SALES (Art.
1561-1581) Warranty Against Hidden Defects of or Encumbrance Upon the Thing Sold
Arts. 1561-1571 Warranty Against Hidden Defects
of or Encumbrance Upon the Thing Sold
I. Warranty against Redhibitory (Hidden, Physical)
Vices (of movables)
A. Requisites The vices must be
a. Not visible or could not be known to the buyer,
even if an expert (1561);
b. They must be serious (as to render the thing
unfit) (1561) because of the
implied warranty of quality
(1562) or of fitness for a purpose
known to the seller;
Except: Sales under a patent or
trade name (1563) where no
implied warranty exists.
c. They were not known to the buyer;
d. They existed prior to the sale;
e. They must be notified to the seller within a
reasonable time from discovery
(1586);
f. Action must be within 6 months (1571) or 40
days (from delivery) in case of
animals (1577) (prescription);
g. No stipulation against the warranty has been
agreed
Case: Applicability of warranty to sale of second-
hand article
Moles vs. IAC
Facts: In 1977, petitioner needed a linotype printing
machine for his printing business and applied for an
industrial loan with DBP for the purchase thereof. He
was introduced to respondent who had 2 available
machines. Petitioner went to Iloilo City to inspect the
two machines offered for sale and was informed that
the same were secondhand but functional. Petitioner
decided to buy it but to facilitate the loan application
with the DBP, a pro forma invoice worth P50,000.00
as the consideration of the sale, was signed by
petitioner.
The machine was then delivered and installed to
petitioners publishing house. August 29, 1977,
private respondent issued a certification wherein he
warranted that the machine sold was in "A-1
condition", together with other express warranties.
On November 29, 1977, petitioner wrote private
respondent that the machine was not functioning
properly as it needed a new distributor bar. private
respondent sent two technicians to make the
necessary repairs but they failed to put the machine
in running condition. In fact, since then petitioner
was never able to use the machine. According to
1
experts, major repairs were needed to put the
machine back in good running condition.
Lower court ordered rescission of the contract. CA
reversed
Issue: (1) Whether there was a warranty on the sale
of linotype printing machine which is a second-hand
article
(2) Whether the filing of action for rescission was
barred by prescription
Ruling: (1) when an article is sold as a secondhand
item, a question arises as to whether there is an
implied warranty of its quality or fitness. 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 a
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.
There is no implied warranty as to the condition,
adaptation, fitness, or suitability for the purpose for
which made, or the quality, of an article sold as and
for a secondhand article. Said general rule, however,
is not without exceptions: 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;"
An express warranty can be made by and also be
binding on the seller even in the sale of a secondhand
article.
Respondent is indeed bound by the express warranty
he executed in favor of herein petitioner.
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.
(2) While it is true that Article 1571 of the Civil Code
provides for a prescriptive period of six months for a
 SALES (Art. 1561-1581) Warranty Against Hidden Defects of or Encumbrance Upon the Thing Sold
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.
B. The vice need not be known to the vendor
(1566)
C. Effects of warranty against defects or vices:
a. The vendee may elect between (1567)
1)Withdrawal from the contract; or
2)Reduction of the price (with damages in case
of bad faith).
b. If the thing is lost due to hidden vice (1568)
1)If the Vendor is aware of the vice: he must
i) Return the price (not the value); and
ii) Refund the expenses of the contract; and
ii) Pay damages
2)If the Vendor is not aware of the vice: he
must
i) Return the price with interest; and
ii) Refund expenses (without damages).
c. If the thing is lost by fortuitous event or by the
fault of the buyer
Choices of the vendee (1567)
Case: Effect of sale of car with hidden defects
SUPERCARS MANAGEMENT & DEVELOPMENT
CORPORATION vs. THE LATE FILEMON FLORES,
substituted by his surviving spouse, NORA C.
FLORES
Facts: In the second week of December 1988,
Filemon Flores, purchased from Supercars
Management and Development Corporation, an Isuzu
Carter Crew Cab for P212,000.00 payable monthly
with a down payment equivalent to 30% of the price
or P63,600.00. The sale was coursed through Pablito
Marquez, petitioner's salesman. Upon delivery of the
vehicle, respondent paid petitioner the 30% down
payment, plus premium for the vehicle's
comprehensive insurance policy amounting to
P7,374.80. The Rizal Commercial Banking
Corporation (RCBC) financed the balance of the
purchase price. Its payment was secured by a chattel
mortgage of the same vehicle.
2
A day after the vehicle was delivered, respondent
used it for his family's trip to La Union. The vehicle
malfunctioned on the trip. Upon their return to
Manila in the first week of January 1989, 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. A copy of
the letter was furnished RCBC.
In response to the 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, the vehicle was still defective.
Hence, on February 1989, respondent sent petitioner
another letter restating that he is rescinding the
contract of sale, a copy of which was furnished RCBC.
He then returned the vehicle to petitioner. On March
1989, respondent sent petitioner a letter demanding
the refund of his down payment, plus the premium
he paid for the vehicle's insurance. Petitioner failed
to comply with the demand. Consequently,
respondent stopped paying the monthly
amortization for the vehicle. Subsequently, RCBC
sent respondent a letter demanding that he settle his
past overdue accounts for February 15 and March
15, 1989. In reply, respondent, through a letter dated
March 31, 1989, informed RCBC that he had
rescinded the contract of sale and had returned the
vehicle to petitioner. This prompted RCBC to file
with the Office of the Clerk of Court and Ex-Officio
Sheriff, Regional Trial Court, Quezon City, a Petition
for Extra-judicial Foreclosure of Chattel Mortgage.
A Notice of Sheriff's Sale of the vehicle was set and
subsequently the auction sale proceeded as
scheduled. RCBC, being the highest bidder,
purchased the vehicle. Subsequently, RCBC sold the
vehicle to a third party. On November 1989, Flores
filed with the Regional Trial Court in Makati City a
complaint for rescission of contract with damages
against petitioner, Marquez, Catley and RCBC.
Issue: Whether or not Flores has the right to rescind
the contract of sale and to claim damages as a result
thereof.
Held : Flores has the right to rescind the contract of
sale.
 SALES (Art. 1561-1581) Warranty Against Hidden Defects of or Encumbrance Upon the Thing Sold 3

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, 1561,
and 1566 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.
to give back to respondent the purchase price upon
his return of the vehicle. Records show that at the
time respondent opted to rescind the contract, the
vehicle was still in his possession. He returned it to
petitioner who, without objection, accepted it.
Accordingly, the 30% down payment equivalent to
P63,600.00, plus the premium for the comprehensive
insurance amounting to P7,374.80 paid by
respondent should be returned by petitioner.

The findings of both the RTC and Court of Appeals 1)If the vendor is in good faith: He must
that petitioner committed a breach of warranty return the price less the
against hidden defects are fully supported by the value when lost.
records. The Appellate Court correctly ruled: 2)If the vendor is in bad faith: He must -
i) Return the price less the value; and
"The evidence clearly shows that Flores [now ii) Pay damages.
respondent] was justified in opting to rescind the
D. Period to bring action for breach of warranty 6
sale given the hidden defects of the vehicle,
months from date of delivery
allowance for the repair of which he patiently
extended, but which repair did not turn out to be
CASES
satisfactory.
DINO vs. CA
G.R. No. 113564, June 20, 2001
For when by three letters, Flores declared his
Facts: Petitioners spouses Dino, doing business
rescission of the sale, which rescission was not
under the trade name "Candy Claire Fashion
impugned or opposed by appellants as in fact they
Garment" are engaged in the business of
accepted the return of the vehicle on February 9,
manufacturing and selling shirts. Respondent Sio is
1989, such extra-judicial rescission produced legal
part owner and general manager of a manufacturing
effect.
corporation doing business under the trade name
"Universal Toy Master Manufacturing."
It is well within respondent's right to recover
damages from petitioner who committed a breach of
Petitioners and respondent Sio entered into a
warranty against hidden defects. Article 1599 of the
contract whereby the latter would manufacture for
Civil Code partly provides:
the petitioners 20,000 pieces of vinyl frogs and
"Article 1599. Where there is a breach of warranty
20,000 pieces of vinyl mooseheads at P7.00 per piece
by the seller, the buyer may, at his election:
in accordance with the sample approved by the
(4) Rescind the contract of sale and refuse to receive
petitioners. These frogs and mooseheads were to be
the goods, or if the goods have already been received,
attached to the shirts petitioners would manufacture
return them or offer to return them to the seller and
and sell.
recover the price or any part thereof which has been
paid.
Respondent Sio delivered in several installments the
When the buyer has claimed and been granted a
40,000 pieces of frogs and mooseheads. The last
remedy in anyone of these ways, no other remedy
delivery was made on September 28, 1988.
can thereafter be granted, without prejudice to the
Petitioner fully paid the agreed price. Subsequently,
provisions of the second paragraph of Article 1191.
petitioners returned to respondent 29,772 pieces of
frogs and mooseheads for failing to comply with the
Petitioner's contention that under Article 1191 of the
approved sample. The return was made on different
Civil Code, rescission can no longer be availed of as
dates: the initial one on December 12, 1988
the vehicle was already in the hands of an innocent
consisting of 1,720 pieces, the second on January 11,
purchaser for value lacks merit. Rescission is proper
1989, and the last on January 17, 1989.
if one of the parties to a contract commits a
substantial breach of its provisions. It creates an
Petitioners then demanded from the respondent a
obligation to return the object of the contract. It can
refund of the purchase price of the returned goods in
be carried out only when the one who demands
the amount of P208,404.00. As respondent Sio
rescission can return whatever he may be obliged to
refused to pay, petitioners filed on July 24, 1989 an
restore. Rescission abrogates the contract from its
action for collection of a sum of money in the
inception and requires a mutual restitution of the
Regional Trial Court of Manila, Branch 38 which
benefits received. Petitioner is thus mandated by law
 SALES (Art. 1561-1581) Warranty Against Hidden Defects of or Encumbrance Upon the Thing Sold
ruled in his favor. However, CA previously affirmed
RTCs decision but was subsequently reversed for
having filed beyond the prescriptive period.
Issue: Whether or not the action had prescribed.
Ruling: There is no dispute that respondent made the
last delivery of the vinyl products to petitioners on
September 28, 1988. It is also settled that the action
to recover the purchase price of the goods
petitioners returned to the respondent was filed on
July 24, 1989, more than nine months from the date
of last delivery. Petitioners having filed the action
three months after the six-month period for filing
actions for breach of warranty against hidden defects
stated in Art. 1571, the appellate court dismissed the
action.
Petitioners fault the ruling on the ground that it was
too late in the day for respondent to raise the
defense of prescription. Thus, they claim that since
the respondent failed to raise the defense of
prescription in a motion to dismiss or in its answer,
it is deemed waived and cannot be raised for the first
time on appeal in a motion for reconsideration of the
appellate court's decision.
As a rule, the defense of prescription cannot be
raised for the first time on appeal. Thus, we held in
Ramos v. Osorio, viz: "It is settled law in this
jurisdiction that the defense of prescription is
waivable, and that if it was not raised as a defense in
the trial court, it cannot be considered on appeal, the
general rule being that the appellate court is not
authorized to consider and resolve any question not
properly raised in the lower court.
However, this is not a hard and fast rule. In Gicano v.
Gegato,19 we held: ". . .(T)rial courts have authority
and discretion to dimiss an action on the ground of
prescription when the parties' pleadings or other
facts on record show it to be indeed time-barredand
it may do so on the basis of a motion to dismiss or an
answer which sets up such ground as an affirmative
defense or even if the ground is alleged after
judgment on the merits, as in a motion for
reconsideration; or even if the defense has not been
asserted at all, as where no statement thereof is
found in the pleadings; or where a defendant has
been declared in default. What is essential only, to
repeat, is that the facts demonstrating the lapse of
the prescriptive period be otherwise sufficiently and
satisfactorily apparent on the record; either in the
averments of the plaintiff's complaint, or otherwise
established by the evidence."
In Aldovino, et al. v. Alunan, et al., the Court en banc
reiterated the Garcia v. Mathis doctrine cited in the
4
Gicano case that when the plaintiff's own complaint
shows clearly that the action has prescribed, the
action may be dismissed even if the defense of
prescription was not invoked by the defendant.
It is apparent in the records that respondent made
the last delivery of vinyl products to the petitioners
on September 28, 1988. Petitioners admit this in
their Memorandum submitted to the trial court and
reiterate it in their Petition for Review. It is also
apparent in the Complaint that petitioners instituted
their action on July 24, 1989. The issue for resolution
is whether or not the respondent Court of Appeals
could dismiss the petitioners' action if the defense of
prescription was raised for the first time on appeal
but is apparent in the records.
Following the Gicano doctrine that allows dismissal
of an action on the ground of prescription even after
judgment on the merits, or even if the defense was
not raised at all so long as the relevant dates are
clear on the record, we rule that the action filed by
the petitioners has prescribed. The dates of delivery
and institution of the action are undisputed. There
are no new issues of fact arising in connection with
the question of prescription, thus carving out the
case at bar as an exception from the general rule that
prescription if not impleaded in the answer is
deemed waived.
Even if the defense of prescription was raised for the
first time on appeal in respondent's Supplemental
Motion for Reconsideration of the appellate court's
decision, this does not militate against the due
process right of the petitioners. On appeal, there was
no new issue of fact that arose in connection with the
question of prescription, thus it cannot be said that
petitioners were not given the opportunity to
present evidence in the trial court to meet a factual
issue. Equally important, petitioners had the
opportunity to oppose the defense of prescription in
their Opposition to the Supplemental Motion for
Reconsideration filed in the appellate court and in
their Petition for Review in this Court.
Guzman vs. Toyota Cubao
Facts: November 27, 1997, petitioner purchased
from respondent a brand new white Toyota Hi-Lux
2.4 SS double cab motor vehicle, 1996 model. The
vehicle was delivered to petitioner two days later. On
October 18, 1998, petitioner demanded the
replacement of the engine of the vehicle because it
developed a crack after traversing Marcos Highway
during a heavy rain.
On April 20, 1999, petitioner filed a complaint for
damages against respondent with the RTC.
Respondent moved to dismiss the case on the ground
 SALES (Art. 1561-1581) Warranty Against Hidden Defects of or Encumbrance Upon the Thing Sold 5

that under Article 1571 of the Civil Code, the i) In case of rescission, the buyer must
petitioner's cause of action had prescribed as the return the animal and answer for
case was filed more than six months from the date injuries due to his fault (1579)
the vehicle was sold and/or delivered. b. In case of sale of two or more animals sold
together
Issue: Whether petitioners cause of action was 1)the redhibitory defect of one shall only give
barred by prescription rise to its redhibition
i) Exception: if the vendee would not have
Ruling: Yes. In the absence of an existing express purchased the sound animal/animals
warranty on the part of the respondent, as in this without the defective one
case, the allegations in petitioner's complaint for
D. The action must be brought within 40 days from
damages were clearly anchored on the enforcement
delivery
of an implied warranty against hidden defects, i.e.,
(1577)
that the engine of the vehicle which respondent had
sold to him was not defective. By filing this case,
petitioner wants to hold respondent responsible for
breach of implied warranty for having sold a vehicle
with defective engine. Such being the case, petitioner
should have exercised this right within six months
from the delivery of the thing sold. Since petitioner
filed the complaint on April 20, 1999, or more than
nineteen months counted from November 29, 1997
(the date of the delivery of the motor vehicle), his
cause of action had become time-barred.

Arts. 1572-1581
Concept:
Redhibitory vice (hidden vices of animals)
Redhibition -
I. Warranty against hidden vices of animals
(Redhibitory vices)
A. No warranty (1574) exists in
a. Sales at fairs or public auctions;
b. Sales of condemned livestock;
c. If the animals were examined by an expert,
unless the vice is undiscoverable
(1576);
1)The negligent or unskillful expert is liable to
the buyer
d. When the vice is not declared Redhibitory by
law or local custom (1577);
e. If the animals are unfit for the use stated in the
contract (the sale is void) (1575)
f. If the animals suffer from contagious diseases
(the sale is void) (1575)
B. It is presumed that the vice is Redhibitory
(covered by the warranty) if:
a. The disease causes death within 3 days from
the purchase and
b. The disease existed at the time of contract
(1578).
C. Effects of breach of warranty (buyers option):
a. The vendee may elect between
1)Reduction of the price (1580) (1567) or
2)Rescission of the sale (plus damages in case
of bad faith)