Risk of Loss or Deterioration

SUN BROS. APPLIANCES V PEREZ

G.R. No. L-17527, APRIL 30, 1963

I. 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:” 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:” 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 down payment 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.

II. Contention of the Petitioner:

The petitioner -- Sun Borothers Appliances, Inc. demands to recover the

remaining balance of the air conditioner Perez purchased. The item was delivered to
the buyer and had it installed on his office, yet the said air-conditioner was loss by
fire.

III. Contention of the Respondent:

Damaso Perez, the respondent contends that he should not pay the remaining
balance of the air conditioner the purchased after it was burned by the fire. He claims
that the item was destroyed due to fortuitous event.

IV. Issue:
Whether or not loss by fire extinguishes the obligation of Perez to pay Sun
Bros. Appliances the subsequent installments.

V. Ruling:
No. Where goods are sold and delivered to the buyer under an agreement that
the title is to remain in the vendor until full payment, the loss and destruction of the
property while in the possession of the vendor before payment, does not relieve the
buyer from the obligation to pay the price as he therefore suffers the loss. Several
basis of this rule are:
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. The policy of providing an incentive to care properly for the goods, they
being exclusively under the
control and dominion of the vendee.
In the case at bar, it was expressly stated in the agreement that the buyer shall keep
said property in good condition and properly protected against the elements. If said
property (airconditioner) 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 the Buyer’s risk after delivery.
The terms “any cause” used in the agreement include a fortuitous event, and an
express stipulation making the vendee, Perez, responsible is valid. The happening of
the fire, a fortuitous event, which destroyed the air conditioner, does not relieved
Perez to pay the price of the property. Moreover, even if the title remains with the
vendor while the fortuituous event happened, making Perez still liable to pay the price
is neither contrary to law nor to morals or public policy. Therefore, his obligation is
not extinguished and he shall pay the price.
Documents of Title

Carino v Insular Government

G. R. No. 2869 (1907)

 Facts:
Mateo Cariño, on February 23 , 1904, filed his petition in the Court of Land
Registration for a title to a parcel of land consisting of 40 hectares, 1 are, and 13
centares in the town of Baguio, Province of Benguet. This was heard with a petition
for a title for a portion of the land.
The Insular Government opposed the granting of these petitions, because they alleged
that the whole parcel of land is public property of the Government and that the same
was never acquired in any manner or through any title of egresion from the State.
According to Carino, in 1884, he erected and utilized as a domicile a house on the
property situated to the north of that property now in question. They said that during
the year 1893 Cariño sold said house to one Cristobal Ramos, who in turn sold the
same to Donaldson Sim. Carino abandoned the house and lived on the land in
question.

 Contention of the Petitioner:

Mateo Cariño, the appellant herein, argues that the Court of Land Registration
should grant him the title to a parcel of land. He claims that his grandfather had lived
upon it, and had maintained fences sufficient for the holding of cattle. According to
the custom of the country and they all had been recognized as owners by the Igorots,
and he had inherited or received the land from his father. However, no document of
title of the land, had issued from the Spanish Crown.

 Contention of the Respondent:

Insular Government objected to the petitions being granted, alleging that the
whole parcel of land is government property and that it was never obtained in any
way or by any title of egresion from the State.

 Issue:
Whether or not is Carino the rightful possessor of the land.

 Ruling:
No, petition denied. Under the express provisions of law, a parcel of land
being of common origin, presumptively belonged to the State during its sovereignty,
and, in order to perfect the legitimate acquisition of such land by private persons, it
was necessary that the possession of the same pass from the State.
There was no proof of title of egresion of this land from the domain of the Spanish
Government.
The possessory information was not the one authorized in substitution for the one in
adjustment of the royal decree of February 13, 1894. This was due to:
1. the land has been in an uninterrupted state of cultivation during a period of six
years last past; or that the same has been possessed without interruption during a
period of twelve years and has been in a state of cultivation up to the date of the
information and during the three years immediately preceding such information; or
that such land had been possessed openly without interruption during a period of
thirty or more years, notwithstanding the land had not been cultivated
Or such land had been possessed openly without interruption during a period of thirty
or more years, notwithstanding the land had not been cultivated
2. Under Spanish law, there was a period of one year allowable to verify the
possessory information. After the expiration of this period of the right of the
cultivators and persons in possession to obtain gratuitous title thereto lapses and the
land together with full possession reverts to the state, or, as the case may be, to the
community, and the said possessors and cultivators or their assigns would simply
have rights under universal or general title of average in the event that the land is sold
within a period of five years immediately following the cancellation. The possessors
not included under this chapter can only acquire by time the ownership and title to
unappropriated or royal lands in accordance with common law.
In accordance with the preceding provisions, the right that remained to Cariño, if it be
certain that he was the true possessor of the land in question, was the right of average
in case the Government or State could have sold the same within the period of five
years immediately following for example, if the denouncement of purchase had been
carried out by Felipe Zafra or any other person, from the record of the case
The right of possession in accordance with civil law remained at all times subordinate
to the Spanish administrative law, inasmuch as it could only be of force when
pertaining to royal transferable or alienable lands even until after February 13, 1894.
3. The advent of American sovereignty necessarily brought a new method of dealing
with lands and particularly as to the classification and manner of transfer and
acquisition of royal or common lands then appropriated, which were thenceforth
merely called public lands, the alienation of which was reserved to the Government,
in accordance with the Organic Act of 1902 and other laws like Act No. 648, herein
mentioned by the petitioner.
Section 6 of Act No. 627 admits prescription, as a basis for obtaining the right of
ownership. "The petitioners claim the title under the period of prescription of ten
years established by that act, as well as by reason of his occupancy and use from time
immemorial. But said act admits such prescription for the purpose of obtaining title
and ownership to lands not exceeding more that 16 hectares in extent." Under Sec. 6
of said act. The land claimed by Cariño is 40 hectares in extent, if we take into
consideration his petition, or an extension of 28 hectares, therefore it follows that the
judgment denying the petition herein and now appealed from was strictly in
accordance with the law invoked.
And of the 28 hectares of land as set out in the possessory information, one part of
same, according to the testimony of Cariño, belongs to Vicente Valpiedad, the extent
of which is not determined. From all of which it follows that the precise extent has not
been determined in the trial of this case on which judgment might be based in the
event that the judgment and title be declared in favor of the petitioner, Mateo Cariño.
And we should not lose sight of the fact that, considering the intention of Congress in
granting ownership and title to 16 hectares, that Mateo Cariño and his children have
already exceeded such amount in various acquirements of lands, all of which is shown
in different cases decided by the said Court of Land Registration.