G.R. No. 2387

FACTS:
On July 6, 1901, plaintiffs-appellants Oliver & Trill and defendant-appellee W.E. Sherman executed a written contract in Spanish, which on its face was a rental agreement for a piano at a monthly rate of 14 pesos. The contract granted the plaintiffs the right to repossess the piano upon non-payment. The defendant paid monthly installments totaling either 406 or 434 pesos (covering 29 or 31 months). When the plaintiffs later demanded possession of the piano, the defendant refused, claiming the true agreement was a contract of sale for 400 pesos, payable in monthly installments of 14 pesos. He alleged the written document was misrepresented to him as a mere receipt. The justice of the peace ruled in favor of the plaintiffs, but the Court of First Instance reversed, declaring the defendant the owner. The plaintiffs appealed.

ISSUE:
Whether the contract between the parties is one of lease (rent) or sale.

RULING:
The contract is one of lease, not sale. The Supreme Court reversed the decision of the Court of First Instance.
The written contract is clear and unambiguous on its face as a rental agreement. The defendant’s claim of misrepresentation (that it was presented as a receipt) was not substantiated by the evidence. The Court found that any misunderstanding was attributable to the interpreter selected by the defendant himself. The defendant’s conductcontinuing to make monthly payments even after the total exceeded the alleged purchase price of 400 pesos, and only belatedly asserting a claim of ownershipstrongly indicated that the parties understood and acted under a rental contract. Therefore, the plaintiffs are declared the owners entitled to possession of the piano.