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  • Obana v. CA

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    Ildefonso Hernaez
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    Sandoval sold 170 cavans of rice to Chan Lim, transferring ownership. Chan Lim then sold the rice to Obana and delivered it. However, Chan Lim did not pay Sandoval. A few days later, Chan Lim repaid Obana, rescinding their sale contract. As such, Obana no longer had ownership of the rice. The Supreme Court ruled in favor of Sandoval, finding that Obana could not unjustly enrich himself by keeping rice that no longer belonged to him after the rescission with Chan Lim.

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    Sales Law Case Digest

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    Sandoval sold 170 cavans of rice to Chan Lim, transferring ownership. Chan Lim then sold the rice to Obana and delivered it. However, Chan Lim did not pay Sandoval. A few days later, Chan Lim repaid Obana, rescinding their sale contract. As such, Obana no longer had ownership of the rice. The Supreme Court ruled in favor of Sandoval, finding that Obana could not unjustly enrich himself by keeping rice that no longer belonged to him after the rescission with Chan Lim.

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    315 views2 pages

    Obana v. CA

    Uploaded by

    Ildefonso Hernaez
    Sandoval sold 170 cavans of rice to Chan Lim, transferring ownership. Chan Lim then sold the rice to Obana and delivered it. However, Chan Lim did not pay Sandoval. A few days later, Chan Lim repaid Obana, rescinding their sale contract. As such, Obana no longer had ownership of the rice. The Supreme Court ruled in favor of Sandoval, finding that Obana could not unjustly enrich himself by keeping rice that no longer belonged to him after the rescission with Chan Lim.

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    of 2

    [73] OBANA v. CA - CA reversed CFI.

    GR No. L-36249 | March 29, 1985 - CA held that Chan was a clear swindler
    Melencio-Herrera, J. - No intention to honor the obligation since he bought it from
    Sandoval at a higher price that what he charged Pet Obana
    SUMMARY: Sandoval is the owner and manager of “Sandoval and Sons Rice Mill” in - Chan Lin could not be considered the owner of the goods at the time
    Pangasinan. Chan Lim offered to buy 170 cavans of clean rice at P37.25/cavan to be of the delivery. Since Obana acquired the goods from Chan Lin, who
    delivered to Obana’s store in La Union, which was then accepted Sandoval, Obana being was not the owner of such goods, Obana acquired no greater right
    Sandoval’s previous customer. Upon delivery, Chan Lin could not be found, so the driver to the 170 cavans than Chan Lin.
    tried to collect from Obana. However, Obana refused since his agreement was with
    Chan Lin and that he had already paid in full to Chan Lin at P33/cavan. Sandoval again ISSUES w/ HOLDING:
    demanded payment but such was refused by Obana. Therefore, the former filed a case 1. W/N there was a perfected sale between Sandoval and Chan Lin – YES
    against the latter. The MTC ruled in favor of Sandoval but was reversed by the CA. The - Art. 1475 provides that mere meeting of the minds perfects a contract of sale.
    SC ruled in favor of Sandoval.
    2. W/N Chan Lin acquired ownership of the rice - YES
    DOCTRINE: There was a perfected sale because there was meeting of the minds upon - Ownership of the rice was transferred to Chan Lin upon its delivery to him in
    the object of the contract and its price. Thus the ownership of the rice was transferred San Fernando, La Union.
    to Chan Lin upon its delivery by Sandoval. However, Chan Lin only had a rescissible title - Art 1477: Ownership is transferred upon actual or constructive
    to the goods because of the non-payment but it had not been rescinded at the time of delivery
    the sale to Obana. Nevertheless, when Chan Lin repaid the sum of P5,600 to Obana, the - Art 1496: Ownership is acquired from the moment it is delivered to
    sale between then is considered voluntarily rescinded. Thus, Obana is divested of any him in any of the ways specidied in 1497-1501 or in any manner
    claim to the rice. Obana cannot be allowed to keep the rice and be allowed to unjustly signifying an agreement that the possession is transferred form the
    enrich himself at the expense of another by holding on to property no longer belonging vendor to the vendee
    to him. - At the very least, Chan Lin had a rescissible title to the good because of the
    non-payment. The same however was not rescinded at the time of the sale to
    FACTS: Obana.
    - Sandoval is the owner and manager of “Sandoval and Sons Rice Mill” in
    Pangasinan 3. W/N Obana had ownership of the rice – YES
    - On Nov 21 1964, Chan Lim offered to buy 170 cavans of clean rice (wagwag) - Obana obtained ownership upon delivery by Chan Lin to him
    at P37.25/cavan from Sandoval. - However Obana, himself, testified that 3 days after the delivery, Chan
    - The delivery is to be made to Obana’s store in La Union on the 22 nd Lin, accompanied by Sandoval’s driver, repaid P5,600 to him.
    of November 1964. Sandoval accepted the offer as he knew Obana, - Obana then also claims that upon repayment by Chan Lin to him,
    the latter being a previous customer of his. Obana returned the rice to Sandovals’s driver.
    - The 170 cavans were delivered on the 22nd to Obana via Sandoval’s truck, - Sandoval’s driver disputes the return of the rice →
    accompanied by Chan Lin. driver’s testimony more credible
    - Upon unloading the goods, the driver tried to collect the payment - Therefore, having been repaid by Chan Lin and accepted by Obana, the sale
    from Chan Lin. However, Chan Lin could not be found, so the driver between them was voluntarily rescinded.
    tried to collect from Obana. However, Obana refused since his - Obana was then divested of any claim to the rice.
    agreement was with Chan Lin and that he had already paid in full to - Technically then he should return the rice to Chan Lin.
    Chan Lin at P33/cavan. - However, since Chan Lin was willing to return the rice to
    - Sandoval again demanded payment but such was refused by Obana. Sandoval, Obana should then just return the rice to
    Therefore, the former filed a case against the latter at MTC San Fernando, La Sandoval based on law and equity.
    Union.MTC ruled in favor of Sandoval.
    - CFI reversed MTC.
    - 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)

    RULING: AFFIRMED albeit under a different premise.

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