GR 80298; (April, 1990) (Digest)
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.
FACTS
Petitioner EDCA Publishing sold 406 books to a person identifying himself as Professor Jose Cruz, who paid with a personal check. EDCA delivered the books and issued an invoice indicating payment on delivery. Before the check could clear, Cruz sold 120 of these books to respondent Leonor Santos of Santos Bookstore. Santos verified Cruz’s ownership from the EDCA invoice he presented and paid him. EDCA later discovered Cruz was an impostor named Tomas de la Peña and that his check was dishonored. With police assistance, EDCA forcibly seized the books from Santos Bookstore without a warrant.
The private respondents sued to recover the books. The Municipal Trial Court ruled in their favor, a decision sustained by the Regional Trial Court and the Court of Appeals. EDCA appealed to the Supreme Court, arguing it was unlawfully deprived of the books due to the dishonored check and could thus recover them under Article 559 of the Civil Code.
ISSUE
Whether EDCA was “unlawfully deprived” of the books under Article 559 of the Civil Code, thereby entitling it to recover them from the private respondents, who purchased the books from the impostor in good faith.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions. EDCA was not unlawfully deprived of the books under Article 559. The contract of sale between EDCA and Cruz was perfected upon their agreement and the constructive delivery of the books, transferring ownership to Cruz under Article 1477 of the Civil Code. EDCA’s invoice itself indicated the books were “paid,” further vesting ownership in Cruz. The subsequent dishonor of the check did not nullify the perfected contract of sale or revert ownership; it merely gave EDCA a personal right to pursue payment from Cruz, not a real right to recover the property from a subsequent good faith purchaser.
The private respondents acquired the books in good faith. Leonor Santos verified Cruz’s apparent ownership through the EDCA invoice before purchasing. Under Article 559, possession of movable property acquired in good faith is equivalent to title. EDCA’s loss resulted from its own negligence in dealing with an unknown buyer and accepting a personal check without verification. The law cannot transfer this loss to an innocent purchaser who exercised due diligence. Therefore, EDCA’s remedy lies against the impostor, not the good faith buyers. The Court also condemned EDCA’s extrajudicial, forcible seizure of the books with police assistance.