FACTS:

The car in dispute was originally owned by Northern Motors and was subsequently purchased by a Chinaman. This Chinaman then sold it to Belizo, who in turn sold the same to Cruz. Belizo was a second-hand car dealer. He offered to Cruz that he would sell the car to a prospective buyer and since the car registration was missing, Cruz issued an authorization letter to Belizo to obtain another certificate, at the insinuation of the latter. The car was also turned over to Belizo. The letter was then falsified by Belizo and converted into an absolute deed of sale. Because of this, he was able to secure a car registration in his name and was later able to sell the car to Balahan who then sold the car to Pahati. This prompted Cruz to file an action for replevin.

HELD:

One who has lost or has been unlawfully deprived of a movable may recover the same from the person in possession of the same and the only defense the latter may have is if he has acquired it in good faith at a public sale in which case the owner cannot obtain its return without reimbursing the price paid therefore. This is supplemented by the provision stating that
where goods are sold by a person who is not the owner thereof, and who doesn't 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. Cruz has a better right to the car in question than Bulahan or Pahati. He has the right to recover the car as he was unlawfully deprived of it due to the ingenious scheme employed by Belizo. This is the case even if Bulahan or Pahati acted in good faith.