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    60 - Elisco Tool Manufacturing Corp Vs CA

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    Ria Gabs
    Private respondent Rolando Lantan entered into an agreement with petitioner Elisco Tool Manufacturing Corp to lease a car for 5 years, with an option to purchase. The agreement called the payments "monthly rentals" but they were actually installments towards the purchase price. The court ruled this was a contract of sale, not a lease, so provisions on installment contracts applied. While petitioner initially had a right to collect interest on late payments, private respondent's default was due to petitioner ceasing operations. By accepting payments over 2 years after employment ended, petitioner waived its right to interest. The payments made constituted payment in full.

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    60 - Elisco Tool Manufacturing Corp Vs CA

    Uploaded by

    Ria Gabs
    209 views1 page
    Private respondent Rolando Lantan entered into an agreement with petitioner Elisco Tool Manufacturing Corp to lease a car for 5 years, with an option to purchase. The agreement called the payments "monthly rentals" but they were actually installments towards the purchase price. The court ruled this was a contract of sale, not a lease, so provisions on installment contracts applied. While petitioner initially had a right to collect interest on late payments, private respondent's default was due to petitioner ceasing operations. By accepting payments over 2 years after employment ended, petitioner waived its right to interest. The payments made constituted payment in full.

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    60 - Elisco Tool Manufacturing Corp vs CA

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    Private respondent Rolando Lantan entered into an agreement with petitioner Elisco Tool Manufacturing Corp to lease a car for 5 years, with an option to purchase. The agreement called the payments "monthly rentals" but they were actually installments towards the purchase price. The court ruled this was a contract of sale, not a lease, so provisions on installment contracts applied. While petitioner initially had a right to collect interest on late payments, private respondent's default was due to petitioner ceasing operations. By accepting payments over 2 years after employment ended, petitioner waived its right to interest. The payments made constituted payment in full.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    209 views1 page

    60 - Elisco Tool Manufacturing Corp Vs CA

    Uploaded by

    Ria Gabs
    Private respondent Rolando Lantan entered into an agreement with petitioner Elisco Tool Manufacturing Corp to lease a car for 5 years, with an option to purchase. The agreement called the payments "monthly rentals" but they were actually installments towards the purchase price. The court ruled this was a contract of sale, not a lease, so provisions on installment contracts applied. While petitioner initially had a right to collect interest on late payments, private respondent's default was due to petitioner ceasing operations. By accepting payments over 2 years after employment ended, petitioner waived its right to interest. The payments made constituted payment in full.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    TITLE: ELISCO TOOL MANUFACTURING CORP VS CA

    G.R. NO.: 109966


    DATE: MAY 31, 1998

    TOPIC:

    PRINCIPLE/DOCTRINE:

    FACTS:

    Private respondent Rolando Lantan entered into an agreement with his employer, herein petitioner,
    leasing unto the former a Colt lancer fro a period of 5 years.   The contract also provided that at the end of
    the 5 year period, Lantan may exercise the option to purchase price of the car and he should just pay the
    remaining balance.  Said option is limited to the employee.  It also provided that upon Lantan’s failure to
    pay 3 accumulated monthly rentals, the petitioner will have the option to lease said vehicle to another.
    Lantan also has to return the car in case he resigns or is dismissed.  He was laid off after petitioner
    ceased operations in 1981.  At that time, he has paid P61, 070.94. Petitioner then filed a replevin case
    against Lantan and his wife, alleging that they have failed to pay the monthly rentals despite repeated
    demands.

    RTC RULING: In favor of the private respondent

    CA RULING: Affirmed RTC decision

    ISSUE:

    W/N the CA erred in holding that the interest stipulation in respondents’ Promissory Note was not valid
    and binding.

    RULING:

    Although the agreement provides for the payment by Lantan of monthly rentals”, the 5 th paragraph thereof
    gives them the option to purchase the motor vehicle at the end of the 5th year or upon payment of the
    60th monthly rental when “all monthly rentals shall be applied to the payment of the full purchase price of
    the car.” Clearly, the transaction is a lease in name only.  The so-called monthly rentals are in truth
    monthly amortizations on the car’s price.  Being a contract of sale on installment, A.1484 &1485
    apply.  As such, the case should be considered as one for specific performance pursuant to
    A.1484 (1). The prayer for a writ of replevin is only for the purpose of ensuring specific performance by
    private respondents.  However, the private respondents could no longer be held liable for the payment of
    interest on unpaid monthly rentals since it was entered into in pursuance of a car plan adopted by
    petitioner for the benefit of its deserving employees.  Further, private respondents’ default in payment was
    due to the cessation of operations of petitioner’s sister company. Elizalde Steel Company. That petitioner
    accepted payments from Lantan more than 2 years after the latter’s employment have been terminated
    constitutes a waiver of petitioner’s right to collect interest upon delayed payment. What private
    respondents paid should be considered the payment in full.

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