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SALES | B2015

CASES

Sun Bros. Appliances, Inc.


vs. Perez

CFI RULING: Ordered Perez to pay


As the buyer would be liable in case of loss for any cause, such
buyer assumed liability even in case of loss by fortuitous event

April 30, 1963


Labrador, J.

Points of
Buyers
Sellers
Contention
interpretation
interpretation
SUMMARY: Sun Bro Appliances and Perez entered into a Conditional Sale Agreement on an air conditioner. The agreement states that the buyer
The
contract
It
follows
that
the
The
risk ofinvoking
loss was
shall bear the loss for any cause, but the title is not transferred until full payment. The item was burned, Perez refused to pay the
balance
stipulates that title
vendor bears the loss
expressly stipulated
fortuitous event as cause of loss. The court ordered Perez to pay.
would vest only upon
in this case (bec. Full
to be undertaken by
full
payment
of
the
payment
not
yet
buyer,
even if the
DOCTRINE: The agreement making the buyer responsible for any loss whatsoever, fortuitous or otherwise, even if the title to the the
property
remains
price
made)
title to the property
in the vendor, is neither contrary to law, nor to morals or public policy.
sold remained
SELLER
BUYER

Sun Brothers Appliances, Inc.


Perez

The phrase for any


SUBJECT PROPERTY:
cause in the
DOCUMENT:
agreement

FACTS:
Sun bros and Perez entered into a Conditional Sale Agreement
of an Admiral air conditioner, the price of which is 1,678php
The agreement contains the ff. stipulations:

Should not be
interpreted to include
fortuitous events.
Although 1174, CC
recognizes an
exception to FE when
parties expressly
stipulate, for any
cause did not
indicate such
intention

"2. Title to said property shall vest in the Buyer only upon full
payment of the entire account as herein provided, and only
upon complete performance of all the other conditions herein
specified:
"3. The Buyer shall keep said property in good condition and
properly protected against the elements, at his/its address
above-stated, and undertakes that if said property or any part
thereof be lost, damaged, or destroyed for any causes, he shall
suffer such loss, or repair such damage, it being distinctly
understood and agreed that said property remains at Buyer's
risk after delivery;"
-

Pursuant to the contract, sun bros. delivered the item and was
received by Perez
Perez made a downpayment of 274php and the item was
installed by sun bro representatives
The said air conditioner was burned where it was installed by
the plaintiff (no details about the fire in the case). The
defendant claims that the destruction was due to force majeure.
Perez did not pay any of the monthly installments leaving a
balance of 1, 404php

ACTION AND PRAYER:


Action to recover the balance of the items price

the terms "any cause"


used in the
agreement includes a
fortuitous event, and
an express stipulation
making the vendee
responsible in such
case is valid
The stipulation in the
contract of sale
whereby the buyer
shall be liable for any
loss, damage or
destruction for any
cause, is not contrary
to law, morals or
public policy and is
specifically authorized
to be stipulated upon
between the parties
by Article 1174 of the
Civil Code

ISSUE: Who should bear the loss? - Buyer


RATIO:
I. The agreement making the buyer responsible for any loss whatsoever,
fortuitous or otherwise, even if the title to the property remains in the
vendor, is neither contrary to law, nor to morals or public policy.
II. Citing American decisions, the court held that the loss did not relieve
the buyer from his obligation to pay

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III. Reason for the rule:


1. The absolute and unconditional nature of the vendee's promise
to pay for the goods. The promise is nowise dependent upon
the transfer of the absolute title.
2.

The fact that the vendor has fully performed his contract and
has nothing further to do except receive payment, and the
vendee received what he bargained for when he obtained the

right of possession and use of the goods and the right to


acquire title upon making full payment of the price
3.

Providing an incentive to care properly for the goods, they being


exclusively under the control and dominion of the vendee

DISPOSITIVE: Judgment of lower court affirmed.