Case Digest (G.R. No. 18999)
Facts:
The case involves Albert Bryan as the plaintiff and appellant against Thomas Hankins and J. Bialoglowski as the defendants and appellants. The events leading to the case began on October 20, 1920, in Manila, where the defendants sold a motor schooner named Sultan to the plaintiff for a total purchase price of P55,000. The plaintiff made an initial payment of P20,000 and executed two promissory notes for P18,000 and P17,000, maturing on April 26, 1921, and July 26, 1921, respectively. The possession of the vessel was transferred to the plaintiff, who subsequently took it to Iloilo. The vessel was inspected for the first time on March 11, 1921, by the inspector of hulls and boilers in Iloilo, who found it to be unseaworthy and ordered immediate repairs.
In his complaint, the plaintiff alleged that the defects in the vessel existed at the time of delivery, rendering it unfit for his intended use. He claimed that had he known of these defects, he would not have purchased the v...
Case Digest (G.R. No. 18999)
Facts:
- 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).
- 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.
- 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.
- 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.
- 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:
- 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.
- 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.
- 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.
- 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.