SCHMID and Oberly vs RJL Martinez

GR 75198
October 18 1988

Facts:
1) RJL Martinez bought 3 generators from SCHMID branded as Nagata.
2) After the transaction, RJL bought 12 more by executing a letter of credit to Nagata
and Co. The generators wer shipped directly to RJL from Nagata. SCHMID received a
commission from Nagata for the transaction.
3) The generators had defects. The first three were replaced by SCHMID.
4) For the others, 3 were shipped to Japan for repair. The rest were left unrepaired.
5) RJL sued SCHMID for damages.
6) SCHMID claimed that it mere acted as a agent in the second sale, so they are not
liable.
7) The lower court and CA ruled in favor of RJL.
ISSUE:
Was SCHMID a party to the contract of sale or was merely acting as indentor?
HELD:
SCHMID was merely an indentor. RJL admiited in its complaint that RJL were purchased through
indent orders. The same was also contained in the demand letter of RJL to SCHMID. It cannot
be held liable for implied warranty for hidden defects under the Civil Code.