Obana v CA| March 29, 1985| Melencio-Herrera, J
delivery to him in San Fernando, LU
 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
 Ownership of the rice was transferred to Chan Lin upon its
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o The same however was not rescinded at the time of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