Case Summary (G.R. No. L-21263)
Facts
On May 3, 1955, Tabora purchased from the petitioner a complete 48-volume set of American Jurisprudence with 1951 pocket parts, plus a four-volume General Index, for P1,675.50, plus freight of P6.90, totaling P1,682.40. He paid P300.00 down and agreed to pay the balance in monthly installments. The books were delivered and receipted on May 15, 1955, at Tabora’s law office in Naga City. That same midnight, a conflagration destroyed the entire block, including Tabora’s office and the books. Tabora notified the petitioner by letter on May 20, 1955. The petitioner replied on May 23, offering four complementary volumes as goodwill. Tabora thereafter failed to pay further installments.
Contract Terms and Applicable Law
The parties’ contract provided that (a) title and ownership remain with the seller until full payment and (b) “loss or damage to the books after delivery to the buyer shall be borne by the buyer.” Article 1504, Civil Code, confirms that where the seller retains ownership to secure payment, goods delivered are at the buyer’s risk. Article 1262 provides that an obligor is generally exempt when performance becomes impossible through no fault of either party, but exceptions exist when parties stipulate otherwise.
Issue
Whether Tabora is liable to pay the unpaid balance of P1,382.40 and 25% as liquidated damages despite the books having been destroyed by fire through no fault of his own.
Ruling
The trial court rendered judgment in favor of the petitioner ordering Tabora to pay P1,382.40 with legal interest from the complaint’s filing date and 25% of the total as liquidated damages. The Supreme Court, upon certification of only law questions, affirmed liability for the unpaid balance but modified the judgment by eliminating the 25% liquidated damages.
Legal Rationale
- Risk Allocation under Article 1504: Although ownership remained with the seller until full payment, the contract clearly placed the risk of loss on the buyer from delivery. The retention of title was a security device and did not shift the burden of fortuitous loss back to the seller.
- Exception to Fortuitous-Event Exemption (Article 1262): The general rule that an obligor is exempt from liability when performance is prevented by a fortuitous event does not apply when the obligation is pecuniary
Case Syllabus (G.R. No. L-21263)
Facts of the Case
- On May 3, 1955, defendant-appellant Perfecto A. Tabora purchased from plaintiff-appellee Lawyers Cooperative Publishing Company:
• A complete set of American Jurisprudence (48 volumes with 1951 pocket parts)
• A set of American Jurisprudence, General Index (4 volumes) - Total purchase price: ₱1,675.50; freight: ₱6.90; grand total: ₱1,682.40.
- Tabora paid a down payment of ₱300.00; balance due: ₱1,382.40.
- On May 15, 1955, the books were delivered to and receipted by Tabora at his Naga City law office.
- That same night a fire razed the entire block, destroying the law office, the library, the books, and Tabora’s other documents.
- Tabora notified the company by letter dated May 20, 1955; on May 23 the company sent, as a goodwill gesture, volumes 75–78 of the Philippine Reports free of charge.
- Tabora failed to pay subsequent installments; the company demanded payment and, upon nonpayment, filed suit in the Court of First Instance of Manila for the balance, 25% as liquidated damages, and costs.
Procedural History
- Court of First Instance rendered judgment in favor of the plaintiff, ordering:
• Payment of ₱1,382.40 with legal interest from the complaint’s filing
• An additional 25% of the amount as liquidated damages
• Costs of suit - Defendant appealed to the Court of Appeals.
- The Court of Appeals certified t