Aznar v.

Yapdiangco
G.R. No. L-18536 March 31, 1965
REGALA, J.

DOCTRINE OF THE LAW: So long as the property is not delivered, ownership over it is
not transferred by merely contract but by delivery. Contracts only constitute titles or
rights to the transfer or acquisition of ownership, while delivery or tradition is the method
of acquiring ownership.

FACTS: A Ford Fairlane 500 was originally owned by Teodoro Santos but which was
unlawfully deprived of the same by Vicente Marella through fraud and machinations.
Thereafter, Marella sold the car to Jose Aznar for P15K, who took it in good faith and for
value.

ISSUE: Whether or not Teodoro Santos has a better right over the vehicle.

RULING: Teodoro Santos has the better title over the vehicle. Under Article 712 of the
Civil Code, "ownership and other real rights over property are acquired and transmitted
by law, by donation, by testate and intestate succession, and in consequence of certain
contracts, by tradition." As interpreted by this Court in a host of cases, by this provision,
ownership is not transferred by contract merely but by tradition or delivery. Contracts
only constitute titles or rights to the transfer or acquisition of ownership, while delivery or
tradition is the mode of accomplishing the same. In the case at bar, the car in question
was never delivered to the vendee by the vendor as to complete or consummate the
transfer of ownership by virtue of the contract. It should be recalled that while there was
indeed a contract of sale between Vicente Marella and Teodoro Santos, the former, as
vendee, took possession of the subject matter thereof by stealing the same while it was
in the custody of the latter's son. Consequently, Santos may recover the property on the
basis under Article 559 of the Civil Code that if the owner has lost a thing, or if he has
been unlawfully deprived of it, he has a right to recover it, not only from the finder, thief
or robber, but also from third persons who may have acquired it in good faith from such
finder, thief or robber. The said article establishes two exceptions to the general rule of
irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has been unlawfully
deprived thereof.
 Tagatac v. Jiminez
G.R. No. 80298 April 26, 1990
CRUZ, J.

DOCTRINE OF THE LAW: When there is a valid transmission of ownership from the
vendor to the vendee, the failure to pay the price does not affect the transfer.

FACTS: 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. 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 and managed to
sell the car to another. Tagatac filed a suit for the recovery of the car’s possession.

ISSUE: Whether or not Tagatac remains the owner over the car.

RULING: Tagatac is no longer the owner. Article 559 of the NCC does not apply
because Tagatac was not unlawfully deprived. There was a valid transmission of
ownership from Tagatac to Fiest. The failure to pay the price does not validly affect the
transfer. The fraud employed made the contract merely voidable. Not being voided at
the time Fiest sold it to Sanchez, there was a valid transmission of ownership under Art
1506. As the car was again sold to Jimenez, the title acquired by him was an
indefeasible one, even as against the original owner.
 EDCA Publishing v. Santos
G.R. No. 80298 April 26, 1990
CRUZ, J.

DOCTRINE OF THE LAW: Ownership in the thing sold shall not pass to the buyer until
full payment of the purchase only if there is a stipulation to that effect. Otherwise, the
rule is that such 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 yet been paid.
Non-payment only creates a right to demand payment or to rescind the contract, or to
criminal prosecution in the case of bouncing checks. But absent the stipulation above
noted, delivery of the thing sold will effectively transfer ownership to the buyer who can
in turn transfer it to another.

FACTS: A person identifying himself as Professor Jose Cruz placed an order by

telephone with the petitioner company for 406 books, payable on delivery. EDCA
prepared the corresponding invoice and delivered the books as ordered, for which Cruz
issued a personal check covering the purchase price of P8,995.65. Cruz sold 120 of the
books to private respondent Leonor Santos who, after verifying the seller's ownership
from the invoice he showed her, paid him P1,700.00. EDCA later found out that Cruz
was an imposter and that Cruz had no more account or deposit with the Philippine
Amanah Bank, against which he had drawn the payment check. EDCA sought the
assistance of the police and seized the books which are in the possession of Santos.
Santos sued for the recovery for the books from EDCA. It is the contention of the
petitioner that the private respondents have not established their ownership of the
disputed books because they have not even produced a receipt to prove they had
bought the stock.

ISSUE: Whether or not EDCA is still the owner over the books because the check
issued by the impostor in payment therefor was dishonored.

RULING: No. EDCA is no longer the lawful owner over the books. Ownership in the
thing sold shall not pass to the buyer until full payment of the purchase only if there is a
stipulation to that effect. Otherwise, the rule is that such 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 yet been paid. Non-payment only creates a right to demand
payment or to rescind the contract, or to criminal prosecution in the case of bouncing
checks. But absent the stipulation above noted, delivery of the thing sold will effectively
transfer ownership to the buyer who can in turn transfer it to another. Actual delivery of
the books having been made, Cruz acquired ownership over the books which he could
then validly transfer to the private respondents. The fact that he had not yet paid for
them to EDCA was a matter between him and EDCA and did not impair the title
acquired by the private respondents to the books.
 Heirs of Spouses Gavino v. CA
G.R. No. 120154 June 29, 1998
BELLOSILLO, J.

DOCTRINE OF THE LAW: When a property is brought by a purchaser in good faith

from one of the heirs, who is entitled to a portion of the property under administration
and to whom they were made to believe that such has an authority to sell, the buyer
acquires title to the property even without judicial approval.

FACTS: A parcel of land measuring 9.3540 hectares was owned by Luis P. Arejola
which was later on sold by his surviving wife, Juana Vda. de Arejola to Spouse Gavino.
The said lot was not included in the inventory of properties submitted by Juana to the
intestate court. The heirs of Arejola asserts that the sale of the property by Juana Vda.
de Arejola and Atty. Jacobo Briones to the Gavino spouses was invalid and unlawful so
that the property must be included in the final distribution of the intestate estate of Luis
P. Arejola. CA ruled that the said property belong to the estate of Luis Arejola.

ISSUE: In a conflict of rights over registered land subject of intestate proceedings which
is sold without express authority of the court, which right should prevail: those of the
innocent purchasers for value in good faith, or those of the heirs of the estate?

RULING: Innocent purchasers for value in good faith. If the sale was without judicial
approval, it could only be attributable to Juana's own fault because she knew very well
that she was no longer administratrix of the estate and therefore could not be
empowered by the intestate court to sell the property. And yet, despite this knowledge,
she proceeded with the sale. Justice and reason therefore dictate that she, not the
Gavinos, should suffer the consequences of her foolhardy act. Even assuming that the
sale by Atty. Briones to the Gavinos was void — being based on a fictitious transfer
from Juana to Atty. Briones — as the former did not own the property in its entirety
when sold, the general rule that the direct result of a previous void contract cannot be
valid, is inapplicable in this case as it will directly contravene the Torrens system of
registration. Where innocent third persons, relying on the correctness of the certificate
of title thus issued, acquire rights over the property, the court cannot disregard such
rights and order the cancellation of the certificate. The effect of such outright
cancellation will be to impair public confidence in the certificate of title. The sanctity of
the Torrens system must be preserved; otherwise, everyone dealing with the property
registered under the system will have to inquire in every instance as to whether the title
had been regularly or irregularly issued, contrary to the evident purpose of the law.
Every person dealing with the registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go behind the
certificate to determine the condition of the property.
 Insurance Services and Commercial Traders, Inc. v. CA
G.R. No. 109305. October 2, 2000
QUISUMBING, J.

DOCTRINE OF THE LAW: The holder of a certificate for value issued by virtue of the
registration of a voluntary instrument may be considered a holder in good faith and for
value, the instrument registered should not be forged. When the instrument presented is
forged, even if accompanied by the owner’s duplicate certificate of title, the registered
owner does not lose his title, and neither does the assignee in the forged deed acquire
any right or title to the property.

FACTS: Paz Salvaleon and her sister Vivencia Salvaleon were the owners of a parcel
of land. Salvaleon borrowed P2k from spouses Castro by mortgaging the land. A SPA
was executed by the Salvaleon authorizing Mila Castro to mortgage the property.
Thereafter, Busque negotiated a real estate mortgage with Insurance Services and
Commercial Traders, Inc. (Instrade), using a forged SPA purportedly signed by the
Salvaleons, authorizing Busque to use the property as security for Cantrade’s
indebtedness to Instrade. When Cantrade failed to fulfill its obligation, Instrade initiated
foreclosure proceedings on the property. Salvaleons claimed that the SPA authorizing
Busque to mortgage their property to Instrade was a forgery. Allegedly, the real estate
mortgage between Cantrade and Instrade and its subsequent foreclosure were null and
void. The Salvaleons prayed for the reconveyance of the property in their favor.

ISSUE: Whether or not there was a valid transfer of the Salvaleons’ property to
Instrade.

RULING: No. the holder of a certificate for value issued by virtue of the registration of a
voluntary instrument may be considered a holder in good faith and for value, the
instrument registered should not be forged. When the instrument presented is forged,
even if accompanied by the owner’s duplicate certificate of title, the registered owner
does not lose his title, and neither does the assignee in the forged deed acquire any
right or title to the property. An innocent purchaser for value is one who purchases a
titled land by virtue of a deed executed by the registered owner himself not by a forged
deed. One who purchases real estate with knowledge of a defect or lack of title in his
vendor cannot claim that he has acquired title thereto in good faith as against the true
owner of the land of an interest therein; and the same rule must be applied to one who
has knowledge of facts which should have put him upon such inquiry and investigation
as might be necessary to acquaint him with the defects in the title of his vendor. A
purchaser cannot close his eyes to facts, which should put a reasonable man upon his
guard, and then claim that he acted in good faith under the belief that there was no
defect in the title of the vendor. His mere refusal to believe that such defect exists, or his
willful closing of his eyes to the possibility of the existence of a defect in his vendor’s
title, will not make him an innocent purchaser for value, if it afterwards develops that the
title was in fact defective and it appears that he had such notice of the defect as would
have led to its discovery had he acted with that measure of precaution which may
reasonably be required of a prudent man in a like situation.