Conditions and Warranties Cases

1.) Palanca vs Dir. of lands

FACTS :
-- Carlos Palanca is the applicant for the registration of the

parcel of land marked lot No. 2 described in the plan

accompanying his application. Roman Santos opposes the
registration of the eastern portion of this lot which is
more fully described in his written opposition.
- the sisters Irene Mojica and Consuelo Mojica sold the hacienda
composed of these two lots to Felipe Buencamino Suntay .
Suntay sold the same lands to Carlos Palanca.
- - In the description of this hacienda in the document of

sale to Suntay the portion claimed by Roman Santos appears to

have been excluded. Mojic sisters sold to the opponent Roman
Santos the said portion that had been excluded. The deeds of
sale of SUNTAY. PALANCA AND SANTOS WERE ALL RECORDED.
- The hacienda, composed of lots Nos. 1 and 2, Benito Mojica

( original owner- deceased ) considered it as a single property

calling it "Hacienda of Sapang Cawayan," which includes the
part sold to Santos.
-Prior to sale . Benito Mojica leased a small part within
this hacienda to Song Fo & Company in order to erect thereon a
structure for the manufacture of alcohol but After the death of
Benito Mojica Irene Mojica, cancelled the former contract with
Song Fo & Company and on December 21, 1911, entered into a
new agreement with him for the lease of the entire property. In
the second contract of lease the property was described and the

part now objected to was excluded from the description.

Notwithstanding this fact we are persuaded that, in selling the
land, it was not the intention of the parties to exclude any
portion.

Issue : WON the contract of sale of land sold to Suntay includes

the portion sold to Santos .
Held :
( true intentions of parties vs description in contract of
sale ) -if the true intention of the parties was to sell the portion
now in question, the mere fact of having been excluded from
the description contained in the document of sale of the said
property is a mistake which cannot annul the intention of
the contracting parties. The document is nothing more than
a mere formality of the contract, and cannot prevail as against
the contract itself which may be proved by extraneous facts.
( Preference in registration ) - It results, therefore,
that the land under discussion was twice sold to two
different purchasers. In accordance with article 1473 of the
Civil Code the sale that was first recorded must be given
preference. Although the sale to Suntay and the sale by the
latter to Palanca were recorded, it must be deemed that no
record was made as to the portion of land in question.
For the purposes of article 1473, the record in the
registry is tantamount to a notice of the fact of the
existence of the contract. But, as in the deeds
containing these contracts the portion of land under
discussion does not appear, the registration of the
documents cannot be considered as a notice of the sale
of the said portion.

- ( Purchaser in bad faith ) On the other hand, although the

sale to Roman Santos was also recorded, it was only effected
after the herein applicant had already filed his application for
this land claiming to have bought it from the sisters Mojica and
after the said Palanca had filed an opposition to the application
of Roman Santos for the registration of the said parcel of land,
consequently the record made by santos was not in
good faith and he cannot base his preference of title
thereon. the record to which article 1473 of the civil
code refers is that made in good faith, for the law will
not protect anything done in bad faith. CONSEQUENTLY
THE RECORD MADE BY SANTOS WAS NOT IN GOOD FAITH AND
HE CANNOT BASE HIS PREFERENCE OF TITLE.

2.) Sigaya VS Mayuga

FACTS :

- Dionisia Alorsabes owned a three hectare land in Dao, Capiz,

denominated as Lot 3603. She sold a portion of the lot to Juanito
Fuentes while the remainder was inherited by her children Paz
Dela Cruz, Rosela Dela Cruz, and Consorcia Arroja (an adopted
child), and a grandson, Francisco Abas, in representation of his
deceased mother Margarita Dela Cruz.
-These four heirs executed an Extra-Judicial Settlement with
Sale dated Consorcia sold her share with an area of 6,694 square
meters to spouses Balleriano Mayuga. ( respondent ) . Paz also
sold her share to Honorato de los Santos.

- Later, another document entitled Extra-Judicial Partition

with Deed of Sale was uncovered wherein the heirs of Dionisia
purportedly adjudicated Lot 3603 among themselves and sold
their shares to Francisco. Francisco executed a Deed of Sale
over Lot 3603 in favor of Teodulfo Sigaya. Thus, the title over Lot
3603 was cancelled and a new one was issued in the name of
TEODULFO Sigaya, predecessor-in-interest of the petitioners
herein.
- ( TO WHOM IT IS SOLD ) Respondent Mayuga further asserted
that he possesses his portion of the property by virtue of the
sale by Consorcia Arroja of her share to his parents, Sps.
Balleriano Mayuga. Respondent de los Santos meanwhile
averred that Paz Dela Cruz sold her share to him in 1957.
Respondents Rosela Dela Cruz-Viva and her husband Jose Viva
claimed that the portion of land occupied by them pertains to
Rosela's share which she inherited from Dionisia, while
respondent Renato Distor claimed that his wife inherited said
property from her father Juanito Fuentes, who in turn bought the
same from Dionisia during her lifetime
- Petitioners argue that: Teodulfo, their predecessor-in-interest,
purchased the subject property from Francisco, who was in
possession of the Original Certificate of Title (OCT) ), with ExtraJudicial Partition with Deed of Sale . Relying on these instruments
and after inspecting the land and seeing that nobody occupied
the same, Teodulfo bought the land and had the title
subsequently issued in his name;
-Respondents in their Comment meanwhile contend that:
Teodulfo relied on a title that is not in the name of his
transferor, Francisco, but on its registered owner, it was
incumbent upon Teodulfo to examine further the extent of the

right of the supposed transferor and why there were a lot of

occupants in the land in dispute

issue : WHETHER A PERSON DEALING WITH A REGISTERED

LAND CAN SAFELY RELY ON THE CORRECTNESS OF THE
CERTIFICATE OF TITLE ISSUED THEREFOR
HELD:
Indeed, it is a well-settled rule that every person dealing with
registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige
him to go beyond the certificate to determine the condition of the
property. Where there is nothing in the certificate of title to
indicate any cloud or vice in the ownership of the property, or any
encumbrance thereon, the purchaser is not required to explore
further than what the Torrens Title upon its face indicates in quest
for any hidden defects or inchoate right that may subsequently
defeat his right thereto.

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However, this rule shall not apply when the party has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably prudent man
to inquire into the status of the title of the property in litigation.
( IN CASE AT BAR petitioners failed to show that they fall under
any of the exceptional circumstances) .
In this case, preponderance of evidence shows that respondents
had been in actual possession of their respective portions even
prior to 1960. THUS ( teodulfo is NOT a purchaser in goodfaith ).
- ( DOUBLE SALE ) - the law on double sales as provided in Art.
1544 of the Civil Code38 contemplates a situation where a single

vendor sold one and the same immovable property to two or

more buyers. For the rule to apply, it is necessary that the
conveyance must have been made by a party who has an
existing right in the thing and the power to dispose it. The rule
cannot be invoked where the two different contracts of sale are
made by two different persons, one of them not being the owner
of the property sold.

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In this case, respondents derive their right

over their respective portions either through inheritance or sale

from Dionisia while petitioners' invoke their right from the sale of
the land from Francisco. Clearly, the law on double sales does not
apply here.

3.) YAP CHUAN VS TIAOQUI

FACTS :
-plaintiff filed a written complaint in the Court of First Instance of Manila
claied that plaintiff leased the building at No. 218 Calle Rosario, owned
by the defendant, up to December 31 of the same year because of the
leaks in the roof of the storeroom of said building, without fault or
negligence on the plaintiff's part, some of his merchandise stored in
said storeroom was so wet and damaged as to cause him a loss
amounting to P1,169

- afterwards the defendant expressly authorized the plaintiff to sell the

damaged goods at any price, promising to pay the difference between
the selling price and the regular price of the articles in good condition;
that by virtue of said authorization and promise, plaintiff accordingly
disposed of all the damaged goods that could be sold, at a loss of
P1,169; and that notwithstanding the repeated demands made upon

him to pay this amount, according to promise, said defendant had

refused and refuses to pay
- defendant filed his answer stating that that the building the plaintiff
occupies had been recently finished, the construction thereof having been
under the direction and inspection of an engineer, after approval of the
plans and specifications by the engineering and sanitation departments
that the wetting the plaintiff's merchandise sustained from that rainfall
was not caused wholly by the leaks and drips but was in large part due to
the improper situation or location of said merchandise inside the building;
that in neither case was there fault or negligence on defendant's part,
said occurrence having been unforeseen, or, even being foreseen,
unavoidable

-that the wetting the plaintiff's merchandise sustained from that rainfall
was not caused wholly by the leaks and drips but was in large part due to
the improper situation or location of said merchandise inside the building;
that in neither case was there fault or negligence on defendant's part,
said occurrence having been unforeseen, or, even being foreseen,
unavoidable
-Defendant's building, composed of four apartments, had just been
finished and a few months ago was inspected by the city engineer and
approved for the use for which it was intended. There is no record that
said building presented any indication or sign of having defects in its roof
such as might cause leaks and damage to the merchandise placed
therein

held :
- Article 1562 of the same code reads: "If, at the time of the lease of
the estate, the condition of the same was not mentioned, the law

presumes that the lessee received it in good condition, unless there

be proof to the contrary."
The fact is that neither the lessor nor the lessees knew that the roof
was defective and was going to leak when it rained, for they only
became aware of the leaks during the rainstorm on the afternoon of
the day the occurrence was undoubtedly due toforce majeure, being
a fortuitous event which could not have been foreseen by the owner
or the plaintiff-tenants, or many other proprietors of stores whose
interiors were flooded as a result of that heavy rainfall, and
consequently the damages and losses the water inflicted upon the
plaintiffs could not be ascribed to the owner of the premises so as to
hold him liable for the indemnity.
Article 1105 of the same Code prescribes: "No one
shall be liable for events which could not be foreseen, or
which having been foreseen were inevitable, with the
exception of the cases expressly mentioned in the law or
those in which the obligation so declares."

Being evidently a fortuitous event, unforeseeable by any of the litigating

parties, inevitable on account of force majeure, the case discloses no
proof of any kind that the defendant Tiaoqui knew that the roof of the
building leased to the plaintiffs had cracks or defects in it that would
cause leakages, just as the plaintiff-tenants did not know that fact
themselves, for otherwise they would have notified the defendant-lessor
in due season and demanded immediate repair thereof so as to avoid
injury to their interests

Nobody, neither the defendant nor the plaintiffs, could have foreseen that
on the said afternoon of April 14 it was going to rain in torrents and in an
extraordinary manne
- In connection with a lease, warranty is the obligation to repair or

correct the error whereunder the lessee took over the property
leased, but when the law declares that the lessor must warrant the

thing leased, it is not to be understood that he must also indemnify

the lessee. Liability for the warranty is not equivalent to liability in
damages, as the latter is an obligation distinct from the former.
- For proper understanding of the provisions of articles 1484 and
1485 of the Civil Code dealing with warranty it is necessary to
remember that under their provisions the-lessor is liable for the
warranty of the thing leased against any hidden defects it may have,
even when unknown to said lessor, but this liability for warranty of
the thing leased does not amount to an obligation to indemnify the
tenant for damages, which is only to be allowed when there is proof
that the lessor acted with fraud and in bad faith by concealing the
defect in the thing leased and in not revealing it to the lessee.
- Hence, while the lessor is obligated by general rule to warranty of
the thing leased, whether or not he may know of the existence
therein of defects that render it inadequate for the use the tenant
intends, he is only liable for an indemnity for damages in addition to
the warranty when he knew of the defects in the thing leased and
had not revealed them to the lessee, a procedure which induces the
presumption that he acted with fraud and in bad faith; but in order to
hold him responsible for the damages and losses caused by such
defects there must be the express condition that the lessee should
choose rescission of the contract, according to the prescription of
the second paragraph of the article quoted above, whence it is
inferred that, should the lessee insist upon continuing the contract
by occupying the property, he must be understood to have waived
the indemnity.

4.) MOLES VS IAC

FACTS :

-petitioner needed a linotype printing machine for his printing

business, The LM Press at Bacolod City, and applied for an
industrial loan with the Development Bank of the Philippines,
(hereinafter, DBP) for the purchase thereof. An agent of Smith,
Bell and Co. who is a friend of petitioner introduced the latter to
private respondent, owner of the Diolosa Publishing House in
Iloilo City, who had two available machines. Thereafter, petitioner

went to Iloilo City to inspect the two machines offered for sale
and was informed that the same were secondhand but functional.
-On his second visit to the Diolosa Publishing House, petitioner
together with Rogelio Yusay, a letterpress machine operator,
decided to buy the linotype machine, Model 14. The transaction
was basically verbal in nature but to facilitate the loan application
with the DBP, a pro forma invoice
-the machine was delivered to petitioner's publishing house at
Tangub, Bacolod City where it was installed by one Crispino
Escurido, private respondent issued a certification wherein he
warranted that the machine sold was in "A-1 condition", together
with other express warranties.

- Prior to the release of the loan, a representative from the DBP,

Bacolod, supposedly inspected the machine but he merely looked
at it to see that it was there 8 The inspector's recommendation
was favorable and, thereafter, petitioner's loan of P50,000.00 was
granted and released.
On November 29, 1977, petitioner wrote private respondent that
the machine was not functioning properly as it needed a new
distributor bar.
Private respondent made no reply to said letter, so petitioner
engaged the services of other technicians. Later, after several
telephone calls regarding the defects in the machine, 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

private respondent decided to purchase a new distributor bar

when thereafter petitioner asked private respondent to pay for
the price of the distributor bar, the latter asked petitioner to
share the cost with him. Petitioner thus finally decided to indorse
the matter to his lawyer.

ISSUE : WON an article that is sold as a secondhand item, a gives

an implied warranty of its quality or fitness.
Held :

On the basis of the foregoing circumstances, the inescapable

conclusion is that private respondent is indeed bound by the
express warranty he executed in favor of herein petitioner
His certification as to the condition of the machine was not made
to induce petitioner to purchase it but to confirm in writing for
purposes of the financing aspect of the transaction his
representations thereon. Ordinarily, what does not appear on the
face of the written instrument should be regarded as dealer's or
trader's talk;

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conversely, what is specifically represented as

true in said document, as in the instant case, cannot be

considered as mere dealer's talk.
- 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. In a line of decisions
rendered by the United States Supreme Court, it had theretofore
been held that 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.
Thus, in finding for private respondent, the respondent court
cited the ruling in Sison vs. Ago, et al. to the effect that unless

goods are sold as to raise an implied warranty, as a general rule

there is no implied warranty in the sale of secondhand articles.
EXCEPTIONS. The general rule, however, is not without
exceptions. Article 1562 of our Civil Code, which was taken from
the Uniform Sales Act, provides: "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;" Furthermore, and
of a more determinative role in this case, a perusal of past
American decisions likewise reveals a uniform pattern of rulings
to the effect that an express warranty can be made by and also
be binding on the seller even in the sale of a secondhand article.

- On the question as to whether the hidden defects in the

machine is sufficient to warrant a rescission of the contract
between the parties, we have to consider the rule on redhibitory
defects contemplated in Article 1561 of the Civil Code. A
redhibitory defect must be an imperfection or defect of such
nature as to engender a certain degree of importance. An
imperfection or defect of little consequence does not come within
the category of being redhibitory.

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(REDHIBITORY DEFECT; MUST BE AN IMPERFECTION OR DEFECT

OF SUCH NATURE AS TO ENGENDER A CERTAIN DEGREE OF
IMPORTANCE. On the question as to whether the hidden
defects in the machine is sufficient to warrant a rescission of the

contract between the parties, we have to consider the rule on

redhibitory defects contemplated in Article 1561 of the Civil Code.
A redhibitory defect must be an imperfection or defect of such
nature as to engender a certain degree of importance. An
imperfection or defect of little consequence does not come within
the category of being redhibitory.)