ebal digest

 CASE DIGESTS IN SALES

By Meralie C. Ebal   LLB_DMC

DIGNOS YS. COURT OF APPEALS158 SCRA 378

FACTS:

The spouses Silvestre and Isabel Dignos were. owners of a parcel of land in Opon, Lapu-Lapu City. OnJune 7, 1965, appellants, herein petitioners Dignos spouses sold the said parcel of land to respondentAtilano J. Jabil for the sum of P28,000.00, payable in two installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the sum of PI 2,000.00, which was paid andacknowledged by the vendors in the deed of sale executed in favor of plaintiff-appellant, and the nextinstallment in the sum of P4,000.00 to be paid on or before September 15, 1965.On November 25, 1965, the Dignos spouses sold the same land in favor of defendants spouses, LucianoCabigas and Jovita L. De Cabigas, who were then U.S. citizens, for the price of P35,000.00. A deed of absolute sale was executed by the Dignos spouses in favor of the Cabigas spouses, and which wasregistered in the Office of the Register of Deeds pursuant to the provisions of Act No. 3344.As the Dignos spouses refused to accept from plaintiff-appellant the balance of the purchase price of theland, and as plaintiff- appellant discovered the second sale made by defendants-appellants to the Cabigasspouses, plaintiff-appellant brought the present suit.

ISSUE:

Whether or not there was an absolute contract of sale.2. Whether or not the contract of sale was already rescinded when the Digros spouses sold the land toCabigas

HELD:

Yes. That a deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale"where nowhere in the contract in question is a proviso or stipulation to the effect that title to theproperty sold is reserved in the vendor until full payment of the purchase price, nor is there astipulation giving the vendor the right to unilaterally rescind the contract the moment the vendeefails to pay within a fixed period.A careful examination of the contract shows that there is no such stipulation reserving the title of the property on the vendors nor does it give them the right to unilaterally rescind the contract uponnon-payment of the balance thereof within a fixed period.On the contrary, all the elements of a valid contract of sale under Article 1458 of the Civil Code, arepresent, such as: (1) consent or meeting of the minds; (2) determinate subject matter; and (3)price certain in money or its equivalent. In addition, Article 1477 of the same Code provides that"The ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof." While it may be conceded that there was no constructive delivery of the land soldin the case at bar, as subject Deed of Sale is a private instrument, it is beyond question that therewas actual delivery thereof. As found by the trial court, the Dignos spouses delivered the possessionof the land in question to Jabil as early as March 27,1965 so that the latter constructed thereonSally's Beach Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach Resorton January 15, J 966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts were admittedby petitioner spouses.2. No. The contract of sale being absolute in nature is governed by Article 1592 of the Civil Code. It isundisputed that petitioners never notified private respondents Jabil by notarial act that they wererescinding the contract, and neither did they file a suit in court to rescind the sale. There is noshowing that Amistad was properly authorized by Jabil to make such extra-judicial rescission for thelatter who, on the contrary, vigorously denied having sent Amistad to tell petitioners that he wasalready waiving his rights to the land in question. Under Article 1358 of the Civil Code, it is requiredthat acts and contracts which have for their object extinguishment of real rights over immovableproperty must appear in a public document.Petitioners laid considerable emphasis on the fact that private respondent Jabil had no money onthe stipulated date of payment on September 15,1965 and was able to raise the necessary amountonly by mid-October 1965. It has been ruled, however, that where time is not of the essence of theagreement, a slight delay on the part of one party in the performance of his obligation is not asufficient ground for the rescission of the agreement. Considering that private respondent has only abalance of P4,OOO.00 and was delayed in payment only for one month, equity and justice mandateas in the aforecited case that Jabil be given an additional period within which to complete paymentof the purchase price.

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NORKIS DISTRIBUTORS, INC. vs. COURT OF APPEALS193

SCRA 694, G.R. No. 91029 February 7,1991

FACTS:

Petitioner Norkis Distributors, Inc. is the distributor of Yamaha motorcycles in Negros Occidental. OnSeptember 20, 1979, private respondent Alberto Nepales bought trom the Norkis Bacolod branch abrand new Yamaha Wonderbike motorcycle Model YL2DX. The price of P7,500.00 was payable bymeans of a Letter of Guaranty from the DBP, which Norkis agreed to accept. Credit was extended toNepales for the price of the motorcycle payable by DBP upon release of his motorcycle loan. As securityfor the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of DBP. Petitionerissued a sales invoice which Nepales signed in conformity with the terms of the sale. In themeantime, however, the motorcycle remained in Norkis' possession. On January 22, 1980, themotorcycle was delivered to a certain Julian Nepales, allegedly the agent of Alberto Nepales. Themotorcycle met an accident on February 3, 1980 at Binalbagan, Negros Occidental. An investigationconducted by the DBP revealed that the unit was being driven by a certain ZacariasPayba at the timeof the accident. The unit was a total wreck was returned.On March 20, 1980, DBP released the proceeds of private respondent's motorcycle loan to Norkis in thetotal sum of P7,500. As the price of the motorcycle later increased to P7,828 in March, 1980, Nepalespaid the difference of P328 and demanded the delivery of the motorcycle. When Norkis could not deliver,he filed an action for specific performance with damages against Norkis in the RTC of Negros Occidental.He alleged that Norkis failed to deliver the motorcycle which he purchased, thereby causing himdamages. Norkis answered that the motorcycle had already been delivered to private respondent beforethe accident, hence, the risk of loss or damage had to be borne by him as owner of the unit.

ISSUE:

Whether or not there has been a transfer of ownership of the motorcycle to Alberto Nepales.

HELD:

No.The issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer. Aninvoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold andhas been considered not a bill of sale. In all forms of delivery, it is necessary that the act of deliverywhether constructive or actual, be coupled with the intention of delivering the thing. The act, without theintention, is insufficient.When the motorcycle was registered by Norkis in the name of private respondent,Norkis did not intend yet to transfer the title or ownership to Nepales, but only to facilitate the executionof a chattel mortgage in favor of the DBP for the release of the buyer's motorcycle loan. The Letter of Guarantee issued by the DBP reveals that the execution in its favor of a chattel mortgage over thepurchased vehicle is a pre-requisite for the approval of the buyer's loan. If Norkis would not accede tothat arrangement, DBP would not approve private respondent's loan application and, consequently, therewould be no sale.Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by thebuyer, the things sold remain at seller's risk until the ownership thereof is transferred to the buyer," isapplicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence,the risk of loss should be borne by the seller, Norkis, which was still the owner and possessor of themotorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino.

SOUTHERN MOTORS, INC. vs. MOSCOSO

2 SCRA 168G.R. No. L-14475, May 30, 1961

FACTS:

Plaintiff Southern Motors, Inc. sold to defendant Angel Moscoso one Chevrolet truck on installment basis,for P6,445.00. Upon making a down payment, the defendant executed a promissory note for the sum of P4,915.00, representing the unpaid balance of the purchase price to secure the payment of which, achattel mortgage was constituted on the truck in favor of the plaintiff. Of said account, the defendant hadpaid a total of P550.00, of which P110.00 was applied to the interest and P400.00 to the principal, thusleaving an unpaid balance of P4,475.00. The defendant failed to pay 3 installments on the balance of thepurchase price.Plaintiff filed a complaint against the defendant, to recover the unpaid balance of the promissory note.Upon plaintiff's petition, a writ of attachment was issued by the lower court on the properties of thedefendant. Pursuant thereto, the said Chevrolet truck, and a house and lot belonging to defendant, wereattached by the Sheriff and said truck was brought to the plaintiff's compound for safe keeping. Afterattachment and before the trial of the case on the merits, acting upon the plaintiff's motion for theimmediate sale of the mortgaged truck, the Provincial Sheriff of Iloilo sold the truck at public auction inwhich plaintiff itself was the only bidder for P1,OOO.OO. The trial court condemned the defendant to paythe plaintiff the amount of P4,475.00 with interest at the rate of 12% per annum from August 16, 1957,until fully paid, plus 10% thereof as attorneys fees and costs. Hence, this appeal by the defendant.

ISSUE:

Whether or not the attachment caused to be levied on the truck and its immediate sale at public auction,was tantamount to the foreclosure of the chattel mortgage on said truck.

HELD:

No.Article 1484 of the Civil Code provides that in a contract of sale of personal property the price of which ispayable in installments, the vendor may exercise any of the following remedies: (I) Exact fulfillment of the obligation, should the vendee fail to pay; (2) Cancel the sale, should the vendee's failure to pay covertwo or more installments; and (3) Foreclose the chattel mortgage on the thing sold, if one has beenconstituted, should the vendee's failure to pay cover two or more installments. In this case, he shall haveno further action against the purchaser to recover any unpaid balance of the price. Any agreement to thecontrary shall be void.The plaintiff had chosen the first remedy. The complaint is an ordinary civil action for recovery of theremaining unpaid balance due on the promissory note. The plaintiff had not adopted the procedure ormethods outlined by Sec. 14 of the Chattel Mortgage Law but those prescribed for ordinary civil actions,under the Rules of Court. Had the plaintiff elected the foreclosure, it would not have instituted this casein court; it would not have caused the chattel to be attached under Rule 59, and had it sold at publicauction, in the manner prescribed by Rule 39. That the plaintiff did not intend to foreclose the mortgagetruck, is further evinced by the fact that it had also attached the house and lot of the appellant at SanJose, Antique.We perceive nothing unlawful or irregular in plaintiff's act of attaching the mortgaged truck itself. Sincethe plaintiff has chosen to exact the fulfillment of the appellant's obligation, it may enforce execution of the judgment that may be favorably rendered hereon, on all personal and real properties of the latter notexempt from execution sufficient to satisfy such judgment. It should be noted that a house and lot at SanJose, Antique were also attached. No one can successfully contest that the attachment was merely anincident to an ordinary civil action. The mortgage creditor may recover judgment on the mortgage debtand cause an execution on the mortgaged property and may cause an attachment to be issued andlevied on such property, upon beginning his civil action.

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ARTATES YS. URB

I37 SCRA 395, No. L-2942I , January 30, 1971

FACTS:

A homestead patent was issued to appellants Lino Artates and Manuela Pojas on September 23, 1952. Itwas sold at a public auction to Marcela Soliven by the Provincial Sheriff of Cagayan to satisfy a judgmentagainst Lino Artates by the Justice of the Peace of Calanlugan, Cagayan for physical injuries inflicted byhim upon Daniel Urbi on October 21, 1955. The appellants Artates and Pojas alleged that the saleviolated the provision of Public Land Law exempting said property from execution for any "debtcontracted within 5 years from date of the issuance of the patent.Appellants prayed that the execution sale of the land to the defendant Urbi, as well as the deed of saleexecuted by the latter in favor of the defendant Soliven be declared null and void.

ISSUE:

Whether or not the purchaser Marcela Soliven has acquired an absolute ownership or title in fee over theland.

HELD:

No. The execution sale being null and void, the possession of the land should be returned to theowners, the herein appellants. There would even no need to order appelleeUrbi to execute a deed of reconveyance thereof to the owners. It appears that what was issued here to the judgment creditor orpurchaser was only the sheriff's provisional certificate, under which he derived no definite title or rightuntil the period made, or issuance of a final deed or certificate of sale. In other words, the purchaserherein has not acquired an absolute ownership or title in fee over the land that would necessitate a deedof reconveyance to revert ownership back to appellant spouses.

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QUIROGA vs. PARSONS HARDWARE CO.

38 Phil 501, G.R. No. L-11491, August 23, 1918

FACTS:

On January 24, 1911, herein plaintiff-appellant AndressQuiroga and J. Parsons, both merchants, enteredinto a contract, for the exclusive sale of "Quiroga" Beds in the Visayan Islands. It was agreed, amongothers, that Andres Quiroga grants the exclusive right to sell his beds in the Visayan Islands to J.Parsons, subject to some conditions provided in the contract. Likewise, it was agreed that. Incompensation for the expenses of advertisement which, for the benefit of both contracting parties, Mr.Parsons may find himself obliged to make, Mr.Quiroga assumes the obligation to offer and give thepreference to Mr. Parsons in case anyone should apply for the exclusive agency for any island notcomprised with the Visayan group; and that, Mr. Parsons may sell, or establish branches of his agency forthe sale of "Quiroga" beds in all the towns of the Archipelago where there are no exclusive agents, andshall immediately report such action to Mr. Quiroga for his approval.Plaintiff filed a complaint, alleging that the defendant violated the following obligations: not to sell thebeds at higher prices than those of the invoices; to have an open establishment in Iloilo; itself to conductthe agency; to keep the beds on public exhibition, and to pay for the advertisement expenses for thesame; and to order the beds by the dozen and in no other manner. He alleged that the defendant washis agent for the sale of his beds in Iloilo, and that said obligations are implied in a contract of commercial agency.

ISSUE:

Whether or not the defendant, by reason of the contract hereinbefore transcribed, was an agent of theplaintiff for the sale of his beds.

HELD:

No. In order to classify a contract, due regard must be given to its essential clauses. In the contract inquestion, there was the obligation on the part of the plaintiff to supply the beds, and, on the part of thedefendant, to pay their price. These features exclude the legal conception of an agency or order to sellwhereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers tothe principal the price he obtains from the sale of the thing to a third person, and if he does not succeedin selling it, he returns it. By virtue of the contract between the plaintiff and the defendant, the latter, onreceiving the beds, was necessarily obliged to pay their price within the term fixed, without any otherconsideration and regardless as to whether he had or had not sold the beds.In respect to the defendant's obligation to order by the dozen, the only one expressly imposed by thecontract, the effect of its breach would only entitle the plaintiff to disregard the orders which thedefendant might place under other conditions; but if the plaintiff consents to fill them, he waives his rightand cannot complain for having acted thus at his own free will.

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