the stock. This is unacceptable. Precisely, the first sentence of Article 559 provides that "the possession of movable property acquired in good faith is equivalent to a title," thus dispensing with further proof.The argument that the private respondents did not acquire the books in good faith has been dismissed by the lower courts, and we agree. Leonor Santos first ascertained the ownership of the books from the EDCA invoice showing that they had been sold to Cruz, who said he was selling them for a discount because he was in financial need. Private respondents are in the business of buying and selling books and often deal with hard-up sellers who urgently have to part with their books at reduced prices. To Leonor Santos, Cruz must have been only one of the many such sellers she was accustomed to dealing with. It is hardly bad faith for any one in the business of buying and selling books to buy them at a discount and resell them for a profit.But the real issue here is whether the petitioner has been unlawfully deprived of the books because the check issued by the impostor in payment therefor was dishonored.In its extended memorandum, EDCA cites numerous cases holding that the owner who has been unlawfully deprived of personal property is entitled to its recovery except only where the property was purchased at a public sale, in which event its return is subject to reimbursement of the purchase price. The petitioner is begging the question. It is putting the cart before the horse. Unlike in the cases invoked, it has yet to be established in the case at bar that EDCA has been unlawfully deprived of the books.The petitioner argues that it was, because the impostor acquired no title to the books that he could have validly transferred to the private respondents. 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.The contract of sale is consensual and is perfected once agreement is reached between the parties on the subject matter and the consideration. According to the Civil Code:Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.x x x x x x x x xArt. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.Art. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price.It is clear from the above provisions, particularly the last one quoted, that ownership in the thing sold shall not pass to the buyer until full payment of the purchaseonlyif 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 soldevenif 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.In Asiatic Commercial Corporation v. Ang,11the plaintiff sold some cosmetics to Francisco Ang, who in turn sold them to Tan Sit Bin. Asiatic not having been paid by Ang, it sued for the recovery of the articles from Tan, who claimed he had validly bought them from Ang, paying for the same in cash. Finding that there was no conspiracy between Tan and Ang to deceive Asiatic the Court of Appeals declared:Yet the defendant invoked Article 46412of the Civil Code providing, among other things that "one who has been unlawfully deprived of personal property may recover it from any person possessing it." We do not believe that the plaintiff has been unlawfully deprived of the cartons of Gloco Tonic within the scope of this legal provision. It has voluntarily parted with them pursuant to a contract of purchase and sale. The circumstance that the price was not subsequently paid did not render illegal a transaction which was valid and legal at the beginning.In Tagatac v. Jimenez,13the plaintiff sold her car to Feist, who sold it to Sanchez, who sold it to Jimenez. When the payment check issued to Tagatac by Feist was dishonored, the plaintiff sued to recover the vehicle from Jimenez on the ground that she had been unlawfully deprived of it by reason of Feist's deception. In ruling for Jimenez, the Court of Appeals held:The point of inquiry is whether plaintiff-appellant Trinidad C. Tagatac has been unlawfullydeprivedof her car. At first blush, it would seem that she was unlawfully deprived thereof, considering that she was induced to part with it by reason of the chicanery practiced on her by Warner L. Feist. Certainly, swindling, like robbery, is an illegal method of deprivation of property. In a manner of speaking, plaintiff-appellant was "illegally deprived" of her car, for the way by which Warner L. Feist induced her to part with it is illegal and is punished by law. But does this "unlawful deprivation" come within the scope of Article 559 of the New Civil Code?x x x x x x x x x. . . The fraud and deceit practiced by Warner L. Feist earmarks this sale as a voidable contract (Article 1390 N.C.C.). 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, N.C.C.) and the contract is cleansed from all its defects (Article 1396, N.C.C.); 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, N.C.C.).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.The above rulings are sound doctrine and reflect our own interpretation of Article 559 as applied to the case before us.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.One may well imagine the adverse consequences if the phrase "unlawfully deprived" were to be interpreted in the manner suggested by the petitioner. A person relying on the seller's title who buys a movable property from him would have to surrender it to another person claiming to be the original owner who had not yet been paid the purchase price therefor. The buyer in the second sale would be left holding the bag, so to speak, and would be compelled to return the thing bought by him in good faith without even the right to reimbursement of the amount he had paid for it.It bears repeating that in the case before us, 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.Surely, the private respondent did not have to go beyond that invoice to satisfy herself that the books being offered for sale by Cruz belonged to him; yet she 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.It would certainly be unfair now to make the private respondents bear the prejudice sustained by EDCA as a result of its own negligence.1wphi1We cannot see the justice in transferring EDCA's loss to the Santoses who had acted in good faith, and with proper care, when they bought the books from Cruz.While we sympathize with the petitioner for its plight, it is clear that its remedy is not against the private respondents but against Tomas de la Pea, who has apparently caused all this trouble. The private respondents have themselves been unduly inconvenienced, and for merely transacting a customary deal not really unusual in their kind of business. It is they and not EDCA who have a right to complain.WHEREFORE, the challenged decision is AFFIRMED and the petition is DENIED, with costs against the petitioner.[G.R. No. 86051. September 1, 1992.]

JAIME LEDESMA,Petitioner, v. THE HONORABLE COURT OF APPEALS and CITIWIDE MOTORS, INC.,Respondents.SYLLABUS

1. CIVIL LAW; POSSESSION; REQUISITES TO MAKE POSSESSION OF MOVABLE PROPERTY EQUIVALENT TO TITLE. It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully deprived thereof can recover the same from the present possessor even if the latter acquired it in good faith and has, therefore, title thereto for under the first sentence of Article 559, such manner of acquisition is equivalent to a title. There are three (3) requisites to make possession of movable property equivalent to title, namely: (a) the possession should be in good faith; (b) the owner voluntarily parted with the possession of the thing; and (c) the possession is in the concept of owner. (TOLENTINO, A.M., Civil Code of the Philippines, Vol. II, 1983 ed., 275-276, citing 2-II Colin and Capitant 942; De Buen: Ibid., 1009, 2 Salvat 165; 4 Manresa 339). Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it cannot be said to have voluntarily parted with the possession thereof. This is the justification for the exceptions found under the second sentence of Article 559 of the Civil Code.

2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT OF SALE; ABSENCE OF CONSIDERATION; EFFECT THEREOF. There was a perfected unconditional contract of sale between private respondent and the original vendee. The former voluntarily caused the transfer of the certificate of registration of the vehicle in the name of the first vendee even if the said vendee was represented by someone who used a fictitious name and likewise voluntarily delivered the cars and the certificate of registration to the vendees alleged representative Title thereto was forthwith transferred to the vendee. The subsequent dishonor of the check because of the alteration merely amounted to a failure of consideration which does not render the contract of sale void, but merely allows the prejudiced party to sue for specific performance or rescission of the contract, and to prosecute the impostor for estafa under Article 315 of the Revised Penal Code.

D E C I S I O N

DAVIDE, JR.,J.:

Petitioner impugns the Decision of 22 September 1988 of respondent Court of Appeals 1 in C.A.-G.R. CV No. 05955 2 reversing the decision of then Branch XVIII-B (Quezon City) of the then Court of First Instance (now Regional Trial Court) of Rizal in a replevin case, Civil Case No. Q-24200, the dispositive portion of which reads:chanroblesvirtualawlibrary

"Accordingly, the Court orders the plaintiff to return the repossessed Isuzu Gemini, 1977 Model vehicle, subject of this case to the defendant Ledesma. The incidental claim (sic) for damages professed by the plaintiff are dismissed for lack of merit. On defendants counterclaim, Court (sic) makes no pronouncement as to any form of damages, particularly, moral, exemplary and nominal in view of the fact that Citiwide has a perfect right to litigate its claim, albeit by this pronouncement, it did not succeed." 3

which was supplemented by a Final Order dated 26 June 1980, the dispositive portion of which reads:jgc:chanrobles.com.ph

"IN VIEW OF THE FOREGOING, the Court grants defendant Ledesma the sum of P35,000.00 by way of actual damages recoverable upon plaintiffs replevin bond. Plaintiff and its surety, the Rizal Surety and Insurance Co., are hereby ordered jointly and severally to pay defendant Jaime Ledesma the sum of P10,000.00 as damages for the wrongful issue of the writ of seizure, in line with Rule 57, Sec. 20, incorporated in Rule 60, Sec. 10.

In conformity with the rules adverted to, this final order shall form part of the judgment of this Court on September 5, 1979.

The motion for reconsideration of the judgment filed by the plaintiff is hereby DENIED for lack of merit. No costs at this instance." 4

The decision of the trial court is anchored on its findings that (a) the proof on record is not persuasive enough to show that defendant, petitioner herein, knew that the vehicle in question was the object of a fraud and a swindle 5 and (b) that plaintiff, private respondent herein, did not rebut or contradict Ledesmas evidence that valuable consideration was paid for it.

The antecedent facts as summarized by the respondent Court of Appeals are as follows:jgc:chanrobles.com.ph

"On September 27, 1977, a person representing himself to be Jojo Consunji, purchased purportedly for his father, a certain Rustico T. Consunji, two (2) brand new motor vehicles from plaintiff-appellant Citiwide Motors, Inc., more particularly described as follows:chanrobles lawlibrary : rednad

a) One (1) 1977 Isuzu Gemini, 2-door Model PF 50ZIK, with Engine No. 751214 valued at P42,200.00; and

b) One (1) 1977 Holden Premier Model 8V41X with Engine No. 198-1251493, valued at P58,800.00.

Said purchases are evidenced by Invoices Nos. 3054 and 3055, respectively. (See Annexes A and B).

On September 28, 1977, plaintiff-appellant delivered the two-above described motor vehicles to the person who represented himself as Jojo Consunji, allegedly the son of the purported buyers Rustico T. Consunji, and said person in turn issued to plaintiff-appellant Managers Check No. 066-110-0638 of the Philippine Commercial and Industrial Bank dated September 28, 1977 for the amount of P101,000.00 as full payment of the value of the two (2) motor vehicles.

However, when plaintiff-appellant deposited the said check, it was dishonored by the bank on the ground that it was tampered with, the correct amount of P101.00 having been raised to P101,000.00 per the banks notice of dishonor (Annexes F and G).

On September 30, 1977, plaintiff-appellant reported to the Philippine Constabulary the criminal act perpetrated by the person who misrepresented himself as Jojo Consunji and in the course of the investigation, plaintiff-appellant learned that the real identity of the wrongdoer/impostor is Armando Suarez who has a long line of criminal cases against him for estafa using this similar modus operandi.

On October 17, 1977, plaintiff-appellant was able to recover the Holden Premier vehicle which was found abandoned somewhere in Quezon City.

On the other hand, plaintiff-appellant learned that the 1977 Isuzu Gemini was transferred by Armando Suarez to third persona and was in the possession of one Jaime Ledesma at the time plaintiff-appellant instituted this action for replevin on November 16, 1977.

In his defense, Jaime Ledesma claims that he purchases (sic) and paid for the subject vehicle in good faith from its registered owner, one Pedro Neyra, as evidenced by the Land Transportation Commission Registration Certificate No. RCO1427249.chanrobles.com.ph : virtual law library

After posting the necessary bond in the amount double the value of the subject motor vehicle, plaintiff-appellant was able to recover possession of the 1977 Isuzu Gemini as evidenced by the Sheriffs Return dated January 23, 1978." 6

After trial on the merits, the lower court rendered the decision and subsequently issued the Final Order both earlier adverted to, which plaintiff (private respondent herein) appealed to the respondent Court of Appeals; it submitted the following assignment of errors:jgc:chanrobles.com.ph

"The trial court erred.I

IN HOLDING THAT THE DEFENDANT IS ENTITLED TO THE POSSESSION OF THE CAR;II

IN HOLDING THAT THE DEFENDANT IS AN INNOCENT PURCHASER IN GOOD FAITH AND FOR VALUE;III

IN RULING THAT THE PLAINTIFF SHOULD RETURN THE CAR TO DEFENDANT, DISMISSING ITS CLAIM FOR DAMAGES, AND GRANTING DEFENDANT P35,000.00 DAMAGES RECOVERABLE AGAINST THE REPLEVIN BOND AND P101,000.00 DAMAGES FOR ALLEGED WRONGFUL SEIZURE;IV

IN RENDERING THE DECISION DATED SEPTEMBER 3, 1979 AND THE FINAL ORDER DATED JUNE 26, 1980." 7

In support of its first and second assigned errors, private respondent cites Article 559 of the Civil Code which provides:jgc:chanrobles.com.ph

"ARTICLE 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."cralaw virtua1aw library

Without in any way reversing the findings of the trial court that herein petitioner was a buyer in good faith and for valuable consideration, the respondent Court ruled that:chanroblesvirtualawlibrary

"Under Article 559, Civil Code, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it not only from the finder, thief or robber, but also from third persons who may have acquired it in good faith from such finder, thief or robber. The said article establishes two (2) exceptions to the general rule of irrevendicability (sic), to wit: when the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner who may recover it without paying any indemnity, except when the possessor acquired it in a public sale. (Aznar v. Yapdiangco, 13 SCRA 486).

Put differently, where the owner has lost the thing or has been unlawfully deprived thereof, the good faith of the possessor is not a bar to recovery of the movable unless the possessor acquired it in a public sale of which there is no pretense in this case. Contrary to the court a assumption, the issue is not primarily the good faith of Ledesma for even if this were true, this may not be invoked as a valid defense, if it be shown that Citiwide was unlawfully deprived of the vehicle.

In the case of Dizon v. Suntay, 47 SCRA 160, the Supreme Court had occasion to define the phrase unlawfully deprived, to wit:chanrob1es virtual 1aw library

. . . it extends to all cases where there has been no valid transmission of ownership including depositary or lessee who has sold the same. It is believed that the owner in such a case is undoubtedly unlawfully deprived of his property and may recover the same from a possessor in good faith.xxx

In the case at bar, the person who misrepresented himself to be the son of the purported buyer, Rustico T. Consunji, paid for the two (2) vehicles using a check whose amount has been altered from P101.00 to P101,000.00. There is here a case of estafa. Plaintiff was unlawfully deprived of the vehicle by false pretenses executed simultaneously with the commission of fraud (Art. 315 2(a) R.P.C.). Clearly, Citiwide would not have parted with the two (2) vehicles were it not for the false representation that the check issued in payment thereupon (sic) is in the amount of P101,000.00, the actual value of the two (2) vehicles." 8

In short, said buyer never acquired title to the property; hence, the Court rejected the claim of herein petitioner that at least, Armando Suarez had a voidable title to the property.

His motion for reconsideration having been denied in the resolution of the respondent Court of 12 December 1988, 9 petitioner filed this petition alleging therein that:chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"A

THE HONORABLE COURT OF APPEALS ERRED IN APPLYING ARTICLE 559 OF THE NEW CIVIL CODE TO THE INSTANT CASE DESPITE THE FACT THAT PRIVATE RESPONDENT CITIWIDE MOTORS, INC. WAS NOT UNLAWFULLY DEPRIVED OF THE SUBJECT CAR, AS IN FACT CITIWIDE VOLUNTARILY PARTED WITH THE TITLE AND POSSESSION OR (sic) THE SAME IN FAVOR OF ITS IMMEDIATE TRANSFEREE.B

THE FACTUAL MILIEU OF THE INSTANT CASE FALLS WITHIN THE OPERATIVE EFFECTS OF ARTICLES 1505 AND 1506 OF THE NEW CIVIL CODE CONSIDERING THAT THE IMMEDIATE TRANSFEREE OF THE PRIVATE RESPONDENT CITIWIDE MOTORS, INC., ACQUIRED A VOIDABLE TITLE OVER THE CAR IN QUESTION WHICH TITLE WAS NOT DECLARED VOID BY A COMPETENT COURT PRIOR TO THE ACQUISITION BY THE PETITIONER OF THE SUBJECT CAR AND ALSO BECAUSE PRIVATE RESPONDENT, BY ITS OWN CONDUCT, IS NOW PRECLUDED FROM ASSAILING THE TITLE AND POSSESSION BY THE PETITIONER OF THE SAID CAR." 10

There is merit in the petition. The assailed decision must be reversed.

The petitioner successfully proved that he acquired the car in question from his vendor in good faith and for valuable consideration. According to the trial court, the private respondents evidence was not persuasive enough to establish that petitioner had knowledge that the car was the object of a fraud and a swindle and that it did not rebut or contradict petitioners evidence of acquisition for valuable consideration. The respondent Court concedes to such findings but postulates that the issue here is not whether petitioner acquired the vehicle in that concept but rather, whether private respondent was unlawfully deprived of it so as to make Article 559 of the Civil Code apply.

It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully deprived thereof can recover the same from the present possessor even if the latter acquired it in good faith and has, therefore, title thereto for under the first sentence of Article 559, such manner of acquisition is equivalent to a title. There are three (3) requisites to make possession of movable property equivalent to title, namely: (a) the possession should be in good faith; (b) the owner voluntarily parted with the possession of the thing; and (c) the possession is in the concept of owner. 11

Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it cannot be said to have voluntarily parted with the possession thereof. This is the justification for the exceptions found under the second sentence of Article 559 of the Civil Code.

The basic issue then in this case is whether private respondent was unlawfully deprived of the cars when it sold the same to Rustico Consunji, through a person who claimed to be Jojo Consunji, allegedly the latters son, but who nevertheless turned out to be Armando Suarez, on the faith of a Managers Check with a face value of P101,000.00, dishonored for being altered, the correct amount being only P101.00.chanrobles virtual lawlibrary

Under this factual milieu, the respondent Court was of the opinion, and thus held, that private respondent was unlawfully deprived of the car by false pretenses.

We disagree. There was a perfected unconditional contract of sale between private respondent and the original vendee. The former voluntarily caused the transfer of the certificate of registration of the vehicle in the name of the first vendee even if the said vendee was represented by someone who used a fictitious name and likewise voluntarily delivered the cars and the certificate of registration to the vendees alleged representative Title thereto was forthwith transferred to the vendee. The subsequent dishonor of the check because of the alteration merely amounted to a failure of consideration which does not render the contract of sale void, but merely allows the prejudiced party to sue for specific performance or rescission of the contract, and to prosecute the impostor for estafa under Article 315 of the Revised Penal Code. This is the rule enunciated in EDCA Publishing and Distributing Corp. v. Santos, 12 the facts of which do not materially and substantially differ from those obtaining in the instant case. In said case, a person identifying himself as Professor Jose Cruz, dean of the De la Salle College, placed an order by telephone with petitioner for 406 books, payable upon delivery. Petitioner agreed, prepared the corresponding invoice and delivered the books as ordered, for which Cruz issued a personal check covering the purchase price. Two (2) days later, Cruz sold 120 books to private respondent Leonor Santos who, after verifying the sellers ownership from the invoice the former had shown her, paid the purchase price of P1,700.00. Petitioner became suspicious over a second order placed by Cruz even before his first check had cleared, hence, it made inquiries with the De la Salle College. The latter informed the petitioner that Cruz was not in its employ. Further verification revealed that Cruz had no more account or deposit with the bank against which he drew the check. Petitioner sought the assistance of the police which then set a trap and arrested Cruz. Investigation disclosed his real name, Tomas de la Pea, and his sale of 120 of the books to Leonor Santos. On the night of the arrest; the policemen whose assistance the petitioner sought, forced their way into the store of Leonor and her husband, threatened her with prosecution for the buying of stolen property, seized the 120 books without a warrant and thereafter turned said books over to the petitioner. The Santoses then sued for recovery of the books in the Municipal Trial Court which decided in their favor; this decision was subsequently affirmed by the Regional Trial Court and sustained by the Court of Appeals. Hence, the petitioner came to this Court by way of a petition for review wherein it insists that it was unlawfully deprived of the books because as the check bounced for lack of funds, there was failure of consideration that nullified the contract of sale between it and the impostor who then acquired no title over the books. We rejected said claim in this wise:jgc:chanrobles.com.ph

"The contract of sale is consensual and is perfected once agreement is reached between the parties on the subject matter and the consideration. According to the Civil Code:chanrob1es virtual 1aw library

ART. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.chanrobles.com : virtual law libraryxxx

ART. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.

ART. 1478. The parties may stipulate that ownership in the thing shall not pass to the purchaser until he has fully paid the price.

It is clear from the above provisions, particularly the last one quoted, that ownership in the thing sold shall not pass to the buyer until full payment of the purchase price 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." 13

In the early case of Chua Hai v. Hon. Kapunan, 14 one Roberto Soto purchased from the Youngstown Hardware, owned by private respondent, corrugated galvanized iron sheets and round iron bars for P6,137.70, in payment thereof, he issued a check drawn against the Security Bank and Trust Co. without informing Ong Shu that he (Soto) had no sufficient funds in said bank to answer for the same. In the meantime, however, Soto sold the sheets to, among others, petitioner Chua Hai. In the criminal case filed against Soto, upon motion of the offended party, the respondent Judge ordered petitioner to return the sheets which were purchased from Soto. Petitioners motion for reconsideration having been denied, he came to this Court alleging grave abuse of discretion and excess of jurisdiction. In answer to the petition, it is claimed that inter alia, even if the property was acquired in good faith, the owner who has been unlawfully deprived thereof may recover it from the person in possession of the same unless the property was acquired in good faith at a public sale. 15 Resolving this specific issue, this Court ruled that Ong Shu was not illegally deprived of the possession of the property:jgc:chanrobles.com.ph

". . . It is not denied that Ong Shu delivered the sheets to Soto upon a perfected contract of sale, and such delivery transferred title or ownership to the purchaser. Says Art. 1496:chanrob1es virtual 1aw library

Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. (C.C.)

The failure of the buyer to make good the price does not, in law, cause the ownership to revest in the seller until and unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the new Civil Code.chanrobles lawlibrary : rednad

And, assuming that the consent of Ong Shu to the sale in favor of Soto 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, and Article 1390 expressly provides that:chanrob1es virtual 1aw library

ART. 1390. The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties:chanrob1es virtual 1aw library

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification.

Agreeably to this provision, Article 1506 prescribes:chanrob1es virtual 1aw library

ARTICLE 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 sellers defect of title. (C.C.)

Hence, until the contract of Ong Shu with Soto is set aside by a competent court (assuming that the fraud is established to its satisfaction), the validity of appellants claim to the property in question can not be disputed, and his right to the possession thereof should be respected." 16

It was therefore erroneous for the respondent Court to declare that the private respondent was illegally deprived of the car simply because the check in payment therefor was subsequently dishonored; said Court also erred when it divested the petitioner, a buyer in good faith who paid valuable consideration therefor, of his possession thereof.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

WHEREFORE, the challenged decision of the respondent Court of Appeals of 22 September 1988 and its Resolution of 12 December 1988 in C.A.-G.R. CV No. 05955 are hereby SET ASIDE and the Decision of the trial court of 3 September 1979 and its Final Order of 26 June 1980 in Civil Case No. Q-24200 are hereby REINSTATED, with costs against private respondent Citiwide Motors, Inc.

SO ORDERED.3. G.R. No. L-20264 January 30, 1971CONSUELO S. DE GARCIA and ANASTACIO GARCIA,petitioners,vs.HON. COURT OF APPEALS, ANGELINA D. GUEVARA and JUAN B. GUEVARA,respondents.FERNANDO,J.:This petition for certiorari to review a decision of respondent Court of Appeals was given due course because it was therein vigorously asserted that legal questions of gravity and of moment, there being allegations of an unwarranted departure from and a patent misreading of applicable and controlling decisions, called for determination by this Tribunal. The brief for petitioners-spouses, however, failed to substantiate such imputed failings of respondent Court. The performance did not live up to the promise. On the basis of the facts as duly found by respondent Court, which we are not at liberty to disregard, and the governing legal provisions, there is no basis for reversal. We affirm.The nature of the case presented before the lower court by private respondent Angelina D. Guevara, assisted by her spouse, Juan B. Guevara, as plaintiffs, was noted in the decision of respondent Court of Appeals thus: "Plaintiff seeks recovery of `one (1) lady's diamond ring 18 cts. white gold mounting, with one (1) 2.05 cts. diamond-solitaire, and four (4) brills 0.10 cts. total weight' which she bought on October 27, 1947 from R. Rebullida, Inc."1Then came a summary of now respondent Guevara of her evidence: "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 hercomadre. Plaintiff explained that that ring was stolen from her house in February, 1952. Defendant handed the ring to plaintiff and it fitted her finger. Two or three days later, at the request of plaintiff, plaintiff, her husband Lt. Col. Juan Guevara, Lt. Cementina of Pasay PD, defendant and her attorney proceeded to the store of Mr. Rebullida to whom they showed the ring in question. 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."2How the defendant, Consuelo S. de Garcia, the present petitioner before us, along with her husband Anastacio Garcia, sought to meet plaintiff's claim was narrated thus: "On the other hand, defendant denied having made any admission before plaintiff or Mr. Rebullida or the sheriff. Her evidence tends to show that the ring (Exhibit 1) was purchased by her from Mrs. Miranda who got it from Miss Angelita Hinahon who in turn got it from the owner, Aling Petring, who was boarding in her house; 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 on Exhibit 1 was before the trial never dismantled. When dismantled, defendant's diamond was found to weigh 2.57 cts."3Plaintiff 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.These are the facts as found by respondent Court of Appeals: "That the ring brought by the parties for examination by Rafael Rebullida on December 14, 1953 was the same ring purchased by plaintiff from R. Rebullida, Inc. on October 27, 1947 and stolen in February, 1952 has been abundantly established by plaintiff's evidence. Before plaintiff lost the ring, she had been wearing it for six years and became familiar with it. Thus, when she saw the missing ring in the finger of defendant, she readily and definitely identified it. Her identification was confirmed by Mr. Rafael Rebullida, whose candid testimony is entitled to great weight, with his 30 years experience behind him in the jewelry business and being a disinterested witness since both parties are his customers. Indeed, defendant made no comment when in her presence Rebullida after examining the ring and stock card told plaintiff that that was her ring, nor did she answer plaintiff's letter of demand, ... asserting ownership. Further confirmation may be found in the extra-judicial admissions, contained in defendant's original and first amended answers ..."4These further facts likewise appeal therein: "The foregoing proof is not counter-balanced by the denial on the part of defendant or the presentation of the ring, Exhibit I, which has a diamond-solitaire 2.57 cts., or much heavier than the lost diamond weighing 2.05 cts. only. It is noteworthy that defendant gave a rather dubious source of her ring. Aling Petring from whom the ring supposedly came turned out to be a mysterious and ephemeral figure. Miss Hinahon did not even know her true and full name, nor her forwarding address. She appeared from nowhere, boarded three months in the house of Miss Hinahon long enough to sell her diamond ring, disappearing from the scene a week thereafter. Indeed, the case was terminated without any hearing on the third-party and fourth-party complaints, which would have shown up the falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda, third-party defendant, who tried to corroborate defendant on the latter's alleged attempt to exchange the ring defendant bought through her, is [belied] by her judicial admission in her Answer that appellee `suggested that she would make alterations to the mounting and structural design of the ring to hide the true identity and appearance of the original one' (Cunanan vs. Amparo, 45 O.G. 3796). Finally, defendant is refuted by her own extra-judicial admissions ... although made by defendant's counsel. For an attorney who acts as counsel of record and is permitted to act such, has the authority to manage the cause, and this includes the authority to make admission for the purpose of the litigation... Her proffered explanation that her counsel misunderstood her is puerile because the liability to error as to the identity of the vendor and the exchange of the ring with another ring of the same value, was rather remote."5It is in the light of the above facts as well as the finding that the discrepancy as to the weight between the diamond-solitaire in Exhibit I and the lost diamond was due to defendant having "substituted a diamond-solitaire of plaintiff with a heavier stone" that the decision was rendered, respondent Court reversing the lower court and ordering defendant, now petitioner Consuelo S. de Garcia, to return plaintiff's ring or fact value of P1,000.00 and costs, as well as to pay plaintiff P1,000.00 as attorney's fee and P1,000.00 as exemplary damages. Hence this appeal.To repeat, there is no occasion to reverse respondent Court. It correctly applied the law to the facts as found.1. 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. As authoritative interpreted in Cruz v. Pahati,6the right of the owner cannot be defeated even by proof that there was good faith by the acquisition by the possessor. There is a reiteration of this principle inAznar v. Yapdiangco.7Thus: "Suffice it to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is based on his being dispossessed without his consent. The common law principle that where one of two innocent persons must suffer by a fraud perpetrated by the another, the law imposes the loss upon the party who, by his misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the new Civil Code, specifically Article 559. Between a common law principle and statutory provision, the latter must prevail in this jurisdiction."82. It is thus immediately apparent that there is no merit to the contention raised in the first assigned error that her possession in good faith, equivalent to title, sufficed to defeat respondent Guevara's claim. As the above cases demonstrate, even on that assumption the owner can recover the same once she can show illegal deprivation. Respondent Court of Appeals was so convinced from the evidence submitted that the owner of the ring in litigation is such respondent. That is a factual determination to which we must pay heed. Instead of proving any alleged departure from legal norms by respondent Court, petitioner would stress Article 541 of the Civil Code, which provides: 'A possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it." She would accord to it a greater legal significance than that to which under the controlling doctrines it is entitled.lwph1.tThe brief for respondents did clearly point out why petitioner's assertion is lacking in support not only from the cases but even from commentators. Thus: "Actually, even under the first clause, possession in good faith does not really amount to title, for the reason that Art. 1132 of the Code provides for a period of acquisitive prescription for movables through `uninterrupted possession for four years in good faith' (Art. 1955 of the old Spanish Code, which provided a period of three years), so that many Spanish writers, including Manresa, Sanchez Roman, Scaevola, De Buen, and Ramos, assert that under Art. 464 of the Spanish Code (Art. 559 of the New Civil Code),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(II Tolentino, Civil Code of the Phil. p. 258: IV Manresa, Derecho Civil Espaol, 6th Ed., p. 380). And it is for the very reason that the title established by the first clause of Art. 559 is only a presumptive title sufficient to serve as a basis for acquisitive prescription, that the clause immediately following provides that `one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same.' As stated by the Honorable Justice Jose B. L. Reyes of this Court in Sotto vs. Enage (C.A.), 43 Off. Gaz. 5075, Dec. 1947: `Article 559 in fact assumes that possessor is as yet not the owner; for it is obvious that where the possessor has come to acquire indefeasible title by, let us say, adverse possession for the necessary period, no proof of loss or illegal deprivation could avail the former owner of the chattel. He would no longer be entitled to recover it under any condition.' "9The second assigned error is centered on the alleged failure to prove the identity of the diamond ring. Clearly the question raised is one of the fact. What the Court of Appeals found is conclusive. Again, petitioner could not demonstrate that in reaching such a conclusion the Court of Appeals acted in an arbitrary manner. As made mention of in the brief for respondents two disinterested witnesses, Mr. Rafael Rebullida as well as Lt. Col. Reynaldo Cementina of the Pasay City Police Department, both of whom could not be accused of being biased in favor of respondent Angelina D. Guevara, did testify as to the identity of the ring.The third assigned error of petitioners would find fault with respondent Court relying "on the weakness of the title or evidence" of petitioner Consuelo S. de Garcia. It is true, in the decision under review, mention was made of petitioner Consuelo S. de Garcia making no comment when in her presence Rebullida, after examining the ring the stock card, told respondent Angelina L. Guevara that that was her ring, nor did petitioner answer a letter of the latter asserting ownership. It was likewise stated in such decision that there were extra-judicial admissions in the original and first amended answers of petitioner. In the appraisal of her testimony, respondent Court likewise spoke of her giving a rather dubious source of her ring, the person from whom she allegedly bought it turning out "to be a mysterious and ephemeral figure." As a matter of fact, as set forth a few pages back, respondent Court did enumerate the flaws in the version given by petitioner. From the weakness of the testimony offered which, as thus made clear, petitioner, did not even seek to refute, she would raise the legal question that respondent Court relied on the "weakness of [her] title or evidence" rather than on the proof justifying respondent Angelina D. Guevara's claim of ownership. Petitioner here would ignore the finding of fact of respondent Court that such ownership on her part "has been abundantly established" by her evidence. Again here, in essence, the question raised is one of fact, and there is no justification for us to reverse respondent Court.The legal question raised in the fourth assignment of error is that the matter of the substitution of the diamond on the ring was a question raised for the first time on appeal as it was never put in issue by the pleadings nor the subject of reception of evidence by both parties and not touched upon in the decision of the lower court. Why no such question could be raised in the pleadings of respondent Angelina D. Guevara was clarified by the fact that the substitution came after it was brought for examination to Mr. Rebullida. After the knowledge of such substitution was gained, however, the issue was raised at the trial according to the said respondent resulting in that portion of the decision where the lower court reached a negative conclusion. As a result, in the motion for reconsideration, one of the points raised as to such decision being contrary to the evidence is the finding that there was no substitution. It is not necessary to state that respondent Court, exercising its appellate power reversed the lower court. What was held by it is controlling. What is clear is that there is no factual basis for the legal arguments on which the fourth assigned error is predicated.What is said takes care of the fifth assigned error that respondent Court was mistaken in its finding that there was such a substitution. Again petitioner would have us pass on a question of credibility which is left to respondent Court of Appeals. The sixth assigned error would complain against the reversal of the lower court judgment as well as petitioner Consuelo S. de Garcia being made to pay respondent Angelina D. Guevara exemplary damages, attorney's fees and costs. The reversal is called for in the light of the appraisal of the evidence of record as meticulously weighed by respondent Court. As to the attorney's fees and exemplary damages, this is what respondent Court said in the decision under review: "Likewise, plaintiff is entitled to recover reasonable attorney's fees in the sum of P1,000, it being just and equitable under the circumstances, and another P1,000 as exemplary damages for the public good to discourage litigants from resorting to fraudulent devices to frustrate the ends of justice, as defendant herein tried to substitute the ring, Exhibit 1, for plaintiff's ring."10Considering the circumstances, the cursory discussion of the sixth assigned error on the matter by petitioner fails to demonstrate that respondent Court's actuation is blemished by legal defects.WHEREFORE, the decision of respondent Court of Appeals of August 6, 1962 is hereby affirmed. With costs.4. G.R. No. L-30817 September 29, 1972DOMINADOR DIZON, doing business under the firm name "Pawnshop of Dominador Dizon",petitioner,vs.LOURDES G. SUNTAY,respondent.FERNANDO,J.:pIn essence there is nothing novel in this petition for review of a decision of the Court of Appeals affirming a lower court judgment sustaining the right of an owner of a diamond ring, respondent Lourdes G. Suntay, as against the claim of petitioner Dominador Dizon, who owns and operates a pawnshop. The diamond ring was turned over to a certain Clarita R. Sison, for sale on commission, along with other pieces of jewelry of respondent Suntay. It was then pledged to petitioner. Since what was done was violative of the terms of the agency, there was an attempt on her part to recover possession thereof from petitioner, who refused. She had to file an action then for its recovery. She was successful, as noted above, both in the lower court and thereafter in the Court of Appeals. She prevailed as she had in her favor the protection accorded by Article 559 of the CivilCode.1The matter was then elevated to us by petitioner. Ordinarily, our discretion would have been exercised against giving due course to such petition for review. The vigorous plea however, grounded on estoppel, by his counsel, Atty. Andres T. Velarde, persuaded us to act otherwise. After a careful perusal of the respective contentions of the parties, we fail to perceive any sufficient justification for a departure from the literal language of the applicable codal provision as uniformly interpreted by this Court in a number of decisions. The invocation of estoppel is therefore unavailing. We affirm.The statement of the case as well as the controlling facts may be found in the Court of Appeals decision penned by Justice Perez. Thus: "Plaintiff is the owner of a three-carat diamond ring valued at P5,500.00. On June 13, 1962, the plaintiff and Clarita R. Sison entered into a transaction wherein the plaintiff's ring was delivered to Clarita R. Sison for sale on commission. Upon receiving the ring, Clarita R. Sison executed and delivered to the plaintiff the receipt ... . The plaintiff had already previously known Clarita R. Sison as the latter is a close friend of the plaintiff's cousin and they had frequently met each other at the place of the plaintiff's said cousin. In fact, about one year before their transaction of June 13, 1962 took place, Clarita R. Sison received a piece of jewelry from the plaintiff to be sold for P500.00, and when it was sold, Clarita R. Sison gave the price to the plaintiff. After the lapse of a considerable time without Clarita R. Sison having returned to the plaintiff the latter's ring, the plaintiff made demands on Clarita R. Sison for the return of her ring but the latter could not comply with the demands because, without the knowledge of the plaintiff, on June 15, 1962 or three days after the ring above-mentioned was received by Clarita R. Sison from the plaintiff, said ring was pledged by Melia Sison, niece of the husband of Clarita R. Sison, evidently in connivance with the latter, with the defendant's pawnshop for P2,600.00 ... ."2Then came this portion of the decision under review: "Since the plaintiff insistently demanded from Clarita R. Sison the return of her ring, the latter finally delivered to the former the pawnshop ticket ... which is the receipt of the pledge with the defendant's pawnshop of the plaintiff's ring. When the plaintiff found out that Clarita R. Sison pledged, she took steps to file a case of estafa against the latter with the fiscal's office. Subsequently thereafter, the plaintiff, through her lawyer, wrote a letter ... dated September 22, 1962, to the defendant asking for the delivery to the plaintiff of her ring pledged with defendant's pawnshop under pawnshop receipt serial-B No. 65606, dated June 15, 1962 ... . Since the defendant refused to return the ring, the plaintiff filed the present action with the Court of First Instance of Manila for the recovery of said ring, with P500.00 as attorney's fees and costs. The plaintiff asked for the provisional remedy of replevin by the delivery of the ring to her, upon her filing the requisite bond, pending the final determination of the action. The lower court issued the writ of replevin prayed for by plaintiff and the latter was able to take possession of the ring during the pendency of the action upon her filing the requisite bond."3It was then noted that the lower court rendered judgment declaring that plaintiff, now respondent Suntay, had the right to the possession of the ring in question. Petitioner Dizon, as defendant, sought to have the judgment reversed by the Court of Appeals. It did him no good. The decision of May 19, 1969, now on review, affirmed the decision of the lower court.In the light of the facts as thus found by the Court of Appeals, well-nigh conclusive on use, with the applicable law being what it is, this petition for review cannot prosper. To repeat, the decision of the Court of Appeals stands.1. There is a fairly recent restatement of the force and effect of the governing codal norm inDe Gracia v. Court of Appeals.4Thus: "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. As authoritatively interpreted inCruz v. Pahati, the right of the owner cannot be defeated even by proof that there was good faith in the acquisition by the possessor. There is a reiteration of this principle inAznar v. Yapdiangco. Thus: 'Suffice it to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is based on his being dispossessed without his consent. The common law principle that were one of two innocent persons must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who, by his misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the new Civil Code, specifically Article 559. Between a common law principle and a statutory provision, the latter must prevail in this jurisdiction." "52. It must have been a recognition of the compulsion exerted by the above authoritative precedents that must have caused petitioner to invoke the principle of estoppel. There is clearly a misapprehension. Such a contention is devoid of any persuasive force.Estoppel as known to the Rules of Court6and prior to that to the Court of Civil Procedure,7has its roots in equity. Good faith is its basis.8It is a response to the demands of moral right and natural justice.9For estoppel to exist though, it is indispensable that there be a declaration, act or omission by the party who is sought to be bound. Nor is this all. It is equally a requisite that he, who would claim the benefits of such a principle, must have altered his position, having been so intentionally and deliberately led to comport himself thus, by what was declared or what was done or failed to be done. If thereafter a litigation arises, the former would not be allowed to disown such act, declaration or omission. The principle comes into full play. It may successfully be relied upon. A court is to see to it then that there is no turning back on one's word or a repudiation of one's act. So it has been from our earliest decisions. As Justice Mapa pointed out in the first case, a 1905 decision,Rodriguez v. Martinez,10a party should not be permitted "to go against his own acts to the prejudice of [another]. Such a holding would be contrary to the most rudimentary principles of justice and law."11He is not, in the language of Justice Torres, inIrlanda v. Pitargue,12promulgated in 1912, "allowed to gainsay [his] own acts or deny rights which [he had] previously recognized."13Some of the later cases are to the effect that an unqualified and unconditional acceptance of an agreement forecloses a claim for interest not therein provided.14Equally so the circumstance that about a month after the date of the conveyance, one of the parties informed the other of his being a minor, according to Chief Justice Paras, "is of no moment, because [the former's] previous misrepresentation had already estopped him from disavowing the contract.15It is easily understandable why, under the circumstances disclosed, estoppel is a frail reed to hang on to. There was clearly the absence of an act or omission, as a result of which a position had been assumed by petitioner, who if such elements were not lacking, could not thereafter in law be prejudiced by his belief in what had been misrepresented to him.16As was put by Justice Labrador, "a person claimed to be estopped must have knowledge of the fact that his voluntary acts would deprive him of some rights because said voluntary acts are inconsistent with said rights."17To recapitulate, there is this pronouncement not so long ago, from the pen of Justice Makalintal, who reaffirmed that estoppel "has its origin in equity and, being based on moral right and natural justice, finds applicability wherever and whenever the special circumstances of a case so demand."18How then can petitioner in all seriousness assert that his appeal finds support in the doctrine of estoppel? Neither the promptings of equity nor the mandates of moral right and natural justice come to his rescue. He is engaged in a business where presumably ordinary prudence would manifest itself to ascertain whether or not an individual who is offering a jewelry by way of a pledge is entitled to do so. If no such care be taken, perhaps because of the difficulty of resisting opportunity for profit, he should be the last to complain if thereafter the right of the true owner of such jewelry should be recognized. The law for this sound reason accords the latter protection. So it has always been sinceVarela v.Finnick,19a 1907 decision. According to Justice Torres: "In the present case not only has the ownership and the origin of the jewels misappropriated been unquestionably proven but also that the accused, 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 the injured party, who was thereby illegally deprived of said jewels; therefore, in accordance with the provisions of article 464, the owner has an absolute right to recover the jewels from the possession of whosoever holds them, ... ."20There have been many other decisions to the same effect since then. At least nine may be cited.21Nor could any other outcome be expected, considering the civil code provisions both in the former Spanish legislation22and in the present Code.23Petitioner ought to have been on his guard before accepting the pledge in question. Evidently there was no such precaution availed of. He therefore, has only himself to blame for the fix he is now in. It would be to stretch the concept of estoppel to the breaking point if his contention were to prevail. Moreover, there should have been a realization on his part that courts are not likely to be impressed with a cry of distress emanating from one who is in a business authorized to impose a higher rate of interest precisely due to the greater risk assumed by him. A predicament of this nature then does not suffice to call for less than undeviating adherence to the literal terms of a codal provision. Moreover, while the activity he is engaged in is no doubt legal, it is not to be lost sight of that it thrives on taking advantage of the necessities precisely of that element of our population whose lives are blighted by extreme poverty. From whatever angle the question is viewed then, estoppel certainly cannot be justly invoked.WHEREFORE, the decision of the Court of Appeals of May 19, 1969 is affirmed, with costs against petitioner.5. G.R. No. L-18536 March 31, 1965JOSE B. AZNAR,plaintiff-appellant,vs.RAFAEL YAPDIANGCO,defendant-appellee;TEODORO SANTOS,intervenor-appellee.REGALA,J.:This is an appeal, on purely legal questions, from a decision of the Court of First Instance of Quezon City, Branch IV, declaring the intervenor-appellee, Teodoro Santos, entitled to the possession of the car in dispute.The records before this Court disclose that sometime in May, 1959, Teodoro Santos advertised in two metropolitan papers the sale of his FORD FAIRLANE 500. In the afternoon of May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence to answer the ad. However, Teodoro Santos was out during this call and only the latter's son, Irineo Santos, received and talked with De Dios. The latter told the young Santos that he had come in behalf of his uncle, Vicente Marella, who was interested to buy the advertised car.On being informed of the above, Teodoro Santos instructed his son to see the said Vicente Marella the following day at his given address: 1642 Crisostomo Street, Sampaloc, Manila. And so, in the morning of May 29, 1959, Irineo Santos went to the above address. At this meeting, Marella agreed to buy the car for P14,700.00 on the understanding that the price would be paid only after the car had been registered in his name.Irineo Santos then fetched his father who, together with L. De Dios, went to the office of a certain Atty. Jose Padolina where the deed of the sale for the car was executed in Marella's favor. The parties to the contract thereafter proceeded to the Motor Vehicles Office in Quezon City where the registration of the car in Marella's name was effected. Up to this stage of the transaction, the purchased price had not been paid.From the Motor Vehicles Office, Teodoro Santos returned to his house. He gave the registration papers and a copy of the deed of sale to his son, Irineo, and instructed him not to part with them until Marella shall have given the full payment for the car. Irineo Santos and L. De Dios then proceeded to 1642 Crisostomo Street, Sampaloc, Manila where the former demanded the payment from Vicente Marella. Marella said that the amount he had on hand then was short by some P2,000.00 and begged off to be allowed to secure the shortage from a sister supposedly living somewhere on Azcarraga Street, also in Manila. Thereafter, he ordered L. De Dios to go to the said sister and suggested that Irineo Santos go with him. At the same time, he requested the registration papers and the deed of sale from Irineo Santos on the pretext that he would like to show them to his lawyer. Trusting the good faith of Marella, Irineo handed over the same to the latter and thereupon, in the company of L. De Dios and another unidentified person, proceeded to the alleged house of Marella's sister.At a place on Azcarraga, Irineo Santos and L. De Dios alighted from the car and entered a house while their unidentified companion remained in the car. Once inside, L. De Dios asked Irineo Santos to wait at the sala while he went inside a room. That was the last that Irineo saw of him. For, after a considerable length of time waiting in vain for De Dios to return, Irineo went down to discover that neither the car nor their unidentified companion was there anymore. Going back to the house, he inquired from a woman he saw for L. De Dios and he was told that no such name lived or was even known therein. Whereupon, Irineo Santos rushed to 1642 Crisostomo to see Marella. He found the house closed and Marella gone. Finally, he reported the matter to his father who promptly advised the police authorities.That very same day, or on the afternoon of May 29, 1959 Vicente Marella was able to sell the car in question to the plaintiff-appellant herein, Jose B. Aznar, for P15,000.00. Insofar as the above incidents are concerned, we are bound by the factual finding of the trial court that Jose B. Aznar acquired the said car from Vicente Marella in good faith, for a valuable consideration and without notice of the defect appertaining to the vendor's title.While the car in question was thus in the possession of Jose B. Aznar and while he was attending to its registration in his name, agents of the Philippine Constabulary seized and confiscated the same in consequence of the report to them by Teodoro Santos that the said car was unlawfully taken from him.In due time, Jose B. Aznar filed a complaint for replevin against Captain Rafael Yapdiangco, the head of the Philippine Constabulary unit which seized the car in question Claiming ownership of the vehicle, he prayed for its delivery to him. In the course of the litigation, however, Teodoro Santos moved and was allowed to intervene by the lower court.At the end of the trial, the lower court rendered a decision awarding the disputed motor vehicle to the intervenor-appellee, Teodoro Santos. In brief, it ruled that Teodoro Santos had been unlawfully deprived of his personal property by Vicente Marella, from whom the plaintiff-appellant traced his right. Consequently, although the plaintiff-appellant acquired the car in good faith and for a valuable consideration from Vicente Marella, the said decision concluded, still the intervenor-appellee was entitled to its recovery on the mandate of Article 559 of the New Civil Code which provides:ART. 559. The possession of movable property acquired in good faith is equivalent to title. Nevertheless, one who 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.From this decision, Jose B. Aznar appeals.The issue at bar is one and simple, to wit: Between Teodoro Santos and the plaintiff-appellant, Jose B. Aznar, who has a better right to the possession of the disputed automobile?We find for the intervenor-appellee, Teodoro Santos.The plaintiff-appellant accepts that the car in question originally belonged to and was owned by the intervenor-appellee, Teodoro Santos, and that the latter was unlawfully deprived of the same by Vicente Marella. However, the appellant contends that upon the facts of this case, the applicable provision of the Civil Code is Article 1506 and not Article 559 as was held by the decision under review. Article 1506 provides:ART. 1506. Where the seller of goods has a voidable title thereto, but his, title has not been voided 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.The contention is clearly unmeritorious. Under the aforequoted provision, it is essential that the seller should have a voidable title at least. It is very clearly inapplicable where, as in this case, the seller had no title at all.Vicente Marella did not have any title to the property under litigation because the same was never delivered to him. He sought ownership or acquisition of it by virtue of the contract. Vicente Marella could have acquired ownership or title to the subject matter thereof only by the delivery or tradition of the car to him.Under Article 712 of the Civil Code, "ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition." As interpreted by this Court in a host of cases, by this provision, ownership is not transferred by contract merely but by tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez and Co. v. International Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle & Streiff v. Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil. 180).For the legal acquisition and transfer of ownership and other property rights, the thing transferred must be delivered, inasmuch as, according to settled jurisprudence, the tradition of the thing is a necessary and indispensable requisite in the acquisition of said ownership by virtue of contract. (Walter Laston v. E. Diaz & Co. & the Provincial Sheriff of Albay,supra.)So long as property is not delivered, the ownership over it is not transferred by contract merely but by delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the method of accomplishing the same, the title and the method of acquiring it being different in our law. (Gonzales v. Roxas, 16 Phil. 51)In the case on hand, the car in question was never delivered to the vendee by the vendor as to complete or consummate the transfer of ownership by virtue of the contract. It should be recalled that while there was indeed a contract of sale between Vicente Marella and Teodoro Santos, the former, as vendee, took possession of the subject matter thereof by stealing the same while it was in the custody of the latter's son.There is no adequate evidence on record as to whether Irineo Santos voluntarily delivered the key to the car to the unidentified person who went with him and L. De Dios to the place on Azcarraga where a sister of Marella allegedly lived. But even if Irineo Santos did, it was not the delivery contemplated by Article 712 of the Civil Code. For then, it would be indisputable that he turned it over to the unidentified companion only so that he may drive Irineo Santos and De Dios to the said place on Azcarraga and not to vest the title to the said vehicle to him as agent of Vicente Marella. Article 712 above contemplates that the act be coupled with the intent of delivering the thing. (10 Manresa 132)The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under it, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it, not only from the finder, thief or robber, but also from third persons who may have acquired it in good faith from such finder, thief or robber. The said article establishes two exceptions to the general rule of irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying any indemnity, except when the possessor acquired it in a public sale. (Del Rosario v. Lucena, 8 Phil. 535; Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9 Phil. 479; Arenas v. Raymundo, 19 Phil. 46.Tolentino,id., Vol. II, p. 261.)In the case ofCruz v. Pahati, et al.,52 O.G. 3053 this Court has already ruledthat Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover it from the person in possession of the same and the only defense the latter may have is if he has acquired it in good faith at a public sale, in which case, the owner cannot obtain its return without reimbursing the price paid therefor. In the present case, plaintiff has been illegally deprived of his car through the ingenious scheme of defendant B to enable the latter to dispose of it as if he were the owner thereof. Plaintiff, therefore, can still recover possession of the car even if it is in the possession of a third party who had acquired it in good faith from defendant B. The maxim that "no man can transfer to another a better title than he had himself" obtains in the civil as well as in the common law. (U.S. v. Sotelo, 28 Phil. 147)Finally, the plaintiff-appellant here contends that inasmuch as it was the intervenor-appellee who had caused the fraud to be perpetrated by his misplaced confidence on Vicente Marella, he, the intervenor-appellee, should be made to suffer the consequences arising therefrom, following the equitable principle to that effect. Suffice it to say in this regard that the right of the owner to recover personal property acquired in good faith b