Case Name: Toyota Shaw v CA [LG Miranda]
Case No.:  G.R. No. L-116650 | May 23, 1995| J. Davide, Jr.
Doctrine: A definite agreement on the manner of payment of the price is an
essential element in the formation of a binding and enforceable contract of
sale. This is so because the agreement as to the manner of payment goes
into the price such that a disagreement on the manner of payment is
tantamount to a failure to agree on the price. Definiteness as to the price is
an essential element of a binding agreement to sell personal property.
RELEVANT FACTS
Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from
the Toyota office at Shaw Boulevard, Pasig (petitioner Toyota) on June 14, 1989
where they met Popong Bernardo who was a sales representative of said branch.
Sosa emphasized that he needed the car not later than June 17, 1989 because he, his
family, and a balikbayan guest would be using it on June 18 to go home to
Marinduque where he will celebrate his birthday on June 19. Bernardo assured Sosa
that a unit would be ready for pick up on June 17 at 10:00 in the morning, and signed
the "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc.,” a
document which did not mention anything about the full purchase price and the
manner the installments were to be paid. Sosa and his son delivered the down
payment of P100,000.00 on June 15, 1989 and Bernardo accomplished a printed
Vehicle Sales Proposal (VSP) No. 928 which showed Sosa’s full name and home
address, that payment is by "installment," to be financed by "B.A.," and that the
"BALANCE TO BE FINANCED" is "P274,137.00", but the spaces provided for
"Delivery Terms" were not filled-up.
When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence,
Sosa asked that his down payment be refunded and petitioner Toyota issued also on
June 17 a Far East Bank check for the full amount of P100,000.00, the receipt of
which was shown by a check voucher of Toyota, which Sosa signed with the
reservation, "without prejudice to our future claims for damages." Petitioner Toyota
contended that the B.A. Finance disapproved Sosa’s the credit financing application
and further alleged that a particular unit had already been reserved and earmarked for
Sosa but could not be released due to the uncertainty of payment of the balance of
the purchase price. Toyota then gave Sosa the option to purchase the unit by paying
the full purchase price in cash but Sosa refused.
The trial court found that there was a valid perfected contract of sale between Sosa
and Toyota which bound the latter to deliver the vehicle and that Toyota acted in bad
faith in selling to another the unit already reserved for Sosa, and the Court of
Appeals affirmed the said decision.
ISSUES
W/N there was a perfected contract of sale — NO
To be discussed via 3rd element of contract of sale – CAUSE (price)
RATIO DECIDENDI
WHEN PRICE IS CERTAIN/ASCERTAINABLE
• Price is CERTAIN when it has been expressed and agreed in terms of
specific pesos and/or centavos.
• In order that price be considered ASCERTAINABLE, it should be with
reference to another thing certain, or that the determination be left to the
judgment of a third person.
• MANNER OF PAYMENT (infra) is also considered an additional requisite
for price to valid. The reason is to be explained in the doc- trines below.
• Lack of any of these = VOID Contract
The Supreme Court granted Toyota’s petition and dismissed Sosa’s complaint for
damages because the document entitled “Agreements Between Mr. Sosa & Popong
Bernardo of Toyota Shaw, Inc.,” was not a perfected contract of sale, but merely an
agreement between Mr. Sosa and Bernardo as private individuals and not between
Mr. Sosa and Toyota as parties to a contract.
There was no indication in the said document of any obligation on the part of Toyota
to transfer ownership of a determinate thing to Sosa and neither was there a
correlative obligation on the part of the latter to pay therefor a price certain. The
provision on the downpayment of P100,000.00 made no specific reference to a sale
of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on
installment basis, as VSP No.928 executed on June 15, 1989 confirmed. The VSP
also created no demandable right in favor of Sosa for the delivery of the vehicle to
him, and its non-delivery did not cause any legally indemnifiable injury.
A definite agreement on the manner of payment of the price is an essential element
in the formation of a binding and enforceable contract of sale. This is so because the
agreement as to the manner of payment goes into the price such that a disagreement
on the manner of payment is tantamount to a failure to agree on the price.
Definiteness as to the price is an essential element of a binding agreement to sell
personal property.
DISPOSITIVE
WHEREFORE, the instant petition is GRANTED. The challenged decision of the
Court of Appeals in CA-G.R. CV NO. 40043 as well as that of Branch 38 of the
Regional Trial Court of Marinduque in Civil Case No. 89-14 are REVERSED and
SET ASIDE and the complaint in Civil Case No. 89-14 is DISMISSED. The
counterclaim therein is likewise DISMISSED.