Sun bros and Perez entered into a Conditional Sale Agreement of an Admiral air conditioner, the price of which is 1,678php. The agreement contains the ff. stipulations:”2. Title to said property shall vest in the Buyer only upon full payment of the entire account as herein provided, and only upon complete performance of all the other conditions herein specified:”3. The Buyer shall keep said property in good condition and properly protected against the elements, at his/its address above-stated, and undertakes that if said property or any part thereof be lost, damaged, or destroyed for any causes, he shall suffer such loss, or repair such damage, it being distinctly understood and agreed that said property remains at Buyer’s risk after delivery;”
Pursuant to the contract, sun bros. delivered the item and was received by Perez. Perez made a down payment of 274php and the item was installed by sun bro representatives. The said air conditioner was burned where it was installed by the plaintiff (no details about the fire in the case). The defendant claims that the destruction was due to force majeure. Perez did not pay any of the monthly installments leaving a balance of 1,404php.
ISSUE: Who should bear the loss? – Buyer
Ordered Perez to pay. As the buyer would be liable in case of loss for any cause, such buyer assumed liability even in case of loss by fortuitous event.
The agreement making the buyer responsible for any loss whatsoever, fortuitous or otherwise, even if the title to the property remains in the vendor, is neither contrary to law, nor to morals or public policy . Citing American decisions, the court held that the loss did not relieve the buyer from his obligation to pay. Reason for the rule:
- The absolute and unconditional nature of the vendee’s promise to pay for the goods. The promise is nowise dependent upon the transfer of the absolute title.
- The fact that the vendor has fully performed his contract and has nothing further to do except receive payment, and the vendee received what he bargained for when he obtained the right of possession and use of the good sand the right to acquire title upon making full payment of the price
- Providing an incentive to care properly for the goods, they being exclusively under the control and dominion of the vendee
Digest Credit: Badeth Dc
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