Cavite Development Banks vs.

Spouses Lim 1983 by Rodolfo Guansing must, therefore, be deemed a

nullity for CDB did not have a valid title to the said property.
Facts:
Under Art. 1459, at the time of delivery or
Rodolfo Guansing obtained a loan for an amount of consummation stage of the sale, it is required that the seller
90, 000 from cavitred Development bank. He mortgaged a be the owner of the thing sold. Otherwise, he will not be able
parcel of land situated in La Loma, Quezon City to secure the to comply with his obligation to transfer ownership to the
said Loan. CDB foreclosed the mortgage since Guansing buyer. It is at the consummation stage where the principle
defaulted in the payment of his loan. At the foreclosure sale, of nemo dat quod non habet applies.
the mortgaged property was sold to CDB as the highest
bidder.
Dizon vs. Suntay
Lolita Chan Lim offered to purchase the said land
from CDB. Later Lim paid 30,000 as option money. However
An owner of a movable unlawfully pledged by another is not
she later discovered that the subject property was originally
registered in the name of Perfecto Guansing, father of estopped from recovering possession. Where the owner
Rodolfo. Rodolfo derived the land from his father, and CDB delivered the diamond ring solely for sale on commission but
derived it from Rodolfo. It appears, however that Perfecto the seller instead pawned it without authority, the owner is
instituted a civil case for the cancellation of his son’s title. The
not stopped form pursuing an action against the pawnshop.
RTC restored Perfecto’s previous title over the land since the
title of Rodolfo was secured fraudulently.

Lim filed an action for specific performance and damages FACTS:

against CDB and FEBTC.
The RTC rendered a decision in favour of the Lim spouses. t
ruled that: (1) there was a perfected contract of sale between
Lim and CDB, contrary to the latter's contention that the
written offer to purchase and the payment of P30,000.00
were merely pre-conditions to the sale and still subject to the
approval of FEBTC; (2) performance by CDB of its obligation
under the perfected contract of sale had become impossible
on account of the 1984 decision in Civil Case No. Q-39732
cancelling the title in the name of mortgagor Rodolfo
Guansing; (3) CDB and FEBTC were not exempt from liability
despite the impossibility of performance, because they could
not credibly disclaim knowledge of the cancellation of
Rodolfo Guansing's title without the admitting their failure to
discharge their duties to the public as reputable banking
institutions; and (4) CDB and FEBTC are liable for damages for
the prejudice caused against the Lims.
The CA affirmed the decision of RTC.
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.

Issue: WON the contract of Sale between CDB and Lim is valid
The CFI issued a writ of replevin so Lourdes was able to have
Held:
possession of the ring during the pendency of the case. The
No. CDB never acquired a valid title to the property because CFI also ruled in her favor which was affirmed by the CA on
the foreclosure sale, by virtue of which, the property had appeal. Thus the case at bar.
been awarded to CDB as highest bidder, is likewise void since
the mortgagor was not the owner of the property foreclosed.
Thus the sale by CDB to Lim of the property mortgaged in
ISSUE:
W/N the CA erred in ruling that Lourdes has a right to
possession of the ring > 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
HELD: NO
intended interpretation to be that of the French Code, it

It reiterated the ruling in de Garcia v. CA, that the controlling certainly would have adopted and used a narrower term than

provision is Art. 559 of the CC which states that the the broad language of Art. 559 (formerly 464) and the

possession ofmovable property acquired in good faith is accepted meaning in accordance with our jurisprudence.

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: