[1504]Lawyer’s Cooperative Company vs. Tabora 

Facts:

Perfecto Tabora bought a set of American jurisprudence and general index from company. Totalprice is P1,682.40, payable on installment plan. Tabora paid P300.

It was provided in the contract that "title to and ownership of the books shall remain with the selleruntil the purchase price shall have been fully paid. Loss or damage to the books after delivery tothe buyer shall be borne by the buyer."

Delivered to his law office. Same night of delivery, fire broke out. Office and library burned down.

Tabora gave company notice. Eventually, he was unable to pay.

Company commenced action in CFI Manila to recover balance of obligation.

Tabora’s defense: 1) force majeure, so he can’t be responsible for loss 2) since it was agreed thatthe title to and the ownership of the books shall remain with the seller until the purchase price shallhave been fully paid, and the books were burned or destroyed immediately after the transaction,company should be the one to bear the loss for, as a result, the loss is always borne by the owner

CFI ruled in favor of company

Issue: Whether or not Tabora is liable for payment (YES)

Held:

On defense regarding ownership: While as a rule the loss of the object of the contract of sale isborne by the owner or in case of  force majeure the one under obligation to deliver the object isexempt from liability, the application of that rule does not here obtain because the law on thecontract entered into on the matter argues against it. It is true that in the contract entered intobetween the parties the seller agreed that the ownership of the books shall remain with it until thepurchase price shall have been fully paid, but such stipulation cannot make the seller liable in caseof loss not only because such was agreed merely to secure the performance by the buyer of hisobligation but in the very contract it was expressly agreed that the "loss or damage to the booksafter delivery to the buyer shall be borne by the buyer." Any such stipulation is sanctioned by Article1504 of our Civil Code, which in part provides: (1) Where delivery of the goods has been made tothe buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goodshas been retained by the seller merely to secure performance by the buyer of his obligations underthe contract, the goods are at the buyer's risk from the time of such delivery.

On force majeure: rule only holds true when the obligation consists in the delivery of a determinatething and there is no stipulation holding him liable even in case of fortuitous event. Here thesequalifications are not present. The obligation does not refer to a determinate thing, but is pecuniaryin nature, and the obligor bound himself to assume the loss after the delivery of the goods to him.In other words, the obligor agreed to assume any risk concerning the goods from the time of theirdelivery, which is an exception to the rule provided for in Article 1262 of our Civil Code