Toyota Shaw Inc. vs.

Court of Appeals, and Sosa

244 SCRA 320
May 1995

FACTS:

Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the
Toyota office at Shaw Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where
they met Popong Bernardo who was a sales representative of said branch. Sosa
emphasized that he needed the car not later than June 17, 1989 because he, his
family, and a balikbayan guest would be using it on June 18 to go home to Marinduque
where he will celebrate his birthday on June 19. Bernardo assured Sosa that a unit
would be ready for pick up on June 17 at 10:00 in the morning, and signed the
"Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc., a document
which did not mention anything about the full purchase price and the manner the
installments were to be paid. Sosa and Gilbert delivered the down payment of
P100,000.00 on June 15, 1989 and Bernardo accomplished a printed Vehicle Sales
Proposal (VSP) No. 928 which showed Sosas full name and home address, that
payment is by "installment," to be financed by "B.A.," and that the "BALANCE TO BE
FINANCED" is "P274,137.00", but the spaces provided for "Delivery Terms" were not
filled-up.

When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence,
Sosa asked that his down payment be refunded and petitioner Toyota issued also on
June 17 a Far East Bank check for the full amount of P100,000.00, 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." Petitioner Toyota
contended that the B.A. Finance disapproved Sosas the credit financing application
and further alleged that a particular unit had already been reserved and earmarked
for Sosa but could not be released due to the uncertainty of payment of the balance
of the purchase price. Toyota then gave Sosa the option to purchase the unit by
paying the full purchase price in cash but Sosa refused.

The trial court found that there was a valid perfected contract of sale between Sosa
and Toyota which bound the latter to deliver the vehicle and that Toyota acted in bad
faith in selling to another the unit already reserved for Sosa, and the Court of Appeals
affirmed the said decision.

ISSUE:

Was there a perfected contract of sale between respondent Sosa and petitioner
Toyota?

COURT RULING:

The Supreme Court granted Toyotas petition and dismissed Sosas complaint for
damages because the document entitled Agreements Between Mr. Sosa & Popong
Bernardo of Toyota Shaw, Inc., was not a perfected contract of sale, but merely an
agreement between Mr. Sosa and Bernardo as private individuals and not between Mr.
Sosa and Toyota as parties to a contract.

There was no indication in the said document of any obligation on the part of Toyota
to transfer ownership of a determinate thing to Sosa and neither was there a
correlative obligation on the part of the latter to pay therefor a price certain. The
provision on the downpayment of P100,000.00 made no specific reference to a sale of
a vehicle. If it was intended for a contract of sale, it could only refer to a sale on
installment basis, as VSP No.928 executed on June 15, 1989 confirmed. The VSP also
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.