WARRANTY AGAINST EVICTION

Eviction is the deprivation of the vendee of the whole or a part of the thing
sold by virtue of a final judgement based on a right prior to the sale or an act imputable
to the vendor. (Art. 1548)
The seller guarantess that he has the right to sell the thing sold and to transfer
ownership to the buyer, who shall not be disturbed in his legal and peaceful possession
thereof.

Essential Elements: (Requisites in order that the seller's warranty against

eviction may be enforced)
1. Vendee is evicted, in whole or in part, of the thing purchased.
2. The eviction is by final judgement.
Necessity of final judgement
In order that the vendor's warranty for eviction can be enforced, it is
required that final judgement must have been rendered depriving the vendee of the
whole or a part of the thing sold. A judgement beomes final after the expiration of the
time allowed by law for appeal therefrom or, if an appeal is perfected, after the
judgement is upheld in the appellate court.
The vendee need not appeal from the decision or judgement in order
that the vendor may become liable for eviction.
(explanation):
The vendor need not appeal from the decision of the lower court that decreed the
eviction before he can sue the vendee for damages. As long as the decision has become
final, the liability of the vendor already accrues. THe vendor cannot escape from his
liability for eviction by asserting that the vendee should have appealed the judgement of
the lower court on the theory that the lower court's decision could have been reversed on
appeal. After all, the vendor had been summoned in the suit for eviction and had all the
opportunity to avail himself of the possible remedies to stop the eviction.
3. The judgement is based on a prior right to the sale or an act imputable to
the vendor.
Generally, all rights acquired prior to the sale by others can be imputed to the
seller. But imputability or fault is really important: hence, seller is still liable even if the
act be made after the sale.
Example:
B bought land from S. B did not register. C then bought the same land from S. C
registers. B is defeated. Can B hold S liable for the eviction although C's right came after
the sale to him?
Yes, because although it came after the sale yet it was attributable to S's own

fault and bad faith.

4. The vendor was summoned in the suit for eviction at the instance of the
vendee.
Summoned - order to appear
Necessity of summons on vendor
In order that the vendor's warranty against eviction may be enforced
against him, it is likewise required that he is summoned in tge suit for eviction at the
instance of the vendee. This will enable the vendor to defend his title adn show that the
suit for eviction against the buyer is unjust.
5. No waiver of warranty by the vendee
2 Kinds of Waiver:
a. Consciente - voluntarily made by the vendee without the knowledge and
assumption of the risks of eviction
*Vendor shall pay only the value of the thig sold at the time of eviction.
b. Intencionada - made by the vendee with the knowledge of the risks of
eviction and assumption of its consequences.
* The vendor shall not be liable.

NOTE: Every waiver is presumed to be consciente. To consider it

intencionada, it must be accompanied by some circumstance which reveals the vendor's
knowledge of the risks of eviction and his intention to submit to such consequences.

Othe instances when seller is liable for breach of warranty against eviction:
a. Sale of the property for non-payment of taxes
If the property is sold for non-payment of taxes due and not made known to the
vendee before the sale, the vendor is liable for eviction. (Art. 1551)
Example:
A has land, the taxes on which he has not paid. A sells it to B. Later, the land is
sold at public auction for the non-payment of taxes and B is evicted. A is responsible, but
only if B id not know at the time of the sale that A had not paid the taxes thereon.
b. Judicial sales
The judgement debtor is liable for eviction, unless otherwise decreed in the
judgement. (Art. 1552)
Judgement debtor - losing defendant in a lawsuit who owes the amont
awarded in the judgement to the winner.

Example:
D borrowed P 500,000 from C. D failed to pay the debt on the due date, so C
sued him for collection. The court rendered judgement in favor of C and ordered the sale
of a certain farm lot which was registered in the name of D to satisfy the debt. The lot
was awarded to B at the execution sale. It appeared, however, that T had a claim on the
property, so T sued B for eviction, and obtained judgement against the latter. Here, D, the
judgement debtor in the suit that C filed against him, will be liable to B for eviction,
although the latter acquired the lot in a judicial sale.

VENDOR'S LIABLITY
1. TOTAL EVICTION: (VICED)
Art. 1555. When the warranty has been agreed upon or nothing has
been stipulated on this point, in case eviction occurs, the vendee shall have the
right to demand of the vendor:
(1) Value which the thing sold had at the time of the eviction, be it greater or
less than the price of the sale;
(2) Income or fruits, if he has been ordered to deliver them to the party who
won the suit against him;
(If the court does not order the buyer to deliver the in- come or fruits to the
winner, said buyer would be entitled to them. This is fair for after all, in the meantime,
the seller was using the price money without interest. )
(3) Costs of the suit which caused the eviction, and, in a proper case, those of
the suit brought against the vendor for the warranty;
(Paragraph 3 does not include transportation and other incidental expenses. )
(4) Expenses of the contract;
(5) Damages and interests if the sale was made in bad faith.
(The interests in paragraph 5 refer to interests on costs, expenses, and
damages. Note that in paragraph 5 the sale must have been made in BAD FAITH, which
must be proved. )

2. PARTIAL EVICTION
a. to enforce vendor's liablity for eviction (VICED) OR
b. to demand recission of the contract

Why is Rescission Not a Remedy in Case of TOTAL Eviction?

The remedy of rescission contemplates that the one demanding it is able to
return whatever he has received under the contract; and when this cannot be done,

rescission cannot be carried out. It is for this reason that the law on sales does not make
rescission a remedy in case the vendee is totally evicted from the thing sold, for he can
no longer restore the subject matter of the sale to the vendor. Of course, in case of partial
eviction, rescission may still be allowed with respect to the subject matter that remains,
as in the case contemplated in Art. 1556.

Art. 1556. Should the vendee lose, by reason of the eviction, a part of
the thing sold of such importance, in relation to the whole, that he would not
have bought it without said part, he may demand the rescission of the
contract; but with the obligation to return the thing without other
encumbrances than those which it had when he acquired it.
He may exercise this right of action, instead of enforc- ing the
vendors liability for eviction.
The same rule shall be observed when two or more things have been
jointly sold for a lump sum, or for a separate price for each of them, if it should
clearly appear that the vendee would not have purchased one without the
other.
(1) Rules in Case of Partial Eviction
(a) The Article deals with a case of partial eviction.
(b) Remedy here is either:
1) rescission, or
2) enforcement of warranty.
(2) Rescission
If he chooses rescission, there should be no new encumbrances, like a
mortgage.
(3) When Enforcement of the Warranty Is the Proper Remedy
If the circumstances set forth in paragraph 1 are not present (as when there
are new encumbrances), the only remedy is to enforce the warranty.

Example:
S sold two lots (Lot 1 and Lot 2) for a lump sum pf P 1,000,000
(a) If B is deprived of Lot 1 because of eviction, what remedies are available to
him?
Ans. B may rescind the whole contract (the sale of both lots), or he
may retain Lot 2 and enforce S's liability for breach of warranty against eviction for Lot 1.
(b) If B paid P 450,000 for Lot 1 and P 550,000 and it appears that he would
not have purchsed one lot without the other, what remedies are available to him?

Ans. Same as the previous one, although he paid a seperate price for
both lots, because he would not have bought one of the lots without the other.

* In general, it is only the buyer in good faith who may sue for the breach of
warranty against eviction. If he knew of possible dangers, chances are that he assumed
the risk of eviction.
* In a proper case, the suit for the breach can be directed only against the
immediate seller, not sellers of the seller unless such sellers had promised to warrant in
favor of later buyers or unless the immediate seller has expressly assigned to the buyer
his own right to sue his own seller.
1. Vendor's liability in case of Eviction
a. If there is a stipulation exempting the vendor from the obligation to answer
for eviction
1) Vendor acted in bad faith (he had knowledge at the time of sale of the
existence of a fact that may give rise to eviction, teh waiver is void - Vendor shall be
liable for VICED
2) Vendor acted in good faith - Vendor's liability shall be (refer to the kinds of
waiver)

b. Where no warranty has been agreed upon or there was no stipulation

expemting the vendor from liablity
1) Vendor acted in bad faith - Vendor shall be liable for VICED
2) Vendor acted in good faith - Vendor shall be liable for VICE, there is no
liability for damages and interest

WARRANTY AGAINST ENCUMBRANCES (NON-APARENT)

Requisites:
a. immovable sold is encumbered with nonapparent burden or
mentioned in the agreement

servitude not

b. nature of nonapparent servitude or burden is such that it must be presumed that

the buyer would not have acquired it had he been aware thereof
c. when breach of warranty exist: buyer may ask for rescission of indemnity
d. warranty not applicable when non apparent burden or servitude is recorded in the
Registry of Property unless there is express warranty that the thing is free from all

burdens and encumbrances

Right of the vendee:

a. rescisiion, or
b. indemnity

2. Implied

Prof. De Leon:
because of this implied warranty, itcannot be said that Philippine law does not
adoptcaveat emptor buyer beware. Even if there is no stipulation as to thesewarranties,
the law itself would provide for thesewarranties and hence if there are hidden defectshe
would have remedies under the law or even if he was deprived of the thing he bought he
wouldhave a remedy against the seller. Hence, it is notcorrect to say that Philippine law
has adoptedcaveat emptor. But there are certain instanceswhen there would be no such

implied warrantyagainst hidden defects. There may be warranty asto title or against
eviction but there is no warrantyagainst hidden defects under certaincircumstances.
Warranty Against Eviction / Title
Q: If the seller was able to transfer ownershipto the buyer may the seller nonetheless be
held liable for breach of warranty against eviction?
A: Yes. These are 2 different obligations: theobligation to transfer ownership and the
obligationto warrant the thing.
Example:
This warranty against eviction wouldinclude the warranty that the buyer from themoment
of the sale have and enjoy the legal andpeaceful possession over the thing sold.He may
be deprived of the thing by a 3rd person even if he would not lose ownership.
Q: When would this happen?
A: Maybe the 3rd person has a better right to thepossession of the thing. Maybe there
was a leaseagreement entered into which has to be respectedby the buyer.
Note:
A contract of lease may last for 99 years.
Q: If there is a claim or a 3rd person claims aright over the thing bought, does it mean
that the seller will already be liable for breach of warranty against eviction?
A: No because there are requisites which must becomplied with.
Requisites:
1. There has to be final judgment depriving him of such thing either wholly or partially. In
other words,a case was filed by a 3rd person against the buyer which resulted in a
favorable decision as to theplaintiff resulting in the deprivation of the propertyby the
buyer.
Note:
For the seller to be liable, he must havebeen notified of this case against the buyer. In
fact,he should be impleaded as a co-defendant in theaction because:
(a)The seller should have an opportunity todefend his title.
(b)The seller would normally have theknowledge of the defenses as to
theproperty which is sold. If there is oneperson who can mediate the claim of theplaintiff
between the seller and the buyer normally it would be the seller.
Q: If there is a decision in favor of the plaintiff (3rd person) against the buyer in the trial
court,is it required that the buyer should appeal inorder for him to be able to hold the
seller liable?
A: No because the party who should appeal if he isinterested should be the seller. If he
does not wantto be held liable, he should appeal the case up tothe SC. If the decision
becomes final, he may beheld liable for breach of warranty.

2. Deprivation must be either:

(2.1) Based on a 3rd persons prior right over the thing prior to the sale or
(2.2) Based on an act after the sale butimputable to the vendor.Concretely, the
reason for the deprivation maybebecause of non payment of real property taxesby the
seller and not the buyer.
Example:
If land was sold in an execution salebecause of the failure of the seller to pay realproperty
taxes this can be the basis of liabilityfor breach of warranty.
Based on an Act after the Sale but Imputable tothe Vendor
Example:
There was a first sale to A and then a 2ndsale to B. Under the law on double sale, B have
a better right if this is a sale involving immovable, if he was the first one who registered
the sale ingood faith.The first buyer even if he was in possession maybeevicted from such
property by the 2nd buyer because the 2nd buyer would have a better right.This is based
on an act of the vendor after the saleor after the 1st sale hence, there can be a liabilityfor
breach of warranty against eviction.
Q: If during the sale a 3rd person was already occupying the land by way of adverse
possession so in an open, continuous xxx for 7 years under the color of title. But after the
sale,the buyer did nothing. And hence, theoccupants claiming a right or ownership
wasable to complete the prescriptive period of aminimum of 10 years. Thus, if a 3rd
person would be able to deprive this buyer of ownership over the thing because of
acquisitive prescription, can the buyer hold thevendor liable for breach of warranty?
A: No because it was his fault that the 3rd person was able to complete the period for
acquisitiveprescription. Had he done something to interruptthe running of the prescriptive
period then hewould not have been deprived of the ownership of the thing.3. There
should be no valid waiver 4. The action to hold the vendor liable should befiled within the
period prescribed by law.
Q: If indeed the seller can be held liable for breach of warranty against eviction, what will
be the extent of liability of the vendor?
A: The vendor can be held liable for the value of the thing at the time of the eviction,
income or fruits, cost of suit, expenses of the contract anddamages and
interest.Damages may only be claimed if the seller is aseller in bad faith. As long as he
sold the thing ingood faith, he cannot be held liable for damagesregardless of whether
there was a waiver or not. Infact, if there is a waiver but the vendor is in badfaith, the
waiver is void and hence he can be heldliable for everything under the law. If there was
nowaiver and the vendor is in bad faith, again he willnot only be liable for expenses xxx
but also for damages, cost of suit xxx everything!
Q: If the seller was aware of the defect of histitle at the time of the sale, hence, he is a
seller in bad faith?
A: Not necessarily. He may be aware but heinformed the buyer of such defect in the title
andhence he cannot be considered bad faith vendor.Even if he did not inform the buyer

but if the buyer was already aware of the defect.

Q: Why would a buyer buy a thing if the title of the seller has defect?
A: Maybe because the buyer needs the thing for his business.If I am the vendor and I
know there is a defect inmy title, I will ask the vendee to execute a waiver.
Q: Thus, if there is such a waiver and assuming the vendor acted in good faith, can the
vendor be held liable for breach of warranty?
A: It depends on the kind of waiver.
(a)If waiver consiente the buyer executed awaiver without knowledge of the
defect inthe title of the seller. Also, the vendor doesnot know of the defect. The only
liability of the vendor for breach of warranty againsteviction is the value of the thing at
the timeof eviction.
(b) If the waiver is intentionada when thevendee executed the waiver
withknowledge in the defect of the title of theseller, hence, he knew of the possibility of
being evicted and nonetheless bought thething the vendee cannot hold the vendor liable.