G.R. No. L-18536 March 31, 1965
JOSE 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 of Cruz v. Pahati, et al., 52 O.G. 3053 this Court
has already ruled that
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 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 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. (Cruz v.
Pahati, supra)
UPON ALL THE FOREGOING, the instant appeal is hereby dismissed
and the decision of the lower court affirmed in full. Costs against
the appellant.
DIGESTFACTS: Teodoro advertised for sale his Ford Fairlane car.
De Dios approached them purporting to be a nephew of Marella.
Teodoro transacted with Marella who agreed to buy the car, agreeing
to pay the same only after the car has been registered in his name.
The Deed was registered in his name, but Marella has yet to pay so
the documents were not delivered to him, he pleaded with Ireneo,
Teodoros son, that they proceed to Marellas sister to secure the
shortage of cash. Ireneo agreed. They proceeded thereto, Ireneo was
accompanied by De Dios and an anonymous person. De Dios was able to
induce Ireneo to hand over the documents under the pretext that he
will show them to his lawyer, Ireneo agreed. De Dios made Ireneo
wait and thereafter escaped with the car and the deed. Marella was
then able to sell the car to Aznar. The police thereafter seized
the car in Aznars possession. Aznar countered with a complaint for
Replevin.
ISSUE: W/N Teodoro may recover the car from Aznar
HELD: YES. Teodoro was clearly unlawfully deprived of the car.
There was no valid delivery to Marella, hence the latter acquired
no title to the car. Delivery must be coupled with intent. That
being the case, Teodoro hasthe right to claim the car not only from
the thief, butalso from 3rd persons who may have acquired it in
goodfaith. The buyer would only be entitled toreimbursement if he
purchased the same in good faithfrom a public sale.
G.R. No. 59550January 11, 1995
EDILBERTO NOEL (now PINITO W. MERCADO) as ADMINISTRATOR OF THE
INTESTATE ESTATE OF GREGORIO NANAMAN and HILARIA TABUCLIN,
petitioner, vs.COURT OF APPEALS and JOSE C. DELESTE,
respondents.
G.R. No. 60636January 11, 1995
PINITO W. MERCADO, as SPECIAL ADMINISTRATOR OF THE INTESTATE
ESTATE OF GREGORIO NANAMAN and HILARIA TABUCLIN, petitioner,
vs.HONORABLE COURT OF APPEALS and JOSE C. DELESTE, respondents.
QUIASON, J.:
The consolidated cases, G.R. Nos. 59550 and 60636, are petitions
for review on certiorari under Rule 45 of the Revised Rules of
court of the Amended Decision dated May 14, 1981 of the Court of
Appeals in CA-G.R. No. 56303-R, which affirmed in toto the decision
of the Court of First Instance, Branch II, Lanao del Norte in
Special Proceedings No. 596 (II-94) in favor of Jose C. Deleste,
private respondent herein.
Gregorio Nanaman and Hilaria Tabuclin (Nanaman spouses) were a
childless, legally-married couple. Gregorio, however, had a child
named Virgilio Nanaman by another woman. Since he was two years
old, Virgilio was reared by Gregorio and Hilaria. He was sent to
school by the couple until he reached third year of the law
course.
During their marriage, Gregorio and Hilaria acquired certain
property including a 34.7-hectare land in Tambo, Iligan City on
which they planted sugarcane, corn and bananas. They also lived
there with Virgilio and fifteen tenants.
On October 2, 1945, Gregorio died. Hilaria then administered the
property with the help of Virgilio enjoyed the procedure of the
land to the exclusion of Juan Nanaman, the brother of Gregorio, and
Esperanza and Caridad Nanaman, Gregorio's daughters by still
another woman. In 1953, Virgilio declared the property in his name
for taxation purposes under Tax Declaration No. 5534 (Exhs. 13
& 13-A). On November 1, 1952, Hilaria and Virgilio, mortgaged
the 34.7-hectare land in favor of private respondent, in
consideration of the amount of P4,800.00 (Exh. 5).On February 16,
1954, Hilaria and Virgilio executed a deed of sale over the same
tract of land also in favor of private respondent in consideration
of the sum of P16,000.00 (Exh. 7). Witnesses to the sale were the
wife of Virgilio, Rosita S. Nanaman, Rufo C. Salas, the driver of
private respondent, and Remedios Pilotan. The document was
notarized on February 17, 1954 and was registered with the Register
of Deeds of Iligan city on March 2, 1954. The tax declaration in
the name of Virgilio was cancelled and a new tax declaration was
issued in the name of private respondent. Having discovered that
the property was in arrears in the payment of taxes from 1952,
private respondent paid the taxes for 1952, 1953 and 1954 (Exhs.
13-B, 13-C & 14-B). From then on, private respondent has paid
the taxes on the property.
On May 15, 1954, Hilaria died. On October 27, 1954, Esperanza
and Caridad Nanaman filed intestate estate proceedings concerning
the estate of their father, Gregorio. Included in the list of
property of the estate was the 34.7-hectare land. Inasmuch as only
Esperanza, Caridad and Virgilio Nanaman were named as heirs of
Gregorio in the petition, Juan Nanaman, Gregorio's brother, opposed
it. On November 26, 1954, the petition was amended to include the
estate of Hilaria with Alejo Tabuclin, Hilaria's brother, and Julio
Tabuclin, a son of Hilaria's deceased brother, Jose, as additional
petitioners.
Having been appointed special administrator of the estate of the
Nanaman couple, Juan Nanaman included the 34.7-hectare land in the
list of the assets of the estate.
Juan also reported that Virgilio took the amount of P350.00 from
the procedure of the estate without prior permission and that five
tenants in contempt of court. Accordingly, in its Order of January
30, 1956, the probate court required private respondent and said
tenants to appear before it and "show cause why they should not be
cited for contempt for illegally interfering in the land" under
special administration.
On June 16, 1956, when Edilberto Noel took over as regular
administrator of the estate, he was not able to take possession of
the land in question because it was in the possession of private
respondent and some heirs of Hilaria.
On July 18, 1957, private respondent and the heirs of the
Nanaman spouses executed an amicable settlement of the Nanaman
estate. In the document, private respondent agreed "to relinquish
his rights to one-half (1/2) of the entire parcel of land in Tambo,
Iligan City, indicated in item 1 under the Estate, sold to him by
Hilaria Tabuclin, in favor of all the heirs of the abovementioned
intestate [estate] for the reason that not all of the heirs of
Gregorio Nanaman have signed and agreed" (G.R. No. 60636, Rollo, p.
67). The court approved the amicable settlement but when it was
questioned by some heirs, the court set aside its approval and
declared it null and void (Exh. H-1).
The court thereafter ordered Noel, as regular administrator, to
file an action to recover the 34.7-hectare land from private
respondent. Consequently, on April 30, 1963, Noel filed an action
against private respondent for the version of title over the
34.7-hectare land to the Nanaman estate and to order private
respondent to pay the rentals and attorney's fees to the
estate.
On December 14, 1973, the trial court rendered a decision,
holding that the action for annulment of the deed of sale had
prescribed in 1958 inasmuch as the sale was registered in 1954 and
that Gregorio's heirs had slept on their rights by allowing Hilaria
to exercise rights of ownership over Gregorio's share of the
conjugal property after his death in 1945. On the issue that
Hilaria had no authority to dispose of one-half of the property
pertaining to her husband, the trial court ruled: (1) that Hilaria
in effect acted as administratrix over the estate of Gregorio; (2)
that she sold the 34.7- hectare land in order to pay the debts of
the conjugal partnership; and (3) that out of the purchase price of
P16,000.00, P4,000.00 was in payment to private respondent (who was
a doctor of medicine) for medical services rendered and medicine
administered during Gregorio's ailment and P800.00 was used to pay
taxes in arrears.
Noel appealed to the Court of Appeals. In its Decision of
February 18, 1980, the appellate court ruled that the transaction
between Hilaria and Virgilio on one hand and private respondent on
the other, was indeed a sale. It found that no fraud, mistake or
misrepresentation attended in the execution of the deed of sale and
that no proof was shown that the contract was merely a
mortgage.
The appellate court, however, agreed with Noel that Hilaria
could not validly sell the 37.7-hectare land because it was
conjugal property, and Hilaria could sell only her one-half share
thereof.
On the issue of prescription, the appellate court ruled that
since no fraud, mistake or misrepresentation attended the execution
of the deed of sale, the prescriptive period of ten years had not
yet elapsed when the action to recover the property was filed in
1963. Moreover, the appellate court held that in the absence of
proof of adverse possession by Hilaria, she should be considered as
holding the property pursuant to her usufructuary rights over the
same under the provisions of the Spanish Civil Code of 1889, the
law in force at the time of the death of Gregorio.
Finding that Noel's claim for rentals of P5,000.00 per annum
from 1957 was uncontroverted, the appellate court ruled that
one-half thereof belonged to the estate of Gregorio. The
dispositive portion of the decision states:
WHEREFORE, the judgment appealed from is set aside and another
is hereby entered declaring the intestate estate of Gregorio
Nanaman and the defendant-appellee co-owners of the land in
question in the proportion of one-half (1/2) interest each;
ordering defendant-appellee Jose C. Deleste to return to
plaintiff-appellant, as administrator of Gregorio Nanaman's estate
the land in question, and to pay plaintiff as such administrator
the sum of P2,500.00 as rental of the 1/2 interest of the estate
from the year 1957 until the land is returned to the estate with
legal interest from the filing of plaintiff's complaint; and, to,
pay the expenses of litigation and attorney's fees to plaintiff in
the sum of P3,000.00. Costs against the appellee, Jose C. Deleste
(G.R. No. 60636, Rollo, p. 42).
Private respondent filed a motion for the reconsideration of
said decision praying for the total affirmance of the decision of
the trial court. Noel also filed a motion for reconsideration
praying for the return of ownership and possession of the entire
tract of land to the estate of the 34.7-hectare land.
The appellate court took into account that since Gregorio's
death, Hilaria and Virgilio took physical possession of the
property and enjoyed its fruits which were delivered to them by the
tenants; that Virgilio instituted said tenants; and that he
declared the property in his own name for tax purposes. The court
also ruled that the non-payment of the real estate taxes by Juan
constituted abandonment of the property and his non-filing of an
action to recover the same from the time that private respondent
"usurped" the property until the filing of the complaint in 1963 by
Noel amounted to laches (G.R. No. 60636, Rollo, p. 50).
Hence, the appellate court tacked "the physical possession of
Hilaria and Virgilio to the possession of the defendant for another
nine (9) years up to the time the complaint was filed." It
considered the "change of conditions or relations" which had
transpired in the case such as private respondent's registration of
his muniment of title over the property; the cancellation of
Virgilio's tax declaration and the issuance of another tax
declaration in the name of private respondent; private respondent's
payment of taxes from 1952 "up to the present;" the execution of a
new tenancy agreement between private respondent and the tenants;
and private respondent's purchase of plows, a carabao and
insecticides for use in the ricefield.
Stating that it was "proscribed from taking away property from
the alert and the industrious and dumping it into the hands and
possession of one has previously slept on his rights," the
appellate court in its amended decision decreed:
WHEREFORE, Our decision of February 18, 1980 is hereby affirmed
and reiterated insofar as it upheld the regularity and due
execution of the deed of sale (Exh. A or 7) and the transaction
affecting the undivided one-half portion of the property described
in par. 3 of the complaint appertaining to the share of Hilaria
Tabuclin, as evidenced by said Exh. A or 7, and is reconsidered and
set aside and another one entered affirming the decision of the
lower court in all its parts, including the award of damages and
the costs of suit. No costs in this instance (G.R. No. 60636,
Rollo, p. 52).
II
Pinito W. Mercado, as new administrator of the estate, appealed
to this Court, questioning the court of Appeals' Amended Decision
applying the doctrine of laches and equating the said doctrine with
acquisitive prescription (G.R. No. 59550).
Subsequently, another petition for certiorari to declare the
sale to private respondent as an equitable mortgage, was filed by
Atty. Bonifacio Legaspi (G.R. No. 60636). Said counsel explained
that he represented the heirs of Hilaria while the counsel in G.R.
No. 59550 represented the heirs of Gregorio (G.R. No. 60636, Rollo,
pp. 104-107). These two cases, arising as they do from the same
decision of the Court of Appeals, were consolidated in the
resolution of September 2, 1991 and are herein jointly
considered.
III
There are no cogent reasons to deviate from the ruling of the
Court of Appeals that the contract involving the 34.7-hectare
property was one of sale and not of mortgage in the absence of a
showing that the findings complained of are totally devoid of
support in the record or that they are so glaringly erroneous as to
constitute serious abuse of discretion (Andres v. Manufacturers
Hanover & Trust Corporation, 177 SCRA 618 [1989]). It should be
noted that two contracts had been executed involving said property
(the November 1, 1952 mortgage and the February 16, 1954 sale). In
the absence of proof of gross inadequacy of the price, that the
sale was made with what might appear as an inadequate consideration
does not make the contract one of mortgage (Askay v. Cosalan, 46
Phil. 179 [1924]).
We find, however, that the resolution of these petitions hinges
on whether Hilaria and Virgilio could dispose of the entire
property sold to private respondent and assuming that they did not
have full ownership thereof, whether the right of action to recover
the share of the collateral heirs of Gregorio had prescribed or
been lost through laches.
Gregorio died in 1945 long before the effectivity of the Civil
Code of the Philippines on August 30, 1950. Under Article 2263 of
the said Code, "rights to the inheritance of a person who died,
with or without a will, before the effectivity of this Code, shall
be governed by the Civil Code of 1889, by other previous laws, and
by the rules of Court."
Thus, succession to the estate of Gregorio was governed
primarily by the provisions of the Spanish Civil Code of 1889.
Under Article 953 thereof, a spouse like Hilaria, who is survived
by brothers or sisters or children of brothers or sisters of the
decedent, as is obtaining in this case, was entitled to receive in
usufruct the part of the inheritance pertaining to said heirs.
Hilaria, however, had full ownership, not merely usufruct, over the
undivided half of the estate (Spanish Civil Code of 1889, Art.
493). It is only this undivided half-interest that she could
validly alienate.
On the other hand, Virgilio was not an heir of Gregorio under
the Spanish Civil Code of 1889. Although he was treated as a child
by the Nanaman spouses, illegitimate children who were not natural
were disqualified to inherit under the said Code (Cid v. Burnaman,
24 SCRA 434 [1968]). Article 998 of the Civil Code of the
Philippines, which gave an illegitimate child certain hereditary
rights, could not benefit Virgilio because the right of ownership
of the collateral heirs of Gregorio had become vested upon his
death (Civil Code of the Philippines, Art. 2253; Uson v. Del
Rosario, 92 Phil. 530 [1953]). Therefore, Virgilio had no right at
all to transfer ownership over which he did not own.
In a contract of sale, it is essential that the seller is the
owner of the property he is selling. The principal obligation of a
seller is "to transfer the ownership of" the property sold (Civil
Code of the Philippines, Art. 1458). This law stems from the
principle that nobody can dispose of that which does not belong to
him (Azcona v. Reyes, 59 Phil. 446 [1934]; Coronel v. Ona, 33 Phil.
456 [1916). NEMO DAT QUAD NON HABET .
While it cannot be said that fraud attended the sale to private
respondent, clearly there was a mistake on the part of Hilaria and
Virgilio in selling an undivided interest in the property which
belonged to the collateral heirs of Gregorio.
The sale, having been made in 1954, was governed by the Civil
Code of the Philippines. Under Article 1456 of said Code, an
implied trust was created on the one-half undivided interest over
the 34.7-hectare land in favor of the real owners.
Said Article provides:
If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property
comes.
In Diaz v. Gorricho, 103 Phil. 261 (1958), the Court said that
Article 1456 merely expresses a rule recognized in Gayondato v.
Insular Treasurer, 49 Phil. 244 (1926). Applying said rule, the
Gayondato court held that the buyer of a parcel of land at a public
auction to satisfy a judgment against a widow acquired only
one-half interest the land corresponding to the share of the window
and the other half belonging to the heirs of her husband became
impressed with a constructive trust in behalf of said heirs.
On the issue of prescription, we hold that the action for
recovery of title or possession over the 34.7-hectare land had not
yet prescribed when the complaint was filed on April 30, 1963.
In its Amended Decision, the Court of Appeals reckoned the
prescriptive period from the death of Gregorio on October 2,
1945.
Under the law in force in 1945, the surviving spouse was given
the management of the conjugal property until the affairs of the
conjugal partnership were terminated. The surviving spouse became
the owner of one-half interest of the conjugal estate in his own
right. he also became a trustee with respect to the other half for
the benefit of whoever may be legally entitled to inherit the said
portion. "He could therefore no more acquire a title by
prescription against those for whom he was administering the
conjugal estate than could a guardian his ward or a judicial
administrator against the heirs of an estate. . . . The surviving
husband as the administrator and liquidator of the conjugal estate
occupies the position of a trustee of the highest order and is not
permitted by the law to hold that estate or any portion thereof
adversely to those for whose benefit the law imposes upon him duty
of administration and liquidation" (Pamittan v. Lasam, 60 Phil. 908
[1934]).
The possession of Virgilio, his registration of the land in his
name for tax purposes, his hiring of tenants to till the land, and
his enjoyment of the produce of the tenants, appear more as acts
done to help Hilaria in managing the conjugal property. There is no
evidence to prove indubitably that Virgilio asserted a claim of
ownership over the property in his own right and adverse to all
including Hilaria.
In the same manner, the doctrine of laches does not apply. Upon
orders of the court in the intestate proceedings, Noel, the
administrator of the estate of the Nanaman spouses, immediately
filed an action to recover possession and ownership of the
property. There is no evidence showing any failure or neglect on
his part, for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have been
done earlier (Cristobal v. Melchor, 78 SCRA 175 [1977]). The
doctrine of stale demands would apply only where by reason of the
lapse of time, "[i]t would be inequitable to allow a party to
enforce his legal rights" (Z.E. Lotho, Inc. v. Ice and cold Storage
Industries of the Philippines, Inc., 3 SCRA 744 [1961]). Moreover,
this Court, except for every strong reasons, is not disposed to
sanction the application of the doctrine of laches to prejudice or
defeat the right of an owner or original transferee (Raneses v.
Intermediate Appellate Court, 187 SCRA 397 [1990]).
The action to recover the undivided half-interest of the
collateral heirs of Gregorio prescribes in ten years. The cause of
action is based on Article 1456 of the Civil Code of the
Philippines, which made private respondent a trustee of an implied
trust in favor of the said heirs. Under Article 1144 of the Civil
Code of the Philippines, actions based upon an obligation created
by law, can be brought within ten years from the time the right of
action accrues (Rosario v. Auditor General, 103 Phil. 1132
[1958]).
The ten-year prescriptive period within which the collateral
heirs of Gregorio could file an action to recover their share in
the property sold to private respondent ( prescripcion extintiva)
accrued only on march 2, 1954, when the deed of sale was registered
with the Register of Deeds (Cf. Arradaza v. Court of Appeals, 170
SCRA 12 [1987]). From march 2, 1954 to April 30, 1963, when the
complaint for the recovery of the property was filed, less than ten
years had elapsed. Therefore, the action had not been barred by
prescription.
The ten-year prescriptive period before title to real estate
shall vest by adverse possession ( prescripcion adquisitiva) is
also reckoned in the case of private respondent from March 2, 1954
(Corporacion de PP. Agustinos Recoletos v. Crisostomo, 32 Phil. 427
[1915]).
WHEREFORE, the Amended Decision dated May 14, 1981 of the Court
of Appeals is REVERSED and SET ASIDE and the Decision dated
February 18, 1980 is REINSTATED and AFFIRMED in toto.
SO ORDERED.
Asset Privatization Trust vs. T.J. EnterpriseG.R. No. 167195 May
8, 2009Facts:Petitioner was a government entity created for the
purpose to conserve, to provisionally manage and to dispose assets
of government institutions. It had acquired assets consisting of
machinery and refrigeration equipment stored at the Golden City
compound which was leased to and in the physical possession of
Creative Lines, Inc., (Creative Lines). These assets were beingsold
on an as-is-where-is basis.Petitioner and respondent entered into
an absolute deed of sale over certain machineryand refrigeration
equipment wherein respondent paid the full amount as evidenced by
petitioners receipt. After two (2) days, respondent demanded the
delivery of the machinery ithad purchased. Petitioner issued a Gate
Pass to respondent to enable them to pull out from thecompound the
properties designated ; however, during the hauling of Lot No. 2
consisting of sixteen (16) items, only nine (9) items were pulled
out by respondent. Respondent filed acomplaint for specific
performance and damages against petitioner and Creative Lines.
Uponinspection of the remaining items, they found the machinery and
equipment damaged and hadmissing parts. Petitioner claimed that
there was already a constructive delivery of the machineryand
equipment upon the execution of the deed of sale it had complied
with its obligation todeliver the object of the sale since there
was no stipulation to the contrary and it was the duty of
respondent to take possession of the property.The RTC ruled that
petitioner is liable for breach of contract and should pay for the
actualdamages suffered by respondent. It found that at the time of
the sale, petitioner did not havecontrol over the machinery and
equipment and, thus, could not have transferred ownership
byconstructive delivery. The Court of Appeals affirmed the
judgment; hence, this petition.Issue:Whether or not the petitioner
had complied with its obligations to make delivery of the
properties and failure to make actual delivery of the properties
was not attributable was beyondthe control of petitioner?Held: No.
There was no constructive delivery of the machinery and equipment
upon theexecution of the deed of absolute sale or upon the issuance
of the gate pass since it was not the petitioner but Creative Lines
which had actual possession of the property. The presumption of
constructive delivery is not applicable as it has to yield to the
reality that the purchaser was not placed in possession and control
of the property.Petitioner also claims that its failure to make
actual delivery was beyond its control. It posits that the refusal
of Creative Lines to allow the hauling of the machinery and
equipment wasunforeseen and constituted a fortuitous event. The
matter of fortuitous events is governed by Art.1174 of the Civil
Code which provides that except in cases expressly specified by the
law, or when it is otherwise declared by stipulation, or when the
nature of the obligation requires assumption of risk, no person
shall be responsible for those events which could not be
foreseen,or which though foreseen, were inevitable. A fortuitous
event may either be an act of God, or natural occurrences such as
floods or typhoons, or an act of man such as riots, strikes or
wars. However, when the loss is found to be partly the result of a
persons participation whether byactive intervention, neglect or
failure to act, the whole occurrence is humanized and removedfrom
the rules applicable to a fortuitous event. Thus, the risk of loss
or deterioration of propertyis borne by petitioner. Thus, it should
be liable for the damages that may arise from the delay.
G.R. No. L-10027 November 13, 1915
ROSENDO HERNAEZ y ESPINOSA, plaintiff-appellant, vs.MATEO
HERNAEZ y ESPINOSA, ET AL., defendants-appellants.
TRENT, J.:
The spouses, Pedro Hernaez and Juana Espinosa, died, leaving
several legitimate descendants. Neither of their estates had been
divided up to the date of the institution of this action, but were
both under administration. Their son, Domingo Hernaez y Espinosa,
sold all his interest in both his father's and mother's estate to
his son, Vicente Hernaez y Tuason, on November 6, 1901.
Notwithstanding the fact that Domingo Hernaez y Espinosa had thus
parted with all his interest in the estates of his two parents, he
executed a document of sale in favor of Alejandro Montelibano y
Ramos on February 27, 1907, in which he purported to convey all his
undivided interest in his mother's estate. On the same date he
executed another document of sale in which he purported to convey
to Jose Montelibano Uy-Cana four-eighteenths of his interest in his
mother's estate. Both of these sales were made with the connivance
of his son, Vicente Hernaez y Tuason. Hence, although Vicente
Hernaez y Tuason had actually purchased all of his father's
interests in the estates of Pedro Hernaez and Juana Espinosa as
early as November 6, 1901, and was, on February 27, 1907, the
undoubted owner thereof, he is effectually estopped from asserting
his title as against either of the vendees mentioned in the
documents of sale dated February 27, 1907, to which we have just
referred. (Code Civ. Pro., sec. 333, No. 1.) Bigelow on Estoppel
(p. 607) says:
. . . it is now a well-established principle that where the true
owner of property, for however short a time, holds out another, or,
with knowledge of his own right, allows another to appear as the
owner of or as having full power of disposition over the property,
the same being in the latter's actual possession, and innocent
third parties are thus led into dealing with such apparent owner,
they will be protected.
On August 19, 1912, Jose Montelibano Uy-Cana sold his interest
in the estate to Alejandro Montelibano y Ramos. By this transfer,
the latter stood owner of all the interest of Domingo Hernaez y
Espinosa in the estate of Pedro Hernaez, and five-eighteenths of
his interest in the estate of Juana Espinosa as against Vicente
Hernaez y Espinosa.
It is admitted that Rosendo Hernaez y Espinosa, another son of
the deceased spouses administrator of the estates, was notified of
Montelibano's purchases on January 8, 1913, when he received notice
of Montelibano's motion, entered in the administration proceedings,
asking that he (Montelibano) be substituted as assignee of the
interests of various heirs of the estate which he had acquired by
purchase. Notwithstanding this knowledge, Rosendo Hernaez y
Espinosa entered into a contract of sale with Vicente Hernaez y
Tuason, whereby the latter purported to convey all the interest,
which he had acquired from his father, in the estate of the
deceased spouses, Pedro Hernaez and Juana Espinosa. It will be
remembered that he purchased his father's share of the estate on
November 6, 1901; that he is estopped from asserting title to any
interest in his grandfather's estate and in five-eighteenths of his
grandmother's estate. Rosendo Hernandez y Espinosa purchased with
full knowledge of these facts. He, therefore, acquired
thirteen-eighteenths of the interest of Domingo Hernaez y Espinosa
in the estate of the latter's mother nothing more. lawph!l.net
That rule is that the holder [Alejandro Montelibano y Ramos] of
a prior equitable right has priority over the purchaser [Rosendo
Hernandez y Espinosa] of a subsequent estate (whether legal or
equitable) without value, or with notice of the equitable right,
but not as against a subsequent purchaser for value and without
notice. (Ewart on Estoppel, p. 199.)
Alejandro Montelibano y Ramos has acquired in his interest in
the estate of the deceased spouses for a valuable consideration and
in good faith, and there remains to the plaintiff, Rosendo Hernaez
y Espinosa, only the right of subrogation allowed him by article
1067 of the Civil Code, which reads as follows:
If any of the heirs should sell his hereditary rights to a
stranger before the division, all or any of the co-heirs may
subrogate himself in the place of the purchaser, reimbursing him
for the value of the purchase, provided they do so within the
period of a month, to be counted from the time they were informed
thereof.
On January 24, 1913, the plaintiff instituted this action
seeking to subrogate himself in the rights acquired by Montelibano
in the estate. Unless the plaintiff can be charged with actual
notice of the conveyance by which Montelibano acquired these
interests, prior to January 8, 1913, it is clear that he has
opportunely asserted his right of subrogation. This is purely a
question of fact. As to the sales whereby Domingo Hernaez y
Espinosa parted with that portion of his interest in the estate
which is now held by Alejandro Montelibano, as well as to those
sales made by other heirs to Montelibano, the trial court found
that the plaintiff, Rosendo Hernaez y Espinosa, was not chargeable
with notice prior to January 8, 1913. After a careful examination
of the record we see no reason for disturbing this finding of fact.
As a consequence, the plaintiff, Rosendo Hernaez y Espinosa, is
entitled to exercise his right of subrogation in accordance with
article 1067, above quoted. lawph!1.net
The interest which Jose Montelibano Uy-Cana purchased from
Domingo Hernaez y Espinosa on February 27, 1907, for the sum of
P4,500, he afterwards transferred to Alejandro Montelibano y Ramos
for the sum of P10,000. In rendering judgment, the trial court
decreed that the plaintiff, Rosendo Hernaez y Espinosa, should pay
the latter sum for the privilege of exercising the right of
subrogation. This was error. Article 1067 of the Civil Code
provides that the co-heir may exercise this right of subrogation
upon the payment to the purchaser of another heir's interest, "el
precio de la compra" (the purchase price). Obviously, if the
interest had not been resold, the plaintiff, Rosendo Hernaez y
Espinosa, would have had to pay only the price for which Uy-Cana
acquired it. The purpose of the article cannot be evaded by a
reconveyance of the interest to a third person at a higher price.
Subsequent purchasers of the interest acquire it burdened with the
right of subrogation of co-heirs at the price for which the heir
who sold it parted with it.
It is urged that the prices in some of the deeds of sale by
which Alejandro Montelibano y Ramos purchased the interest of
various heirs in the estates are fictitious. This is a question of
fact upon which both parties adduced evidence, and we concur in the
opinion of the trial court that there is no basis to the charge.
For the foregoing reasons, the judgment of the court is modified by
substituting, as the price of subrogation of the interest
originally purchased by Jose Montelibano Uy-Cana, the sum of
P4,500, as set out in Exhibit 7, for the sum of P10,000, the
consideration expressed in Exhibit 10. As modified, the judgment
appealed from is affirmed, without costs. So ordered.
[G.R. No. 10599. December 24, 1915. ]
VICENTA JALBUENA, Plaintiff-Appellant, v. SALVADOR LIZARRAGA Et.
Al., Defendants-Appellees.
D E C I S I O N
TRENT, J. :
On May 22,1903, Salvador Lizarraga, as judgment creditor, caused
the sheriff of the Province of Iloilo to levy upon an old
sugar-mill as the property of Ildefonso Doronila, the judgment
debtor and husband of the plaintiff. At the time of the levy
Doronila stated to the sheriff that the mill belonged to him. The
sale took place about the last of July, 1913. The purchaser at this
public sale sold the mill to Lopez. The present action was
instituted on November 26, 1913, by the plaintiff for the purpose
of recovering the mill or its value upon the ground that the same
was her exclusive property and that her husband had no interest
therein. From a judgment dismissing the cause after a hearing on
the merits, the plaintiff appealed.
The plaintiff knew that the old sugar-mill had been levied upon
at the levy was made and also knew that it would be sold as the
property of her husband. Notwithstanding these facts, she stood by
and permitted the sale to go forward without making the slightest
protest or claim until the property had passed into the hands of
Lopez. Upon these facts the trial court held that the plaintiff was
estopped from asserting her claim of ownership against the
defendants, or either of them. this holding is assigned as an
error, and in support of this alleged error the plaintiff cites and
relies upon the doctrine enunciated by this court in the cases of
Waite v. Peterson (8 Phil. Rep., 449) Lopez v. Alvarez (9 Phil.
Rep., 28); Uy Piaoco v. Osmea (9 Phil. Rep., 299); Ariston v. Cea
(Phil. Rep., 109) and Bonzon v. Standard Oil Co. and Osorio (27
Phil. Rep., 141).
An examination of the above cited cases will show that they do
not support the plaintiffs contention. In the first case the
interested party made a demand upon the sheriff for the return of
the property levied upon. The second case had do not with the
question of preferred creditors. In the third case there was also a
claim made upon the sheriff for the return of the property soon
after it was attached. In the fourth case there was likewise a
claim made upon the sheriff for the release of the property before
it was sold under execution. In the last case the court used the
following language: "In this jurisdiction, under the general
principle that one person may not enrich himself at the expense of
another, a judgment creditor would not be permitted to retain the
purchase price of the land sold as the property of a judgment
debtor after it has been made to appear that the judgment debtor
had no title to the land and that the purchaser had failed to
secure title thereto, and we find no difficulty, therefore, in
accepting a liberal construction of the statute which arrives at
the same equitable result." This is a correct statement of the law;
but it has nothing to do with the question of estoppel.
An execution is an order to the sheriff to attach and sell the
property of the judgment debtor. If he sells the property of
another person, he exceeds his authority and the true owner may
issue in trespass for damages or for the recovery of the property,
provide he has not lost his right to do so by his own conduct. Upon
this point, the rule is stated in 16 Cyc., thus: "When a person
having title to or an interest in property knowingly stands by and
suffers it to be sold under a judgment or decree, without asserting
his title or right or making it known to the bidders, he cannot
afterward set up his claim." (Citing a long array of cases from
Florida, Georgia, Illinois, Kentucky, South Carolina, New York,
North Carolina, Pennsylvania, and Conklin v. Wehrman, 38 Fed.,
874.)"
Bigelow on Estoppel says: ". . . it is now a well established
principle that where the true owner of property, for however short
a time , holds out another ,or, with knowledge of his own right,
allows another to appear, as the owner of or as having full power
of disposition over the property, the same being in the latters
actual possession, and innocent third parties are thus led into
dealing with some [such] apparent owner, they will be protected."
(Quoted with approval in the case of Hernaez v. Hernaez, 32 Phil.
Rep., 214.)
The foregoing quotations from Cyc. and Bigelow are in harmony
with No. 1 of section 333 of the Code of Civil Procedure, wherein
it is provided that " Whenever a party has, by his own declaration,
act, or omission, intentionally and deliberately led another to
believe a particular thing true, and to act upon such belief, he
can not, in any litigation arising out of such declaration, act, or
omission, be permitted t falsify it."cralaw virtua1aw library
The phrase "stood by" does not an actual presence, but implies
knowledge under such circumstances as to render in the duty of the
prossessor to communicate it. The herein plaintiff had, as we have
indicated, full knowledge of the fact that the property was gong to
be sold to pay the debts of her husband. She did not communicate
her claim to the purchaser, and it is now too late to assert such a
claim.
For the foregoing reasons, the judgment appealed from is
affirmed, with costs against the Appellant. So ordered.
BUCTON v GABARFACTS: Josefina (Gabar) bought a parcel of land
from Villarin. By verbal agreement, Josefina sold a portion thereof
to Nicanora (Bucton) for P3,000. Nicanora paid P1,000 then P400all
evidence by receiptsthen she loaned Josefina P1,000 and thereafter
along with her spouse, took possession of the lot and built their
house as well as apartments thereon. Villarin then issued a Deed of
Sale to Josefina, but the latter refused to execute the
corresponding Deed of Sale to Nicanora. Josefina claimed that the
amounts paid by Nicanora were in the concept of loans. Thus,
Nicanora filed a case for specific performance.
ISSUE: W/N there was a sale between Josefina and Nicanora
HELD: YES. Assuming that at the time when Josefina sold the lot
to Nicanora, she was not yet the owner thereof. When Villarin
executed the Deed of Sale in her favor, title passed to Nicanora by
operation of law. Although the sale between Josefina and Nicanora
wasverbal, it was as between them. Considering thatNicanora has
paid the purchase price, she becameowner of of the lot. Likewise,
although the complaintwas titled specific performance it was
actually one forquieting of title, which is imprescriptible so long
as theplaintiff is in possession of the lot.
G.R. No. L-36359January 31, 1974
FELIX BUCTON AND NICANORA GABAR BUCTON, petitioners, vs.ZOSIMO
GABAR, JOSEFINA LLAMOSO GABAR AND THE HONORABLE COURT OF APPEALS,
respondents.
ANTONIO, J.:1wph1.t
Appeal from the decision of the Court of Appeals in CA-G.R. No.
49091-R, dated January 10, 1973, reversing the judgment of the
trial court and dismissing the complaint filed by herein
petitioners, and from said appellate court's resolution, dated
February 5, 1973, denying petitioners' motion for
reconsideration.
The facts of the case, as found by the trial court, which have
not been disturbed by respondent Court of Appeals, are as
follows:
Plaintiff Nicanora Gabar Bucton (wife of her co-plaintiff Felix
Bucton) is the sister of defendant Zosimo Gabar, husband of his
co-defendant Josefina Llamoso Gabar.
This action for specific performance prays, inter-alia, that
defendants-spouses be ordered to execute in favor of plaintiffs a
deed of sale of the western half of a parcel of land having an area
of 728 sq. m. covered by TCT No. II (from OCT No. 6337) of the
office of the Register of Deeds of Misamis Oriental.
Plaintiffs' evidence tends to show that sometime in 1946
defendant Josefina Llamoso Gabar bought the above-mentioned land
from the spouses Villarin on installment basis, to wit, P500 down,
the balance payable in installments. Josefina entered into a verbal
agreement with her sister-in-law, plaintiff Nicanora Gabar Bucton,
that the latter would pay one-half of the price (P3,000) and would
then own one-half of the land. Pursuant to this understanding
Nicanora on January 19, 1946 gave her sister-in-law Josefina the
initial amount of P1,000, for which the latter signed a receipt
marked as Exhibit A.
Subsequently, on May 2, 1948 Nicanora gave Josefina P400. She
later signed a receipt marked as Exhibit B.
On July 30, 1951 plaintiffs gave defendants P1,000 in concept of
loan, for which defendant Zosimo Gabar signed a receipt marked as
Exhibit E.
Meanwhile, after Josefina had received in January, 1946 the
initial amount of P1,000 as above stated, plaintiffs took
possession of the portion of the land indicated to them by
defendants and built a modest nipa house therein. About two years
later plaintiffs built behind the nipa house another house for
rent. And, subsequently, plaintiffs demolished the nipa house and
in its place constructed a house of strong materials, with three
apartments in the lower portion for rental purposes. Plaintiffs
occupied the upper portion of this house as their residence, until
July, 1969 when they moved to another house, converting and leasing
the upper portion as a dormitory.
In January, 1947 the spouses Villarin executed the deed of sale
of the land abovementioned in favor of defendant Josefina Llamoso
Gabar, Exhibit I, to whom was issued on June 20, 1947 TCT No. II,
cancelling OCT No. 6337. Exhibit D.
Plaintiffs then sought to obtain a separate title for their
portion of the land in question. Defendants repeatedly declined to
accommodate plaintiffs. Their excuse: the entire land was still
mortgaged with the Philippine National Bank as guarantee for
defendants' loan of P3,500 contracted on June 16, 1947: Exhibit
D-1.Plaintiffs continued enjoying their portion of the land,
planting fruit trees and receiving the rentals of their buildings.
In 1953, with the consent of defendants (who were living on their
portion), plaintiffs had the entire land surveyed and subdivided
preparatory to obtaining their separate title to their portion.
After the survey and the planting of the concrete monuments
defendants erected a fence from point 2 to point 4 of the plan,
Exhibit I, which is the dividing line between the portion
pertaining to defendants, Exhibit I-1, and that pertaining to
plaintiffs, Exhibit I-2.
In the meantime, plaintiffs continued to insist on obtaining
their separate title. Defendants remained unmoved, giving the same
excuse. Frustrated, plaintiffs were compelled to employ Atty.
Bonifacio Regalado to intercede; counsel tried but failed.
Plaintiffs persevered, this time employing Atty. Aquilino Pimentel,
Jr. to persuade defendants to comply with their obligation to
plaintiffs; this, too, failed. Hence, this case, which has cost
plaintiffs P1,500 in attorney's fees.
Defendants' evidence based only on the testimony of defendant
Josefina Llamoso Gabar denies agreement to sell to plaintiffs
one-half of the land in litigation. She declared that the amounts
she had received from plaintiff Nicanora Gabar Bucton first,
P1,000, then P400 were loans, not payment of one-half of the price
of the land (which was P3,000). This defense is devoid of
merit.
When Josefina received the first amount of P1,000 the receipt
she signed, Exhibit A, reads:
Cagayan, Mis. Or.January 19, 1946
Received from Mrs. Nicanora Gabar the sum of one thousand
(P1,000) pesos, victory currency, as part payment of the one
thousand five hundred (P1,500.00) pesos, which sum is one-half of
the purchase value of Lot No. 337, under Torrens Certificate of
Title No. 6337, sold to me by Mrs. Carmen Roa Villarin."(Sgd.)
Josefina Ll. Gabar".
On the basis of the facts quoted above the trial court on
February 14, 1970, rendered judgment the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered for plaintiffs:
1)Ordering defendants within thirty days from receipt hereof to
execute a deed of conveyance in favor of plaintiffs of the portion
of the land covered by OCT No. II, indicated as Lot 337-B in the
Subdivision Plan, Exhibit I, and described in the Technical
Description, Exhibit 1-2; should defendants for any reason fail to
do so, the deed shall be executed in their behalf by the Provincial
Sheriff of Misamis Oriental or his Deputy;
2)Ordering the Register of Deeds of Cagayan de Oro, upon
presentation to him of the above-mentioned deed of conveyance, to
cancel TCT No. II and in its stead to issue Transfer Certificates
of Title, to wit, one to plaintiffs and another to defendants,
based on the subdivision Plan and Technical Description
above-mentioned; and ordering defendants to present and surrender
to the Register of Deeds their TCT No. II so that the same may be
cancelled; and
3)Ordering defendants to pay unto plaintiffs attorney's fees in
the amount of P1,500 and to pay the costs.SO ORDERED.
Appeal was interposed by private respondents with the Court of
Appeals, which reversed the judgment of the trial court and ordered
petitioners' complaint dismissed, on the following legal
disquisition:
Appellees' alleged right of action was based on the receipt
(Exh. A) which was executed way back on January 19, 1946. An action
arising from a written contract does not prescribe until after the
lapse of ten (10) years from the date of action accrued. This
period of ten (10) years is expressly provided for in Article 1144
of the Civil Code.
From January 19, 1946 to February 15, 1968, when the complaint
was filed in this case, twenty-two (22) years and twenty-six (26)
days had elapsed. Therefore, the plaintiffs' action to enforce the
alleged written contract (Exh. A) was not brought within the
prescriptive period of ten (10) years from the time the cause of
action accrued.
The land in question is admittedly covered by a torrens title in
the name of Josefina Llamoso Gabar so that the alleged possession
of the land by the plaintiffs since 1947 is immaterial because
ownership over registered realty may not be acquired by
prescription or adverse possession (Section 40 of Act 496).
It is not without reluctance that in this case we are
constrained to sustain the defense of prescription, for we think
that plaintiffs really paid for a portion of the lot in question
pursuant to their agreement with the defendants that they would
then own one-half of the land. But we cannot apply ethical
principles in lieu of express statutory provisions. It is by law
provided that:
"ART. 1144.The following actions must be brought within ten
years from the time the right of action accrues:1.Upon a written
contract;2.Upon an obligation created by law;3.Upon a
judgment."
If eternal vigilance is the price of safety, one cannot sleep on
one's right and expect it to be preserved in its pristine
purity.
Petitioners' appeal is predicated on the proposition that owners
of the property by purchase from private respondents, and being in
actual, continuous and physical possession thereof since the date
of its purchase, their action to compel the vendors to execute a
formal deed of conveyance so that the fact of their ownership may
be inscribed in the corresponding certificate of title, had not yet
prescribed when they filed the present action.
We hold that the present appeal is meritorious.1.There is no
question that petitioner Nicanora Gabar Bucton paid P1,500.00 to
respondent Josefina Gabar as purchase price of one-half of the lot
now covered by TCT No. II, for respondent Court of Appeals found as
a fact "that plaintiffs really paid for a portion of the lot in
question pursuant to their agreement with the defendants that they
would own one-half (1/2) of the land." That sale, although not
consigned in a public instrument or formal writing, is nevertheless
valid and binding between petitioners and private respondents, for
the time-honored rule is that even a verbal contract of sale or
real estate produces legal effects between the parties. 1 Although
at the time said petitioner paid P1,000.00 as part payment of the
purchase price on January 19, 1946, private respondents were not
yet the owners of the lot, they became such owners on January 24,
1947, when a deed of sale was executed in their favor by the
Villarin spouses. In the premises, Article 1434 of the Civil Code,
which provides that "[w]hen a person who is not the owner of a
thing sells or alienates and delivers it, and later the seller or
grantor acquires title thereto, such title passes by operation of
law to the buyer or grantee," is applicable. 2 Thus, the payment by
petitioner by Nicanora Gabar Bucton of P1,000.00 on January 19,
1946, her second payment of P400.00 on May 2, 1948, and the
compensation, up to the amount of P100.00 (out of the
P1,000.00-loan obtained by private respondents from petitioners on
July 30, 1951), resulted in the full payment of the purchase price
and the consequential acquisition by petitioners of ownership over
one-half of the lot. Petitioners therefore became owners of the
one-half portion of the lot in question by virtue of a sale which,
though not evidenced by a formal deed, was nevertheless proved by
both documentary and parole evidence.
2.The error of respondent Court of Appeals in holding that
petitioners' right of action had already prescribed stems from its
belief that the action of petitioners is based on the receipt Exh.
"A" which was executed way back on January 19, 1946, and,
therefore, in the view of said appellate court, since petitioners'
action was filed on February 15, 1968, or after the lapse of
twenty-two (22) years and twenty-six (26) days from, the date of
said document, the same is already barred according to the
provisions of Article 1144 of the New Civil Code. The aforecited
document (Exh. "A"), as well as the other documents of similar
import (Exh. "B" and Exh. "E"), are the receipts issued by private
respondents to petitioners, evidencing payments by the latter of
the purchase price of one-half of the lot.The real and ultimate
basis of petitioners' action is their ownership of one-half of the
lot coupled with their possession thereof, which entitles them to a
conveyance of the property. In Sapto, et al. v. Fabiana, 3 this
Court, speaking thru Mr. Justice J.B.L. Reyes, explained that,
under the circumstances no enforcement of the contract is needed,
since the delivery of possession of the land sold had consummated
the sale and transferred title to the purchaser, and that,
actually, the action for conveyance is one to quiet title, i.e., to
remove the cloud upon the appellee's ownership by the refusal of
the appellants to recognize the sale made by their predecessors. We
held therein that "... it is an established rule of American
jurisprudence (made applicable in this jurisdiction by Art. 480 of
the New Civil Code) that actions to quiet title to property in the
possession of the plaintiff are imprescriptible (44 Am. Jur. p. 47;
Cooper vs. Rhea, 20 L.R.A. 930; Inland Empire Land Co. vs. Grant
County, 138 Wash. 439, 245 Pac. 14).
The prevailing rule is that the right of a plaintiff to have his
title to land quieted, as against one who is asserting some adverse
claim or lien thereon, is not barred while the plaintiff or his
grantors remain in actual possession of the land, claiming to be
owners thereof, the reason for this rule being that while the owner
in fee continues liable to an action, proceeding, or suit upon the
adverse claim, he has a continuing right to the aid of a court of
equity to ascertain and determine the nature of such claim and its
effect on his title, or to assert any superior equity in his favor.
He may wait until his possession is disturbed or his title in
attacked before taking steps to vindicate his right. But the rule
that the statute of limitations is not available as a defense to an
action to remove a cloud from title can only be invoked by a
complainant when he is in possession. One who claims property which
is in the possession of another must, it seems, invoke remedy
within the statutory period. (44 Am. Jur., p. 47)
The doctrine was reiterated recently in Gallar v. Husain, et
al., 4 where We ruled that by the delivery of the possession of the
land, the sale was consummated and title was transferred to the
appellee, that the action is actually not for specific performance,
since all it seeks is to quiet title, to remove the cloud cast upon
appellee's ownership as a result of appellant's refusal to
recognize the sale made by his predecessor, and that as
plaintiff-appellee is in possession of the land, the action is
imprescriptible. Considering that the foregoing circumstances
obtain in the present case, We hold that petitioners' action has
not prescribed.
WHEREFORE, the decision and resolution of respondent Court of
Appeals appealed from are hereby reversed, and the judgment of the
Court of First Instance of Misamis Oriental, Branch IV, in its
Civil Case No. 3004, is revived. Costs against private
respondents.
5. SUN BROS. & CO. v VELASCOFACTS: Sun Brothers sold an
Admiral Refrigerator toLopez upon the agreement that ownership will
only passto the latter upon payment of the full purchase
price.Lopez paid only the downpayment and sold the same toJV
Trading (owned by Velasco) and was displayed in thelatters store.
It was thereafter bought by CO Kang Chiufrom JV Trading. Sun
Brothers sought to recover therefrigerator.
SBC delivered to Lopez and Admiral refrigerator under a
conditional sale agreement. Of the1700 pesos purchase price, a down
payment of 500 pesos was made. It was stipulated thatLopez cannot
remove the refrigerator without the written consent of SBC. It also
remains as anabsolute property of SBC until the full payment of the
price. Its violation would grant SBC theright to rescind the
contract and forfeit the down payment.- Without SBCs knowledge,
Lopez, misrepresenting himself as the owner, sold it to J.V.
Trading which was owned by Velasco. The latter in turn sold it to
Co who transferred the refrigerator tohis home.- SBC filed a writ
of replevin at the municipal court which the latter issued in its
favor. However, itwas not executed because Co filed a counter-bond
with the court.- Co filed a cross-claim against Velasco and a
counter-claim against SBC.- In the CFI, Vel asco and Cos answers
were reproduced. It held SBC as the rightful owner of the
refrigerator. Velasco and Co appealed
ISSUE: W/N Sun Brothers may recover the thingHELD: NO. It is
true that where a person who is not theowner of a thing sells the
same, the buyer acquires nobetter title than the seller has. In
this case. Lopezobviously had no title to the goods for having
failed topay the full price. It only follows that JV Trading had
notitle thereto as Velasco was not in good faith. He shouldhave
inquired if Lopez had good title to itthe same notbeing engaged in
the business of selling appliances.HOWEVER, when the refrigerator
passed to Co KangChiu, the latter acquired valid title thereto.
Theexception to the foregoing rule is the purchase in goodfaith in
a merchant store or a fair or a market. This rulefosters stability
to commerce and business transactions.Co Kang Chiu purchased the
refrigerator in a merchantstoreand for value and in good faith.
Thus, he isprotected by the law. Sun Brothers would not beentitled
to recover the refrigeratornot even if they payits valuesince they
were not deprived of the sameunlawfully. Lopez is the one who
should be liable to SunBrothers for the full purchase price of the
ref.
[No. L-8420. May 31, 1956]LUCENA MASICLAT, ET AL., petitioner,
vs. NATALIA CENTENO, respondent. Appeal by certiorari from the
decision of the Court of Appeals reversing the judgment of the
Court of FirstInstance of Pampanga and awarding the rice in
questionto the defendant.1044
The appealed decision is correct, first, because the evidence
does not clearly show the identity of the person who tried to buy
the rice from the respondent, and neither does it show that the
same person was the one who sold the commodity to Ramon Masiclat;
and, second, although acojitraet of sale is perfected upon the
parties having agreedas to the thing which is the subject matter of
the contractand the price (Warner, Barnes & Co. vs. Inza, 43
Phil., 505; Article 1475, Civil Code), ownership is not
consideredtransmitted until the property is actually delivered and
thepurchaser has taken possession thereof and has paid theprice
agreed upon (Romanvs. Grimalt, 6 Phil., 96; Article1524, Civil
Code).Judgment appealed from affirmed, without pronouncementas to
costs. Paras, CJ. Y ponente
TAGATAC v JIMENEZFACTS: Tagatac bought a car abroad and brought
it tothe Philippines. Warner Feist deceived her into believingthat
he was very rich and purchased her car. Shedelivered possession
thereof. Levy (another name ofFeist) issued her a postdated check,
which wasdishonored. Feist then disappeared with the car. Feistwas
able to register the car in his name and eventuallysold the car to
Sanchez, who then sold the same toJimenez. Jimenez even labored to
verify the carsrecords with Motor Vehicle Office. Jimenez
thendelivered the car to California Car Exchange for
display.Tagatac, upon finding out, sought to recover the car,but
Jimenez refused.ISSUE: W/N Jimenez may refuse to give the car
backHELD: YES. Jimenez was a buyer in good faith of thecarhe had no
knowledge of any defect in the title ofthe seller. It is true that
one who has lost any movableor has been unlawfully deprived thereof
may recoverthe same from the possessor. However, in this case,
Tagatac was NOT unlawfully deprived within the contextof the Civil
Code.The sale between Feist and Tagatac was merelyvoidablevalid
until annulled. There was a validtransmission of ownership. The
fact that Feist did notpay only gives rise to an action to resolve
the contractor demand payment. When Feist sold the car toSanchez,
the sale between him and Tagatac was stillvalid; therefore, good
title passed to Sanchez. Asbetween 2 innocent parties, the one who
made possiblethe injury must bear the loss.
DE GARCIA V. COURT OF APPEALS/ GUEVARA- Buying Lost or Stolen
Goods
(Art 559) One who has lost or has been unlawfully deprived of
any movable may recover the same from the possessor except when the
owner has been unlawfully deprived of it and it has been obtained
by the latter in good faith at a public sale wherein the former
needs to reimburse the latter of the price paid.
:. THE ONLY EXCEPTION is acquisition in good faith of the
possession at a public sale
FACTS:
Mrs. Guevara owned a pretty diamond ring with white gold
mounting, 2.05 diamond-solitaire, and 4 brills. Sometime in
February 1952, the ring was stolen from her house. Luckily, on
October 1953 (barely a year after), she found it at a restaurant,
La Bulakena, on the finger of the restaurant owner, Consuelo De
Garcia.
Guevara asked De Garcia where she bought it and explained to her
how she had lost it. When the ring was handed to her by De Garcia,
it fitted her perfectly. The next time around, she brought her
husband and Rebullida, the person whom she bought the ring from, to
verify the identity of the ring. Rebullida examined the ring with
the aid of high power lens and his 30 years of experience. He
concluded that it was the very ring that he had sold to the
Guevaras. After that, Guevara sent a written request for the ring,
but De Garcia did not deliver it. When the sheriff tries to serve a
writ of seizure, De Garica likewise refused to deliver the
ring.
According to De Garcia, she bought the ring from her kumare who
got it from another Miss who in turn got it from the owner, a
certain Aling Petring. Aling Petring however, was nowhere to be
found. She boarded three months at the first buyers house but left
a week after her landlady bought the ring. The first buyer did not
even know Aling Petrings last name nor her forwarding address.De
Garcia claims to be a holder in good faith and for value. She says
her possession is equivalent to title.
[Note: There was a discrepancy as to the weight of the ring at
the time it was purchased and at the time it was found, but this
was because De Guevara substituted the diamond-solitaire with a
heavier stone.]The lower court both ruled in favor of the buyer and
CA reversed in favor of the owner, Guevara. Hence, the present
petition.
ISSUE: Who has a better right?
RULING: Guevara (owner)
Article Article 559 again, applies. Remember that the article
establishes two exceptions to the general rule of
irrevindicability: 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. THE ONLY EXCEPTION is acquisition in
good faith of the possession at a public sale.
There is no merit in the contention that De Garcias possession
is in good faith, equivalent to title, sufficed to defeat the
owners claim. Possession in good faith does not really amount to
title for the reason that there is a period for acquisitive
prescription for movable through uninterrupted possession of 4
years.
The title of the possessor in good faith is not that of
ownership, but is merely a presumptive title sufficient to serve as
a basis for acquisitive prescription. This, one who has lost any
movable or has been unlawfully deprived thereof, may recover it
from the person in possession of the same.Besides, De Garcias
title, if any, was weak. Her source, Aling Petring, was dubious.
She did not make a comment when Rebullida examined the ring nor did
she answer Guevaras letter asserting ownership of it. Her testimony
was weak!
Other facts1. Subject matter = 1 diamond ring 18 cts. white gold
mounting, with 1 2.05 cts. diamond-solitaire, and 4 brills 0.10
cts. total weight.2. Mr. Rebullidas experience in the jewelry
business = 30 years3. Mrs. Garcia = owner of La Bulakea
restaurant4. Weight of the diamonds:5. substituted diamond = 2.57
cts.6. lost diamond (guevaras) = 2.05 cts7. Ruling of the CA =
return the ring or pay P1,000 and costs, P1,000 (attys fees) &
P1,000 as exemplary damages
EDCA PUBLISHING & DISTRIBUTING CORP. v. SANTOS (1990)Facts:A
person identifying himself as Prof. Jose Cruz placed an order
bytelephone with EDCA for 406 books, payable on delivery.
EDCAprepared the corresponding invoice and delivered the books
asordered for which Cruz issued a personal check of P8,995.65.Cruz
sold 120 of the books to Leonor Santos who paid him P1,700
afterverifying the sellers ownership from the invoice he
showed.EDCA became suspicious over a second order placed by Cruz
evenbefore clearing his first check. So EDCA made inquiries with
the DLSUCollege of which he claimed to be a dean but was informed
that therewas no such person in their employ. Cruz also had no more
accountwith Philippine Amanah Bank against which he had drawn the
paymentcheck.EDCA then went to the police to set up a trap and
arrested Cruz whosereal name was Tomas dela Pena.EDCA sought the
assistance of the police which forced their way intothe store of
Santos and threatened her with prosecution for buyingstolen
property. They seized the 120 books without warrant and loadedthem
into EDCAs van.Santos sued for recovery of the books. A writ of
preliminaryattachment was issued and EDCA finally surrendered the
books back toSantos. The lower courts were in favor of
Santos.Issue(s)/Held:WHETHER EDCA was unlawfully deprived of
movable property (books) in thehands of another because the check
issued by Cruz in payment wasdishonored applying Art. 559.
NO.RatioArt. 559 The possession of movable property acquired in
good faith isequivalent to a title.Nevertheless, one who has lost
any movable or has been unlawfullydeprived thereof, may recover it
from the person in possession of thesame.If the possessor of a
movable lost or of which the owner has beenunlawfully deprived has
acquired it in good faith at a public sale, theowner cannot obtain
its return without reimbursing the price paidtherefor.EDCA contends
that Santos was not able to establish ownership of thedisputed
books because they have not even produced a receipt toprove that
they bought it.
But the first sentence of Art. 559 provides that the possession
of movable property acquired in good faith is equivalent to a
title, thusdispensing with further proof.Santos is a buyer in good
faith because she first ascertained theownership of the books from
the EDCA invoice showing that they havebeen sold to Cruz. Santos is
in the business of buying and sellinggoods. To Santos, Cruz was
only one of the many sellers she wasaccustomed to dealing
with.Santos first ascertained that the books belonged to Cruz
before buyingthem. By contrast, EDCA was less than cautious in
dealing with Cruz.Although it had never transacted with Cruz
before, it readily deliveredthe books he ordered by telephone and
readily accepted his personalcheck as payment. It did not verify
his identity. It did not wait to clearCruzs check.Worse, it
indicated in the sales invoice that the books had been paidfor on
delivery thereby vesting ownership in Cruz.EDCA argues that Cruz
acquired no title to the books because hischeck was dishonored thus
could not have validly transferred thebooks to Santos. But a
contract of sale is consensual and perfectedonce an agreement is
reached between the parties on the subjectmatter and
consideration.Ownership in the thing sold shall not pass to the
buyer until fullpayment of the purchase price ONLY if there is a
stipulation to thateffect. Otherwise, the general rule is that
ownership shall pass fromthe vendor to the vendee upon the actual
or constructive delivery of the thing sold EVEN if the purchase
price has not been paid. In thiscase, there was no stipulation so
the general rule applies.Non-payment only creates a right to (1)
demand payment, (2) rescindthe contract and (3) have a cause of
action for criminal prosecution forbouncing checks.Actual delivery
of the books having been made, Cruz acquiredownership over the
books which he could validly transfer to Santos. The fact that he
had not yet paid for them was a matter between Cruzand EDCA and did
not impair the title acquired by Santos over thebooks.There is no
unlawful deprivation if the seller voluntarily partedwith it
pursuant to a contract of sale. The fact that price wasnot
subsequently paid did not render illegal a transactionwhich was
valid and legal at the beginning
Smith, Bell & Co. v Sotelo Matti (1992)FACTSPlaintiff Smith,
Bell & Co and the defendant Mr. Vicente Sotel entered into a
contract. Plaintiff hasto deliver (1) two steel tanks shipped from
New York to Manilawithin three or four months, (2)two expellers
shipped from SanFrancisco in the month of September 1918or as soon
aspossible,and (3) two electric motors with approximate
deliverywithin ninety days. This isnot guaranteed.The tanks arrived
at Manila on 27 April 1919; the expellers on 26 October 1918; and
the motorson 27 February 1919. Upon notification from plaintiff,
defendant refused to receive any of thegoods or to pay for their
price. Plaintiff alleged that the expellers and motors were in
goodcondition.Plaintiff filed a complaint against the defendant.
The defendant, Mr Sotelo and intervenor, ManilaOil Refining and
By-Products Co., Inc., denied the plaintiffs allegations. They
allege that due toplaintiffs delay in the delivery of goods, the
intervenor suffered damages.The lower court absolved the defendants
from the complaint insofar as the tanks and the electricmotors were
concerned, but rendered judgment against them ordering them to
receive expellersand pay the sum of P50,000, with legal interest
and cost.Both parties appealed to the Court.ISSUEWhat period was
fixed for the delivery of the goods? Did the plaintiff incur delay
in thedelivery of goods?HELDIn all these contracts, there is a
final clause as follows:The sellers are not responsible for delays
cause by fires, riots on land or on thesea, strikes or other causes
known as force majeure entirely beyond the control of thesellers or
their representatives.Under these stipulations, it cannot be said
that any definite date was fixed for the delivery of thegoods. xxx.
From the record it appears that thee contracts were executed at the
time of the worldwar when there existed rigid restrictions on the
export from the united States xxx; hence clauseswere inserted in
the contracts, regarding Government regulations, railroading
embargoes, lack of vessel space, the exigencies of the requirements
of the United States Government xxx. At thetime of the execution of
the contracts, the parties were not unmindful of the contingency of
theUnited States Government not allowing the export of the goods
xxx.We cannot but conclude that the term which parties attempted to
fix is so uncertain that oncecannot tell just whether, as a matter
of fact, those articles could be brought to manila or
not.Theobligation must be regarded as conditional.The delivery was
subject to a condition thefulfillment of which depended not only
upon the effort of the plaintiff, but upon the will of thirdpersons
who could in no way be compelled to fulfill the condition.It is
sufficiently proven in the record that the plaintiff has made all
the efforts it could possibly beexpected to make under the
circumstances, to bring the goods in question to Manila, as soon
aspossible. Xxxit is obvious that the plaintiff has complied with
its obligation.When the time of delivery is not fixed in the
contract, time is regarded unessential. In such cases,the delivery
must be made within a reasonable time. Xxx Reasonable time for the
delivery of thegoods by the seller is to be determined by
circumstances attending the particular transactions.Whether of not
the delivery of the machinery in litigation was offered to the
defendantwithin a reasonable time, is a question to be determined
by the court. Xxx The plaintiff hasnot been guilty of any delay in
the fulfillment of its obligation