Case Digest (G.R. No. 194533)
Facts:
Petitioner PHILIPPINE STEEL COATING CORP. sold primer-coated G.I. sheets to respondent Eduard Quinones, owner of Amianan Motors, after assurances by petitioner’s sales manager that the sheets were compatible with Quinones’ acrylic paint; after deliveries in 1994 the paint blistered and peeled, Quinones repaired units, withheld an unpaid balance of P448,041.50 and filed suit on 6 September 1996.
The Regional Trial Court awarded damages to Quinones; the Court of Appeals affirmed; petitioner brought this Rule 45 petition to the Supreme Court.
Issues:
- Can vague oral statements by a seller about a generic good be invoked as warranties to support damages?
- Do general warranties on the suitability of products prescribe in six months under Article 1571 of the Civil Code?
- If statements were made about the product, was the buyer equally negligent?
- Is nonpayment of the purchase price justified on allegations of breach of warranty?
Ruling:
The petition was DENIED and the Court of Appeals Decision dated 17 March 2010 and Resolution dated 19 November 2010 were AFFIRMED except that the award of attorney’s fees was DELETED. The Court found that an express warranty was proven, that the buyer was not negligent, that the suit was not prescribed, and that the withholding of the unpaid balance of P448,041.50 was a proper recoupment under the applicable statutory remedy.
Ratio:
The Court held that repeated assurances by petitioner’s sales manager, including reliance on laboratory tests, constituted an express warranty under Article 1546, because the affirmations were positive statements of fact that induced Quinones to buy and were relied upon. Absent a contractual prescription, the prescriptive period for actions arising from an express warranty is the four-year period for rescission under Article 1389, and Quinones’ suit was timely. Breach of an express warranty invokes the remedies of Article 1599, including recoupment by diminution or extinction of the price, which justified Quinones’ nonpayment; negligence was not established under the bonos paterfamilias standard of Article 1173. The award of attorney’s fees was deleted for lack of specific factual basis or proven agreement.
Doctrine:
- An express warranty exists when a seller’s affirmation or promise is a positive statement of fact that induces and is relied upon by the buyer, per Article 1546.
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