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Cases warratnty G.R. No. 136500 December 3, 1999 CONRADO R. ISIDRO, petitioner, vs. NISSAN MOTOR PHILIPPINES, INC.

, respondent.

On December 21, 1995, petitioner bought from respondent a brand new Nissan Sentra with an express manufacturer's warranty against hidden defects for a period of 24 months or 50,000 kilometers, whichever comes first. 3 On August 31, 1998, or two years and nine months after delivery of the car, petitioner a complaint against respondent for breach of warranty. 4 On October 7, 1998, respondent filed with the trial court a motion to dismiss the complaint alleging that petitioner's cause of action is barred by the statute of limitation under Article 1571 of the Civil Code. 5 On October 9, 1998, petitioner filed with the trial court an opposition to the motion to dismiss pointing out that Article 1571 applies only to implied warranties and not to express warranty. 6 ISSUE: At issue is whether or not petitioner's action for enforcement of the manufacturer's express warranty covering the subject motor vehicle has prescribed. We agree with the trial court that petitioner's action has prescribed. The manufacturer's warranty covering the subject motor vehicle was for defective parts over a period of twenty four (24) months or fifty thousand (50,000) kilometers, whichever comes first. Where there is an express warranty in the contract, as in the case at bar, the prescriptive period is the one specified in the express warranty, if any. 15 The action to enforce the warranty was filed two and a half years from the date of the purchase or delivery of the vehicle subject of the warranty. Clearly, the action has prescribed. The period of the guarantee under the express warranty has expired.

G.R. No. 148173

December 10, 2004

SUPERCARS MANAGEMENT & DEVELOPMENT CORPORATION, represented by its President Benigno Chan, petitioner, vs. THE LATE FILEMON FLORES, substituted by his surviving spouse, NORA C. FLORES,1 respondent. In Filemon Flores, respondent, purchased from Supercars Management and Development Corporation, petitioner, an Isuzu Carter Crew Cab A day after the vehicle was delivered, respondent used it for his family's trip to Bauang, La Union. While traversing the national highway in Tarlac, Tarlac, the fan belt of the vehicle snapped. Then its brakes hardened after several stops and did not function properly; the heater plug did not also function; the engine could not start; and the fuel consumption increased.4 , respondent complained to petitioner about the defects of the vehicle. Marquez then had the vehicle repaired and returned it to respondent that same day, assuring the latter that it was already in good condition. But after driving the vehicle for a few days, the same defects resurfaced, prompting respondent to send petitioner a letter dated January 30, 1989 rescinding the contract of sale and returning the vehicle due to breach of warranty against hidden defects. In response to respondent's letter, petitioner directed Marquez to have the vehicle fixed. Thereafter, he returned the vehicle to respondent with the assurance that it has no more defects. However, when respondent drove it for a few days, he found that the vehicle was still defective. Hence, on February 7, 1989, respondent sent petitioner another letter restating that he is rescinding the contract of sale

Hence, the instant petition. Petitioner contends that respondent has "no right to rescind the contract of sale"11 because "the motor vehicle in question, as found by the RTC and the Court of Appeals, is already in the hands of a third party, one Mr. Lim an innocent purchaser for value."12 Thus, both courts erred in ordering petitioner to refund respondent of the amounts he paid for the vehicle. The issue here is whether respondent has the right to rescind the contract of sale and to claim damages as a result thereof. We rule for respondent. Respondent's complaint filed with the RTC seeks to recover from petitioner the money he paid for the vehicle due to the latter's breach of his warranty against hidden defects under Articles 1547,13 1561,14 and 156615 of the Civil Code. The vehicle, after it was delivered to respondent, malfunctioned despite repeated repairs by petitioner. Obviously, the vehicle has hidden defects. A hidden defect is one which is unknown or could not have been known to the vendee.16

The findings of both the RTC and Court of Appeals that petitioner committed a breach of warranty against hidden defects are fully supported by the records. The Appellate Court correctly ruled: "The evidence clearly shows that Flores [now respondent] was justified in opting to rescind the sale given the hidden defects of the vehicle, allowance for the repair of which he patiently extended, but which repair did not turn out to be satisfactory. For when by letters of January 30, 1989 and February 7, 1989, which were followed up by another dated March 1, 1989, Flores declared his rescission of the sale, which rescission was not impugned or opposed by appellants as in fact they accepted the return of the vehicle on February 9, 1989, such extra-judicial rescission x x x produced legal effect

G.R. No. 136586

November 22, 2001

JON AND MARISSA DE YSASI, petitioners, vs. ARTURO AND ESTELA ARCEO, respondents. MENDOZA, J.: On October 1, 1988, petitioner spouses Jon and Marissa de Ysasi leased from spouses Arturo and Estela Arceo, respondents herein, the latter's premises It appears that due to heavy rains, the roof of the building leaked and the premises were flooded, as a result of which the schedule of the delivery of handpainted mouldings to petitioners' customers was disrupted. Respondents in turn filed an ejectment suit against petitioners in the Metropolitan Trial Court, Branch 71, Pasig City. In its decision, the MeTC, while ruling that petitioners were justified in suspending the payment of rent, ISSUE: WARRANTY Petitioners contend that respondents were liable for hidden defects and, for this purpose, cite the following provisions of the Civil Code: Art. 1566. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof. This provision shall not apply if the contrary has been stipulated, and the vendor was not aware of the hidden faults or defects in the thing sold. Art. 1653. The provisions governing warranty, contained in the Title on Sales, shall be applicable to the contract of lease. Petitioners' contention is without merit. Petitioner Jon de Ysasi admitted on cross-examination that he inspected the premises three or four times before signing the lease contract.12 During his inspection, he noticed the rotten plywood on the ceiling which in his opinion was caused by leaking water or "anay" (termites). Yet, he decided to go through with the lease agreement.13 Hence,

respondents cannot be held liable for the alleged warranty against hidden defects. What we said in Coca-Cola Bottlers Philippines, Inc. v. Court of Appeals14 applies mutatis mutandis to this case: Considering that the representatives of the petitioner were given every opportunity to visit and inspect the premises prior to the execution of the contract of lease, we cannot impute bad faith on the part of respondents for having allegedly withheld the information that the leased land was a former fishpond. xxx xxx xxx

Accordingly, private respondents cannot be held liable for the alleged warranty against defects under Art. 1561 of the Civil Code. Under Arts. 1561 and 1653 of the Civil Code, the lessor is responsible for warranty against hidden defects, but he is not answerable for patent defects or those which are visible. Such appears to be the case here.

G.R. No. 173575

February 2, 2011


Immaculate Conception Academy (ICA) owned a three-storey building in Dasmarias, Cavite. The property caught the eye of AMA Computer College, Inc. (AMA) and it sought to buy the same but did not succeed. Subsequently, after inspecting the building, AMA settled on leasing it.2 After the signing of the contract, officials of AMA re-inspected the building and began renovating it for the upcoming school year. But during an inspection, AMAs Chief Operating Officer for its Cavite Campus noted several cracks on the floor and walls of the buildings second storey. This prompted more inspections. Eventually, AMA applied with the municipal engineers office for an occupancy permit.3 Based from the above observations we are in doubt as to the structural soundness and stability of that three-storey building. Whether it can withstand against any natural calamity is presently under question. We are convinced that the building is structurally unsafe for human occupancy.4 On the same date, September 29, 1997, AMA wrote ICA demanding the return of all that it paid within 24 hours from notice. AMA cited the buildings structural deficiency, which it regarded as a violation of ICAs implied warranty against hidden defects. In its Answer, ICA denied that AMA asked for the buildings certificate of occupancy. ICA alleged that it was AMAs responsibility to secure the certificate from the municipal government as stipulated in the contract. Further, ICA claims that it never misrepresented the condition of the building and that AMA inspected it before entering into the contract of lease.

In its Decision dated April 8, 2003, the RTC took AMAs side and ruled that the latter entered into the lease contract without knowing the actual condition of the building. The RTC held that ICA failed to disclose the buildings condition, thus justifying AMAs rescission of the contract The Issues Presented The issues presented in this case are: 1. Whether or not AMA was justified in rescinding the contract of lease either on account of ICAs fraudulent representation regarding the condition of its building or on account of its failure to make repairs on the same upon demand; and

The Courts Rulings One. The Court is not convinced that AMA was justified in rescinding the contract of lease on account of ICAs alleged fraudulent representation regarding the true condition of its building Apparently, AMA did not, at the beginning, believe that the cracks on the floor and on the walls were of a serious nature. It realized that such cracks were manifestations of structural defects only when it sought the issuance of a municipal occupancy permit. The local building official inspected the cracks and concluded that they compromised the buildings structural safety. AMA belatedly invokes Article 1660 of the Civil Code which reads: Art. 1660. If a dwelling place or any other building intended for human habitation is in such a condition that its use brings imminent and serious danger to life or health, the lessee may terminate the lease at once by notifying the lessor, even if at the time the contract was perfected the former knew of the dangerous condition or waived the right to rescind the lease on account of this condition. Article 1660 is evidently intended to protect human lives. If ICAs building was structurally defective and in danger of crashing down during an earthquake or after it is made to bear the load of a crowd of students, AMA had no right to waive those defects. It can rescind the lease contract under Article 1660. But this assumes that the defects were irremediable and that the parties had no agreement for rectifying them. As pointed out above, the lease contract implicitly gave ICA the option to repair structural defects at its expense. If that had been done as the contract provides, the risk to human lives would have been removed and the right to rescind, rendered irrelevant. WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE

) JERRY T. MOLES VS. INTERMEDIATE APPELLATE COURT AND MARIANO M. DIOLOSA G.R. No. 73913, January 31, 1989 FACTS: Jerry Moles(petitioner) bought from Mariano Diolosa owner of Diolosa Publishing House a linotype printing machine(secondhand machine). Moles promised Diolosa that 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 warrated that the machine was in A-1 condition, together with other express warranties. After the release of the 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.

ISSUE/S: 1. Whether 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.

FACTS: 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 an 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.

(VILLOSTAS vs. COURT OF APPEALS G.R. No. 96271 June 26, 1992)
FACTS: Petitioner Villostas and her husband placed an order for one unit of water purifier from private respondent's Electrolux sales agents. Private respondent's sales agents assured petitioner of the very special features of their brand of water purifier. On September 13, 1986, an Electrolux Aqua Guard Water purifier was delivered and installed at petitioner's residence. Petitioner signed the Sales Order and the Contract of Sale with Reservation of Title in October 1986. A warranty certificate was issued by private respondent which provides that the product will perform efficiently for one full year from date of original purchase. The purchase of said unit was on installment basis under which petitioner would pay the amount of P16,190.00 in 20 monthly installments of P635.00 a month. However, after two (2) weeks, petitioner verbally complained about the impurities, dirtiness and bad odor coming out of the unit. Thus, private respondent Electrolux changed the filter of the unit. Petitioner complained for the second and third time when dirty water still came out of the water purifier after the replacement of the filter. It was on the third complaint of petitioner when the service technician gave advise that the filter should be changed every six (6) months costing about P300.00 which was considered to be uneconomical by the former. On December 9, 1986, petitioner sent a letter to the private respondent's branch manager stating the herein complaint that the actual performance of the carbon filter was only for a month instead of the private respondent's claim that the replacement of such filter will be only once every six (6) months. The petitioner, citing the above incident as uneconomical, decided to return the unit and demand a refund for the amount paid. Electrolux's branch manager offered to change the water purifier with another brand or any of its appliance of the unit in her favor. Petitioner did not accept it as she was disappointed with the original unit which did not perform as warranted. ISSUE: Whether or not the petitioner is entitled to rescind the contract on the basis of a violation of the warranty of the article delivered by the respondent? HELD: Yes. At the time the Electrolux Aqua Guard water purifier was delivered and installed at petitioner Villostas' residence a Warranty Certificate was issued by private respondent Electrolux which provides that the product will perform efficiently for one full year from date of original purchase. It clearly expresses warranty regarding the efficiency of the water purifier. On this regard, 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 an express warranty.
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