G.R. No. L-116650, 23 May 1995

FACTS:

On June of 1989, Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was then a seller’s market and Sosa had difficulty finding a dealer with an available unit for sale. But upon contacting Toyota Shaw, Inc., he was told that there was an available unit. So on 14 June 1989, Sosa and his son, Gilbert, went to the Toyota office at Shaw Boulevard, Pasig, Metro Manila. There they met Popong Bernardo, a sales representative of Toyota.

Bernardo assured Sosa that a unit would be ready for pick up at 10:00 a.m. on 17 June 1989. Sosa insisted that the vehicle be delivered to him because he would be laughed at if seen without a new car. Bernardo called Gilbert to inform him that the vehicle would not be ready for pick up at 10:00 a.m. as previously agreed upon but at 2:00 p.m. that same day. At 2:00 p.m., Sosa and Gilbert met Bernardo at the latter’s office. According to Sosa, Bernardo informed them that the Lite Ace was being readied for delivery. After waiting for about an hour, Bernardo told them that the car could not be delivered because “nasulot ang unit ng ibang malakas.”

Toyota contends, however, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the credit financing application of Sosa. It further alleged that a particular unit had already been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in cash but Sosa refused.

Sosa then demanded for refund. Toyota insisted that there was no contract of sale established between them.

ISSUE:

Whether or not that the acts of Bernardo are also the acts of Toyota?

RULING:

No. There is an absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not even sign it.

For another, Sosa was well aware from its title, written in bold letters, viz.,that he was not dealing with Toyota but with Popong Bernardo and that the latter did not misrepresent that he had the authority to sell any Toyota vehicle. He knew that Bernardo was only a sales representative of Toyota and hence a mere agent of the latter.

It was incumbent upon Sosa to act with ordinary prudence and reasonable diligence to know the extent of Bernardo’s authority as an agent in respect of contracts to sell Toyota’s vehicles. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.

*Case digest by Claudette Anne G. Sayson, JD – 4, Andres Bonifacio College, SY 2019 – 2020