No. L-21263 – LAWYERS COOPERATIVE PUBLISHING COMPANY, plaintiff-appellee, vs. PERFECTO A. TABORA, defendant-appellant.
BAUTISTA ANGELO, J.
Rule Synopsis
Seller’s retention of title, when merely intended to secure payment of the purchase price, does not prevent shifting of the risk of loss to the buyer upon delivery of the thing.
Facts
Tabora bought from Lawyers Coop. one set of American Jurisprudence, including one set of general index, payable on installment plan. It was provided in the contract that “title to and ownership of the books shall remain with the seller until the purchase price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall be borne by the buyer.” The total price of the books, including the cost of freight, amounts to P1,682.40. Tabora only made a down payment of P300.00 leaving a balance of P1,382.40. Lawyers Coop. demanded for the payment of the same but Tabora refused.
Thus, the seller filed a complaint for the recovery of the balance.
The buyer contended the seller should bear the risk of loss given that they were destroyed immediately after the transaction and that it was agreed upon that title to and the ownership of the books shall remain with the seller until the purchase price shall have been fully paid. In the alternative, he sought exemption from liability on ground of fortuitous event.
The lower court ruled in favor of Lawyers Coop, ordering Tabor to pay the balance. The Supreme Court affirmed.
Issues
- Who should bear the risk of loss?
- Was Tabora exempted from liability arising from the loss as the same was due to a fortuitous event?
Ruling and Discussion
- Tabor should bear the risk of loss.
Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer’s risk from the time of such delivery (Art. 1504).
In this case, the seller’s retention of title of over the books was agreed merely to secure the performance by the buyer of his obligation but in the very contract it was expressly agreed that the “loss or damage to the books after delivery to the buyer shall be borne by the buyer.” - No. Tabora was not exempted from liability arising from the loss as the same was due to a fortuitous event.
The exemption from liability from loss arising from fortuitous events applies only when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event.
In this case, The obligation does not refer to a determinate thing, but is pecuniary in nature, and the obligor bound himself to assume the loss after the delivery of the goods to him. In other words, the obligor agreed to assume any risk concerning the goods from the time of their delivery, which is an exception to the rule provided for in Article 1262 of our Civil Code.
Dispositive
Decision modified.