Power Construction Supply v CA

Power needed a bigger office so they agreed to purchase from spouses Quiambao a parcel of land. 245K.
108K downpayment, balance on execution of deed of transfer. They also agreed to assume quiambao’s
mortgage of said property to PNB.

In the contract it was stipulated that the spouses warrant the property free from any liens and
encumbrances and defend the title and peaceful possession of Power.

Informal settlers were in said land but spouses did not evict them out of it. So Power requested PNB to
transfer the mortgage and title to them so they can evict by themselves the informal settlers. PNB
demanded the charges and interests first. Instead petitioner filed a complaint for damages against the
spouses. Eventually the mortgaged foreclosed and was sold at public auction

RTC held in favor of Power rescinding the contract and ordering spouses to pay. PNB to pay the price
that Power paid in relation to assumption of mortgage.

CA reversed. Contract did not obligate Spouses to eject the squatters

SC

 Failure to evict was not a condition stipulated in the contract. The effects of non-fulfillment
were not stated
 If the parties intended to impose on respondent spouses the obligation to eject the tenants
from the lot sold, it should have included in the contract a provision to that effect
 There is no breach of warranty against eviction. There are four requisites for such:

o The purchaser has been deprived of the whole or part of the thing sold;

o This eviction is by a final judgment;

o The basis thereof is by virtue of a right prior to the sale made by the vendor; and

o The vendor has been summoned and made co-defendant in the suit for eviction at the
instance of the vendee.

 Presence of lessees(squatters) did not deprive Power of control of said land, nor did it encumber
said land. Thus first requisite is absent. Moreover, their complete deprivation which happened
thereafter was due to their own fault but not paying the amortizations for said mortgage and
allowing it to be foreclosed.

Phil Manufacture v Go Jocco

Plaintiff agreed to sell to defendant 1,500 tons of coconut oil, with a stipulation, among others, that it
would not contain more than 5% free fatty acid(FFA). Upon delivery to Mason, he said that it would be
necessary for him to examine the tanks first before he pays for it. After examination, he paid the full
purchase price.

Plaintiff then sold this coconut oil to Portsmouth Cotton Oil Refining Co. But upon getting there, it was
refused by PCOIRC because it was contaminated with cottonseed oil. Thus an action for damges.

Go Jocco’s defense is that under art 336, plaintiff lost cause of action since he inspected the coconut oil.
And moreover the claim was made beyond the 30 day period after delivery.

RTC dismissed complaint for pliantiff’s inability to prove that at time of delivery tanks were
contaminated with cottonseed oil.

SC

 Evidence point to the conclusion that tanks were not contaminated at time of delivery

 Assuming it was, the small quanitity mixed with the coconut oil can only be regarded as an
impurity and did not change the essential character of the merchandise.

 the contract of sale between the plaintiff and the defendant

contains no express warranty against impurities aside from the
stipulation that not more than 5 per cent of free fatty acid would
be allowed (Topical)
 Implied Warranty? As it appears that the plaintiff examined the oil to his satisfaction, it is
evident that he cannot now rely on this article for his cause of action. (art 336 of code of
commerce

Filinvest Credit Corp v CA (case on lease)

Spouses Bang bought a rockcrusher from Gemini by loaning from Filinvest. Filinvest was the one who
provided the funds and thus ownership was held by it. Filinvest leased it to spouses with the agreement
that at end of lease period, ownership transfers to the spouses. Spouses inspected the machine and
were satisfied with it. However during period of lease, spouses complained that rock crusher did not
crush as much rocks as was stated. They were unheeded so they stopped payments, thus Filinvest
extrajudically foreclosed the RC. A complaint for annulment of contract and damages filed by spouses.

SC

 First part is in relation to lease agreement so I will not discuss it here. On to the main issued
  even if the private respondents could not be adjudged as negligent, they still are precluded from
imputing any liability on the petitioner. One of the stipulations in the contract they
entered into with the petitioner is an express waiver of warranties in favor of the
latter. By so signing the agreement, the private respondents absolved the petitioner from
any liability arising from any defect or deficiency of the machinery they bought .

Harrison v Navarro

Harrison sold to Navarro two elf trucks and assembled it using imported components, with a stipulation
that taxes and custom duties had already been paid.

In 1987, LTO and BIR entered toa MOA which states

“that prior to registration in the LTO of any assembled or re-assembled motor vehicle which used imported
parts, a Certificate of Payment should first be obtained from the BIR to prove payment of all taxes
required under existing laws”

In 1988, the Elf trcusk were seized for unpaid taxes and custom duties. She went to Claros, harrison’s
president to get receipt for cpmpliance with tax, but he refused to comply. Thus the action sum of money

RTC ordered harrision to reimburse Navarro for the taxes and customs duties she had to pay for th elf
trucks.

SC

It is true that the ownership of the trucks shifted to private respondent after the sale. But
petitioner must remember that prior to its consummation it expressly
intimated to her that it had already paid the taxes and customs duties .
Such representation shall be considered as a seller’s express
warranty under Art. 1546 of the Civil Code which covers any
affirmation of fact or any promise by the seller which induces
the buyer to purchase the thing and actually purchases it
relying on such affirmation or promise. It includes all warranties which
are derived from express language, whether the language is in the form of a
promise or representation.

Engineering and Machinery Co v CA

EMC agreed to furnish and install aircondioning systems in Almeda’s bldg. Almeda later sold building.
For failure to pay, possession reverted bak to almeda and he then discovered the defective conditions
of airconditoning systems; that it was not able to achieve the desired room temperature. Thus the
complaint
EMC stated that action prescribed since warranties in Art 1566 and 1567 in relation to 1571 is 6 months

Almeda argues it is a piece of work, thus prescribes in 10 years

RTC: piece of work, thus within 10 year period. EMC ailed to install necessary components

CA affirmed

SC

 Remedies for breach of warranty are, withdraw from contract or reduction or price, with a
claim of damages in both

 The 6 month period in Art 1571 only applies to implied warranties, for express warranties, it is
what is stipulated, if no period stipulated general rule on rescission which is our years

 Does acceptance of work relieve EMC from liability

o it is evident that the defect in the installation was not apparent at the time of the delivery and
acceptance of the work, considering further that plaintiff is not an expert to recognize the same.
From the very nature of things, it is impossible to determine by the simple inspection of air
conditioning system installed in an 8-floor building whether it has been furnished and installed as
per agreed specifications.

 Nevertheless, though the action supposedly prescribed in relation to the warranties, what the
complaint avers of is actually breach of contract, so this action prescribes in 10 years.

Castle v Hermanos

Agreement to buy and sell between agents of plaintiffs and defendants of hemp.

There are two ways by which hemps are marked, either by markings (letters) or by grades(superior,
fair current)

Plaintiff ordered 500 bales or hemps of good current manila. However only 211 of te delivered
satisfied suc h requirement, the 299 were rejected.

Pacific Commercial v Ermita Market and cold stores

Ermita ordered an automatic refrigerating machine from Pacific. For P255 payable in installments. A few
days after installment was completed, Ermita informed Pacific that the ref was not serving its purpose
and lacks ammonia and oil separator. As goodwill, pacific provided oil separator free of charge.To no
avail, the ref did not produce desried result thus the action for non-payment of balance.
Counterclaim by Ermita that ref was not as described in contract, did not reach desired temp to preserve
meat, vegetables, etc. as a result forced to closed. Claim for damages.

Defense on countefclaim: Pacific alleges that any defects were the results of the coils provided by Pacific
but installed by Ermita’s workers, and that those who handled the machine were inefficient and
incompetent.

RTC ordered Ermita to pay the balance of 1740.

SC

 The machines were what they were stated in the contract. There failure to operate efficiently
was the lack of Ermita’s understanding of the machines. That it is not possible for 3 of them to
operate automatically in different rooms, with different temperatures.

 They could not demnd for a thermostate for it is not stipulated in the contract. In relation to oil
separator, it was provided with one but assembled together with receiver and condenser into
one component.

 . It may be that the machine could have given satisfaction to the defendant if
the coils had been installed properly and the machine had been
operated by competent persons. Any deficiency in this regard could not be the
plaintiff's fault; the coils were supplied and installed by someone other than the plaintiff,
and the machine was being operated by the defendant itself

Nutrimix Feeds v CA

Spouses Evangelist ordered from Nutrimix, feeds. They made several orders payable in postdated checks
with 30-45 days credit extensions. They failed to pay an outstanding balance of 766K. Thus filing of
complaint

Spouse’s version is that they stopped payment only when they discovered upon examination of the
feeds that it was the feeds which caused the death of their poultry, hogs, etc. thus they had a legal
ground to stop payment.

Nutrimix alleges that their feeds were not contaminated and poisoning the ffeds may be a scheme for
spouses to avoid payment. The death of the poultry were due to pestilence in farm, not the feeds.

SC:

The requisites to recover from 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 animal feeds, there is an implied warranty that it is reasonably fit and suitable to be
used for the purpose which both parties contemplated. The second requisite requires that
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;[32] or when the
product was sold to the purchaser;[33] or the product must have reached the user or consumer
without substantial change in the condition it was sold

In the case at hand, it is unbelievable that the feeds were contaminated from point of delivery.
The reason for such is that animals started dying after a few hours the feeds were fed. However,
it was only 3 months after that the feeds were examined. In this period of 3 months, the feeds
may already been contaminated by external factors beyond the control of Nutrimix. The
stomachs of the dead chickens were not also examined to determine the cause of death.
Moreover, it was shown that Spouses feeds their hogs with a mixture of feeds because it was
more effective. Thus it cannot be determined whether it was the Nutrimix feeds which caused
their death.