Lawyers Cooperative v. Tabora

LAWYERS COOPERATIVE PUBLISHING COMPANY v. PERFECTO A. TABORA

1965 / BAUTISTA ANGELO

FACTS

Perfecto Tabora bought from the Lawyers Cooperative Publishing Company a complete set of AmJur, plus a set of AmJur, General Index.

CONTRACT "Title to and ownership of the books shall remain with the seller until the purchase price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall be borne by the buyer."

Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books were delivered and receipted for by Tabora. On the same day, a fire broke out, burning down Tabora’s law office and library. Tabora immediately reported it to LCBC. The company replied and as a token of goodwill it sent to Tabora free of charge 4 Philippine Reports volumes.

As Tabora failed to pay the monthly installments agreed upon, LCBC filed an action to recover of the balance.

TABORA’S CONTENTIONS

• Contract: title to and the ownership of the books shall remain with the seller until the purchase price shall have been fully paid, so LCBC should bear the loss
• Even assuming that the ownership was transferred to Tabora, he should not answer for the loss: force majeure (no evidence that Tabora contributed in any way)

ISSUE & HOLDING

Who bears the loss? Tabora

RATIO

GENERAL RULE The loss of the object of the contract of sale is borne by the owner or in case of force majeure the one under obligation to deliver the object is exempt from liability

• THIS IS NOT APPLICABLE HERE Contract provides that loss or damage after delivery shall be borne by the buyer

FORCE MAJEURE DEFENSE FAILS

The rule only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event.

• NOT PRESENT IN THIS CASE

The obligation is pecuniary in nature, and the obligor bound himself to assume the loss after the delivery.

Tagatac v. Jimenez

TRINIDAD TAGATAC v. LIBERATO JIMENEZ

1957 / Ocampo / Appeal from CFI judgment

Trinidad Tagatac bought a car for $4,500 in the US, and seven months later, she brought the car to the Philippines. When her friend Joseph Lee came to see her, he was with one Warner Feist who posed as a wealthy man. Seeing that Tagatac seemed to believe him, he offered to buy her car for P15,000, and Tagatac was amenable to the idea. The deed of sale was made, Feist paid by means of a postdated check, and the car was delivered to Feist. When Tagatac tried to encash the check, PNB refused to honor it and told her that Feist had no account in said bank. Tagatac notified the law enforcement agencies of the estafa committed on her by Feist, but he was not apprehended and the car disappeared.

Meanwhile, Feist managed to have the private deed of sale notarized, so he succeeded in having the car’s registration certificate [RC] transferred in his name. He sold the car to Sanchez, who was able to transfer the RC to his name. He offered to sell the car to defendant Liberato Jimenez, who bought the car for P10,000 after investigating in the Motor Vehicles Office. Jimenez delivered the car to the California Car Exchange so that it may be displayed for sale. Masalonga offered to sell the car for Jimenez, so the car was transferred to the former, but when Masalonga failed to sell it right away, he transferred it to Villanueva so he could sell it for Jimenez. Tagatac discovered that the car was in California Car Exchange’s possession, so she demanded from the manager for the delivery of the car, but the latter refused. The RC was retransferred to Jimenez.

Tagatac filed a suit for the recovery of the car’s possession, and the sheriff, pursuant to a warrant of seizure that Tagatac obtained, seized and impounded the car, but it was delivered back to Jimenez upon his filing of a counter-bond. The lower court held that Jimenez had the right of ownership and possession over the car.

JIMENEZ IS A PURCHASER IN GOOD FAITH; TAGATAC NOT ENTITLED TO POSSESSION

RATIO

The disputable presumption that a person found in possession of a thing taken in the doing of a recent wrongful act is the taker and the doer of the whole act does NOT apply in this case because the car was not stolen from Tagatac, and Jimenez came into possession of the car two months after Feist swindled Tagatac. In addition, when Jimenez acquired the car, he had no knowledge of any flaw in the title of the person from whom he acquired it. It was only later that he became fully aware that there were some questions regarding the car, when he filed a petition to dissolve Tagatac’s search warrant which had as its subject the car in question.

Re: Tagatac’s allegation that the lower court ignored the judgment convicting Feist of estafa, and that it erred in not declaring that restitution of the swindled property must follow, SHE IS WRONG! The lower court noted that Feist was accused of estafa because of the check and NOT because of the delivery of the car.

Her legal basis for the restitution of thing is RPC 104-5¹ . Now the question is WON she has beenunlawfully deprived of her car. It seems like though, but it does not fall under the scope of NCC 599. ²In this case, there is a valid transmission of ownership from true owner [Tagatac] to the swindler [Feist], considering that they had a contract of sale.

As long as no action is taken by the entitled party [annulment / ratification], the contract of sale remains valid and binding. Feist acquired defective and voidable title, but when he sold it to Sanchez, he conferred a good title on the latter. Jimenez bought the car from Sanchez in good faith, for value, and without notice of any defect in Sanchez’ title, so he acquired a good title to the car. Good title means an indefeasible title to the car, even as against original owner Tagatac. As between two innocent parties, the one whose acts made possible the injury must shoulder the consequences thereof.

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¹ Civil liability of person who is criminally liable includes restitution of thing even though it is with a third person who acquired it legally
² Although possession of movable property acquired in good faith is equivalent to a title, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person who possesses it. 

Sun Brothers & Co. v. Velasco

SUN BROTHERS & CO. [SBC] v. JOSE VELASCO & CO KANG CHIU

1958 / Angeles / Appeal from CFI judgment [Note that this is a CA, not SC, decision.]

FACTS

SBC delivered to Francisco Lopez an Admiral refrigerator. The stipulated price was P1,700, but only the downpayment of P500 was paid. Their contract stipulated the following:

• Lopez shall not remove the ref nor part possession without the express written consent of SBC.
• In the event of a violation of the agreement, SBC may rescind the contract of sale and recover possession of the ref. In addition, any amount previously paid shall be forfeited as liquidated damages, and the ref remains as SBC’s absolute property until Lopez is able to pay the full purchase price.

Without SBC’s knowledge, Lopez (who misrepresented himself as Jose Lim) sold it to JV Trading (owned by Jose Velasco) for P850, and Lopez executed a document that stated that he is the absolute owner of the ref. Without SBC’s knowledge, after displaying the ref at his store, JV Trading sold the ref to Co Kang Chiu for P985, and it was delivered to the latter’s house.

SBC filed a complaint for replevin against Lopez and Co Kang Chiu (later, JV Trading / Jose Velasco was included), and asked for a preliminary writ of replevin for the recovery of the possession of the ref, and it was issued. However, on Co Kang Chiu’s request and having filed a counter-bond, the ref was not taken out of his residence.

CFI decided in favor of SBC, declaring it as the absolute owner. Co Kang Chiu should return ref, or else, Lopez shall pay full amount of P1,700 to SBC, and JV Trading should reimburse Co Kang Chiu the amount of P985.

CFI ERRED; CO KANG CHIU IS THE ABSOLUTE OWNER; LOPEZ MUST PAY SBC P1,700

ALSO, NCC 1505 PARAGRAPH 3 (ON MERCHANT STORE) SHOULD BE APPLIED

The lower court erred in applying the first paragraph of NCC 1505. It is true that Lopez never had title since it would only be vested on him upon full payment of the purchase price. As regards JV Trading, it did not acquire any better right than what Lopez had. The Court also found that he was not a purchaser in good faith. Since he was purchasing a ref from a private person who is not engaged in such business, he should have inquired WON Lopez has paid for the ref in full.

Paragraph 3 should be applied since Co Kang Chiu purchased the ref from JV Trading, which is a merchant store. Co Kang Chiu should be declared to have acquired a valid title, although his predecessors-in-interest did not have any right of ownership thereto. Here is a case where an imperfect or void title ripens into a valid one, because of some intervening causes.

            The rights and interests of an innocent buyer for value should be protected when it comes into clash with the rights and interests of a vendor. This is embodied in NCC 1505 (3) to facilitate commercial sales of movables and to give stability to business transactions.

            SBC’s recourse should be a claim for indemnity against Lopez, and not recovery upon reimbursement, since SBC did not lose ref nor was the company unlawfully deprived of it.