1. JM Tuazon & Co., Inc. v.

Court of Appeals

G.R. No. L-41233, 21 November 1979, 94 SCRA 413

FACTS:

Petitioner executed, in favor of Ricardo de Leon, a contract to sell a lot containing an area of
1,703.6sqm. At the execution of the contract, the latter paid the down-payment and agreed to pay the
balance in the monthly installment including the agreed annual interest. Meanwhile, petitioner signed a
compromise agreement with the Deudors (in another Civil case) which affect the same subject lot. This
lot was later on sold to Ramon Rivera. On the other hand, De Leon transferred all his rights to the lot in
favor of his parents, herein private respondents Alfonso and Rosario de Leon. The parents paid the
outstanding balance. JM Tuason issued a deed of sale over the lot and upon its registration, the Register
of Deeds issued to the TCT. At the time of the execution of the contract to sell, the contracting parties
knew that a portion of the lot in question was actually occupied by Ramon Rivera. However, it was their
understanding that the latter will be ejected by the petitioner from the premises. Hence, JM Tuason filed
a complaint of ejectment. The CFI dismissed and ordered JM Tuason to enter into an agreement
allowing Rivera to purchase 1,050 sqm. The CA affirmed the decision and advised the De Leons to file a
case against JM Tuason. De Leons filed a case to enforce the vendor’s warranty against eviction or to
recover the value of the land. The CFI ruled in favor of De Leon and ordered JM Tuason to pay. CA
affirmed.

ISSUE:

Whether respondents De Leon are entitled to the vendor’s warranty against eviction and
damages.

RULING:

NO. It was not shown that they were vendees in good faith and thus being entitled to warranty against
eviction. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot
claim that he has acquired title thereto in good faith, as against the true owner of the land or of an
interest therein; and the same rule must be applied to one who has knowledge of facts which should
have put him upon such inquiry and investigation as might be necessary to acquaint him with the
defects in the title of his vendor. A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard and then claim that he acted in good faith under the belief that there
was no defect in the title of the vendor. The appellate court, in this action of warranty against eviction,
found that petitioner J.M. Tuason & Co., Inc. failed to comply with its obligation to transfer ownership
over the lot to the De Leons due to the compromise agreement it entered with the Deudors, and that
petitioner is guilty of “wilful deception, intentional forsaking of one to whom defendant was bound in a
contract to convey, and worse yet, even at that, after the compromise, defendant still continued to
collect installments from buyer.” Contrary to these findings, this Court holds that it was not petitioner’s
own making that it executed the compromise agreement with the Deudors. This agreement was
sanctioned by the court after the Deudors filed an action against petitioner. JM Tuason also believed
that the compromise agreement did not include lots that have already been sold to third parties. Its
continuous receipt of payment from the De Leons only proved its honest belief that it found no barrier
against the enforceability of the contract to sell. It also desired to compensate respondents as disclosed
by prayer in the instant petition that it is willing to sell to Ramon Rivera the lot in the sum of P60.00/
square meter. This again reveals how fair petitioner would want to not to defraud them. The prior right
of Ramon Rivera to purchase the lot in litigation was based more on his prior occupancy to the same
since 1949, about which fact respondents De Leon were informed by petitioner at the time of the
execution of the contract to sell. Hence, private respondents were lacking in good faith for knowing
beforehand, at the time of the sale, the presence of an obstacle to their taking over the possession of
the land, which, in effect, would amount to eviction from said land, and still they bought the land
without first removing that obstacle. Without being shown to be vendees in good faith, respondents are
not entitled to the warranty against eviction nor are they entitled to recover damages (Article 1555 of
the Civil Code). However, for justice and equity sake, and in consonance with the salutary principle of
non-enrichment at another’s expense, herein petitioner J.M. Tuason & Co., Inc. should compensate
respondents De Leons in the total sum of P126,000, representing the aggregate value of the 1,050
square meters

2. Escaler v. Court of Appeals

G.R. No. L-42636, 1 August 1985, 138 SCRA 1

FACTS:

Spouses Africa V. Reynoso and Jose L, Reynoso sold to petitioners several others, a parcel of
land. The Deed of Sale contained a covenant against eviction. On April 21, 1961, the Register of Deeds of
Rizal and A. Doronilla Resources Development, Inc. filed a case before the CFI of Rizal for the
cancellation of the OCT issued in the name of Angelina Reynoso (predecessor-in-interest of private
respondents-vendors) on the ground that the property covered by said title is already previously
registered under a TCT issued in the name of A. Doronilla Development, Inc. In that case, an order was
issued declaring the OCT null and void. Petitioners, spouses Maria de Leon Escaler and Ernesto Escaler
and spouses Cecilia J. Roxas and Pedro Roxas, filed a civil case against their vendors, herein private
respondents, spouses Jose L. Reynoso and Africa Reynoso for the recovery of the value of the property
sold to them plus damages on the ground that the latter have violated the vendors’ “warranty against
eviction.” The CFI rendered a judgment ordering the return to the plaintiffs Maria Luisa de Leon Escaler
and Ernesto Escaler, Cecilia J. Roxas and Pedro Roxas, the value of the property sold to them at the time
of eviction. The CA reversed this decision and ruled that petitioners, as vendees, had not given private
respondents-vendors, formal notice of the eviction case as mandated by Arts. 1558 and 1559 of the New
Civil Code.

ISSUE:

Whether or not a vendor‘s liability for eviction may be enforced in the case at bar.

RULING:

The petition is devoid of merit. Consequently, it must be dismissed. Article 1548, in relation to
Articles 1558. and 1559 of the New Civil Code reads as follows: Art. 1548, Eviction shall take place
whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor, the
vendee is deprived of the whole or of a part of the thing purchased. The vendor shall answer for the
eviction even though nothing has been said in the contract on the subject. The contracting parties,
however, may increase, diminish, or suppress this legal obligation of the vendor. Art. 1558. The vendor
shall not be obliged to make good the proper warranty, unless he is summoned in the suit for eviction at
the instance of the vendee. (emphasis supplied) Art. 1559. The defendant vendee shall ask, within the
time fixed in the Rules of Court for answering the complaint that the vendor be made as co-defendant.
In order that a vendor’s liability for eviction may be enforced, the following requisites must concur—a)
there must be a final judgment; b) the purchaser has been deprived of the whole or part of the thing
sold; c) said deprivation was by virtue of a right prior to the sale made by the vendor; and d) the vendor
has been summoned and made co-defendant in the suit for eviction at the instance of the vendee. In the
case at bar, the fourth requisite—that of being summoned in the suit for eviction (Case No. 4252) at the
instance of the vendee—is not present. All that the petitioners did, per their very admission, was to
furnish respondents, by registered mail, with a copy of the opposition they (petitioners filed in the
eviction suit. Decidedly, this is not the kind of notice prescribed by the aforequoted Articles 1558 and
1559 of the New Civil Code. The term “unless he is summoned in the suit for eviction at the instance of
the vendee” means that the respondents as vendor/s should be made parties to the suit at the instance
of petitioners-vendees, either by way of asking that the former be made a co-defendant or by the filing
of a third-party complaint against said vendors. Nothing of that sort appeared to have been done by the
petitioners in the instant case.

3. Moles v. IAC

G.R. No. 73913, 31 January 1989, 169 SCRA 777

FACTS:

Jerry Moles (petitioner) bought from Mariano Diolosa owner of Diolosa Publishing House a
linotype printing machine (secondhand machine). Moles promised Diolosa that he will pay the full
amount after the loan from DBP worth P50,000.00 will be released. Private respondent on return issued
a certification wherein he warranted that the machine was in A-1 condition, together with other express
warranties. After the release of the money from DBP, Petitioner required the Respondent to accomplish
some of the requirements. On which the dependant complied the requirements on the same day. On
November 29, 1977, petitioner wrote private respondent that the machine was not functioning
properly. The petitioner found out that the said machine was not in good condition as experts advised
and it was worth lesser than the purchase price. After several telephone calls regarding the defects in
the machine, private respondent sent two technicians to make necessary repairs but they failed to put
the machine in running condition and since then the petitioner wan unable to use the machine
anymore.

ISSUES:

1. Whether or not there is an implied warranty of its quality or fitness.

2. Whether the hidden defects in the machine is sufficient to warrant a rescission of the contract
between the parties.

RULING:
 1. It is generally held that in the sale of a designated and specific article sold as secondhand,
there is no implied warranty as to its quality or fitness for the purpose intended, at least where it is
subject to inspection at the time of the sale. On the other hand, there is also authority to the effect that
in a sale of secondhand articles there may be, under some circumstances, an implied warranty of fitness
for the ordinary purpose of the article sold or for the particular purpose of the buyer. Said general rule,
however, is not without exceptions. Article 1562 of our Civil Code, which was taken from the Uniform
Sales Act, provides: “Art. 1562. In a sale of goods, there is an implied warranty or condition as to the
quality or fitness of the goods, as follows:

(1) Where the buyer, expressly or by implication, makes known to the seller the particular purpose for
which the goods are acquired, and it appears that the buyer relies on the seller’s skill or judgment
(whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be
reasonably fit for such purpose;”

2. We have to consider the rule on redhibitory defects contemplated in Article 1561 of the Civil
Code. A redhibitory defect must be an imperfection or defect of such nature as to engender a certain
degree of importance. An imperfection or defect of little consequence does not come within the
category of being redhibitory. As already narrated, an expert witness for the petitioner categorically
established that the machine required major repairs before it could be used. This, plus the fact that
petitioner never made appropriate use of the machine from the time of purchase until an action was
filed, attest to the major defects in said machine, by reason of which the rescission of the contract of
sale is sought. The factual finding, therefore, of the trial court that the machine is not reasonably fit for
the particular purpose for which it was intended must be upheld, there being ample evidence to sustain
the same. At a belated stage of this appeal, private respondent came up for the first time with the
contention that the action for rescission is barred by prescription. While it is true that Article 1571 of the
Civil Code provides for a prescriptive period of six months for a redhibitory action a cursory reading of
the ten preceding articles to which it refers will reveal that said rule may be applied only in case of
implied warranties. The present case involves one with and express warranty. Consequently, the general
rule on rescission of contract, which is four years shall apply. Considering that the original case for
rescission was filed only one year after the delivery of the subject machine, the same is well within the
prescriptive period. This is aside from the doctrinal rule that the defense of prescription is waived and
cannot be considered on appeal if not raised in the trial court, and this case does not have the features
for an exception to said rule.

4. Nutrimix Feeds Corporation v. Court of Appeals

G.R. No. 152219, 25 October 2004

FACTS:

On April 5, 1993, the Spouses Efren and Maura Evangelista, the respondents herein, started to
directly procure various kinds of animal feeds from petitioner Nutrimix Feeds Corporation. The
petitioner gave the respondents a credit period of thirty to forty-five days to postdate… checks to be
issued in payment for the delivery of the feeds. When the above-mentioned checks were deposited at
the petitioner’s depository bank, the same were, consequently, dishonored because respondent Maura
Evangelista had already closed her account. On December 15, 1993, the petitioner filed with the
Regional Trial Court of Malolos, Bulacan, a complaint, docketed as Civil Case No. 1026-M-93, against the
respondents for sum of money and damages with a prayer for issuance of writ of preliminary
attachment. On January 19, 1994, the respondents also lodged a complaint for damages against the
petitioner, docketed as Civil Case No. 49-M-94, for the untimely and unforeseen death of their animals
supposedly effected by the adulterated animal feeds the petitioner sold to them.

ISSUE:

Whether or not Nutrimix is guilty of breach of warranty due to hidden defects.

RULING:

NO. The provisions on warranty against hidden defects are found in Articles 1561 and 1566 of
the New Civil Code of the Philippines. A hidden defect is one which is unknown or could not have been
known to the vendee. Under the law, the requisites to recover on account of hidden defects are as
follows:

a) the defect must be hidden;

b) the defect must exist at the time the sale was made;

c) the defect must ordinarily have been excluded from the contract;

d) the defect, must be important (renders thing UNFIT or considerably decreases FITNESS);

e) the action must be instituted within the statute of limitations.

In the sale of animal feeds, there is an implied warranty that it is reasonably fit and suitable to be used
for the purpose which both parties contemplated. To be able to prove liability on the basis of breach of
implied warranty, three things must be established by the respondents. The first is that they sustained
injury because of the product; the second is that the injury occurred because the product was defective
or unreasonably unsafe; and finally, the defect existed when the product left the hands of the petitioner.
A manufacturer or seller of a product cannot be held liable for any damage allegedly caused by the
product in the absence of any proof that the product in question was defective. The defect must be
present upon the delivery or manufacture of the product; or when the product left the seller’s or
manufacturer’s control; or when the product was sold to the purchaser; or the product must have
reached the user or consumer without substantial change in the condition it was sold. Tracing the defect
to the petitioner requires some evidence that there was no tampering with, or changing of the animal
feeds. The nature of the animal feeds makes it necessarily difficult for the respondents to prove that the
defect was existing when the product left the premises of the petitioner.

5. Philippine Steel Coating Corp. v. Quiñones

G.R. No. 194533, 19 April 2017

FACTS:
 Respondent was producing buses while petitioner was selling primer-coated, long-span, rolled
galvanized iron (G.I.) sheets. The petitioner offered Quiñones their product and the latter showed
interest, but asked if the primer-coated sheets were compatible with its assembled buses. Petitioner
expressly represented to respondent that the primer-coated G.I. sheets were compatible with the acrylic
paint process used by the latter on his bus units. This representation was made in the face of
respondent’s express concerns regarding incompatibility. Respondent bought the G.I. sheets and made
them into buses. However, the paints peeled off and the customers complained. Respondent sued
petitioner for damages on the basis of express warranty.The RTC rendered a Decision in favor of
Quiñones and ordered PhilSteel to pay damages. The RTC found that the assurance made by petitioner
constituted an express warranty under Article 1546 of the Civil Code. The CA affirmed the ruling of the
RTC in toto.

ISSUES:

1. Whether or not the “vague oral statements” made by the seller is a case of express warranty
under Article 1546 of the Civil Code that may be invoked to warrant payment of damages.

2. Whether or not petitioner is considered an expert under art 1546.

RULING:

1. Yes. This Court agrees with the CA that this is a case of express warranty under Article 1546 of
the Civil Code which provides that “any affirmation of fact or any promise by the seller relating to the
thing is an express warranty if the natural tendency of such affirmation or promise is to induce the buyer
to purchase the same, and if the buyer purchases the thing relying thereon. No affirmation of the value
of the thing, nor any statement purporting to be a statement of the seller’s opinion only, shall be
construed as a warranty, unless the seller made such affirmation or statement as an expert and it was
relied upon by the buyer.” As held in Carrascoso, Jr. vs. CA, the following requisites must be established
in order to prove that there is an express warranty in a contract of sale: (1) the express warranty must
be an affirmation of fact or any promise by the seller relating to the subject matter of the sale; (2) the
natural effect of the affirmation or promise is to induce the buyer to purchase the thing; and (3) the
buyer purchases the thing relying on that affirmation or promise. The court resolves on the issue where
petitioner argues that the purported warranties by mere “vague oral statements” cannot be invoked to
warrant the payment of damages that— a warranty is not necessarily written. It may be oral as long as it
is not given as a mere opinion or judgment. Rather, it is a positive affirmation of a fact that buyers rely
upon, and that influences or induces them to purchase the product.

2. Yes. On the issue whether the petitioner was an expert on what they advised respondent,
court resolves that— despite its claims to the contrary, petitioner was an expert in the eyes of the buyer
Quinones. As the sales manager of PhilSteel, Angbengco made repeated assurances and affirmations
and even invoked laboratory tests that showed compatibility. In the eyes of the buyer Quinones,
PhilSteel -through its representative, Angbengco -was an expert whose word could be relied upon.”
6. SPS Batalla V. Prudential Bank

Facts:

Sps petitioner bought a honda civic car from Respondent Honda cars san pablo, Rantael (manager of
prudential bank) brokered the deal. Hence petitioner applied for a car loan to buy the car. They
executed a promissory note for the sum of 292,200 pesos payable within 36 months. After that the sps
paid 214k for the portion of the purchase price of the car plus 11k for the delivery cost and installation
of a remote control door mechanism, and 28k for insurance. The sps received the car from Rantael
which was parked near prudential. After 3 days the car’s rear right door broke and consulted a certain
sanchez who stated that the door’s power lock is broken and that the car was no longer brand new since
the paint on the roof was merely retouched. This resulted to the sps notifying prudential about the
defects and demanding replacement. On a later date they went to a auto repair shop to further evaluate
the car. It was proved there that the car was old because the roof was merely repainted. After that the
manager along with 2 individuals from honda met the sps and offered to repair the car. The sps did not
agree and demanded a replacement. Since they did not acquire a replacement the sps filed a complaint
for rescission and damages. RTC ruled against the petitioner for failure to prove their claims regarding
the defects. The court also ordered them to pay their loan since they admitted that they haven’t paid for
it yet. (the decision was 10 years after the procurement of the car 1998-2008). The CA then affirmed the
ruling of the rtc. (2011) Hence this petition.

Issue:

Whether the petitioners may rescind the contract of sale, car loan and promissory note due to the
defects of the car.

Held:

No, the court held that even if the car delivered had a defective door,it is not a ground for rescission.
Article 1561 of the civil code provides for an Implied warranty against hidden defects in that the vendor
shall be responsible for any hidden defects which rendered the thing sold unfit for the use for which it is
intended, or should they diminish its fitness for such use to such an extent that, had the vendee been
aware thereof, he would not have acquired it or would have given a lower price. In an implied warranty
against hidden defects, vendors cannot raise the defense of ignorance as they are responsible to the
vendee for any hidden defects even if they were not aware of its existence.(pleas see art 1561 for
further details). Besides that rescission is not even a remedy to defects. The corrects remedies either
withdrawing from the contracts or demanding a proportionate reduction of the price with damages with
either case. In this case the sps were not able to prove the defects, even if there was a defect it was not
serious nor important. It could not even be ascertained whether the defects were initially from the
delivery of the car or from the installation of the door. Also the contract of loan cannot be treated the
same as a contract of sale. Both have different objects.

7.

Facts:
Asuncion and Catalina claimed to be the registered owners of a Lot 4900 of the Cadastral Survey of
Santiago... which they inherited from their father... in 1997, they discovered that respondents unlawfully
caused the subdivision of Lot 4900 into several parcels of land... the Zamoras presented the following,
among others: (a) the owner's duplicate copy (ODC) of TCT No. T-65150... entered in the Registry of
Deeds for Isabela in Ilagan, Isabela... respondents... claimed that
Lot 4900, which was originally registered under OCT No. 3429 in the names of Spouses Pariñas... was
transferred to them on October 19, 1990, through an Extrajudicial Settlement of Estate... executed by
the Heirs of Spouses Pariñas who gave them a photocopy of Pariñas OCT 3429
Issues:
whether or not the CA erred in declaring that: (a) respondents are purchasers in good faith
Ruling:
Persons dealing with administratively reconstituted titles should conduct an inquiry or investigation as
might be necessary to acquaint themselves with the defects in the titles of their vendors.
Case law states that reconstituted titles shall have the same validity and legal effect as to the originals
thereof unless the reconstitution was made extrajudicially, or administratively. This is because
administrative reconstitution is essentially ex-parte and without notice, and thus, administratively
reconstituted titles do not share the same indefeasible character of the original certificates of title.
respondents only relied on a mere plain photocopy[91] of Pariñas OCT 3429 when they purchased Lot
4900. Aside from instructing Ms. Masa to verify the existence and genuineness of the said title with the
RD-Ilagan, who claimed that she was shown the original copy thereof,[92] respondents had not
conducted any other inquiry or investigation

8.