the yanga report

CARLOS B. DE GUZMAN  vs. TOYOTA CUBAO, INC.

G.R. No. 141480      November 29, 2006

 

Facts:  On November 27, 1997, petitioner purchased from respondent a brand new white Toyota Hi-Lux 2.4 SS double cab motor vehicle, 1996 model, in the amount of P508,000.  Petitioner made a down payment of P152,400, leaving a balance of P355,600 which was payable in 36 months with 54% interest.  The vehicle was delivered to petitioner two days later.  On October 18, 1998, petitioner demanded the replacement of the engine of the vehicle because it developed a crack after traversing Marcos Highway during a heavy rain.  Petitioner asserted that respondent should replace the engine with a new one based on an implied warranty. Respondent countered that the alleged damage on the engine was not covered by a warranty. 

   On April 20, 1999, petitioner filed a complaint for damages against respondent with the RTC.  Respondent moved to dismiss the case on the ground that under Article 1571 of the Civil Code, the petitioner’s cause of action had prescribed as the case was filed more than six months from the date the vehicle was sold and/or delivered.    

Issue: Whether or not there was implied warranty?

Held:    Under Article 1599 of the Civil Code, once an express warranty is breached, the buyer can accept or keep the goods and maintain an action against the seller for damages.  In the absence of an existing express warranty on the part of the respondent, as in this case, the allegations in petitioner’s complaint for damages were clearly anchored on the enforcement of an implied warranty against hidden defects, i.e., that the engine of the vehicle which respondent had sold to him was not defective.  By filing this case, petitioner wants to hold respondent responsible for breach of implied warranty for having sold a vehicle with defective engine.  Such being the case, petitioner should have exercised this right within six months from the delivery of the thing sold.      Since petitioner filed the complaint on April 20, 1999, or more than nineteen months counted from November 29, 1997 (the date of the delivery of the motor vehicle), his cause of action had become time-barred.  

Petitioner contends that the subject motor vehicle comes within the context of Republic Act No. 7394.  Thus, petitioner relies on Article 68 (f) (2) in relation to Article 169 of Republic Act No. 7394.  Article 4 (q) of the said law defines “consumer products and services” as goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include, but not limited to, food, drugs, cosmetics, and devices.  The following provisions of Republic Act No. 7394 state:        

Art. 67. Applicable Law on Warranties. — The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties.

Art. 68.  Additional Provisions on Warranties. — In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the sale of consumer products with warranty: 

e)  Duration of warranty.  The seller and the consumer may stipulate the period within which the express warranty shall be enforceable.  If the implied warranty on merchantability accompanies an express warranty, both will be of equal duration.

Any other implied warranty shall endure not less than sixty (60) days nor more than one (1) year following the sale of new consumer products.

            f)  Breach of warranties — xxx

           

x x x

2)  In case of breach of implied warranty, the consumer may retain in the goods and recover damages, or reject the goods, cancel the contract and recover from the seller so much of the purchase price as has been paid, including damages.  (Emphasis supplied.)

          Consequently, even if the complaint is made to fall under the Republic Act No. 7394, the same should still be dismissed since the prescriptive period for implied warranty thereunder, which is one year, had likewise lapsed. 

G.R. No. L-45519    April 26, 1939

RUFINA SALAO and LUCIO LUCAS
vs.
TEOFILO C. SANTOS, municipal president of Malabon, Rizal, and ELIGIO GOZON.

Facts:  The present action was instituted by plaintiffs Rufina Salao and Lucio Lucas, now appellants, to restrain the defendant, Teofilo C. Santos, as municipal president of Malabon, Rizal, from enforcing compliance with his letter of October 22, 1935, wherein said plaintiffs were directed to observe he requirements of ordinance No. 23, series of 1929, of said municipality, on the matter of the operation of their smoked fish factory (umbuyan).

    The evidence discloses that for many years prior to the enactment of this ordinance, plaintiffs had already established a smoked fish factory in the barrio of Baritan, Malabon, Rizal, and had continually operated the same since then. On October 30, 1933, Lucio Lucas, one of the plaintiffs herein, was criminally prosecuted in the justice of the peace court of Malabon for non-compliance with the requirements of the ordinance aforementioned, but was acquitted to the charge. Thereafter, the intervenor herein, Eligio Gozon. whose house is situated near the smoked fish factory of the appellants, denounced said factory as a nuisance, by lodging a complaint in the central office of the Bureau of Health seeking relief against its continuance. 

Issue:   W/Not the smoked fish factory is a nuisance per se or per accidens?

Held:   It is not disputed that appellants' smoked fish factory was established long before the enactment of the ordinance in question. Municipal ordinances, like all statutes, are to be construed as having only prospective operation unless the intention to give them retrospective effect is expressly declared or is necessarily implied from the language used. There is nothing in the ordinance showing the intention to give it a retrospective effect. On the contrary, it expressly refers to "fabrica o negocio que se ha de levantar" and not to factories already established. That such was the intention of the ordinance of 1929 is confirmed by ordinance No. 10 of 1935, which expressly provides that the amended ordinance "shall not be applicable to those already operating at the time of the approval" of the same.

    Moreover, nuisances are of two kinds: nuisance per se and nuisance per accidens. The first is recognized as a nuisance under any and all circumstances, because it constitutes a direct menace to public health or safety, and, for that reason, may be abated summarily under the undefined law of necessity. The second is that which depends upon certain conditions and circumstances, and its existence being a question of fact, it cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing does in law constitute a nuisance. (Iloilo Ice and Cold Storage Co. vs. Municipal Council of Iloilo, 24 Phil., 471; Monteverde vs.Generoso, 52 Phil., 123, 127.) Appellants' smoked fish factory is not a nuisance per se. It is a legitimate industry. If it be, in fact, a nuisance due to the manner of its operation, then it would be merely a nuisance per accidens. (Iloilo Ice and Cold Storage Co. vs. Municipal Council of Iloilo, supra; Monteverde vs. Generoso, supra.) Consequently, the order of the municipal president and those of the health authorities issued with a view to the summary abatement of what they have concluded, by their own findings, as a nuisance, are null and void there having been no hearing in court to the effect

G.R. No. 167213   October 31, 2006

DARREL CORDERO, EGMEDIO BAUTISTA, ROSEMAY BAUTISTA, MARION BAUTISTA, DANNY BOY CORDERO, LADYLYN CORDERO and BELEN CORDERO, petitioners,
vs.
F.S. MANAGEMENT & DEVELOPMENT CORPORATION, respondent.

Facts:   On or about October 27, 1994, petitioner Belen Cordero (Belen), in her own behalf and as attorney-in-fact of her co-petitioners Darrel Cordero, Egmedio Bautista, Rosemay Bautista, Marion Bautista, Danny Boy Cordero and Ladylyn Cordero, entered into a contract to sell with respondent, F.S. Management and Development Corporation, through its chairman Roberto P. Tolentino over five (5) parcels of land located in Nasugbu, Batangas described in and covered by TCT Nos. 62692, 62693, 62694, 62695 and 20987.

    Pursuant to the terms and conditions of the contract to sell, respondent paid earnest money in the amount ofP500,000 on October 27, 1994. She likewise paid P1,000,000 on June 30, 1995 and another P1,000,000 on July 6, 1995. No further payments were made thereafter.

    Petitioners thus sent respondent a demand letter dated November 28, 1996 informing her that they were revoking/canceling the contract to sell and were treating the payments already made as payment for damages suffered as a result of the breach of contract, and demanding the payment of the amount of P10 Million Pesos for actual damages suffered due to loss of income by reason thereof. Respondent ignored the demand, however.

Hence, on February 21, 1997, petitioner Belen, in her own behalf and as attorney-in-fact of her co-petitioners, filed before the RTC of Parañaque a complaint for rescission of contract with damages alleging that respondent failed to comply with its obligations under the contract to sell, specifically its obligation to pay the downpayment ofP3.5 Million by April 30, 1995, and the balance within 18 months thereafter; and that consequently petitioners are entitled to rescind the contract to sell as well as demand the payment of damages.

Issues:    1. Whether or not a contract to sell may be subject to rescission under Article 1191 of the Civil                             Code.

              2. Whether or not the Court of Appeals erred in setting aside the award of damages.

Held:  In the present case, the nature as well as the characteristics of a contract to sell is determinative of the propriety of the remedy of rescission and the award of damages. As will be discussed shortly, the trial court committed manifest error in applying Article 1191 of the Civil Code to the present case, a fundamental error which "lies at the base and foundation of the proceeding, affecting the judgment necessarily," or, as otherwise expressed, "such manifest error as when removed destroys the foundation of the judgment." Hence, the Court of Appeals correctly ruled on these matters even if they were not raised in the appeal briefs.

Under a contract to sell, the seller retains title to the thing to be sold until the purchaser fully pays the agreed purchase price. The full payment is a positive suspensive condition, the non-fulfillment of which is not a breach of contract but merely an event that prevents the seller from conveying title to the purchaser. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect.

Since the obligation of petitioners did not arise because of the failure of respondent to fully pay the purchase price, Article 1191 of the Civil Code would have no application.

        The subject contract to sell clearly states that "title will be transferred by the owner (petitioners) to the buyer (respondent) upon complete payment of the agreed purchase price." Since respondent failed to fully pay the purchase price, petitioners’ obligation to convey title to the properties did not arise. While rescission does not apply in this case, petitioners may nevertheless cancel the contract to sell, their obligation not having arisen.This brings this Court to Republic Act No. 6552 (THE REALTY INSTALLMENT BUYER PROTECTION ACT). 

        The properties subject of the contract having been intended for commercial, and not for residential, purposes, petitioners are entitled to retain the payments already made by respondent. RA 6552 expressly recognizes the vendor’s right to cancel contracts to sell on installment basis industrial and commercial properties with full retention of previous payments. But even assuming that the properties were not intended for commercial or industrial purpose, since respondent paid less than two years of installments, it is not entitled to any refund.³³ It is on this score that a modification of the challenged issuances of the appellate court is in order.

Respecting petitioners’ claim for damages, failure to make full payment of the purchase price in a contract to sell is not really a breach, serious or otherwise, but, as priorly stated, an event that prevents the obligation of the vendor to convey title to the property from arising.Consequently, the award of damages is not warranted in this case.

  

HEIRS OF PAULINO ATIENZA,      G.R. No. 180665

vs.  DOMINGO P. ESPIDOL,            August 11, 2010

Facts:   Petitioner Heirs of Paulino Atienza, namely, Rufina L. Atienza, Anicia A. Ignacio, Roberto Atienza, Maura A. Domingo, Ambrocio Atienza, Maxima Atienza, Luisito Atienza, Celestina A. Gonzales, Regalado Atienza and Melita A. Dela Cruz (collectively, the Atienzas) own a 21,959 square meters of registered agricultural land at Valle Cruz, Cabanatuan City.  They acquired the land under an emancipation patent through the government’s land reform program.

    On August 12, 2002 the Atienzas and respondent Domingo P. Espidol entered into a contract called Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad (contract to sell land with a down payment) covering the property.  They agreed on a price of P130.00 per square meter or a total of P2,854,670.00, payable in three installments: P100,000.00 upon the signing of the contract; P1,750,000.00 in December 2002, and the remaining P974,670.00 in June 2003. Respondent Espidol paid the Atienzas P100,000.00 upon the execution of the contract and paid P30,000.00 in commission to the brokers. 

        When the Atienzas demanded payment of the second installment of P1,750,000.00 in December 2002, however, respondent Espidol could not pay it.  He offered to pay the Atienzas P500.000.00 in the meantime,which they did not accept.  Claiming that Espidol breached his obligation, on February 21, 2003 the Atienzas filed a complaint for the annulment of their agreement with damages before the Regional Trial Court (RTC) of Cabanatuan City.

 Issues:   1.       Whether or not the Atienzas could validly sell to respondent Espidol the subject land which they acquired through land reform under Presidential Decree 27(P.D. 27);

2.       Whether or not the Atienzas were entitled to the cancellation of the contract to sell they entered into with respondent Espidol on the ground of the latter’s failure to pay the second installment when it fell due; and

3.       Whether or not the Atienzas’ action for cancellation of title was premature absent the notarial notice of cancellation required by R.A. 6552.

Held:    One.  The Atienzas’ title shows on its face that the government granted title to them on January 9, 1990 by virtue of P.D. 27.  This law explicitly prohibits any form of transfer of the land granted under it except to the government or by hereditary succession to the successors of the farmer beneficiary. 

Upon the enactment of Executive Order 228 in 1987, however, the restriction ceased to be absolute.  Land reform beneficiaries were allowed to transfer ownership of their lands provided that their amortizations with the Land Bank of the Philippines (Land Bank) have been paid in full.  In this case, the Atienzas’ title categorically states that they have fully complied with the requirements for the final grant of title under P.D. 27.  This means that they have completed payment of their amortization with Land Bank.  Consequently, they could already legally transfer their title to another. 

Two.  Regarding the right to cancel the contract for non-payment of an installment, there is need to initially determine if what the parties had was a contract of sale or a contract to sell.  In a contract of sale, the title to the property passes to the buyer upon the delivery of the thing sold.  In a contract to sell, on the other hand, the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full payment of the purchase price.  In the contract of sale, the buyer’s non-payment of the price is a negative resolutory condition; in the contract to sell, the buyer’s full payment of the price is a positive suspensive condition to the coming into effect of the agreement.  In the first case, the seller has lost and cannot recover the ownership of the property unless he takes action to set aside the contract of sale.  In the second case, the title simply remains in the seller if the buyer does not comply with the condition precedent of making payment at the time specified in the contract. Here, it is quite evident that the contract involved was one of a contract to sell since the Atienzas, as sellers, were to retain title of ownership to the land until respondent Espidol, the buyer, has paid the agreed price.  Indeed, there seems no question that the parties understood this to be the case.

Admittedly, Espidol was unable to pay the second installment of P1,750,000.00 that fell due in December 2002.  That payment, said both the RTC and the CA, was a positive suspensive condition failure of which was not regarded a breach in the sense that there can be no rescission of an obligation (to turn over title) that did not yet exist since the suspensive condition had not taken place.  And this is correct so far.  Unfortunately, the RTC and the CA concluded that should Espidol eventually pay the price of the land, though not on time, the Atienzas were bound to comply with their obligation to sell the same to him. 

 But this is error.  In the first place, since Espidol failed to pay the installment on a day certain fixed in their agreement, the Atienzas can afterwards validly cancel and ignore the contract to sell because their obligation to sell under it did not arise.  Since the suspensive condition did not arise, the parties stood as if the conditional obligation had never existed. 

The Atienzas had the right to seek judicial declaration of such non-existent status of that contract to relieve themselves of any liability should they decide to sell the property to someone else.  Parenthetically, Espidol never offered to settle the full amount of the price in June 2003, when the last installment fell due, or during the whole time the case was pending before the RTC.

 Three.  Notice of cancellation by notarial act need not be given before the contract between the Atienzas and respondent Espidol may be validly declare non-existent.  R.A. 6552 which mandated the giving of such notice does not apply to this case.  The cancellation envisioned in that law pertains to extrajudicial cancellation or one done outside of court,which is not the mode availed of here.  The Atienzas came to court to seek the declaration of its obligation under the contract to sell cancelled.  Thus, the absence of that notice does not bar the filing of their action.

  Since the contract has ceased to exist, equity would, of course, demand that, in the absence of stipulation, the amount paid by respondent Espidol be returned, the purpose for which it was given not having been attained; and considering that the Atienzas have consistently expressed their desire to refund the P130,000.00 that Espidol paid.

    The Court declares the Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad between petitioner Heirs of Paulino Atienza and respondent Domingo P. Espidol dated August 12, 2002 cancelled and the Heirs’ obligation under it non-existent.  The Court directs petitioner Heirs of Atienza to reimburse the P130,000.00 down payment to respondent Espidol.

Spouses Eulogio N. Antazo

vs. Leonides Doblada, Diosdado  G.R. no. 178908 February 4, 2010

Facts: Respondents, Leonides Doblada, Diosdado Celestra, Leopoldo Celestra, Ferdinand Celestra, and Roberto Doblada, filed a complaint for forcible entry against petitioners, spouses Eulogio N. Antazo and Nelia C. Antazo. The complaint alleged that respondents have been in open and peaceful possession of a parcel of land, identified as Assessor’s Lot Nos. 112 and 113, located in Barangay Pila-Pila, Binangonan, Rizal, with an area of, approximately, 551.87 square meters.

     Respondents narrated that, in May 2003, they received a letter from petitioners, through the Panganiban Law Office, informing them that the latter had bought the property. It was made to appear in the said letter that respondents forcibly took possession of the property from petitioners. Respondents replied that they could not have wrested possession of the property from petitioners, as they were in possession thereof and that, in fact, on June 11, 2003, petitioners evicted them therefrom, destroyed respondents’ bamboo fence, and constructed a concrete perimeter fence thereon.

      In their Answer, petitioners admitted that they sent a letter to respondents through the Panganiban Law Office, but they denied that respondents had been in possession of the property since time immemorial. They averred that respondents failed to show their right to recover possession of the property. On the contrary, petitioners claimed that they are the ones entitled to possess the property considering that they purchased it from a certain Carmencita S. Anciano, registered it for taxation purposes in their names, and paid the real property tax thereon.

Issue: W/not respondents commit forcible entry?

Held:  Petitioners’ argument is misplaced, considering that this is a forcible entry case. They are apparently referring to “possession” flowing from ownership of the property, as opposed to actual possession. In ejectment cases, possession means nothing more than actual physical possession, not legal possession in the sense contemplated in civil law.    

Prior physical possession is the primary consideration in a forcible entry case. A party who can prove prior possession can recover such possession even against the owner himself. Whatever may be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain on the property until a person with a better right lawfully ejects him. The party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror.

We are convinced that respondents were in prior possession of the property and that petitioners deprived them of such possession by means of force.

We also note that petitioners did not deny in their Answer respondents’ allegation that they constructed a concrete fence on the subject property. Failure to specifically deny the allegation amounts to a judicial admission. Unlawfully entering the subject property, erecting a structure thereon and excluding therefrom the prior possessor would necessarily imply the use of force. In order to constitute force, the trespasser does not have to institute a state of war. No other proof is necessary.

This case involves respondents’ cause of action against petitioners for evicting them from the subject property which was in their possession. It is immaterial how respondents came into such possession or by what right they did so. Even usurpers of land owned by another are entitled to remain on it until they are lawfully ejected therefrom.

Granting that petitioners had earlier possession and respondents were the ones who first forcibly dispossessed them of the property, this circumstance would not have given petitioners license to recover possession in the same way. Such course of action is precisely what is sought to be avoided by the rule on ejectment. The underlying philosophy behind ejectment suits is to prevent breach of the peace and criminal disorder and to compel the party out of possession to respect and resort to the law alone to obtain what he claims is his. The party deprived of possession must not take the law into his own hands. Petitioners would have had a right of action against respondents to file an ejectment suit, but they evidently let the chance pass and chose the easier and faster way. Unfortunately for them, this time, their opponents chose to resort to appropriate judicial measures.