Toyota Shaw vs CA

 GR No. 116650 May 23, 1995

Facts:

Sosa wanted to purchase a Toyota Car. She met Bernardo, the sales representative of Toyota. Sosa emphasized to the sales rep that she needed the car not later than 17 June 1989. They contracted an agreement on the delivery of the unit and that the balance of the purchase price would be paid by credit financing. The following day, Sosa delivered the downpayment and a Vehicle sales proposal was printed. On the day of delivery, Bernardo called Sosa to inform him that the car could not be delivered. Toyota contends, on the other hand, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the credit financing application of Sosa. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in cash but Sosa refused. Sosa asked that his down payment be refunded. Toyota did so on the very same day by issuing a Far East Bank check for the full amount, which Sosa signed with the reservation, “without prejudice to our future claims for damages.” Thereafter, Sosa sent two letters to Toyota. In the first letter, she demanded the refund of the down payment plus interest from the time she paid it and for damages. Toyota refused to the demands of Sosa.

Issue:

Whether or not there was a perfected contract of sale

Ruling:

What is clear from the agreement signed by Sosa and Gilbert is not a contract of sale. No obligation on the part of Toyota to transfer ownership of the car to Sosa and no correlative obligation on the part of Sosa to pay . The provision on the down payment of PIOO,OOO.OO made no specific reference to a sale of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on installment basis, as the VSP executed the following day. Nothing was mentioned about the full purchase price and the manner the installments were to be paid. An agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. This is so because the agreement as to the manner of payment goes, into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to the price is an essential element of a binding agreement to sell personal property.