Chrysler vs CA

Facts:

Petitioner is a domestic corporation engaged in the assembling and sale of motor vehicles. Respondent
Sambok Motors Co. was its dealer for automotive products with offices at Bacolod and Iloilo. The two
offices were run by relatives. Miguel Ng was Assistant Manager for Sambok, Bacolod, while an elder
brother, Pepito Ng, was the President.

Thereafter, petitioner filed with the CFI of Rizal a Complaint for Damages against Allied Brokerage
Corporation, Negros Navigation Company and Sambok, Bacolod, alleging that Sambok, Bacolod, ordered
from petitioner various automotive products worth P30,909.61.

On November 1970, petitioner delivered said products to its forwarding agent, Allied Brokerage
Corporation, for shipment; that Allied Brokerage loaded the goods on board the M/S Doña Florentina, a
vessel owned and operated by Negros Navigation Company, for delivery to Sambok, Bacolod; that when
petitioner tried to collect from the latter the amount of P31,037.56, representing the price of the spare
parts plus handling charges, Sambok, Bacolod, refused to pay claiming that it had not received the
merchandise; that petitioner also demanded the return of the merchandise or their value from Allied
Brokerage and Negros Navigation, but both denied any liability.

RTC proceedings

The case against Negros Navigation was dismissed for failure of petitioner and Sambok, Bacolod, to file
the necessary notices and claims as conditions precedent for a judicial action

The trial court dismissed the case against defendant Negros Navigation for lack of cause of action. While
defendant Sambok Motors Co. (Bacolod) is ordered to pay plaintiff Chrysler Philippines Corporation. The
trial court found that the act of Sambok, Bacolod, "in refusing to take delivery of the shipment for no
justifiable reason from Negros Navigation despite having received the Bill of Lading constituted wrongful
neglect or refusal to accept and pay for the subject shipment, by reason of which defendant Sambok
Motors may be held liable for damages.

CA proceedings

On appeal, the CA set aside the appealed judgment and dismissed petitioner's Complaint, after finding
that the latter had not performed its part of the obligation under the contract by not delivering the goods
at Sambok, Iloilo, the place designated in the Parts Order Form and must, therefore, suffer the loss. In
other words, respondent Appellate Court found. that there was misdelivery.

Issue: WON Sambok Bacolod branch is liable for the loss of the goods

Held:

No, the matter of misdelivery is not the decisive factor for relieving Sambok, Bacolod, of liability. While it
was specifically indicated that Sambok Iloilo as the destination. Sambok, Bacolod, and Sambok, Iloilo, are
actually one. In fact, the order for spare parts was made by the President of Sambok, Pepito Ng.
Notwithstanding, upon receipt of the Bill of Lading, Sambok, Bacolod, initiated, but did not pursue, steps
to take delivery as they were advised by Negros Navigation that because some parts were missing. they
would just be informed as soon as the missing parts were located. It was only four years later when Negros
Navigation found in their off-shore bodega, parts of the shipment.- in question, but already deteriorated
and valueless.

Sambok, Bacolod, cannot be faulted for not accepting or refusing to accept the shipment from Negros
Navigation four years after shipment. The evidence is clear that Negros Navigation could not produce the
merchandise nor ascertain its whereabouts at the time Sambok, Bacolod, was ready to take delivery.
Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may
reject them.

It was Negros Navigation was the party negligent in failing to deliver the complete shipment either to
Sambok, Bacolod, or to Sambok, Iloilo, but as the Trial Court found, petitioner failed to comply with the
conditions precedent to the filing of a judicial action. Thus, it is petitioner that must shoulder the resulting
loss. The general rule that before, delivery, the risk of loss is home by the seller who is still the owner,
under the principle of "res petit domino", 7 is applicable in petitioner's case.

In sum, the judgment of respondent Appellate Court, will have to be sustained not on the basis of
misdelivery but on non-delivery since the merchandise was never placed in the control and possession of
Sambok, Bacolod, the vendee.

Lawyers Coop vs Tabora

Facts:

Respondent Perfecto A. Tabora bought from tpetitioner Lawyers Cooperative Publishing Company one
complete set of American Jurisprudence for a total price of P1,675.50 which, in addition to the cost of
freight of P6.90, makes a total of P1,682.40. Tabora made a partial payment of P300.00, leaving a balance
of P1,382.40. The books were duly delivered and receipted for by in his law office.

It was provided in the contract that "title to and ownership of the books shall remain with the seller until
the purchase price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall
be borne by the buyer."

However, a big fire broke out in that locality which destroyed and burned all the buildings standing on
one whole block including at the law office and library of Tabora As a result, the books bought from the
company were burned during the conflagration. This unfortunate event was immediately reported by
Tabora to the company, the company replied and as a token of goodwill it sent to Tabora free of charge
volumes of the Philippine Reports. As Tabora failed to pay the monthly installments agreed upon on the
balance of the purchase price, the company demanded payment of the installments due, and having
failed, to pay the same, it commenced the present action before the CFI of Manila for the recovery of the
balance of the obligation.

Tabora pleaded force majeure as a defense. He alleged that the books bought from the plaintiff were
burned during the fire that broke out and since the loss was due to force majeure he cannot be held
responsible for the loss.
RTC proceedings

The trial court rendered judgment for the plaintiff. It ordered the defendant to pay the sum of P1,382.40.

CA proceedings

Defendant took the case to the Court of Appeals, but the same is now was referred to the SC by virtue of
a certification issued by that Court that the case involves only questions of law. Tabora contended that
since it was agreed that the title to and the ownership of the books shall remain with the seller until the
purchase price shall have been fully paid, and the books were burned or destroyed immediately after the
transaction, appellee should be the one to bear the loss for, as a result, the loss is always borne by the
owner. Moreover, even assuming that the ownership of the books were transferred to the buyer after the
perfection of the contract the latter should not answer for the loss since the same occurred through force
majeure

Issue: WON the respondent is liable to pay the goods

Held:

Yes, While it is true that in the contract entered into between the parties the seller agreed that the
ownership of the books shall remain with it until the purchase price shall have been fully paid, but such
stipulation cannot make the seller liable in case of loss not only because such was agreed merely to secure
the performance by the buyer of his obligation but in the very contract it was expressly agreed that the
"loss or damage to the books after delivery to the buyer shall be borne by the buyer." Any such stipulation
is sanctioned by Article 1504 of our Civil Code, which in part provides:

(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in
pursuance of the contract and the ownership in the goods has been retained by the seller
merely to secure performance by the buyer of his obligations under the contract, the goods
are at the buyer's risk from the time of such delivery.

Neither can appellant find comfort in the claim that since the books were destroyed by fire without any
fault on his part he should be relieved from the resultant obligation under the rule that an obligor should
be held exempt from liability when the loss occurs thru a fortuitous event. This is because this rule only
holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation
holding him liable even in case of fortuitous event. Here these qualifications are not present. The
obligation does not refer to a determinate thing, but is pecuniary in nature, and the obligor bound himself
to assume the loss after the delivery of the goods to him. In other words, the obligor agreed to assume
any risk concerning the goods from the time of their delivery, which is an exception to the rule provided
for in Article 1262 of our Civil Code.

Levy vs Gervacio

Facts:

On March 10, 1937, plaintiff Levy Hermanos, Inc., sold to defendant Lazaro Blas Gervacio, a Packard car.
Defendant, after making the initial payment, executed a promissory note for the balance of P2,400, to
secure the payment of the note, he mortgaged the car to the plaintiff. Defendant failed to pay the note it
its maturity. Accordingly, plaintiff foreclosed the mortgage and the car was sold at public auction at which
plaintiff was the highest bidder for P1,800. The present action is for the collection of the balance of P1,600
and interest.

RTC proceedings

The lower court applied, the provisions of Act No. 4122, inserted as articles 1454-A of the Civil Code, and
rendered judgment in favor of the defendant Gervacio. Hence, this petition

Issue: WON the defendant is liable to pay the balance of P 1600.

Held:

Yes, Under Article 1454-A of the Civil Code provides:

In a contract for the sale of personal property payable in installments shall confer upon the vendor the
right to cancel the sale or foreclose the mortgage if one has been given on the property, without
reimbursement to the purchaser of the installments already paid, if there be an agreement to this effect.

However, if the vendor has chosen to foreclose the mortgage he shall have no further action against the
purchaser for the recovery of any unpaid balance owing by the same and any agreement to the contrary
shall be null and void.

Further, In Macondray and Co. vs. De Santos, we held that "in order to apply the provisions of article 1454-
A of the Civil Code it must appear that there was a contract for the sale of personal property payable in
installments and that there has been a failure to pay two or more installments.

In this case, the sale of personal property, is not, however, one on installments, but on straight term, in
which the balance, after payment of the initial sum, should be paid in its totality at the time specified in
the promissory note. The transaction is not, therefore, the one contemplated in Act No. 4122 and
accordingly the mortgagee is not bound by the prohibition therein contained as to the right to the
recovery of the unpaid balance.

Undoubtedly, the law is aimed at those sales where the price is payable in several installments, for,
generally, it is in these cases that partial payments consist in relatively small amounts, constituting thus a
great temptation for improvident purchasers to buy beyond their means. There is no such temptation
where the price is to be paid in cash, or, as in the instant case, partly in cash and partly in one term, for,
in the latter case, the partial payments are not so small as to place purchasers off their guard and delude
them to a miscalculation of their ability to pay.

The suggestion that the cash payment made in this case should be considered as an installment in order
to bring the contract sued upon under the operation of the law, is completely untenable. A cash payment
cannot be considered as a payment by installment, and even if it can be so considered, still the law does
not apply, for it requires non-payment of two or more installments in order that its provisions may be
invoked. Here, only one installment was unpaid.
Delta Motor Sales vs Niu Kim Duan

Facts:

On July 5, 1975, the defendants purchased from the plaintiff three (3) units of ‘DAIKIN’ air-conditioner all
valued at P19,350.00; that the aforesaid deed of sale had the following terms and conditions: chanrob 1es virtual 1aw lib rary

‘(a) the defendants shall pay a down payment of P774.00 and the balance of P18,576.00 shall be paid by
them in twenty four (24) installments;

(b) the title to the properties purchased shall remain with the plaintiff until the purchase price thereof is fully
paid;

(c) if any two installments are not paid by the defendants on their due dates, the whole of the principal sum
remaining unpaid shall become due, and

That to secure the payment of the balance of P18,576.00 the defendants jointly and severally executed in
favor of the plaintiff a promissory note. That after paying the amount of P6,966.00, the defendants failed to
pay at least two (2) monthly installments; the remaining unpaid obligation of the defendants amounted to
P12,920.08; that statements of accounts were sent to the defendants and the plaintiff’s collectors personally
went to the former to effect collections but they failed to do so; that because of the unjustified refusal of the
defendants to pay their outstanding account and their wrongful detention of the properties in question, the
plaintiff tried to recover the said properties extra-judicially but it failed to do so; that the matter was later
referred by the plaintiff to its legal counsel for legal action;

In their verified complaint, the plaintiff prayed for the issuance of a writ of replevin, which the Court granted,
the plaintiff, by virtue of the aforesaid writ, succeeded in retrieving the properties in question. The outstanding
account of the defendants is only in the amount of P6,188.29 as shown by the computation, Exhibit F, after
deducting the interests in arrears, cover charges, replevin bond premiums, the value of the units repossessed
and the like; and, that in view of the failure of the defendants to pay their obligations, the amount of P6,966.00
which had been paid by way of installments were treated as rentals for the units in question for two (2) years
pursuant to the provisions of paragraph 5 of the Deed of Conditional Sale, Exhibit A.’ (pp. 5-7, Record; pp. 4-
6, Appellant’s Brief)."chanroble s law lib rary