Dizon vs.

Suntay

Respondent Lourdes G. Suntay and one Clarita R. Sison entered into a transaction wherein the Suntay’s
three-carat diamond ring, valued at P5,500.00, was delivered to Sison for sale on commission. Upon
receiving the ring, Sison executed and delivered to the receipt to Suntay. After the lapse of a
considerable time without Clarita R. Sison having returned to the ring to her, Suntay made demands on
Clarita R. Sison for the return of said jewelry. Clarita R. Sison, however, could not comply with
Suntay’s demands because on June 15, 1962, Melia Sison, niece of the husband of Clarita R. Sison,
evidently in connivance with the latter, pledged the ring with the petitioner Dominador Dizon's
pawnshop for P2,600.00 without Suntay’s knowledge. When Suntay found out that Clarita R. Sison
pledged the ring, she filed a case of estafa against the latter with the fiscal's office. Subsequently,
Suntay wrote a letter to Dizon on September 22, 1962 asking for the return of her ring which was
pledged with the latter’s pawnshop under its Pawnshop Receipt serial B No. 65606, dated June 15,
1962.

Dizon refused to return the ring, so Suntay filed an action for its recovery with the CFI of Manila, which
declared that she had the right to its possession. The Court of Appeals likewise affirmed said decision.

Who has the right title over the subject property?

The Supreme Court affirmed the decision of the lower courts. The controlling provision is Article 559 of
the Civil Code which provides that “[T]he 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 of
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.” The only exception the law
allows is when there is acquisition in good faith of the possessor at a public sale, in which case the
owner cannot obtain its return without, reimbursing the price. Hanging on to said exception as his
basis, Dizon insisted that the principle of estoppel should apply in this case but the Supreme Court
ruled otherwise.

In the present case not only has the ownership and the origin of the jewels misappropriated been
unquestionably proven but also that Clarita R. Sison, acting fraudulently and in bad faith, disposed of
them and pledged them contrary to agreement with no right of ownership, and to the prejudice of
Suntay, who was illegally deprived of said jewels and who, as the owner, has an absolute right to
recover the jewels from the possession of whosoever holds them, which in this case is Dizon’s
pawnshop. Dizon ought to have been on his guard before accepting the pledge in question, but
evidently there was no such precaution availed of and he has no one to blame but himself. While the
activity he is engaged in is no doubt legal, it is not to be lost sight of that it thrives on taking
advantage of the necessities precisely of that element of our population whose lives are blighted by
extreme poverty. From whatever angle the question is viewed then, estoppel certainly cannot be justly
invoked.

DIZON V. SUNTAY- Pledge of Immovable

An owner of a movable unlawfully pledged by another is not estopped from recovering

possession. Where the owner delivered the diamond ring solely for sale on commission
but the seller instead pawned it without authority, the owner is not stopped form
pursuing an action against the pawnshop.

Lourdes Suntay is the owner of a 3-carat diamond ring valued at P5,500. She and
Clarita Sison entered into a transaction wherein the ring would be sold on commission.
Clarita received the ring and issued a receipt. After some time, Lourdes made demands
for the return of the ring but the latter refused to comply. When Lourdes insisted on the
return, Clarita gave her the pawnshop ticket which is the receipt of the pledge and she
found out that 3 days after the ring was received by Clarita, it was pledged by Melia
Sison, the niece of Clarita’s husband in connivance with Clarita with the pawnshop of
Dominador Dizon for P2,600. Lourdes then filed an estafa case. She then asked
Dominador Dizon for the return of the ring pledged but refused to return the ring thus
the case filed by Lourdes.

The CFI issued a writ of replevin so Lourdes was able to have possession of the ring
during the pendency of the case. The CFI also ruled in her favor which was affirmed by
the CA on appeal. Thus the case at bar.

W/N the CA erred in ruling that Lourdes has a right to possession of the ring

NO It reiterated the ruling in de Garcia v. CA, that the controlling provision is Art. 559 of
the CC which states that the possession ofmovable 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 of 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.

Lourdes, being unlawfully deprived of her ring thus she has a right to recover it from the
current possessor. Dizon is engaged in a business where presumably ordinary
prudence would require him to inquire whether or not an individual who is offering the
jewelry by pledge is entitled to do so. The principle of estoppel cannot help him at all.
Since there was no precaution availed of, perhaps because of the difficulty of resisting
opportunity for profit, he only has himself to blame and should be the last to complain if
the right of the true owner of the jewelry should be recognized.

Other issues raised:

Principle of estoppel = has its roots in equity, moral right and natural justice.
> For estoppel to exist, there must be a declaration, act or omission by the party who is
sought to be bound.

> A party should not be permitted to go against his own acts to the prejudice of another.
Concurring opinion by J. Teehankee:

> Interpretation of the “unlawfully deprived” in Art. 559 of the CC. It is understood to
include all cases where there has been no valid transmission of ownership. If our
legislature intended interpretation to be that of the French Code, it certainly would have
adopted and used a narrower term than the broad language of Art. 559 (formerly 464)
and the accepted meaning in accordance with our jurisprudence.

EDCA vs. Santos

Facts: Mr. Cruz bought 406 books payable upon delivery from EDCA. Upon discovery that said Mr.
Cruz was an impostor and that the check issued by the impostor as payment was dishonored, EDCA
with the assistance of the police, seized the 120 books from spouses Santos who bought said books
from the impostor, without a warrant. After petitioner refused the demand made by the spouses
Santos for recovery of the books, said spouses obtained a writ of preliminary attachment, and thus
petitioner surrendered the books to the spouses. Now, petitioner alleges that they have been
unlawfully deprived of the books. The petitioner argues that it was, because the impostor acquired no
title to the books that he could have validly transferred to the private respondents. Its reason is that as
the payment check bounced for lack of funds, there was a failure of consideration that nullified the
contract of sale between it and Cruz.

Issue: WON the Contract of Sale between Mr. Cruz and EDCA was null and void for lack of
consideration.

Held: The Contract of Sale is valid.

The contract of sale is consensual and is perfected once agreement is reached between the parties on
the subject matter and the consideration. According to the Civil Code:

Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the
law governing the form of contracts.

Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.

Art. 1478. The parties may STIPULATE that ownership in the thing shall not pass to the purchaser
until he has fully paid the price.

It is clear from the above provisions, particularly the last one quoted, that 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.

EDCA PUBLISHING v. SANTOS

FACTS:
The movable property in this case consists of books, which were bought from EDCA by an
impostor who sold it to SANTOS. EDCA Publishing sold to a person identifying himself as
Professor Jose Cruz who placed an order by telephone with the former for 406 books, payable on
delivery. EDCA prepared the corresponding invoice and delivered the books as ordered, for
which Cruz issued a personal check. On October 7, 1981, Cruz then sold the 120 of the books to
Leonor Santos who asked for verification, and was then showed the invoice for the books.
Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before
clearing of his first check, made inquiries with the De la Salle College where he had claimed to
be a dean and was informed that there was no such person in its employ. Further verification
revealed that Cruz had no more account or deposit with the Philippine Amanah Bank, against
which he had drawn the payment check. EDCA then went to the police, which set a trap and
arrested Cruz. Investigation disclosed his real name as Tomas de la Peña and his sale of 120 of
the books he had ordered from EDCA to the private respondents.

ISSUE:
Whether or not EDCA PUBLISHINGAND DISTRIBUTING CORP was unlawfully deprived of
the property?
HELD:
NO
Santos was a good faith buyer after taking steps to verify the identity of the seller. When she was
showed the invoice, she reasonably believed that he was a legitimate seller. With regard to
unlawful deprivation, EDCA was not unlawfully deprived of the property by mere failure of
consideration. There was already a perfected contract of sale. Proof was even substantiated when
EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to
unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already
transferred to him.
It would certainly be unfair now to make the SANTOSES bear the prejudice sustained by EDCA
as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the
SANTOSES who had acted in good faith, and with proper care, when they bought the books
from Cruz.
\FACTS:
Petitioner EDCA prapared 406 books amounting P8,995.65 for delivery to one Professor Jose Cruz.
Subsequently, the latter sold 120 of the said books to the respondent.
Petitioner became suspicious when Professor Cruz, placed another order without settling his previous
account. EDCA find out that the check released by the same does not have funds and that no Professor
under the name of Jose Cruz works for De La Salle College.
Over investigation it was made known that Jose Cruz's real name is Tomas de la Peña. Petitioners with
the assistance of authority, seized without warrant the books sold to the respondent Leonor Santos and
delivered it to the petitioners.
ISSUE:
Whether or not the petitioner may seize the books from private respondent because it has been
unlawfully deprived of the books due to the dishonored check issued by the impostor.
HELD:
NO
In its extended memorandum, EDCA cites numerous cases holding that the owner who has been
unlawfully deprived of personal property is entitled to its recovery except only where the property was
purchased at a public sale, in which event its return is subject to reimbursement of the purchase price.
The petitioner is begging the question. It is putting the cart before the horse. Unlike in the cases invoked,
it has yet to be established in the case at bar that EDCA has been unlawfully deprived of the books.
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 toEDCA was a
matter between him and EDCA and did not impair the title acquired by the private respondents to the
books.

It would certainly be unfair now to make the private respondents bear the prejudice sustained by EDCA
as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the Santoses
who had acted in good faith, and with proper care, when they bought the books from Cruz.
Layug v IAC: Mojica

DOCTRINE: Even in residential properties, RA 6552 recognizes and reaffirms the vendor’s right to cancel the contract
to sell upon breach and non-payment of the stipulated instalments. The one who fails to pay the rest of the
instalments as agreed upon is left only to a right to a refund of the cash surrender value of the payments on the
property equivalent to 50% of the total payments already made.

FACTS

1) Gabuya brought a suit against Layug for annulment of the contract and for recovery of damages because Layug failed to
pay the rest of the instalments for the purchase of 12 lots in Iligan City (agreed to cost P120,000 payable in three yearly
instalments). Layug only paid the first 2 installments (P80,000) and failed to pay the last instalment of
P40,000.

2) The TC ruled in favour of Gabuya. This was affirmed by the CA.

3) Layug is relying on the stipulation in the contract a) granting him, as vendee, a 30days grace period within which to pay
any yearly instalment not paid within the time fixed therefor, and b) declaring him liable, in the event of his failure to pay
within the grace period, “for interest at the legal rate.” He argues that the stipulation indicates that rescission was
not envisioned as a remedy against a failure to pay instalments and that such failure was not a ground for
abrogating the contract but merely generated liability for interest at legal rate…”

ISSUE

Whether or not Gabuya had the right to rescind the contract and should this happen, whether Layug should be entitled to
get back the ENTIRE amount he already paid?

HELD

Yes Gabuya could rescind the contract. No, Layug should not be entitled to the entire amount he already paid.
The SC: The grace period clause should be read conjointly with the stipulation on rescission, and in such a manner as to
give full effect. The patent and logical import of both provisions, taken together, is that when the vendee fails to pay any
instalment on its due date, he becomes entitled to a grace period of 30 days to cure default by paying the amount of the
instalment plus interest, but that if he should still fail to pay within the grace period, then rescission of the
contract takes place.

Layug cannot be permitted to claim that all his payments should be credited to him in their entirety without
regard whatever to the damages his default might have caused to Gabuya.

R.A. 6552 governs sales of real estate on installments. It recognizes the vendor's right to cancel such contracts upon failure
of the vendee to comply with the terms of the sale, but imposes, chiefly for the latter's protection, certain conditions
thereon. We have had occasion to rule that "even in residential properties the Act" recognizes and reaffirms the vendor's
right to cancel the contract to sell upon breach and nonpayment of the stipulated installments. ..."

The law provides inter alia that "in all transactions or contracts involving the sale or financing of real estate on installment
payments, including residential condominium apartments, ..., 15 where the buyer has paid at least two years of installments ,
the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:

[Grace Period]

(a) To pay, without additional interest, the unpaid installments due within the total grace period earned
by him which is hereby fixed at the rate of one month grace period for every year of
installment payments made: Provided , That this right shall be exercised by the buyer only
once in every five years of the life of the contract and its extensions, if any;

[Refund of "Cash Surrender Value"]

(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value
of the payments on the property equivalent to fifty percent of the total payments made and,
after five years of installments, an additional five per cent every year but not to exceed ninety per
cent of the total payments made; Provided, That the actual cancellation of the contract shall take place
after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of
the contract by a notarial act and upon full payment of the cash surrender value to the buyer.

In the case at bar, Layug had paid two (2) annual installments of P40,000.00 each. He is deemed therefore, in the words of
the law, to have "paid at least two years of installments." He therefore had a grace period of "one month .. for every year of
installment payments made," or two (2) months (corresponding to the two years of installments paid) within which to pay
the final installment. He has thus been left only with the right to a refund of the " cash surrender value of the
payments on the property equivalent to fifty percent of the total payments made," or P40,000.00 (i.e., ½ of
the total payments of P80,000.00). Such refund will be the operative act to make effective the cancellation of the contract
by Gabuya, conformably with the terms of the law.

Dizon vs. Suntay

Respondent Lourdes G. Suntay and one Clarita R. Sison entered into a transaction wherein the Suntay’s
three-carat diamond ring, valued at P5,500.00, was delivered to Sison for sale on commission. Upon
receiving the ring, Sison executed and delivered to the receipt to Suntay. After the lapse of a
considerable time without Clarita R. Sison having returned to the ring to her, Suntay made demands on
Clarita R. Sison for the return of said jewelry. Clarita R. Sison, however, could not comply with
Suntay’s demands because on June 15, 1962, Melia Sison, niece of the husband of Clarita R. Sison,
evidently in connivance with the latter, pledged the ring with the petitioner Dominador Dizon's
pawnshop for P2,600.00 without Suntay’s knowledge. When Suntay found out that Clarita R. Sison
pledged the ring, she filed a case of estafa against the latter with the fiscal's office. Subsequently,
Suntay wrote a letter to Dizon on September 22, 1962 asking for the return of her ring which was
pledged with the latter’s pawnshop under its Pawnshop Receipt serial B No. 65606, dated June 15,
1962.

Dizon refused to return the ring, so Suntay filed an action for its recovery with the CFI of Manila, which
declared that she had the right to its possession. The Court of Appeals likewise affirmed said decision.

Who has the right title over the subject property?

The Supreme Court affirmed the decision of the lower courts. The controlling provision is Article 559 of
the Civil Code which provides that “[T]he 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 of
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.” The only exception the law
allows is when there is acquisition in good faith of the possessor at a public sale, in which case the
owner cannot obtain its return without, reimbursing the price. Hanging on to said exception as his
basis, Dizon insisted that the principle of estoppel should apply in this case but the Supreme Court
ruled otherwise.

In the present case not only has the ownership and the origin of the jewels misappropriated been
unquestionably proven but also that Clarita R. Sison, acting fraudulently and in bad faith, disposed of
them and pledged them contrary to agreement with no right of ownership, and to the prejudice of
Suntay, who was illegally deprived of said jewels and who, as the owner, has an absolute right to
recover the jewels from the possession of whosoever holds them, which in this case is Dizon’s
pawnshop. Dizon ought to have been on his guard before accepting the pledge in question, but
evidently there was no such precaution availed of and he has no one to blame but himself. While the
activity he is engaged in is no doubt legal, it is not to be lost sight of that it thrives on taking
advantage of the necessities precisely of that element of our population whose lives are blighted by
extreme poverty. From whatever angle the question is viewed then, estoppel certainly cannot be justly
invoked.

DIZON V. SUNTAY- Pledge of Immovable

An owner of a movable unlawfully pledged by another is not estopped from recovering

possession. Where the owner delivered the diamond ring solely for sale on commission
but the seller instead pawned it without authority, the owner is not stopped form
pursuing an action against the pawnshop.

Lourdes Suntay is the owner of a 3-carat diamond ring valued at P5,500. She and
Clarita Sison entered into a transaction wherein the ring would be sold on commission.
Clarita received the ring and issued a receipt. After some time, Lourdes made demands
for the return of the ring but the latter refused to comply. When Lourdes insisted on the
return, Clarita gave her the pawnshop ticket which is the receipt of the pledge and she
found out that 3 days after the ring was received by Clarita, it was pledged by Melia
Sison, the niece of Clarita’s husband in connivance with Clarita with the pawnshop of
Dominador Dizon for P2,600. Lourdes then filed an estafa case. She then asked
Dominador Dizon for the return of the ring pledged but refused to return the ring thus
the case filed by Lourdes.

The CFI issued a writ of replevin so Lourdes was able to have possession of the ring
during the pendency of the case. The CFI also ruled in her favor which was affirmed by
the CA on appeal. Thus the case at bar.

W/N the CA erred in ruling that Lourdes has a right to possession of the ring

NO It reiterated the ruling in de Garcia v. CA, that the controlling provision is Art. 559 of
the CC which states that the possession ofmovable 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 of 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.

Lourdes, being unlawfully deprived of her ring thus she has a right to recover it from the
current possessor. Dizon is engaged in a business where presumably ordinary
prudence would require him to inquire whether or not an individual who is offering the
jewelry by pledge is entitled to do so. The principle of estoppel cannot help him at all.
Since there was no precaution availed of, perhaps because of the difficulty of resisting
opportunity for profit, he only has himself to blame and should be the last to complain if
the right of the true owner of the jewelry should be recognized.

Other issues raised:

Principle of estoppel = has its roots in equity, moral right and natural justice.
> For estoppel to exist, there must be a declaration, act or omission by the party who is
sought to be bound.

> A party should not be permitted to go against his own acts to the prejudice of another.
Concurring opinion by J. Teehankee:

> Interpretation of the “unlawfully deprived” in Art. 559 of the CC. It is understood to
include all cases where there has been no valid transmission of ownership. If our
legislature intended interpretation to be that of the French Code, it certainly would have
adopted and used a narrower term than the broad language of Art. 559 (formerly 464)
and the accepted meaning in accordance with our jurisprudence.

EDCA vs. Santos

Facts: Mr. Cruz bought 406 books payable upon delivery from EDCA. Upon discovery that said Mr.
Cruz was an impostor and that the check issued by the impostor as payment was dishonored, EDCA
with the assistance of the police, seized the 120 books from spouses Santos who bought said books
from the impostor, without a warrant. After petitioner refused the demand made by the spouses
Santos for recovery of the books, said spouses obtained a writ of preliminary attachment, and thus
petitioner surrendered the books to the spouses. Now, petitioner alleges that they have been
unlawfully deprived of the books. The petitioner argues that it was, because the impostor acquired no
title to the books that he could have validly transferred to the private respondents. Its reason is that as
the payment check bounced for lack of funds, there was a failure of consideration that nullified the
contract of sale between it and Cruz.

Issue: WON the Contract of Sale between Mr. Cruz and EDCA was null and void for lack of
consideration.

Held: The Contract of Sale is valid.

The contract of sale is consensual and is perfected once agreement is reached between the parties on
the subject matter and the consideration. According to the Civil Code:

Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the provisions of the
law governing the form of contracts.

Art. 1477. The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.

Art. 1478. The parties may STIPULATE that ownership in the thing shall not pass to the purchaser
until he has fully paid the price.

It is clear from the above provisions, particularly the last one quoted, that 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.

EDCA PUBLISHING v. SANTOS

FACTS:
The movable property in this case consists of books, which were bought from EDCA by an
impostor who sold it to SANTOS. EDCA Publishing sold to a person identifying himself as
Professor Jose Cruz who placed an order by telephone with the former for 406 books, payable on
delivery. EDCA prepared the corresponding invoice and delivered the books as ordered, for
which Cruz issued a personal check. On October 7, 1981, Cruz then sold the 120 of the books to
Leonor Santos who asked for verification, and was then showed the invoice for the books.
Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before
clearing of his first check, made inquiries with the De la Salle College where he had claimed to
be a dean and was informed that there was no such person in its employ. Further verification
revealed that Cruz had no more account or deposit with the Philippine Amanah Bank, against
which he had drawn the payment check. EDCA then went to the police, which set a trap and
arrested Cruz. Investigation disclosed his real name as Tomas de la Peña and his sale of 120 of
the books he had ordered from EDCA to the private respondents.

ISSUE:
Whether or not EDCA PUBLISHINGAND DISTRIBUTING CORP was unlawfully deprived of
the property?
HELD:
NO
Santos was a good faith buyer after taking steps to verify the identity of the seller. When she was
showed the invoice, she reasonably believed that he was a legitimate seller. With regard to
unlawful deprivation, EDCA was not unlawfully deprived of the property by mere failure of
consideration. There was already a perfected contract of sale. Proof was even substantiated when
EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to
unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already
transferred to him.
It would certainly be unfair now to make the SANTOSES bear the prejudice sustained by EDCA
as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the
SANTOSES who had acted in good faith, and with proper care, when they bought the books
from Cruz.
\FACTS:
Petitioner EDCA prapared 406 books amounting P8,995.65 for delivery to one Professor Jose Cruz.
Subsequently, the latter sold 120 of the said books to the respondent.
Petitioner became suspicious when Professor Cruz, placed another order without settling his previous
account. EDCA find out that the check released by the same does not have funds and that no Professor
under the name of Jose Cruz works for De La Salle College.
Over investigation it was made known that Jose Cruz's real name is Tomas de la Peña. Petitioners with
the assistance of authority, seized without warrant the books sold to the respondent Leonor Santos and
delivered it to the petitioners.
ISSUE:
Whether or not the petitioner may seize the books from private respondent because it has been
unlawfully deprived of the books due to the dishonored check issued by the impostor.
HELD:
NO
In its extended memorandum, EDCA cites numerous cases holding that the owner who has been
unlawfully deprived of personal property is entitled to its recovery except only where the property was
purchased at a public sale, in which event its return is subject to reimbursement of the purchase price.
The petitioner is begging the question. It is putting the cart before the horse. Unlike in the cases invoked,
it has yet to be established in the case at bar that EDCA has been unlawfully deprived of the books.
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 toEDCA was a
matter between him and EDCA and did not impair the title acquired by the private respondents to the
books.

It would certainly be unfair now to make the private respondents bear the prejudice sustained by EDCA
as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the Santoses
who had acted in good faith, and with proper care, when they bought the books from Cruz.
Layug v IAC: Mojica

DOCTRINE: Even in residential properties, RA 6552 recognizes and reaffirms the vendor’s right to cancel the contract
to sell upon breach and non-payment of the stipulated instalments. The one who fails to pay the rest of the
instalments as agreed upon is left only to a right to a refund of the cash surrender value of the payments on the
property equivalent to 50% of the total payments already made.

FACTS

1) Gabuya brought a suit against Layug for annulment of the contract and for recovery of damages because Layug failed to
pay the rest of the instalments for the purchase of 12 lots in Iligan City (agreed to cost P120,000 payable in three yearly
instalments). Layug only paid the first 2 installments (P80,000) and failed to pay the last instalment of
P40,000.

2) The TC ruled in favour of Gabuya. This was affirmed by the CA.

3) Layug is relying on the stipulation in the contract a) granting him, as vendee, a 30days grace period within which to pay
any yearly instalment not paid within the time fixed therefor, and b) declaring him liable, in the event of his failure to pay
within the grace period, “for interest at the legal rate.” He argues that the stipulation indicates that rescission was
not envisioned as a remedy against a failure to pay instalments and that such failure was not a ground for
abrogating the contract but merely generated liability for interest at legal rate…”

ISSUE

Whether or not Gabuya had the right to rescind the contract and should this happen, whether Layug should be entitled to
get back the ENTIRE amount he already paid?

HELD

Yes Gabuya could rescind the contract. No, Layug should not be entitled to the entire amount he already paid.

The SC: The grace period clause should be read conjointly with the stipulation on rescission, and in such a manner as to
give full effect. The patent and logical import of both provisions, taken together, is that when the vendee fails to pay any
instalment on its due date, he becomes entitled to a grace period of 30 days to cure default by paying the amount of the
instalment plus interest, but that if he should still fail to pay within the grace period, then rescission of the
contract takes place.

Layug cannot be permitted to claim that all his payments should be credited to him in their entirety without
regard whatever to the damages his default might have caused to Gabuya.

R.A. 6552 governs sales of real estate on installments. It recognizes the vendor's right to cancel such contracts upon failure
of the vendee to comply with the terms of the sale, but imposes, chiefly for the latter's protection, certain conditions
thereon. We have had occasion to rule that "even in residential properties the Act" recognizes and reaffirms the vendor's
right to cancel the contract to sell upon breach and nonpayment of the stipulated installments. ..."

The law provides inter alia that "in all transactions or contracts involving the sale or financing of real estate on installment
payments, including residential condominium apartments , ..., 15 where the buyer has paid at least two years of installments ,
the buyer is entitled to the following rights in case he defaults in the payment of succeeding installments:

[Grace Period]

(a) To pay, without additional interest, the unpaid installments due within the total grace period earned
by him which is hereby fixed at the rate of one month grace period for every year of
installment payments made: Provided , That this right shall be exercised by the buyer only
once in every five years of the life of the contract and its extensions, if any;

[Refund of "Cash Surrender Value"]

(b) If the contract is cancelled, the seller shall refund to the buyer the cash surrender value
of the payments on the property equivalent to fifty percent of the total payments made and,
after five years of installments, an additional five per cent every year but not to exceed ninety per
cent of the total payments made; Provided, That the actual cancellation of the contract shall take place
after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of
the contract by a notarial act and upon full payment of the cash surrender value to the buyer.
In the case at bar, Layug had paid two (2) annual installments of P40,000.00 each. He is deemed therefore, in the words of
the law, to have "paid at least two years of installments." He therefore had a grace period of "one month .. for every year of
installment payments made," or two (2) months (corresponding to the two years of installments paid) within which to pay
the final installment. He has thus been left only with the right to a refund of the " cash surrender value of the
payments on the property equivalent to fifty percent of the total payments made," or P40,000.00 (i.e., ½ of
the total payments of P80,000.00). Such refund will be the operative act to make effective the cancellation of the contract
by Gabuya, conformably with the terms of the law.