Elisco Tool Manufacturing Corporation v. Court of Appeals

Summary

This case involved a dispute over a company car plan where employee Rolando Lantan acquired a vehicle under what was styled as a lease agreement with option to purchase. When the company ceased operations and Lantan was laid off, he continued making payments but the company later sought to repossess the car claiming unpaid rentals. The Supreme Court affirmed lower courts' rulings that such car plan agreements are installment sales disguised as leases. Under the Recto Law (Civil Code Articles 1484-1485), a vendor who repossesses goods sold on installment cannot also collect unpaid balances. The Court found Lantan had fully paid for the vehicle, having paid P61,070.94 against a principal amount of P60,639.00. The company's acceptance of late payments for over two years after employment termination constituted a waiver of interest charges. The decision clarifies the legal nature of executive car plans and protects employees from double recovery by employers.