NORKIS DISTRIBUTORS, INC., petitioner, vs. THE COURT OF APPEALS & ALBERTO NEPALES, respondents.

facts: - Nepales bought from the Norkis a brand new Yamaha Wonderbike motorcycle - The price of P7,500.00 was payable by means of a Letter of Guaranty from DBP - Branch Manager issued Norkis Sales Invoice showing that the contract of sale of the motorcycle had been perfected. - Nepales signed the sales invoice to signify his conformity with the terms of the sale. - the motorcycle remained in Norkis' possession. - the motorcycle was registered in the Land Transportation Commission in the name of Nepales. - the motorcycle was delivered to a certain Julian Nepales - The motorcycle met an accident - An investigation conducted by the DBP revealed that the unit was being driven by a certain Payba at the time of the accident - The unit was a total wreck was returned, and stored inside Norkis' warehouse. - DBP released the proceeds of private respondent's loan to Norkis in the total sum of P7,500. As the price of the motorcycle later increased to P7,828 Nepales paid the difference of P328 and demanded the delivery of the motorcycle. - When Norkis could not deliver, he filed an action for specific performance with damages against Norkis - Norkis answered that the motorcycle had already been delivered to private respondent before the accident, hence, the risk of loss or damage had to be borne by him as owner of the unit. - trial court: in favor of private respondent - court of appeals: affirmed the decision ISSUES: (1) W/N there is a transfer of ownership (2) W/N private respondent should bear the risk of loss of the motorcycle. RULING: (1) NO; (2) NO Ratio: (1) the issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been considered not a bill of sale. In all forms of delivery, it is necessary that the act of delivery whether constructive or actual, be coupled with the intention of delivering the thing. The act, without the intention, is insufficient. (2) Article 1496 of the Civil Code which provides that "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," is applicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence, 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. This is in accordance with the well-known doctrine of res perit domino. LINO R. TOPACIO, petitioner, vs. HON. COURT OF APPEALS, BPI INVESTMENT CORP., respondents. Facts: - Lot No. 13, Block 21-A property was previously mortgaged to secure an obligation. - it was foreclosed and defendant acquired the property as highest bidder - No redemption having been exercised, the defendant was able to consolidate its title over the property. - Plaintiff negotiated to purchase the property from defendant and offered P1,250,000.00 as the purchase price, with 30% downpayment, and the balance, payable in cash, upon execution of the Deed of Sale. Plaintiff confirmed his offer in his letter to the defendant with his check payment of P375,000.00. - Defendant received plaintiff's initial payment and issued an official receipt. - Defendant wrote a letter the terms of the sale and to pay the balance of P875,000.00 until January 1986. - Plaintiff asked for extensions within which to pay the balance - Defendant agreed to extend the payment up to June 1986 requiring plaintiff, in addition, to pay interest at 24% per annum on the unpaid balance. - being unable to pay, defendant wrote to plaintiff declaring itself free to sell the property to other buyers and informing plaintiff that he could already claim his initial payment of P375,000.00. - plaintiff asked for an extension of another 6 months, within which to pay the balance. Defendant denied and asked plaintiff to get back his initial payment. - defendant mailed to plaintiff a cashier's check payable to him. Plaintiff declining acceptance and insisting that defendant allow to pay the balance. - defendant informed plaintiff that the property is being sold for P1,600,000.00 - Plaintiff returned the cashier's check earlier issued by defendant in favor of plaintiff. Defendant acknowledged receipt but declined to take back the said check - The cashier's check of P375,000.00 remains uncashed to date and is still in the hands of the plaintiff, after defendant refused to accept its return. - trial court: in favor of the plaintiff ruling that there is perfected contract of sale and is still enforceable because there was a failure to rescind - court of appeals: reversed because the contract is a contract to sell ISSUE: W/N the contract is a contract to sell. Ruling: NO RATIO:

- The payment by petitioner of P375,000.00 was the operative act that gave rise to a perfected contract of sale between the parties. - Earnest money is something of value to show that the buyer was really in earnest, and given to the seller to bind the bargain. Under the Civil Code, earnest money is considered part of the purchase price and a proof of the perfection of the contract. The P375,000.00 given by petitioner representing 30% of the purchase price is earnest money - Nowhere in the transaction indicates that BPI reserved its title on the property nor did it provide for any automatic rescission in case of default. So when petitioner failed to pay the balance of P875,000.00 despite several extensions given by private respondent, the latter could not validly rescind the contract without complying with the provision of Article 1592 or Article 1191 on notarial or judicial rescission respectively.