Apedia

Good Faith Betty Jewelries Tambunting Aida  I Rule

Front
IX.
Betty entrusted to her agent, Aida, several pieces of jewelry to be sold on commission with the express obligation to turn over to Betty the proceeds of the sale, or to return the jewelries if not sold in a month's time. Instead of selling the jewelry, Aida pawned them with the Tambunting Pawnshop, and used the money for herself. Aida failed to redeem the pawned jewelries and after a month, Betty discovered what Aida had done. Betty brought criminal charges which resulted in Aida's conviction for estafa.
Betty thereafter filed an action against Tambunting Pawnshop for the recovery of the jewelry. Tambunting raised the defense of ownership, additionally arguing that it is duly licensed to engage in the pawnshop and lending business, and that it accepted the mortgage of the jewelry in good faith and in the regular course of its business.
If you were the judge, how will you decide the case? (1%)
(A)  I will rule in favor of Betty. My ruling is based on the Civil Code provision that one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. Tam bunting's claim of good faith is inconsequential.
(B)  I will rule in favor of Betty. Tambunting's claim of good faith pales into insignificance in light of the unlawful deprivation of the jewelries. However, equity dictates that Tambunting must be reimbursed for the pawn value of the jewelries.
(C)  I will rule in favor ofTambunting. Its good faith takes precedence over the right of Betty to recover the jewelries.
(D)  I will rule in favor ofTambunting. Good faith is always presumed. Tambunting's lawful acquisition in the ordinary course of business coupled with good faith gives it legal right over the jewelries.

Back
SUGGESTED ANSWER:
(A)
Tambunting's claim of good faith is inconsequential.
Although possession of movable property acquired in good faith is equivalent to a title, nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same.  Betty has been deprived unlawfully of her jewelries by the estafa committed by Aida.  The pledge of said jewelries by Aida to Tambunting Pawnshop is void because the pledgor is not the owner (Article 2085 (2) Civil Code).  Tambunting's claim of good faith is inconsequential, because, aside from good faith Tambunting must prove also that it acquired the jewelries at a public sale in order to be able to retain the jewelries until reimbursed by Betty the amount of the loan including interest. (Art. 559 Civil Code)
The only exception the law allows is when there is acquisition in good faith of the possessor at a public sale, in which case the owner cannot obtain its return without reimbursing the price (Dizon v. Suntay, 47 SCRA 160, September 29, 1972).

Tags: 2013, bar

Learn with these flashcards. Click next, previous, or up to navigate to more flashcards for this subject.

Next card: Janet arlene motion grant lease action i contract

Previous card: Action vendee recovery real statute frauds  a contract

Up to card list: CIVIL LAW