Case Summary (G.R. No. L-30871)
Facts of the Transaction and Trial Court Proceedings
On September 20, 1979, Nepales entered into a contract to purchase a brand-new Yamaha Wonderbike (Model YL2DX) from Norkis-Bacolod for ₱7,500. Payment was to be secured by a Letter of Guaranty from DBP, Kabankalan Branch, and by a chattel mortgage on the motorcycle. Norkis issued Sales Invoice No. 0120, which Nepales signed, but retained physical possession of the unit. On November 6, 1979, the motorcycle was registered in Nepales’s name and registration fees were paid by him. Delivery allegedly occurred on January 22, 1980, to Julian Nepales, whom Alberto Nepales denies authorized as his agent. On February 3, 1980, while driven by Payba, the motorcycle was involved in a total wreck and thereafter stored in Norkis’s warehouse. DBP released the ₱7,500 proceeds on March 20, 1980, and Nepales paid an additional ₱328 for the increased price. When Norkis failed to deliver a functional unit, Nepales sued for specific performance with damages (Civil Case No. 1272).
The Regional Trial Court rendered judgment for Nepales, awarding the present value of the destroyed motorcycle (or replacement), interest, exemplary damages of ₱1,000, and costs. The Court of Appeals affirmed but deleted the daily damages.
Issue
Whether ownership—hence the risk of loss—had passed to Nepales before the accident, thereby shifting responsibility for the destroyed motorcycle to him, or whether Norkis remained the owner and bore the risk under Article 1496 of the Civil Code.
Applicable Law
• Civil Code of the Philippines (1987):
– Article 1475 (perfection of contract)
– Article 1262 (risk of loss after perfection if thing is determinate)
– Article 1263 (generic things)
– Article 1174 (fortuitous event)
– Article 1496 (risk remains with seller until ownership transfer)
• Doctrine of res perit domino (thing perishes, loss is borne by its owner)
Analysis on Delivery and Transfer of Ownership
Actual delivery requires placing the object in the vendee’s control coupled with the intention to transfer. Constructive delivery—symbolic acts such as a public instrument—also demands that the vendor have the power to effect material delivery at the time of sale. Here:
- Sales Invoice: Serves as billing evidence, not a bill of sale; no intent to transfer ownership merely by invoicing.
- Registration: Done to secure the chattel mortgage required by DBP, not to vest Nepales with ownership or dominion.
- Alleged Agent Delivery: Nepales denied authorizing Julian to accept delivery; Payba’s possession is unexplained and uncontrolled by Nepales.
The absence of intention to transfer possession, together with Norkis’s continued control, negates any actual or constructive delivery.
Determination of Risk of Los
...continue readingCase Syllabus (G.R. No. L-30871)
Facts of the Case
- Norkis Distributors, Inc. (“Norkis”) is the authorized Yamaha motorcycle distributor in Negros Occidental, with its branch office in Bacolod City managed by Avelino Labajo.
- On September 20, 1979, private respondent Alberto Nepales purchased a brand-new Yamaha Wonderbike Model YL2DX (Engine No. L2-329401K, Frame No. NL2-0329401, maroon color) displayed at the Norkis showroom for P7,500.00.
- Payment was to be made by a Letter of Guaranty issued by the Development Bank of the Philippines (DBP), Kabankalan Branch. Nepales agreed to execute a chattel mortgage on the motorcycle in favor of DBP as loan security.
- Norkis issued Sales Invoice No. 0120 (Exh. 1), which Nepales signed to confirm the sale. The motorcycle, however, remained in Norkis’s possession pending loan release.
- On November 6, 1979, Norkis registered the motorcycle with the Land Transportation Commission in Nepales’s name and Nepales paid the registration fees (Exhs. 2 and 3).
- On January 22, 1980, Norkis allegedly delivered the motorcycle to Julian Nepales, who was said to be Alberto’s agent, a claim Alberto denied.
- On February 3, 1980, while driven by one Zacarias Payba, the motorcycle was involved in a total-loss accident at Binalbagan, Negros Occidental.
- The wrecked unit was returned to and stored in Norkis’s warehouse.
- On March 20, 1980, DBP released P7,500.00 to Norkis; Nepales later paid an additional P328.00 to cover the price increase.
- Nepales then demanded delivery of the unit; upon Norkis’s failure to deliver, he filed Civil Case No. 1272 in the Regional Trial Court (RTC) of Himamaylan for specific performance with damages.
Procedural History
- RTC, Branch LVI, Himamaylan: rendered decision on August 27, 1985, in favor of Nepales, ordering Norkis to:
• Pay the present value of the destroyed motorcycle plus interest and P50.00/day from February 3, 1980 until payment, exemplary damages of P1,000.00, and costs; or
• Deliver a brand-new motorcycle of identical brand, kind, and quality. - Court of Appeals (Seventeenth Division), CA-G.R. No. 09149: on August 21, 1989, affirmed with mod