FIRST DIVISION

[G.R. No. 80298. April 26, 1990.]

EDCA 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.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B. Samson for petitioner.
Cendaa, Santos, Delmundo & Cendaa for private respondents.
D E C I S I O N
CRUZ, J p:
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,
1
which was sustained by the Regional Trial Court,
2
which was in turn sustained by
the Court of Appeals.
3
The 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.
4
EDCA prepared the
corresponding invoice and delivered the books as ordered, for which Cruz
issued a personal check covering the purchase price of P8,995.65.
5
On
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.
6
Meanwhile, EDCA having become suspicious over a second order placed by Cruz
even before clearing of his rst 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 verication revealed that Cruz had no more account or
deposit with the Philippine Amanah Bank, against which he had drawn the payment
check.
7
EDCA 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.
8
On 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.
9
Protesting 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, nally surrendered
the books to the private respondents.
10
As previously stated, the petitioner was
successively rebued 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 rst 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 merits.
It 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 rst 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 rst
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 nancial 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: cdll
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.
xxx xxx xxx
ART. 1477. The owner ship 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 eect. 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 eectively transfer ownership to the
buyer who can in turn transfer it to another.
I n Asiatic Commercial Corporation v. Ang,
11
the plainti 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 464
12
of 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 plainti 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. LLjur
I n Tagatac v. Jimenez ,
13
the plainti 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 plainti 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 plainti-appellant Trinidad C. Tagatac has
been unlawfully deprived of her car. At rst 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, plainti-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?
xxx xxx xxx
. . . 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 ratication or annulment. If the contract is ratied, 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 ratication, the contract of sale remains valid and binding.
When plainti-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 reect 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
rst 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.Cdpr
Surely, the private respondent did not have to go beyond that invoice to satisfy
herself that the books being oered 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. We 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.
Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Footnotes
1. Presided by Judge Jose B. Herrera.
2. Presided by Judge Ernesto S. Tengco.
3. Buena, J., with Castro-Bartolome and Cacdac, Jr., JJ., concurring.
4. Rollo, pp. 9-10.
5. Ibid., p. 10.
6. Id., p. 37; TSN, Orig. Records, pp. 215-219.
7. Rollo, p. 10.
8. Ibid., p.11.
9. Id., p. 37.
10. Id., p. 38.
11. Vol. 40, O.G.S. No. 15, p.102.
12. Substantially reproduced in what is now Article 559.
13. Vol. 53, O.G. No. 12, p. 3792.