Soto purchased from Youngstown Hardware 700 galvanized iron sheets and round iron bars. He issued as payment a check drawn against Security Bank. Soto then sold the sheets, some of them to Chua Hai. Meanwhile, the check issued for payment was dishonored due to insufficiency of funds. This prompted the hardware store to file a case of estafa against Soto and prayed for the return of the sheets. This was opposed by Chua on the part of the sheets he purchased. Notwithstanding this opposition, the court ordered for its return.
HELD:
To deprive Chua, who was in good faith, of the possession of the sheets, may it be temporarily or permanently, is in violation of the rule laid down in Article 559. Possession of chattels in good faith is equivalent to title, until ordered by the proper court to restore the thing to the owner who was illegally derpived thereof. Until such decree is issued, the possessor as presumptive owner is entitled to the enjoyment and holding of the thing. Further, the hardware store or Ong was not unlawfully deprived of the sheets. There was a perfected contract of sale between it and Soto. There was delivery, by virtue of which, Soto was able to acquire title over the sheets and bars. The failure of the buyer to pay the purchase price doesn't automatically revest ownership to the seller until the contract of sale has been first rescinded or resolved. Hence, until the contract between Soto and Ong has been set aside by the competent court, the validity of Chua’s possession cannot be disputed and his right to possession thereof should be respected.
