Jose Cruz vs Reynaldo Pahati, et. Al.

Facts:

Northern motors, inc. sold an automobile to a Chinaman named Lu Dag. Lu Dag sold it to Jesusito Belizo, a
dealer on second hand car. He then sold the same to Jose Cruz.
One year later, Belizo offered Cruz to sell the car for the latter claiming that Belizo has a buyer. Cruz
agreed.
Cruz wrote a letter addressed to motor section of the Bureau of Public Works for the issuance of a new
certificate of registration because his certificate of registration was missing and that he intends to sell the
car.
This letter was sent to Belizo. The car was likewise turned over to him on the pretext that Belizo would
show the car to the buyer. However, the letter was falsified and was converted to a deed of sale in favor
of Belizo by replacing a portion of the letter and by adding in its place the words, sold the car to Mr.
Belizo for P5000.
By virtue of the falsified deed of sale, he was able to obtain a certificate of registration in his name and at
the same time, sold the car to Felixberto Bulahan who in turn sold the car to Reynaldo Pahati.
Cruz filed a case for replevin. Both Cruz and Bulahan claim to be the owners of the same property.

Issue: WON Cruz has a better right over the car.

Held: Yes

Art. 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 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
therefore.

Art. 1505 as a supplementing provision - Where goods are sold by a person who is not the owner thereof,
and who does not sell them under authority or with the consent of the owner, the buyer acquires no
better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell.
o Applying these articles, the conclusion is that Jose Cruz has a better right to the car than Bulahan
for it cannot be disputed that Cruz had been illegally deprived thereof because of the ingenious
scheme utilized by Belizo to enable him to dispose of the car as if he were the owner thereof.
o Thus, Cruz may still recover the possession of the car even if Bulahan had acted in good faith in
purchasing it from Belizo.
o Further, the conduct of Cruz in giving Belizo a letter to secure the issuance of a new certificate of
registration does not constitute a sufficient defense that would preclude recovery of the car and
denial of Belizos authority to sell because the letter was falsified.