G.R. No. 111008 - Tramat Mercantile, Inc. vs. Court of Appeals

On April 9, 1984, Melchor de la Cuesta, doing business as "Farmers Machineries," sold one (1) unit HINOMOTO TRACTOR Model MB 1100D powered by a 13 H.P. diesel engine to Tramat Mercantile, Inc. ("Tramat").
The payment was made by David Ong, Tramat's president and manager, who issued a check for ₱33,500.00, replacing an earlier postdated check for ₱33,080.00.
Tramat later sold the tractor, with an attached lawn mower fabricated by Tramat, to the Metropolitan Waterworks and Sewerage System ("MWSS") for ₱67,000.00.

Ong caused a stop payment on the check when MWSS refused to pay due to defects found in the lawn mower and that the engine was a reconditioned, not brand new, unit.
On May 28, 1985, de la Cuesta filed an action to recover ₱33,500.00, attorney’s fees of ₱10,000.00, and costs of suit.
Ong answered denying personal liability, arguing the transaction was between de la Cuesta and Tramat, and that payment was stopped due to the tractor being a reconditioned unit instead of new as represented.

On November 2, 1989, after hearing evidence, the trial court ordered the defendants jointly and severally to pay ₱33,500.00 with 12% legal interest from July 7, 1984, plus attorney’s fees and costs.

The Court of Appeals affirmed the trial court’s decision on March 4, 1993, and denied the motion for reconsideration on July 1, 1993.
Petitioners, Tramat Mercantile, Inc. and David Ong, sought review via a petition for certiorari.

Whether the contract between Melchor de la Cuesta and Tramat Mercantile, Inc. was one of absolute or conditional sale.
Whether de la Cuesta violated any warranty regarding the condition of the tractor sold.
Whether David Ong can be held personally and jointly liable with Tramat Mercantile, Inc. under the transaction.