EDCA Publishing v.

Santos
184 SCRA 614 (1990)
1st Division. Cruz, J.

Topic: Sale by a person having a voidable title

SUMMARY: “Prof. Jose Cruz” bought books from EDCA Publishing with a check. Cruz sold books to
Leonor Santos. Cruz's check was dishonored, prompting EDCA to claim their books from Leonor Santos,
saying that return of the books was just because EDCA was unlawfully deprived of it. Court held that
spouses, through Cruz, obtained title over the books, as Cruz perfected a contract of sale with them.
Although voidable for being obtained through deceit (check bounced), it is valid and binding until it is
annulled.

DOCTRINE: Voidable contracts (of sale) are valid and binding until annulled by a proper action in
court, thereby making a sale by a person having a voidable title over it also valid and binding until
annulled (Article 1390).

FACTS:

1. A person who introduced himself as “Professor Jose Cruz” placed an order by telephone to
Petitioner EDCA Publishing & Distributing Corp., for a total of 406 books. EDCA prepared the
corresponding invoice and delivered the ordered books. Cruz issued a personal check for
P8,995.65.

2. Cruz sold 120 of the books to Respondent Leonor Santos. Leonor Santos first verified the seller
Cruz's ownership of the books. Cruz showed her his EDCA invoice, and was paid P1,700.

3. EDCA became suspicious over a second order placed by Cruz. They then made inquiries at the
De la Salle College where he claimed to be a dean, and they were informed that there was no such
person employed there. Further, Cruz had no more account or deposit with Philippine Amanah
Bank, where he had drawn the payment check for the first order of books.

4. EDCA went to the police, who then arrested Cruz. Investigation revealed that his true name was
Tomas de la Peña and that he had sold 120 of the books to respondent Leonor Santos.

5. EDCA then asked for the assistance of the police, who then forced their way into the store of
respondents Leonor Santos. The police threatened Santos with prosecution for buying stolen
property. They also seized the 120 books without warrant, loaded them in a van belonging to
EDCA, and then gave the books back to Petitioner EDCA.

6. Private respondents Leonor Santos and her husband Gerardo demanded for the return of the
books from EDCA, who refused. They then sued for the recovery of the books.

7. A writ of preliminary attachment was issued and the petitioner EDCA after initial refusal finally
surrendered the books back to the Santoses.

8. MTC, RTC and CA held that ownership of the books was duly vested in the Spouses. EDCA
appeals here, with the argument that:
a. “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.”
 b. Impostor Cruz “acquired no title to the books that he could have validly transferred to the
private respondents,” because his payment check bounced, leading to a failure of
consideration and therefore the nullity of the contract of sale.

ISSUE:
W/N EDCA was “unlawfully deprived” of the books because the check to pay for them was dishonored,
therefore giving EDCA the rightful title over the books and granting its return to them - NO

RULING: Decision AFFIRMED and Petition DENIED.

RATIO:

1. EDCA was NOT unlawfully deprived of the books. The impostor, Cruz, has acquired ownership
of the books, even though he has not yet paid the price. This is because there was a perfected
contract of sale already, at the moment of the meeting of the minds upon the thing which is the
object of the contract and the price (Article 1475). If there is no stipulation that the ownership of
the thing shall not pass to the buyer until full payment of the purchase price, then the general rule
shall follow, that ownership shall pass from the vendor to the vendee upon actual or constructive
delivery of the thing sold, even if the purchase price has not yet been paid. Since there had been
delivery, Cruz lawfully acquired title over the books. Having acquired ownership of the books, it
was valid for him to transfer ownership to the Santoses, giving them title over it. The fact that he
has not yet paid for the books does not impair the title acquired by the Santoses over the books.

2. Initially, though, the transaction or sale Cruz made was a voidable contract. As may be learned
from Tagatac v. Jimenez, the fraud and deceit practiced in a sale, as done here by Cruz, makes the
sale a voidable contract (Article 1390, NCC). Being a voidable contract, it is susceptible of either
ratification or annulment. If the contract is ratified, the action to annul it is extinguished (Article
1392), and the contract is cleansed from its defects (Article 1396). Only if the contract is annulled
is there restitution to their respective situations before the contract (Article 1398). But as long as
no action is taken by the party entitled, the contract of sale remains valid and binding.

3. While the Court sympathizes with EDCA, there is no justice in transferring EDCA's loss to
Leonor Santos, a buyer in good faith, who even ascertained Cruz's ownership of the books before
buying them. The remedy of EDCA is not against Santoses but against Cruz who caused all this
trouble.