FIRSTDIVISION

[G.R.No.116650.May23,1995.]

TOYOTASHAW,INC.,petitioner,vs.COURTOFAPPEALS
andLUNAL.SOSA,respondents.

SYLLABUS

1. CIVILLAWSPECIALCONTRACTSSALESCONTRACTOFSALE
ELEMENTOFDEFINITENESSOFPRICEFORPERFECTIONTHEREOF
NOTPRESENTINCASEATBAR.Article1458oftheCivilCodedefinesa
contractofsaleandArticle1475specificallyprovideswhenitisdeemed
perfected.Itisnotacontractofsale.NoobligationonthepartofToyotato
transferownershipofadeterminatethingtoSosaandnocorrelativeobligation
onthepartofthelattertopaythereforapricecertainappearstherein.The
provisiononthedownpaymentofP100,000.00madenospecificreferenceto
asaleofavehicle.Ifitwasintendedforacontractofsale,itcouldonlyreferto
asaleoninstallmentbasis,astheVSPexecutedthefollowingdayconfirmed.
Butnothingwasmentionedaboutthefullpurchasepriceandthemannerthe
installmentsweretobepaid.ThisCourthadalreadyruledthatadefinite
agreementonthemannerofpaymentofthepriceisanessentialelementin
theformationofabindingandenforceablecontractofsale.Thisissobecause
theagreementastothemannerofpaymentgoesintothepricesuchthata
disagreementonthemannerofpaymentistantamounttoafailuretoagreeon
theprice.Definitenessastothepriceisanessentialelementofabinding
agreementtosellpersonalproperty.
2. ID.ID.ID.ID.ELEMENTOFMEETINGOFMINDSNOT
ESTABLISHEDINCASEATBAR.Exhibit"A"showstheabsenceofa
meetingofmindsbetweenToyotaandSosa.Foronething,Sosadidnoteven
signit.Foranother,Sosawaswellawarefromitstitle,writteninboldletters,
viz.,AGREEMENTSBETWEENMRSOSA&POPONGBERNARDOOF
TOYOTASHAW,INC.thathewasnotdealingwithToyotabutwithPopong
Bernardoandthatthelatterdidnotmisrepresentthathehadtheauthorityto
sellanyToyotavehicle.HeknewthatBernardowasonlyasales
representativeofToyotaandhenceamereagentofthelatter.Itwas
incumbentuponSosatoactwithordinaryprudenceandreasonablediligence
toknowtheextentofBernardo'sauthorityasanagentinrespectofcontracts
tosellToyota'svehicles.Apersondealingwithanagentisputuponinquiry
andmustdiscoveruponhisperiltheauthorityoftheagent.Financing
companiesaredefinedinSection3(a)ofR.A.No.5980,asamendedbyP.D.
No.1454andP.D.No.1793,as"corporationsorpartnerships,exceptthose
regulatedbytheCentralBankofthePhilippines,theInsuranceCommission
andtheCooperativesAdministrationOffice,whichareprimarilyorganizedfor
thepurposeofextendingcreditfacilitiestoconsumersandtoindustrial,
commercial,oragriculturalenterprises,eitherbydiscountingorfactoring
commercialpapersoraccountsreceivables,orbybuyingandselling
contracts,leases,chattelmortgages,orotherevidenceofindebtedness,orby
leasingofmotorvehicles,heavyequipmentandindustrialmachinery,business
andofficemachinesandequipment,appliancesandothermovableproperty.
Accordingly,inasaleoninstallmentbasiswhichisfinancedbyafinancing
company,threepartiesarethusinvolved:thebuyerwhoexecutesanoteor
notesfortheunpaidbalanceofthepriceofthethingpurchasedon
installment,thesellerwhoassignsthenotesofdiscountsthemwitha
financingcompany,andthefinancingcompanywhichissubrogatedinthe
placeoftheseller,asthecreditoroftheinstallmentbuyer.SinceB.A.Finance
didnotapproveSosa'sapplication,therewasthennomeetingofmindsonthe
saleoninstallmentbasis.WeareinclinedtobelieveToyota'sversionthatB.A.
FinancedisapprovedSosa'sapplicationforwhichreasonitsuggestedtoSosa
thathepaythefullpurchaseprice.Whenthelatterrefused,Toyotacancelled
theVSPandreturnedtohimhisP100,000.00.Sosa'sversionthattheVSP
wascancelledbecause,accordingtoBernardo,thevehiclewasdeliveredto
anotherwhowas"masmalakas"doesnotinspirebeliefandwasobviouslya
delayedafterthought.ItisclaimedthatBernardosaid,"Pasensiyakayo,
nasulotangunitngibangmalakas,"whiletheSosashadalreadybeenwaiting
foranhourforthedeliveryofthevehicleintheafternoonof17June1989.
However,inparagraph7ofhiscomplaint,Sosasolemnlystates:OnJune17,
1989ataround9:30o'clockinthemorning,defendant'ssalesrepresentative,
Mr.PopongBernardo,calledplaintiff'shouseandinformedtheplaintiff'sson
thatthevehiclewillnotbereadyforpickupat10:00a.m.ofJune17,1989but
at2:00p.m.ofthatdayinstead.Plaintiffandhissonwenttodefendant'soffice
onJune17,1989at2:00p.m.inordertopickupthevehiclebutthe
defendant,forreasonsknownonlytoitsrepresentatives,refusedand/orfailed
toreleasethevehicletotheplaintiff.Plaintiffdemandedforanexplanation,but
nothingwasgiven...TheVSPwasamereproposalwhichwasabortedin
lieuofsubsequentevents.ItfollowsthattheVSPcreatednodemandableright
infavorofSosaforthedeliveryofthevehicletohim,anditsnondeliverydid
notcauseanylegallyindemnifiableinjury.
3. ID.ID.ID.ID.STAGESTHEREOFCASEATBAR.Atthemost,
Exhibit"A"maybeconsideredaspartoftheinitialphaseofthegenerationor
negotiationstageofacontractofsale.Therearethreestagesinthecontract
ofsale,namely:(a)preparation,conception,orgeneration,whichistheperiod
ofnegotiationandbargaining,endingatthemomentofagreementofthe
parties(b)perfectionorbirthofthecontract,whichisthemomentwhenthe
partiescometoagreeonthetermsofthecontractand(c)consummationor
death,whichisthefulfillmentorperformanceofthetermsagreeduponinthe
contract.Thesecondphaseofthegenerationornegotiationstageinthiscase
wastheexecutionoftheVSP.Itmustbeemphasizedthatthereunder,the
downpaymentofthepurchasepricewasP53,148.00whilethebalancetobe
paidoninstallmentshouldbefinancedbyB.A.FinanceCorporation.Itis,of
course,tobeassumedthatB.A.FinanceCorp.wasacceptabletoToyota,
otherwiseitshouldnothavementionedB.A.FinanceintheVSP.
4. ID.DAMAGESMORALDAMAGESNOTWARRANTEDTO
COMPENSATEMISPLACEDPRIDEANDEGO.Theawardthenofmoral
andexemplarydamagesandattorney'sfeesandcostsofsuitiswithoutlegal
basis.Besides,theonlygrounduponwhichSosaclaimedmoraldamagesis
thatsinceitwasknowntohisfriends,townmates,andrelativesthathewas
buyingaToyotaLiteAcewhichtheyexpectedtoseeonhisbirthday,he
sufferedhumiliation,shame,andsleeplessnightswhenthevanwasnot
delivered.Thevanbecamethesubjectmatteroftalksduringhiscelebration
thathemaynothavepaidforit,andthiscreatedanimpressionagainsthis
businessstandingandreputation.Atthebottomofthisclaimisnothingbut
misplacedprideandego.Heshouldnothaveannouncedhisplantobuya
ToyotaLiteAceknowingthathemightnotbeabletopaythefullpurchase
price.Itwashewhobroughtembarrassmentuponhimselfbybraggingabout
athingwhichhedidnotownyet.
5. ID.ID.EXEMPLARYDAMAGESWHENAVAILABLE.SinceSosa
isnotentitledtomoraldamagesandtherebeingnoawardfortemperate,
liquidated,orcompensatorydamages,heislikewisenotentitledtoexemplary
damages.UnderArticle2229oftheCivilCode,exemplaryorcorrective
damagesareimposedbywayofexampleorcorrectionforthepublicgood,in
additiontomoral,temperate,liquidated,orcompensatorydamages.
6. ID.ATTORNEY'SFEESWHENWARRANTED.Itissettledthatfor
attorney'sfeestobegranted,thecourtmustexplicitlystateinthebodyofthe
decision,andnotonlyinthedispositiveportionthereof,thelegalreasonfor
theawardofattorney'sfees.Nosuchexplicitdeterminationthereonwasmade
inthebodyofthedecisionofthetrialcourt.Noreasonthusexistsforsuchan
award.

DECISION

DAVIDE,JR.,J :
p

At the heart of the present controversy is the document marked

Exhibit "A" 1 for the private respondent, which was signed by a sales
representative of Toyota Shaw, Inc. named Popong Bernardo. The
documentreadsasfollows:
4June1989
 AGREEMENTSBETWEENMR.SOSA&
POPONGBERNARDOOFTOYOTA
SHAW,INC.
1. allnecessarydocumentswillbesubmittedtoTOYOTA
SHAW, INC. (POPONG BERNARDO) a week after,
upon arrival of Mr. Sosa from the Province
(Marinduque)wheretheunitwillbeusedonthe19thof
June.
2. the downpayment of P100,000.00 will be paid by Mr.
SosaonJune15,1989.
3. theTOYOTASHAW,INC.LITEACEyellow,willbepick
up [sic] and released by TOYOTA SHAW, INC. on the
17thofJuneat10a.m.
Verytrulyyours,
(Sgd.)POPONGBERNARDO
Was this document, executed and signed by the petitioner's sales
representative, a perfected contract of sale, binding upon the petitioner,
breach of which would entitle the private respondent to damages and
attorney's fees? The trial court and the Court of Appeals took the
affirmativeview.Thepetitionerdisagrees.Hence,thispetitionforreviewon
certiorari.llcd

Theantecedentsasdisclosedinthedecisionsofboththetrialcourt
and the Court of Appeals, as well as in the pleadings of petitioner Toyota
Shaw,Inc.(hereinafterToyota) and respondent Luna L. Sosa (hereinafter
Sosa)areasfollows.SometimeinJuneof1989,LunaL.Sosawantedto
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
contractingToyotaShaw,Inc.,hewastoldthattherewasanavailableunit.
Soon14June1989,Sosaandhisson,Gilbert,wenttotheToyotaShaw
Boulevard,Pasig,MetroManila.TheretheymetPopongBernardo,asales
representativeofToyota.
SosaemphasizedtoBernardothatheneededtheLiteAcenotlater
than17June1989becausehe,hisfamily,andabalikbayan guest would
useiton18June1989togotoMarinduque,hishomeprovince,wherehe
wouldcelebratehisbirthdayonthe19thofJune.Headdedthatifhedoes
notarriveinhishometownwiththenewcar,hewouldbecomea"laughing
stock." Bernardo assured Sosa that a unit would be ready for pick up at
10:00 a.m. on 17 June 1989. Bernardo then signed the aforequoted
"AgreementsBetweenMr.Sosa&PopongBernardoofToyotaShaw,Inc."
It was also agreed upon by the parties that the balance of the purchase
price would be paid by credit financing through B.A. Finance, and for this
Gilbert, on behalf of his father, signed the documents of Toyota and B.A.
Financepertainingtotheapplicationforfinancing.

 The next day, 15 June 1989, Sosa and Gilbert went to Toyota to
deliver the downpayment of P100,000.00. They met Bernardo who then
accomplishedaprintedVehicleSalesProposal(VSP)No.928, 2onwhich
Gilbert signed under the subheading CONFORME. This document shows
thatthecustomer'snameis"MR.LUNASOSA"withhomeaddressatNo.
2316GuijoStreet,UnitedParaaqueIIthatthemodelseriesofthevehicle
is a "Lite Ace 1500" described as "4 Dr minibus" that payment is by
"installment," to be financed by "B.A.," 3 with the initial cash outlay of
P100,000.00brokendownasfollows: Cdpr

a) downpayment P53,148.00
b) insurance P13,970.00
c) BLTregistrationfee P1,067.00
CHMOfee 2,715.00
servicefee 500.00
accessories 29,000.00
andthatthe"BALANCETOBEFINANCED"is"P274,137.00."Thespaces
provided for "Delivery Terms" were not filledup. It also contains the
followingpertinentprovisions:
CONDITIONSOFSALES
1. Thissaleissubjecttoavailabilityofunit.
2. Stated Price is subject to change without prior notice.
Priceprevailingandineffectattimeofsellingwillapply.
...
Rodrigo Quirante, the Sales Supervisor of Bernardo, checked and
approvedtheVSP.
On 17 June, at around 9:30 a.m., Bernardo called Gilbert to inform
him that the vehicle would not be ready for pick up at 10:00 a.m. as
previouslyagreeduponbutat2:00p.m.thatsameday.At2:00p.m.,Sosa
andGilbertmetBernardoatthelatter'soffice.AccordingtoSosa,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
deliveredbecause"nasulotangunitngibangmalakas."
Toyota contends, however, that the Lite Ace was not delivered to
Sosa because of the disapproval of B.A. Finance of the credit financing
applicationofSosa.Itfurtherallegedthataparticularunithadalreadybeen
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
gaveSosatheoptiontopurchasetheunitbypayingthefullpurchaseprice
incashbutSosarefused. prcd

AfteritbecameclearthattheLiteAcewouldnotbedeliveredtohim,
Sosaaskedthathisdownpaymentberefunded.Toyotadidsoonthevery
same day by issuing a Far East Bank check for the full amount of
P100,000.00, 4 the receipt of which was shown by a check voucher of
Toyota, 5whichSosasignedwiththereservation,"withoutprejudicetoour
futureclaimsfordamages."
Thereafter,SosasenttwoletterstoToyota.Inthefirstlatter,dated27
June 1989 and signed by him, he demanded the refund, within five days
from receipt, of the downpayment of P100,000.00 plus interest from the
timehepaiditandthepaymentofdamageswithawarningthatincaseof
Toyota'sfailuretodosohewouldbeconstrainedtotakelegalaction.6The
second, dated 4 November 1989 and signed by M.O. Caballes, Sosa's
counsel demanded one million pesos representing interest and damages,
again,withawarningthatlegalactionwouldbetakenifpaymentwasnot
madewithinthreedays.7Toyota'scounselansweredthroughaletterdated
27November19898refusingtoaccedetothedemandsofSosa.Buteven
beforethisanswerwasmadeandreceivedbySosa,thelatterfiledon20
November 1989 with Branch 38 of the Regional Trial Court (RTC) of
MarinduqueacomplaintagainstToyotafordamagesunderArticles19and
21 of the Civil Code in the total amount of P1,230,000.00. 9 He alleges,
interalia,that:
9. Asaresultofdefendant'sfailureand/orrefusaltodeliverthe
vehicletoplaintiff,plaintiffsufferedembarrassment,
humiliation,ridicule,mentalanguishandsleeplessnights
because:(i)heandhisfamilywereconstrainedtotakethe
publictransportationfromManilatoLucenaCityontheirway
toMarinduque(ii)hisbalikbayanguestcancelledhis
scheduledfirstvisittoMarinduqueinordertoavoid
inconvenienceoftakingpublictransportationand(iii)his
relative,friends,neighborsandotherprovincemates,
continuouslyirkedhimabout"hisBrandNewToyotaLiteAce
thatneverwas."Underthecircumstances,defendant
shouldbemadeliabletotheplaintiffformoraldamagesinthe
amountofOneMillionPesos(P1,000,000.00).10
In its answer to the complaint, Toyota alleged that no sale was
entered into between it and Sosa, that Bernardo had no authority to sign
Exhibit"A"forandinitsbehalf,andthatBernardosignedExhibit"A"inhis
personalcapacity.Asspecialandaffirmativedefenses,itallegedthat:the
VSP did not state a date of delivery Sosa had not completed the
documents required by the financing company, and as a matter of policy,
the vehicle could not and would not be released prior to full compliance
withfinancingrequirements,submissionofalldocuments,andexecutionof
the sales agreement/invoice the P100,000.00 was returned to and
receivedbySosathevenuewasimproperlylaidandSosadidnothavea
sufficient cause of action against it. It also interposed compulsory
counterclaims. LibLex
 Aftertrialontheissueagreeduponduringthepretrialsession,11the
trialcourtrenderedon18February1992adecisioninfavorofSosa. 12 It
ruled that Exhibit "A," the "AGREEMENTS BETWEEN MR. SOSA AND
POPONG BERNARDO," was a valid perfected contract of sale between
Sosa and Toyota which bound Toyota to deliver the vehicle to Sosa, and
furtheragreedwithSosathatToyotaactedinbadfaithinsellingtoanother
theunitalreadyreservedforhim.
As to Toyota's contention that Bernardo had no authority to bind it
through Exhibit "A," the trial court held that the extent of Bernardo's
authority "was not made known to plaintiff," for a testified to by Quirante,
"theydonotvolunteeranyinformationastothecompany'ssalespolicyand
guidelines because they are internal matters." 13 Moreover, "[f]rom the
beginning of the transaction up to its consummation when the
downpaymentwasmadebytheplaintiff,thedefendantshadmadeknown
totheplaintifftheimpressionthatPopongBernardoisanauthorizedsales
executive as it permitted the latter to do acts within the scope of an
apparentauthorityholdinghimouttothepublicaspossessingpowertodo
theseacts."14Bernardothen"wasanagentofthedefendantToyotaShaw,
Inc.andhenceboundthedefendants."15
The court further declared that "Luna Sosa proved his social
standing in the community and suffered besmirched reputation, wounded
feelings and sleepless nights for which he ought to be compensated." 16
Accordingly,itdisposedasfollows:
WHEREFORE, viewed from the above findings, judgment is
herebyrenderedinfavoroftheplaintiffandagainstthedefendant:
1. ordering the defendant to pay the plaintiff the sum of
P75,000.00formoraldamages
2. ordering the defendant to pay the plaintiff the sum of
P10,000.00forexemplarydamages
3. ordering the defendant to pay the sum of P30,000.00
attorney's fees plus P2,000.00 Lawyer's transportation
farepertripinattendingtothehearingofthiscase
4. ordering the defendant to pay the plaintiff the sum of
P2,000.00 transportation fare per trip of the plaintiff in
attendingthehearingofthiscaseand
5. orderingthedefendanttopaythecostofsuit.
SOORDERED.
Dissatisfied with the trial court's judgment, Toyota appealed to the
CourtofAppeals.ThecasewasdocketedasCAG.R.CVNo.40043.Inits
decisionpromulgatedon29July1994, 17theCourtofAppealsaffirmedin
tototheappealeddecision.
 Toyota now comes before this Court via this petition and raises the
core issue stated at the beginning of the ponencia and also the following
related issues: (a) whether or not the standard VSP was the true and
documented understanding of the parties which would have led to the
ultimate contract of sale, (b) whether or not Sosa has any legal and
demandablerighttothedeliveryofthevehicledespitethenonpaymentof
the consideration and the nonapproval of his credit application by B.A.
Finance, (c) whether or not Toyota acted in good faith when it did not
release the vehicle to Sosa, and (d) whether or not Toyota may be held
liablefordamages. llcd

Wefindmeritinthepetition.
Neither logic nor recourse to one's imagination can lead to the
conclusionthatExhibit"A"isaperfectedcontractofsale.
Article1458oftheCivilCodedefinesacontractofsaleasfollows:
ART.1458. Bythecontractofthesaleoneofthecontracting
partiesobligateshimselftotransfertheownershipofandtodelivera
determinatething,andtheothertopaythereforapricecertainin
moneyoritsequivalent.
Acontractofsalemaybeabsoluteorconditional.
andArticle1475specificallyprovideswhenitisdeemedperfected:
ART.1475. Thecontractofsaleisperfectedatthemomentthere
isameetingofmindsuponthethingwhichistheobjectofthe
contractandupontheprice.
Fromthatmoment,thepartiesmayreciprocallydemand
performance,subjecttotheprovisionsofthelawgoverningtheform
ofcontracts.
WhatisclearfromExhibit"A"isnotwhatthetrialcourtandtheCourt
ofAppealsappeartosee.Itisnotacontractofsale.Noobligationonthe
partofToyotatotransferownershipofadeterminatethingtoSosaandno
correlativeobligationonthepartofthelattertopaythereforapricecertain
appearstherein.TheprovisiononthedownpaymentofP100,000.00made
nospecificreferencetoasale,itcouldonlyrefertoasaleoninstallment
basis,astheVSPexecutedthefollowingdayconfirmed.Butnothingwas
mentioned about the full purchase price and the manner the installments
weretobepaid.
This Court had already ruled that a definite agreement on the
mannerofpaymentofthepriceisanessentialelementintheformationof
a binding and enforceable contract of sale. 18 This is so because the
agreement as to the manner of payment goes into the price such that a
disagreementonthemannerofpaymentistantamounttoafailuretoagree
on the price. Definiteness as to the price is an essential element of a
bindingagreementtosellpersonalproperty.19

Moreover, Exhibit "A" shows the absence of a meeting of minds
between Toyota and Sosa. For one thing, Sosa did not even sign it. For
another,Sosawaswellawarefromitstitle,writteninboldletters,viz., Cdpr

AGREEMENTSBETWEENMR.SOSA&POPONG
BERNARDOOFTOYOTASHAW,INC.
thathewasnotdealingwithToyotabutwithPopongBernardoandthatthe
latter did not misrepresent that he had the authority to sell any Toyota
vehicle.HeknewthatBernardowasonlyasalesrepresentativeofToyota
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'sauthorityasanagent 20inrespectofcontractstosellToyota's
vehicles. A person dealing with an agent is put upon inquiry and must
discoveruponhisperiltheauthorityoftheagent.21
At the most, Exhibit "A" may be considered as part of the initial
phaseofthegenerationofnegotiationstageofacontractsale.Thereare
threestagesinthecontractofsale,namely:
(a) preparation,conception,orgeneration,whichistheperiodof
negotiation and bargaining, ending at the moment of
agreementoftheparties
(b) perfectionorbirthofthecontract,whichisthemomentwhen
thepartiescometoagreeonthetermsofthecontractand
(c) consummation or death, which is the fulfillment or
performanceofthetermsagreeduponinthecontract.22
Thesecondphaseofthegenerationornegotiationstageinthiscasewas
the execution of the VSP. It must be emphasized that thereunder, the
downpaymentofthepurchasepricewasP53,148.00whilethebalanceto
bepaidoninstallmentshouldbefinancedbyB.A.FinanceCorporation.It
is, of course, to be assumed that B.A Finance Corp. was acceptable to
Toyota,otherwiseitshouldnothavementionedB.A.FinanceintheVSP. LLjur

Financing companies are defined in Section 3(a) of R.A. No. 5980,

as amended by P.D. No. 1454 and P.D. No. 1793, as "corporations or
partnerships, except those regulated by the Central Bank of the
Philippines, the Insurance Commission and the Cooperatives
Administration Office, which are primarily organized for the purpose of
extending credit facilities to consumers and to industrial, commercial, or
agricultural enterprises, either by discounting or factoring commercial
papersoraccountsreceivables,orbybuyingandsellingcontracts,leases,
chattel mortgages, or other evidence of indebtedness, or by leasing of
motor vehicles, heavy equipment and industrial machinery, business and
officemachinesandequipment,appliancesandothermovableproperty."23
 Accordingly, in a sale on installment basis which is financed by a
financingcompany,threepartiesarethusinvolved:thebuyerwhoexecutes
anoteornotesfortheunpaidbalanceofthepriceofthethingpurchased
on installment, the seller who assigns the notes or discounts them with a
financingcompany,andthefinancingcompanywhichissubrogatedinthe
place of the seller, as the creditor of the installment buyer. 24 Since B.A.
FinancedidnotapproveSosa'sapplication,therewasthennomeetingof
mindsonthesaleoninstallmentbasis.
We are inclined to believe Toyota's version that B.A. Finance
disapprovedSosa'sapplicationforwhichreasonitsuggestedtoSosathat
he pay the full purchase price. When the latter refused, Toyota cancelled
theVSPandreturnedtohimhisP100,000.00.Sosa'sversionthattheVSP
wascancelledbecause,accordingtoBernardo,thevehiclewasdelivered
to another who was "mas malakas" does not inspire belief and was
obviously a delayed afterthought. It is claimed that Bernardo said,
"Pasensiyakayo,nasulotangunitngibangmalakas,"whiletheSosashad
already been waiting for an hour for the delivery of the vehicle in the
afternoonof17June1989.However,inparagraph7ofhiscomplaint,Sosa
solemnlystates:
OnJune17,1989ataround9:30o'clockinthemorning,defendant's
salesrepresentative,Mr.PopongBernardo,calledplaintiff'shouse
andinformedtheplaintiff'ssonthatthevehiclewillnotbereadyfor
pickupat10:00a.m.ofJune17,1989butat2:00p.m.ofthatday
instead.Plaintiffandhissonwenttodefendant'sofficeonJune17,
1989at2:00p.m.inordertopickupthevehiclebutthedefendant,
forreasonsknownonlytoitsrepresentatives,refusedand/orfailedto
releasethevehicletotheplaintiff.Plaintiffdemandedforan
explanation,butnothingwasgiven...(Emphasissupplied)25
The VSP was a mere proposal which was aborted in lieu of
subsequentevents.ItfollowsthattheVSPcreatednodemandablerightin
favorofSosaforthedeliveryofthevehicletohim,anditsnondeliverydid
notcauseanylegallyindemnifiableinjury. Cdpr

The award then of moral and exemplary damages and attorney's

feesandcostsofsuitiswithoutlegalbasis.Besides,theonlygroundupon
which Sosa claimed moral damages is that since it was known to his
friends, townmates, and relatives that he was buying a Toyota Lite Ace
whichtheyexpectedtoseeonhisbirthday,hesufferedhumiliation,shame,
andsleeplessnightswhenthevanwasnotdelivered.Thevanbecamethe
subjectmatteroftalksduringhiscelebrationthathemaynothavepaidfor
it, and this created an impression against his business standing and
reputation. At the bottom of this claim is nothing but misplaced pride and
ego. He should not have announced his plan to buy Toyota Lite Ace
knowingthathemightnotbeabletopaythefullpurchaseprice.Itwashe
whobroughtembarrassmentuponhimselfbybraggingaboutathingwhich
hedidnotownyet.
 Since Sosa is not entitled to moral damages and there being no
awardfortemperate,liquidated,orcompensatorydamages,heislikewise
not entitled to exemplary damages. Under Article 2229 of the Civil Code,
exemplary or corrective damages are imposed by way of example or
correctionforthepublicgood,inadditiontomoral,temperate,liquidated,or
compensatorydamages.
Also,itissettledthatforattorney'sfeestobegrantedthecourtmust
explicitly state in the body of the decision, and not only in the dispositive
portion thereof, the legal reason for the award of attorney's fees. 26 No
suchexplicitdeterminationthereonwasmadeinthebodyofthedecisionof
thetrialcourt.Noreasonthusexistsforsuchaward.
WHEREFORE, the instant petition is GRANTED. The challenged
decisionoftheCourtofAppealsinCAG.R.CVNo.40043aswellasthat
of Branch 38 of the Regional Trial Court of Marinduque in Civil Case No.
8914areREVERSEDandSETASIDEandthecomplaintinCivilCaseNo.
8914isDISMISSED.ThecounterclaimthereinislikewiseDISMISSED. cdll

Nopronouncementastocosts.
SOORDERED.
Padilla,BellosilloandKapunan,JJ.,concur.
Quiason,J.,isonleave.

Footnotes

1. Annex "A" of Complainant in Civil Case No. 8914 Branch 38 of the

RegionalTrialCourtofMarinduqueRollo,70.
2. Annex of Answer in Civil Case No. 8914 Rollo, 82 Annex "E" of
PetitionRollo,85.
3. ReferringtoB.A.Finance.
4. Exhibit"3,"Annex"G"ofPetitionRollo,8.
5. Exhibit"4,"Annex"H"ofPetitionRollo,87.
6. Annex "C" of Complaint in Civil Case No. 8914 Id., 7172. This
downpayment had already been refunded and received by Sosa himself
asshownbytheCheckVoucher,Exhibit"4."
7. Annex"C1,"Id.Id.,7374.
8. Annex"I"ofPetitionId.,8889.
9. Annex"B,"Id.Id.,6469.
10. Rollo,67.
11. Id.,8384.
12. Id.,90108.PerJudgeRomuloA.Lopez.
 13. Rollo,104.
14. Id.
15. Id.
16. Id.,107.
17. Annex "A" of Petition Rollo, 4562. Per TayaoJaguros, L., J., with
Elbinias,J.andSalas,B.,JJ.,concurring.
18. Velasco vs. Court of Appeals, 51 SCRA 439 [1973], citing Navarro vs.
Sugar Producers Cooperative Marketing Association, 1 SCRA 1180
[1961].
19. 67AmJur2dSales105[1973].
20. See Harry Keeler Electric Co. vs. Rodriguez, 44 Phil. 19 [1922] B.A.
FinanceCorp.vs.CourtofAppeals,211SCRA112[1992].
21. Cruz vs. Court of Appeals, 201 SCRA 495 [1991] Pineda vs. Court of
Appeals,226SCRA754[1993].
22. ARTURO M. TOLENTINO, Commentaries and Jurisprudence on the
CivilCodeofthePhilippines,Vol.4,1985ed.,411EDGARDOL.PARAS,
CivilCodeofthePhilippinesAnnotated,Vol.4,1989ed.,490.
23. SeeBeltranvs.PAICFinanceCorp.,209SCRA105[1992].
24. International Harvester Macleod, Inc. vs. Medina, 183 SCRA 485
[1990].
25. Rollo,66.
26. See Central Azucarera de Bais vs. Court of Appeals, 188 SCRA 328
[1990]Koavs.CourtofAppeals,219SCRA541[1993]ScottConsultants
&ResourceDevelopmentCorp.vs.CourtofAppeals,G.R.No.112916,16
March1995.