RUBISO AND GELITO V. RIVERA

FACTS:

Gelito & Co. was owned by Bonifacio Gelito and Chinaman Sy Qui. One of the properties of the company was a pilot ship/merchant vessel called Valentina, whose ownership is at question here.

A series of sales had taken place:

1. First, Gelito had sold is 2/3 share to Chinaman Sy Qui.
2. When Sy Qui acquired full ownership of the company, he sold Valentina to Florentino Rivera for P2,500 on January 4, 1915. The sale was registered in the Bureau of Customs over two months later on March 17, 1915.
3. Shorty after the sale to Rivera, a suit was brought against Sy Qui to enforce payment of a certain sum of money. Valentina was placed at a public auction and was purchased by Sy Qui’s creditor, Fausto Rubiso. He bought the vessel for P55.45. The sale was registered in the Office of the Collector of Customs on January 27, 1915 and in the commercial registry on March 14, 1925.

The first buyer, Florentino Rivera, contends that he had lost the ship when it got stranded somewhere in Batangas. He claims that Rubiso took possession of the vessel without his knowledge or consent. Rivera seeks to be indemnified for the profits he could have collected from the vessel’s voyages had Rivera not taken it. But, does he have the right to the vessel?

ISSUE:

Who is the rightful owner of the merchant vessel--Rivera or Rubiso?

RULING:

Rubiso. It is true that the sale to Rivera had taken place prior to the public auction where Rubiso bought the vessel, but the same was entered in the customs registry only on March 17, 1915. Rubiso, however, had acted more swiftly by registering the property much earlier in the Office of the Collector Customs and in the commercial registry in the same month. Although the sale to Rivera had taken place first, the registration made by Rubiso was made earlier.

Rubiso did the smart thing by registering the property at the commercial registry. Pursuant to Article 573 of the Code of Commerce, the acquisition of a vessel must be registered at the commercial registry in order to bind third parties. Such registration is necessary and indispensible in order that the purchaser’s rights may be maintained against a claim filed by third persons.

With respect to the rights of two purchasers, whichever of them first registered his acquisition of the vessel is the one entitled to enjoy the protection of the law. By first registration, he becomes the absolute owner of the boat and is freed from all encumbrances and claims by strangers.