Title
BRYAN vs. HANKINS
Case
G.R. No. 18999
Decision Date
Nov 24, 1922
Plaintiff purchased unseaworthy vessel; court upheld rescission due to hidden defects, awarding partial refund after deducting for use, denying defendants' counterclaim.
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Case Digest (G.R. No. 18999)

Facts:

  1. Contract of Sale: On October 20, 1920, in Manila, the defendants (Thomas Hankins and J. Bialoglowski) sold the motor schooner "Sultan" to the plaintiff (Albert Bryan) for P55,000. The plaintiff paid P20,000 upfront and issued two promissory notes: one for P18,000 (due April 26, 1921) and another for P17,000 (due July 26, 1921).
  2. Delivery and Inspection: The schooner was delivered to the plaintiff and taken to Iloilo. On March 11, 1921, an inspection by the hull and boiler inspector revealed the vessel was unseaworthy and required immediate repairs.
  3. Plaintiff’s Claims: The plaintiff alleged that the defects existed at the time of delivery, were hidden, and rendered the vessel unfit for use. He sought rescission of the contract, cancellation of the promissory notes, and recovery of the P20,000 paid, plus interest and costs.
  4. Defendants’ Counterclaim: The defendants denied the allegations and counterclaimed for P35,000, representing the unpaid promissory notes, arguing that the plaintiff repudiated the notes by filing the lawsuit.
  5. Trial Court Decision: The trial court awarded the plaintiff P10,000 (after deducting P10,000 for the vessel’s use) but denied costs. Both parties appealed.

Issue:

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Ruling:

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Ratio:

  1. Applicability of Article 342 of the Code of Commerce: Article 342 applies only to commercial transactions involving the sale of merchandise for resale. Since the vessel was purchased for personal use and not for resale, the 30-day limitation did not apply.
  2. Implied Warranty Against Hidden Defects: Under Articles 1484 and 1485 of the Civil Code, the vendor is liable for hidden defects that render the thing sold unfit for its intended use. The defects in the vessel were hidden, and the plaintiff had no knowledge of them at the time of purchase.
  3. Use of the Vessel: The plaintiff used the vessel for nearly five months, and the trial court correctly deducted P10,000 from the P20,000 refund to account for the vessel’s rental value during this period.
  4. Judgment Affirmed: The trial court’s decision was fair and equitable, balancing the plaintiff’s right to rescind the contract with the defendants’ entitlement to compensation for the vessel’s use.


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