Toyota Shaw V Ca.docx

Toyota Shaw v CA| May 23, 1995| Davide, J 

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Private-respondent Sosa wanted to buy a Toyota Lite Ace but encountered difficulties finding a car dealer with an available unit o Toyota Shaw branch informed him that they have one in stock. o Sosa emphasized to Bernardo, the sales rep, that he needed that car no later than June 17 1989  He planned to use the car to go to Marinduque with a balikbayan on the 18th to celebrate his birthday on the 19th  Expressed worry that if he did not have a new car he would be a ‘laughing stock’ in his town June 4, 1989, Bernardo assured Sosa regarding promptness of delivery and “Agreement between Mr. Sosa & Bernardo of Toyota Shaw” (exhibit A) was executed containing: o Signed by Sosa’s son on the former’s behalf and Bernardo o Downpayent of 100k to be paid on 15th June o Yellow Toyota Lite Ace will be ready for pick up on the 17th of June at 10am Downpayment was paid on the 15th and a Vehicle Sales Proposal (VSP) was issued by Bernardo containing ff: o That it was signed by Sosa’s son under the subheading “CONFRME” o “Delivery terms” left blank o Initial cash outlay broken down as follows  Downpayment = 53.148K, Insurance =13.97k, Other fees = 33.282k o Rest of balance of 274k to be financed by B.A. Finance o “Conditions of sale”  Sale is subject to an available unit  Price is subject to change w/o notice  Price prevailing and in effect at the time of selling will apply o Checked and approved by Quirante, Sales Supervisor

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June 17 at 9:30 Bernardo informed Sosa’s son that pick-up time for the car is moved from 10am to 2pm Sosa went to Toyota Shaw at 2pm waited an hour and was later told by Bernardo that the unit would not be arriving o Bernardo explains that “nasulot ang unit ng ibang malakas” Toyota then gave Sosa the option to pay full price in cash o Sosa refused asked for refund of the downpayment  Toyota obliged and issued Far East Bank check for the full amount  Sosa indicated on the check voucher that acceptance was w/o prejudice to our future claims for damages Sosa then sent 2 letters on June 27 and Nov 4 o Demanding the refund of the downpayment w/ interest to be paid in 5 day or else legal action o Demanding 1mil representing interest and damages to be paid in 3 days or else legal action Nov 20, Sosa filed a claim for damages under Art 19 and 21 at RTC Marinduque o Toyota claims no sale was made o Bernardo was acting in his personal capacity and had no authority to sign Exhibit A o VSP indicated no date of delivery o B.A. financing disapproved the credit agreement w/Sosa hence no delivery could be made RTC and CA ruled in favor of Sosa o Exhibit A was a valid and perfected contract o Toyota estopped from claiming that Bernardo was not authorize due to manifestations that he was acting as its agent

W/N Exhibit A was a valid contract – NO  There was no obligation for Toyota to deliver a determinate thing nor a correlative obligation for Sosa to pay a price certain  The only price indicated in Exhibit A was the downpayment o If it was intended for a sale it could only refer to a sale on installment basis

But nothing was mentioned about the full purchase price  Nor anything mentioned on the manner of the installment o Definiteness of the manner of payment and the price itself are essential elements for a valid contract of sale  Failure to agree on mode of payment is tantamount to a failure to agree on price No meeting of the minds between Sosa and Toyota o Sosa didn’t even sign it, it was his son o Clear from the title that he was dealing with Bernardo from Toyota Shaw and not Toyota Shaw itself  No misrepresentation on the part of Bernardo that he had authority to sell  Sosa knew that Bernardo was a mere sale rep and therefore a mere agent of Toyota o It was incumbent on Sosa to act w/ ordinary diligence to know the exact extent of Bernardo’s authority  A person dealing w/ an agent is put upon inquiry and must discover upon his peril the authority of the agent At most Exhibit A may be considered as a part of the initial phase of negotiation o The second part of the negotiation phase was the VSP  The VSP however indicated a downpayement of 53k and the rest of the balance to be financed by B.A. Finance o In a sale on installment basis financed by a financing company, the financing company is a party to the sale as it subrogates the seller w/r to the payment of the installment buyer  Since B.A. Finance did not approve the credit of Sosa there was no meeting of the minds on the sale on installment basis  Bernardo’s explanation for the non-release of the vehicle - that “may mas malakas” - does not inspire belief VSP was a mere proposal 

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Such was aborted due to the not approval of the credit Therefore the VSP created no demandable right in favor of Sosa  Therefore the non-delivery did not cause a legally indemnifiable injury Claim is but a misplaced sense of pride and ego o He should not have announce his plan to buy a car if he knew he would not be able to pay the full purchase price o o

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HELD: RTC and CA REVERSED