Obana V Ca.docx

Obana v CA| March 29, 1985| Melencio-Herrera, J  

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Sandoval is the owner and manager of “Sandoval and Sons Rice Mill” in Pangasinan Nov 21 1964, Chan Lim offered to buy 170 cavans of clean rice (wagwag) at P37.25/cavan from Sandoval o Delivery to be made to Pet Obana’s store in La Union on the 22nd of November 1964 o Sandoval accepted the offer as he knew Obana, the latter being a previous customer of his The 170 cavans were delivered on the 22nd to Obana via Sandoval’s truck, accompanied by Chan Lin o Upon unloading the goods, the driver tried to collect the payment from Chan Lin o However, Chan Lin could not be found o Driver tried to collect from Obana  Obana refused since his agreement was with Chan Lin  He had already paid in full to Chan Lin at P33/cavan Sandoval again demanded payment but such was refused by Pet therefore former filed a case against Pet at MTC San Fernando, LU o MTC ruled in favor of Sandoval o CFI reversed MTC CA reversed CFI o CA held that Chan was a clear swindler  No intention to honor the obligation since he bought it from Sandoval at a higher price that what he charged Pet Obana o Chan Lin could not be considered the owner of the goods at the time of the delivery o Since Pet acquired the good from Chan Lin, who was not the owner of such goods, Pet acquired no greater right to the 170 cavans than Chan Lin

W/N there was a perfected sale between Sandoval and Chan Lin – YES  Mere meeting of the minds perfects a contact of sale (Art 1475) W/N Chan Lin acquired ownership of the rice - YES

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Ownership of the rice was transferred to Chan Lin upon its delivery to him in San Fernando, LU o Art 1477: Ownership is transferred upon actual or constructive delivery o Art 1496: Ownership is acquired from the moment it is delivered to him in any of the ways specidied in 1497-1501 or in any manner signifying an agreement that the possession is transferred form the vendor to the vendee  At the very least, Chan Lin had a rescissible title to the good because of the non-payment o The same however was not rescinded at the time of the sale to Obana W/N Obana had ownership of the rice – YES  Obana obtained ownership upon delivery by Chan Lin to him  However Pet Obana, himself, testified that 3 days after the delivery, Chan Lin, accompanied by Sandoval’s driver, repaid P5,600 to him o Obana then also claims that upon repayment by Chan Lin to him, Obana returned the rice to Sandovals’s driver  Sandoval’s driver disputes the return of the rice o Driver’s testimony more credible  Therefore, having been repaid by Chan Lin and accepted by Obana, the sale between them was voluntarily rescinded o Obana was then divested of any claim to the rice o Technically then he should return the rice to Chan Lin  However since Chan Lin was willing to return the rice to Sandoval  Obana should then just return the rice to Sandoval based on law and equity  Obana cannot unjustly enrich himself at the expense of another by holding property no longer belonging to him (does not have ownership anymore due to the rescission) HELD: AFFIRMED albeit under a different premise