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contract of sale was already rescinded when the Digros spouses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.
xxx
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.
xxx
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.
xxx
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.
xxx
