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UNITED STATES SUPREME COURT JURISPRUDENCE

PHILIPPINE SUPREME COURT JURISPRUDENCE

September-1992 Jurisprudence

A.M. No. RTJ-88-22 September 1, 1992 - JOEL GARGANERA v. ENRIQUE JOCSON

G.R. No. 32075 September 1, 1992 - SIAO TIAO HONG v. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 32657 September 1, 1992 - PEOPLE OF THE PHIL. v. JOSE S. RODRIGUEZ, ET AL.

G.R. Nos. 70746-47 September 1, 1992 - BIENVENIDO O. MARCOS v. FERNANDO S. RUIZ, ET AL.

G.R. No. 86051 September 1, 1992 - JAIME LEDESMA v. COURT OF APPEALS, ET AL.
G.R. No. 86844 September 1, 1992 - SPOUSES CESAR DE RAMOS, ET AL. v. COURT OF APPEALS, ET AL.

A.M. No. 92-8-027-SC September 2, 1992 - RE: JOSEFINA V. PALON

G.R. No. 43747 September 2, 1992 - REPUBLIC OF THE PHIL. v. COURT OF FIRST INSTANCE OF MANILA,
ET AL.

G.R. No. 46025 September 2, 1992 - FLORITA T. BAUTISTA v. COURT OF APPEALS, ET AL.

G.R. No. 50618 September 2, 1992 - LEOPOLDO FACINAL, ET AL. v. AGAPITO I. CRUZ, ET AL.

G.R. No. 51289 September 2, 1992 - RODOLFO ENCARNACION v. DYNASTY AMUSEMENT CENTER
CORPORATION, ET AL.

G.R. No. 56865 September 2, 1992 - IRENEO TOBIAS, ET AL. v. TEMISTOCLES B. DIEZ

G.R. No. 61043 September 2, 1992 - DELTA MOTOR SALES CORPORATION v. NIU KIM DUAN, ET AL.

G.R. Nos. 62554-55 September 2, 1992 - REPUBLIC BANK v. COURT OF TAX APPEALS, ET AL.

G.R. No. 70120 September 2, 1992 - CIVIL AERONAUTICS ADMINISTRATION, ET AL. v. INTERMEDIATE
APPELLATE COURT, ET AL.

G.R. No. 73198 September 2, 1992 - PRIVATE DEVELOPMENT CORPORATION OF THE PHIL. v.
INTERMEDIATE APPELLATE COURT, ET AL.
G.R. No. 74618 September 2, 1992 - ANA LIM KALAW v. INTERMEDIATE APPELLATE COURT, ET AL.

G.R. No. 75242 September 2, 1992 - MANILA RESOURCE DEVELOPMENT CORP. v. NATIONAL LABOR
RELATIONS COMMISSION, ET AL.

G.R. No. 78777 September 2, 1992 - MERLIN P. CAIÑA v. PEOPLE OF THE PHIL., ET AL.

G.R. No. 80812 September 2, 1992 - LUZ E. TAN v. COURT OF APPEALS, ET AL.

G.R. No. 84256 September 2, 1992 - ALEJANDRA RIVERA OLAC, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 87318 September 2, 1992 - PEOPLE OF THE PHIL. v. JAIME G. SERDAN

G.R. No. 91535 September 2, 1992 - PEOPLE OF THE PHIL. v. EDUARDO L. DE JESUS, ET AL.

G.R. No. 92461 September 2, 1992 - ESTATE DEVELOPERS AND INVESTORS CORPORATION v. COURT OF
APPEALS, ET AL.

G.R. No. 92789 September 2, 1992 - SILLIMAN UNIVERSITY v. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.

G.R. No. 92795-96 September 2, 1992 - PEOPLE OF THE PHIL. v. FREDDIE B. TANTIADO

G.R. No. 93141 September 2, 1992 - PEOPLE OF THE PHIL v. ESTANISLAO GENERALAO, JR.

G.R. No. 93634 September 2, 1992 - PEOPLE OF THE PHIL. v. MASALIM CASIM
G.R. No. 94918 September 2, 1992 - DANILO I. SUAREZ, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 95249 September 2, 1992 - REPUBLIC PLANTERS BANK v. COURT OF APPEALS, ET AL.

G.R. No. 95843 September 2, 1992 - EDILBERTO C. ABARQUEZ, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 95921 September 2, 1992 - SPOUSES ROBERT DINO, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 96333 September 2, 1992 - EDUARDO C. DE VERA v. ERNESTO L. PINEDA

G.R. Nos. 96952-56 September 2, 1992 - SMI FISH INDUSTRIES, INC., ET AL. v. NATIONAL LABOR
RELATIONS COMMISSION, ET AL.

G.R. Nos. 97408-09 September 2, 1992 - PEOPLE OF THE PHIL. v. TOMAS MORENO, JR.

G.R. No. 97805 September 2, 1992 - NILO H. RAYMUNDO v. COURT OF APPEALS, ET AL.

G.R. No. 99050 September 2, 1992 - PEOPLE OF THE PHIL. v. CONWAY B. OMAWENG

G.R. No. 99359 September 2, 1992 - ORLANDO M. ESCAREAL v. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.

G.R. No. 100970 September 2, 1992 - FINMAN GENERAL ASSURANCE CORPORATION v. COURT OF
APPEALS, ET AL.

G.R. No. 103269 September 2, 1992 - PEOPLE OF THE PHIL. v. REYNALDO VALIENTE
A.M. No. P-90-418 September 3, 1992 - EDILBERTO NATIVIDAD v. ALFONSO B. MELGAR

G.R. No. 86695 September 3, 1992 - MARIA ELENA MALAGA, ET AL. v. MANUEL R. PENACHOS, JR., ET AL.

G.R. No. 90693 September 3, 1992 - SPARTAN SECURITY & DETECTIVE AGENCY, INC. v. NATIONAL LABOR
RELATIONS COMMISSION, ET AL.

G.R. No. 91284 September 3, 1992 - PEOPLE OF THE PHIL. v. PEPITO T. PEÑERO

G.R. No. 92310 September 3, 1992 - AGRICULTURAL AND HOME EXTENSION DEVELOPMENT GROUP v.
COURT OF APPEALS, ET AL.

G.R. No. 77285 September 4, 1992 - PEOPLE OF THE PHIL. v. AMADEO ABUYEN

G.R. No. 83995 September 4, 1992 - BENJAMIN EDAÑO v. COURT OF APPEALS

G.R. No. 88788 September 4, 1992 - RESTITUTO DE LEON v. COURT OF APPEALS, ET AL.

G.R. No. 89278 September 4, 1992 - PEOPLE OF THE PHIL. v. FERNANDITO S. SICAT

G.R. No. 94375 September 4, 1992 - PEOPLE OF THE PHIL. v. SOTERO A. CRUZ

G.R. No. 94825 September 4, 1992 - PHIL. FISHERIES DEVELOPMENT AUTHORITY v. NATIONAL LABOR
RELATIONS COMMISSION, ET AL.

G.R. No. 97111-13 September 4, 1992 - PEOPLE OF THE PHIL. v. MONICA P. PADILLA
G.R. No. 101469 September 4, 1992 - MALAYAN INTEGRATED INDUSTRIES, CORPORATION v. COURT OF
APPEALS, ET AL.

G.R. No. 101539 September 4, 1992 - CECILE DE OCAMPO, ET AL. v. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.

G.R. No. 102397 September 4, 1992 - BAGUIO COUNTRY CLUB CORPORATION v. NATIONAL LABOR
RELATIONS COMMISSION, ET AL.

G.R. No. 105120 September 4, 1992 - SIMPLICIO C. GRIÑO, ET AL. v. COMMISSION ON ELECTIONS, ET AL.

G.R. No. 105346 September 4, 1992 - RAUL H. SESBREÑO v. COURT OF APPEALS, ET AL.

G.R. No. 93842 September 7, 1992 - ERNANDO C. LAYNO v. PEOPLE OF THE PHIL., ET AL.

G.R. No. 92988 September 9, 1992 - PEOPLE OF THE PHIL. v. IRENEO TIWAKEN

G.R. No. 55741 September 11, 1992 - LUZ LATAGAN v. EMPLOYEES’ COMPENSATION COMMISSION, ET
AL.

G.R. No. 73071 September 11, 1992 - PEOPLE OF THE PHIL. v. REYNALDO S. ALVAREZ

G.R. No. 82586 September 11, 1992 - SALVADOR M. MISON, ET AL. v. ELI G.C. NATIVIDAD, ET AL.

G.R. No. 91159 September 11, 1992 - PEOPLE OF THE PHIL. v. LARRY A. FRANCISCO
G.R. No. 91915 September 11, 1992 - DIVINE WORD UNIVERSITY OF TACLOBAN v. SECRETARY OF LABOR
AND EMPLOYMENT, ET AL.

G.R. No. 97441 September 11, 1992 - PEOPLE OF THE PHIL. v. DOMINGO CASINILLO

G.R. No. 98062 September 11, 1992 - PEOPLE OF THE PHIL. v. REGOBERTO YBEAS

G.R. No. 103903 September 11, 1992 - MELANIO D. SAMPAYAN, ET AL. v. RAUL. A. DAZA, ET AL.

G.R. No. 57475 September 14, 1992 - REPUBLIC OF THE PHIL. v. RUFO NERI, ET AL.

G.R. No. 74851 September 14, 1992 - RIZAL COMMERCIAL BANKING CORPORATION v. INTERMEDIATE
APPELLATE COURT

A.C. No. 3248 September 18, 1992 - DOMINGO R. MARCELO v. ADRIANO S. JAVIER, SR.

G.R. No. 70890 September 18, 1992 - CRESENCIO LIBI, ET AL. v. INTERMEDIATE APPELLATE COURT, ET
AL.

G.R. No. 73919 September 18, 1992 - NATIONAL IRRIGATION ADMINISTRATION, ET AL. v. INTERMEDIATE
APPELLATE COURT, ET AL.

G.R. No. 75915-16 September 18, 1992 - SPS. GO IT BUN, ET AL. v. BALTAZAR R. DIZON, ET AL.

G.R. No. 84917 September 18, 1992 - PEOPLE OF THE PHIL. v. QUEROBEN A. POLIZON

G.R. No. 86218 September 18, 1992 - PEOPLE OF THE PHIL. v. ELSIE B. BAGISTA
G.R. No. 91001 September 18, 1992 - PEOPLE OF THE PHIL. v. SILFERIO F. SILLO

G.R. No. 94511-13 September 18, 1992 - PEOPLE OF THE PHIL. v. ALEJANDRO C. VALENCIA

G.R. No. 94828 September 18, 1992 - SPOUSES ROMULO DE LA CRUZ, ET AL. v. ASIAN CONSUMER AND
INDUSTRIAL FINANCE CORP., ET AL.

G.R. No. 95456 September 18, 1992 - PEOPLE OF THE PHIL. v. MARIO A. BAÑEZ

G.R. No. 95540 September 18, 1992 - PEOPLE OF THE PHIL. v. ARCHIE Q. DISTRITO, ET AL.

G.R. No. 96255 September 18, 1992 - HERCULES INDUSTRIES, INC. v. SECRETARY OF LABOR, ET AL.

G.R. No. 96329 September 18, 1992 - MABUHAY VINYL CORP. v. NATIONAL LABOR RELATIONS
COMMISSION, ET AL.

G.R. No. 97918 September 18, 1992 - PEOPLE OF THE PHIL. v. VICTOR E. JAPSAY

G.R. No. 102141 September 18, 1992 - PEOPLE OF THE PHIL. v. WILFREDO SABORNIDO

G.R. No. 105227 September 18, 1992 - LEANDRO I. VERCELES v. COMMISSION ON ELECTIONS, ET AL.

G.R. No. 61218 September 23, 1992 - LIBERTAD SANTOS, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 81883 September 23, 1992 - KNITJOY MANUFACTURING, INC. v. PURA FERRER-CALLEJA, ET AL.
G.R. No. 83580 September 23, 1992 - ENRICO SY v. ARTURO A. ROMERO

G.R. Nos. 85403-06 September 23, 1992 - ANTONIO T. TIONGSON v. COURT OF APPEALS, ET AL.

G.R. No. 101706 September 23, 1992 - CONSOLIDATED PLYWOOD INDUSTRIES INC., ET AL. v. COURT OF
APPEALS, ET AL.

G.R. No. 102693 September 23, 1992 - SPOUSES AGOSTO MUÑOZ, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 85086 September 24, 1991

ARSENIO P. BUENAVENTURA ENTERPRISES v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

G.R. No. 90254 September 24, 1992 - PEOPLE OF THE PHIL. v. CARLOS C. FLORIDA

G.R. No. 97765 September 24, 1992 - KHOSROW MINUCHER v. COURT OF APPEALS, ET AL.

G.R. No. L-44936 September 25, 1992 - PHILIPPINE AIRLINES, INC. v. COURT OF APPEALS, ET AL.

G.R. No. 91114 September 25, 1992 - NELLY LIM v. COURT OF APPEALS, ET AL.

G.R. No. 91359 September 25, 1992 - VETERANS MANPOWER AND PROTECTIVE SERVICES, INC. v. COURT
OF APPEALS, ET AL.

G.R. No. 58027 September 28, 1992 - GOLDEN COUNTRY FARMS, INC. v. SANVAR DEVELOPMENT CORP.
G.R. No. 97431 September 28, 1992 - PEOPLE OF THE PHIL. v. JONATHAN J. ALABAN

G.R. No. 99046 September 28, 1992 - AQUALYN CORPORATION v. COURT OF APPEALS, ET AL.

G.R. No. 100574 September 28, 1992 - SPS. MARINO SAPUGAY, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 102381 September 29, 1992 - PEOPLE OF THE PHIL. v. EDGARDO H. LOPEZ

G.R. No. 53630 September 30, 1992 - ENRIQUE KHO, ET AL. v. COURT OF APPEALS, ET AL.

G.R. No. 82531 September 30, 1992 - DOMINGO T. MENDOZA v. MARIA MENDOZA NAVARETTE, ET AL.

G.R. No. 82630 September 30, 1992 - MARIA GULANG v. GENOVEVA NADAYAG, ET AL.

G.R. No. 94461 September 30, 1992 - INTERNATIONAL CORPORATE BANK, INC. v. COURT OF APPEALS, ET
AL.

G.R. No. 97356 September 30, 1992 - ARTURO C. CORONA v. COURT OF APPEALS, ET AL.

G.R. No. 105017 September 30, 1992 - PABLO NIDOY v. COURT OF APPEALS, ET AL.
Philippine Supreme Court Jurisprudence > Year 1992 > September 1992 Decisions > G.R. No. 86051
September 1, 1992 - JAIME LEDESMA v. COURT OF APPEALS, ET AL.:

G.R. No. 86051 September 1, 1992 - JAIME LEDESMA v. COURT OF APPEALS, ET AL.

PHILIPPINE SUPREME COURT DECISIONS

THIRD DIVISION

[G.R. No. 86051. September 1, 1992.]

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

Ledesma, Saludo & Associates for Petitioner.

Magtanggol C. Gunigundo for Private Respondent.

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 vendee’s 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.

DECISION

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 defendant’s 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 plaintiff’s 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
Ledesma’s 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 Manager’s 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 bank’s 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 Sheriff’s 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.

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.’

x x x

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.

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 respondent’s 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 petitioner’s 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
latter’s son, but who nevertheless turned out to be Armando Suarez, on the faith of a Manager’s 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 vendee’s 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 seller’s 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 Peña, 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 library

x x x

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. Petitioner’s 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 seller’s 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 appellant’s 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.

Gutierrez, Jr., Bidin and Romero, JJ., concur.

Feliciano, J., is on leave.

Endnotes:

1. Per Associate Justice Oscar M. Herrera, concurred in by Associate Justices Jorge S. Imperial and
Fernando A. Santiago.

2. Entitled Citiwide Motors, Inc., Plaintiff-Appellant, v. Jaime Ledesma, Et Al., Defendants-

Appellees.

3. Annex "A" of Petition; Rollo, 23-38, at p. 28.

4. Id., 33; 40.

5. Id., 27.

6. Rollo, 42-43.
7. Rollo, 41-42.

8. Rollo, 45-46.

9. Annex "E" of Petition; Rollo, 59-60.

10. Id., 7-8.

11. 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.

12. 184 SCRA 614 [1990].

13. 184 SCRA 618 [1990].

14. 104 Phil. 110 [1958].

15. Article 559, Civil Code.

16. 104 Phil. 116-117 [1958].

G.R. No. 86051 September 1, 1992 - JAIME LEDESMA v. COURT OF APPEALS, ET AL.

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