TRINIDAD c.

TAGATAC, palintiff and appellant,

vs.
LIBERATO C. JIMENEZ, defendant and appellee

[No. 13514-R. February 22, 1957]

OCAMPO, J.:

Digest Author: Jude Fanila

Topic: VI. Obligations of the Vendor – Sale by a Person Having a Voidable Title

Case Summary: Tagatac owned a car. Car was sold to one Warner Feist who used fraud and
deceit to execute the sale (he made Tagatac believe he had money to pay). Feist subsequently
sold car to another party, who then sold it to respondent, Jimenez.

Current case is a complaint for recovery filed by Tagatac, claiming that under NCC 559 if the
possessor of a movable is unlawfully deprived of possession they are entitled to recovery of the
same.

SC held that there was no unlawful deprivation. The sale executed between Tagatac and Feist
was a voidable one. As such, it had a valid and binding effects prior to ratification or annulment.
Therefore, title to the car was validly passed to Feist, which eventually passed to Jimenez.
Jimenez, as a purchaser in good faith cannot be made to return the car.

Petitioners: TRINIDAD c. TAGATAC – original owner of the car

Respondents: LIBERATO C. JIMENEZ – purchaser of car from subsequent seller.

Doctrines Involved: voidable contract is susceptible of either ratification or annulment. If the

contract is ratified, the action to annul it is extinguished (1392, N. C. C.) and the contract is
cleansed from all defects (Article 1396, N. C.); if the contract is annulled, the contracting parties
are restored to their respective situations before the contract and mutual restitution follows
consequently (Article 1398, N. C. C.).

FACTS:
1. Oct. 1951 – Petitioner, Trinidad Tagatac owned a car worth $4,500. She subsequently
sold the car to one Warner L. Feist. Warner Feist paid for the car by issuing a check
worth P15k.
a. June 18 1952 – Trinidad and Feist signed a private document of sale. Feist paid by
issuing a postdated check for June 19 1952. On the same day, Trinidad delivered
the car to Feist.
2. June 19 1952 – Trinidad attempted to encash the check with the Philippine National
Bank. The Bank refused to honor the check as Feist had no accounts and no funds with
the bank.
a. Trinidad notified all relevant law enforcement agencies, but they failed to
apprehend Feist.
3. Feist secured a notarization f the private deed of sale. He then successfully registered the
car under his name on June 28, 1952.
 4. August 18, 1952 – Feist sold the car to one Felix Sanchez in Imus, Cavite. Sanchez had
the car registered under his name.
5. August 21 1952 – Sanchez delivered the car to Jimenez who paid the purchase price of
P10k.
a. Note that Jimenez bought the car after verifying its registration with the Motor
Vehicles Office.
b. On the same day (Aug 21) Jimenez delivered the car to California Car Exchange,
located at Taft ave. to display it for sale. There, one Ruben Masalonga offered to
sell the car for Jimenez. Jimenez then transferred the car to Ruben to facilitate the
sale. Ruben in turn transferred it to one Eugenio Villanueva who also offered to
facilitate the sale.
6. August 31 – Trinidad discovered the car in California Car Exchange, demanded its return
but the manager refused.
7. Sept 3 1952 – Certificate of registration was transferred back to Jimenez.
8. Oct. 30 1952 – Trinidad filed a suit for recovery of possession before the CFI of Manila.
a. CFI – dismissed the complaint confirmed ownership of Liberato Jimenez.
9. Car Trail
a. Petitioner, Trinidad original owner.  Sold it to Warner Feist for P15k  Feist
sold the car to Felix Sanchez  Sanchez sold the car to Liberato Jimenez. 
Jimenez transferred registration of the car to Ruben Masalonga  Masalonga
transferred registration to Eugenio Villanueva  Villanueva transferred it back to
Jimenez.

ARGUMENTS BEFORE THE SUPREME COURT:

 Petitioner’s Argument related to Doctrine: (1) That Liberato was a purchaser in bad faith;
(2) Thus, she is entitled to possession of the car.

ISSUES + HELD:
1. W/N Jimenez was a purchaser in bad faith? – NO
a. Rules of Court, Rule 123 Sec. 69(j) – Here, 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 doer of the whole act.
i. SC – this presumption does not apply to Jimenez. The car was not stolen
from Trinidad and; Jimenez acquired the car almost (2) months after Feist
swindled Trinidad. Thus, even assuming that it was stolen the presumption
does not apply still due to the lapse of time.
b. Transfer of Car –Trinidad argues that Jimenez is a purchaser in bad faith because
the car was transferred to him on Sept. 3, despite him knowing that the car was
already the subject of a search warrant in connection to the Estafa case filed
against Feist.
i. SC - car was transferred twice to Jimenez. Once on Aug 21, and once on
Sept. 1. The car having been purchased in August 21, prior to the issuance
of the search warrant makes Jimenez a purchaser in good faith. The
successive transfers were only to facilitate the sale of the car.
 c. NCC 559 – Under NCC 559i, a person who has been unlawfully deprived of the
possession of a movable may recover possession.
i. SC – here, there was no unlawful deprivation. The case is analogous to the
case of Benjamin v. Favis which involved the transfer of property through
estafa. Here, the sale executed by Feist and Trinidad was a voidable
contract under NCC 1390ii. With Trinidad’s consent being vitiated through
fraud and deceit. As such, the voidable contract was susceptible to either
ratification or annulment. If it is ratified, then the action to annul is
extinguished and the contract is cured of all defects pursuant to NCC 1392
and 1396iii. If annulled, the parties are obliged to make mutual restitution
under NCC 1398.iv
ii. Prior to Annulment or Ratification – before a voidable contract is annulled
or ratified, it is valid and binding. As such, it has valid legal effects.
Therefore, Feist validly acquired the title of the car, which then eventually
passed through Felix Sanchez. Felix Sanchez was a purchaser in good
faith, having bought it for value and without knowledge of the defect of
Feist’s title.v
iii. Good Title – having acquired the car in good faith, Sanchez acquired good
title to the car. Good title is indefeasible, even against the original owner.
As such, Sanchez then validly transmitted the good title to Jimenez.
iv. Rights of Jimenez and Trinidad – Jimenez has a better right to the car.
Both parties are innocent parties. Applying the rules of equity, the one
whose acts made possible the injury should bear the consequences thereof.

RULING:

For all the foregoing considerations, we hereby affirm the appealed decision without making any
pronouncement respecting costs.

DISSENT:

NOTES:
i
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 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. (464a)
ii
Article 1390. The following contracts are voidable or annullable, even though there may have been
no damage to the contracting parties:

(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. (n)

iii
Article 1392. Ratification extinguishes the action to annul a voidable contract. (1309a) | Article
1396. Ratification cleanses the contract from all its defects from the moment it was constituted. (1313)
iv
Article 1398. An obligation having been annulled, the contracting parties shall restore to each other
the things which have been the subject matter of the contract, with their fruits, and the price with its
interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the basis for damages. (1303a)
v
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. (n)