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UNION MOTOR CORPORATION vs.

COURT OF APPEALS, JARDINE-MANILA FINANCE, SPOUSES BERNAL

FACTS
On Sep. 14, 1979, respondent Sps. Bernal purchased from Union Motor Corporation (UMC) 1 Cimarron Jeepney for P37,758 to be paid
in installments. For this, Sps. Bernal executed a promissory note and a deed of chattel mortgage in favor of UMC. Meanwhile, UMC
entered into a contract of assignment of the promissory note and chattel mortgage with respondent Jardine-Manila Finance (JMF).
Through Sosmea, an agent of UMC, the Sps. Bernal would pay the amount of the promissory note to JMF being the assignee of UMC.

To effectuate the sale as well as the assignment, Sps. Bernal were required to sign a notice of assignment, a deed of assignment, a
sales invoice, a registration certificate, an affidavit, and a disclosure statement. The ps. Bernal were obliged to sign for the reason that,
according to Sosmea, it was requirement of UMC and JMCF for the Sps. Bernal to accomplish all documents in order to have their
application approved. Upon the Sps. Bernals tender of downpayment of P10,037, and UMCs acceptance of the same, UMC approved
the sale. Although the Sps. Bernal have not yet physically possessed the vehicle, Sosmea required them to sign the receipt as a
condition for the delivery of the vehicle.

Sps. Bernal continued paying the installments even if the vehicle remained undelivered inasmuch as JMF promised to deliver. Sps.
Bernal paid a total of P7,507 before they discontinued paying on account of non-delivery of the vehicle. According to Sps. Bernal, the
reason why the vehicle was not delivered was due to the fact that Sosmea allegedly took the vehicle in his personal capacity.

On Sep. 11, 1981, JMF filed a complaint for a sum of money against Sps. Bernal before the CFI Manila. The case was later transferred
to RTC Makati, the complaint was amended to include UMC as alternative defendant, the reason that if Sps. Bernals reason for non-
payment was UMCs failure to deliver, UMC should pay. Sps. Bernal filed an answer with cross-claim against UMC and counterclaim
against JMF.

RTC: (1) JNF to pay Sps. Bernal P7,507 plus legal interest
(2) UMC to pay Sps. Bernal the downpayment of P10,037 plus interest
(3) UMC to pay JNF P23,238 plus interest and attorneys fees
(4) UMC to pay Sps. Bernal 20,000 as moral damages, 10,000 as atty.s fee
CA: Affirmed the RTCs decision

ISSUE WON there has been a delivery, physical or constructive, of the vehicle NO

Sps. Bernal did not come into possession of the vehicle that was supposed to be delivered to them by UMC. The registration certificate,
receipt and sales invoice that they signed were explained during the hearing. According to testimonial evidence, the said documents
were signed as a part of the processing and for the approval of their application to buy the vehicle. Without such signed documents, no
sale, much less delivery, of the vehicle could be made. The documents were not therefore an acknowledgement of the physical
acquisition of the vehicle but merely a requirement of UMC so that the vehicle would be delivered to them.

The SC has held that the issuance of a sales invoice does not prove transfer of ownership to the buyer; an invoice is nothing more than
a detailed statement of the nature, quantity, and cost of the thing sold and has been considered not a bill of sale.

The registration certificate signed does not conclusively prove that constructive delivery was made or that ownership has been
transferred to Sps.Bernal. Like the receipt and the invoice, the signing of the registration certificate was qualified by the fact that it was a
requirement for the sale to be approved. In all forms of delivery, it is necessary that the act of delivery, actual or constructive, should be
couple with the intention of the delivering the thing. Without such intention, there is no delivery. The critical factor in the different modes
of effecting delivery which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee.

In Addision vs. Felix, the SC held that in order that symbolic delivery may produce the effect of tradition, it is necessary that the vendor
shall have had control over the thing sold, that, at the moment of the sale, its material delivery could have been made. It is not enough
to confer ownership and the right of possession. The thing sold must be placed in the vendees control. When there is no impediment to
prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution
of a public instrument is sufficient. But if, despite the execution of instrument, the purchaser cannot have the enjoyment and material
tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by
the interposition of another will, then fiction yields to reality the delivery has not been effected.

Here, the act of signing the registration certificate was not intended to transfer ownership of the vehicle as UMC still needed the same
for the approval of the financing contract with JMF.

Inasmuch as there was neither physical nor constructive delivery of a determinate thing, the thing sold remained at the sellers risk.
UMC should therefore bear the loss of the vehicle after Sosmea allegedly stole the same.

UMCs reliance on the Chattel Mortgage Contract does not help its assertion that ownership has been transferred since there was
neither delivery nor transfer of possession. Consequently, this contract has no legal effect inasmuch as the Sps. Bernal are not the
absolute owners thereof, ownership of the mortgagor being an essential requirement of a valid mortgage contract.

Lastly, Sps. Bernal presented sufficient evidence to prove that Sosmea took delivery and possession of the vehicle in his personal
capacity as shown by a document on which he personally acknowledged the receipt of the registration certificate from JMF. Also, it was
proven that Sps. Bernal went several times to UMC to demand the vehicle.
DISPOSITIVE CA is AFFIRMED with MODIFICATION, moral damages is deleted