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Norkis v Nepales_Risk of Loss

Norkis v Nepales_Risk of Loss

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Published by: Richelle Joy Belgira on Jul 24, 2011
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NORKIS DISTRIBUTORS, INC., petitioner vs. CA & ALBERTO NEPALES, respondents.
G.R. No. 91029 February 7, 1991 Topic: Risk of Loss
FACTS:
1. Petitioner Norkis is the distributor of Yamaha motorcycles in Negros Occidental Bacolod withAvelino Labajo as its Branch Manager. Private respondent Alberto Nepales bought from theNorkis-Bacolod branch a brand new Yamaha Wonderbike motorcycle.2. The price of P7,500.00 was payable by means of a Letter of Guaranty from the DevelopmentBank of the Philippines (DBP). Norkis' Branch Manager Labajo agreed to accept. Credit wasextended to Nepales for the price of the motorcycle payable by DBP upon release of hismotorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on themotorcycle in favor of DBP. Branch Manager Labajo issued Norkis Sales Invoice No. 0120 showingthat the contract of sale of the motorcycle had been perfected. Nepales signed the sales invoiceto signify his conformity with the terms of the sale. In the meantime, however, the motorcycleremained in Norkis' possession.3. On January 22, 1980, the motorcycle was delivered to a certain Julian Nepales who claimed tobe an agent of Alberto Nepales. The motorcycle met an accident on February 3, 1980 atBinalbagan, Negros Occidental. An investigation conducted by the DBP revealed that the unitwas being driven by a certain Zacarias Payba at the time of the accident. It was a total wreck,and so it was returned to Norkis.5. DBP released the proceeds of private respondent's motorcycle loan to Norkis. As the price of the motorcycle later increased Nepales paid the difference and demanded the delivery of themotorcycle. When Norkis could not deliver, he filed an action for specific performance withdamages against Norkis in RTC.6. RTC ruled in favor of Norkis stating that the motorcycle had been delivered to Nepales beforeaccident, hence the risk of loss was borne by the buyer already. However, CA reversed theruling. Hence this petition for review
ISSUE:
WON private respondent (buyer Alberto Nepales) bears the risk of loss
HELD:
No. The decision of the CA was affirmed.
RATIO:
 The Civil Code provides (1946 sabi sa case pero baka lumang version na ito kasi hindi na ito ang1496 ngayon) "in the absence of an express assumption of risk by the buyer, the things soldremain at seller's risk until the ownership thereof is transferred to the buyer." This is applicableto this case, for there was neither an actual nor constructive delivery of the thing sold by theseller to the buyer. Hence, the risk of loss should be borne by the seller, Norkis, which was stillthe owner and possessor of the motorcycle when it was wrecked. This is in accordance with thewell-known doctrine of 
res perit domino
.Moreover, as stated by De Leon, 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 the intention, is insufficient.When the motorcycle was registered by Norkis in the name of private respondent, Norkis did notintend yet to transfer the title or ownership to Nepales, but only to facilitate the execution of achattel mortgage in favor of the DBP for the release of the buyer's motorcycle loan. The Letter of Guarantee (Exh. 5) issued by the DBP, reveals that the execution in its favor of a chattel

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