Case Digest (G.R. No. 61043)
Facts:
Delta Motor Sales Corporation v. Niu Kim Duan and Chan Fue Eng, G.R. No. 61043, September 02, 1992, Supreme Court Second Division, Nocon, J., writing for the Court.Plaintiff-appellee Delta Motor Sales Corporation sold three (3) Daikin air-conditioners to defendants-appellants Niu Kim Duan and Chan Fue Eng on July 5, 1975 under a Deed of Conditional Sale. The total price was P19,350.00; the buyers paid a down payment of P774.00 and agreed to pay the P18,576.00 balance in twenty-four (24) monthly installments. The contract retained title in the seller until full payment and contained clauses providing (a) that if any two installments were not paid the whole balance would become due with interest at 14% per annum, (b) that installments paid would be considered rentals and not refundable upon rescission (paragraph 5), and (c) that upon rescission the buyer must deliver the property and, if suit is brought, pay expenses and an amount equal to 25% of the remaining unpaid obligation as damages, penalty and attorney’s fees (paragraph 7). A promissory note and delivery receipt were executed.
After paying amounts characterized in the record variously as P6,966.00 by the trial court and P6,429.92 by appellants (the latter consisting of the downpayment plus seven installment payments), the buyers defaulted on at least two monthly installments and had, according to plaintiff, an unpaid balance of P12,920.08 as of January 6, 1977. Plaintiff sent statements and its collectors attempted collection; after unsuccessful extra-judicial efforts it filed a verified complaint on January 28, 1977 seeking a writ of replevin. The trial court granted the writ after plaintiff posted bond; plaintiff repossessed the units on April 11, 1977. The trial court, in a decision promulgated October 11, 1977 (Civil Case No. 25578, CFI Rizal at Makati, Branch XXXVI, Judge Leo D. Medialdea), declared the contract rescinded and ordered defendants to pay P6,188.29 with 14% interest and P1,000.00 attorney’s fees, treating the sums already paid by defendants as rentals for two years pursuant to paragraph 5 of the contract...(Subscriber-Only)
Issues:
- Did plaintiff, having rescinded the sale and repossessed the chattels, remain entitled to recover the unpaid balance of the purchase price?
- Were the contract provisions treating installments paid as nonrefundable rentals and imposing penalties/attorney’s fees unconscionable or contrary...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)