EDCA PUBLISHING & DISTRIBUTING CORP. v.

SANTOS (1990)

Facts:
• A person identifying himself as Prof. Jose Cruz placed an order by
telephone with EDCA for 406 books, payable on delivery. EDCA
prepared the corresponding invoice and delivered the books as
ordered for which Cruz issued a personal check of P8,995.65.

• Cruz sold 120 of the books to Leonor Santos who paid him P1,700 after
verifying the seller’s ownership from the invoice he showed.

• EDCA became suspicious over a second order placed by Cruz even

before clearing his first check. So EDCA made inquiries with the DLSU
College of which he claimed to be a dean but was informed that there
was no such person in their employ. Cruz also had no more account
with Philippine Amanah Bank against which he had drawn the payment
check.

• EDCA then went to the police to set up a trap and arrested Cruz whose
real name was Tomas dela Pena.

• EDCA sought the assistance of the police which forced their way into
the store of Santos and threatened her with prosecution for buying
stolen property. They seized the 120 books without warrant and loaded
them into EDCA’s van.

• Santos sued for recovery of the books. A writ of preliminary

attachment was issued and EDCA finally surrendered the books back to
Santos. The lower courts were in favor of Santos.

Issue(s)/Held:
WHETHER EDCA was unlawfully deprived of movable property (books) in the
hands of another because the check issued by Cruz in payment was
dishonored applying Art. 559. – NO.

Ratio
• 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.

• EDCA contends that Santos was not able to establish ownership of the
disputed books because they have not even produced a receipt to
prove that they bought it.
• But the first sentence of Art. 559 provides that the possession of
movable property acquired in good faith is equivalent to a title, thus
dispensing with further proof.

• Santos is a buyer in good faith because she first ascertained the

ownership of the books from the EDCA invoice showing that they have
been sold to Cruz. Santos is in the business of buying and selling
goods. To Santos, Cruz was only one of the many sellers she was
accustomed to dealing with.

• Santos first ascertained that the books belonged to Cruz before buying
them. By contrast, EDCA was less than cautious in dealing with Cruz.
Although it had never transacted with Cruz before, it readily delivered
the books he ordered by telephone and readily accepted his personal
check as payment. It did not verify his identity. It did not wait to clear
Cruz’s check.

• Worse, it indicated in the sales invoice that the books had been paid
for on delivery thereby vesting ownership in Cruz.

• EDCA argues that Cruz acquired no title to the books because his
check was dishonored thus could not have validly transferred the
books to Santos. But a contract of sale is consensual and perfected
once an agreement is reached between the parties on the subject
matter and consideration.

• 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 general rule is that 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 been paid. In this
case, there was no stipulation so the general rule applies.

• Non-payment only creates a right to (1) demand payment, (2) rescind

the contract and (3) have a cause of action for criminal prosecution for
bouncing checks.

• Actual delivery of the books having been made, Cruz acquired

ownership over the books which he could validly transfer to Santos.
The fact that he had not yet paid for them was a matter between Cruz
and EDCA and did not impair the title acquired by Santos over the
books.

• There is no unlawful deprivation if the seller voluntarily parted

with it pursuant to a contract of sale. The fact that price was
not subsequently paid did not render illegal a transaction
which was valid and legal at the beginning.