JOSEPH HARRY WALTER POOLE-BLUNDEN V.

UNION BANK OF THE

PHILIPPINES
G.R. NO. 205838

FACTS: 
Petitioner came across an advertisement for public auction of certain properties placed by
Union Bank in the Manila Bulletin. One of these properties was a unit of T-Tower
Condominium located at Makati. The condominium unit was acquired by UnionBank
through forclosure proceedings. Petitioner won the bid and he entered to a Contract to
Sell with UnionBank. Petitioner decided to construct two additional bedrooms in the
unit.. He took a rough measurement and found that the floor area was just 70 sqm, not 95
sqm as advertised. He got in touch with an officer of UnionBank, but no action was
taken. He then wrote to Unionbank to inform them of the discrepancy and asked for the
rescission of the Contract to Sell, along with the refund of the amounts he had paid.
UnionBank replied that upon inquiring with the Homeowners’s Association of T-Tower,
the unit was confirmed to be 95 sqm inclusive of the terrace and the comon areas. The
petitioner was not satisfied. He hired an independent geodetic engineer. It was found out
that the actual area was only 74.4 sqm and gave a copy of the certification to Unionbank.
UnionBank explained that the total area of the unit is based on the  ratio allocation
maintenance cost submitted by the developer to HLURB is 98 square meters. On the
other hand, the actual area thereof based on the measurements made by its surveyor is
74.18 square meters which was much higher than the unit area of 60 square meters that
was approved by HLURB. 

GENERAL ISSUE: 
Whether or not fraud would constitute the voiding of the Contract of Sell

CONTROLLING ISSUE:
Whether or not UnionBank committed such a degree of fraud that would entitle the
petitoner to the voiding of the Contract to Sell the said condominium unit.

RULING: YES
Petitioner's contention on how crucial the dimensions and area of the Unit are to his
decision to proceed with the purchase is well-taken. The significance of space and
dimensions to any buyer of real property is plain to see. This is particularly significant to
buyers of condominium units in urban areas, and even more so in central business
districts, where the scarcity of space drives vertical construction and propels property
values. 
The defense of "as-is-where-is" terms of the purchase is untenable. First, a stipulation
absolving a seller of liability for hidden defects can only be invoked by a seller who has
no knowledge of hidden defects. Respondent here knew that the Unit's area, as reckoned
in accordance with the Condominium Act, was not 95 square meters. Second, an as-is-
where-is stipulation can only pertain to the readily perceptible physical state of the object
of a sale. It cannot encompass matters that require specialized scrutiny, as well as features
and traits that are immediately appreciable only by someone with technical competence.
Thus, the Court ordered that the Contract to Sell between petitioner and respondent be
annulled, and petitioner be refunded all the amounts he paid to respondent in respect of
the purchase of the Unit plus damages.

DISPOSITION:
WHEREFORE, the Petition is GRANTED.