Toyota Shaw, Inc. vs.

Court of Appeals
G.R. No. 116650. May 23, 1995
DAVIDE, JR., J.:
Facts:
On June 14, 1989, Luna Sosa, respondent, contacted Toyota Shaw, Inc., petitioner, with
his intention to buy a Lite Ace unit and emphasized that he needed the unit not later than June
17, 1989. Sosa met Popong Bernardo, a Toyota Shaw sales representative assured Sosa that a
unit would be ready to pick up on June 17, 1989 at 10:00am. Thereafter, Bernardo signed the
agreement (Exhibit A) which agreed upon that the balance of the purchase price would be paid
by credit financing through B.A Finance. On June 15, 1989, Sosa went to Toyota Shaw to deliver
the down payment of P100,000.00 wherein Bernardo accomplished a printed Vehicle Sales
Proposal. However, on June 17, 1989, Sosa went to Toyota Shaw but was informed that the
reserved unit for him was given to another customer but Toyota contended that the unit was not
delivered to Sosa because of disapproval by B.A Finance of the credit financing application of
Sosa. Thereafter, Sosa demanded a refund in which Toyota complied. Later, Sosa filed a
complaint for damages wherein the trial court ruled in his favor. Upon appeal, CA affirmed in
toto. Thus, this petition.
Issue:
Whether or not the standard VSP was the true and documented understanding of the
parties which would have led to the ultimate contract of sale?
Rule of law:

Application:
What is clear from Exhibit “A” is not what the trial court and the Court of Appeals
appear to see. It is not a contract of sale. No obligation on the part of Toyota to transfer
ownership of a determinate thing to Sosa and no correlative obligation on the part of the latter to
pay therefor a price certain appears therein. 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 the VSP executed the following day confirmed. But
nothing was mentioned about the full purchase price and the manner the installments were to be
paid.
This Court had already ruled that 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.
Conclusion:
WHEREFORE, the instant petition is GRANTED and the decision of CA is reversed and
set aside.