[G.R. No. 149153.

September 12, 2001]

PERCIVAL DE GUZMAN vs. TRIANGLE ACE CORP.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated  SEPT 12 2001.

G.R. No. 149153(Percival de Guzman vs. Triangle Ace Corporation.)

Petitioner Percival de Guzman is engaged in the business of manufacturing and selling reinforced concrete
pipes.From October 1987 to November 1988, he purchased large quantities of steel bars from respondent
Triangle Ace Corporation.Some of the steel bars were used by petitioner in the manufacture of reinforced
concrete pipes which he delivered to the Vinnel Belvoir Corporation.Respondent brought suit against
petitioner in the Regional Trial Court, Branch 72, Olongapo City for recovery of the unpaid price of the steel
bars in the amount of P124,277.00 and obtained a writ of attachment against petitioner.

Petitioner did not deny liability but claimed that his total liability amounted to P115,863.00 only, of which
P36,353.00 had been paid, leaving an unpaid balance of P79,510.00.He filed a counterclaim for damages
allegedly suffered as a result of the cancellation of his contract with the Vinnel Belvoir Corporation due to
the fact that the steel bars delivered by respondent measured only 8 mm. X 20 ft. instead of 9 mm. X 20 ft.
as agreed upon by them.

The trial court gave judgment for respondent and ordered petitioner to pay the amount of  P87,924.00 with
12% annual interest counted from the date of the filing of the complaint, and attorney's fees representing
25% of the principal amount.It found that of the unpaid price of P124,277.00, respondent had made partial
payments in the amounts of P21,453.00 and P15,000.00.On appeal, the Court of Appeals affirmed but set
aside the writ of attachment.The appeals court ruled that petitioner had waived his right to claim damages
for the alleged deliveries of undersized steel bars as he failed to give notice of such fact to respondent within
six months from the date of the delivery of the steel bars.It based its ruling on Art. 1586, in relation to Art.
1571, of the Civil Code.Petitioner filed a motion for reconsideration but his motion was denied.Hence this
petition.

Petitioner contends that he has ten years within which to notify the seller of the breach of warranty.He
argues that since the orders for steel bars were covered by invoices issued by respondent, Art. 1144 (1),
which pertains to the ten-year prescriptive period for filing of actions based upon a written contract, is
applicable.Petitioner adds that since he filed his counterclaim on April 28, 1999, or within ten years from the
deliveries of the steel bars in 1987 and 1988, he should be deemed to have timely notified respondent of
the breach of warranty.

The contention has no merit.Art. 1586 provides that the seller shall not be liable if after the acceptance of
the goods the buyer fails to give notice to the seller of the breach in any warranty within a reasonable time
after the buyer knows, or ought to know of such breach.The Court of Appeals correctly ruled that the
"reasonable time" provided in Art. 1571, which involves the period for the filing of actions for breach of
implied warranty.At any rate, the buyer must notify the seller of the breach of warranty at any time before
the latter has filed the suit for the collection of the unpaid price since the purpose of the rule requiring notice
is to prevent the buyer from interposing belated claims for damages as an offset to a suit begun by the
seller for the purchase price (1 TOLENTINO, CIVIL CODE OF THE PHILIPPINES 134 (2 nd ed., 1999)).In this
case, petitioner has failed to establish by satisfactory evidence that he notified respondent of the delivery of
the alleged undersized steel bars either within six months from his receipt thereof or at any time before the
filing of the complaint by petitioner.

Contrary to petitioner's contention, Art. 1144(1) cannot apply to this case, not only because such provision
refers to the prescriptive period for filing of actions, but also because the period of ten years, counted from
the date of the delivery of the goods, is too long a time within which to notify the seller of the breach of
warranty.
Furthermore, even assuming that the alleged deliveries of the undersized steel bars do not constitute a
breach of warranty but of the terms of the sale itself, respondent's counterclaim cannot prosper.Art. 1595
provides that if the ownership of the goods has passed to the buyer and he wrongfully refuses to pay for
such, the seller may maintain an action for the price of the goods.A buyer is deemed to have accepted the
goods when he does an act inconsistent with the ownership of the seller, or when, after the lapse of a
reasonable time, he retains the goods without intimating to the seller that he has rejected them (Civil Code,
Art. 1585).In the case at bar, there is no dispute that the steel bars purchased by petitioner were received
by him.It is also not disputed that petitioner made partial payments for the goods and that some of the steel
bars were in fact used by him to manufacture reinforced concrete pipes although they were allegedly
rejected on the ground that the steel bars were undersized.The retention and use of the steel bars by
petitioner clearly show that he accepted the goods and for this reason he should pay of the price of the
same.

For the foregoing reasons, the Court RESOLVED to DENY the petition for lack of showing that the Court of
Appeals committed a reversible error.