G.R. No. 91029 – NORKIS DISTRIBUTORS, INC., petitioner, vs. THE COURT OF APPEALS & ALBERTO NEPALES, respondents.
GRIÑO-AQUINO, J.
Rule Synopsis
Intent to deliver is indispensable to make the delivery effectual, absent which, the risk of loss remains with the seller despite execution of modes of delivery in favor of the buyer.
Facts
On September 20, 1979, Norkis sold a specific motorcycle to Nepales for P7,500, payable via Letter of Guaranty from the Development Bank of the Philippines (DBP). This was to be secured by a chattel mortgage over the vehicle. Norkis then issued a Sales Invoice, signed by Nepales. The motorcycles was also registered in Nepales’ name. The latter paid the fees evidence by official receipt. The registration was made to facilitate the execution of the chattel mortgage. On January 22, 1980, the motorcycle was released to one Julian Nepales, an alleged agent of the buyer. On February 3, the motorcycle was totally wrecked in an accident while driven by one Payba. On March 20, DBP released the loan proceeds. Nepales paid Norkis out of the same and demanded delivery of the motorcycle. Norkis failed.
Thus, the buyer filed a complaint for specific performance with damages on ground of non-delivery.
The seller, in its answer, said that the motorcycle had already been delivered to buyer at the time of the accident. Thus, it contended that Nepales shall bear the risk of loss being the owner. Furthermore, it added that the risk of loss of the thing is shifted to the buyer upon perfection of the contract of sale, even before delivery and transfer of ownership. As according to Art. 1262, the obligation to deliver a specific thing is extinguished by the loss of the thing due to fortuitous event. Lastly, it contended that while there was no actual delivery, there had been constructive delivery upon: 1) the issuance of the Sales Invoice; 2) the registration of the vechicle; and 3) the issuance of the official receipts for the payment of the registration fees.
The RTC ruled in favor of the Nepales, ordering Norkis to pay Nepales the value of the mortorcycle or to deliver another motorcycle of the same brand, kind and quality. It also awarded damages. The CA, affirmed with modification as to the award of damages. The Supreme Court affirmed.
Issues
- Who should bear the loss of the motorcycle?
- Was there a delivery of the motorcycle to Nepales?
Ruling and Discussion
- Norkis should bear the loss of the motorcycle.
In the absence of an express assumption of risk by the buyer, the things sold remain at seller’s risk until the ownership thereof is transferred to the buyer (Art. 1496). This is in accordance with the doctrine of res perit domino.
In this case, not actual or constructive deliver was effected. Thus, the risk of loss should be borne by the seller, Norkis, which was still the owner and possessor of the motorcycle when it was wrecked. - No. There was no delivery of the motorcycle to Nepales.
The critical factor in the different modes effecting delivery, which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition.
The purpose of the execution of the sales invoice and the registration of the vehicle in the name of Nepales was not to transfer to the latter, the ownership of the motorcycle, but only to comply with the reguirements of the DBP for processing his loan.
Before Nepales’ loan was released and before he even paid Norkis, the motorcycle had already figured in an accident while driven by one Payba. Payba was not shown by Norkis to be a representative or relative of Nepales.
Dispositive
Decision affirmed.