KATIGBAK vs. CA - G.R. No. L-16480

ARTEMIO KATIGBAK vs. CA,

DANIEL EVANGELISTA and V. K. LUNDBERG

G.R. No. L-16480             January 31, 1962

Artemio Katigbak upon reading an advertisement for the sale of the winch placed by V. K. Lundberg, owner and operator of the International Tractor and Equipment Co., Ltd., went to see Lundberg and inspected the equipment. Desiring a reduction of the quoted price, Katigbak was referred to Daniel Evangelista, the owner. After the meeting, it was agreed that Katigbak was to purchase the winch for P12,000.00, payable at P5,000.00 upon delivery and the balance of P7,000.00 within 60 days. The condition of the sale was that the winch would be delivered in good condition. Katigbak was apprised that the winch needed some repairs, which could be done in the shop of Lundberg. It was then stipulated that the amount necessary for the repairs will be advanced by Katigbak but deductible from the initial payment of P5,000.00. The sale was not consummated and Katigbak sued Evangelista, Lundberg and the latter's company, for the refund of such amount. Lundberg alleged the non-liability for the amount since it was purely a personal account between defendant Evangelista and plaintiff Katigbak. Evangelista claimed that Katigbak refused to comply with his contract to purchase the winch so he was forced to sell the same to a third person.

ISSUE:

Whether or not the petitioner is entitled to a refund for the repairs undertaken, despite the fact that the breach of contract was committed by him.

HELD:

Yes. Notwithstanding the breach of contract committed by him, appellee has a right to a refund, but equally undeniable is appellant Evangelista's right to recover from him his loss of P2,000.00, which is the difference between the contract price for the sale of the winch between him and appellee and the actual price for which it was sold after the latter had refused to carry out his agreement. If the purchaser fails to take delivery and pay the purchase price of the subject matter of the contract, the vendor, without the need of first rescinding the contract judicially, is entitled to resell the same, and if he is obliged to sell it for less than the contract price, the buyer is liable for the difference. This loss, which is the subject matter of Evangelista's main counterclaim, should therefore be set off against the sum claimed by appellee. Considering that it was appellee who committed a breach of contract, it follows that the present action was unjustified and he must be held liable to appellant Evangelista for attorney's fees.