Title
Sun Brothers Appliances, Inc. vs. Perez
Case
G.R. No. L-17527
Decision Date
Apr 30, 1963
A fire destroyed an air conditioner under a conditional sale; the buyer was held liable for unpaid installments despite the loss, as per the contract's risk allocation clause.

Case Digest (G.R. No. 73155)

Facts:

  • Conditional Sale Agreement
    • On December 6, 1958, the defendant entered into a Conditional Sale Agreement with the plaintiff, SUN BROTHERS APPLIANCES, INC.
    • Under the agreement, the plaintiff delivered an Admiral Air Conditioner, Slim Style, Model 100-23-1, HP, Serial No. 2978828, with a contract price of P1,678.00.
    • The contract contained a stipulation that title to the property would vest in the buyer only upon full payment and complete performance of other conditions.
  • Terms and Payment
    • The defendant made a down payment of P274.00 on the day of the contract.
    • The remaining balance of P1,404.00 was to be paid in subsequent monthly installments of P78.00.
    • The contract expressly required that the buyer keep the property in good condition and properly protected against the elements, with the risk of any loss, damage, or destruction expressly assumed by him.
  • Delivery and Installation
    • The air conditioner was delivered by the plaintiff and installed at the defendant’s office located at Gardiner Street, Lucena, Quezon.
    • The delivery and installation were acknowledged by the parties as part of the fulfillment of the contractual obligations.
  • Destruction of the Air Conditioner
    • The air conditioner was reported to have been burned on December 27, 1958, at around 2:00 in the morning.
    • The defendant admitted the occurrence of the fire and presented evidence that the destruction happened at the location where the appliance was installed.
    • The defendant argued that the destruction resulted from a fortuitous event (force majeure) for which he should not be held liable under the terms of the conditional sale agreement.
  • Stipulations on Risk Allocation
    • The contract explicitly provided that, despite the title remaining with the vendor until full payment, the buyer assumed all risks of loss or damage to the property “for any cause.”
    • This clause intended that even in cases of force majeure, the buyer would not be relieved from his obligation to pay the remaining balance.
  • Litigation Background
    • The trial court, considering the stipulations of the agreement, rendered judgment in favor of the plaintiff, condemning the defendant to pay the balance due, along with interest and attorney’s fees.
    • The defendant appealed, arguing that loss by a fortuitous event should exempt him from further payment obligations since title had not yet vested in him.

Issues:

  • Whether the loss of the air conditioner due to fire, a fortuitous event, exempts the defendant from the obligation to pay the remaining balance.
    • The interpretation of the contractual clause assigning risk “for any cause” and whether it includes losses due to force majeure.
    • The effect of title retention by the seller until full payment on the buyer’s obligation in the event of loss.
  • Whether the express stipulation in the conditional sale that the buyer assumes the risk of loss is valid and enforceable.
    • Consideration of the exception provided under Article 1174 of the new Civil Code regarding loss due to fortuitous event.
    • The alignment of the clause with public policy and existing precedents in similar conditional sale agreements.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
Unlock Full Case Digest

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms