SUN BROTHERS APPLIANCES, INC., PLAINTIFF AND APPELLEE COMMA VS. DAMASO P PERIOD PEREZ, DEFENDANT AND APPELLANT.

This is an action brought by the plaintiff to recover from defendant
the sum of P1,404.00, the price of one Admiral Air Conditioner, Slim
Style, Model 100-23-1 H.P., Serial No. 2978828, delivered to the
defendant by the plaintiff under a conditional sale agreement entered
into by and between them on December 6, 1958, in the City of Manila,
plus stipulated interest of 12% from January 6, 1959 until the same is
fully paid, together with P200 as attorney’s fees, and costs. Defendant
answered that the air-conditioner in question was delivered to him and
installed in the office of the defendant located at Gardiner street,
Lucena, Quezon on December 14, 1959 but that said air-conditioner was
totally destroyed by fire which occurred in the morning of December
28,1958 at 2 o’clock. Defendant further claimed that the machine was
destroyed by force majeure, not by the defendant’s fault and/or
negligence and, therefore, he is not liable under the conditional sale,
Annex “A”, which the parties, plaintiff and defendant, had executed.

At the trial of the case the parties entered into a stipulation of facts, the most important provisions of which are as follows:

1. That defendant admits that on December 6, 1958,
   he entered into a Conditional Sale Agreement with plaintiff, copy of
   which contract is attached to the complaint as Annex “A”;

2. That pursuant to the terms and conditions provided in the said
   Conditional Sale Agreement, the plaintiff delivered to the defendant
   (1) Admiral Air Conditioner Slim Style, Model 100-23-1, HP, Serial No.
   2978828 with the contract price of P1,678,00 and that said Air
   Conditioner was received by the defendant;

3. That
   defendant made a down payment of P274.00 on December 6,1958, pursuant
   to the terms and conditions of the Conditional “Sale Agreement; and Air
   Conditioner was installed by the plaintiff, thru its representative, at
   Lucena, Quezon;

4. That said Air Conditioner was burned on
   December 27, 1958, on or about 2:00 o’clock in the morning, however,
   defendant will present evidence to show that the Air Conditioner
   subject of the complaint herein was burned where it was installed by
   the plaintiff;

5. That defendant, after making down payment
   of P274.00 to the plaintiff, did not pay any of the monthly
   installments of P78.00 thereafter, leaving a balance of P1,404.00 in
   favor of the plaintiff;

6.  That after defendant presents
   evidence to prove that the Air Conditioner was burned where it was
   installed by the plaintiff, to the satisfaction of this Honorable
   Court; the parties agree to leave to this Honorable Court the
   resolution of the issue whether loss by fire extinguishes the
   obligation of the defendant to pay to the plaintiff the subsequent
   installments of the initial payment;”

The Court of First Instance before which the action was brought
rendered judgment condemning the defendant to pay the plaintiff the
amount demanded in the complaint, including interest and attorney’s
fees. The defendant has appealed the case directly to Us as involving
only a question of law.

The conditional sale executed by the plaintiff and defendant contained the following stipulation:

“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 kteep 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 cause, 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;”

The court below declared that, as the buyer would.be liable in ease
of loss for any Cause, such buyer assumed liability even in case of
logs by fortuitous event; so it rendered judgment declaring defendant
liable for the sum demanded together with interest and attorney’s fees.

In this Court on appeal defendant-appellant argues that inasmuch as the title to the property sold shall vest in the buyer only upon full payment of the price,
the loss of the air conditioner should be for the exclusive account of
the vendor; that the phrase “for any cause” used in paragraph 2 of the
agreement may not be interpreted to include a fortuitous event
absolutely beyond the control of the appellant; and that although
Article 1174 of the new Civil Code recognizes the exception on
fortuitous event when the parties to a contract expressly so stipulate,
the phrase “for any cause” used in the contract did not indicate any
intention of the parties that the loss of the unit due to fortuitous
event is to be included within the responsibility of the vendor,

In answer to the arguments, above set forth the appellee argues that
the stipulation in the contract of sale whereby the buyer shall be
liable for any loss, damage or destruction for any cause, is not
contrary to law, morals or public policy and is specifically authorised
to be stipulated upon between the parties by Article 1174 of the Civil
Code; that the risk of loss was expressly stipulated to be undertaken
by the buyer, even if the title to the property sold remained, also by
stipulation, in the vendor; that the term “any cause” used in the
agreement includes a fortuitous event, and an express stipulation
making the vendee responsible in such case is valid.

We believe that the agreement making the buyer responsible for any
loss whatever, fortuitous or otherwise, whatsoever even if the title to
the property remains in the vendor, is neither contrary to law, nor to
morals or public policy. We have held such stipulation to be legal in
the case of government vs. Amechazurra, 10 Phil. 637 (Tolentino,
Commentaries on the Civil Code, Vol. IV, p. 120), and declare it to be
based on a sound public policy in conditional sales according to
American decisions.

“The weight, of authority supports the rule that
where, goods are sold and delivered to the vendee under an agreement
that the title is to reraairt in the vendor until payment, the loss or
destruction of the property while in the possession of the vendee
before payment, without his fault, does not relieve him from the
obligation to pay the price, and he, therefore, suffers the loss. In
accord with this rule.are the provisions of the Uniform Sales Act and
the Uniform Conditional Sales Act, There are several bases for this
rule. First is 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. Second is 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 goods and the right to
acquire title upon-making full payment of the price. A third basis
advanced for the rule is the policy of providing, an incentive to care
properly for the goods, they being exclusively under the control and
dominion at the vendee.” (47 Am. Jur., pp. 81-82)

We, therefore, agree with the trial court that the loss by fire or
fortuitous event was expressly agreed in the contract to be borne by
the buyer and this express agreement is not contrary to law but
sanctioned by it as well as by the demands of sound public policy. The
judgment of the court below is affirmed, with costs against
defendant-appellant.

Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes. Dizon, Regala and Makalintal, JJ., concur.