Toyota Shaw vs. CA

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TOYOTA SHAW VS.

CA

FACTS

Private respondent Sosa wanted to purchase a Toyota Lite Ace but had difficulty finding
a dealer with an available unit for sale. He contacted Toyota Shaw, Inc., he was told
that there was an available unit so they met Popong Bernardo, a sales representative of
Toyota. Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17
June 1989 because his family, and a balikbayan guest would use it.

Bernardo then signed a document marked as Exhibit A which said.

AGREEMENTS BETWEEN MR. SOSA & POPONG BERNARDO OF TOYOTA SHAW,


INC.
 all necessary documents will be submitted to TOYOTA SHAW, INC. (POPONG
BERNARDO) a week after, upon arrival of Mr. Sosa from the Province
(Marinduque) where the unit will be used on the 19th of June.
 the downpayment of P100,000.00 will be paid by Mr. Sosa on June 15, 1989.
 the TOYOTA LITE ACE yellow, will be pick-up [sic] and released by TOYOTA
SHAW, INC. on the 17th of June at 10 a.m.

It was also agreed upon by the parties that the balance of the purchase price would be
paid by credit financing through B.A. Finance.

The next day, 15 June 1989, Sosa and Gilbert went to Toyota to deliver the
downpayment of P100,000.00. They met Bernardo who then accomplished a printed
Vehicle Sales Proposal (VSP) No. 928,), which showed customer's name is "MR. LUNA
SOSA", his home address, model series of the vehicle, payment is by "installment," to
be financed by "B.A.,"  and with the initial cash outlay of P100K.

and that the "BALANCE TO BE FINANCED" is "P274,137.00." The spaces provided for
"Delivery Terms" were not filled-up. It also contains the following pertinent provisions:

CONDITIONS OF SALES

1. This sale is subject to availability of unit.

2. Stated Price is subject to change without prior notice, Price prevailing


and in effect at time of selling will apply.

Quirante, the Sales Supervisor of Bernardo, checked and approved the VSP. However,
on 17 June 1989, at around 9:30 a.m., Bernardo told Gilbert that the car could not be
delivered because it was sold to another customer
- Toyota contends, it was not delivered to Sosa because of the disapproval by B.A.
Finance of the credit financing application of Sosa. Toyota gave Sosa the option to
purchase by paying the full purchase price in cash but Sosa refused. Sosa asked for the
refund of 100K, which Toyota did by issuing a Far East Bank check, the receipt of which
was shown by a check voucher of Toyota,  which Sosa signed with the reservation,
"without prejudice to our future claims for damages."

Thereafter, Sosa sent 2 letters to Toyota demanding for refund plus interest and
damages. Sosa’s counsel filed before Regional Trial Court of Marinduque a complaint
against Toyota for damages alleging that as a result of defendant's failure and/or refusal
to deliver the vehicle to plaintiff, plaintiff suffered embarrassment, humiliation, ridicule,
mental anguish and sleepless nights.

the trial court rendered decision in favor of Sosa. 12 It ruled that Exhibit "A," the
"AGREEMENTS BETWEEN MR. SOSA AND POPONG BERNARDO," was a valid
perfected contract of sale between Sosa and Toyota which bound Toyota to deliver the
vehicle to Sosa, and further agreed with Sosa that Toyota acted in bad faith in selling to
another the unit already reserved for him..

Toyota appealed to the Court of Appeals which affirmed the decision of the lower court

ISSUE

Whether there was a perfected contract of sale?

RULING

NO. there is no obligation on the part of Toyota to transfer ownership of a determinate thing to
Sosa and no correlative obligation on the part of the latter to pay therefor a price certain
appears therein. In the agreement, Nothing was mentioned about the full purchase price and the
manner the instalments were to be paid.

This Court has already ruled that a definite agreement on the manner of payment of the price is
an essential element in the formation of a binding and enforceable contract of sale. This is so
because the agreement as to the manner of payment goes into the price such that
a disagreement on the manner of payment is tantamount to a failure to agree on
the price. Definiteness as to the price is an essential element of a binding agreement to sell
personal property.

Exhibit “A” shows the absence of a meeting of minds between Toyota and Sosa. For one thing,
Sosa did not even sign it. He was not dealing with Toyota but with Popong Bernardo. Bernardo
was only a sales representative of Toyota and hence a mere agent of the latter.
Exhibit “A” may be considered as part of the initial phase of the generation or negotiation stage
of a contract of sale. Accordingly, in a sale on installment basis which is financed by a financing
company, three parties are thus involved:1.) the buyer who executes a note or notes for the
unpaid balance of the price of the thing purchased on installment, 2.) the seller who
assigns the notes or discounts them with a financing company, 3.) and the financing
company which is subrogated in the place of the seller, as the creditor of the installment
buyer. Since B.A. Finance did not approve Sosa’s application, there was then no meeting of
minds on the sale on installment basis.

The Vehicle Sales Proposal was a mere proposal which was aborted in lieu of subsequent
events. It follows that the VSP created no demandable right in favor of Sosa for the delivery of
the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.

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