notified all enforcement agencies such as the Police authorities

TOPIC: Sale by a Person Having a Voidable Title, Art. 1506,

of Manila, the National. Bureau of Investigation, the Philippine
599 Constabulary and the Military Intelligence Service, of the estafa
committed on her by Warner L. Feist. The law enforcement
TRINDAD C. TAGATAC, palintiff and appellant, vs. agencies failed to apprehend Warner L. Feist. The car itself
disappeared completely. Meanwhile, Warner L. Feist
LIBERATO C. JIMENEZ, defendant and appellee
managed to have the private deed of sale notarized by Notary
No. 13514-R | 1957-02-22  Public Juan N, Sombrito. With the properly notarized deed of
sale, he succeeded in having the registration certificate of the
Ocampo, J.: car transferred in his name on June 28, 1952, exactly 11 days
 
after the sale thereof, On August 18, 1952 Feist sold the car to
1951, Trinidad C. Tagatac bought a car for $4,500 from
Felix Sanchez of Imus, Cavite. Sanchez had the registration
Danielson and Kavarno Motors of Sta. Barbara, California,
certificate of the car transferred in his name on the same date.
U.S.A.
Sanchez offered to sell the car to Liberato C. Jimenez. Jimenez
1952, she brought the car to the Philippines. Tagatac counted
investigated in the Motor Vehicles Office the registration
among her friends one Joseph Lee and his wife, the latter being
certificate of Sanchez. After finding out that everything was in
her childhood friend. Sometime in June, 1952, Tagatac,
order, he bought the car from Sanchez for P10,000. On August
accompanied by her sister, Dolores Corpus, visited the Lee’s in
21, 1952, Jimenez delivered the car to the California Car
the latter’s house. Shortly thereafter Joseph Lee came to see
Exchange on Taft Avenue in order that it may be displayed for
Trinidad C. Tagatac. With him was one Warner L. Feist alias
sale. Ruben Masalonga offered to sell the car for Jimenez so the
Warner L. Levy who was posing as a very wealthy man. Joseph
latter transferred the car to Ruben Masalonga in order to
Lee introduced Feist to Trinidad C. Tagatac. Possessed of a glib
facilitate the sale of the car. Masalonga in turn, unable to sell
tongue, Feist easily convinced Tagatac that he was a millionaire.
the car immediately, transferred it to Eugenio Villanueva, in
He told her that he was the manager of a corporation named
order that the latter might sell it for Liberato C. Jimenez. On
China Pacific Trading Co., Inc.; that he was the owner of two
August 31, 1952 plaintiff discovered the car in the possession of
cars and two houses in Baguio; and that he was the consignee
the California Car Exchange so she demanded from the
of billions of pesos of textiles then deposited in the custom
manager of said exchange for the delivery of the car to her but
house. Seeing that Tagatac believed every word he said, he
the latter refused. On September 3, 1952 the certificate of
offered to buy her car for P15,000. Tagatac was amenable to
registration was retransferred to Liberato C. Jimenez.
the idea. She agreed to sell the car to Feist at the price quoted  
by him. On June 18, 1952 between 9 and 10 in the morning, On October 20, 1952, Trinidad C. Tagatac filed a suit for the
the deed of sale was made. Tagatac signed said private recovery of the possession of the car. The Sheriff, pursuant to a
document of sale. Warner L. Feist paid the price to Tagatac by warrant of seizure obtained by plaintiff, seized and impounded
means of a check postdated June 19, 1952 which check he the car but upon defendant Jimenez filing a counterbond the car
delivered on the day of the execution of the deed of sale, June was delivered back to him.
18, 1952. In turn, Tagatac delivered the car to Feist on the  
same day, June 18, 1952. After trial, the lower court rendered a decision dismissing
  plaintiff's complaint and confirming the ownership and
The next day, June 19, 1952, Tagatac tried to cash the check possession of defendant Liberato C. Jimenez.
with the Philippine National Bank. The bank refused to honor  
the check and informed her that Warner L. Feist has no account
and no funds in said bank.  Without losing any time, Tagatac
Plaintiff appealed. She raises two - questions, one a question of
fact and the other a question of law, to wit: (1) whether
defendant-appellant Liberato C. Jimenez is a purchaser in good
faith; and (2) whether in view of the facts obtaining in this case,
she is entitled to the possession of the car in question.
 
We shall first resolve the question of fact.
 
Plaintiff-appellant claims that defendant-appellee is a purchaser
in bad faith of the car in question. Plaintiff-appellant further
submits that in view of the fact that the estafa was committed
by Warner L. Feist on June 19, 1952, and the car was
transferred to defendant-appellee, on August 21, 1952 the
presumption set forth in section 69 (j), Rule 123, of the Rules of
Court, arises. According to the aforecited section of Rule 123,
there is a 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. This presumption
usually arises in cases of stolen goods. We cannot make this
presumption in the present case, because (1) the car was not
stolen from plaintiff-appellant and (2) defendant-appellee came
into possession of the car two months after Warner L. Feist
swindled plaintiff-appellant so that even assuming that the car
was stolen, defendant-appellee could not have been presumed
to have been the wrongdoer for the wrongful act was done two
months before the car came into his possession.
 
The car was transferred twice to defendant-appellee, for the
first time on August 21, 1952 and for the second time on
September 8, 1952. Plaintiff-appellant argues that defendant-
appellee is a purchaser in bad faith because on September 1,
1952, that is three days before the car was transferred to him
on September 3, 1952, he already knew that the car was
subject of a search warrant in a estafa case against Warner L.
Feist, as shown by his motion for the dissolution of the search
warrant (Exhibit O). Defendant-appellee bought the car for
P10,000  from Felix Sanchez on August 21, 1952 (Exhibit O-2).
The car was duly registered in his name (Exhibit G). On August
22, 1952 defendant-appellee transferred the Car to Ruben
Masalonga (Exhibit H). On the same date Masalonga transferred
the car to Eugenio Villanueva (Exhibit I). On September 8,
1952, Villanueva transferred the car back to defendant-appellee
(Exhibit J).
 
The search warrant (Exhibit M) submitted by plaintiff-appellant
is dated September 1, 1952. Defendant-appellee, on the same
date filed a petition to dissolve the search warrant (Exhibit 0) in
which he stated “that there is, however, a criminal case pending
in Branch 6 of this court presided over by the Honorable
Potenciano Pecson regarding an automobile of similar
description wherein Trinidad C. Tagatac is the offended party
and the accused are WarnerL. Feist and Joseph Lee for estafa".
Admittedly, on that date, September 1, 1952, defendant-
appellee was fully aware that there were some questions
regarding the car. Plaintiff-appellant claims that such knowledge
already constitutes had faith when the car was transferred to
him for the second time on September 3. We do not find it so.
It is a fact beyond dispute that when defendant-appellee
acquired the car on August 21, 1952 he had no knowledge of
any flaw in the title of the person from whom he acquired it. He,
therefore, acted in good faith in buying the car. Such good faith
continued even though the car was transferred first to Ruben
Masalonga, then to Eugenio Villanueva and later back to
defendant-appellee, for the successive transfers were made for
the purpose merely of facilitating the sale of the car.
 
Contrary to plaintiff-appellant’s claim, defending appellee
Liberate C. Jimenez did not commit perjury when he swore
under oath in Exhibit O that he owns the car and that it was
registered in his name, because even though the car on that
date, September 1, 1952, was still registered in the name of
Eugenio Villanueva, defendant-appellee considered himself to
be the owner of the car for as we have said the transfer of the
car to Masalonga and that to Villanueva were made for the
purpose of enabling these persons to sell it. For all intents and
purposes, defendant-appellee had every reason to assert that
he was the owner of the car on September 1, 1952.
 
Plaintiff-appellant alleges that the lower court totally ignored
the judgment convicting Warner L. Feist. of estafa and that the
lower court erred in not declaring that restitution of the
property swindled must inevitably follow.
The record reveals that the court a qua tack notice of the
judgment of conviction in its order of July 15, 1954 denying
plaintiff-appellant’s motion for reconsideration of the decision
now under consideration. In said order, it expressly declared
“this court knows that in one criminal case Feist was convicted
of estafa on the rubber check. he issued against the Philippine
Bank of Commerce without any fond in the said bank so that he
was accused of estafa because of that check and not because-of
the delivery of the car."
 
Plaintiff-appellant Trinidad C. Tagatac relies chiefly on Articles
100, 104 and 105 of the Revised Penal Code and Article 559 of
the New Civil Code. True it is that every person criminally liable
is also civilly liable (Article 100, Revised Penal Code) and his
civil liability includes restitution of the thing itself even though it
be found in the possession of a third person who acquired it by
lawful means (Articles 104 and 105, Revised Penal Code).
 
According to Article 559 of the New Civil Code, 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 nevertheless recover it from
the person in possession of the same.
 
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? Plaintiff-appellant cites a
number of cases to support her stand that the car should be
returned to her in consonance with the provisions of Article 559
of the New Civil Code. However, the cases she cites are not on
all fours with the case at bar. The cases of Gacula, et al. vs,
Martinez, et al. (G.R. No. L-3038, promulgated January 31,
1951); Valera vs. Finnick (9 Phil. 482); U.S. vs. Sotelo (28 Phil.
147); Arenas vs. Raymundo (19 Phil. 47); and Del Rosario vs.
Lucena (8 Phil. 535) have one factor in common: Persons not
duly authorized to do so pawned or pledged jewelry in favor of
innocent third persons. It should be noted that in the case
under consideration, Warner L. Feist sold the car to Felix
Sanchez, and the latter in turn sold it to defendant-appellee
Liberato C. Jimenez. Furthermore, in the above-mentioned five
cases, the jewelry involved were not sold by the true owners
thereof to the persons who unlawfully pledged or pawned them.
The jewelry were delivered to persons who had the obligation to
either return them or the price thereof, but who instead of
complying with this obligation, pledged them with innocent third
persons. There was no valid transmission of ownership from the
owners of the jewelry to the persons who illegally deprived
them thereof, whereas in the present case, there was a valid
transmission of ownership from the true owner, plaintiff-
appellant Trinidad C. Tagatac, to the swindler, Warner L. Feist,
considering that there was between them a contract of sale by
reason of which plaintiff-appellant delivered to Feist the car in
litigation.
 
The other two cases upon which plaintiff-appellant relies are
likewise not in point. In People vs. Alejano (54 Phil. 987) the
owner was clearly unlawfully deprived of his property, for it was
stolen from him; likewise the owner of the truck in Tuazon &
Sampedro, Inc., vs. Gimenea (CA) 46 Off. Gaz. 1118, was
illegally deprived thereof the Japanese forcibly took it from him
during the Occupation.
 
The facts of this case closely resemble those obtaining in
Benjamin vs. Favis (CA-G. R. No. 4964-R, January 12, 1951),
wherein this Court declared:
 
“The trial court opined that the plaintiff was unlawfully deprived
of his property through estafa, with the car constituting the
corpus delicti, and he is entitled to its restitution without
compensating the possessor in good faith, as authorized by
Article 464 of the Civil Code. We believe with the defendant-
appellant that the position thus taken by the lower Court is not
legally tenable. The sale of the car by plaintiff to Serefin
Belmonte has all the elements essential for its validity. There
was consent unvitiated by any vice or defect. The vendor and
the vendee freely agreed-upon the car to be sold and the price
to be paid. The consideration of the contract was licit. The
transaction came about openly. Nothing of material significance
was concealed by one party from the other. Even the fact that
the check issued in payment of the car had no funds in the bank
to back it up was not unknown to the plaintiff, for he was
informed of the same at the time he was requested by
Belmonte to refrain from collecting the check until 9:00 o'clock
on the day following the day of the sale, to which request, by
the way, plaintiff readily assented. This is a circumstance
showing clearly that plaintiff was well aware, at least soon after
the issuance of the check in question, of the financial Position of
his vendee; and it would not be entirely correct to say that he
was deceived all along as regards the latter's ability to pay. And
even if it were so, it would not necessarily imply that plaintiff
was unlawfully deprived of his property when he voluntarily
parted with it in the belief, proved by subsequent events to be
erroneous, that his buyer was solvent. It would be more in
conformity with the fact to state that the plaintiff, placing far
too much stock on the appearances and pretenses of his buyer,
who misrepresented himself to be a Congressman and a man of
means, threw discretion to the winds and allowed himself to be
paid in check instead of cash for the price of car only to regret it
later; pat the misrepresentation of the purchaser did not, in our
opinion, render fraudulent or illegal the sale which, ac already
stated, bears all the earmarks of legality. The fact that the
check, ss it turned out, was without funds may have given rise
to a prosecution of the issuer for estafa under our penal laws,
but it did not make the consummated sale unlawful for the
reasons above-mentioned; nor was the automobile the corpus
delicti of such estafa, as the lower Court mistakely assumed.
We are not, therefore, justified that the plaintiff was able to
prove illegal or unlawful deprivation, and the trial Court,
consequently, was not justified in applying the provisions of
Article 464, Civil Code (Enage vs. Sotto, CA-G.R. No. 221-R,
May 17, 1947).
 
“The only conclusion left to be drawn from the foregoing
circumstances is that the sale of the car by plaintiff to Belmonte
was a good and valid sale (Article 1450, Civil Code). The
delivery of the car by the plaintiff to his buyer Belmonte
effectively passed ownership to the latter (Arts. 1095 and 609,
Civil Code), And the failure to pay the price, or the issuance of a
check for the price without funds to answer therefor, did not
and could not affect the validity of the transfer of title; at the
most it would give to the vendor a right to resolve the contract
under Article 1124 of the Civil Code, but the title to the
automobile would not revert to the seller until the sale was set
aside by a competent Court. This has not been done, and it is
elementary that the rights of a stranger in good faith, acquired
before the resolution of the contract, are entitled to protection.”
 
Let us turn our attention to the contract of sale between
plaintiff-appellant Trinidad C. Tagatac and Warner L. Feist. 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 annual 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 1898, 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 piaintiff-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. But even granting for the sake of
argument that Felix Sanchez was a buyer in bad faith and he
acquired from Warner L. Feist merely a voidable title to the car,
considering that defendant-appellee Liberate C. Jimenez bought
the car in good faith, for value and without notice of any defect
in Sanchez title,  then he acquired a good title to the car (Article
1506,  N.C.C.). Good title means an indefeasible title to the car
even as against the original owner of the car, herein plaintiff-
appellant Trinidad C. Tagatac.
 
Even under rules of equity, defendant-appellee Liberate C.
Jimenez has a better right to the car. Both he and plaintiff-
appellant Trinidad C. Tagatac are innocent parties, but it was
the latter’s gullibility which made possible the swindle
committed by Warner L. Feist. As between them, therefore, it is
plaintiff-appellant who should bear the consequences of the
swindle for as between two innocent parties, the one whose
acts made possible the injury. must shoulder the consequences
thereof.
 
For all the foregoing considerations, we hereby affirm the
appealed decision without making any pronouncement
respecting costs.
 
Santiago and San Jose, J.J., concur.
Judgment affirmed.