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AEROSPACE CHEMICAL Vs CA Case Digest

AEROSPACE CHEMICAL Vs CA 69. ELISCO TOOL MFG CORP vs. CAGR No. 109966,
g.r.no. 108129 September 23, 1999 May31, 1999
FACTS: On June 27, 1986, petitioner Aerospace Industries,
FACTS: Private respondent Rolando Lantan entered into an
Inc. (Aerospace) purchased five hundred (500) metric tons of
sulfuric acid from private respondent Philippine Phosphate agreement with his employer, herein petitioner, leasing unto
Fertilizer Corporation (Philphos). Initially set beginning July the former a Colt lancer from a period of 5 years. The contract
1986, the agreement provided that the buyer shall pay its also provided that at the end of the 5 year period, Lantan may
purchases in equivalent Philippine currency value, five days exercise the option to purchase price of the car and he should
prior to the shipment date. Petitioner as buyer committed to just pay the remaining balance. Said option is limited to the
secure the means of transport to pick-up the purchases from employee. It also provided that upon Lantan’s failure to pay 3
private respondent's loadports. Per agreement, one hundred
accumulated monthly rentals, the petitioner will have the option
metric tons (100 MT) of sulfuric acid should be taken from
Basay, Negros Oriental storage tank, while the remaining four to lease said vehicle to another. Lantan also has to return the
hundred metric tons (400 MT) should be retrieved from Sangi, car in case he resigns or is dismissed. He was laid off after
Cebu. On December 18, 1986, M/T Sultan Kayumanggi petitioner ceased operations in 1981. At that time, he has paid
docked at Sangi, Cebu, but withdrew only 157.51 MT of P61, 070.94. Petitioner then filed a replevin casea gainst
sulfuric acid. Again, the vessel tilted. Further loading was Lantan and his wife, alleging that they have failed to pay the
aborted. Two survey reports conducted by the Societe
monthly rentals despite repeated demands.
Generale de Surveillance (SGS) Far East Limited, dated
December 17, 1986 and January 2, 1987, attested to these
occurrences. Later, on a date not specified in the record, M/T The trial court sustained private respondents’ claim that the
Sultan Kayumanggi sank with a total of 227.51 MT of sulfuric agreement in question was one of
acid on board. Petitioner chartered another vessel, M/T Don
Victor, with a capacity of approximately 500 MT.6 [TSN, sale and held that the latter had fully paid the price of the car
September 1, 1989, pp. 28-29.] On January 26 and March 20, having paid the total amount of P61,070.94aside from installing
1987, Melecio Hernandez, acting for the petitioner, addressed accessories in the car worth P15,000.00. Petitioner appealed
letters to private respondent, concerning additional orders of with the CA which affirmed the decision of the trial court in toto.
sulfuric acid to replace its sunken purchases.
ISSUE: WON the agreement between the parties is one of
ISSUE: Should expenses for the storage and preservation of
sale.
the purchased fungible goods, namely sulfuric acid, be on
seller's account pursuant to Article 1504 of the Civil Code?
RULING :Although the agreement provides for the payment by
RULING: Petitioner tries to exempt itself from paying rental Lantan of monthly rentals, the fifth paragraph thereof gives
expenses and other damages by arguing that expenses for the them the option to purchase the motor vehicle at the end of the
preservation of fungible goods must be assumed by the seller. fifth year or upon payment of the 60th monthly rental when all
Rental expenses of storing sulfuric acid should be at private monthly rentals shall be applied to the payment of the full
respondent's account until ownership is transferred, according purchase price of the car. Clearly, the transaction is a lease in
to petitioner. However, the general rule that before delivery, the
risk of loss is borne by the seller who is still the owner, is not name only. The so-called monthly rentals are in truth monthly
applicable in this case because petitioner had incurred delay in amortizations on the cars price. Being a contract of sale on
the performance of its obligation. Article 1504 of the Civil Code installment, Articles 1484 and 1485 apply. As such, the case
clearly states: "Unless otherwise agreed, the goods remain at should be considered as one for specific performance pursuant
the seller's risk until the ownership therein is transferred to the to Article 1484 (1). The remedies provided for in Art.1484 are
buyer, but when the ownership therein is transferred to the alternative, not cumulative. The exercise of one bars the
buyer the goods are at the buyer's risk whether actual delivery
exercise of the others. This limitation applies to contracts
has been made or not, except that: (2) Where actual delivery
has been delayed through the fault of either the buyer or seller purporting to be leases of personal property with option to buy
the goods are at the risk of the party at fault." by virtue of Art. 1485. The condition that the lessor has
deprived the lessee of possession or enjoyment of the thing for
On this score, we quote with approval the findings of the the purpose of applying Art. 1485 was fulfilled in this case by
appellate court, thus: The defendant [herein private the filing by petitioner of the complaint for replevin to recover
respondent] was not remiss in reminding the plaintiff that it possession of movable property. The prayer for a writ of
would have to bear the said expenses for failure to lift the
replevin is only for the purpose of ensuring specific
commodity for an unreasonable length of time.But even
assuming that the plaintiff did not consent to be so bound, the performance by private respondents. However, the private
provisions of Civil Code come in to make it liable for the respondents could no longer be held liable for the payment of
damages sought by the defendant. intereston unpaid monthly rentals since it was entered into in
pursuance of a car plan adopted by petitioner forthe benefit of
its deserving employees. Further, private respondents default
in payment was due to the cessation of operations of
petitioner’s sister company, Elizalde Steel Company. That
petitioner accepted payments from Lantan more than two
years after the latter’s employment have been terminated
constitutes a waiver of petitioner’s right to collect interest upon
delayed payment. What private respondents paid should be
considered the payment in full.
Pagtalunan v. Vda.deManzano RULING:
G.R. No. 147695, September 13, 2007
NO, the contract has not been automatically rescinded.
FACTS:
While the Court agrees with petitioner that the cancellation of
Patricio Pagtalunan, petitioner’s stepfather, entered into a the Contract to Sell may be done outside the court particularly
Contract to Sell with private respondent Rufina Manzano over when the buyer agrees to such cancellation, the cancellation of
a house and lot for P17,000 to be paid in the following manner: the contract by the seller must be in accordance with Sec. 3
P1,500 as downpayment upon execution of the Contract and (b) of the Maceda Law, which requires:(1) a notarial act of
the balance to be paid in equal monthly installments of P150 rescission and (2) the refund to the buyer of the full
on or before the last day of each month until fully paid. payment of the cash surrender value of the payments on the
property. Actual cancellation of the contract takes place
The contract provides that while respondent could immediately after 30 days from receipt by the buyer of the notice of
occupy the house and lot, in case of default in the payment of cancellation or the demand for rescission of the contract by a
any of the installments for 90 days after its due date, the notarial act AND upon full payment of the cash surrender
contract would be automatically rescinded without need of value to the buyer.
judicial declaration; all payments made and all improvements
done on the premises by respondent would be considered as Here, the Contract to Sell was not validly cancelled or
rentals for the use and occupation of the property or payment rescinded under Sec. 3 (b) of the Maceda Law.First, Patricio,
for damages suffered; and that respondent should peacefully the vendor in the Contract to Sell, died on September 17, 1992
vacate the premises and deliver the possession thereof back to without canceling the Contract to Sell. Second, petitioner
the vendor. also failed to cancel the Contract to Sell in accordance
with law.
Petitioner Pagtalunan alleged that Manzano stopped paying
after December 1979 without any justification or explanation Meanwhile, petitioner asserts that his demand letter should be
and that the latter paid only P12,950.Pagtalunan asserted that considered as the notice of cancellation or demand for
when respondent ceased paying her installments, her status of rescission by notarial act and that the cash surrender value of
buyer was automatically transformed to that of a lessee. the payments on the property has been applied to rentals for
the use of the house and lot after respondent stopped payment
Pagtalunan issued a demand letter for Manzano to vacate the after January 1980.
premises of the property but Manzano ignored the same. Thus,
Pagtalunan filed a Complaint for unlawful detainer against The Court, however, found that the letter merely made formal
respondent with the Municipal Trial Court (MTC) of Guiguinto, demand upon respondent to vacate the premises in
Bulacan. question. Clearly, the demand letter is not the same as the
notice of cancellation or demand for rescission by a
The MTCfound for Pagtalunan, holding that failure to pay not a notarial act required by the Maceda Law.
few installments caused the resolution or termination of the
Contract to Sell. After her last payment of the installment, Moreover, petitioner cannot insist on compliance with the
Manzano’s right of possession ipso facto ceased to be a legal requirement by assuming that the cash surrender value
right, and became possession by mere tolerance of Patricio payable to the buyer had been applied to rentals of the
and his successors-in-interest. Said tolerance ceased upon property after respondent failed to pay the installments due.
demand on respondent to vacate the property. Sec. 3 (b) of the Maceda Law does not provide a different
requirement for contracts to sell which allow possession of
On appeal, the RTC of Malolos, Bulacan reversed the decision the property by the buyer upon execution of the contract like
of the MTC and dismissed the case for lack of merit, ruling that the instant case but the refund of the cash surrender value
the agreement could not be automatically rescinded since of the payments on the property to the buyer before
there was delivery to the buyer. A judicial determination of cancellation of the contract.
rescission must be secured by petitioner as a condition
precedent to convert the possession de facto of respondent There being no valid cancellation of the Contract to Sell, the
from lawful to unlawful. Court held that CA correctly recognized respondent’s right to
continue occupying the property subject of the Contract to Sell
The Court of Appeals affirmed the RTC’s decision but held that and affirmed the dismissal of the unlawful detainer case by the
the parties, as well as the MTC and RTC, failed to advert to RTC.Consequently, it is only right and just, under the
and to apply the Maceda Law (RA 6522). It ruled that the Maceda Law, to allow respondent to pay her arrears and
Contract to Sell was NOT VALIDLY cancelled or rescinded settle the balance of the purchase price, subject to
under Sec. 3 (b) of the Maceda Law, and recognized interests.
respondent’s right to continue occupying unmolested the
property subject of the contract to sell.

ISSUE:

WON the contract has been automatically rescinded pursuant

to the agreement when Manzano defaulted in the payment of
her installments?