5. Guinhawa v.

People, 468 SCRA 278 (2005)

Facts: Under the company name Guinrox Motor Sales, Jaime Guinhawa was in the business of
selling brand-new automobiles, particularly Mitsubishi vans. He has an office and an automobile
showroom on Panganiban Avenue in Naga City. Gil Azotea worked for him as his sales
manager. Guinhawa bought a brand-new Mitsubishi L-300 Versa Van with the serial number
4D56A-C8929 on March 17, 1995. L069WQZJL-07970 from Paco, Manila's Union Motors
Corporation (UMC). The van had Plate Number. DLK 406. Leopoldo Olayan, Guinhawa's
driver, drove the van from Manila to Naga City. Olayan, however, had a heart attack when the
van he was driving along the highway at Labo, Daet, Camarines Norte. The van went out of
control, traversed the highway onto the opposite lane, and was ditched into the canal parallel to
the highway. The van was damaged, and the left front tire had to be replaced. The incident was
reported to the local police authorities and was recorded in the police blotter. The van was
repaired and later offered for sale in Guinhawa’s showroom. The couple decided to purchase the
van for ₱591,000.00.On October 11, 1995, the couple arrived in Guinhawa’s office to take
delivery of the van. Guinhawa executed the deed of sale, and the couple paid the ₱161,470.00
downpayment, for which they were issued Receipt No. 0309. On October 12, 1995, Josephine
Silo, accompanied by Glenda Pingol, went to Manila on board the L-300 Versa Van, with
Glenda’s husband, Bayani Pingol III, as the driver. Their trip to Manila was uneventful. When
Pingol complained to Guinhawa, the latter told him that the defects were mere factory defects.
The trial court rendered judgment convicting Guinhawa guilty of the crime of Other Deceits
defined and penalized under Art. 318(1) of the Revised Penal Code. The CA ruled that the
private complainant had the right to assume that the van was brand new because Guinhawa held
himself out as a dealer of brand new vans. According to the appellate court, the act of displaying
the van in the showroom without notice to any would-be buyer that it was not a brand new unit
was tantamount to deceit. Thus, in concealing the van’s true condition from the buyer, Guinhawa
committed deceit.

Issue: Whether or not there is a breach of warranty on the part of the seller Jaime Guinhawa.

Ruling: Failure to disclose facts where there is a responsibility to disclose them is considered
fraud, according to Article 1389 of the New Civil Code. When the seller knows a truth that, if
disclosed to the buyer, would make the grounds unsuitable or at the very least significantly less
appealing, the buyer and seller are not in an equal bargaining position. Deception is
accomplished by the suppression of the truth if, in a contract of sale, the vendor knowingly
allowed the vendee to be misled about the thing sold in a material matter by failing to disclose an
intrinsic circumstance that is essential to the contract, knowing that the vendee is acting on the
presumption that no such fact exists.

On the petitioner’s insistence that the private complainant was proscribed from charging him
with estafa based on the principle of caveat emptor, case law has it that this rule only requires the
purchaser to exercise such care and attention as is usually exercised by ordinarily prudent men in
like business affairs, and only applies to defects which are open and patent to the service of one
exercising such care.
It bears stressing that Azotea and the petitioner had every opportunity to reveal to the private
complainant that the van was defective. They resolved to maintain their silence, to the prejudice
of the private complainant, who was a garment merchant and who had no special knowledge of
parts of motor vehicles. Based on the surrounding circumstances, she relied on her belief that the
van was brand new. In fine, she was the innocent victim of the petitioner’s fraudulent
nondisclosure or concealment.

6. Carrascoso, Jr. v. CA, 477 SCRA 666 (2005).

Facts: Fernando Carrascoso, Jr. and El Dorado Plantation, Inc. (El Dorado) signed a Deed of
Sale in March 1972 through board member Lauro Leviste. 1,825 hectares of land were the object
of the auction. It was decided that Carrascoso would pay P1.8 million and P290,000 to PNB to
pay off the mortgage on the subject property. Leviste would receive a straight payment of
P210,000. Over the following three years, P519k will be paid on the 25th of March for the
remaining P1.3M plus 10% interest.
Subsequently, Carrascoso obtained a total of P1.07M as mortgage and he used the same to pay
the down payment agreed upon in the contract. Carrascoso defaulted from his obligation which
was supposed to be settled on March 25, 1975. Leviste then sent him letters to make good his
end of the contract; otherwise, he will be litigated.Meanwhile, El Dorado filed a civil case
against Carrascoso.The Regional Trial Court (RTC) ruled in favor of Carrascoso. The Court of
Appeals (CA), however, reversed the RTC ruling.

Issue: Whether or not the contract entered into by the parties is a contract of sale.

Ruling: YES. The Court held that the contract executed between El Dorado and Carrascoso was
a contract of sale. It was perfected by their meeting of the minds and was consummated by the
delivery of the property to Carrascoso. However, El Dorado has the right to rescind the contract
by reason of Carrascoso’s failure to perform his obligation. A contract of sale is a reciprocal
obligation. The seller obligates itself to transfer the ownership of and deliver a determinate
thing, and the buyer obligates itself to pay therefor a price certain in money or its equivalent. The
non-payment of the price by the buyer is a resolutory condition which extinguishes the
transaction that for a time existed, and discharges the obligations created thereunder. Also, such
failure to pay the price in the manner prescribed by the contract of sale entitles the unpaid seller
to sue for collection or to rescind the contract.