G.R. No.
L-32974 July 30, 1979
BARTOLOME ORTIZ, petitioner,
vs.
HON. UNION C. KAYANAN, in his capacity as Judge of the Court of First
Instance of Quezon, Branch IV; ELEUTERIO ZAMORA, QUIRINO COMINTAN,
VICENTE FERRO, AND GREGORIO PAMISARAN, respondents.
ANTONIO, J.:1äwphï1.ñët
Petition for certiorari and Prohibition with Preliminary Injunction to nullify the Order of
respondent Judge directing the execution of the final judgment in Civil Case No. C-90,
entitled "Bartolome Ortiz vs. Secretary of Agriculture and Natural Resources, et al.,"
and the Writ of Execution issued to implement said Order, allegedly for being
inconsistent with the judgment sought to be enforced.
Civil Case No. C-90 was filed by Bartolome Ortiz who sought the review and/or
annulment of the decision of the Secretary of Agriculture and Natural Resources,
giving preference to the sales applications of private respondents Quirino Comintan
and Eleuterio Zamora over Lot No. 5785, PLS-45, located at Barrio Cabuluan,
Calauag, Quezon.
On March 22, 1966, respondent Court rendered judgment in the afore-mentioned civil
I case, the dispositive portion of which reads as follows:têñ.£îhqwâ£
The factual background of the case, as found by respondent Court, is as
follows:têñ.£îhqwâ£
... The lot in controversy was formerly the subject of Homestead
Application No. 122417 of Martin Dolorico II, plaintiff's ward who died
on August 20, 1931; that since then it was plaintiff who continued the
cultivation and possession of the property, without however filing any
application to acquire title thereon; that in the Homestead Application
No. 122417, Martin Dolorico II named his uncle, Martin Dolorico I as
his heir and successor in interest, so that in 1951 Martin Dolorico I
executed an affidavit relinquishing his rights over the property in
favor of defendants Quirino Comintan and Eleuterio Zamora, his
grandson and son-in-law, respectively, and requested the Director of
Lands to cancel the homestead application; that on the strength of
the affidavit, Homestead Application No. 122417 was cancelled and
thereafter, defendants Comintan and Zamora filed their respective
sales applications Nos. 8433 and 9258; that plaintiff filed his protest
on November 26, 1951 alleging that he should be given preference
to purchase the lot inasmuch as he is the actual occupant and has
been in continuous possession of the same since 1931; and inspite
of plaintiff's opposition, "Portion A" of the property was sold at public
auction wherein defendant Comintan was the only bidder; that on
June 8, 1957, investigation was conducted on plaintiff's protest by
Assistant Public Lands Inspector Serapion Bauzon who submitted
his report to the Regional Land Officer, and who in turn rendered a
decision on April 9, 1958, dismissing plaintiff's claim and giving due
course to defendants' sales applications on the ground that the
relinquishment of the homestead rights of Martin Dolorico I in favor of
Comintan and Zamora is proper, the former having been designated
as successor in interest of the original homestead applicant and that
because plaintiff failed to participate in the public auction, he is
forever barred to claim the property; that plaintiff filed a motion for
reconsideration of this decision which was denied by the Director of
Lands in his order dated June 10, 1959; that, finally, on appeal to the
Secretary of Agriculture and Natural Resources, the decision
rendered by the Regional Land Officer was affirmed in toto. 1
IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is
hereby rendered awarding Lot No. 5785-A of PLS-45, (Calauag
Public Land Subdivision) one-half portion of the property in litigation
located at Bo. Cabuluan, Calauag, Quezon, in favor of defendant
QUIRINO COMINTAN, being the successful bidder in the public
auction conducted by the bureau of Lands on April 18, 1955, and
hereby giving due course to the Sales Application No. 9258 of
defendant Eleuterio Zamora over the other half, Lot No. 5785-B of
PLS-45, Calauag, without prejudice to the right of plaintiff
BARTOLOME ORTIZ to participate in the public bidding of the same
to be announced by the Bureau of Lands, Manila. However, should
plaintiff Bartolome Ortiz be not declared the successful bidder
thereof, defendants Quirino Comintan and Eleuterio Zamora are
ordered to reimburse jointly said plaintiff the improvements he has
introduced on the whole property in the amount of THIRTEEN
 THOUSAND SIX HUNDRED THIRTY-TWO (P13,632.00) PESOS,
the latter having the right to retain the property until after he has
been fully paid therefor, without interest since he enjoys the fruits of
the property in question, with prejudice and with costs again the
plaintiff.2
Plaintiff appealed the decision to the Court of Appeals.
Two (2) years after the rendition of the judgment by the court a quo, while the case
was pending appeal and upon petition of private respondents Quirino Comintan and
Eleuterio Zamora, respondent Court appointed respondent Vicente Ferro, Clerk of
Court, as Receiver to collect tolls on a portion of the property used as a diversion
road. On August 19, 1969, the Court of Appeals issued a Resolution annulling the
Order appointing the Receiver. Subsequently, on February 19, 1970, the Appellate
Court affirmed the decision of the trial court. A petition for review on certiorari of the
decision of the Court of Appeals was denied by this Court on April 6, 1970. At this
point, private respondents filed a petition for appointment of a new receiver with the
court a quo. This petition was granted and the receiver was reappointed. Petitioner
sought the annulment of this Order with the Court of Appeals, but said Court ruled
that its decision had already become final and that the records of the case were to be
remanded to the trial court.
Not satisfied with such denial, petitioner filed a petitioner for certiorari, prohibition and
mandamus with preliminary injunction before this Court, 3 praying for the annulment
of the Order reappointing the Receiver. On July 13, 1970, the petition was dismissed
by this Court on the ground of insufficient showing of grave abuse of discretion.
II
The judgment having become final and executory private respondents filed a motion
for the execution of the same, praying as follows:têñ.£îhqwâ£
WHEREFORE, it is respectfully prayed of this Honorable Court to
order the issuance of a writ of execution in accordance with the
judgment of this Honorable Court, confirmed by the Court of Appeals
and the Supreme Court, commanding any lawful officer to deliver to
defendants Comintan and Zamora the land subject of the decision in
this case but allowing defendants to file a bond in such amount as
this Honorable Court may fix, in lieu of the P13,632.00 required to be
paid to plaintiff, conditioned that after the accounting of the tools
collected by plaintiff, there is still an amount due and payable to said
plaintiff, then if such amount is not paid on demand, including the
legal interests, said bond shall be held answerable.
Ordering further the plaintiff to render an accounting of the tolls he
collected from March of 1967 to December 31, 1968 and from
September 1969 to March 31, 1970, and deliver said tolls collected
to the receiver and if judgment is already executed, then to Quirino
Comintan and Eleuterio Zamora; and,
Finally, to condemn plaintiff to pay moral damages for withholding
the tools which belong to your movant in an amount this Court may
deem just in the premises.4
Acting upon the foregoing motion, respondent Judge issued an Order, dated
September 23, 1970, stating, among others, the following: têñ.£îhqwâ£
The records further disclosed that from March 1967 to December 31,
1968, piaintiff Bartolome Ortiz collected tolls on a portion of the
propertv in question wherein he has not introduced anv improvement
particularlv on Lot No. 5785-A; PLS-45 awarded to defendant Quirino
Comintan, thru which vehicular traffic was detoured or diverted, and
again from September 1969 to March 31, 1970, the plaintiff resumed
the collection of tools on the same portion without rendering any
accounting on said tolls to the Receiver, who, was reappointed after
submitting the required bond and specifically authorized only to
collect tolls leaving the harvesting of the improvements to the plaintiff.
xxx xxx xxx
ln virtue of he findings of this Court as contained in the dispositive
portion of its decision, the defendants are jointly obligated to pay the
plaintiff in the amount of P13,632.00 as reasonable value of the
improvements he introduced on the whole property in question, and
that he has the right of retention until fully paid. It can be gleaned
from the motion of the defendants that if plaintiff submits an
accounting of the tolls he collected during the periods above alluded
to, their damages of about P25,000.00 can more than offset their
obligation of P13,362.00 in favor of the plaintiff, thereafter the
possession of the land be delivered to the defendants since the
decision of the Supreme Court has already become final and
executory, but in the interregnum pending such accounting and
recovery by the Receiver of the tolls collected by the plaintiff, the
defendants pray that they allowed to put up a bond in lieu of the said
P13,632.00 to answer for damages of the former, if any.
On the other hand, plaintiff contends in his opposition, admitting that
the decision of the Supreme Court has become final and executory;
(1) the offer of a bond in lieu of payment of P13,632.00 does not, and
cannot, satisfy the condition imposed in the decision of this Court
which was affirmed in toto; (2) the public sale of Portion "B" of the
land has still to take place as ordained before the decision could be
executed; and, (3) that whatever sums plaintiff may derive from the
property cannot be set off against what is due him for the
improvements he made, for which he has to be reimbursed as
ordered.
xxx xxx xxx
Let it be known that plaintiff does not dispute his having collected
tolls during the periods from March 1967 to December 31, 1968 and
from September 1969 to March 31, 1970. The Supreme Court
affirmed the decision of this Court its findings that said tolls belong to
the defendant, considering that the same were collected on a portion
of the land question where the plaintiff did not introduce any
improvement. The reimbursement to the plaintiff pertains only to the
value of the improvements, like coconut trees and other plants which
he introduced on the whole property. The tolls collected by the
plaintiff on an unimproved portion naturally belong to the defendants,
following the doctrine on accretion. Further, the reappointment of a
Receiver by this Court was upheld by the Supreme Court when it
denied the petition for certiorari filed by the plaintiff, bolstering the
legal claim of defendants over said tolls. Thus, the decision of the
Supreme Court rendered the decision of this Court retroactive from
March 22, 1966 although pending accounting of the tolls collected by
the plaintiff is justified and will not prejudice anybody, but certainly
would substantially satisfy the conditions imposed in the decision.
However, insofar as the one-half portion "B" of the property, the
decision may be executed only after public sale by the Bureau of
Lands shall be accomplished.
WHEREFORE, finding the Motion for Execution filed by the
defendants to be meritorious, the same is granted; provided,
however, that they put up a bond equal the adjudicated amount of
P13,632.00 accruing in favor of the plaintiff, from a reputable or
recognized bonding or surety company, conditioned that after an
accounting of the tolls collected by the plaintiff should there be found
out any balance due and payable to him after reckoning said
obligation of P13,632.00 the bond shall be held answerable
therefor.5
Accordingly, a Writ of Execution was issued after private respondent Quirino
Comintan had filed the required bond. The writ directed the Sheriff to enforce the
decision of the Court, and stated, part in, the following:têñ.£îhqwâ£
But should there be found any amount collectible after accounting
and deducting the amount of P3,632.00, you are hereby ordered that
of the goods and chattels of Bartolome Ortiz of Bo. Kabuluan,
Calauag, Quezon, be caused to be made any excess in the above-
metioned amount together with your lawful fees and that you render
same to defendant Quirino Comintan. If sufficient personal property
cannot be found thereof to satisfy this execution and lawful fees
thereon, then you are commanded that of the lands and buildings of
the said BARTOLOME ORTIZ you make the said excess amount in
the manner required by the Rules of Court, and make return of your
proceedings within this Court within sixty (60) days from date of
service.
You are also ordered to cause Bartolome Ortiz to vacate the property
within fifteen (15) days after service thereof the defendant Quirino
Comintan having filed the required bond in the amount of THIRTEEN
THOUSAND SIX HUNDRED THIRTY-TWO (P13,632.00) PESOS. 6
On October 12, 1970, petitioner filed a Motion for Reconsideration of the aforesaid
Order and Writ of Execution, alleging:têñ.£îhqwâ£
 (a) That the respondent judge has no authority to place respondents
in possession of the property;
(b) That the Supreme Court has never affirmed any decision of the
trial court that tolls collected from the diversionary road on the
property, which is public land, belong to said respondents;
(c) That to assess petitioner a P25,000.00 liability for damages is
purely punitive imposition without factual or legal justification.
The foregoing Motion for Reconsideration was denied by respondent Judge per
Order dated November 18, 1970. Saod Order states, in part:têñ.£îhqwâ£
It goes without saying that defendant Comintan is entitled to be
placed in possession of lot No. 5785-A of PLS-45 (Calauag Public
Land Subdivision) and enjoyment of the tolls from March, 1967 to
March, 1968 and from September, 1969 to March 31, l970 which
were received by plaintiff Bartolome Ortiz, collected from the
property by reason of the diversion road where vehicular traffic was
detoured. To defendant Comintan belongs the tolls thus collected
from a portion of the land awarded to him used as a diversionary
road by the doctrine of accretion and his right over the same is ipso
jure, there being no need of any action to possess said addition. It is
so because as consistently maintained by the Supreme Court, an
applicant who has complied with all the terms and conditions which
entitle him to a patent for a particular tract of publlic land, acquires a
vested right therein and is to be regarded as equitable owner thereof
so that even without a patent, a perfected homestead or sales
application is a property right in the fullest sense, unaffectcd by the
fact that the paramount title is still in the Government and no
subsequent law can deprive him of that vested right The question of
the actual damages suffered by defendant Comintan by reason of
the unaccounted tolls received by plaintiff had already been fully
discussed in the order of September 23, 1970 and the Court is
honestly convinced and believes it to be proper and regular under
the circumstances.
Incidentally, the Court stands to correct itself when in the same order,
it directed the execution of he decision with respect to the one-half
portion "B" of the property only after the public sale by the Bureau of
Lands, the same being an oversight, it appearing that the Sales
Application of defendant Eleuterio Zamora had already been
recognized and full confirmed by the Supreme Court.
In view thereof, finding the motion filed by plaintiff to be without merit,
the Court hereby denies the same and the order of September 23,
1970 shall remain in full force subject to the amendment that the
execution of the decision with respect to the one-half portion "B"
shall not be conditioned to the public sale by the Bureau of Lands.
SO ORDERED.7
III
Petitioner thus filed the instant petition, contending that in having issued the Order
and Writ of Execution, respondent Court "acted without or in excess of jurisdiction,
and/or with grave abuse of discretion, because the said order and writ in effect vary
the terms of the judgment they purportedly seek to enforce." He argued that since
said judgment declared the petitioner a possessor in good faith, he is entitled to the
payment of the value of the improvements introduced by him on the whole property,
with right to retain the land until he has been fully paid such value. He likewise
averred that no payment for improvements has been made and, instead, a bond
therefor had been filed by defendants (private respondents), which, according to
petitioner, is not the payment envisaged in the decision which would entitle private
respondents to the possession of the property. Furthermore, with respect to portion
"B", petitioner alleges that, under the decision, he has the right to retain the same
until after he has participated and lost in the public bidding of the land to be
conducted by the Bureau of Lands. It is claimed that it is only in the event that he
loses in the bidding that he can be legally dispossessed thereof.
It is the position of petitioner that all the fruits of the property, including the tolls
collected by him from the passing vehicles, which according to the trial court amounts
to P25,000.00, belongs to petitioner and not to defendant/private respondent Quirino
Comintan, in accordance with the decision itself, which decreed that the fruits of the
property shall be in lieu of interest on the amount to be paid to petitioner as
reimbursement for improvements. Any contrary opinion, in his view, would be
tantamount to an amendment of a decision which has long become final and
executory and, therefore, cannot be lawfully done.
Petitioner, therefore, prayed that: (1) a Writ of Preliminary Injunction be issued
enjoining the enforcement of the Orders of September 23, 1970 and November 18,
1970, and the Writ of Execution issued thereto, or restoring to petitioner the
possession of the property if the private respondents had been placed in possession
thereof; (2) annulling said Orders as well as the Writ of Execution, dissolving the
receivership established over the property; and (3) ordering private respondents to
account to petitioner all the fruits they may have gathered or collected from the
property in question from the time of petitioiier's illegal dispossession thereof.
On January 29, 1971, this Court issued the Writ of Preliminary Injunction. On January
30, 1971, private respondents filed a Motion for Reconsideration and/or Modification
of the Order dated January 29, 1971. This was followed by a Supplemental Motion
for Reconsideration and Manifestation on February 3, 1971. In the latter motion,
private respondents manifested that the amount of P14,040.96, representing the
amount decreed in the judgment as reimbursement to petitioner for the improvements,
plus interest for six months, has already been deposited by them in court, "with the
understanding that said amount shall be turned over to the plaintiff after the court a
quo shall have determined the improvement on Lot 5785-A, and subsequently the
remaining balance of the deposit shall be delivered to the petitioner (plaintiff therein)
in the event he loses the bid for Lot 5785-B in favor of private respondent Eleuterio
Zamora."8 The deposit is evidenced by a certification made by the Clerk of the
Court a quo.9 Contending that said deposit was a faithful compliance with the
judgment of the trial court, private respondent Quirino Comintan prayed for the
dissolution of the Writ of Injunction.
It appears that as a consequence of the deposit made by private respondents, the
Deputy, Sheriff of Calauag, Quezon ousted petitioner's representative from the land
in question and put private respondents in possession thereof. 10
On March 10, 1971, petitioner filed a "Comment on Respondents' 'Motion for
Reconsideration' dated January 29, 1971' and 'Supplemental Motion for
Reconsideration and Manifestation,'" contending that the tender of deposit mentioned
in the Suplemental Motion was not really and officially made, "inasmuch as the same
is not supported by any official receipt from the lower court, or from its clerk or
cashier, as required by law;" that said deposit does not constitute sufficient
compliance with the judgment sought to be enforced, neither was it legally and validly
made because the requisites for consignation had not been complied with; that the
tender of legal interest for six months cannot substitute petitioner's enjoyment of the
fruits of the property as long as the judgment in Civil Case No. C-90 has not been
implemented in the manner decreed therein; that contrary to the allegations of private
respondents, the value of the improvements on the whole property had been
determined by the lower court, and the segregation of the improvements for each lot
should have been raised by them at the opportune moment by asking for the
modification of the decision before it became final and executory; and that the tolls on
the property constituted "civil fruits" to which the petitioner is entitled under the terms
of the decision.
IV
The issue decisive of the controvery is—after the rendition by the trial court of its
judgment in Civil Case No. C-90 on March 22, 1966 confirming the award of one-half
of the property to Quirino Comintan—whether or not petitioner is still entitled to retain
for his own exclusive benefit all the fruits of the property, such as the tolls collected
by him from March 1967 to December 1968, and September 1969 to March 31, 1970,
amounting to about P25,000.00. In other words, petitioner contends that so long as
the aforesaid amount of P13,632,00 decreed in the judgment representing the
expenses for clearing the land and the value of the coconuts and fruit trees planted
by him remains unpaid, he can appropriate for his exclusive benefit all the fruits
which he may derive from the property, without any obligation to apply any portion
thereof to the payment of the interest and the principal of the debt.
We find this contention untenable.
There is no question that a possessor in good faith is entitled to the fruits received
before the possession is legally interrupted. 11 Possession in good faith ceases or is
legally interrupted from the moment defects in the title are made known to the
possessor, by extraneous evidence or by the filing of an action in court by the true
owner for the recovery of the property.12 Hence, all the fruits that the possessor may
receive from the time he is summoned in court, or when he answers the complaint,
must be delivered and paid by him to the owner or lawful possessor. 13
However, even after his good faith ceases, the possessor in fact can still retain the
property, pursuant to Article 546 of the New Civil Code, until he has been fully
reimbursed for all the necessary and useful expenses made by him on the property.
This right of retention has been considered as one of the conglomerate of measures
devised by the law for the protection of the possessor in good faith. Its object is to
guarantee the reimbursement of the expenses, such as those for the preservation of
the property,14 or for the enhancement of its utility or productivity. 15 It permits the
actual possessor to remain in possession while he has not been reimbursed by the
person who defeated him in the possession for those necessary expenses and useful
improvements made by him on the thing possessed. The principal characteristic of
the right of retention is its accessory character. It is accessory to a principal obligation.
Considering that the right of the possessor to receive the fruits terminates when his
good faith ceases, it is necessary, in order that this right to retain may be useful, to
concede to the creditor the right to secure reimbursement from the fruits of the
property by utilizing its proceeds for the payment of the interest as well as the
principal of the debt while he remains in possession. This right of retention of the
property by the creditor, according to Scaevola, in the light of the provisions of Article
502 of the Spanish Civil Code,16 is considered not a coercive measure to oblige the
debtor to pay, depriving him temporarily of the enjoyment of the fruits of his property,
but as a means of obtainitig compensation for the debt. The right of retention in this
case is analogous to a contract of antichresis and it cati be considered as a means of
extinguishing the obligation, inasmuch as the right to retain the thing lasts only for the
period necessary to enable the creditor to be reimbursed from the fruits for the
necessary and useful expenses. 17
According to Manresa, the right of retention is, therefore, analogous to that of a
pledge, if the property retained is a movable, and to that of antichresis, if the property
held is immovable.18 This construction appears to be in harmony with similar
provisions of the civil law which employs the right of retention as a means or device
by which a creditor is able to obtain the payment of a debt. Thus, under Article 1731
of the New Civil Code, any person who has performed work upon a movable has a
right to retain it by way of pledge until he is paid. Similarly, under Article 1914 of the
same Code, the agent may retain in pledge the things which are the object of the
agency until the principal effects reimbursement of the funds advanced by the former
for the execution of the agency, or he is indemnified for all damages which he may
have suffered as a consequence of the execution of the agency, provided he is free
from fault. To the same effect, the depositary, under Article 1994 of the same Code,
may retain the thing in pledge until the full payment of what may be due him by
reason of the deposit. The usufructuary, pursuant to Article 612 of the same Code,
may retain the property until he is reimbursed for the amount paid for taxes levied on
the capital (Article 597) and tor extraordinary repairs (Article 594).
In all of these cases, the right of retention is used as a means of extinguishing the
obligation. As amply observed by Manresa: "El derecho de retencion, lo hemos dicho,
es el derecho de prenda o el de anticresis constituido por la ley con independencia
de las partes." 19 In a pledge, if the thing pledged earns or produces fruits, income,
dividends or interests, the creditor shall compensate what he receives with those
which are owing him.20 In the same manner, in a contract of antichresis, the creditor
acquires the right to receive the fruits of an immovable of his debtor with the
obligation to apply them to payment of the interest, if owing, and thereafter to the
principal of his credit. 21 The debtor can not reacquire enjoyment of the immovable
until he has actually paid what he owes the creditor. 22
Applying the afore-cited principles to the case at bar, petitioner cannot appropriate for
his own exclusive benefit the tolls which he collected from the property retained by
him. It was his duty under the law, after deducting the necessary expenses for his
administration, to apply such amount collected to the payment of the interest, and the
balance to the payment of the obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for
administration, belong to Quirino Comintan, owner of the land through which the toll
road passed, further considering that the same was on portions of the property on
which petitioner had not introduced any improvement. The trial court itself clarified
this matter when it placed the toll road under receivership. The omission of any
mention of the tolls in the decision itself may be attributed to the fact that the tolls
appear to have been collected after the rendition of the judgment of the trial court.
The records further reveal that earnest efforts have been made by private
respondents to have the judgment executed in the most practicable manner. They
deposited in court the amount of the judgment in the sum of P13,632.00 in cash,
subject only to the accounting of the tolls collected by the petitioner so that whatever
is due from him may be set off with the amount of reimbursement. This is just and
proper under the circumstances and, under the law, compensation or set off may
take place, either totally or partially. Considering that petitioner is the creditor with
respect to the judgment obligation and the debtor with respect to the tolls collected,
Comintan being the owner thereof, the trial court's order for an accounting and
compensation is in accord with law. 23
With respect to the amount of reimbursement to be paid by Comintan, it appears that
the dispositive portion of the decision was lacking in specificity, as it merely provided
that Comintan and Zamora are jointly liable therefor. When two persons are liable
under a contract or under a judgment, and no words appear in the contract or
judgment to make each liable for the entire obligation, the presumption is that their
obligation is joint or mancomunada, and each debtor is liable only for a proportionate
part of the obligation. 24 The judgment debt of P13,632.00 should, therefore, be pro-
rated in equal shares to Comintan and Zamora.
Regarding Lot 5785-B, it appears that no public sale has yet been conducted by the
Bureau of Lands and, therefore, petitioner is entitled to remain in possession thereof.
This is not disputed by respondent Eleuterio Zamora. 25 After public sale is had and in
the event that Ortiz is not declared the successful bidder, then he should be
reimbursed by respondent Zamora in the corresponding amount for the
improvements on Lot 5785-B.

WHEREFORE, in view hereof, the Order of respondent Court of November 18, 1970
is hereby modified to conform to the foregoing judgment. The Writ of Preliminary
Injunction, dated January 29, 1971, is hereby dissolved. Without special
pronouncement as to costs.
G.R. No. L-9989 March 13, 1918
EDUARDO CUAYCONG, ET AL., plaintiffs-appellees,
vs.
RAMONA BENEDICTO, ET AL., defendants-appellants.
FISHER, J.:
The issues in this case relate to the right of plaintiffs to make use of two roads
existing on the Hacienda Toreno, a tract of land in the municipality of Victorias,
Negros Occidental, the property of the defendants, Blasa Benedicto and Ramona
Benedicto. One of these roads is referred to in the proceedings as the Nanca-
Victorias road and the other as the Dacuman — Toreno road. The Court of First
Instance held that those of the plaintiffs who claimed to be entitled to make use of the
Dacuman — Toreno road had failed to establish the asserted right, and dismissed
the action as to them. From this decision they appealed to this court but, their brief
not having been filed within the time prescribed by the rules, their appeal was
dismissed, on motion of defendants, by resolution dated February 14, 1916.
Consequently, the issues presented on this appeal are limited to those which relate
to the rights of the parties with respect to the Nanca-Victorias road, and the
determination of the correctness of the decision of the court concerning that part of
the controversy submitted to its decision.
The allegations in the complaint with respect to the Nanca-Victorias road are that the
appellees, Eduardo Cuaycong, Lino Cuaycong, and Eulalio Dolor, are the owners of
a group of haciendas situated between the southern boundary of the Hacienda
Toreno and the barrio of Nanca, of the municipality of Seravia, and that the appellees
Silverio Ginoo, Gervasio Ascalon, and Juan Ledesma, are the lessees of part of said
haciendas; that more than twenty years the appellees and their predecessors in
interest have made use of the Nanca-Victorias road, which crosses the Hacienda
Toreno, openly, publicly, and continiously, with the knowledge of the owners of the
said hacienda, for the purpose of conveying the products of their haciendas to the
town of Victorias and to the landing place there situated, and for the purpose of
transporting supplies from those points to their haciendas, making use of the said
road by means of carts, carabaos, and other usual means of transportation; that
there is no outlet to a public road from the hacienda occupied by these plaintiffs, the
only road and way by which the products of the plaintiffs' property can be taken to the
town of Victorias and to the landing place there being across the Hacienda Toreno by
the road marked on the plan attached to the complaint; that on the fifteenth day of
November, 1912, the defendants closed the road in question at the point at which it
crosses the Hacienda Toreno, and refused to permit plaintiffs to continue using it;
that plaintiffs were about to commence to grind their crop of sugar cane, and that, if
prevented from transporting their sugar across the Hacienda Toreno to their point of
embarkation, would suffer damages difficult to estimate. Upon these averments of
fact the plaintiffs prayed for a judgment that they are entitled to use the road in
question as they have been using it in the past, and that a perpetual injunction be
issued against plaintiffs restraining them from impending such use. Upon the filing of
the complaint, plaintiffs moved the court to issue a preliminary injunction restraining
defendants from interfering with the use of the road during the pendency of the suit,
which motion was granted by the court.
Defendants in their answer put in issue all the special averments of the complaint, as
above set forth, and by way of counterclaim and special defense, averred that the
road crossing the Hacienda Toreno, over which plaintiffs claim the right of passage,
is the private property of defendants; and, further, that they have not refused plaintiffs
permission to pass over this road but have required them to pay toll for the privilege
of doing so. Defendants also claimed damages for the use of the road by plaintiffs
during the pendency of the suit, alleging that the preliminary injunction had been
improvidently issued upon false statements contained in the verified complaint filed
by plaintiffs.
The case was tried in July, 1913. The court on December 8, 1913, rendered
judgment, dismissing the complaint with respect to the plaintiffs Felix Suarez, Probo
Jereza, Enrique Azcona, and Melecio Pido, these being the plaintiffs who claimed the
right to use the Dacuman — Toreno road. With respect to the Nanca-Victorias road,
the court held that it was a public highway over which the public had acquired a right
of use by immemorial prescription, and ordered the issuance of a perpetual injunction
against plaintiffs, restraining them from interfering in any manner with the use of the
said road.
The conclusion of the court with respect to the facts affecting the Nanca-Victorias
road are as follows:
Turning to a consideration of the evidence relative to the Nanca-Victorias
road we find incontestable proof that it has been in existence for at least forty
years. That the hacenderos located in the southwestern section of Victorias
and the public generally passed over it freely and that it was used for all
purposes of transportation of farm produce, animals, etc. and by pedestrians
as well as carromatas and other conveyances without break or interruption
until two or three years ago when the defendants announced that the road
 was private and that those who wished to pass over it with sugar carts would
be obliged to pay a toll of ten centavos — all other vehicles, it appears, were
permitted to pass free charge. This arrangement seems to have existed
during the years of 1911 and 1912 and part of 1913, the money being
collected apparently from some hacenderos and not from others. There is
some reason to believe from the evidence presented by defendants
themselves that the practice of making these payments to hacienda 'Toreno'
originated in an attempt to raise a fund for the repair of the road. There is no
evidence that any other hacenderos between Nanca and Victorias or any
other person made any attempt to close the road or to collect toll. On the
contrary the road appears to have been repaired by the hacenderos when it
needed repairing and everyone used it on equal terms until the defendants in
1910 or 1911 interposed the objection that the road in dispute was private.
This we think is a fair deduction from the evidence and although it is asserted
that toll was collected at an earlier date by the late Leon Montinola, brother of
the defendant Ruperto Montinola, there is no tangible evidence that this was
so and that toll has been paid only during the years of 1911, 1912, and part
of 1913.
The question presented by the assignment of error are in effect:
(a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno
a public highway or not?
(b) If it be held that the road in question is not a public highway, have plaintiffs proven
their acquisition of an easement of way over the Hacienda Toreno at the point
traversed by the road in question?
The trial judge, in holding that the road in question is public, bases in conclusion
upon the fact, which he deems to have been proven, that the road has been in
existence "from time immemorial," and had been "continiously used as a public
road . . . and open to public as such for thirty or forty years . . . until . . . the
defendants undertook to claim it as private and to collect toll for the passage of
carts." (Bill of Exceptions, p. 56.) There is no doubt that for the past thirty or forty
years a road has existed between the former site of the town of Victorias and the
barrio of Nanca, of the municipality of Seravia, and that this road crosses defendants'
hacienda. It is also true that during this period the plaintiffs and their predecessors in
the ownership of the hacienda now held by them have made use of this road for the
purpose of going and coming from their haciendas to the town of Victorias; but the
question is whether this use was limited to the plaintiffs, and their tenants and
employees, or whether it was, as held by the lower court, a use enjoyed by the public
in general. Plaintiffs produced only two witnesses, Segundo de Leon (stet. notes, pp.
21-22) and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use
of the Nanca-Victorias road. Several other witnesses testified on behalf of plaintiffs,
but their testimony relates to the Dacuman — Toreno road, which is not involved in
this appeal. We have carefully read the testimony of the witnesses Leon and
Cuaycong, given upon their direct and cross examination, but we have been unable
to find that either of them has testified that the road in question was ever used by the
public in general. These witnesses testified with regard to the use of the road by the
present and former owners and occupants of the estates of Bacayan, Esperanza,
Alcaigan, Pusot, and Dolores for the transportation of the products of these estates to
the town of Victorias, and of supplies and agricultural implements from Victorias to
the haciendas, but neither of them testified expressly that any other use had been
made of said road. Nevertheless, it may be reasonably inferred from the testimony of
these witnesses that all persons having occasion to travel between Victorias and the
haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether or not
they were owners, tenants, or employees of said estates, made use of the road now
in dispute, crossing the Hacienda Toreno, and to this limited extent it may be said
that the public made use of the road, but there is nothing in the evidence to indicate
that the so — called public use extended beyond this.
Apart from the fact that there is no direct evidence to support the finding of the court
concerning the general public use of the road in dispute, the record contains data
strongly tending to show that when the complaint was filed plaintiffs did not contend
that the road was a public highway, but merely contended that they had acquired by
prescription an easement of way across the Hacienda Toreno. For example, the
action is entitled an "action concerning a right of away." (Bill of Exceptions, pp. 64
and 65.) It is not averred in the complaint that the road in question was used by the
public. On the contrary, it is averred that it was used by the plaintiffs and their
predecessors. The averment in paragraph 8 of the complaint that the plaintiffs have
no other "outlet to a public road" than that which they have been accustomed to used
by going across the defendants' hacienda for the purpose of going to the town of
Victorias also shows that when they commenced this action they had in mind the
provisions of articles 564, et seq. of the Civil Code, which relate to the method
of establishing the compulsory easement of way. The owners of an existing
easement, as well as those whose properties are adjacent with a public road, have
no occasion to invoke these provisions of the Code, which relate to the creation
of new rights, and not the enforcement of rights already in existence.
It is true in the opening statement made to the court, counsel for plaintiffs, who was
not the same attorney by whom the complaint was signed, stated that plaintiffs
contend that the road in question is public, but as no evidence was introduced
tending to establish this contention concerning the Nanca — Victorias road, counsel
for defendants had no occasion to object upon the ground that such testimony was
not relevant to the averments of the complaint. No evidence was taken to indicate
that at any time since the road in question has been in existence any part of the
expense of its upkeep has been defrayed by the general government, the province,
or the municipality. The trial judge said upon this subject:
It is true that whatever repairs were made on the road were made irregularly.
The municipality of Victorias had no funds to devote to the construction and
repair of roads, and the upkeep of the road depending entirely therefore on
the initiative of the persons who used it, was attended to only at such times
as repairs were absolutely necessary. (Bill of Exceptions, p. 49.)
The court also held that it appears from the government grant issued in 1885 to the
original owner of the hacienda adjacent to the Hacienda Toreno on its western
boundary, that the Nanca-Victorias road at that time separated that estate from the
Jalbuena Hacienda, and that these facts constitute "circumstantial evidence that the
road was in existence in 1885." We have examined the document to which the court
refers, and we agree that the road in question existed in 1885; but we do not believe
that the document in question proves that the road was public highway.
Another circumstance established by the evidence, and which is some importance in
the determination of this issue, is that although the defendants closed the Nanca-
Victorias road in the month of February, 1911, and since that time have collected toll
from persons passing over it with carts loaded with sugar, including those belonging
to several of the plaintiffs, nothing was done by them to prevent the continuation of
this restriction until December, 1912, when this action was commenced. It is natural
to assume that if plaintiffs had considered that the road in question was public, they
would have protested immediately against the action of the defendants, and would
have either commenced a civil action, as they subsequently did, or would have
brought about a prosecution under section 16 of Act No. 1511.
Upon the evidence taken and admissions contained in the pleadings and those made
during the course of the trial we consider that the following findings are warranted:
1. The town of Victorias has always been the shipping point of the products of the
Hacienda Toreno, and of the haciendas of appellees, as well as the place from which
supplies were brought to those properties.
2. For thirty or forty years before the commencement of the suit a wagon road, herein
called the Nanca-Victorias road, has been in existence, connecting the haciendas of
appellees with the town of Victorias, and this road traverses the property of
defendants. Since the removal of the town of Victorias to a new site the Nanca-
Victorias road has been used by appellees in travelling between their properties and
the provincial road which crosses the Hacienda Toreno from east to west.
3. No public funds have at any time been expended on the construction or upkeep of
the Nanca-Victorias road, but from time to time work has been done on it by the
laborers employed by the present and former owners of the Hacienda Toreno and the
haciendas owned by the appellees and their predecessors in title.
4. The Nanca-Victorias wagon road, including that part of it which crosses the
Hacienda Toreno, has for thirty-five or forty years been used by the appellees and
their predecessors in title for the transportation, by the usual means, of the products
of their estates to their shipping points in or near the town of Victorias, and the
transportation to their estates of all supplies required by them, and has been used by
all persons having occasion to travel to and from all or any of the estates now owned
by the appellees.
5. The use of the Nanca-Victorias road in the manner and by the person above
mentioned was permitted without objection by the owners of the Hacienda Toreno
until the year 1911, when they closed it, and began charging a toll of 5 centavos for
each cart which passed over the road, including carts belonging to the appellants,
until restrained from continuing to do so by the preliminary injunction granted in this
case.
6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants
to the nearest public road which is the provincial road which crosses the Hacienda
Toreno from east to west.
Upon these facts the questions of law to be decided are:
(a) Is the Nanca-Victorias road a public highway?
(b) If the Nanca-Victoria road, or that part of it which crosses the Hacienda Toreno, is
not a public highway, is it subject to a private easement of way in favor of the
appellees?
The defendants are the owners of the Hacienda Toreno under a Torrens title issued
in accordance with the Land Registration Act, conferring to them its absolute
ownership, subject only to the limitations of paragraph four of section 39 of said Act.
It is admitted that there is no annotation on the certificate of title regarding the road
here in question, either as a "public road" or as a "private way established by law,"
and, therefore, the questions presented by this appeal are to be determined precisely
as they would be had the Hacienda Toreno not been brought under the operation of
the Land Registration Act. The plaintiffs being the owners of the property in question,
the presumption of law is that it is free from any lien or encumbrance whatever, and
the burden therefore rests upon plaintiffs to establish the contrary. As this court said
in case of Fabie vs. Lichauco and the children of Francisco L. Roxas (11 Phil. Rep.,
14):
It is settled of law that a property is assumed to be free from all encumbrance
unless the contrary is proved.
There is admittedly no evidence to show that the land occupied by the road here in
question was any time conveyed to the general government or any of its political
subdivisions by the present or any of the former owners of the Hacienda Toreno.
There is no evidence, even remotely, tending to show that the road existed prior to
the time when the property now known as the Hacienda Toreno passed from the
State into private ownership. The record fails to disclose any evidence whatever
tending to show that the Government has at any time asserted any right or title in or
to the land occupied by the road, or that it has incurred any expense whatever in its
upkeep or construction. The Civil Code defines as public roads those which are
constructed by the State (art. 339), and as provincial and town roads those "the
expense of which is borne by such towns or provinces." (Civil Code, art. 344.) While
it is not contended that this definition is exclusive, it does show that during the
Spanish regime, under normal conditions, roads which were public were maintained
at the public expense, and that the fact that at no time was any expense incurred by
the Government with respect to the road here in question tends strongly to support
the contention of the defendants that it is private way.
During the Spanish regime the law required each able to bodied citizen not within
one of the exempted classes to work a certain number of days in each year, his labor
to be devoted to "services of general utility" to the municipality of his residence.
(Royal Decree of July 11, 1883, art. 5.) Under this Decree and the Regulations for its
enforcement (Berriz, vol. 11, 258) the greater part of the work on the public road of
the Islands was accomplished. Had the road here in question been a public way, it is
reasonable to assume that the polistas of the town of Victorias would have been
employed in maintaining it. It is most significant that no mention is made in the
testimony of the plaintiffs' witnesses of any work of this character having been done
on the road at any time, particularly in view of the fact that their attention was drawn
to this point. (Stet. note, pp. 8, 10, 11, 12, 13 and 14.)
The evidence shows that the repairs were made by the owners of the estates
benefited by the road, and by their laborers, as a pure voluntary act for their own
convenience and interest. There being no evidence of a direct grant to the
government of the land occupied by the road in question or that any Government
funds or labor were expended upon it, the question presents itself whether the use to
which the road has been put was such as to justify the conclusion of the lower court
that it has become public property. There being no evidence that the original use of
the road by plaintiffs' predecessors was based upon any grant of the fee to the road
or of an easement of way, or that it began under the assertion of a right on their part,
the presumption must be that the origin of the use was the mere tolerance or license
of the owners of the estates affected.
This being so, has that merely permissive use been converted into a title vested in
the public at large, or in the plaintiffs by reason of their ownership of the land
beneficially affected by the use?
Had it been shown that the road had been maintained at the public expense, with the
acquiescence of the owners of the estates crossed by it, this would indicate such
adverse possession by the government as in course of time would ripen into title or
warrant the presumption of a grant or of a dedication. But in this case there is no
such evidence, and the claims of plaintiffs, whether regarded as members of the
public asserting a right to use the road as such, or as persons claiming a private
easement of way over the land of another must be regarded as resting upon the
mere fact of user.
If the owner of a tract of land, to accommodate his neighbors or the public in general,
permits them to cross his property, it is reasonable to suppose that it is not his
intention, in so doing, to divest himself of the ownership of the land so used, or to
establish an easement upon it and that the persons to whom such permission, tacit or
express, is granted, do not regard their privilege of use as being based upon an
essentially revocable license. If the use continues for a long period of time, no
change being made in the relations of the parties by any express or implied
agreement, does the owner of the property affected lose his right of revocation? Or,
putting the same question in another form, does the mere permissive use ripen into
title by prescription?
It is a fundamental principle of the law in this jurisdiction concerning the possession
of real property that such possession is not affected by acts of a possessory
character which are "merely tolerated" by the possessor, or which are due to his
license (Civil Code, arts. 444 and 1942). This principle is applicable not only with
respect to the prescription of the dominium as a whole, but to the prescription of
right in rem. In the case of Cortes vs. Palanca Yu Tibo (2 Phil. Rep., 24, 38), the
Court said:
The provision of article 1942 of the Civil Code to the effect that acts which
are merely tolerated produce no effect with respect to possession is
applicable as much to the prescription of real rights as to the prescription of
the fee, it being a glaring and self-evident error to affirm the contrary, as does
the appellant in his motion papers. Possession is the fundamental basis of
the prescription. Without it no kind of prescription is possible, not even the
extraordinary. Consequently, if acts of mere tolerance produce no effect with
respect to possession, as that article provides, in conformity with article 444
of the same Code, it is evident that they can produce no effect with respect to
prescription, whether ordinary or extraordinary. This is true whether the
prescriptive acquisition be of a fee or of real rights, for the same reason holds
in one and the other case; that is, that there has been no true possession in
the legal sense of the word. (See also Ayala de Roxas vs. Maglonso, 8 Phil
Rep., 745; Municipality of Nueva Caceres vs. Director of Lands and Roman
Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485.)
Possession, under the Civil Code, to constitute the foundation of a prescriptive right,
must be possession under claim of title (en concepto de dueno), or use the common
law equivalent of the term, it must be adverse. Acts of a possessory character
performed by one who holds by mere tolerance of the owner are clearly not en
concepto de dueño, and such possessory acts, no matter how long so continued, do
not start the running of the period of prescription.
A similar question was presented in the case of the Roman Catholic Archbishop of
Manila vs. Roxas (22 Phil. Rep., 450), in which case it appeared that Roxas, the
owner of the Hacienda de San Pedro Macati, claimed a right of way across the
property of the church to Calle Tejeron, a public street of the town of San Pedro
Macati. The proof showed that the road in question had been used by the tenants of
the Hacienda de San Pedro Macati for the passage of carts in coming and leaving
the hacienda "from time immemorial," and further that the road had been used for
time out of mind, not only by the tenants of the hacienda but by many other people in
going and coming from a church half-way between the boundary line of the hacienda
and Calle Tejeron. The court held that the facts did not give rise to a prescriptive right
of easement in favor of the owner of the hacienda, upon the ground that such use "is
to be regarded as permissive and under an implied license, and not adverse. Such a
use is not inconsistent with the only use which the proprietor thought fit to make of
the land, and until the appellee thinks proper to inclose it, such use is not adverse
and will not preclude it from enclosing the land when other views of its interest render
it proper to do so. And though an adjacent proprietor may make such use of the open
land more frequently than another, yet the same rule will apply unless there be some
decisive act indicating a separate and exclusive use under a claim of right. A different
doctrine would have a tendency to destroy all neighborhood accommodations in the
way of travel; for if it were once understood that a man, by allowing his neighbor to
pass through his farm without objection over the pass-way which he used himself,
would thereby, after the lapse of time, confer a right on such neighbor to require the
pass-way to be kept open for his benefit and enjoyment, a prohibition against all such
travel would immediately ensue."
The decisions of the supreme court of Louisiana, a State whose jurisdiction is based,
as is our own, upon the Roman Law, and whose Civil Code is taken, as is our own,.
very largely from the Code of Napoleon, are particularly persuasive in matters of this
character. In the case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants
in their brief, in which the issues were very similar to those of the present case, the
court held that—
The mere fact that for thirty or forty years the public was permitted to pass
over this ground would not of itself constitute the place a locus publicus . . .
dedication must be shown by evidence so conclusive as to exclude all idea of
private ownership; . . . such dedication cannot be inferred from ere user
alone; . . . no one is presumed to give away his property. The burden is on
him who avers a divestiture of ownership to prove it clearly.
We are, therefore, of the opinion, and so hold, that upon the facts established by the
evidence it does not appear that the road in question is a public road or way. We are
also of the opinion that plaintiffs have failed to show that they have acquired by
prescription a private right of passage over the lands of defendants. The supreme
court of Spain has decided that under the law in force before the enactment of the
Civil Code, the easement of way was discontinous, and that while such an easement
might be acquired by prescription, it must be used in good faith, in the belief of the
existence of the right, and such user must have been continuous from time
immemorial. (Judgment of December 15, 1882.) In the appealed decision the court
below says that the plaintiffs and their predecessors made use of the road in
question "from time immemorial," but there is no evidence whatever in the record to
sup[port this finding, although it is true that the evidence shows the existence of the
road and its use by the plaintiffs and their predecessors for thirty-five or forty years.
Speaking of the evidence required under the present Code of Civil Procedure to
show immemorial use of an easement, this court said in the case of Ayal de Roxas vs.
Case (8 Phil. Rep., 197, 198):
Third Partida in title 31, law 15 . . . says that discontinues servitudes . . . must
be proved by usage or a term so long that men can not remember its
commencement. . . . In many judgments the supreme court of Spain has
refused to accept proof of any definite number of years as a satisfaction of
this requirement of the law. . . . We are of the opinion that in order to
establish a right of prescription [title of prescription based upon use from time
immemorial] something more required than memory of living witnesses.
Whether this something should be the declaration of persons long dead,
repeated by those who testify, as exacted by the Spanish law, or should be
the common reputation of ownership recognized by the Code of Procedure, it
is unnecessary for us to decide. On either theory the appellant has failed in
his proof . . . .
The same thing may be said in this case. Witnesses have testified that they have
known the road for a certain period of years, beginning at a time prior to the
enactment of the Civil Code, but no evidence has been made to prove immemorial
use by either of the means of proof mentioned in this decision cited, nor is
immemorial user averred in the complaint as the basis of the right. It is evident,
therefore, that no vested right by user from time immemorial had been acquired by
plaintiffs at the time the Civil Code took effect. Under that Code (art 539) no
discontinuous easement could be acquired by prescription in any event. Assuming,
without deciding, that this rule has been changed by the provisions of the present
Code of Civil Procedure relating to prescription, and that since its enactment
discontinuous easement may be required by prescription, it is clear that this would
not avail plaintiffs. The Code of Civil Procedure went into effect on October 1, 1901.
The term of prescription for the acquisition of rights in real estate is fixed by the Code
(sec. 41) at ten years. The evidence shows that in February, 1911, before the
expiration of the term of ten years since the time the Code of Civil Procedure took
effect, the defendants interrupted the use of the road by the plaintiffs by constructing
and maintaining a toll gate on it and collecting toll from persons making use of it with
carts and continued to do so until they were enjoined by the granting of the
preliminary injunction by the trial court in December, 1912. Our conclusion is,
therefore, that the plaintiffs have not acquired by prescription a right to an easement
of way over the defendant's property; that their use of the Nanca-Victorias road
across the Hacienda Toreno was due merely to the tacit license and tolerance of the
defendants and their predecessors in title; that license was essentially revokable; and
that, therefore, the defendants were within their rights when they closed the road in
1911.
While in the allegations from the plaintiffs' complaint it might be inferred that it was
their purpose to seek to impose upon the defendants the easement to which arts.
564 et seq. of the Civil Code relate, that purpose was evidently abandoned, and the
case was tried upon a wholly different theory. Proof was offered to show that the right
of passage across defendants' land is necessary to enable plaintiffs to get their
products to market, but there was no offer on their part to pay defendants the
indemnity required by section 564.
For the reasons stated the judgment of the court below is reversed, the injunction
issued against defendants is allowed on this appeal.
SO ORDERED.
[G.R. No. 86051. September 1, 1992.]
JAIME LEDESMA, Petitioner, v. THE HONORABLE COURT OF APPEALS and
CITIWIDE MOTORS, INC., Respondents.
SYLLABUS
1. CIVIL LAW; POSSESSION; REQUISITES TO MAKE POSSESSION OF
MOVABLE PROPERTY EQUIVALENT TO TITLE. — It is quite clear that a party who
(a) has lost any movable or (b) has been unlawfully deprived thereof can recover the
same from the present possessor even if the latter acquired it in good faith and has,
therefore, title thereto for under the first sentence of Article 559, such manner of
acquisition is equivalent to a title. There are three (3) requisites to make possession
of movable property equivalent to title, namely: (a) the possession should be in good
faith; (b) the owner voluntarily parted with the possession of the thing; and (c) the
possession is in the concept of owner. (TOLENTINO, A.M., Civil Code of the
Philippines, Vol. II, 1983 ed., 275-276, citing 2-II Colin and Capitant 942; De Buen:
Ibid., 1009, 2 Salvat 165; 4 Manresa 339). Undoubtedly, one who has lost a movable
or who has been unlawfully deprived of it cannot be said to have voluntarily parted
with the possession thereof. This is the justification for the exceptions found under
the second sentence of Article 559 of the Civil Code.
2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT OF SALE; ABSENCE OF
CONSIDERATION; EFFECT THEREOF. — There was a perfected unconditional
contract of sale between private respondent and the original vendee. The former
voluntarily caused the transfer of the certificate of registration of the vehicle in the
name of the first vendee — even if the said vendee was represented by someone
who used a fictitious name — and likewise voluntarily delivered the cars and the
certificate of registration to the vendee’s alleged representative Title thereto was
forthwith transferred to the vendee. The subsequent dishonor of the check because
of the alteration merely amounted to a failure of consideration which does not render
the contract of sale void, but merely allows the prejudiced party to sue for specific
performance or rescission of the contract, and to prosecute the impostor for estafa
under Article 315 of the Revised Penal Code.
DECISION
DAVIDE, JR., J.:
Petitioner impugns the Decision of 22 September 1988 of respondent Court of
Appeals 1 in C.A.-G.R. CV No. 05955 2 reversing the decision of then Branch XVIII-B
(Quezon City) of the then Court of First Instance (now Regional Trial Court) of Rizal
in a replevin case, Civil Case No. Q-24200, the dispositive portion of which
reads:chanroblesvirtualawlibrary
"Accordingly, the Court orders the plaintiff to return the repossessed Isuzu Gemini,
1977 Model vehicle, subject of this case to the defendant Ledesma. The incidental
claim (sic) for damages professed by the plaintiff are dismissed for lack of merit. On
defendant’s counterclaim, Court (sic) makes no pronouncement as to any form of
damages, particularly, moral, exemplary and nominal in view of the fact that Citiwide
has a perfect right to litigate its claim, albeit by this pronouncement, it did not
succeed." 3
which was supplemented by a Final Order dated 26 June 1980, the dispositive
portion of which reads:jgc:chanrobles.com.ph
"IN VIEW OF THE FOREGOING, the Court grants defendant Ledesma the sum of
P35,000.00 by way of actual damages recoverable upon plaintiff’s replevin bond.
Plaintiff and its surety, the Rizal Surety and Insurance Co., are hereby ordered jointly
and severally to pay defendant Jaime Ledesma the sum of P10,000.00 as damages
for the wrongful issue of the writ of seizure, in line with Rule 57, Sec. 20, incorporated
in Rule 60, Sec. 10.
In conformity with the rules adverted to, this final order shall form part of the judgment
of this Court on September 5, 1979.
The motion for reconsideration of the judgment filed by the plaintiff is hereby DENIED
for lack of merit. No costs at this instance." 4
The decision of the trial court is anchored on its findings that (a) the proof on record
is not persuasive enough to show that defendant, petitioner herein, knew that the
vehicle in question was the object of a fraud and a swindle 5 and (b) that plaintiff,
private respondent herein, did not rebut or contradict Ledesma’s evidence that
valuable consideration was paid for it.
The antecedent facts as summarized by the respondent Court of Appeals are as
follows:jgc:chanrobles.com.ph
"On September 27, 1977, a person representing himself to be Jojo Consunji,
purchased purportedly for his father, a certain Rustico T. Consunji, two (2) brand new
motor vehicles from plaintiff-appellant Citiwide Motors, Inc., more particularly
described as follows:chanrobles lawlibrary : rednad
a) One (1) 1977 Isuzu Gemini, 2-door Model PF 50ZIK, with Engine No. 751214
valued at P42,200.00; and
b) One (1) 1977 Holden Premier Model 8V41X with Engine No. 198-1251493, valued
at P58,800.00.
Said purchases are evidenced by Invoices Nos. 3054 and 3055, respectively. (See
Annexes A and B).
On September 28, 1977, plaintiff-appellant delivered the two-above described motor
vehicles to the person who represented himself as Jojo Consunji, allegedly the son of
the purported buyers Rustico T. Consunji, and said person in turn issued to plaintiff-
appellant Manager’s Check No. 066-110-0638 of the Philippine Commercial and
Industrial Bank dated September 28, 1977 for the amount of P101,000.00 as full
payment of the value of the two (2) motor vehicles.
However, when plaintiff-appellant deposited the said check, it was dishonored by the
bank on the ground that it was tampered with, the correct amount of P101.00 having
been raised to P101,000.00 per the bank’s notice of dishonor (Annexes F and G).
On September 30, 1977, plaintiff-appellant reported to the Philippine Constabulary
the criminal act perpetrated by the person who misrepresented himself as Jojo
Consunji and in the course of the investigation, plaintiff-appellant learned that the real
identity of the wrongdoer/impostor is Armando Suarez who has a long line of criminal
cases against him for estafa using this similar modus operandi.
On October 17, 1977, plaintiff-appellant was able to recover the Holden Premier
vehicle which was found abandoned somewhere in Quezon City.
On the other hand, plaintiff-appellant learned that the 1977 Isuzu Gemini was
transferred by Armando Suarez to third persona and was in the possession of one
Jaime Ledesma at the time plaintiff-appellant instituted this action for replevin on
November 16, 1977.
In his defense, Jaime Ledesma claims that he purchases (sic) and paid for the
subject vehicle in good faith from its registered owner, one Pedro Neyra, as
evidenced by the Land Transportation Commission Registration Certificate No.
RCO1427249.chanrobles.com.ph : virtual law library
After posting the necessary bond in the amount double the value of the subject motor
vehicle, plaintiff-appellant was able to recover possession of the 1977 Isuzu Gemini
as evidenced by the Sheriff’s Return dated January 23, 1978." 6
After trial on the merits, the lower court rendered the decision and subsequently
issued the Final Order both earlier adverted to, which plaintiff (private respondent
herein) appealed to the respondent Court of Appeals; it submitted the following
assignment of errors:jgc:chanrobles.com.ph
"The trial court erred.
I
IN HOLDING THAT THE DEFENDANT IS ENTITLED TO THE POSSESSION OF
THE CAR;
II
IN HOLDING THAT THE DEFENDANT IS AN INNOCENT PURCHASER IN GOOD
FAITH AND FOR VALUE;
III
IN RULING THAT THE PLAINTIFF SHOULD RETURN THE CAR TO DEFENDANT,
DISMISSING ITS CLAIM FOR DAMAGES, AND GRANTING DEFENDANT
P35,000.00 DAMAGES RECOVERABLE AGAINST THE REPLEVIN BOND AND
P101,000.00 DAMAGES FOR ALLEGED WRONGFUL SEIZURE;
IV
IN RENDERING THE DECISION DATED SEPTEMBER 3, 1979 AND THE FINAL
ORDER DATED JUNE 26, 1980." 7
In support of its first and second assigned errors, private respondent cites Article 559
of the Civil Code which
"ARTICLE 559. The possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in possession of the
same.
If the possessor of a movable lost or of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid therefor."cralaw virtua1aw library
Without in any way reversing the findings of the trial court that herein petitioner was a
buyer in good faith and for valuable consideration, the respondent Court ruled
that:chanroblesvirtualawlibrary
"‘Under Article 559, Civil Code, the rule is to the effect that if the owner has lost a
thing, or if he has been unlawfully deprived of it, he has a right to recover it not only
from the finder, thief or robber, but also from third persons who may have acquired it
in good faith from such finder, thief or robber. The said article establishes two (2)
exceptions to the general rule of irrevendicability (sic), to wit: when the owner (1) has
lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the
possessor cannot retain the thing as against the owner who may recover it without
paying any indemnity, except when the possessor acquired it in a public sale.’ (Aznar
v. Yapdiangco, 13 SCRA 486).
Put differently, where the owner has lost the thing or has been unlawfully deprived
thereof, the good faith of the possessor is not a bar to recovery of the movable unless
the possessor acquired it in a public sale of which there is no pretense in this case.
Contrary to the court a assumption, the issue is not primarily the good faith of
Ledesma for even if this were true, this may not be invoked as a valid defense, if it be
shown that Citiwide was unlawfully deprived of the vehicle.
In the case of Dizon v. Suntay, 47 SCRA 160, the Supreme Court had occasion to
define the phrase unlawfully deprived, to wit:chanrob1es virtual 1aw library
‘. . . it extends to all cases where there has been no valid transmission of ownership
including depositary or lessee who has sold the same. It is believed that the owner in
such a case is undoubtedly unlawfully deprived of his property and may recover the
same from a possessor in good faith.’
x x x
In the case at bar, the person who misrepresented himself to be the son of the
purported buyer, Rustico T. Consunji, paid for the two (2) vehicles using a check
whose amount has been altered from P101.00 to P101,000.00. There is here a case
of estafa. Plaintiff was unlawfully deprived of the vehicle by false pretenses executed
simultaneously with the commission of fraud (Art. 315 2(a) R.P.C.). Clearly, Citiwide
would not have parted with the two (2) vehicles were it not for the false
representation that the check issued in payment thereupon (sic) is in the amount of
P101,000.00, the actual value of the two (2) vehicles." 8
In short, said buyer never acquired title to the property; hence, the Court rejected the
claim of herein petitioner that at least, Armando Suarez had a voidable title to the
property.
His motion for reconsideration having been denied in the resolution of the respondent
Court of 12 December 1988, 9 petitioner filed this petition alleging therein that:
"A
THE HONORABLE COURT OF APPEALS ERRED IN APPLYING ARTICLE 559 OF
THE NEW CIVIL CODE TO THE INSTANT CASE DESPITE THE FACT THAT
PRIVATE RESPONDENT CITIWIDE MOTORS, INC. WAS NOT UNLAWFULLY
DEPRIVED OF THE SUBJECT CAR, AS IN FACT CITIWIDE VOLUNTARILY
PARTED WITH THE TITLE AND POSSESSION OR (sic) THE SAME IN FAVOR OF
ITS IMMEDIATE TRANSFEREE.
B
THE FACTUAL MILIEU OF THE INSTANT CASE FALLS WITHIN THE OPERATIVE
EFFECTS OF ARTICLES 1505 AND 1506 OF THE NEW CIVIL CODE
CONSIDERING THAT THE IMMEDIATE TRANSFEREE OF THE PRIVATE
RESPONDENT CITIWIDE MOTORS, INC., ACQUIRED A VOIDABLE TITLE OVER
THE CAR IN QUESTION WHICH TITLE WAS NOT DECLARED VOID BY A
COMPETENT COURT PRIOR TO THE ACQUISITION BY THE PETITIONER OF
THE SUBJECT CAR AND ALSO BECAUSE PRIVATE RESPONDENT, BY ITS
OWN CONDUCT, IS NOW PRECLUDED FROM ASSAILING THE TITLE AND
POSSESSION BY THE PETITIONER OF THE SAID CAR." 10
There is merit in the petition. The assailed decision must be reversed.

The petitioner successfully proved that he acquired the car in question from his
vendor in good faith and for valuable consideration. According to the trial court, the
private respondent’s evidence was not persuasive enough to establish that petitioner
had knowledge that the car was the object of a fraud and a swindle and that it did not
rebut or contradict petitioner’s evidence of acquisition for valuable consideration. The
respondent Court concedes to such findings but postulates that the issue here is not
whether petitioner acquired the vehicle in that concept but rather, whether private
respondent was unlawfully deprived of it so as to make Article 559 of the Civil Code
apply.
It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully
deprived thereof can recover the same from the present possessor even if the latter
acquired it in good faith and has, therefore, title thereto for under the first sentence of
Article 559, such manner of acquisition is equivalent to a title. There are three (3)
requisites to make possession of movable property equivalent to title, namely: (a) the
possession should be in good faith; (b) the owner voluntarily parted with the
possession of the thing; and (c) the possession is in the concept of owner. 11
Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it
cannot be said to have voluntarily parted with the possession thereof. This is the
justification for the exceptions found under the second sentence of Article 559 of the
Civil Code.
The basic issue then in this case is whether private respondent was unlawfully
deprived of the cars when it sold the same to Rustico Consunji, through a person
who claimed to be Jojo Consunji, allegedly the latter’s son, but who nevertheless
turned out to be Armando Suarez, on the faith of a Manager’s Check with a face
value of P101,000.00, dishonored for being altered, the correct amount being only
P101.00.
Under this factual milieu, the respondent Court was of the opinion, and thus held, that
private respondent was unlawfully deprived of the car by false pretenses.
We disagree. There was a perfected unconditional contract of sale between private
respondent and the original vendee. The former voluntarily caused the transfer of the
certificate of registration of the vehicle in the name of the first vendee — even if the
said vendee was represented by someone who used a fictitious name — and
likewise voluntarily delivered the cars and the certificate of registration to the
vendee’s alleged representative Title thereto was forthwith transferred to the vendee.
The subsequent dishonor of the check because of the alteration merely amounted to
a failure of consideration which does not render the contract of sale void, but merely
allows the prejudiced party to sue for specific performance or rescission of the
contract, and to prosecute the impostor for estafa under Article 315 of the Revised
Penal Code. This is the rule enunciated in EDCA Publishing and Distributing Corp. v.
Santos, 12 the facts of which do not materially and substantially differ from those
obtaining in the instant case. In said case, a person identifying himself as Professor
Jose Cruz, dean of the De la Salle College, placed an order by telephone with
petitioner for 406 books, payable upon delivery. Petitioner agreed, prepared the
corresponding invoice and delivered the books as ordered, for which Cruz issued a
personal check covering the purchase price. Two (2) days later, Cruz sold 120 books
to private respondent Leonor Santos who, after verifying the seller’s ownership from
the invoice the former had shown her, paid the purchase price of P1,700.00.
Petitioner became suspicious over a second order placed by Cruz even before his
first check had cleared, hence, it made inquiries with the De la Salle College. The
latter informed the petitioner that Cruz was not in its employ. Further verification
revealed that Cruz had no more account or deposit with the bank against which he
drew the check. Petitioner sought the assistance of the police which then set a trap
and arrested Cruz. Investigation disclosed his real name, Tomas de la Peña, and his
sale of 120 of the books to Leonor Santos. On the night of the arrest; the policemen
whose assistance the petitioner sought, forced their way into the store of Leonor’ and
her husband, threatened her with prosecution for the buying of stolen property,
seized the 120 books without a warrant and thereafter turned said books over to the
petitioner. The Santoses then sued for recovery of the books in the Municipal Trial
Court which decided in their favor; this decision was subsequently affirmed by the
Regional Trial Court and sustained by the Court of Appeals. Hence, the petitioner
came to this Court by way of a petition for review wherein it insists that it was
unlawfully deprived of the books because as the check bounced for lack of funds,
there was failure of consideration that nullified the contract of sale between it and the
impostor who then acquired no title over the books. We rejected said claim in this
"The contract of sale is consensual and is perfected once agreement is reached
between the parties on the subject matter and the consideration. According to the
Civil Code:chanrob1es virtual 1aw library
ART. 1475. The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price.
From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.chanrobles.com : virtual law
library
x x x moment it is delivered to him in any of the ways specified in articles 1497 to 1501, or
ART. 1477. The ownership of the thing sold shall be transferred to the vendee upon
the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the thing shall not pass to the
purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one quoted, that ownership
in the thing sold shall not pass to the buyer until full payment of the purchase price
only if there is a stipulation to that effect. Otherwise, the rule is that such ownership
shall pass from the vendor to the vendee upon the actual or constructive delivery of
the thing sold even if the purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to rescind the contract, or to
criminal prosecution in the case of bouncing checks. But absent the stipulation above
noted, delivery of the thing sold will effectively transfer ownership to the buyer who
can in turn transfer it to another." 13
In the early case of Chua Hai v. Hon. Kapunan, 14 one Roberto Soto purchased from
the Youngstown Hardware, owned by private respondent, corrugated galvanized iron
sheets and round iron bars for P6,137.70, in payment thereof, he issued a check
drawn against the Security Bank and Trust Co. without informing Ong Shu that he
(Soto) had no sufficient funds in said bank to answer for the same. In the meantime,
however, Soto sold the sheets to, among others, petitioner Chua Hai. In the criminal
case filed against Soto, upon motion of the offended party, the respondent Judge
ordered petitioner to return the sheets which were purchased from Soto. Petitioner’s
motion for reconsideration having been denied, he came to this Court alleging grave
abuse of discretion and excess of jurisdiction. In answer to the petition, it is claimed
that inter alia, even if the property was acquired in good faith, the owner who has
been unlawfully deprived thereof may recover it from the person in possession of the
same unless the property was acquired in good faith at a public sale. 15 Resolving
this specific issue, this Court ruled that Ong Shu was not illegally deprived of the
possession of the property
". . . It is not denied that Ong Shu delivered the sheets to Soto upon a perfected
contract of sale, and such delivery transferred title or ownership to the purchaser.
Says Art. 1496:chanrob1es virtual 1aw library
‘Art. 1496. The ownership of the thing sold is acquired by the vendee from the
in any other manner signifying an agreement that the possession is transferred from
the vendor to the vendee.’ (C.C.)
The failure of the buyer to make good the price does not, in law, cause the ownership
to revest in the seller until and unless the bilateral contract of sale is first rescinded or
resolved pursuant to Article 1191 of the new Civil Code.
And, assuming that the consent of Ong Shu to the sale in favor of Soto was obtained
by the latter through fraud or deceit, the contract was not thereby rendered void ab
initio, but only voidable by reason of the fraud, and Article 1390 expressly provides
that
‘ART. 1390. The following contracts are voidable or annullable, even though there
may have been no damage to the contracting parties:chanrob1es virtual 1aw library
(1) Those where one of the parties is incapable of giving consent to a contract;
(2) Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court.
They are susceptible of ratification.’
Agreeably to this provision, Article 1506 prescribes:
‘ARTICLE 1506. Where the seller of goods has a voidable title thereto, but his title
has not been avoided at the time of the sale, the buyer acquires a good title to the
goods, provided he buys them in good faith, for value, and without notice of the
seller’s defect of title.’ (C.C.)
Hence, until the contract of Ong Shu with Soto is set aside by a competent court
(assuming that the fraud is established to its satisfaction), the validity of appellant’s
claim to the property in question can not be disputed, and his right to the possession
thereof should be respected." 16
It was therefore erroneous for the respondent Court to declare that the private
respondent was illegally deprived of the car simply because the check in payment
therefor was subsequently dishonored; said Court also erred when it divested the
petitioner, a buyer in good faith who paid valuable consideration therefor, of his
possession thereof.

WHEREFORE, the challenged decision of the respondent Court of Appeals of 22

September 1988 and its Resolution of 12 December 1988 in C.A.-G.R. CV No. 05955
are hereby SET ASIDE and the Decision of the trial court of 3 September 1979 and
its Final Order of 26 June 1980 in Civil Case No. Q-24200 are hereby REINSTATED,
with costs against private respondent Citiwide Motors, Inc.

SO ORDERED.
G.R. No. L-30817 September 29, 1972
DOMINADOR DIZON, doing business under the firm name "Pawnshop of
Dominador Dizon", petitioner,
vs.
LOURDES G. SUNTAY, respondent.
FERNANDO, J.:p
In essence there is nothing novel in this petition for review of a decision of the Court
of Appeals affirming a lower court judgment sustaining the right of an owner of a
diamond ring, respondent Lourdes G. Suntay, as against the claim of petitioner
Dominador Dizon, who owns and operates a pawnshop. The diamond ring was
turned over to a certain Clarita R. Sison, for sale on commission, along with other
pieces of jewelry of respondent Suntay. It was then pledged to petitioner. Since what
was done was violative of the terms of the agency, there was an attempt on her part
to recover possession thereof from petitioner, who refused. She had to file an action
then for its recovery. She was successful, as noted above, both in the lower court
and thereafter in the Court of Appeals. She prevailed as she had in her favor the
protection accorded by Article 559 of the Civil Code.1 The matter was then elevated
to us by petitioner. Ordinarily, our discretion would have been exercised against
giving due course to such petition for review. The vigorous plea however, grounded
on estoppel, by his counsel, Atty. Andres T. Velarde, persuaded us to act otherwise.
After a careful perusal of the respective contentions of the parties, we fail to perceive
any sufficient justification for a departure from the literal language of the applicable
codal provision as uniformly interpreted by this Court in a number of decisions. The
invocation of estoppel is therefore unavailing. We affirm.
The statement of the case as well as the controlling facts may be found in the Court
of Appeals decision penned by Justice Perez. Thus: "Plaintiff is the owner of a three-
carat diamond ring valued at P5,500.00. On June 13, 1962, the plaintiff and Clarita R.
Sison entered into a transaction wherein the plaintiff's ring was delivered to Clarita R.
Sison for sale on commission. Upon receiving the ring, Clarita R. Sison executed and
delivered to the plaintiff the receipt ... . The plaintiff had already previously known
Clarita R. Sison as the latter is a close friend of the plaintiff's cousin and they had
frequently met each other at the place of the plaintiff's said cousin. In fact, about one
year before their transaction of June 13, 1962 took place, Clarita R. Sison received a
piece of jewelry from the plaintiff to be sold for P500.00, and when it was sold, Clarita
R. Sison gave the price to the plaintiff. After the lapse of a considerable time without
Clarita R. Sison having returned to the plaintiff the latter's ring, the plaintiff made
demands on Clarita R. Sison for the return of her ring but the latter could not comply
with the demands because, without the knowledge of the plaintiff, on June 15, 1962
or three days after the ring above-mentioned was received by Clarita R. Sison from
the plaintiff, said ring was pledged by Melia Sison, niece of the husband of Clarita R.
Sison, evidently in connivance with the latter, with the defendant's pawnshop for
P2,600.00 ... ."2 Then came this portion of the decision under review: "Since the
plaintiff insistently demanded from Clarita R. Sison the return of her ring, the latter
finally delivered to the former the pawnshop ticket ... which is the receipt of the
pledge with the defendant's pawnshop of the plaintiff's ring. When the plaintiff found
out that Clarita R. Sison pledged, she took steps to file a case of estafa against the
latter with the fiscal's office.
Subsequently thereafter, the plaintiff, through her lawyer, wrote a letter ... dated
September 22, 1962, to the defendant asking for the delivery to the plaintiff of her
ring pledged with defendant's pawnshop under pawnshop receipt serial-B No. 65606,
dated June 15, 1962 ... . Since the defendant refused to return the ring, the plaintiff
filed the present action with the Court of First Instance of Manila for the recovery of
said ring, with P500.00 as attorney's fees and costs. The plaintiff asked for the
provisional remedy of replevin by the delivery of the ring to her, upon her filing the
requisite bond, pending the final determination of the action. The lower court issued
the writ of replevin prayed for by plaintiff and the latter was able to take possession of
the ring during the pendency of the action upon her filing the requisite bond." 3 It was
then noted that the lower court rendered judgment declaring that plaintiff, now
respondent Suntay, had the right to the possession of the ring in question. Petitioner
Dizon, as defendant, sought to have the judgment reversed by the Court of Appeals.
It did him no good. The decision of May 19, 1969, now on review, affirmed the
decision of the lower court.
In the light of the facts as thus found by the Court of Appeals, well-nigh conclusive on
use, with the applicable law being what it is, this petition for review cannot prosper.
To repeat, the decision of the Court of Appeals stands.
1. There is a fairly recent restatement of the force and effect of the governing codal
norm in De Gracia v. Court of Appeals.4 Thus: "The controlling provision is Article 559
of the Civil Code. It reads thus: '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 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.' Respondent Angelina D. Guevara,
having been unlawfully deprived of the diamond ring in question, was entitled to
recover it from petitioner Consuelo S. de Garcia who was found in possession of the
same. The only exception the law allows is when there is acquisition in good faith of
the possessor at a public sale, in which case the owner cannot obtain its return
without reimbursing the price. As authoritatively interpreted in Cruz v. Pahati, the right
of the owner cannot be defeated even by proof that there was good faith in the
acquisition by the possessor. There is a reiteration of this principle in Aznar v.
Yapdiangco. Thus: '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 were 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." "5
2. It must have been a recognition of the compulsion exerted by the above
authoritative precedents that must have caused petitioner to invoke the principle of
estoppel. There is clearly a misapprehension. Such a contention is devoid of any
persuasive force.
Estoppel as known to the Rules of Court6 and prior to that to the Court of Civil
Procedure,7 has its roots in equity. Good faith is its basis.8 It is a response to the
demands of moral right and natural justice.9 For estoppel to exist though, it is
indispensable that there be a declaration, act or omission by the party who is sought
to be bound. Nor is this all. It is equally a requisite that he, who would claim the
benefits of such a principle, must have altered his position, having been so
intentionally and deliberately led to comport himself thus, by what was declared or
what was done or failed to be done. If thereafter a litigation arises, the former would
not be allowed to disown such act, declaration or omission. The principle comes into
full play. It may successfully be relied upon. A court is to see to it then that there is no
turning back on one's word or a repudiation of one's act. So it has been from our
earliest decisions. As Justice Mapa pointed out in the first case, a 1905
decision, Rodriguez v. Martinez, 10 a party should not be permitted "to go against his
own acts to the prejudice of [another]. Such a holding would be contrary to the most
rudimentary principles of justice and law." 11 He is not, in the language of Justice
Torres, in Irlanda v. Pitargue, 12 promulgated in 1912, "allowed to gainsay [his] own
acts or deny rights which [he had] previously recognized." 13Some of the later cases
are to the effect that an unqualified and unconditional acceptance of an agreement
forecloses a claim for interest not therein provided. 14 Equally so the circumstance
that about a month after the date of the conveyance, one of the parties informed the
other of his being a minor, according to Chief Justice Paras, "is of no moment,
because [the former's] previous misrepresentation had already estopped him from
disavowing the contract. 15 It is easily understandable why, under the circumstances
disclosed, estoppel is a frail reed to hang on to. There was clearly the absence of an
act or omission, as a result of which a position had been assumed by petitioner, who
if such elements were not lacking, could not thereafter in law be prejudiced by his
belief in what had been misrepresented to him. 16 As was put by Justice Labrador, "a
person claimed to be estopped must have knowledge of the fact that his voluntary
acts would deprive him of some rights because said voluntary acts are inconsistent
with said rights." 17 To recapitulate, there is this pronouncement not so long ago, from
the pen of Justice Makalintal, who reaffirmed that estoppel "has its origin in equity
and, being based on moral right and natural justice, finds applicability wherever and
whenever the special circumstances of a case so demand." 18
How then can petitioner in all seriousness assert that his appeal finds support in the
doctrine of estoppel? Neither the promptings of equity nor the mandates of moral
right and natural justice come to his rescue. He is engaged in a business where
presumably ordinary prudence would manifest itself to ascertain whether or not an
individual who is offering a jewelry by way of a pledge is entitled to do so. If no such
care be taken, perhaps because of the difficulty of resisting opportunity for profit, he
should be the last to complain if thereafter the right of the true owner of such jewelry
should be recognized. The law for this sound reason accords the latter protection. So
it has always been since Varela v.
Finnick, 19 a 1907 decision. According to Justice Torres: "In the present case not only
has the ownership and the origin of the jewels misappropriated been unquestionably
proven but also that the accused, acting fraudulently and in bad faith, disposed of
them and pledged them contrary to agreement, with no right of ownership, and to the
prejudice of the injured party, who was thereby illegally deprived of said jewels;
therefore, in accordance with the provisions of article 464, the owner has an absolute
right to recover the jewels from the possession of whosoever holds
them, ... ." 20 There have been many other decisions to the same effect since then. At
least nine may be cited. 21 Nor could any other outcome be expected, considering the
civil code provisions both in the former Spanish legislation 22 and in the present
Code. 23 Petitioner ought to have been on his guard before accepting the pledge in
question. Evidently there was no such precaution availed of. He therefore, has only
himself to blame for the fix he is now in. It would be to stretch the concept of estoppel
to the breaking point if his contention were to prevail.
 Moreover, there should have been a realization on his part that courts are not likely
to be impressed with a cry of distress emanating from one who is in a business
authorized to impose a higher rate of interest precisely due to the greater risk
assumed by him. A predicament of this nature then does not suffice to call for less
than undeviating adherence to the literal terms of a codal provision. Moreover, while
the activity he is engaged in is no doubt legal, it is not to be lost sight of that it thrives
on taking advantage of the necessities precisely of that element of our population
whose lives are blighted by extreme poverty. From whatever angle the question is
viewed then, estoppel certainly cannot be justly invoked.
WHEREFORE, the decision of the Court of Appeals of May 19, 1969 is affirmed, with
costs against petitioner.
Separate Opinions
TEEHANKEE, J., concurring:
I concur in the main opinion of Mr. Justice Fernando, tracing and confirming the long
settled and uniform jurisprudence since 1905 based on the express statutory
provision of article 559 of our Civil Code (formerly article 464 of the old Civil Code)
that the owner "who has lost any movable or has been unlawfully deprived thereof
may recover it from the person in possession of the same," the only exception
expressly provided in the codal article being that "if the possessor of a movable lost
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."1
Senator Tolentino's submittal in his commentaries on the Civil Code "that the better
view is to consider 'unlawfully deprived' as limited to unlawful taking, such as theft or
robbery, and should not include disposition through abuse of confidence. Thus, if the
owner has entrusted personal property to a bailee, such as for transportation, pledge,
loan or deposit, without transmitting ownership, and the latter alienates it to a third
person who acquires it in good faith, the owner cannot recover it from such third
person, "is, as he himself admits, based on the express provision of the French Code
which allows the true owner of personal property to recover it from the possessor in
good faith without reimbursement only "if it has been stolen from him." He concedes
likewise that "our Code, following the Spanish code, uses broader language than that
used in the French code" — since our Code provides that the owner who has been
"unlawfully deprived" of personal property may recover it from the possessor without
reimbursement, with the sole exception where the possessor acquired the article
in good faith at a public sale.2
He thus concedes finally that "(T)here are writers who believe that the phrase
'unlawfully deprived' in our Code does not have the same meaning as stolen in the
French code; that it is used in the general sense, and is not used in the specific
sense of deprivation by robbery or theft. Under this view, it extends to all cases
where there has been no valid transmission of ownership, including the case where
the proprietor has entrusted the thing to a borrower, depositary, or lessee who has
sold the same. It is believed that the owner in such case is undoubtedly unlawfully
deprived of his property, and may recover the same from a possessor in good faith"
(citing De Buen: 2-II Colin & Capitant 1008; 1 Bonet
234)3 and cites the long unbroken line of decisions of the Court of Appeals and of this
Court upholding the import of the broader language of the codal article in question.
Indeed, if our legislature had intended to narrow the scope of the term "unlawfully
deprived" to "stolen" as advocated by Tolentino, it certainly would have adopted and
used such a narrower term rather than the broad language of article 464 of the old
Spanish Civil Code with its long-established and accepted meaning in accordance
with our jurisprudence.
Petitioner's contentions at bar had long been disposed of in the Court's 1911 decision
of Arenas vs. Raymundo,4 per Mr. Justice Florentino Torres, reiterating the doctrine
of the earlier cases and holding that
Even supposing that the defendant Raymundo had acted in good
faith in accepting the pledge of the jewelry in litigation, even then he
would not be entitled to retain it until the owner thereof reimburse
him for the amount loaned to the embezzler, since the said owner of
the jewelry, the plaintiff, did not make any contract with the pledgee,
that would obligate him to pay the amount loaned to Perello, and the
trial record does not disclose any evidence, even circumstantial, that
the plaintiff Arenas consented to or had knowledge of the pledging of
her jewelry in the pawnshop of the defendant.
For this reason, and because Concepcion Perello was not the
legitimate owner of the jewelry which she pledged to the defendant
Raymundo, for a certain sum that she received from the latter as a
loan, the contract of pledge entered into by both, is of course, null
and void, and, consequently the jewelry so pawned can not serve as
security for the payment of the sum loaned, nor can the latter be
collected out of the value of the said jewelry.
Article 1857 of the Civil Code prescribes as one of the essential
requisites of the contracts of pledge and of mortgage, that the thing
pledged or mortgaged must belong to the person who pledges or
mortgages it. This essential requisite for the contract of pledge
between Perello and the defendant being absent as the former was
not the owner of the jewelry given in pledge, the contract is as devoid
of value and force as if it had not been made, and as it was executed
with marked violation of an express provision of the law, it can not
confer upon the defendant any rights in the pledged jewelry, nor
impose any obligation toward him on the part of the owner thereof,
since the latter was deprived of her possession by means of the
illegal pledging of the said jewelry, a criminal act.
Between the supposed good faith of the defendant Raymundo and
the undisputed good faith of the plaintiff Arenas, the owner of the
jewelry, neither law nor justice permit that the latter, after being the
victim of embezzlement, should have to choose one of the two
extremes of a dilemma, both of which, without legal ground or reason,
are injurious and prejudicial to her interests and rights, that is, she
must either lose her jewelry or pay a large sum received by the
embezzler as a loan from the defendant, when the plaintiff Arenas is
not related to the latter by any legal or contractual bond out of which
legal obligations arise.
xxx xxx xxx
The business of pawnshops, in exchange for the high and onerous
interest which constitutes its enormous profits, is always exposed to
the contingency of receiving in pledge or security for the loans,
jewels and other articles that have been robbed, stolen, or
embezzled from their legitimate owners; and as the owner of the
pawnshop accepts the pledging of jewelry from the first bearer who
offers the same and asks for money on it, without assuring himself
whether such bearer is or is not the owner thereof, he can not, by
such procedure, expect from the law better and more preferential
protection than the owner of the jewels or other articles, who was
deprived thereof by means of a crime and is entitled to be excused
by the courts.
Antonio Matute, the owner of another pawnshop, being convinced
that he was wrong, refrained from appealing from the judgment
wherein he was sentenced to return, without redemption, to the
plaintiffs, another jewel of great value which had been pledged to
him by the same Perello. He undoubtedly had in mind some of the
previous decisions of this court, one of which was against himself.
By the same token, the contention that the owner may recover the lost article of
which he has been unlawfully deprived without reimbursement of the sum received
by the embezzler from the pawnshop only after a criminal conviction of the embezzler,
is to add a requirement that is not in the codal article and to unduly prejudice the
victim of embezzlement, as pointed out by the Court in Arenas, supra.
The civil action that the owner must resort to for the recovery of his personal property
of which he has been unlawfully deprived as against the possessor (where the latter
refuses to honor the claim, presumably on same valid doubts as to the genuineness
of the claim) gives the possessor every adequate protection and opportunity to
contest the owner's claim of recovery. The owner must therein establish by
competent evidence his lawful claim, and show to the court's satisfaction his lawful
ownership of the article claimed and that he had been unlawfully deprived thereof.
I therefore find no reason to set aside the long settled interpretation given by our
jurisprudence to article 559 (formerly article 464) of our Civil Code in accordance with
its clear and unambiguous language, as reaffirmed in the case at bar.
G.R. No. L-50264 October 21, 1991
IGNACIO WONG, petitioner,
vs.
HON. LUCAS D. CARPIO, as Presiding Judge, Court of First Instance of Davao
del Sur, Branch V and MANUEL MERCADO, respondents.
This is a petition for review on certiorari, certified to this Court by the Court of
Appeals as it involves purely question of law, seeking the annulment of the
September 29, 1978 decision of the then Court of First Instance ** of Davao del Sur,
Branch V, in Civil Case No. 1258 which reversed the February 20, 1978 decision of
the Municipal Court of Sta. Maria, *** Davao del Sur in an action for Forcible Entry
(Civil Case No. 13) ordering the dismissal of the complaint as well as the
counterclaim.
The undisputed facts of this case, as found by both the trial court and the then Court
of First Instance of Davao del Sur, are as follows:
On the basis of the admission of parties in their respective pleadings, the oral
testimonies of all witnesses for both plaintiff and defendants and the
documentary evidence offered and admitted this Court finds that plaintiff
Manuel Mercado acquired his rights to possess the land in litigation,
particularly lot 3 (LRC) Pcs-295, (situated at Colonga, Sta. Maria, Davao del
Sur) and which is particularly described and embraced in Transfer Certificate
of title No. (T-4244) T-972 from William Giger by virtue of a deed of sale with
right to repurchase which was executed in 1972 for a consideration of
P3,500.00 (testimony of plaintiff, T.S.N., p. 3, hearing of January 7, 1977).
Then, in 1973, William Giger again asked an additional amount of P2,500.00
from plaintiff and so he required William Giger to sign a new deed of Pacto
de Retro Sale (Exhibit "A") on November 5,1973 at Davao City before Notary
Public Gregorio C. Batiller (T.S.N., p. 5, hearing of January 7, 1977). In 1972,
plaintiff began harvesting only the coconut fruits and he paid the taxes on the
land (Exhibits B to E) for Mr. Giger. He went periodically to the land to make
copra but he never placed any person on the land in litigation to watch it.
Neither did he reside on the land as he is a businessman and storekeeper by
occupation and resides at Lower Sta. Maria, Davao del Sur while the land in
litigation is at Colongan, Sta. Maria. Neither did he put any sign or hut to
show that he is in actual possession (p. 8, T.S.N., p. 7, hearing of January 14,
1978). He knew defendants' laborers were in the land in suit as early as
August, 1976 and that they have a hut there but he did not do anything to
stop them. Instead plaintiff was happy that there were people and a hut on
the land in suit (p. 14, T.S.N., hearing of January 14, 1978).
Before July, 1976, defendant Ignacio Wong went to the land in litigation to
find out if there were other people residing there or claiming it besides the
owner and he found none. So, in July, 1976, defendant Ignacio Wong bought
the parcel of land in litigation from William Giger and his wife Cecilia
Valenzuela (Exhibit 5). After the execution of Exhibit 5, defendant Ignacio
Wong asked for the delivery of the title to him and so he has in his
possession TCT No. (T-4244) T-974 (Exhibit 6) in the name of William Giger.
Mr. Wong declared the land in suit for taxation purposes in his name (Exhibit
7). He tried to register the pacto de retro sale with the Register of Deeds by
paying the registration fee (Exhibit 8) but due to some technicalities,
the pacto de retro sale could not be registered. The defendant Wong placed
laborers on the land in suit, built a small farm house after making some
clearings and fenced the boundaries. He also placed signboards (T.S.N., pp.
14-15, hearing of September 15, 1977). On September 27, 1976, plaintiff
Manuel Mercado again went to the land in suit to make copras. That was the
time the matter was brought to the attention of the police of Sta. Maria,
Davao del Sur and the incident entered in the police blotter (Exhibit 11). Then
on November 18, 1976, defendant Wong ordered the hooking of the
coconuts from the land in litigation and nobody disturbed him. But on
November 29, 1976, defendant received a copy of plaintiff's complaint for
forcible entry with summons to answer which is the case now before the
Court. During the pendency of this instant complaint for forcible entry,
spouses William Giger and Cecilia Valenzuela filed a case for reformation of
instrument with the Court of First Instance of Digos, Davao del Sur against
plaintiff Mercado (Exhibit 4). The case pertains to Exhibit "A" of plaintiff. (pp.
1-3, CA Decision, pp. 82-84, Rollo).
On the basis of the aforestated undisputed facts, the Municipal Court of Sta. Maria,
Davao del Sur in its February 20, 1978 Decision found that herein petitioner
(defendant Ignacio Wong) had prior, actual and continuous physical possession of
the disputed property and dismissed both the complaint and the counter-claim.
On appeal, the then Court of First Instance of Davao del Sur, in its September 29,
1978 Decision drew a completely different conclusion from the same set of facts and
ruled in favor of herein private respondent (plaintiff Manuel Mercado). The decretal
portion of the said decision, reads:
 WHEREFORE, the Court finds the plaintiff to have taken possession of the
property earlier in point of time and defendant is an intruder and must, as he
is hereby ordered to return, the possession of the land in question for the
plaintiff, paying a monthly rental of P400.00 from August, 1976, till the
property is returned with costs against the defendant. Judgment is reversed.
Petitioner filed the instant petition with the Court of Appeals. But the Court of Appeals,
in its March 1, 1979 Resolution **** found that the only issue is a pure question of law
— the correctness of the conclusion drawn from the undisputed facts and certified the
case to this Court.
In its April 4, 1979 Resolution, the Second Division of this Court docketed the case in
this Court and considered it submitted for decision.
Petitioner alleged two (2) errors committed by respondent judge, to wit:
A) THE CONCLUSION DRAWN BY RESPONDENT JUDGE THAT PETITIONER IS
AN INTRUDER IS WITHOUT FACTUAL AND LEGAL BASIS FOR PURPOSES OF A
FORCIBLE ENTRY.
B) THE CONCLUSION DRAWN BY RESPONDENT JUDGE THAT PETITIONER
MUST PAY A MONTHLY RENTAL OF P400.00 FROM AUGUST, 1976 TILL THE
PROPERTY IS RETURNED HAS NO LEGAL AND FACTUAL BASIS.
The petition is without merit.
Petitioner, in claiming that the private respondent has not established prior
possession, argues that private respondent's periodic visit to the lot to gather
coconuts may have been consented to and allowed or tolerated by the owner thereof
for the purposes of paying an obligation that may be due to the person gathering said
nuts and that a person who enters a property to gather coconut fruits and convert the
same to copras may only be a hired laborer who enters the premises every harvest
season to comply with the contract of labor with the true owner of the property.
The argument is untenable.
It should be stressed that "possession is acquired by the material occupation of a
thing or the exercise of a right, or by the fact that it is subject to the action of our will,
or by the proper acts and legal formalities for acquiring such right." (Art. 531, Civil
Code; Rizal Cement Co., Inc. vs. Villareal, 135 SCRA 15 [1985]); and that the
execution of a sale thru a public instrument shall be equivalent to the delivery of the
thing, unless there is stipulation to the contrary . . . . If, however, notwithstanding the
execution of the instrument, the purchaser cannot have the enjoyment and material
tenancy of the thing and make use of it herself, because such tenancy and
enjoyment are opposed by another, then delivery has not been effected. (Paras, Civil
Code of the Philippines, Vol. II, 1989 Ed., p. 400).
Applying the above pronouncements on the instant case, it is clear that possession
passed from vendor William Giger to private respondent Manuel Mercado by virtue of
the first sale a retro (Exhibit A), and accordingly, the later sale a retro (Exhibit 5) in
favor of petitioner failed to pass the possession of the property because there is an
impediment — the possession exercised by private respondent. Possession as a fact
cannot be recognized at the same time in two different personalities except in the
cases of co-possession. Should a question arise regarding the fact of possession,
the present possessor shall be preferred; if there are two possessions, the one longer
in possession, if the dates of possession are the same, the one who presents a title;
and if these conditions are equal, the thing shall be placed in judicial deposit pending
determination of its possession or ownership through proper proceedings (Art. 538,
Civil Code).
As to petitioner's query that "Is the entry of petitioner to the property characterized by
force, intimidation, threat, strategy, or stealth in order to show that private respondent
has had possession so that the case is within the jurisdiction of the inferior court?" (p.
15, Petition; p. 16, Rollo). The same is answered in the affirmative.
The act of entering the property and excluding the lawful possessor therefrom
necessarily implies the exertion of force over the property, and this is all that is
necessary. Under the rule, entering upon the premises by strategy or stealth is
equally as obnoxious as entering by force. The foundation of the action is really the
forcible exclusion of the original possessor by a person who has entered without right.
The words "by force, intimidation, threat, strategy, or stealth" include every situation
or condition under which one person can wrongfully enter upon real property and
exclude another who has had prior possession therefrom. If a trespasser enters upon
land in open daylight, under the very eyes of person already clothed with lawful
possession, but without the consent of the latter, and there plants himself and
excludes such prior possessor from the property, the action of forcible entry and
detainer can unquestionably be maintained, even though no force is used by the
trespasser other than such as is necessarily implied from the mere acts of planting
himself on the ground and excluding the other party. (Tolentino, Civil Code of the
Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon vs. Gaurana, 149 SCRA 342
[1987]).
Anent the award of rentals in favor of private respondent, the same is in order.
Petitioner's argument that there is no legal or factual basis for the payment of
monthly rentals because bad faith on the part of petitioner was never proved
deserves no merit.
WHEREFORE, with the modification that the computation of the monthly rental
should start from December, 1976 instead of August, 1976, the September 29, 1978
decision of respondent judge is Affirmed in all other respects, with costs against
petitioner.
SO ORDERED.

It should be noted that possession acquired in good faith does not lose this character
except in the case and from the moment facts exist which show that the possessor is
not unaware that he possesses the thing improperly or wrongfully. (Art. 528, Civil
Code).

Possession in good faith ceases from the moment defects in the title are made
known to the possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the fact from which it can
be deduced that the possessor has knowledge of the defects of his title or mode of
acquisition, it must be considered sufficient to show bad faith. (Tolentino, Civil Code
of the Philippines, Vol. II, p. 226). Such interruption takes place upon service of
summons (Manotok Realty vs. Judge Tecson, 164 SCRA 587 [1988] citing Mindanao
Academy, Inc. v. Yap (13 SCRA 190 [1965]). In the latter case, this Court held:

. . . Although the bad faith of one party neutralizes that of the other and
hence as between themselves their rights would be as if both of them had
acted in good faith at the time of the transaction, this legal fiction of Yap's
good faith ceased when the complaint against him was filed, and
consequently the court's declaration of liability for the rents thereafter is
correct and proper. A possessor in good faith is entitled to the fruits only so
long as his possession is not legally interrupted, and such interruption takes
place upon service of judicial summons (Arts. 544 and 1123, Civil Code).

A perusal of the records of the case shows that petitioner received private
respondent's complaint for forcible entry with summons on November 29, 1976 (Rollo,
p. 46). His good faith therefore ceased on November 29,1976. Accordingly, the
computation of the payment of monthly rental should start from December, 1976,
instead of August, 1976.
G.R. No. 82680 August 15, 1994
NICANOR SOMODIO, petitioner,
vs.
COURT OF APPEALS, EBENECER PURISIMA, and FELOMINO
AYCO, respondents.
QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
to reverse and set aside the Decision dated September 29, 1987 and the Resolution
dated February 2, 1988 of the Court of Appeals in CA-G.R. SP No. 11602.
I
On October 21, 1974, Jose Ortigas executed an instrument designated as a Transfer
of Rights, conveying to Wilfredo Mabugat the possession of a residential lot situated
at Rajah Muda, Bula, General Santos City and described in the said instrument as:
Lot No. (Unnumbered), bounded on the North by Temporary Road,
on the South by Customs Zone (Sarangani Bay), on the East by
Public Land, and on the West by Public Land.
Nicanor Somodio, herein petitioner, contributed one-half of the purchase price. On
October 22, 1974, Mabugat executed an Affidavit of Trust expressly recognizing the
right of petitioner over one-half undivided portion of the lot. Later, petitioner
discovered in the District Land Office that the lot was numbered "6328-X, Csd 2281-
D." Thereafter, petitioner and Mabugat partitioned the property into two portions, with
petitioner taking the western part. Immediately after the partition, petitioner took
possession of his portion and planted thereon ipil-ipil trees, coconut trees and other
fruit-bearing trees.
In 1976, petitioner began construction of a structure with a dimension of 22-by-18
feet on his lot. His employment, however, took him to Kidapawan, North Cotabato,
and he left the unfinished structure to the case of his uncle. He would visit the
property every three months or on weekened when he had time.
Sometime in October 1977, petitioner allowed respondent Felomino Ayco, to transfer
his hut to petitioner's lot. About six years later, petitioner demanded that Ayco vacate
the premises but such demand proved futile. Hence, on August 23, 1983, petitioner
filed an action for unlawful detainer with damages against respondent Ayco before
the Municipal Trial Court, Branch I, General Santos, docketed as Civil Case No.
2032-II.
Meanwhile, on June 26, 1983, respondent Ebenecer Purisima entered the land and
constructed a house thereon. Four days later, petitioner filed against respondent
Purisima a complaint for forcible entry before the same court docketed as Civil Case
No. 2013-I. Said case was later consolidated with Civil Case No. 2032-II.
In his answer, respondent Purisima averred that the lot was a portion of the land
subject of his application for miscellaneous sales patent with the Bureau of Lands.
Purisima described the lot in question as:
Lot No. 6328-Y, CSD-2281-D, Bula, General Santos,
Cotabato. Bounded on the North by 6328-X; on the South by
Sarangani Bay; on the East by a Municipal Road; and on the West
by Lot No. 6328-W, containing an area of 1,095 square meters and
covered by Tax Declaration No. 9647 (Rollo, p. 36; Emphasis
supplied).
Respondent Purisima contended that his father, a geodetic engineer, had surveyed
the parcel of land comprising of Lots Nos. 6427 and 6328 for the Small Farmers
Fishpond Association, Inc. in February 1958, and that his father's survey plan was
approved by the Director of Lands in 1960. Respondent Ayco, on the other hand, did
not present any evidence but merely anchored his right to possess the property on
the evidence of Purisima.
On April 30, 1986, the trial court rendered a decision finding that respondent Purisima
built his house "almost on the spot where Somodio's unfinished house" stood "thru
stealth and strategy," not knowing that the house was built on Lot No. 6328-X and not
on Lot No. 6328-Y, the lot said respondent was claiming (Rollo, p. 43). The court
went on to state that:
. . . . He (private respondent Purisima) was a frequent visitor in Rajah
Muda and had sometimes stayed with Mrs. Maturan in Judge
Purisima's house on the adjoining lots, and could not have remained
unaware of the possession of Somodio. He must have depended on
the thought that it was his father who made the subdivision survey
and had fenced an area which he had claimed. He did not exactly
verify that the area fenced by his father had an area of only 1,095
 square meters, which did not include the are Lot No. 6328-X could
eventually be standing on his property, for Lot No. 6328-X is not
claimed by him and has not been applied for even by his father. His
father has been abroad and has not taken steps to apply for Lot No.
6328-X. This lot is not declared for taxation purposes in the name of
any claimant-applicant. Unless and until there would be an
administrative proceedings and the title ultimately issued in favor of
an applicant, the possession of the actual claimant and occupant has
to be respected and maintained in the interest of public order . . .
(Rollo, pp. 43-44).
The Municipal Trial Court further held that petitioner was the actual possessor of Lot
No. 6328-X. The court did not believe respondent Ayco's claim that the administratrix
of the estate of respondent Purisima's father authorized him to build a hut on Lot No.
6328-X in 1976. At any rate, the court said that respondent Ayco was willing to
vacate the premises provided he be given financial assistance to do so (Rollo, pp.
43-44).
Nothing that the ocular inspection of the area showed that the houses of respondents
Purisima and Ayco were "inside Lot No. 6328-X" and not on Lot No. 6328-Y, the
Municipal Trial Court held that the case became one which entailed mere removal of
the houses from the lot in question. Accordingly, the court ordered private
respondents to remove their respective houses, to deliver the land to petitioner, and
to pay attorney's fees and litigation expenses.
On appeal, the Regional Trial Court, Branch 22, General Santos City, affirmed in
toto the decision of the Municipal Trial Court. Respondent then elevated the cases on
a petition for review to the Court of Appeals, which, in its decision dated September
27, 1987, set aside the decisions of the two trial courts and ordered the dismissal of
the two complaints filed by petitioner.
The Court of Appeals held that herein petitioner had not "clearly and conclusively
established physical, prior possession over Lot No. 6328-X."
Petitioner's motion for the reconsideration of the decision of the Court of Appeals
having been denied, he filed the instant petition for review on certiorari.
We grant the petition.
II
The procedural issue raised by private respondents should first be resolved. The
issue is whether the instant petition is proper considering that petitioner "merely
touch(es) upon questions of fact which had been carefully considered" by the Court
of Appeals (Rollo, p. 92). As a general rule, the findings of fact of the Court of
Appeals are binding on this Court. This rule, however, is not without exceptions, one
of which is when the factual findings of the Court of Appeals and the trial court are
contrary to each other. In such a case, this Court may scrutinize the evidence on
record in order to arrive at the correct findings based on the record (Valenzuela v.
Court of Appeals, 191 SCRA 1 [1990]; Roman Catholic Bishop of Malolos, Inc. v.
Intermediate Appellate Court, 191 SCRA 411 [1990]).
Upon a review of the records, we are convinced that petitioner indeed enjoyed priority
of possession over Lot No. 6328-X, notwithstanding respondent Purisima's claim to
the contrary.
In ejectment cases, the only issue for resolution is who is entitled to the physical or
material possession of the property involved, independent of any claim of ownership
set forth by any of the party-litigants. Anyone of them who can prove prior
possession de facto may recover such possession even from the owner himself. This
rule holds true regardless of the character of a party's possession, provided, that he
has in his favor priority of time which entitles him to stay on the property until he is
lawfully ejected by a person having a better right by either accion publiciana or accion
reivindicatoria (De Luna v. Court of Appeals, 212 SCRA 276 [1992]).
Petitioner took possession of the property sometime in 1974 when he planted the
property to coconut trees, ipil- ipil trees and fruit trees. In 1976, he started the
construction of a building on the property. It is immaterial that the building was
unfinished and that he left for Kidapawan for employment reasons and visited the
property only intermittently. Possession in the eyes of the law does not mean that a
man has to have his feet on every square meter of ground before it can be said that
he is in possession (Ramos v. Director of Lands, 39 Phil. 175 [1918]). It is sufficient
that petitioner was able to subject the property to the action of his will.
Article 531 of the Civil Code of the Philippines provides:
Possession is acquired by the material occupation of a thing or the
exercise of a right, or by the fact that it is subject to the action of our
 will, or by the proper acts and legal formalities established for of respondents Purisima and Ayco, five other houses had been built on Lot No. 6328-
acquiring such right. X.

Even if the Court of Appeals is correct in its finding that petitioner started introducing Petitioner's prior possession over the property, however, is not synonymous with his
improvements on the land only in 1981, he still enjoyed priority of possession right of ownership over the same. As earlier stated, resolution of the issue of
because respondent Purisima entered the premises only in 1983. possession is far from the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual title to an estate (German
It should be emphasized that the Court of Appeals noted that none of the parties had Management & Services, Inc. v. Court of Appeals, 177 SCRA 495 [1989]; Manuel v.
produced tax declarations or applications as public land claimants. As such, what Court of Appeals, 199 SCRA 603 [1991].
should have been scrutinized is who between the claimants had priority of
possession. WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE
and that of the trial courts REINSTATED. Costs against private respondents.
Moreover, neither is the fact that respondent Purisima's father surveyed the property
of help to his cause. As the Court of Appeals found, respondent Purisima's father SO ORDERED.
surveyed the land for the Small Farmers Fishpond Association, Inc., not for himself.
Although respondent Purisima now claims that Lot No. 6328-X was in payment of his
fee for the services of his father and that he caused the construction of a perimeter
wall in the area, these facts do not mean that respondent Purisima himself had prior
possession. He did not present any proof that his father had authorized him to enter
the land as his successor-in-interest. Neither did he present proof that between 1958,
when his father allegedly took possession of the land, and 1983, when said
respondent himself entered the land, his father ever exercised whatever right of
possession he should have over the property. Under these circumstances, priority in
time should be the pivotal cog in resolving the issue of possession.

The Court of Appeals opined that petitioner had not properly identified the lot he had
occupied. The matter of identification of the land, however, had been resolved by
respondent Purisima's admission in his pleadings, as well as by two ocular
inspections.

In his answer to the complaint, respondent Purisima claimed possession over Lot No.
6328-Y, while petitioner identified the lot adjacent to it, Lot
NO. 6328-X, as the area where private respondents built their houses. That these
two lots are distinct from one another was resolved by the ocular inspection
conducted by a Senior Geodetic Engineer of the Office of the City Engineer, who
found that "south of lot 6328-H across a 10 meter wide road is lot 6328-Y and from
thence to the south is lot 6328-X." On June 13, 1985, the Municipal Trial Court judge
himself went to the premises in question and discovered that aside from the houses
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.
CRUZ, J.:
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 first 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 verification 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 Peña 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, finally surrendered the
books to the private respondents. 10 As previously stated, the petitioner was
successively rebuffed 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 first 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 first
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 first
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
financial 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:
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 ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof.
Art. 1478. The parties may stipulate that ownership in the thing shall not pass
to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one quoted, that ownership
in the thing sold shall not pass to the buyer until full payment of the purchase only if
there is a stipulation to that effect. Otherwise, the rule is that such ownership shall
pass from the vendor to the vendee upon the actual or constructive delivery of the
thing sold even if the purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to rescind the contract, or to
criminal prosecution in the case of bouncing checks. But absent the stipulation above
noted, delivery of the thing sold will effectively transfer ownership to the buyer who
can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang,11 the plaintiff 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
plaintiff 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.
In Tagatac v. Jimenez,13 the plaintiff 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 plaintiff 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 plaintiff-appellant Trinidad C. Tagatac has
been unlawfully deprived of her car. At first 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, plaintiff-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 ratification or annulment. If the contract is ratified, 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 ratification, the contract of sale remains valid and binding.
When plaintiff-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 reflect 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
first 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.
Surely, the private respondent did not have to go beyond that invoice to satisfy
herself that the books being offered 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.1âwphi1 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 Peña, 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.
G.R. No. L-20264 January 30, 1971
CONSUELO S. DE GARCIA and ANASTACIO GARCIA, petitioners,
vs.
HON. COURT OF APPEALS, ANGELINA D. GUEVARA and JUAN B.
GUEVARA, respondents.
FERNANDO, J.:
This petition for certiorari to review a decision of respondent Court of Appeals was
given due course because it was therein vigorously asserted that legal questions of
gravity and of moment, there being allegations of an unwarranted departure from and
a patent misreading of applicable and controlling decisions, called for determination
by this Tribunal. The brief for petitioners-spouses, however, failed to substantiate
such imputed failings of respondent Court. The performance did not live up to the
promise. On the basis of the facts as duly found by respondent Court, which we are
not at liberty to disregard, and the governing legal provisions, there is no basis for
reversal. We affirm.
The nature of the case presented before the lower court by private respondent
Angelina D. Guevara, assisted by her spouse, Juan B. Guevara, as plaintiffs, was
noted in the decision of respondent Court of Appeals thus: "Plaintiff seeks recovery of
`one (1) lady's diamond ring 18 cts. white gold mounting, with one (1) 2.05 cts.
diamond-solitaire, and four (4) brills 0.10 cts. total weight' which she bought on
October 27, 1947 from R. Rebullida, Inc."1 Then came a summary of now respondent
Guevara of her evidence: "Plaintiff's evidence tends to show that around October 11,
1953 plaintiff while talking to Consuelo S. de Garcia, owner of La Bulakeña
restaurant recognized her ring in the finger of Mrs. Garcia and inquired where she
bought it, which the defendant answered from her comadre. Plaintiff explained that
that ring was stolen from her house in February, 1952. Defendant handed the ring to
plaintiff and it fitted her finger. Two or three days later, at the request of plaintiff,
plaintiff, her husband Lt. Col. Juan Guevara, Lt. Cementina of Pasay PD, defendant
and her attorney proceeded to the store of Mr. Rebullida to whom they showed the
ring in question. Mr. Rebullida a examined the ring with the aid of high power lens
and after consulting the stock card thereon, concluded that it was the very ring that
plaintiff bought from him in 1947. The ring was returned to defendant who despite a
written request therefor failed to deliver the ring to plaintiff. Hence, this case. Later on
when the sheriff tried to serve the writ of seizure (replevin), defendant refused to
deliver the ring which had been examined by Mr. Rebullida, claiming it was lost."2
How the defendant, Consuelo S. de Garcia, the present petitioner before us, along
with her husband Anastacio Garcia, sought to meet plaintiff's claim was narrated thus:
"On the other hand, defendant denied having made any admission before plaintiff or
Mr. Rebullida or the sheriff. Her evidence tends to show that the ring (Exhibit 1) was
purchased by her from Mrs. Miranda who got it from Miss Angelita Hinahon who in
turn got it from the owner, Aling Petring, who was boarding in her house; that the ring
she bought could be similar to, but not the same ring plaintiff purchased from Mr.
Rebullida which was stolen; that according to a pawn-shop owner the big diamond on
Exhibit 1 was before the trial never dismantled. When dismantled, defendant's
diamond was found to weigh 2.57 cts."3
Plaintiff lost in the lower court. She elevated the matter to respondent Court of
Appeals with the judgment of the lower court being reversed. It is this decision now
under review.
These are the facts as found by respondent Court of Appeals: "That the ring brought
by the parties for examination by Rafael Rebullida on December 14, 1953 was the
same ring purchased by plaintiff from R. Rebullida, Inc. on October 27, 1947 and
stolen in February, 1952 has been abundantly established by plaintiff's evidence.
Before plaintiff lost the ring, she had been wearing it for six years and became
familiar with it. Thus, when she saw the missing ring in the finger of defendant, she
readily and definitely identified it. Her identification was confirmed by Mr. Rafael
Rebullida, whose candid testimony is entitled to great weight, with his 30 years
experience behind him in the jewelry business and being a disinterested witness
since both parties are his customers. Indeed, defendant made no comment when in
her presence Rebullida after examining the ring and stock card told plaintiff that that
was her ring, nor did she answer plaintiff's letter of demand, ... asserting ownership.
Further confirmation may be found in the extra-judicial admissions, contained in
defendant's original and first amended answers ..."4
These further facts likewise appeal therein: "The foregoing proof is not counter-
balanced by the denial on the part of defendant or the presentation of the ring,
Exhibit I, which has a diamond-solitaire 2.57 cts., or much heavier than the lost
diamond weighing 2.05 cts. only. It is noteworthy that defendant gave a rather
dubious source of her ring. Aling Petring from whom the ring supposedly came turned
out to be a mysterious and ephemeral figure. Miss Hinahon did not even know her
true and full name, nor her forwarding address. She appeared from nowhere,
boarded three months in the house of Miss Hinahon long enough to sell her diamond
ring, disappearing from the scene a week thereafter. Indeed, the case was
terminated without any hearing on the third-party and fourth-party complaints, which
would have shown up the falsity of defendant's theory. Moreover, Mrs. Baldomera
Miranda, third-party defendant, who tried to corroborate defendant on the latter's
alleged attempt to exchange the ring defendant bought through her, is [belied] by her
judicial admission in her Answer that appellee `suggested that she would make
alterations to the mounting and structural design of the ring to hide the true identity
and appearance of the original one' (Cunanan vs. Amparo, 45 O.G. 3796). Finally,
defendant is refuted by her own extra-judicial admissions ... although made by
defendant's counsel. For an attorney who acts as counsel of record and is permitted
to act such, has the authority to manage the cause, and this includes the authority to
make admission for the purpose of the litigation... Her proffered explanation that her
counsel misunderstood her is puerile because the liability to error as to the identity of
the vendor and the exchange of the ring with another ring of the same value, was
rather remote."5
It is in the light of the above facts as well as the finding that the discrepancy as to the
weight between the diamond-solitaire in Exhibit I and the lost diamond was due to
defendant having "substituted a diamond-solitaire of plaintiff with a heavier stone"
that the decision was rendered, respondent Court reversing the lower court and
ordering defendant, now petitioner Consuelo S. de Garcia, to return plaintiff's ring or
fact value of P1,000.00 and costs, as well as to pay plaintiff P1,000.00 as attorney's
fee and P1,000.00 as exemplary damages. Hence this appeal.
To repeat, there is no occasion to reverse respondent Court. It correctly applied the
law to the facts as found.
1. The controlling provision is Article 559 of the Civil Code. It reads thus: "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 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." Respondent Angelina D. Guevara, having been unlawfully
deprived of the diamond ring in question, was entitled to recover it from petitioner
Consuelo S. de Garcia who was found in possession of the same. The only exception
the law allows is when there is acquisition in good faith of the possessor at a public
sale, in which case the owner cannot obtain its return without reimbursing the price.
As authoritative interpreted in Cruz v. Pahati,6 the right of the owner cannot be
defeated even by proof that there was good faith by the acquisition by the possessor.
There is a reiteration of this principle in Aznar v. Yapdiangco.7 Thus: "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 the 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 statutory provision, the latter must
prevail in this jurisdiction."8
2. It is thus immediately apparent that there is no merit to the contention raised in the
first assigned error that her possession in good faith, equivalent to title, sufficed to
defeat respondent Guevara's claim. As the above cases demonstrate, even on that
assumption the owner can recover the same once she can show illegal deprivation.
Respondent Court of Appeals was so convinced from the evidence submitted that the
owner of the ring in litigation is such respondent. That is a factual determination to
which we must pay heed. Instead of proving any alleged departure from legal norms
by respondent Court, petitioner would stress Article 541 of the Civil Code, which
provides: 'A possessor in the concept of owner has in his favor the legal presumption
that he possesses with a just title and he cannot be obliged to show or prove it." She
would accord to it a greater legal significance than that to which under the controlling
doctrines it is entitled.lâwphî1.ñèt The brief for respondents did clearly point out why
petitioner's assertion is lacking in support not only from the cases but even from
commentators. Thus: "Actually, even under the first clause, possession in good faith
does not really amount to title, for the reason that Art. 1132 of the Code provides for
a period of acquisitive prescription for movables through `uninterrupted possession
for four years in good faith' (Art. 1955 of the old Spanish Code, which provided a
period of three years), so that many Spanish writers, including Manresa, Sanchez
Roman, Scaevola, De Buen, and Ramos, assert that under Art. 464 of the Spanish
Code (Art. 559 of the New Civil Code), the title of the possessor is not that of
ownership, but is merely a presumptive title sufficient to serve as a basis of
acquisitive prescription (II Tolentino, Civil Code of the Phil. p. 258: IV Manresa,
Derecho Civil Español, 6th Ed., p. 380). And it is for the very reason that the title
established by the first clause of Art. 559 is only a presumptive title sufficient to serve
as a basis for acquisitive prescription, that the clause immediately following provides
that `one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.' As stated by the Honorable
Justice Jose B. L. Reyes of this Court in Sotto vs. Enage (C.A.), 43 Off. Gaz. 5075,
Dec. 1947: `Article 559 in fact assumes that possessor is as yet not the owner; for it
is obvious that where the possessor has come to acquire indefeasible title by, let us
say, adverse possession for the necessary period, no proof of loss or illegal
deprivation could avail the former owner of the chattel. He would no longer be
entitled to recover it under any condition.' "9
The second assigned error is centered on the alleged failure to prove the identity of
the diamond ring. Clearly the question raised is one of the fact. What the Court of
Appeals found is conclusive. Again, petitioner could not demonstrate that in reaching
such a conclusion the Court of Appeals acted in an arbitrary manner. As made
mention of in the brief for respondents two disinterested witnesses, Mr. Rafael
Rebullida as well as Lt. Col. Reynaldo Cementina of the Pasay City Police
Department, both of whom could not be accused of being biased in favor of
respondent Angelina D. Guevara, did testify as to the identity of the ring.
The third assigned error of petitioners would find fault with respondent Court relying
"on the weakness of the title or evidence" of petitioner Consuelo S. de Garcia. It is
true, in the decision under review, mention was made of petitioner Consuelo S. de
Garcia making no comment when in her presence Rebullida, after examining the ring
the stock card, told respondent Angelina L. Guevara that that was her ring, nor did
petitioner answer a letter of the latter asserting ownership. It was likewise stated in
such decision that there were extra-judicial admissions in the original and first
amended answers of petitioner. In the appraisal of her testimony, respondent Court
likewise spoke of her giving a rather dubious source of her ring, the person from
whom she allegedly bought it turning out "to be a mysterious and ephemeral figure."
As a matter of fact, as set forth a few pages back, respondent Court did enumerate
the flaws in the version given by petitioner. From the weakness of the testimony
offered which, as thus made clear, petitioner, did not even seek to refute, she would
raise the legal question that respondent Court relied on the "weakness of [her] title or
evidence" rather than on the proof justifying respondent Angelina D. Guevara's claim
of ownership. Petitioner here would ignore the finding of fact of respondent Court that
such ownership on her part "has been abundantly established" by her evidence.
Again here, in essence, the question raised is one of fact, and there is no justification
for us to reverse respondent Court.
The legal question raised in the fourth assignment of error is that the matter of the
substitution of the diamond on the ring was a question raised for the first time on
appeal as it was never put in issue by the pleadings nor the subject of reception of
evidence by both parties and not touched upon in the decision of the lower court.
Why no such question could be raised in the pleadings of respondent Angelina D.
Guevara was clarified by the fact that the substitution came after it was brought for
examination to Mr. Rebullida. After the knowledge of such substitution was gained,
however, the issue was raised at the trial according to the said respondent resulting
in that portion of the decision where the lower court reached a negative conclusion.
As a result, in the motion for reconsideration, one of the points raised as to such
decision being contrary to the evidence is the finding that there was no substitution. It
is not necessary to state that respondent Court, exercising its appellate power
reversed the lower court. What was held by it is controlling. What is clear is that there
is no factual basis for the legal arguments on which the fourth assigned error is
predicated.
What is said takes care of the fifth assigned error that respondent Court was
mistaken in its finding that there was such a substitution. Again petitioner would have
us pass on a question of credibility which is left to respondent Court of Appeals. The
sixth assigned error would complain against the reversal of the lower court judgment
as well as petitioner Consuelo S. de Garcia being made to pay respondent Angelina
D. Guevara exemplary damages, attorney's fees and costs. The reversal is called for
in the light of the appraisal of the evidence of record as meticulously weighed by
respondent Court. As to the attorney's fees and exemplary damages, this is what
respondent Court said in the decision under review: "Likewise, plaintiff is entitled to
recover reasonable attorney's fees in the sum of P1,000, it being just and equitable
under the circumstances, and another P1,000 as exemplary damages for the public
good to discourage litigants from resorting to fraudulent devices to frustrate the ends
of justice, as defendant herein tried to substitute the ring, Exhibit 1, for plaintiff's
ring." 10 Considering the circumstances, the cursory discussion of the sixth assigned
error on the matter by petitioner fails to demonstrate that respondent Court's
actuation is blemished by legal defects.
WHEREFORE, the decision of respondent Court of Appeals of August 6, 1962 is
hereby affirmed. With costs.
G.R. No. L-5741 March 13, 1911
ESTANISLAUA ARENAS, ET AL., plaintiffs-appellees, rendered sentencing the defendant to make restitution of the said jewelry and to pay
vs. the costs.
FAUSTO O. RAYMUNDO, defendant-appellant.
TORRES, J.: In the affidavit presented by the attorney for the plaintiffs dated September 2, 1908,
after a statement and description of the jewelry mentioned, it is set forth that the
This is an appeal field by the defendant from a judgment of conviction rendered by defendant was retaining it for the reason given in the complaint, and that it was not
the Hon. Judge Araullo. sequestrated for the purpose of satisfying any tax or fine or by reason of any
attachment issued in compliance with any judgment rendered against the plaintiffs'
On the date of August 31, 1908, the attorneys for the plaintiffs, Estanislaua Arenas property.
and Julian La O, brought suit against Fausto O. Raymundo, alleging, as a cause of
action, that Estanislaua Arenas was the owner and proprietor of the jewelry described In discharge of the writ of seizure issued for the said jewelry on the 2nd of September,
below with the respective value thereof: 1908, aforementioned, the sheriff of this city made the return that he had, on the
same date, delivered one copy of the bond and another of the said writ to the
defendant personally and, on the petition and designation of the attorney for the
Two gold tamborin rosaries, without bow or plaintiffs, proceeded to seize the jewelry described in the writ, taking it out of the
reliquary at P40 each P80 defendant's control, and held it in his possession during the five days prescribed by
One lady's comb for fastening the hair, made law.
of gold and silver, adorned with pearls of
ordinary size and many small pearls, one of On the 15th of the same month and year, five days having elapsed without the
which is missing 80 defendant's having given bond before the court, the sheriff made delivery of all the
jewelry described in the said order to the attorney for the plaintiff to the latter's entire
One gold ring set with a diamond of ordinary satisfaction, who with the sheriff signed the return of the writ.
size 1,000

One gold bracelet with five small diamonds
and eight brillantitos de almendras 700
One pair of gold picaporte earrings with two
diamonds of ordinary size and two small ones 1,100
The plaintiffs alleged that the said jewelry, during the last part of April or the
beginning of May, 1908, was delivered to Elena de Vega to sell on commission, and
that the latter, in turn, delivered it to Conception Perello, likewise to sell on
commission, but that Perello, instead of fulfilling her trust, pledged the jewelry in the
defendant's pawnshop, situated at No. 33 Calle de Ilaya, Tondo, and appropriated to
her own use the money thereby obtained; that on July 30, 1908, Conception Perello
was prosecuted for estafa, convicted, and the judgment became final; that the said
jewelry was then under the control and in the possession of the defendant, as a
result of the pledge by Perello, and that the former refused to deliver it to the plaintiffs,
the owners thereof, wherefore counsel for the plaintiffs asked that judgment be
After the demurrer to the complaint had been overruled the defendant answered,
setting forth that he denied each and all of the allegations thereof which were not
specifically admitted, explained, or qualified, and as a special defense alleged that
the jewelry, the subject matter of the complaint was pledged on his pawnshop by
Conception Perello, the widow of Pazos, as security for a loan of P1,524, with the
knowledge, consent, and mediation of Gabriel La O, a son of the plaintiffs, as their
agent, and that, in consequence thereof, the said plaintiffs were estopped from
disavowing the action of the said Perello; the defendant therefore prayed that the
complaint be dismissed and that the jewelry seized at the instance of the plaintiffs, or
the amount of the loan made thereon, together with the interest due, be returned to
the defendant, with the costs of the suit against the plaintiffs.
The case came up for hearing on March 17, 1909, and after the presentation of oral
testimony by both parties, the count, on June 23 of the same year, rendered
judgment sentencing the defendant to restore to the plaintiff spouses the jewelry
described in the complaint, the right being reserved to the defendant to institute his
action against the proper party. The counsel for the defendant excepted to this
judgment, asked that the same be set aside, and a new trial granted. This motion
was denied, exceptions was taken by the appellant, and the proper bill of exceptions
was duly approved certified to, and forwarded to the clerk of this court.
This is an action for the replevin of certain jewelry delivered by its owner for sale on
commission, and pledged without his knowledge by Concepcion Perello in the
pawnshop of the defendant, Fausto O. Raymundo, who refuses to deliver the said
jewelry unless first redeemed.
The said Concepcion Perello, who appropriated to herself the money derived from
the pledging of the jewels before mentioned, together with others, to the prejudice of
their owner Estanislaua Arenas, was prosecuted in the Court of First Instance of this
City in cause No. 3955 and sentenced on July 30, 1908, to the penalty of one year
eight months and twenty-one days of prision correccional, to restore to the offended
party the jewelry specified in the complaint, or to pay the value thereof, amounting to
P8,660, or, in case of insolvency, to suffer the corresponding subsidiary
imprisonment, and to pay the costs. This judgment is attested by the certified copy
attached under letter D to folio 26 of the record of the proceedings in the case of the
same plaintiff against Antonio Matute — the pledgee of the other jewelry also
appropriated by the said Concepcion Perello — which record forms a part of the
evidence in this cause.
Perello having pledged the jewelry in question to the defendant Raymundo, and not
having redeemed it by paying him the amount received, it follows that the convicted
woman, now serving the sentence imposed upon her, could not restore the jewelry as
ordered in that judgment, which has become final by the defendant's acquiescence.
Article 120 of the Penal Code prescribes:
The restitution of the thing itself must be made, if be in the possession of a
third person, who had acquired it in a legal manner, reserving, however, his
action against the proper person.
Restitution shall be made, even though the thing may be in the possession of
a third person, who had acquired it in a legal manner, reserving, however, his
action against the proper person.
This provision is not applicable to a case in which the third person has
acquired the thing in the manner and with the requisites established by law to
make it unrecoverable.
The provisions contained in the first two paragraphs of the preinserted article are
based on the uncontrovertible principle of justice that the party injured through a
crime has, as against all others, a preferential right to be indemnified, or to have
restored to him the thing of which he was unduly deprived by criminal means.
In view of the harmonious relation between the different codes in force in these
Islands, it is natural and logical that the aforementioned provision of the Penal Code,
based on the rule established in article 17 of the same, to wit, that every person
criminally liable for a crime or misdemeanor is also civilly liable, should be in
agreement and accordance with the provisions of article 464 of the Civil Code which
prescribes:
The possession of personal property, acquired in good faith, is equivalent to
a title thereto. However, the person who has lost personal property or has
been illegally deprived thereof may recover it from whoever possesses it.
If the possessor of personal property, lost or stolen, has acquired it in good
faith at a public sale, the owner can not recover it without reimbursing the
price paid therefor.
Neither can the owner of things pledged in pawnshops, established with the
authorization of the Government, recover them, whosoever may be the
person who pledged them, without previously refunding to the institution the
amount of the pledge and the interest due.
With regard to things acquired on exchange, or at fairs or markets or from a
merchant legally established and usually employed in similar dealings, the
provisions of the Code of Commerce shall be observed.
On January 2, 1908, this court had occasion to decide, among other cases, two
which were entirely analogous to the present one. They were No. 3889, Varela vs.
Matute, and No. 3890, Varela vs. Finnick (9 Phil., 479, 482).
In the decisions in both cases it appears that Nicolasa Pascual received various
jewels from Josefa Varela to sell on commission and that, instead of fulfilling the trust
or returning the jewels to their owner, she pledged some of them in the pawnshop of
Antonio Matute and others in that of H.J. Finnick and appropriated to herself the
amounts that she received, to the detriment of the owner of the jewelry.
Tried estafa in cause No. 2429, the said Pascual was convicted and sentenced to the
penalty of one year and eleven months of prision correccional, to restore to Varela,
the jewelry appropriated, or to pay the value thereof, and, in case of insolvency, to
subsidiary imprisonment; this judgment became final, whereupon the defendant
began to serve her sentence. The case just cited is identical to that of Concepcion
Perello.
Josefa Varela, in separate incidental proceedings, demanded the restitution or
delivery of possession of the said jewelry; the pledgees, the pawnbrokers, refused to
comply with her demand, alleging, among other reasons, that they were entitled to
possession. The two cases were duly tried, and the Court of First Instance
pronounced judgment, supporting the plaintiff's claims in each. Both cases were
appealed by the defendants, Matute and Finnick, and this court affirmed the
judgments on the same grounds, with costs, and the decisions on appeal established
the following legal doctrines:
1. Crimes against property; criminal and civil liability. — Where, in a
proceeding instituted by reason of a crime committed against property, the
criminal liability of the accused has been declared, it follows that he shall also
be held civilly liable therefor, because every person who is criminally
responsible on account of a crime or misdemeanor is also civilly liable.
2. Id.; Recovery of property unlawfully in possession. — Whoever may have
been deprived this property in consequence of a crime is entitled to the
recovery thereof, even if such property is in the possession of a third party
who acquired it by legal means other than those expressly stated in article
464 of the Civil Code.
3. Personal property; title by possession. — In order that the possession of
personal property may be considered as a title thereto it is indispensable that
the same shall have been acquired in good faith.
4. Id.; Ownership; prescription. — The ownership of personal property
prescribes in the manner and within the time fixed by articles 1955 and 1962,
in connection with article 464, of the Civil Code.
In the cause prosecuted against Perello, as also in the present suit, it was not proven
that Estanislaua Arenas authorized the former to pawn the jewelry given to her by
Arenas to sell on commission. Because of the mere fact of Perello's having been
convicted and sentenced for estafa, and for the very reason that she is now serving
her sentence must be complied with, that is, the jewelry misappropriated must be
restored to its owner, inasmuch as it exists and has not disappeared this restitution
must be made, although the jewelry is found in the pawnshop of Fausto O.
Raymundo and the latter had acquired it by legal means. Raymundo however retains
his right to collect the amounts delivered upon the pledge, by bringing action against
the proper party. This finding is in accord with the provisions of the above article 120
of the Penal Code and first paragraph of article 464 of the Civil Code.
The aforementioned decision, No. 3890, Varela vs. Finnick, recites among other
considerations, the following:
The exception contained in paragraph 3 of said article is not applicable to the
present case because a pawnshop does not enjoy the privilege established
by article 464 of the Civil Code. The owner of the loan office of Finnick
Brothers, notwithstanding the fact that he acted in good faith, did not acquire
the jewels at a public sale; it is not a question of public property, securities, or
other such effects, the transfer, sale, or disposal of which is subject to the
provisions of the Code of Commerce. Neither does a pawnshop enjoy the
privilege granted to a monte de piedad; therefore, Josefa Varela, who lost
said jewels and was deprived of the same in consequence of a crime, is
entitled to the recovery thereof from the pawnshop of Finnick Brothers, where
they were pledged; the latter can not lawfully refuse to comply with the
provisions of article 120 of the Penal Code, as it is a question of jewels which
has been misappropriated by the commission of the crime of estafa, and the
execution of the sentence which orders the restitution of the jewels can not
be avoided because of the good faith with which the owner of the pawnshop
acquired them, inasmuch as they were delivered to the accused, who was
not the owner nor authorized to dispose of the same.
Even supposing that the defendant Raymundo had acted in good faith in accepting
the pledge of the jewelry in litigation, even then he would not be entitled to retain it
until the owner thereof reimburse him for the amount loaned to the embezzler, since
the said owner of the jewelry, the plaintiff, did not make any contract with the pledgee,
that would obligate him to pay the amount loaned to Perello, and the trial record does
not disclose any evidence, even circumstantial, that the plaintiff Arenas consented to
or had knowledge of the pledging of her jewelry in the pawnshop of the defendant.
For this reason, and because Conception Perello was not the legitimate owner of the
jewelry which she pledged to the defendant Raymundo, for a certain sum that she
received from the latter as a loan, the contract of pledge entered the jewelry so
pawned can not serve as security for the payment of the sum loaned, nor can the
latter be collected out of the value of the said jewelry.
Article 1857 of the Civil Code prescribes as one of the essential requisites of the
contracts of pledge and of mortgage, that the thing pledged or mortgaged must
belong to the person who pledges or mortgages it. This essential requisite for the
contract of pledge between Perello and the defendant being absent as the former
was not the owner of the jewelry given in pledge, the contract is as devoid of value
and force as if it had not been made, and as it was executed with marked violation of
an express provision of the law, it can not confer upon the defendant any rights in the
pledged jewelry, nor impose any obligation toward him on the part of the owner
thereof, since the latter was deprived of her possession by means of the illegal
pledging of the said jewelry, a criminal act.
Between the supposed good faith of the defendant Raymundo and the undisputed
good faith of the plaintiff Arenas, the owner of the jewelry, neither law nor justice
permit that the latter, after being the victim of the embezzlement, should have to
choose one of the two extremes of a dilemma, both of which, without legal ground or
reason, are injurious and prejudicial to her interest and rights, that is, she must either
lose her jewelry or pay a large sum received by the embezzler as a loan from the
defendant, when the plaintiff Arenas is not related to the latter by any legal or
contractual bond out of which legal obligations arise.
It is true that the plaintiffs' son, attorney Gabriel La O, intervened and gave his
consent when the Concepcion Perello pawned the jewelry in litigation with Fausto
Raymundo for P1,524? In view of the evidence offered by the trial record, the answer
is, of course, in the negative.
The parents of the attorney Gabriel La O being surprised by the disagreeable news
of the disappearance of various jewels, amounting in value to more than P8,600,
delivered to Elena Vega for sale on commission and misappropriated by Conception
Perello, who received them from Vega for the same purpose, it is natural that the said
attorney, acting in representation of his parents and as an interested party, should
have proceeded to ascertain the whereabouts of the embezzled jewelry an to enter
into negotiations with the pawnshop of Fausto O. Raymundo, in whose possession
he had finally learned were to be found a part of the embezzled jewels, as he had
been informed by the said Perello herself; and although, at first, at the
commencement of his investigations, he met with opposition on the part of the
pledgee Raymundo, who objected to showing him the jewels that he desired to see in
order to ascertain whether they were those embezzled and belonging to his mother,
the plaintiff Arenas, thanks to the intervention of attorney Chicote and to the fact that
they succeeded in obtaining from the embezzler, among other papers, the pawn
ticket issued by Raymundo's pawnshop, Exhibit E, of the date of May 4, 1908, folio
19 of the record in the case against Matute, Gabriel La O succeeded in getting the
defendant to show him the jewelry described in the said ticket together with other
jewels that did not belong to La O's mother, that had been given the defendant by
Ambrosia Capistrano, Perello's agent, in pledge or security for a loan of P170.
Gabriel La O, continuing the search for other missing jewelry belonging to his mother,
found that Fausto O. Raymundo was in possession of it and had received it from the
same embezzler as security for a debt, although the defendant Raymundo would not
exhibit it until he issued the pawn tickets corresponding to such jewels; therefore, at
Raymundo's request, Perello, by means of the document Exhibit C, signed by herself
and bearing date of June 10, 1908, folio 28 of the record, authorized her son Ramon
to get from the defendant, in her name, the pawn tickets of the said other jewelry, for
which such tickets had not yet been issued; Raymundo then wrote out the tickets —
Exhibits L, LL, and M, all dated June 22, 1908, and found on folios 20, 21 and 22 of
the record of the aforesaid proceedings against Matute — in the presence of the
attorney Gabriel La O, who kept the said three pawn tickets, after he had made sure
that the jewels described therein and which Raymundo, taking them out of his cabinet,
exhibited to him at the time, were among those embezzled from his mother.
So that, when the three aforementioned pawn tickets, Exhibits L, LL, and M, from the
pawnshop of the defendant were made out, the latter already, and for some time
previous, had in his possession as a pledge the jewelry described in them, and the
plaintiffs' son naturally desiring to recover his parent's jewelry, was satisfied for the
time being with keeping the three pawn tickets certifying that such jewelry was
pawned to the defendant.
Moreover, the record discloses no proof that the attorney Gabriel La O consented to
or took any part in the delivery of the jewelry in question to the defendant as a pledge,
and both the said defendant, Raymundo, and the embezzler Perello, averred in their
respective testimony that the said attorney La O had no knowledge of and took no
part in the pledging of the jewelry, and Perello further stated that she had received all
the money loaned to her by the defendant Raymundo. (Folios 13 to 14, and 76 to 80
of the record in the case against Matute.)

The business of pawnshops, in exchange for the high and onerous interest which
constitutes its enormous profits, is always exposed to the contingency of receiving in
pledge or security for the loans, jewels and other articles that have been robbed,
stolen, or embezzled from their legitimate owners; and as the owner of the pawnshop
accepts the same and asks for money on it, without assuring himself whether such
bearer is or is not the owner thereof, he can not, by such procedure, expect from the
law better and more preferential protection than the owner of the jewels or other
articles, who was deprived thereof by means of a crime and is entitled to be excused
by the courts.

Antonio Matute, the owner of another pawnshop, being convinced that he was wrong,
refrained from appealing from the judgment wherein he was sentenced to return,
without redemption, to the plaintiffs, another jewel of great value which had been
pledged to him by the same Perello. He undoubtedly had in mind some of the
previous decisions of this court, one of which was against himself.

For the foregoing reasons, whereby the errors attributed to the judgment of the Court
of First Instance have been discussed and decided upon, and the said judgment
being in harmony with the law, the evidence and the merits of the case, it is proper, in
our opinion, to affirm the same, as we hereby do, with the costs against the appellant.
So ordered.