Professional Documents
Culture Documents
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Aucmi' 11, 1958' OFFICIAL GAZETTE .5143.
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1e DECISIONS OF THE COURT OF APPEALS
te
~o [No. 17085-R. January 13, 19'58]
;e
te SUN BROTHF..S & COMPANY, plaintiff and appellee, vs.
[r JOSE VELASCO and Co KANG CHIU, defendants and
it
appeilants.
,f SALE; SALES AT MEnCHANTS' STORES; INNOCENT PURCHASERS FOR
~- VALUE PROTECTED; ARTICLE 1505;- NEW CIVIL' CODE.-Under
g paragraph (3) of Arti~e .15"05 of the Civil CodJ, a person
1,
who buys a t-hing'~ at a ):llerc1:rn,nt's store after the same has
been put on display thereat, acquires a -lid title to the thing
;o although hts predecessors in interest did not have any right
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:e of ownership over it. Thi,s is a ca-ie 'of an imperfect or void
.e title 'ripening into a valid one, as a result of some intervening
,r causes.. The policy of the -law has always been that where)
l- the rights and interesfs-of a vendor come- into clash with that
of an iroiocent buyer for value, the latter must be protected..
.s
e ~- The rule embodied in paragraph (3) of Article 1505, protecting
innocent third par.ties wh~ave made purchases at merchants'
e , stores in good faith and for valut appears to be a wise and
.t necessary rule not only to ~ilitate commercial sales on mov-
ables but to ~ stal5ility to business transactions. This rule
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!- is necessary in a country sucii' as 'ours where free enterprise
prevails, for a buyer cannot be reasonably expected to look
behind the title of every atticle when he buys at a store .
.t The doctrine of caveat empt~r is now rarely applied, a n d ~
e is ever .. mentioned it is ~m-e of an -{x~epti@ rather than tli0
s .
general rule. .
h APPEAL from a judgment of the Court of First Instance
d of Manila. Macadaeg, _J.
- The facts are stated in the opinion of the Court.
n
Jose C. de Guzman for defendant and appellant Jose
n Velasco.
ToZentino & Garcia for defendant and appellant Co
'1
Kang Chirr. ~,:,'\.-.,
1,
Domiriador A. Alafriz fo~ plaintiff and appellee.
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ANGELES, J.:
This a_stion for the r.ecavery of personal property was
commenced h1 the Municipal Court of Manila by the
plaintiff Sun Brothers & Company, a registered s-ene@!.
co.-partnersbip, duly organized and existing under and by
virtue of the laws of the Philippines, against the defend-
ants Francisco Lopez, Jose Velasco and Co Kang Chiu.
After trial, the Court re~ered j u<!_glllent "_2rde.ring the .
plai!!tiff to degver':, the, saf!l~refri~ator .0 defend!nt Q.o ~
Kang,~Chtu g:r~to'-pa]fits val4,~ iri the. sum of 1"985 with
costs againk the plaintiff. The cross-claim filed against
1
~l - ct fj (b
far:-4~~
the complaint. Out of the amount . of Pl,700 which
was the stipulated price of the. I'efr,igerator, ~
was paid b_Y Francisco /
clai:n
Dt
ant I
of d~
Lopez. ~ e r paragr4phs 5 and 6 of the,sa,d Annex A,
tf J / it was s. ula:. ed that F~ancisco Lopez pall npb.rem~ve
rendi
folloi
q<t; '-:,
l ~ -~
the refr1gera or from hrn address nor part poss.essrnn .
therewith ~it!;).pt ,,,the/express Y[r_ift~p___,_conse:riE of:::i@fu.- ''*
absolu
i/ ~ and in the event of violation of the terms of said
agreement then the .J?laintiff may rescind the contract
Chiu,
immed
of sale and recove-r possessi0il bf. the article_ object there- Lopez
Ck._C of. It was stipulated further that in the event of viola- of 12?
the M
tion of the terms of the contract PY, defendant, any "On
amo.unt previously : paid by him shall' be forfeited . as burse <
.~at_aj_ - damag~fl ; a:nd . t . .. the merchandise ob .eS!.t which
'{/cthe sale shall remain the a s ute ro ert of ai:nJiff "The
/ until defendant has aid -'n f r i mages
ft)' On July 2, 1954, without the knowledge of plaintiff, Fro
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defendant Francisco Lopez sold the refrigerator to the and C
J. ~ Trading, a business store at 94 Rosario St.,. Manila, Jose ~
owned by defendant Jose Velasco, in the sum of P850, sense
by m~r-ep,rgl'lenting himself as Jose Lim and executing a refr~~
-(:locument that he is the absolute owner. The following . ancf th
day, July 3, 1954,. without kr.iowledge of plaintiff, defend- cliru-1
ant Jose Velasco, after displaying the refrigerator at his %lase;
store,~ the article to Ci:> Rang Chiu, the ot_ller defend- . P9Ef5;.__
ant herein, in the sum of P985 which was paid in cash judgmE
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by Co Kang Chiu. The refrigerator was delivered to the owner
residence and business address . of. Co Kang Cl).i:u at 505 laritCi
Sto. Cristo, Manila. ~nd as
On August 2, 1954, plaintiff filed a complaint 'for. be the
1
Replevin it;L the Municipal Court of Manila against defend- as agai
ants Frari'cisco Lopez and Co Kang . Chiu, and asked for
further
a preliminar5,{J;vrit of Replevin ror the recovery of the moral.
possession of 'tie refrigerator, which writ was issued by ever ex
the Court. Iniompliance with the Writ of S'eizu"'reissued The
by the Court, .fl),e deputy sheriff, accompanie1f by a repre- main, u
s~tative of, th''. plaintiff, went to the residence of Co Civil Cc
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Kang Chiu to serye th~ writ. On the request of Co Kang "ART,
Chiu and upon the~ntercession of his lawyer, and having are sold'
filed a counter-bond, the refrigerator was Iiot -taken out not sell
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5146
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OFFICIAL GAZ:t;TTE
"~? VOL. 54, No. is
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vendee upon payment in full of the purchase price, and owner
Francisco Lopez has not fully paid the contract price.
When Francisco Lopez, who has no -titleto the refrigera-1 . I
it nh
tor i? question, so.Id. it to Jose Velasc~_,~atter di.d..@t.. .
acqmre any better right than what Franc-1sco Lapez had- 'pl~
whicli is practically nothing:...~We-do-~ agree with tJ::ie Franc1
court a quo that Jose Velasco was a.._pu~chaser in good y_~tion
said:
. faith and for value for the reason that Francisc(o. Lopez,
1s.
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being a private person who not Gngaged in. the busi- "Yet
iding, a
- ness of selling refrigerato.rs, /J"~~e Velasco n.iu~.:t-::be.~f
sonably expected to have mqmred from Francisco Lopez ~
sessing
""' --J whether or not the refrigeratcir !:i:t was selling has been Ii' \~
"--! . paid in full. In this, Jose Velasco has been negligent, ; of this
r\ The conflict of inter~however";"".is between . the Sun suant tc
the pric
. Brothers & Company which is the conditional vendor, saction
on the one hand, and Co Kang Chlu, an innocent pur~ Commer,
chaser for value, on the other. ~The:r~_.can be no questieri. And, n
\ but that the J. V. Tradin0tore from which . C<:>) Kang
. ~ JYefDt.fC-1:1,
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5147
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Chiu purchased th~ ref.rigera.tor."!.fits. a m..e~.han!_.store, ~
ller had
latter mqst be protected. r "'' " 3
'l'he rule embodied in paragraph (3) of Article 1505 l Sf'OTT/~tt- IJA)f-S
J Kang f
protecting innocent third parties who have made pur-
>etween
f: chases at merchants' stores in. good faith and for value
> Kang
~- The
l appears to us to be a~s~ and nece'ssaiy rule not"onJyf-(
Article <" o facilitate commercial sales. on movables but to give~
v{;tabilityto business b-ansactions't This rule is necessary
of the
in a country such 'as ours where free enterprise prevails,
,rn the ~
:~elA::; A~ for buyers cannot be :::easonably expected to look behind
the title of every article when he buys at a store. Th_.
~octrine _of c:wel:l,t emptor is now rarely applied, and 1
if\\
it is ever mentioned it is more of an exception rath~
alue at\~)~~.'i. than the general rule.
r when
is true
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, Upon the whole, we are persuaded to believe that}
appellant Co Kang Chiu who is now in possession of the
refrigerator should 'be adjudged the owner thereof, be-
er had
1se the , ,....
. . C'ause he bought
= it at a mercriant's store in good faith ~P'I
.) all_d for va!ue. / ~ '' ,,...
or, the
Not even the remedy granted by Article ~ to the
in the
owner of a movable to obtain its ];'eturn provided he reim-
::e, and
price. b_urses the one _in possJ, :on L~ _f, is ~vailable to plain-: j /
~
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'rigera-~l ~1ff fecausfv:~1th:--;--c d .1. I _. the fr1gerator n_or .was V
:,.,It ynlawfmfy.dep~_'.:~ ;her.e...:_ t qtnnot be. Sald, that
:lid .n.qt (1 . pl~elivecy I possess10 of ~efr1gera,tor to
; had-\
... .!t Francisco Lopez should be construed as ynlawful depri-
ith th~~/ vation of the owner thereof .. As the Supreme Court has
n good said: . ,.
Lopez, .
e busi- "Yet the defendant invokes Article 464 of the Civil Code prov-
. iding, among other things, that 'one who has been unlawfully
1e rea-' i
!lcc.:.T:..:i.:..ve.::cd::....;o;.:f_D"""~-r~s.onal property may 1:ecover it from an~ person liQ.S- r])
Lopez !\ sessing it.' We do not 'believe that the plaintiff has been unlaw- f'
,s been ~eprived of the cartons of Gloco Tonic within the scope ~
~ligent.. of this legal provi.sion. {!Lhas y6luntarily parted. with them pur-\
1e sui<-=- suant to a contract of purch~se and sale. The ,~1rcumstance that
vendor, the price was not subsequently paid did not render illegal a tran-
saction which was valid and legal at the J:ieginning.'..'J (Asiatic
1t pur- Commercial Corp. V8. Ang, et al., 40 Off. Gaz., Supp. No. 11, 102.)
uestion
And, moreover., as one noted author has aptly put it:
>) Kang
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3792 OFFICIAL GAZETTE VOL. 53 No. 12 .,,. >S
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TRINIDAD c.
[No. 13514-R. February 22, 1957]
TAGAT.A.C, palintiff and appellant, vs. LI~ERATO
C. JIMENEZ, defendant and appellee .
1. OWNiERSHIP; MOVABLE PROPERTY; Loss OF MOVABLE PROPERTY; RE-
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OCAMPO, J.: )
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In October, 1951, Trinidad C. Tagatac bought a car
for .$4,500 from Danielson and Kavarno Motors' of 'Sta.
Barbara, California, U.S.A. On May 27, 1952, she brought
the car to the Philippines. .Tagatac counted among her
friends one Joseph Lee and his wife, the latter being her
\J; ,,
childhood friend. Sometime in June, 1952, Tagatac, accJ1').- ....
panied by her sister, Dolores Corpus, visited the Lee's in "'
the latter's house. Shortly thereafter Joseph Lee came to
see Trinidad C. Tagatac. With him was one Warner L.
Feist alias Warner L. Levy who was posing as a very !' i ,;
wealthy man. Joseph Lee introduced Feist to Trinidad C.
Tagatac. Possessed of a glib tongue, . Feist easily con-
vinced Tagatac that he was a millionaire. He told her that 4-j.g' ~'
he was the manager of a cotporation named China Pacific -~:...
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.JUNE 30, 1957 OFFICIAL GAZETTE 3793
Trading Co., Inc. ; that he was the owner .of two cars and
,. two houses in Baguio; and that he was the consignee of'
;,'!.-. billions. of_ pesos of textiles then deposited in the custom-
. house. Seeing that Tagatac believed every word he said,
f he offered to buy her car for P15,000. Tagatac was amen-
ii~i , able to the idea. She agreed to sell the car to Feist at
the price quoted by him. On June 18, 1952 between 9 and
10 in the morning, the deed of sale was made. Tagatac
signed said private document of sale. Warner L. Feist
paid the price to Tagatac .by means of a check postdated
June 19, 1952 which check he delivered on the day of the
execution of the deed of sale, June 18, 1952. In turn,
, , .. Tagatac delivered the car to Feist on the same day, June 18,
. 1952..
The next day, June 19, 1952, Tagatac tried to cash th~
check with the PhilippiM National Bank. The bank A-
fused to honor the check and informed her that Watner
L. Feist has no account and no funds in said bank. With-
out losing any time, Tagatac notified all enforcement agen-
7 ' t
cies such as the Police authorities of Manila, the National
Bureau of Investigation, the Philippine Constabulary and
the Military Intelligence Service, of the estafa committed
on her by Warner L, Feist. The law enforcement agencies
failed to apprehend. Warner L. Feist. The car itself dis-
appeared completely. Meanwhile, Warner L. Feist managed
to have the private deed of sale notarized by Notary
Public Juan N. Sombrito. With the properly notarized
deed of sale, he succeeded in having the registration certif-
icate of the car transferred in his name on June 28, 19~2,
exactly 11 days after the sale thereof. On August 18,
1952 Feist sold the car to .Felix Sanchez of Imus, Cavite.
Sanchez %had the registration certificate of the car trans- .
ferred in his name on the same date. Sanchez offered to
sell the car to Liberato C. Jimenez. Jimenez investigated
in the lVIotor Vehicles Office the registration certificate of
:#- ~ Sanchez, After finding out that everything was inorder;
he bought the car from Sanchez for Pl0,000. On August
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P, 21, 1952, Jimenez delivered the car to the California Car
l Exchange on Taft Avenue in order that it may be displayed
for sale. Ruben lVIasalonga offered to sell the car for
Jimenez so the latter transferred the car to Ruben Masa-
longa in order to facilitate the sale of the car. Masa-
'...s ,, longa in turn, unable to sell the car immediately, trans-
ferr'ed it to Eugenio Villanueva, in order that the latter
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might sell it for Liberato C. Jimenez. On August 31,
1952 plaintiff discovered the car in the possession of the
California Car Exchange so she demanded from the manager
of said exchange for the delivery of the car to her but
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1- j u the latter. refus.ed. On September 3, 1952 the certificate
of registration was retransferred to Liberato C. Jimenez.
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On October 20, 1952, Tri,d C. Tagatac filed a suit
!i for the recovery of the possession of the car. The Sheriff.,
pursuant to a warrant of seizure obtained by plaintiff,
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' 3794 - OFFICIAL GAZETTE VOL. 53 No. 12 ll<:
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-to the aforecited section of Rule 123, there is a disputable 1
-presumption that a person found in possession of a thing
- taken in the doing of a recent wrongful act is the taker
and the doer of the whole act. This presumption usually
arises in cases of stolen goods. We cannot make this
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presumption in the pre'Sent case, because (1) the car was
.t '
riot stolen from plaintiff-appellant anJ (2) defendant-ap-
pelle came into possession of the car two months after
Warner L. Feist swindled plaintiff-appellant so that even
assuming that the car was stolen, defendant-appellee could
-. not have been presumed to have been the wrongdoer for
-the wrongful act was done two months before the car came
into his possession.
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The car was transferred twice to defendant-appellee,
for_ the first time on August 21, 1952 and for the second
-tire on September 3, 1952. Plaintiff-appellant argues 1
that defendant~appellee is a purchaser in bad faith be-
cause on September 1, 1952, that is three days before the ~ \
car was transferred to him on September 3, 1952, h_e al-
. ready knew that the car was subject of a search warrant
in a estafa case against Warner L. Feist, as shown by
his motion for the dissolution of the search warrant (Ex-
hibit 0). Defendant-appellee bought the car for Pl0,000
from Felix Sanchez on August 21, 1952 (Exhibit 0-2). ;d: I
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The car was. duly registered in his name (Exhibit G). /-'
On August 22, 1952 defendant-appellee transferred the '!<
:car. to Ruben Masalonga (Exhibit H). On the same date ! "
Masalonga transferred the car to Eugenio Villanueva (Ex- I
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Contrary to plaintiff-appellant's claim, defending:.appel-
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:lee Liberato C. Jimenez did not commit perjury when he
swore under oath in Exhibit O that he owns the car and
.that it was registered in his name, because evetl- though
the car oh that date, September 1, 1952, was still registered
it ~- in the name of Eugenio Villanueva, defendant-appellee con-
sidered himself to be the owner of the car for :as we have
.said the transfer of the car to ,Masalonga and that to
Villanueva were made for the purpose of enabling these
persons to sell it. For all intents and purposes, defendant-
. appellee had every reason to assert that he was the <Jwner
of the car on September 1, 1952.
Plaintiff-appellant alleges thaf the . lower . court totally
$ ignored the judgment convicting.Warner L. Feist of estafa
j and that the lower court erred in not declaring that
restitution of the property swindled must inevitably follow.
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: The record reveals that the co.:urt a;. quo took notice-.of
the judgment of conviction in its order of Julyi15, 1954
.denying plaintiff-appellant's motion for reconsideration of
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3796 OFFICIAL GAZETTE Vo~. 53 No. 12 .,.,,..
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JUNE 30, 1957 OFFICIAL GAZETTE 3797
+I menea (CA) 46 Off. Ga~. 1113, was illegally deprived
.1..1,. thereof the Japanese forcibly took it from him during the
Occupation.
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379.8: O;F:(l'ICIAL GAZETTE Vor.;; :5:3 No::12
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of a stranger in good faith, ia.cquired befor.e the resolutiqi:l of the
contract, are. entitiea' to .protection." . .
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Let us turn our attention to the contract of sale between '---. ..
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