Power Commercial and Industrial Corporation

v. CA
The petitioner in this case is an asbestos
manufacturer and the vendee of a parcel of lot in
San Antonio Village, Makati which it purchased
to meet its office and warehouse needs.
Conversely, the private respondents, spouses
uiambao, are the vendor of said lot which was
mortgaged to the respondent bank, !"#. Such
mortgage was assumed by the petitioner.
The case arose because the petitioner filed a
Civil Case against the respondents for rescission
and damages. The petitioner claims that the
failure of respondent spouses to deliver actual
possession to petitioner entitled the latter to
rescind the sale. !etitioner alleges that the failure
to deliver actual possession was due to s$uatters
who have physical possession of the lot which
deprives them of control of said lot.
%ssue& %s the seller's failure to e(ect lessees from
a lot that is the sub(ect of a contract of sale with
assumption of mortgage a ground for rescission
of such contract)
*eld& "o because the alleged +failure, of
respondent spouses to e(ect the lessees from the
lot in $uestion and to deliver actual and physical
possession thereof cannot be considered a
substantial breach of a condition for two reasons&
first, such +failure, was not stipulated as a
condition-whether resolutory or suspensive-in
the contract. and second, its effects and
conse$uences were not specified either.
/escission shall not be allowed because the
breach was not substantial and fundamental to
the fulfilment by the petitioners of the obligation
to sell.
Moreover, the symbolic delivery done
by the spouses was effective. Symbolic delivery,
as a species of constructive delivery, effects the
transfer of ownership through the e0ecution of a
public document. 1hile it is true that its efficacy
can be prevented if the vendor does not possess
control over the thing sold, prior physical deliver
or possession is not re$uired. The key word is
control and not possession. %n the case at bar, the
lot sold had been placed under the control of
petitioner. thus, the filing of the e(ectment suit
was subse$uently done.
Dizon v. Suntay
The petitioner in this case is 2ominador 2i3on
who owns and operates a pawnshop. The
respondet Suntay, on the contrary is the owner of
a diamond ring .
The case arose because the respondent Suntay
filed a replevin for the recovery of the diamond
ring. She filed it because she was not aware that
the said ring was pledged
4
to the petitioner by a
certain Clarita Sison who is a close friend of the
respondent's cousin. Sison was supposed to sell
it on commission and the pledge was violative of
the terms of agency. The respondent filed the
said case when the petitioner refused to return
the ring.
%ssue& Should the respondent be allowed to
recover the ring)
*eld& 5es. The controlling provision is Article
667 of the Civil Code& +The possession of
movable property ac$uired in good faith is
e$uivalent to a title. "evertheless, one who has
lost any movable or has been unlawfully
deprived thereof may recover it from the person
in possession of the same. %f the possessor of a
movable lost of which the owner has been
unlawfully deprived, has ac$uired it in good faith
at a public sale, the owner cannot obtain its
return without reimbursing the price paid
therefore.,
The only e0ception the law allows is
when there is ac$uisition in good faith of the
possessor at a public sale, in which case the
owner cannot obtain its return without
reimbursing the price. The right of the owner
cannot be defeated even by proof that there was
good faith in the ac$uisition by the possessor.
The common law principle that where
one of two innocent persons must suffer by a
fraud perpetrated by another, the law imposes the
loss upon the party who, by his misplaced
confidence, has enabled the fraud to be
committed, cannot be applied in a case which is
covered by an e0press provision in Article 667.
1
!ledge8 delivery by a debtor of a personal property to the
creditor as a security for a debt.
EDCA Publishing & Distributing Corp. v.
Santos
The petitioner in this case is a company which
prints and sells books while the respondents,
spouses Santos, run a bookstore.
The case arose because the private
respondents sued the petitioner for the recovery
of 49: books sei3ed from the respondents
without warrant. The petitioners sei3ed the books
because they were fraudulently purchased by
Tomas de la !ena who pretended to be a dean at
2e ;a Salle College using a check that was not
cleared because said person had no account or
deposit with the bank against which he had
drawn the payment check.
!etitioner claims that the private
respondents have not established their ownership
of the disputed books because they have not even
produced a receipt to prove they had bought the
stock.
%ssue& 4. 2o the respondents have ownership of
the disputed books)
9. 1as the petitioner unlawfully deprived
of the books because the check issued
by the impostor in payment therefore
was dishonoured)
*eld&
4. 5es. Article 667 provides that +the possession
of movable property ac$uired in good faith is
e$uivalent to a title,, thus dispensing of further
proof.
There was good faith because the
private respondents are in the business of buying
and selling books and often deal with hard8up
sellers who urgently have to part with their books
at reduced prices.
9. "o. !etitioner was not unlawfully deprived
because the ob(ect has voluntarily parted with
them pursuant to a contract of purchase and sale.
<wnership shall pass from the vendor to the
vendee upon actual or constructive delivery of
the thing sold even if the purchase price has not
yet been paid.
"on8payment only creates a right to
demand payment or to rescind the contract, or to
criminal prosecution in the case of bouncing
checks. #ut absent the stipulation above noted,
delivery of the thing sold will effectively transfer
ownership to the buyer who can in turn transfer it
to another. Conclusively, the circumstance that
the price was not subse$uently paid did not
render illegal a transaction which was valid and
legal at the beginning.
=The fraud and deceit merely makes the
sale as a voidable contract and is not within the
scope of +unlawful deprivation, within the scope
of Article 667.