ARTHUR PAJUNAR AND INVENCIA PAJUNAR, PETITIONERS, VS. HON. COURT OF APPEALS, MAURO ELUNA AND TEOFILA ELUNA, RESPONDENTS.

This is a petition for review on certiorari seeking to set
aside the decision of the Second Division of the Court of Appeals* in C.A. G.R. No. SP. 02247 (UDK 7544), entitled
“Arthur & Invencia Pajunar
v. Hon. Pedro Gabaton, Judge, RTC, Branch XLI, Negros Oriental, Mauro Eluna and Teofila Eluna” for Recovery
of Personal Property with Writ of Replevin which
affirmed the Order of the aforenamed Regional Trial
Court of Negros Oriental** which
reads:

“This is a case of Recovery of Personal Property with a Writ
of Replevin filed by one Arthur and Invencia Pajunar as plaintiffs,
against one Mauro and Teofila Eluna
as defendants, tried and decided by the Municipal Court of Siaton.

“The decision is in favor of the defendants and against the
plaintiffs apparently based primarily on the preponderance of evidence and
prescription.

“Upon close reading of the exhaustive memorandum submitted by
each of the parties in this case and a close perusal of all the evidences on record and checking them against the
decision itself appealed, this court is of the opinion and so holds that the grounds upon which this
decision is based are well taken, so
that there is nothing that this court
can add neither can deduct for the same conforms to the thinking of this court.

“WHEREFORE, premises considered, the appealed decision of the above-entitled case rendered by the
Municipal Court of Siaton is hereby affirmed.” (Rollo, p. 9)

The facts of the case as
found by public respondent Court of Appeals are as follows:

Sometime in 1969,
respondent Mauro Eluna bartered his three year old
male cow for one year old female carabao then in the possession of Aurelio Enopia.  The female carabao, which is the one in question, bore the brand
“ART” in her front and
hind legs at the time she was acquired by Mauro.  Although the animal was branded, said
respondent did not or could not register the transfer to him.

In March 1980, petitioner
Arthur Pajunar learned that the disputed carabao was in the possession of respondent Eluna.  Claiming that
he was the original owner of the carabao which got
lost in 1974, petitioner demanded her return. 
He demanded also the delivery to him of the two offsprings of the carabao
which were five years and eight months old at the time they were registered in
1980.  When Eluna
refused to do so despite repeated demands, petitioner went to court to recover
possession.  (Rollo,
pp. 10-11).

From the adverse order of
the Regional Trial Court, plaintiff
appealed to public respondent Court of Appeals.

In its decision dated October
30, 1986, the Court
of Appeals affirmed the decision of the lower court, with appellate tribunal
declaring:

“Consequently, since respondent Eluna
had possessed the carabao since 1969, that is, for
more than ten (10) years, he acquired ownership by prescription under Article
1132 of the Civil Code.

“ART. 1132.  The ownership
of movables prescribes through uninterrupted possession for four years in good
faith.

“The ownership of personal property also prescribes through
uninterrupted possession for eight years, without need of any other condition.

“With regard to the
right of the owner to recover personal property last or of which he has been
illegally deprived, as well as with respect to movables acquired in a public
sale, fair or market, or from a merchant’s store, the provisions of articles
559 and 1505 of this Code shall be observed. 
(1955a).”

On March
23, 1987, the Court
resolved, after considering the pleadings
filed by both respondent and petitioner, to give due course to the petition.

The three assignments of
error raised by the petitioner (Rollo, p. 4) in this
case, may be reduced to one main issue:

“Whether or not the findings of the lower court which were
affirmed by the Court of, Appeals are supported by substantial evidence.”

Petitioner contends that
private respondent Eluna has failed to establish his
ownership of the mestisa carabao
found in his possession.  Since the
female carabao bears the brand “ART” on the
fore and hind legs of the animal as branded by petitioners before it got lost (Rollo,
p. 4), failure of defendant Mauro Eluna to register
in his name the said carabao, constitutes a flaw in
his ownership as required by law (Rollo, pp. 10-11).

Private respondents claim
that the female carabao has been in their possession for more than ten (10) years as the subject carabao was acquired by the defendants now respondents
through barter from one Aurelio Enopia in
1969.  The incident was discoverer by the
plaintiffs only in March, 1980.  Hence
respondents acquired ownership of said carabao by
prescription under Article 1132 of the Civil Code (Rollo,
p. 12) as found by public
respondent Court of Appeals.

The trial court’s
findings of facts carry great weight for having the advantage of having
examined the deportment and demeanor of the witnesses.  The only exception to the rule is when the
trial court plainly overlooked certain facts and circumstances of weight and
influence which, if considered, will materially alter the result of the case
(People v. Ramos, 153 SCRA 276 [1987]; People v. Camay, 152 SCRA 401 [1987]).

A careful examination of
the records shows that there are circumstances of substance and value which
were overlooked and which affect the result of the case.

This can be gleaned from
the decision of the Court of Appeals, when it stated:

“In issuing the foregoing order, the respondent Judge
apparently relied on the findings of fact and conclusions of law made by the
Municipal Court of Siaton, Negros
Oriental.  Unfortunately, the decision of
the Municipal Court was wanting in many
respects particularly in its findings.  It failed, for instance, to make a determination
of certain factual matters which could
have helped in the faster disposition of the case.  Instead of general statements explaining why he was adopting the decision of the Municipal Court, it would have been better if the respondent Judge had made his own finding and analysis of the evidence on record.  This was called for because the respondent Judge was acting in the exercise of the appellate jurisdiction of his court.” (Underscoring supplied) (Rollo, p. 10)

Well-settled is the rule that
findings of facts of the Appellate Court are generally binding on this Court
(People v. Atanacio, 128 SCRA 22 [1984]; Aguirre v.
People, 155 SCRA 337 [1987]; Cue Bie v. Intermediate
Appellate Court, 154 SCRA 599 [1987]. 
However, there are exceptions to the general rule that findings of facts
of the Court of Appeals are binding upon the Supreme Court as when the Court of
Appeals clearly misconstrued and misapplied the law, drawn from incorrect
conclusions of fact established by evidence and otherwise at
certain conclusions which are
based on misapprehension of facts and pure conjectures, and made inferences
which are manifestly mistaken and absurd (Chase v. Buencamino,
Jr., 136 SCRA 365 [1985]; Baliwag Transit, Inc. v. CA, 147 SCRA 82 [1987]; International Harvester, Inc. v. Joson & CA, 149 SCRA 641 [1987]; Maclan
v. Santos, 156 SCRA 542 [1987]; Mendoza v. CA, 156 SCRA 597 [1987].

From the records it is
clear that although the animal was branded
“ART” in her front and hind legs at the time she was acquired by
respondent Mauro, said respondent did not or could not register the transfer to
him in accordance with Section 529 of the Revised Administrative Code (Rollo, p. 11).

Section 529 of the
Revised Administrative Code provides:

“Registration necessary to validity of transfer.  No transfer shall be valid unless the same is
registered and a certificate of transfer obtained as herein provided, but the
large cattle under two years of age may be registered and branded gratis for
the purpose of effecting a valid
transfer, if the registration and transfer are made at the same time.”

The records show that
respondents did not comply with this requirement (Petition, p. 2; Rollo, p. 3). 
Respondents are not possessors in good faith, as a possessor in good
faith is one not aware that there exists in his title or mode of acquisition
any flaw which invalidates it. 
Furthermore, failure of a party to exercise precaution to acquaint
himself with the defects in the title of his vendor precludes him claiming
possession in good faith (Caram v. Laureta, 103 SCRA [1981] cited in Manotok
Realty, Inc. v. Court of Appeals, 134 SCRA 325 [1985]).

This duty to make a
closer inquiry into the certificate of registration of the female carabao which was the subject of the barter, defendant
Mauro Eluna should have performed but did not.  Thus, his being in bad faith, in acquiring the carabao from his vendor, Aurelio Enopia.

Thus, as has been
stressed by this Court:

“A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard, and then claim that he acted in good faith under
the belief that there was no defect in the title of the vendor.  His mere refusal to believe that such defect
exists, or his willful closing of the eyes to the possibility of the existence
of a defect in his vendor’s title will not make him an innocent purchaser for
value, if it afterwards develops that the title was in fact defective and it
appears that he had such notice of the defect would have led to its discovery
had he acted with the measure of precaution which may reasonably be required of
a prudent man in a like situation.” (Leung Lee v. Strong, 37 Phil. 644,
see also Emos v. Zusuarregui,
53 Phil. 197, cited in Francisco v. Court of Appeals, 153 SCRA 330).

It is clear from the
foregoing that possession in good faith for four (4) years is not applicable, neither can possession in bad
faith of eight (8) years benefit
respondents, for when the owner of a movable has lost or has been illegally deprived of his property he can
recover the same without need to
reimburse the possessor, as provided in Art. 559 of the Civil Code which states:

“Art. 559.  The
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.

“If the possessor of a movable lost or of which the owner has
been unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid therefor.” (464a)

Neither can Art. 716 of the
Civil Code apply, for this articled evidently refers to a possessor in good
faith.  Art. 716 say:

“The owner of a swarm of bees shall have a right to pursue
them to another’s land, indemnifying the possessor of the latter for the
damage.  If the owner has not pursued the
swarm, or ceases to do so within two consecutive days, the possessor of the land may occupy or retain the
same.  The owner of domesticated animals
may also claim them within twenty days to be counted from their occupation by another
person.  This period having expired, they
shall pertain to him who has caught and kept them.” (612a)

PREMISES CONSIDERED, the decision of the Court of Appeals in CA-G.R. SP No. 02247 is REVERSED and
SET ASIDE and petitioners Arthur Pajunar and Invencia Pajunar are declared the owners of the carabaos in question.

SO ORDERED.

Melencio-Herrera, (Chairman),
Padilla, Sarmiento, and
Regalado, JJ., concur.

* Penned by Justice Ricardo L. Pronove, Jr., concurred in by Justices Crisolito
Pascual and Luis A. Javellana.

** Rendered by Hon. Pedro Gabaton, Judge, RTC, Branch XLI, Negros Oriental.