Toyota Shaw Inc., petitioner, vs. Court of Appeals and Luna L.

Sosa, respondents
Facts:
Luna L. Sosa, the respondent, wanted to buy a yellow car unit of Toyota Lite Ace that
he will use on June 18, 1989, with his family and a balikbayan guest, to go to
Marinduque, his home province, for his birthday on June 19. On June 14, he and his
son, Gilbert, went to Toyota Shaw to meet Popong Bernardo, a sales representative of
Toyota. He said that he needed that car not later than June 17 and added that his
guests will laugh at him if he does not have a new car. Bernardo assured that the unit
would be ready at 10:00 am of June 17. Then, Bernardo signed a document that
contained the agreement between him and Sosa about the car unit, the downpayment
of P100,000 and the time of pick-up. It was also agreed that the purchase price would
be paid by credit financing through B.A. Finance, wherein Gilbert signed on behalf of his
father. The downpayment had been made on the next day, with an approved printed
Vehicle Sales Proposal (VSP) No.928, on which Gilbert signed, that contained the
address of Sosa, the model of the car, and the payment of installment, to be financed by
B.A. Finance. It has no specified Delivery Terms.
On June 17, 1989, Bernardo called Gilbert to change the time of pick-up at 2:00pm. At
2:00 pm, Sosa and Gilbert went to Toyota Shaw to meet Bernardo. After waiting for
about an hour, Bernardo told them that someone, with a higher position in life, already
took possession of the car. However, Toyota said that the car was not be delivered to
Sosa because of the disapproval by B.A. Finance due to the uncertainty of payment for
not completing the documents required by the financing company. Toyota gave Sosa an
option to pay the full purchase price but Sosa refused. After it made clear that the car
would not be delivered to him, he, then, asked to refund his downpayment wherein
Toyota did so on the same day. Then, he took legal action for the payment of interest
and moral damages suffered by him. The trial court had agreed to his complaints and
stated that there was a perfected contract of sale between Sosa and Toyota and Toyota
acted in bad faith. Toyota then appealed to the Court of Appeals, the court affirmed the
lower court.

Issue:
Whether or not there was a perfected contract of sale between the petitioner and the
respondent.

Held:
The Supreme Court held no and granted the petition. The decision of the lower courts
were reversed, and the court dismissed the complaint for damages because there was
no perfected contract of sale.
Ruling:
In Article 1475 of the Civil Code, it states that the contract of sale is perfected at the
moment there is a meeting of minds upon the thing which is the object of the contract
and upon the price. The court had ruled that a definite 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
equivalent to a failure to agree in the price. Thus, definiteness as to the price is an
essential element of a binding agreement to sell personal property. And since B.A.
Finance did not approve Sosa's application, there was then no meeting of minds on the
sale on installment basis.