TOYOTA SHAW, INC.

vs CA & Sosa
FACTS: Private respondent Luna L. Sosa wanted to purchase a Toyota Lite Ace. With his his son,
Gilbert, he went to the Toyota office at Shaw Boulevard, Pasig and met Popong Bernardo, a sales
representative of Toyota. Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17
June 1989. Bernardo assured him that a unit would be ready for pick up at 10:00 a.m. on that date.
They contracted an agreement on the delivery of the unit and that the balance of the purchase price
would be paid by credit financing through B.A. Finance. The next day, Sosa and Gilbert delivered the
downpayment and met Bernardo who then accomplished a printed Vehicle Sales Proposal (VSP) in
which the amount was filled-up but the spaces provided for Delivery Terms were not filled-up.
However, on 17 June 1989, at 9:30 am, Bernardo called Gilbert to inform him that the car could not
be delivered because nasulot ang unit ng ibang malakas. Toyota contends, on the other
hand, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the
credit financing application of Sosa. Toyota then gave Sosa the option to purchase the unit by paying
the full purchase price in cash but Sosa refused. Sosa asked that his down payment be refunded.
Toyota did so on the very same day by issuing a Far East Bank check for the full amount, which Sosa
signed with the reservation, without prejudice to our future claims for damages. Thereafter, Sosa
sent two letters to Toyota. In the first letter, he demanded the refund of the down payment plus
interest from the time he paid it. The second, he demanded one million pesos representing interest
and damages, both with a warning that legal action would be taken if payment not paid. Toyotas
refused to accede to the demands of Sosa. The latter filed with RTC a complaint against Toyota for
damages under Articles 19 and 21 of the Civil Code. In its answer to the complaint, Toyota alleged
that no sale was entered into between it and Sosa, that Bernardo had no authority to sign for and in
its behalf. It alleged that the VSP did not state the date of delivery.
ISSUE: Whether or not there was a perfected contract of sale.
HELD: There was no perfected contract of sale. (ART. 1458 and 1475)
What is clear from the agreement signed by Sosa and Gilbert 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 therefore a price certain appears therein. The provision on
the down payment of PIOO,OOO.OO 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 con finned. Nothing was mentioned about the full purchase price and the manner
the installments were to be paid. 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. Moreover, Exhibit "A" shows the
absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not even sign it. For
another, Sosa was well aware from its title, written in bold letters, that he was not dealing with
Toyota but with Popong Bernardo and that the latter did not misrepresent that he had the authority
to sell any Toyota vehicle. He knew that Bernardo was only a sales representative of Toyota and
hence a mere agent of the latter. It was incumbent upon Sosa to act with ordinary prudence and
reasonable diligence to know the extent of Bernardo's authority as an agent

in respect of contracts to
sell Toyota's vehicles. The VSP was a mere proposal which was aborted in lieu of subsequent events.
It follows that the VSP 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.
ADDISON vs FELIX
FACTS: By a public instrument, plaintiff Addison sold to the defendant Marciana Felix and husband
Balbino Tioco, 4 parcels of land. Defendants paid, at the time of the execution of the deed, the sum of
P3,000.00 on account of the purchase price, and bound herself to pay the remainder in installments.
It was further stipulated that the purchaser was to deliver to the vendor 25 per centum of the value
of the products that she might obtain from the 4 parcels from the moment she takes possession of
them until the Torrens certificate of title be issued in her favor. It was likewise covenanted that
within I year from the date of the certificate of title in favor of Felix, she may rescind the contract of
sale in which she shall be obliged to return to Addison the net value of all the products of the 4
parcels sold, and Addison shall be obliged to return to her all the sums that she may have paid,
together with interest at the rate of I 0 percent per annum. However, Addison was able to
designate only 2 of the 4 parcels and more than two-thirds of these two were found to be in the
possession of one Juan Villafuerte, who claimed to be the owner of the parts so occupied by him.
Addison filed suit in CFI to compel Felix to make payment of the first installment, in accordance with
the terms of the contract and of the interest at the stipulated rate. Defendant answered and alleged
that the plaintiff had failed to deliver the lands that were the subject matter of the sale.
ISSUES:
1. Whether or not the delivery had been effected by reason of the issuance of the Torrens Certificate
of title, notwithstanding the fact that the thing sold was not subject to the control of the vendor.
2. Whether or not the purchaser can rescind the contract.
HELD:
1. No. The record shows that the plaintiff did not deliver the thing sold. With respect to two of the
parcels of land, he was not even able to show them to the purchaser; and as regards the other two,
more than two-thirds of their area was in the hostile and adverse possession of a third person.
The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to
be delivered when it is placed in the hands and possession of the vendee. It is true that the same
article declares that the execution of a public instrument is equivalent to the delivery of the thing
which is the object of the contract, but, in order that this symbolic delivery may produce the effect of
tradition, I t is necessary that the vendor shall have control over the thing sold that, at the moment of
sale, it its material delivery could have been made.
It is not enough to confer upon the purchaser the ownership and the right of possession. The thing
sold must be placed in his control. When there is no impediment whatever 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 the public instrument is sufficient. But if, notwithstanding the execution of the
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.
2. Yes. It is evident in the case at bar, that the mere execution of the instrument was not a fulfillment
of the vendors obligation to deliver the thing sold, and that from such non-fulfillment arises the
purchasers right to demand, as she has demanded, the rescission of the sale and the return of the
price.
SAMPAGUITA PICTURES VS JALWINDOR MANUFACTURERS
FACTS: Both the plaintiff-appellant Sampaguita Pictures Inc. (Sampaguita) and defendant-appellee
Jalwindor Manufacturers Inc. (Jalwindor) were domestic corporations duly organized under the
Philippine laws. Sampaguita leased to Capitol 300 Inc. (Capitol) the roof deck of its building with the
agreement that all permanent improvements Capitol will make on said property shall belong to
Sampaguita without any part on the latter to reimburse Capitol for the expenses of said
improvements. Shortly, Capitol purchased on credit from Jalwindor glass and wooden jalousies, which
the latter itself delivered and installed in the leased premises, replacing the existing windows. On
June 1, 1964, Jalwindor filed with the CFI of Rizal, Quezon City an action for collection of a sum of
money with a petition for preliminary attachment against Capitol for its failure to pay its purchases.
Later, Jalwindor and Capitol submitted to the trial court a Compromised Agreement wherein Capitol
acknowledged its indebtedness of P9,531.09, payable in monthly installments of at least P300.00 a
month beginning December 15,1964 and that all the materials that Capitol purchased will be
considered as security for such undertaking. Meanwhile, Sampaguita filed a complaint for ejectment
and for collection of a sum of money against Capitol for the latters failure to pay rentals from March
1964 to April 1965, and the City Court of Quezon City ordered Capitol on June 8, 1965 to vacate the
premises and to pay Sampaguita. On the other hand, Capitol likewise failed to comply with the
terms of the Compromise Agreement, and on July 31, 1966, the Sheriff of Quezon City made levy on
the glass and wooden jalousies. Sampaguita filed a third-party claim alleging that it is the owner of
said materials and not Capitol, but Jalwindor filed an idemnity bond in favor of the Sheriff and the
items were sold at public auction on August 30, 1966, with Jalwindor as the highest bidder for
P6,000.00. Sampaguita filed with the CFI of Rizal, Quezon City an action to nullify the Sheriff's sale
and for an injunction to prevent Jalwindor from detaching the glass and wooden jalousies. Jalwindor
was ordered to maintain the status quo pending final determination of the case, and on October 20,
1967, the lower court dismissed the complaint and ordered Sampaguita to pay Jalwindor the amount
of P500.00 as attorney's fees.
ISSUE: Was there a delivery made and, therefore, a transfer of ownership of the thing sold?

COURT RULING: The Supreme Court reversed the decision of the lower court declaring Sampaguita as
declared the lawful owner of the disputed glass and wooden jalousies, permanently enjoining
Jalwindor from detaching said items from the roof deck of the Sampaguita Pictures Building, and
ordered Jalwindor to pay Sampaguita the sum of P1,000.00 for and as attorney's fees.
When a property levied upon by the sheriff pursuant to a writ of execution is claimed by a third
person in a sworn statement of ownership thereof, as prescribed by the rules, an entirely different
matter calling for a new adjudication arises. The items in question were illegally levied upon since
they do not belong to the judgment debtor. The power of the Court in execution of judgment extends
only to properties unquestionably belonging to the judgment debtor. The fact that Capitol failed to
pay Jalwindor the purchase price of the items levied upon did not prevent the transfer of ownership
to Capitol and, later, to Sampaguita by virtue of the agreement in their lease contract. Therefore, the
complaint of Sampaguita to nullify the Sheriff's sale is well founded, and should prosper.
TEN FORTY REALTY vs CRUZ
Ten Forty Real ty fi l ed a compl ai nt of ej ectment agai nst Marina Cruz who has allegedly
occupied the residential lot in Olongapo City, which they bought from Barbara Galino, by virtue of a
Deed of Absolute Sale. It appears that Barbara sold the same lot to Marina who immediately
occupied the land. Ten Forty is saying the occupation by Marina was merely tolerated by them.-
Ma r i na s d e f en s e : ( 1 ) T e n F o r t y , b e i n g a c o r p or a t i on , i s not qualified to own the
property which is a public land. (2) Barbara Galino did not sell her property to Ten Forty but merely
obtained a loan. (3) Ten Forty never occupied the property before she did. Barbara Galino was in
possession at the time of the sale, and vacated the lot in favor of Marina. (4) She was the one who
caused the cancellation of the tax declaration in the name of Barbara and a new one was issued in
her name. (5) Ten Forty only obtained its tax declaration 7 months after she did. MT CC r u l ed i n
f a v o r o f T en F or t y a nd o r d er e d Ma r i na t o vacate. -RTC reversed. The RTC ruled as
follows: 1) respondents entry into the property was not by mere tolerance of petitioner, but by
virtue of a Waiver and Transfer of Possessory Rights and Deed of Sale in her favor; 2) the execution of
the Deed of Sale without actual transfer of the physical possession did not have the effect of making
petitioner the owner of the property, because there was no delivery of the object of the sale as
provided for in Article 1428 of the Civil Code; and 3) being a corporation, petitioner was disqualified
from acquiring the property, which was public land.- CA a f f i r med
ISSUE: WON Marina may be validly ejected from the property/petitioner should be declared the
rightful owner of the property
RULING: 1. In a contract of sal e, the buyer acqui res the thi ng sol d only upon its delivery.
The execution of a public instrument gives rise to a presumption of delivery, but this presumption is
destroyed when delivery is not effected because of a legal impediment. Constructive delivery is
deemed negated upon failure of vendee to take actual possession of the land. Ten Forty was not able
to take possession and the SC found it highly unlikely that they allowed occupation of Marina by mere
tolerance. 2. In cases of doubl e sal e, the person who fi rst recorded i t i n the Registry of
Property shall be considered the lawful owner. In this case, however, petitioner was unable to
establish that the Deed was recorded in the Registry of Deeds of Olongapo. An unverified notation on
the Deed is not equivalent to a registration. In the absence of this requirement, the law gives
preferential right to the buyer who in good faith is first in possession. 3. To determi ne who i s
fi rst i n possessi on, the fol l owi ng parameters have been established: a. Possessi on i ncl udes
not onl y materi al but al so symbolic possession; b.Possessors i n good fai th are not aware
of any fl aw in their title or mode of acquisition; c. Buyers of property that i s i n possessi on of
persons other than the seller must be wary they must be investigated. Good fai th i s al ways
presumed. Burden of proof rests on the one alleging bad faith. Property has not been delivered,
hence Ten Forty did not acquire possession either materially or symbolically. Petitioner has not
proven that respondent was aware of any defect to her title. At the time, the property had not been
registered which was why Marina relied on tax declarations. Galino was actually occupying the
property when respondent took possession. Thus, there was no circumstance that could have
required her to investigate further.