Conditions and Warranties Cases ( Full )

[G.R. No. L-15950. March 9, 1922.]

CARLOS

PALANCA, applicant-appellee, vs.

THE

DIRECTOR OF LANDS ET AL., opponents. IRENE

MOJICA,

CONSUELO

MOJICA,

and

ROMAN

SANTOS, appellants.
Crossfield & O'Brien for appellants.
Cohn, Fisher & DeWitt for appellee.
SYLLABUS
1. LAND REGISTRATION; SALE; DESCRIPTION OF LAND;
INTENTION OF PARTIES. It having been the intention of the
parties to a contract of sale to include therein the portion of
land in question, the exclusion of such portion from the
description of the property contained in the document is but a
mere mistake which cannot annul the intention of the
contracting parties, the document being nothing more than a
mere formality of the contract, and cannot prevail as against
the contract itself, which may be proved by another evidence.
2. ID.; ARTICLE 1473 OF THE CIVIL CODE; BAD FAITH.
For the purposes of article 1473 of the Civil Code, determining
the sale to be preferred in case the same property is sold to
different persons, the record in the registry is tantamount
to a NOTICE OF THE EXISTENCE OF THE CONTRACT.
Where, as in the instant case, the portion in question does not
appear in the deed of sale, the registration cannot be
considered as a notice of the sale of the said portion. In any

case, this registration must be made in good faith in

order to produce the effects provided by article 1473.

DECISION

AVANCEA, J :
p

- Carlos Palanca is the applicant for the registration of the

parcel of land marked lot No. 2 described in the plan
accompanying his application.
-Roman Santos opposes the registration of the eastern
portion of this lot which is more fully described in his
written opposition. The trial court dismissed the opposition
and ordered the registration of the entire lot No. 2 in favor of
the applicant.
Lot No. 2 together with lot No. 1, which is the subject of
another proceeding, form one piece of land, lot No. 1 being
located within the Province of Pampanga and lot No. 2 in the
Province of Bulacan.
- the sisters Irene Mojica and Consuelo Mojica sold the hacienda
composed of these two lots to Felipe Buencamino Suntay .
Suntay sold the same lands to Carlos Palanca.
- In the description of this hacienda in the document of sale to
Suntay the portion claimed by Roman Santos appears to have
been excluded. Mojic sisters sold to the opponent Roman
Santos the said portion that had been excluded. The deeds of
sale of SUNTAY. PALANCA AND SANTOS WERE ALL RECORDED.
- hacienda, composed of lots Nos. 1 and 2, Benito Mojica
( original owner- deceased ) considered it as a single property

calling it "Hacienda of Sapang Cawayan," which includes the

part sold to Santos

The deeds of sale of Felipe Buencamino Suntay (Exhibit C) and

of the applicant Carlos Palanca (Exhibit B) were recorded in the
registry on January 26, 1918, and the document of sale to
Santos was also recorded on August 6, 1918 (Exhibit 3).
Although the description in the document of sale
executed be the sisters Irene and Consuelo to Felipe
Buencamino Suntay does not contain that of the portion now
objected to, we are of the opinion that the contracting parties
intended to include this portion of the land in the sale.
This hacienda, composed of lots Nos. 1 and 2, formerly
belonged to Benito Mojica. Although it is composed of several
parcels of land with different titles, Benito Mojica considered it
as a single property calling it "Hacienda of Sapang Cawayan,"
which includes the part sold to Santos. Indeed, it is so stated in
the document filed by him for the purpose of the partition of
the conjugal property of himself and his two deceased wives.
On May 15, 1906, Benito Mojica leased a small part
within this hacienda to Song Fo & Company in order to erect
thereon a structure for the manufacture of alcohol. This
contract provided that Song Fo should have the right to
purchase the tuba (a beverage from which alcohol is
extracted) that was produced on the whole land. The contract
did not describe the boundaries of the land nor did it state the
area thereof. From the terms of this contract it is undeniable
that it referred to the whole land including the part which is
now the subject of opposition.

After the death of Benito Mojica, the judicial

administratrix of his estate, her daughter and heir, Irene
Mojica, cancelled the former contract with Song Fo & Company
and on December 21, 1911, entered into a new agreement
with him for the lease of the entire property. Song Fo &
Company later assigned to Carlos Palanca all their rights to
this land under the lease. Among those rights there was one to
the effect that should the property be sold the lessee should
have the right to subrogate himself to the right of the
purchaser within thirty days if he so desired.
In the second contract of lease the property was
described and the part now objected to was excluded from
the description. Notwithstanding this fact we are persuaded
that, in selling the land, it was not the intention of the parties
to exclude any portion thereof. This second contract of lease
recites that this property is known as the "Hacienda of Sapang
Cawayan" and that it formerly belonged to Benito Mojica; that
a piece of land within this property was leased to Song Fo &
Company with the right on the part of the lessee to buy and
ferment and distill the tuba produced and harvested from the
said property, by virtue of the contract of May 15, 1906, which
was declared cancelled; and that they had covenanted and
AGREED TO LEASE THE "HACIENDA OF SAPANG
CAWAYAN" IN ITS ENTIRETY. It is undeniable that the object
of the lease in the minds of the parties was the whole
"Hacienda of Sapang Cawayan," the same that was the
subject-matter of the contract of May 15, 1906. It is evident
that the understanding between the parties was that this lease
should include that part which was later sold to Santos,
because this portion of land was within what was called the
"Hacienda of Sapang Cawayan" and included in the lease of
May 15, 1906. This conclusion is furthermore strengthened by

the subsequent acts of the parties. Under this contract Song Fo

& Company took possession of the whole property including
that portion now claimed by Santos. Neither Irene nor
Consuelo Mojica, nor any person in their stead, protested
against the occupation by Song Fo of the land excluded from
the description. Furthermore there appears to be no reason
why the sisters Irene and Consuelo Mojica should exclude this
portion of land from the lease as they neither attempted to
cultivate it nor dispose of it in any way.
There is another point which is not devoid of importance.
A short time before the term of the lease expired, the
administrator of the estate of Benito Mojica, Mr. Grey, who
succeeded Irene Mojica as such, asked the court for authority
to extend the time of the lease and in the description of the
property leased he included that part now in question. It must
be presumed that Mr. Grey, as the successor of Irene Mojica in
the administration of the estate, had knowledge of the
property under his care and his act in considering the portion
in question as forming part of the property leased, means, at
least, that such was the understanding between the parties.
At this juncture, Irene and Consuelo Mojica, as already
stated, sold this property to Felipe Buencamino Suntay on
October 31, 1917, and in the transfer the property was
described in the same manner as in the contract of lease, that
is to say, excluding the portion now under discussion. This
deed of sale, after describing the property sold, recites that:
"The said two parcels form but a single property, which during
the lifetime of the deceased father of the vendors was known
as the 'Hacienda of Sapang Cawayan' and is now mortgaged
to the Philippine National Bank in the amount of eleven
thousand pesos (P11,000) and leased to Messrs. Song Fo &

Company . . . on December 21, 1911." From the foregoing the

inference is that what was sold, according to the intention of
the parties, was the farm known as "Sapang Cawayan," the
same property that was leased to Song Fo & Company and, as
before stated, included that part of the land which is now in
question. This conclusion is supported by the very mention of
the mortgage in favor of the bank for in this mortgage a part of
the portion of land now in controversy was included.
This being so, and if the true intention of the parties was
to sell the portion now in question, the mere fact of having
been excluded from the description contained in the document
of sale of the said property is a mistake which cannot annul
the intention of the contracting parties.
-The document is nothing more than a mere formality of
the contract, and cannot prevail as against the contract itself
which may be proved by extraneous facts.
Our conclusion is that the contract of sale of this
hacienda to Suntay included that portion of land in Question
which was later sold to Santos.
It results, therefore, that the land under
discussion was twice sold to two different purchasers.
In accordance with article 1473 of the Civil Code the sale that
was first recorded must be given preference. Although the sale
to Suntay and the sale by the latter to Palanca were recorded,
it must be deemed that no record was made as to the portion
of land in question.
- For the purposes of article 1473, the record in the
registry is tantamount to a notice of the fact of the
existence of the contract. But, as in the deeds
containing these contracts the portion of land under
discussion does not appear, the registration of the

documents cannot be considered as a notice of the sale

of the said portion.
- On the other hand, although the sale to Roman Santos was
also recorded, it was only effected after the herein applicant
had already filed his application for this land claiming to have
bought it from the sisters Mojica and after the said Palanca had
filed an opposition to the application of Roman Santos for the
registration of the said parcel of land, consequently the
record made by santos was not in good faith and he
cannot base his preference of title thereon. the record
to which article 1473 of the civil code refers is that
made in good faith, for the law will not protect
anything done in bad faith.

it being noted that Palanca, before that time, had brought an

action for injunction against Santos on account of the same
portion of land. Wherefore, when Santos recorded his sale he
knew that Palanca was claiming the land in question by virtue
of a former purchase. CONSEQUENTLY THE RECORD MADE BY
SANTOS WAS NOT IN GOOD FAITH AND HE CANNOT BASE HIS
PREFERENCE OF TITLE THEREON. The record to which article
1473 of the Civil Code refers is that made in good faith, for the
law will not protect anything done in bad faith.

The preference, therefore, as between these two sales

must be adjudged to Palanca in accordance with said article
1473 of the Civil Code, on account of priority of possession.
Palanca had possession of the land as a lessee before the land
was sold and after the consummation of the sale he continued
in such possession uninterruptedly, not as lessee, but, as
owner of the property.

The judgment appealed from is affirmed with costs

against the appellant. So ordered.
Araullo, C. J., Johnson, Street, Malcolm, Villamor, Ostrand,
Johns, and Romualdez, JJ., concur.

|||

2.) USTINA COSIPE SIGAYA, ROMEO, FELY,

TOMAS, BERNARDO, LEDA, ANASTACIO,
ERLINDA, ROSA, TERESITA, EDWIN and HELEN,
all surnamed SIGAYA, petitioners, vs. DIOMER
MAYUGA, JOSE VIVA and ROSELA VIVA,
HONORATO DE LOS SANTOS and RENATO
DISTOR,respondents.

Padojinog Amane Gengos & Billena Law Offices for

petitioners.
Esteban Angeles B. Contreras for respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL BY CERTIORARI;
QUESTION OF FACT DIFFERENTIATED FROM QUESTION OF LAW.
There is a question of fact when the doubt or difference arises as
to the truth or the falsity of the statement of facts while a
question of law exists when there is doubt or controversy as to
what the law is on a certain state of facts.
2. ID.; ID.; ID.; SUPREME COURT IS NOT A TRIER OF FACTS;
EXCEPTIONS. The determination of whether Teodulfo is a buyer
in good faith is a factual issue which is generally outside the
province of this Court to determine in a petition for review. If for
this matter alone, the petition should be dismissed because the
remedy of appeal by certiorari under Rule 45 of the Rules of Court
contemplates only questions of law. Indeed, this Court is not a
trier of facts, and the factual findings of the CA are binding and
conclusive upon this Court, unless: (1) the conclusion is a finding
grounded entirely on speculation, surmise and conjecture; (2) the
inference made is manifestly mistaken; (3) there is grave abuse
of discretion; (4) the judgment is based on a misapprehension of
facts; (5) the findings of fact are conflicting; (6) the Court of
Appeals went beyond the issues of the case and its findings are
contrary to the admissions of both appellant and appellees; (7)
the findings of fact of the Court of Appeals are contrary to those
of the trial court; (8) said findings of fact are conclusions without
citation of specific evidence on which they are based; (9) the
facts set forth in the petition as well as in the petitioner's main

and reply briefs are not disputed by the respondents; and (10)
the findings of fact of the Court of Appeals are premised on the
supposed absence of evidence and contradicted by the evidence
on record.
3. ID.; EVIDENCE; CREDIBILITY; SUPREME COURT NECESSARILY
UPHOLDS THE FINDINGS OF FACT OF THE TRIAL COURT
ESPECIALLY IF AFFIRMED BY THE COURT OF APPEALS. The
binding effect of the CA's factual findings on this Court applies
with greater force when both the trial court and the CA are in
complete agreement on their factual findings. It is also settled
that absent any circumstance requiring the overturning of the
factual conclusion made by the trial court, particularly if affirmed
by the CA, the Court necessarily upholds such findings of fact.
4. CIVIL LAW; SALES; PURCHASER IN GOOD FAITH; BURDEN OF
PROVING LIES UPON THE ONE WHO ASSERTS IT. This Court has
held that the burden of proving the status of a purchaser in good
faith lies upon one who asserts that status and this onus probandi
cannot be discharged my mere invocation of the legal
presumption of good faith.
5. ID.; ID.; ID.; ELUCIDATED. A purchaser in good faith is one
who buys property WITHOUT NOTICE that some other person
has a right to or interest in such property and pays its fair price
before he has notice of the adverse claims and interest of another
person in the same property. The honesty of intention which
constitutes good faith implies a freedom from knowledge of
circumstances which ought to put a person on inquiry. ( As
enunciated in Lim vs. Chuatoco . . . good faith consists in the
possessor's belief that the person from whom he received the
thing was the owner of the same and could convey his title. Good
faith, while it is always to be presumed in the absence of proof to
the contrary, requires a well founded belief that the person from

whom title was received was himself the owner of the land, with
the right to convey it. There is good faith where there is an
honest intention to abstain from taking any unconscientious
advantage from another. Otherwise stated, good faith is the
opposite of fraud and it refers to the state of mind which is
manifested by the acts of the individual concerned.)
6. ID.; LAND REGISTRATION; LAND TITLES AND DEEDS; EVERY
PERSON DEALING WITH REGISTERED LAND MAY SAFELY RELY ON
THE CORRECTNESS OF THE CERTIFICATE OF TITLE. Indeed, it is
a well-settled rule that every person dealing with registered land
may safely rely on the correctness of the certificate of title issued
therefor and the law will in no way oblige him to go beyond the
certificate to determine the condition of the property. ( mirror
doctrine ) Where there is nothing in the certificate of title to
indicate any cloud or vice in the ownership of the property, or any
encumbrance thereon, the purchaser is not required to explore
further than what the Torrens Title upon its face indicates in quest
for any hidden defects or inchoate right that may subsequently
defeat his right thereto.
7. ID.; ID.; ID.; ID.; WHEN IT IS NOT APPLICABLE. However, this
rule shall not apply when 1.) the party has actual knowledge of
facts and circumstances that would impel a reasonably cautious
man to make such inquiry or 2.) when the purchaser has
knowledge of a defect or the lack of title in his vendor or of
sufficient facts to induce a reasonably prudent man to inquire into
the status of the title of the property in litigation. . . . As the Court
has stated: A purchaser cannot simply close his eyes to
facts which should put a reasonable man on his guard and
then claim that he acted in good faith under the belief
that there was no defect in the title of his vendor. His mere
refusal to believe that such defect exists or his willful closing of

his eyes to the possibility of the existence of a defect in his

vendor's title will not make him an innocent purchaser for value if
it later develops that the title was in fact defective, and it
appears that he would have notice of the defect had he acted
with that measure of precaution which may reasonably be
required of a prudent man in a similar situation.
8. ID.; SALES; LAW ON DOUBLE SALES; NOT APPLICABLE. [T]he
law on double sales as provided in Art. 1544 of the Civil Code
contemplates a situation where a single vendor sold one and the
same immovable property to two or more buyers. For the rule
to apply, it is necessary that the conveyance must have
been made by a party who has an existing right in the
thing and the power to dispose it. The rule cannot be invoked
where the two different contracts of sale are made by two
different persons, one of them not being the owner of the
property sold.

DECISION

AUSTRIA-MARTINEZ, J :
p

The question of whether or not a person is a purchaser in good

faith is a factual matter that will generally be not delved into by
this Court especially when the findings of the trial court on the
matter were affirmed by the Court of Appeals (CA). Settled as this
rule may be, petitioners now come before this Court seeking an
exception to the general rule.
The facts are as follows:
- Dionisia Alorsabes owned a three hectare land in Dao, Capiz,
denominated as Lot 3603. She sold a portion of the lot to Juanito

Fuentes while the remainder was inherited by her children Paz

Dela Cruz, Rosela Dela Cruz, and Consorcia Arroja (an adopted
child), and a grandson, Francisco Abas, in representation of his
deceased mother Margarita Dela Cruz.
-These four heirs executed an Extra-Judicial Settlement with
Sale dated Consorcia sold her share with an area of 6,694 square
meters to spouses Balleriano Mayuga. ( respondent ) . Paz also
sold her share to Honorato de los Santos.
- Later, another document entitled Extra-Judicial Partition
with Deed of Sale was uncovered wherein the heirs of Dionisia
purportedly adjudicated Lot 3603 among themselves and sold
their shares to Francisco. Francisco executed a Deed of Sale
over Lot 3603 in favor of Teodulfo Sigaya. Thus, the title over Lot
3603 was cancelled and a new one was issued in the name of
TEODULFO Sigaya, predecessor-in-interest of the petitioners
herein.

- the petitioners, who are the widow and children of Teodulfo, filed
Civil Case Nos. for recovery of possession and damages against
alleged owners.
Diomer Mayuga, Honorato de los Santos, Sps. Jose Viva and
Rosela Dela Cruz-Viva, and Renato Distor,

respectively, before

the Regional Trial Court (RTC) of Roxas City, Branch 16, praying
that respondents be ordered to vacate Lot 3603, and turn over
the same to petitioners; that petitioners' right of ownership and
possession over the property be confirmed and that respondents
be ordered to pay damages in the form of unrealized income
starting 1980, plus attorney's fees and costs.

- Respondents in their answers with counterclaim averred that:

the Deed of Sale executed by Francisco in favor of Teodulfo and
the title thereon are null and void for being based on a

fictitious Extra-Judicial Settlement with Sale; Rosela Dela

Cruz-Viva and Paz Dela Cruz, who are illiterates, were
fraudulently made to sign as vendees in the Extra-Judicial
Settlement with Sale
dated 1972, when Francisco represented that they were merely
signing as witnesses to the sale of Francisco of his share to
Teodulfo. As counterclaim, they asked for attorney's fees and
damages.

- Respondent Mayuga further asserted that he possesses his

portion of the property by virtue of the sale by Consorcia Arroja of
her share to his parents, Sps. Balleriano Mayuga. Respondent de
los Santos meanwhile averred that Paz Dela Cruz sold her share
to him in 1957. Respondents Rosela Dela Cruz-Viva and her
husband Jose Viva claimed that the portion of land occupied by
them pertains to Rosela's share which she inherited from
Dionisia, while respondent Renato Distor claimed that his wife
inherited said property from her father Juanito Fuentes, who in
turn bought the same from Dionisia during her lifetime.

The four cases were consolidated and on February 14, 1992, the
trial court rendered its decision, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered as follows:
1. Declaring the defendants Geomer (sic) Mayuga as the
real and absolute owner of the portion of land, containing
an area of Six Thousand Six Hundred Ninety Four (6,694)
square meters, more [or] less, portion of Lot No. 3603,
Dao Cadastre and subject matter in Civil Case No. 5325
indicated in the Commissioner's Report (Exh. "4") as Exh.
"4-B";

2. Declaring the defendant Honorato de los Santos as the

absolute owner of the portion of land containing an area
of Six Thousand Six Hundred Ninety Five (6,695) square
meters more or less, portion of lot No. 3603 Dao
Cadastre, and subject matter in Civil Case No. 5326
indicated in the Commissioner's Report (Exh. "4") as Exh.
"4-D";
3. Declaring the defendants spouses Jose Viva and Rosela
dela Cruz as the absolute owners of the portion of land
containing an area of Six Thousand Six Hundred Ninety
Four (6,694) square meters, more or less, portion of Lot
No. 3603, Dao Cadastre, and subject matter in Civil Case
No. 5327 indicated in the Commissioner's Report (Exh.
"4") as Exh. "4-C";
4. Declaring the defendant, Renato Distor, as the
absolute owner of the portion of land containing an area
of Six Thousand Three Hundred Forty Four (6,344) square
meters, more or less, portion of Lot No. 3603, Dao
Cadastre, and subject matter in Civil Case No. 5328
indicated in the Commissioner's Report (Exh. "4") as Exh.
"4-E";
5. Declaring the plaintiffs as the absolute owners of the
portion of land containing an area of Seven Thousand
Forty-Six (7,046) square meters, more or less, portion of
Lot No. 3603, Dao Cadastre, indicated in the
Commissioner's Report (Exh. "4") as Exh. "4-F";
6. Declaring Transfer Certificate of Title No. T-15630 of the
Register of Deeds of Capiz as null and void and should be
cancelled;

7. Declaring that Deed of Sale, Exh. "C" as null and void

except as affecting the portion with an area of Seven
Thousand Forty Six (7,046) square [meters] of Lot 3603
which portion had been sold by Francisco Abas to the
spouses Teodulfo Sigaya and Justina Cosipe;
8. Declaring that Extra-Judicial Partition with Deed of Sale
as having been procured through fraud and therefore not
valid in so far as the sale of the shares of Paz de la Cruz
and Priscilla de la Cruz were concerned;
9. Condemning the plaintiffs to severally and jointly pay
the following:
a) Unto Diomar Mayuga, defendant in Civil Case No.
V-5325, P10,000.00 as attorney's fees and litigation
expenses;
b) Unto Honorato de los [Santos], defendant, in Civil
Case No. V-5326, P10,000.00 as [attoney's] fees
and litigation expenses;
c) Unto the (sic) Jose Viva and Rosela de la Cruz,
defendants in Civil Case No. V-5327, P10,000.00 as
[attorney's] fees and litigation expenses; and
d) Unto Renato Distor, defendant in Civil Case No.
V-5328, P10,000.00 as [attorney's] fees and
litigation expenses; and
e) Dismissing Civil Case Nos. V-5325, V-5326, V5327 and V-5328 with costs in each case against
the plaintiffs.
SO ORDERED.

The trial court explained that:

There is no question that the deed of sale of the portion

bought by Jacinto Fuentes from Dionisia Alorsabes and
now possessed by defendants Renato Distor was a public
instrument executed in 1934; and the portion occupied
by defendant Diomer Mayuga is the portion bought by
spouses Florentina Viva and Balleriano Mayuga from
Consorcia Mayuga as her share in lot 3603; defendant
Honorato de los Santos is in possession of the portion
which he bought from Paz de la Cruz, in 1977, although
he had been possessing this portion since May 15, 1957
by virtue of a private document of mortgage. (citations
omitted)
xxx xxx xxx
In these cases, the court believes and so holds that the
evidence of actual occupation and possession of the
defendants of the portions of Lot 3603, to each of them
appertaining had been satisfactorily proven. The
defendants were not able to file any opposition to the
reconstitution of title solely because they were not
notified actually. They could not also be considered to
have constructive notice because there was no
publication of the Notice of Hearing of the petition.

STECDc

From the evidence taken together by its totality of

evidence tilts more in favor of the defendants and against
the plaintiffs.

Not satisfied with the decision, petitioners went to the CA which

affirmed, in its Decision promulgated on April 19, 2000, the ruling
of the RTC except as to the award of attorney's fees and expenses
of litigation.

It then disposed of the appeal as follows:

WHEREFORE, premises considered, the decision of the

court a quo is hereby AFFIRMED, with the modification
that the awards of attorney's fees and expenses of
litigation to the defendants-appellants are hereby
eliminated.
SO ORDERED.

The CA found:
Looking at the evidence presented, the trial court
considered the defendants-appellees as having proven
the actual possession and validity of the possession of
the lots in question. Against that, the plaintiffs-appellants
put forward the TCT held by Teodulfo Sigaya, whose
validity rests upon the ability of Francisco Abas to sell Lot
3603, which the TCT now covers, and that the sale to
Teodulfo Sigaya was registered. Prior registration would
protect an innocent purchaser in good faith and for value.
But the plaintiffs-appellants cannot now claim the (sic)
Teodulfo Sigaya was an innocent purchaser for value. The
trial court gave more credence to the testimony of
defendants-appellees and their witnesses that they had
been in possession for a longer period of time, even
before the sale to Teodulfo Sigaya in 1978. This issue of
credibility requires a determination that is concededly
best left to the trial court with its unique position of
having been enabled to observe that elusive and
incommunicable evidence of the deportment of witnesses
on the stand. Findings of the trial court, following that
assessment, must be given the highest degree of respect
absent compelling reasons to conclude otherwise.
Teodolfo (sic) Sigaya examined the land in question, and
did so as a reasonably prudent man buying real property

should. As the defendants-appellees were in possession

before him, he should have questioned such and delved
deeper into the title and right of Francisco Abas to sell the
lot. Not having done so, he is not an innocent purchaser
in good faith, and not entitled to protection under the
Torrens system.

It is clear that the title of Francisco Abas was obtained

through fraud, thus further damaging the case of the
plaintiffs-appellants, whose predecessor-in-interest should
have probed beyond the title after examining the lot to
be sold him. As held by the Supreme Court:
" . . . Having bought the land registered under the
Torrens system from their vendors who procured
title thereto by means of fraud, petitioners cannot
invoke the indefeasibility of a certificate of title
against the private respondent to the extent of her
interest. The Torrens system of land registration
should not be used as a means to perpetuate fraud
against the rightful owner of real property.
Registration to be effective, must be made in good
faith. (Palanca vs. Registry of Lands, 43 Phil. 149
[1922]). Thus, it is a settled rule that the defense of
indefeasibility of a certificate of title does not
extend to a transferee who takes it with notice of
the flaws in his transferor's title. If at all, the
petitioners only acquire the right which their
vendors then had. (Ramos et al. vs. Direno, et al.,
50 Phil. 786 [1927]).

The plaintiffs-appellants' contentions as to their

ownership of the lot in question must then fail in the face
of the principles laid down in jurisprudence.10

Petitioners now come before this Court on a petition for review

under Rule 45 of the Rules of Court, raising the sole issue of:
WHETHER A PERSON DEALING WITH A REGISTERED LAND CAN
SAFELY RELY ON THE CORRECTNESS OF THE CERTIFICATE OF
TITLE ISSUED THEREFOR.

11

Petitioners argue that: Teodulfo, their predecessor-in-interest,

purchased the subject property from Francisco, who was in
possession of the Original Certificate of Title (OCT) ), with ExtraJudicial Partition with Deed of Sale . Relying on these instruments
and after inspecting the land and seeing that nobody occupied
the same, Teodulfo bought the land and had the title
subsequently issued in his name;
the fact that Teodulfo examined the lot does not give rise to
the conclusion that he is not an innocent purchaser in
good faith as adverted to by the CA; if indeed Abas committed
fraud in acquiring said lot, Teodulfo is also a victim of
misrepresentation; there was no evidence that Teodulfo and
Francisco connived to defraud respondents;
-Teodulfo did not have actual knowledge of facts and
circumstances that would impel him to make further inquiry; and
as purchaser in good faith, Teodulfo enjoys the protection of the
Torrens system.

12

- Respondents in their Comment meanwhile contend that:

Teodulfo relied on a title that is not in the name of his transferor,
Francisco, but on its registered owner, Dionisia, who was already
deceased at the time of the supposed sale to Teodulfo; since the
right of the supposed transferor was not shown in the title but

merely on a Deed of Extra-Judicial Settlement with Sale, which

turned out irregular, it was incumbent upon Teodulfo to examine
further the extent of the right of the supposed transferor and why
there were a lot of occupants in the land in dispute; his failure to
do so operates against his favor and those of his successors-ininterest.

13

The parties filed their respective memoranda.

Petitioners, in their Memorandum, further aver that: Teodulfo is a
purchaser in good faith having relied on OCT No. RO-5841
(17205) in the name of Dionisia and the Extra-Judicial Partition
with Deed of Sale dated November 2, 1972 which shows that
Francisco is the absolute owner of the lot; four years had elapsed
from the date that the OCT was reconstituted and the time
Teodulfo bought the property from Francisco and yet none of the
respondents had registered their right in the property; the ExtraJudicial Settlement of Lot 3603 of the Cadastral Survey of Dao,
Capiz with Sale dated February 4, 1964, on which respondents
base their claims, was never registered with the Registry of
Deeds; not having been registered, this will not affect the right of
third persons who had no knowledge thereof; there was no
circumstance that would put Teodulfo on his guard and in cases of
double sales of real property, the ownership shall be awarded to
the vendee who first registers the sale in good faith; Teodulfo is a
resident of Zarraga, Capiz which is more than 50 kilometers from
Dao, Capiz, thus Teodulfo could not have actual knowledge of
facts and circumstances that would impel him to make further
inquiry; the land was merely pointed to him by Francisco and
from what he had seen, there was nothing that would arouse his
suspicion.

14

Meanwhile, respondents, in their Memorandum, contend that

they were in possession of the property before Teodulfo; that

Teodulfo should have probed deeper into the right of Francisco to

sell said lot, and not having done so, he cannot be considered as
a purchaser in good faith; and that the issue of credibility requires
a determination that is best left to the trial court with its unique
position of being able to observe the elusive and incommunicable
evidence of the deportment of witnesses on the stand.

15

Petitioners claim that they are raising before this Court

the legal issue of: Whether a person dealing with a registered
land can safely rely on the correctness of the Certificate of Title
issued therefor.

16

Contrary to what petitioners would like this Court to believe, the

resolution of the present petition hinges principally on the
determination of a question of fact and not one of law.
- Both parties concede that a purchaser in good faith can safely
rely on the four corners of a Torrens Title. The disagreement lies,
however, as to whether or not Teodulfo should be considered as a
purchaser in good faith and thus enjoy the protection of the
Torrens system.

Indeed, this question is one of fact and not one of law. There is a
question of fact when the doubt or difference arises as to the
truth or the falsity of the statement of facts while a question of
law exists when there is doubt or controversy as to what the law
is on a certain state of facts.

17

The determination of whether Teodulfo is a buyer in good faith is

a factual issue which is generally outside the province of this
Court to determine in a petition for review.

18

If for this matter

alone, the petition should be dismissed because the remedy of

appeal by certiorari under Rule 45 of the Rules of Court
contemplates only questions of law.

19

Indeed, this Court is not a

trier of facts,

20

and the factual findings of the CA are binding and

conclusive upon this Court, unless:

(1) the conclusion is a finding grounded entirely on
speculation, surmise and conjecture; (2) the inference
made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on a
misapprehension of facts; (5) the findings of fact are
conflicting; (6) the Court of Appeals went beyond the
issues of the case and its findings are contrary to the
admissions of both appellant and appellees; (7) the
findings of fact of the Court of Appeals are contrary to
those of the trial court; (8) said findings of fact are
conclusions without citation of specific evidence on which
they are based; (9) the facts set forth in the petition as
well as in the petitioner's main and reply briefs are not
disputed by the respondents; and (10) the findings of fact
of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on
record.

21

The binding effect of the CA's factual findings on this Court

applies with greater force when both the trial court and the CA
are in complete agreement on their factual findings.

22

It is also

settled that absent any circumstance requiring the overturning of

the factual conclusion made by the trial court, particularly if
affirmed by the CA, the Court necessarily upholds such findings of
fact.

23

- In this case, petitioners failed to show that they fall under any of
the exceptional circumstances.
In reaching its conclusion, the trial court gave weight to the
testimonies of Engineer Jesus Pimentel, a geodetic engineer

commissioned by the court to conduct a survey of the land, who

found that respondents acquired their respective lots through
sale or inheritance;

24

of Rolly Daniel, a barangay official who

lived 50 meters from said lot, who said that respondents had
been in possession of their respective lots even before 1960 and
that Teodulfo and Francisco asked him to accompany them
sometime between 1976 to 1978 as they went to the different
houses of respondents because Teodulfo was going to buy
Francisco's share;

25

of Ursula Abas, wife of Francisco, who said

that Francisco committed suicide after it was discovered that he

fraudulently sold the portion belonging to his aunts to Teodulfo by
making them sign a prepared document on the pretext that they
were only signing as witnesses to the sale of his share, when in
fact said document also sold their aunts' shares;

26

as well as the

testimonies of Prudencio Fuentes, son of Jacinto and brother-inlaw of respondent Renato Distor; Lourdes Distor, wife of Renato;
Florentina Mayuga, mother of Diomer; and respondents Renato
Distor, Honorato de los Santos, Rosela Dela Cruz-Viva who
asserted that they have been in possession of said lots before the
purported sale to Teodulfo.

27

Petitioners, meanwhile, could only present Fely Sigaya and Cesar

de los Santos. Fely testified that: the land was acquired by her
father from Francisco by virtue of a Deed of Sale dated January 9,
1978 and that Francisco became the owner of the property by
virtue of an Extra-Judicial Partition with Deed of Sale; when her
father bought the property, he showed the documents to a lawyer
who said that the same were in order; when her father visited the
property, he found no occupants thereat; her father also filed a
petition in 1974 for reconstitution of title of Lot 3603 thus a
reconstituted title was issued in the name of Dionisia
Alorsabes.

28

Cesar, petitioners' caretaker meanwhile, merely

corroborated Fely's testimony.

29

This Court has held that the burden of proving the status of a
purchaser in good faith lies upon one who asserts that status and
this onus probandicannot be discharged my mere invocation of
the legal presumption of good faith.

30

In this case, the Court finds that petitioners have failed to

discharge such burden.
A purchaser in good faith is one who buys property without notice
that some other person has a right to or interest in such property
and pays its fair price before he has notice of the adverse claims
and interest of another person in the same property. The honesty
of intention which constitutes good faith implies a freedom from
knowledge of circumstances which ought to put a person on
inquiry.

31

As enunciated in Lim vs. Chuatoco

32

. . . good faith consists in the possessor's belief that the

person from whom he received the thing was the owner
of the same and could convey his title. Good faith, while it
is always to be presumed in the absence of proof to the
contrary, requires a well founded belief that the person
from whom title was received was himself the owner of
the land, with the right to convey it. There is good faith
where there is an honest intention to abstain from taking
any unconscientious advantage from another. Otherwise
stated, good faith is the opposite of fraud and it refers to
the state of mind which is manifested by the acts of the
individual concerned.

33

Indeed, it is a well-settled rule that every person dealing with

registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige
him to go beyond the certificate to determine the condition of the

property. Where there is nothing in the certificate of title to

indicate any cloud or vice in the ownership of the property, or any
encumbrance thereon, the purchaser is not required to explore
further than what the Torrens Title upon its face indicates in quest
for any hidden defects or inchoate right that may subsequently
defeat his right thereto.

34

However, this rule shall not apply when the party has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably prudent man
to inquire into the status of the title of the property in
litigation.

35

In this case, preponderance of evidence shows that respondents

had been in actual possession of their respective portions even
prior to 1960. Rolly Daniel, which the trial court considered as a
credible witness, testified that not only were respondents in
actual possession of their respective portions prior to 1960, he
even accompanied Francisco and Teodulfo to the different houses
of respondents sometime between 1976 to 1978 as Teodulfo was
going to buy the portion of Francisco.

36

This Court cannot give

credence therefore to the claim of petitioners that Teodulfo found

no occupants in the property ( teodulfo is NOT a purchaser in
goodfaith ).
There being occupants of the property, the Court cannot ascribe
good faith to Teodulfo who has not shown any diligence in
protecting his rights.
As the Court has stated:
A purchaser cannot simply close his eyes to facts which
should put a reasonable man on his guard and then claim

that he acted in good faith under the belief that there was
no defect in the title of his vendor. His mere refusal to
believe that such defect exists or his willful closing of
his eyes to the possibility of the existence of a
defect in his vendor's title will not make him an
innocent purchaser for value if it later develops
that the title was in fact defective, and it appears
that he would have notice of the defect had he
acted with that measure of precaution which may
reasonably be required of a prudent man in a
similar situation.

37

(Emphasis supplied)

Petitioners also argue that the rule on double sale of real property
should apply in this case, and since they are the first to register
the sale in good faith, they are entitled to be awarded ownership
thereof.
The Court disagrees. TeApart from the fact that Teodulfo is not a
purchaser in good faith,
- the law on double sales as provided in Art. 1544 of the Civil
Code38 contemplates a situation where a single vendor sold one
and the same immovable property to two or more buyers. For the
rule to apply, it is necessary that the conveyance must have been
made by a party who has an existing right in the thing and the
power to dispose it. The rule cannot be invoked where the two
different contracts of sale are made by two different persons, one
of them not being the owner of the property sold.

39

In this case,

respondents derive their right over their respective portions

either through inheritance or sale from Dionisia while petitioners'
invoke their right from the sale of the land from Francisco.
Clearly, the law on double sales does not apply here.

WHEREFORE, the petition is DENIED for lack of merit and the

decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.
(Sigaya v. Mayuga, G.R. No. 143254, [August 18, 2005], 504
PHIL 600-615)
|||

3.) [G.R. No. 10006. September 18, 1915. ]

YAP KIM CHUAN, plaintiff-appellee, vs.

ALFONSO M. TIAOQUI, defendant-appellant.
Alfredo Chicote and Agustin Alvarez Salazar for
appellant.
D. R. Williams and Albino Z. Sycip for appellee.
SYLLABUS
1. LANDLORD AND TENANT; ACTION FOR
DAMAGES FROM DEFECTS IN BUILDING; ARTICLE
1554, CIVIL CODE. When a lessee has failed to
notify or inform the lessor or the owner of a building
that it is so defective or in such bad condition as to need
repairs to keep it in proper condition for the use for which
it is intended and for which the lessee rented it, and the
lessor is not shown to have had knowledge or to have
made any concealment of such defects as might cause
damage to the lessee, if this resulted from defects
unknown to both parties, the lessor cannot be held
responsible therefor, because in such a case it cannot be
held that he failed to perform the obligations imposed in
article 1554, of the Civil Code.
2. ID.; ID.; STIPULATIONS IN LEASE. When
there is no stipulation in a lease to the effect that in case
the goods and merchandise a lessee has placed in a
rented building should get wet as a result of leaks
developed by a torrential rainfall and the lessor does not
appear to have known of any defect or leak in the roof of
said building, which was inspected and approved by the
city engineer when the lessee moved into it, the lessor
cannot be held liable for damages, because the law has
not established such liability on his part in the absence of
an express agreement.
3. ID.; ID.; WARRANTY OF THING LEASED;
LIABILITY FOR DAMAGES. The lessor's obligation to
warrant the thing leased, whether or not he knew of the
existence therein of defects that rendered it unsuitable for
the use for which the lessee intended it, is distinct from
his liability for damages, which only attaches when he

knew about such defects and failed to reveal them to

the lessee or concealed them, in which case fraud and
bad faith may be presumed on his part. (Civil Code arts.
1484-1486.)
4. ID.; ID.; FORCE MAJEURE. Nobody is
responsible for such unforeseen and inevitable
occurrences in the case of a fortuitous event or force
majeure, unless the law expressly so states or such
responsibility has been expressly stipulated in the
obligation.
DECISION
TORRES, J :
p

This is an appeal filed through a bill of exceptions

by counsel for the defendant from the judgment of March
20,1914, whereby the Honorable A. S. Crossfield, judge,
sentenced him to pay to the plaintiff the sum of P1,019
with legal interest at the rate of 6 per cent a year, from
August 4, 1903, and the costs.
Under date of August 4, 1913, counsel for the-plaintiff filed a written complaint in the Court of First
Instance of Manila, alleging as his first cause of action
that on March 15, 1913, plaintiff leased the building at
No. 218 Calle Rosario, owned by the defendant, up to
December 31 of the same year, undertaking to pay
therefor the sum of P310 from said March 15 to June 30,
1913, and P315 from the subsequent first of July until the
termination of the lease; and that on April 14, 1913,
because of the leaks in the roof of the storeroom of said
building, without fault or negligence on the plaintiff's part,
some of his merchandise stored in said storeroom was
so wet and damaged as to cause him a loss amounting
to P1,169. He set forth as his second cause of action that
subsequent to this occurrence, to wit, on April 15, 1913, a
list of the damaged goods was made out in the presence
of the plaintiff, the defendant and a notary public;
that afterwards the defendant expressly authorized
the plaintiff to sell the damaged goods at any price,

promising to pay the difference between the selling price

and the regular price of the articles in good condition; that
by virtue of said authorization and promise, plaintiff
accordingly disposed of all the damaged goods that could
be sold, at a loss of P1,169; and that notwithstanding the
repeated demands made upon him to pay this amount,
according to promise, said defendant had refused and
refuses to pay. Therefore, judgment is prayed against the
defendant, sentencing him to pay to the plaintiff the sum
of P1,169 with legal interest, and the costs.
On September 3, 1913, defendant filed his answer
in writing, admitting certain paragraphs of the foregoing
com- plaint but specifically denying the rest, and alleging
as a special defense that the building the plaintiff
occupies had been recently finished, the construction
thereof having been under the direction and inspection of
an engineer, after approval of the plans and
specifications by the engineering and sanitation
departments of the city of Manila; that it was opened for
use after acceptation of the work by the city engineer and
approval by the said departments of engineering and
sanitation; that about 5 o'clock in the afternoon of April
14, 1913, there fell over the city of Manila a torrential rain
the heaviest from the month of January of that year; that
because of the large amount of water and the
extraordinary violence of the downpour many buildings in
the Escolta and adjacent business sections, not only
many buildings of wood merely, but even those of
reinforced concrete, were flooded by the overflowing of
the drains, gutters, and by filtrations, because the gutters
of the eaves and roofs were inadequate for holding the
extraordinarily excessive rainfall on that occasion; that
the wetting the plaintiff's merchandise sustained from that
rainfall was not caused wholly by the leaks and drips but
was in large part due to the improper situation or location
of said merchandise inside the building; that in neither
case was there fault or negligence on defendant's part,
said occurrence having been unforeseen, or, even being
foreseen, unavoidable; that it is true an inventory of the
plaintiff's damaged goods was made in the presence of
the interested parties before a notary public; that said
plaintiff presented to the defendant his claim for the

damages sustained, asking the latter to pay them; that

that the wetting the plaintiff's merchandise sustained from
that rainfall was not caused wholly by the leaks and drips
but was in large part due to the improper situation or
location of said merchandise inside the building; that in
neither case was there fault or negligence on defendant's
part, said occurrence having been unforeseen, or, even
being foreseen, unavoidable, for, as recorded in the
document drawn up on April 15, 1913, signed by the
plaintiff, the defendant's intervention therein did not
signify a tacit acceptance of any liability for the alleged
loss sustained by the plaintiff, but was merely to
determine the cause thereof and the manner in which the
water got into the building. As another special defense he
alleged that on August 2, 1913, defendant transferred all
his own rights, claims, and obligations in the lease, as
well as the absolute ownership of the building occupied
by plaintiff's store, to Seoras Romana, Cecilia, Luisa,
and Maria, of the surname Tantungco y Guepangco who,
by agreement set down in the instrument of transfer, took
over all the premises covered by the lease made by the
defendant to the plaintiff from the date thereof, to wit,
March 15, 1913, and consequently they were parties
directly interested in the present suit.
After trial and introduction of the evidence by both
parties, the court rendered the judgment that has been
set forth, whereupon defendant saved his exception and
filed a written motion for a reopening of the case and a
new trial. This motion was denied, with exception on
appellant's part and presentation of the corresponding bill
of exceptions, which was approved and forwarded to the
clerk of this court.
The question raised in this case No. 10006, and in
two others of the same nature, Nos. 10007 and 10008, is
whether the owner of a tenement occupied by each of the
defendants in the three cases cited, each in his
respective rooms or apartment, is responsible for the
deterioration through the wetting of the cloth and other
goods that said plaintiffs as tenants had in same and its
storerooms, as a result of the torrential and extraordinary
rain which fell upon the city for nearly an hour in the
afternoon of April 14, 1913.

Defendant's building, composed of four

apartments, had just been finished and a few months ago
was inspected by the city engineer and approved for the
use for which it was intended. There is no record that
said building presented any indication or sign of having
defects in its roof such as might cause leaks and damage
to the merchandise placed therein, for, to enable the
Chinese contractor Machuca to hand over the same, as
finished, the work was previously approved by the
architect who superintended the construction and finally
by the city engineer, who authorized the use and
occupancy of the building for leasing, therefore it is to be
presumed, in the absence of proof to the contrary, that
the owner who invested many thousands of pesos in the
construction would not have approved or accepted the
work on his building unless he had been convinced that
the building, finished by the contractor and approved by
his architect who superintended the work and by the city
engineer, had been properly constructed, and therefore
that in leasing it to the plaintiff-tenants he acted in the
greatest good faith; that they on their part, in taking over
and occupying the leased premises, did so satisfied and
persuaded that the building was adequate and would
serve for the use they had for it and that it had no defect
which would cause any injury or loss to their interests.
The principal rights and obligations of lessor and
lessee are comprised in the two following articles of the
Civil Code "ART. 1554. The lessor is obliged: 1. To deliver
to the lessee the thing which is the object of the contract.
2. To make thereon, during the lease, all the necessary
repairs in order to preserve it in condition to serve for the
purpose to which it was destined. 3. To maintain the
lessee in the peaceful enjoyment of the lease during all
the time of the contract ART. 1555. The lessee is obliged:
1. To pay the price of the lease in the manner agreed
upon. 2. To use the thing leased as a diligent father of a
family would, applying the same to the use agreed upon;
and, in the absence of an agreement, to the use which
may be inferred from the nature of the thing leased
according to the custom of the land. 3. To pay the
expenses arising from the instrument constituting the
contract. ART. 1556. If the lessor or lessee should not

comply with the obligations mentioned in the preceding

articles, they may request the rescission of the contract
and indemnity for losses and damages, or only the latter,
leaving the contract in force."
Did the defendant owner of the building in question
fail to carry out any obligation imposed by the law in the
foregoing articles, or at least some obligation imposed in
the lease? There is no evidence in the case that he failed
in the performance of the obligations he assumed in
executing the lease, nor does there appear to have been
stipulated therein the liability now imputed to him.
Article 1562 of the same code reads: "If, at the time
of the lease of the estate, the condition of the same was
not mentioned, the law presumes that the lessee
received it in good condition, unless there be proof to the
contrary."
Have the plaintiffs proven that when they accepted
defendant's building it was uninhabitable and inadequate
for the use for which they leased it? There is no evidence
in the case to prove such a circumstance.
Nor have the plaintiffs themselves even in the least
way proven that the three of them, or any one of them,
notified the defendant after they had occupied the
premises that repairs were necessary thereon for
keeping the same in condition suitable for the use
intended, and never did they notify the defendant that the
roof was defective or had holes or cracks that might
cause leakage and the wetting of the merchandise within
the building. The fact is that neither the lessor nor the
lessees knew that the roof was defective and was going
to leak when it rained, for they only became aware of the
leaks during the rainstorm on the afternoon of the day
mentioned, April 14; and therefore only on the hypothesis
that the lessor had known of such defect and had
concealed it from the plaintiffs could he be held
responsible for the consequences thereof on account of
the leakages that occurred, especially when it has not
been duly proven that the defendant lessor failed to
perform any of the obligations imposed by the law in the
article quoted, 1554, by which he might be held

responsible to the plaintiffs for damages and losses for

which indemnity is unwarrantedly sought.
Besides the articles quoted there is nothing in the
Civil Code by virtue whereof the lessor may be declared
responsible for the damages and losses the lessees may
have sustained as a consequence of the leaks in the roof
of the building leased and for the other troubles they
have encountered.
If as a consequence of the torrential rainfall
mentioned, which in scarcely an hour filled the squares,
streets and lots of the city of Manila, and if as a result of
the large quantity of water that fell the yard of the
premises in question was flooded and the roof leaked,
there being no outlet for the water through the drainpipes, by reason whereof the plaintiffs had to break open
four bell traps in the yard so that the water would quickly
and swiftly flow away thus preventing a greater
inundation of the yard of the premises, the occurrence
was undoubtedly due toforce majeure, being a fortuitous
event which could not have been foreseen by the owner
or the plaintiff-tenants, or many other proprietors of stores
whose interiors were flooded as a result of that heavy
rainfall, and consequently the damages and losses the
water inflicted upon the plaintiffs could not be ascribed to
the owner of the premises so as to hold him liable for the
indemnity.
Article 1105 of the same Code prescribes: "No one
shall be liable for events which could not be foreseen, or
which having been foreseen were inevitable, with the
exception of the cases expressly mentioned in the law or
those in which the obligation so declares."
The wetting sustained by the goods and
merchandise of the plaintiffs as a consequence of the
heavy torrential rainfall on the afternoon mentioned,
which caused leaks in the building and flooded the yard,
is not a case expressly mentioned by the law for which
the owner of the premises is responsible, and further it
does not appear to have been provided against in the
lease to be seen on folio 15, letter A, by virtue whereof
the lessor would be liable to an indemnity for the
damages and losses caused his tenants by that rainfall;

and so, in accordance with the provisions of the article

quoted above, the defendant is not responsible for the
results of the torrential rainfall that has been described.
A fortuitous event is an accident independent of the
obligor's will to carry out some stipulation and it is plain
that for him to escape the imputation of not performing
his obligation he must be placed in a situation arising
from an unforeseen event, or in one where, even if he
had foreseen it, still he could not have avoided it, by
reason of the fact that its unexpectedness and
inevitability places it beyond human control.
It was not stipulated in the lease executed between
the defendant and the plaintiffs that, if the goods and
merchandise the defendant-tenants might have on the
premises should get wet, the defendant would as lessor
thereof be liable for indemnity, nor have the plaintiffs
been able to allege such liability in their claim; and we do
not know of any article of the Civil Code included in the
chapter which deals with leasing of urban property that
makes any provision for such liability on the part of the
owner of the property.
If, on the said afternoon of April 14, it rained so
heavily and, so abundantly that the roof of the building
occupied by the plaintiffs, even ,though in good condition,
according to the municipal architect's certificate, leaked,
and if as a consequence of that torrential rainfall said
merchandise of the plaintiffs got wet, the occurrence is
not imputable to the lessor owner of the building, nor
according to any evidence in the case to the lessor's
fault. Being evidently a fortuitous event, unforeseeable by
any of the litigating parties, inevitable on account of force
majeure, the case discloses no proof of any kind that the
defendant Tiaoqui knew that the roof of the building
leased to the plaintiffs had cracks or defects in it that
would cause leakages, just as the plaintiff-tenants did not
know that fact themselves, for otherwise they would have
notified the defendant-lessor in due season and
demanded immediate repair thereof so as to avoid injury
to their interests.
Nobody, neither the defendant nor the plaintiffs,
could have foreseen that on the said afternoon of April 14

it was going to rain in torrents and in an extraordinary

manner, wherefore it is neither right nor proper to ascribe
the wetting of the merchandise of the plaintiff-tenants to
negligence, carelessness, or fault on the defendant's
part. It was a case of accident and force majeure which
could not have been foreseen and which nobody could
have prevented, and the fact that the defendant repaired
and fixed the leaks in the roof the next day cannot be
taken as proof of his liability, for he did not know and
could not have foreseen that it was going to rain in
torrents the said afternoon and that the roof of the
building would leak and show defects.
It would be an absurdity which the law cannot
authorize for said tenant to be entitled to claim damages
from the owner because the roof of a building leaked and
some of the tenant's goods got wet, for no provision of
the law relating to leases of urban property places any
such obligation on the owner to pay indemnity for
damages, when he himself did not know that there was
any defect to cause such damages.
Article 1553 of the Civil Code declares that the
provisions relating to warranty contained in the title of
purchase and sale are applicable to leases.
In connection with a lease, warranty is the
obligation to repair or correct the error whereunder the
lessee took over the property leased, but when the law
declares that the lessor must warrant the thing leased, it
is not to be understood that he must also indemnify the
lessee. Liability for the warranty is not equivalent to
liability in damages, as the latter is an obligation distinct
from the former.
For proper understanding of the provisions of
articles 1484 and 1485 of the Civil Code dealing with
warranty it is necessary to remember that under their
provisions the-lessor is liable for the warranty of the thing
leased against any hidden defects it may have, even
when unknown to said lessor, but this liability for warranty
of the thing leased does not amount to an obligation to
indemnify the tenant for damages, which is only to be
allowed when there is proof that the lessor acted with

fraud and in bad faith by concealing the defect in the

thing leased and in not revealing it to the lessee.
Article 1486 of the Code reads:
"In the cases of the two preceding articles
(1484 and 1485) the vendee (sc. lessee) may
choose between withdrawing from the contract,
the expenses which he may have incurred being
returned to him, or demanding a proportional
reduction of the price, according to the judgment
of experts.
"If the vendor (sc. lessor) knew of the faults
or hidden defects in the thing sold (sc. leased) and
did not give notice thereof to the vendee (sc.
lessee), the latter shall have the same option, and,
furthermore, be indemnified for the losses and
damages should he choose the rescission."

It must be kept in mind that the foregoing article

and the two previously quoted appear in the title on
contracts of purchase and sale and are in every way
applicable, according to article 1553 of the same code, to
leases.
Hence, while the lessor is obligated by general rule
to warranty of the thing leased, whether or not he may
know of the existence therein of defects that render it
inadequate for the use the tenant intends, he is only
liable for an indemnity for damages in addition to the
warranty when he knew of the defects in the thing leased
and had not revealed them to the lessee, a procedure
which induces the presumption that he acted with fraud
and in bad faith; but in order to hold him responsible for
the damages and losses caused by such defects there
must be the express condition that the lessee should
choose rescission of the contract, according to the
prescription of the second paragraph of the article quoted
above, whence it is inferred that, should the lessee insist
upon continuing the contract by occupying the property,
he must be understood to have waived the indemnity.
The plaintiffs, without choosing warranty of the
property leased, supposing that they were entitled to

require it, set up a direct claim for indemnity for losses

and damages from the lessor, without having proven that
the latter had knowledge of the defects in the roof of the
building leased and in spite of such knowledge did not
reveal it to the plaintiff-tenants, thus acting with malice
and bad faith; and yet they continued to occupy the
property without having sought or demanded rescission
of the contract; wherefore, even supposing that the lessor
were liable under the law for losses had damages, the
plaintiffs were not and are not entitled to' claim such,
because they in fact waived the indemnity. Read the
above-quoted article of the code carefully.
As for the rest, article 1101 of the Civil Code reads:
"Those who in fulfilling their obligations are
guilty of fraud, negligence, or delay, and those
who in any manner whatsoever act in
contravention of the stipulations of the same, shall
be subject to indemnity for the losses and
damages caused thereby."

It has not been demonstrated in the case that the

defendant lessor failed to fulfill the conditions of the lease
or that he acted with fraud, negligence or delay in the
fulfillment of said conditions. (Arts. 110~1104, Civil
Code.)
In a judgment on appeal of October 29, 1887, the
supreme court of Spain, in applying said article 1101 of
the civil code of that country, identical with the one in
force in these Islands, laid down the principle that,
according to established jurisprudence, indemnity for
losses and damages cannot be claimed when they are
caused by a fortuitous event.
As for the other facts alleged by the parties, which
have been the subject of the evidence adduced by them,
the record contains a certificate from the Observatory in
this city to the effect that the rain which fell over the city
on April 14, 1913, was the heaviest from January to the
said month of April of that year, for 48.3 mm. of water
were registered in the rain-gauge, an amount of rainfall
notably excessive and the greatest during that period of
four months.

Counsel for the plaintiffs has strongly insisted in his

briefs that the defendant-lessor agreed and stipulated to
pay the amount of the deterioration or depreciation of the
goods and merchandise that were wet.
It has not been duly proven in the case that the
lessor Tiaoqui admitted, or agreed to pay, the amount of
the losses and damages sustained by the plaintiffs
because they sold the merchandise, wet by the rainfall
that afternoon, for a lower price than it was really worth.
The declarations of the three plaintiffs do not constitute
sufficient proof to offset the positive denial of the
defendant Tiaoqui; and the witnesses called by said
plaintiffs, far from confirming their allegations, made
affirmations contradictory among themselves and at
variance with the assertion of the plaintiffs interested, for
the latter aver that two of them demanded of Tiaoqui and
were promised by him that he would pay a half of the
difference caused by the lower price at the sale of the
goods, while the witnesses cited stated under oath
that Tiaoqui agreed to pay the whole amount resulting
from the depreciation in the value of the merchandise.
In fact, the record reveals that the
defendant Tiaoqui denied in a sworn statement (folios 25
and 28) that he had agreed to pay damages to the
plaintiffs and alleged that, not only did he make plain that
his intervention in the notarial instrument drawn up the
day after the disaster did not signify that he tacitly
accepted any responsibility arising from the alleged
losses in the merchandise, but furthermore, when
demand was made by two of them that he pay the
amount averred as the extent of said respective losses,
he replied that he could not pay it; and he added that,
when for a second time the plaintiffs saw him for the
purpose of collecting, he answered in the greatest good
faith that he would investigate whether there were
defects in the roof of the building to cause leaks, in which
case he would collect from the contractor Machuca and
that the sum the latter might pay him he would deliver to
the plaintiffs to cover said losses and damages, but that if
said contractor did not pay up or if the leaks had resulted
from the torrential rain which fell over Manila he would
not pay them a cent. The promise contained in the first

part of the defendant's answer plainly has a condition

attached to it, and there is no record that the plaintiffs
accepted it or that they agreed to the condition
mentioned, and therefore it cannot serve as ground for
an adverse finding.
The contractor Rafael Machuca Gotauco testified
that he constructed the defendant's building, located in
Calle Rosario, according to plans and specifications
which were kept before him, and that after the work had
been finished the architect certified that said building was
well constructed; and he added that he did not know why
the water penetrated at the junction of the roof of the
building with the firewall, for that junction had been
carefully made, but thought it must have been due to that
torrential rainfall.
The attorney, Vicente Miranda, testified in-his
sworn statement that on the afternoon in question he was
in Clarke's situated in the Escolta and that as a
consequence of the rainfall the persons there had to put
their feet on the tables because the water rose so high
that it overflowed the sidewalk. This the witness Aurelio
Acua corroborates in his testimony by saying that his
store at No. 201 Calle Rosario was filled with water
flowing from the yard and the street, so that he sustained
damages, and that he saw his neighbors had to bail the
water out of the interior of their stores or shops with pails
and washbasins. Attorney Miranda added that over a
week after the occurrence he had interviews with
Attorney O'Brien, counsel for the plaintiff Tan Tiap, and
they two talked about the liability of the defendant for the
losses and damages sustained by the plaintiff Tan Tiap,
and he did not then hear that the defendant Tiaoqui had
promised to pay the plaintiffs a part or all of the amount
of the losses and damages they may have sustained
through the wetting of their goods and merchandise.
Summing up, the record fully demonstrates that the
defendant Alfonso M. Tiaoqui is not liable under the law
to pay indemnity for losses and damages because of the
wetting of the goods and merchandise of Yap KimChuan,
plaintiff in case No. 10,006; of Marciano Ong Qui Sing
plaintiff in case No. 10,007; and Tan Tiap, plaintiff in case
No. 10,008; and that on the other hand these cases do

not reveal satisfactory and conclusive evidence that the

defendant lessor Tiaoqui agreed to make up all or part of
the loss or depreciation on the sale of the goods and
merchandise that was wet.
It is to be observed that as the three said cases are
based on analogous facts, having the same origin, they
were tried together and the parol and documentary
evidence adduced by the parties in each of said cases
was all taken in No. 10,006; and as the questions of fact
and of law raised in all three cases are the same, the
legal grounds for the final decision in all three cases are
set forth only in the decision of the first of them, in order
to avoid useless and unnecessary repetition.
Romana Tantungco and three others, represented
by the same counsel for the defendant, as owners of the
building leased to the plaintiffs after August 2, 1913,
through the transfer made by the defendant, prayed that
they be allowed to intervene in these three cases, that
the said cases be finally dismissed and that they be
absolved from the complaints filed. These contentions
were opposed by the plaintiffs, but the record does not
show that any action was taken on the motions presented
by the parties.
For the foregoing reasons the judgment appealed
from, as rendered in this case, No. 10006, must be
reversed, and the defendant Alfonso
M. Tiaoqui absolved, as we do absolve him, from the
complaint filed by Yap Kim Chuan, without special finding
as to costs in both instances. So ordered.
Arellano, C.J., and Araullo, J., concur.
Johnson, J., concurs in the result.

4.)

ECOND DIVISION

[G.R. No. 73913. January 31, 1989.]

JERRY T. MOLES, petitioner, vs. INTERMEDIATE
APPELLATE COURT and MARIANO M.
DIOLOSA, respondents.
Zoilo V. De la Cruz, Jr., Kenneth Barredo, Romeo Sabig and Natalio
V. Sitjao for petitioners.
Rolando N. Medalla and Jose G. Guiez, Jr., for private
respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; VENUE; STIPULATION MUST
BE INTELLIGENTLY AND DELIBERATELY INTENDED BY THEM;
EXCEPTIONS. It is obvious that a venue stipulation, in order to
bind the parties, must have been intelligently and deliberately
intended by them to exclude their case from the reglementary
rules on venue. Yet, even such intended variance may not
necessarily be given judicial approval, as, for instance, where
there are no restrictive or qualifying words in the agreement
indicating that venue cannot be laid in any place other than that
agreed upon by the parties, and in contracts of adhesion.
2. CIVIL LAW; SPECIAL CONTRACTS; SALES; IMPLIED WARRANTY;
DOES NOT APPLY TO SECONDHAND ARTICLES SUBJECT TO
INSPECTION AT THE TIME OF THE SALE. It is generally held that
in the sale of a designated and specific article sold as
secondhand, there is no implied warranty as to its quality or
fitness for the purpose intended, at least where it is subject to

inspection at the time of the sale. On the other hand, there is also
authority to the effect that in a sale of a secondhand articles
there may be, under some circumstances, an implied warranty of
fitness for the ordinary purpose of the article sold or for the
particular purpose of the buyer. In a line of decisions rendered by
the United States Supreme Court, it had theretofore been held
that there is no implied warranty as to the condition, adaptation,
fitness, or suitability for the purpose for which made, or the
quality, of an article sold as and for a secondhand article. Thus, in
finding for private respondent, the respondent court cited the
ruling in Sison vs. Ago, et al. to the effect that unless goods are
sold as to raise an implied warranty, as a general rule there is no
implied warranty in the sale of secondhand articles.
3. ID.; ID.; ID.; ID.; ID.; EXCEPTIONS. The general rule, however,
is not without exceptions. Article 1562 of our Civil Code, which
was taken from the Uniform Sales Act, provides: "Art. 1562. In a
sale of goods, there is an implied warranty or condition as to the
quality or fitness of the goods, as follows: (1) Where the buyer,
expressly or by implication, makes known to the seller the
particular purpose for which the goods are acquired, and it
appears that the buyer relies on the seller's skill or judgment
(whether he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be reasonably fit for such
purpose;" Furthermore, and of a more determinative role in this
case, a perusal of past American decisions likewise reveals a
uniform pattern of rulings to the effect that an express warranty
can be made by and also be binding on the seller even in the sale
of a secondhand article.
4. ID.; ID.; ID.; ID.; WHAT DOES NOT APPEAR ON FACE OF
WRITTEN INSTRUMENT SHOULD BE REGARDED AS DEALER'S OR
TRADER'S TALK. Ordinarily, what does not appear on the face

of the written instrument should be regarded as dealer's or

trader's talk; conversely, what is specifically represented as true
in said document, as in the instant case, cannot be considered as
mere dealer's talk.
5. ID.; ID.; ID.; REDHIBITORY DEFECT; MUST BE AN IMPERFECTION
OR DEFECT OF SUCH NATURE AS TO ENGENDER A CERTAIN
DEGREE OF IMPORTANCE. On the question as to whether the
hidden defects in the machine is sufficient to warrant a rescission
of the contract between the parties, we have to consider the rule
on redhibitory defects contemplated in Article 1561 of the Civil
Code. A redhibitory defect must be an imperfection or defect of
such nature as to engender a certain degree of importance. An
imperfection or defect of little consequence does not come within
the category of being redhibitory.
6. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; FACTUAL FINDING
OF TRIAL COURT MUST BE UPHELD, THERE BEING AMPLE
EVIDENCE TO SUSTAIN THE SAME. An expert witness for the
petitioner categorically established that the machine required
major repairs before it could be used. This, plus the fact that
petitioner never made appropriate use of the machine from the
time of purchase until an action was filed, attest to the major
defects in said machine, by reason of which the rescission of the
contract of sale is sought. The factual finding, therefore, of the
trial court that the machine is not reasonably fit for the particular
purpose for which it was intended must be upheld, there being
ample evidence to sustain the same.
7. CIVIL LAW; SPECIAL CONTRACTS; SALES; EXPRESS WARRANTY;
PRESCRIPTIVE PERIOD; GENERAL RULE ON RESCISSION OF
CONTRACT APPLIES THEREIN. At a belated stage of this appeal,
private respondent came up for the first time with the contention
that the action for rescission is barred by prescription. While it is

true that Article 1571 of the Civil Code provides for a prescriptive
period of six months for a redhibitory action, a cursory reading of
the ten preceding articles to which it refers will reveal that said
rule may be applied only in case of implied warranties. The
present case involves one with and express warranty.
Consequently, the general rule on rescission of contract, which is
four years shall apply. Considering that the original case for
rescission was filed only one year after the delivery of the subject
machine, the same is well within the prescriptive period.
8. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; DEFENSE OF
PRESCRIPTION IS WAIVED AND CANNOT BE CONSIDERED
THEREON IF NOT RAISED IN TRIAL COURT. This is aside from
the doctrinal rule that the defense of prescription is waived and
cannot be considered on appeal if not raised in the trial court,
and this case does not have the features for an exception to said
rule.

DECISION

REGALADO, J :
p

This petition for review on certiorari assails the decision of the

then Intermediate Appellate Court

dismissing the complaint

filed by herein petitioner against the herein private respondent in

the former Court of First Instance of Negros Occidental in Civil
Case No. 13821 thereof.

The factual backdrop of this controversy, as culled from the

records,

shows that on May 17, 1978, petitioner Jerry T. Moles

commenced a suit against private respondent Mariano M. Diolosa

in the aforesaid trial court, Branch IV in Bacolod City, for

rescission of contract with damages. Private respondent moved to

dismiss on the ground of improper venue, invoking therefor Sales
Invoice No. 075A executed between petitioner and private
respondent on April 23, 1977 which provides that "all judicial
actions arising from this contract shall be instituted in the City of
Iloilo."

This was opposed by petitioner who averred that there is

no formal document evidencing the sale which is substantially

verbal in character. In an order dated June 23, 1978, the trial
court denied the motion to dismiss, holding that the question of
venue could not be resolved at said stage of the case. The
subsequent motion for reconsideration was likewise denied.
Consequently, private respondent, invoking the aforesaid venue
stipulation, preceded to this Court on a petition for prohibition
with preliminary injunction in G.R. No. 49078, questioning the
validity of the order denying his aforesaid two motions and
seeking to enjoin the trial court from further proceeding with the
case. This petition was dismissed for lack of merit in a resolution
of the Court, dated February 7, 1979, and which became final on
March 15, 1979. Thereafter, private respondent filed his answer
and proceeded to trial.
The aforecited records establish that sometime in 1977,
petitioner needed a linotype printing machine for his printing
business, The LM Press at Bacolod City, and applied for an
industrial loan with the Development Bank of the Philippines,
(hereinafter, DBP) for the purchase thereof. An agent of Smith,
Bell and Co. who is a friend of petitioner introduced the latter to
private respondent, owner of the Diolosa Publishing House in
Iloilo City, who had two available machines. Thereafter, petitioner
went to Iloilo City to inspect the two machines offered for sale
and was informed that the same were secondhand but functional.

On his second visit to the Diolosa Publishing House, petitioner

together with Rogelio Yusay, a letterpress machine operator,
decided to buy the linotype machine, Model 14. The transaction
was basically verbal in nature but to facilitate the loan application
with the DBP, a pro forma invoice, dated April 23, 1977 and
reflecting the amount of P50,000.00 as the consideration of the
sale, was signed by petitioner with an addendum that payment
had not yet been made but that he promised to pay the full
amount upon the release of his loan from the aforementioned
bank on or before the end of the month 5Although the agreed
selling price was only P40,000.00, the amount on the invoice was
increased by P10,000.00, said increase being intended for the
purchase of new matrices for said machine.

prLL

Sometime between April and May, 1977, the machine was

delivered to petitioner's publishing house at Tangub, Bacolod City
where it was installed by one Crispino Escurido, an employee of
respondent Diolosa. Another employee of the Diolosa Publishing
House, Tomas Plondaya, stayed at petitioner's house for almost a
month to train the latter's cousin in operating the machine.

Under date of August 29, 1977, private respondent issued a

certification wherein he warranted that the machine sold was in
"A-1 condition", together with other express warranties.

Prior to the release of the loan, a representative from the DBP,

Bacolod, supposedly inspected the machine but he merely looked
at it to see that it was there

The inspector's recommendation

was favorable and, thereafter, petitioner's loan of P50,000.00 was

granted and released. However, before payment was made to
private respondent, petitioner required the former, in a letter
dated September 30, 1977, to accomplish the following, with the
explanations indicated by him:

1) Crossed check for P15,407.10 representing:

a) P10,000.00 Overprice in the machine;
b) P 203.00 Freight and handling of the machine;
c) P 203.00 Share in the electric repair; and
d) P 5,000.00 Insurance that Crispin will come
back and repair the linotype machine at seller's
account as provided in the contract; after Crispin
has put everything in order when he goes home on
Sunday he will return the check of P15,000.00.
2) Official receipt in the amount of P50,000.00 as full
payment of the linotype machine.

These were immediately complied with by private respondent

and on the same day, September 30, 1977, he received the DBP
check for P50,000,00.

It is to be noted that the aforesaid official receipt No. 0451, dated

September 30, 1977 and prepared and signed by private
respondent, expressly states that he received from the petitioner
"the DBP check for P50,000.00 issued in our favor in full payment
of one (1) Unit Model 14 Linotype Machine as perPro
forma Invoice dated April 23, 1977."

10

On November 29, 1977, petitioner wrote private respondent that

the machine was not functioning properly as it needed a new
distributor bar. In the same letter, petitioner unburdened himself
of his grievances and sentiments in this wise.

LibLex

"We bought this machine in good faith because we

trusted you very much being our elder brother in printing
and publishing business. We did not hire anybody to look
over the machine, much more ask for a rebate in your

price of P40,000.00 and believed what your trusted two

men, Tomas and Crispin, said although they were hiding
the real and actual condition of the machine for your
business protection.
"Until last week, we found out the worst ever to happen
to us. We have been cheated because the expert of the
Linotype machine from Manila says, that the most he will
buy your machine is at P5,000.00 only . . ."

11

Private respondent made no reply to said letter, so petitioner

engaged the services of other technicians. Later, after several
telephone calls regarding the defects in the machine, private
respondent sent two technicians to make the necessary repairs
but they failed to put the machine in running condition. In fact,
since then petitioner was never able to use the machine.

12

On February 18, 1978, not having received from private

respondent the action requested in his preceding letter as
hereinbefore stated, petitioner again wrote private respondent,
this time with the warning that he would be forced to seek legal
remedies to protect his interest.

13

Obviously in response to the foregoing letter, private respondent

decided to purchase a new distributor bar and, on March 16,
1978, private respondent delivered this spare part to petitioner
through one Pedro Candido. However, when thereafter petitioner
asked private respondent to pay for the price of the distributor
bar, the latter asked petitioner to share the cost with him.
Petitioner thus finally decided to indorse the matter to his lawyer.
An expert witness for the petitioner, one Gil Legaspina, declared
that he inspected the linotype machine involved in this case at
the instance of petitioner. In his inspection thereof, he found the
following defects: (1) the vertical automatic stop lever in the

casting division was worn out; (2) the justification lever had a
slight breach (balan in the dialect); (3) the distributor bar was
worn out; (4) the partition at the entrance channel had a tear; (5)
there was no "pie stacker" tube entrance; and (6) the slouch arm
lever in the driving division was worn out.
It turned out that the said linotype machine was the same
machine that witness Legaspina had previously inspected for Sy
Brothers, a firm which also wanted to buy a linotype machine for
their printing establishment. Having found defects in said
machine, the witness informed Sy Brother about his findings,
hence the purchase was aborted. In his opinion, major repairs
were needed to put the machine back in good running
condition.

14

After trial, the court a quo rendered a decision the dispositive

portion of which reads:
"IN VIEW OF THE FOREGOING CONSIDERATIONS,
judgment is hereby rendered as follows:.
(1) Decreeing the rescission of the contract of sale
involving one linotype machine No. 14 between the
defendant as seller and the plaintiff as buyer;
(2) Ordering the plaintiff to return to the defendant at the
latter's place of business in Iloilo City the linotype
machine aforementioned together with all accessories
that originally were delivered to the plaintiff;
(3) Ordering the defendant to return to the plaintiff the
sum of Forty Thousand Pesos (P40,000.00) representing
the price of the linotype machine, plus interest at the
legal rate counted from May 17, 1978 when this action
was instituted, until fully paid;

(4) Ordering the defendant to indemnify the plaintiff the

sum of Four Thousand Five Hundred Pesos (P4,500.00)
representing unearned income or actual damages;
(5) Ordering the defendant to pay the plaintiff the sum of
One Thousand Pesos (P1,000.00) for attorney's fees.
Costs against the defendant."

15

From this decision, private respondent appealed to the

Intermediate Appellate Court which reversed the judgment of the
lower court and dismissed petitioner's complaint, hence the
present petition.
We find merit in petitioner's cause.
On the matter of venue, private respondent relies on the
aforementioned Sales Invoice No. 075A which allegedly requires
that the proper venue should be Iloilo City and not Bacolod City.
We agree with petitioner that said document is not the contract
evidencing the sale of the linotype machine, it being merely a
preliminary memorandum of a proposal to buy one linotype
machine, using for such purpose a printed form used for printing
job orders in private respondent's printing business. As
hereinbefore explained, this issue on venue was brought to Us by
private respondent in a special civil action for prohibition with
preliminary injunction in G.R. No. 49078. After considering the
allegations contained, the issues raised and the arguments
adduced in said petition, as well as the comments thereto, the
Court dismissed the petition for lack of merit. Respondent court
erred in reopening the same issue on appeal, with a contrary
ruling.

LLpr

Furthermore, it was error for the respondent court, after adopting

the factual findings of the lower court, to reverse the latter's
holding that the sales invoice is merely a pro

forma memorandum. The records do not show that this finding is

grounded entirely on speculation, surmises or conjectures as to
warrant a reversal thereof.

16

In fact, as hereinbefore stated,

private respondent expressly admitted in his official receipt No.

0451, dated September 30, 1977, that the said sales invoice was
merely a pro forma invoice. Consequently, the printed provisions
therein, especially since the printed form used was for purposes
of other types of transactions, could not have been intended by
the parties to govern their transaction on the printing machine. It
is obvious that a venue stipulation, in order to bind the parties,
must have been intelligently and deliberately intended by them
to exclude their case from the reglementary rules on venue. Yet,
even such intended variance may not necessarily be given
judicial approval, as, for instance, where there are no restrictive
or qualifying words in the agreement indicating that venue
cannot be laid in any place other than that agreed upon by the
parties,

17

and in contracts of adhesion.

18

Now, when an article is sold as a secondhand item, a question

arises as to whether there is an implied warranty of its quality or
fitness. It is generally held that in the sale of a designated and
specific article sold as secondhand, there is no implied warranty
as to its quality or fitness for the purpose intended, at least where
it is subject to inspection at the time of the sale. On the other
hand, there is also authority to the effect that in a sale of a
secondhand articles there may be, under some circumstances, an
implied warranty of fitness for the ordinary purpose of the article
sold or for the particular purpose of the buyer.

19

In a line of decisions rendered by the United States Supreme

Court, it had theretofore been held that there is no implied
warranty as to the condition, adaptation, fitness, or suitability for

the purpose for which made, or the quality, of an article sold as

and for a secondhand article.

20

Thus, in finding for private respondent, the respondent court

cited the ruling in Sison vs. Ago, et al.

21

to the effect that unless

goods are sold as to raise an implied warranty, as a general rule

there is no implied warranty in the sale of secondhand articles.

22

Said general rule, however, is not without exceptions. Article

1562 of our Civil Code, which was taken from the Uniform Sales
Act, provides:
"Art. 1562. In a sale of goods, there is an implied
warranty or condition as to the quality or fitness of the
goods, as follows:
(1) Where the buyer, expressly or by implication, makes
known to the seller the particular purpose for which the
goods are acquired, and it appears that the buyer relies
on the seller's skill or judgment (whether he be the
grower or manufacturer or not), there is an implied
warranty that the goods shall be reasonably fit for such
purpose;"
xxx xxx xxx

In Drumar Mining Co. vs. Morris Ravine Mining Co.,

23

the District

Court of Appeals, 3rd District, California, in applying a similar

provision of law, ruled:
"There is nothing in the Uniform Sales Act declaring there
is no implied warranty in the sale of secondhand goods.
Section 1735 of the Civil Code declares there is no
implied warranty or condition as to the quality or fitness
for any particular purpose, of goods supplied under a
contract to sell or a sale, except (this general statement

is followed by an enumeration of several exceptions). It

would seem that the legislature intended this section to
apply to all sales of goods, whether new or secondhand.
In subdivision 1 of this section, this language is used:
'Where the buyer . . . makes known to the seller the
particular purpose for which the goods are required, and
it appears that the buyer relies on the seller's skill or
judgment . . . there is an implied warranty that the goods
shall be reasonably fit for such purpose.' "

Furthermore, and of a more determinative role in this case, a

perusal of past American decisions

24

likewise reveals a uniform

pattern of rulings to the effect that an express warranty can be

made by and also be binding on the seller even in the sale of a
secondhand article.

prcd

In the aforecited case of Markman vs. Hallbeck, while holding that

there was an express warranty in the sale of a secondhand
engine, the court said that it was not error to refuse an
instruction that upon the sale of secondhand goods no warranty
was implied, since secondhand goods might be sold under such
circumstances as to raise an implied warranty.
To repeat, in the case before Us, a certification to the effect that
the linotype machine bought by petitioner was in A-1 condition
was issued by private respondent in favor of the former. This
cannot but be considered as an express warranty. However, it is
private respondent's submission, that the same is not binding on
him, not being a part of the contract of sale between them. This
contention is bereft of substance.
It must be remembered that the certification was a condition sine
qua non for the release of petitioner's loan which was to be used

as payment for the purchase price of the machine. Private

respondent failed to refute this material fact. Neither does he
explain why he made that express warranty on the condition of
the machine if he had not intended to be bound by it. In fact, the
respondent court, in declaring that petitioner should have availed
of the remedy of requiring repairs as provided for in said
certification, thereby considered the same as part and parcel of
the verbal contract between the parties.
On the basis of the foregoing circumstances, the inescapable
conclusion is that private respondent is indeed bound by the
express warranty he executed in favor of herein petitioner.
We disagree with respondent court that private respondent's
express warranty as to the A-1 condition of the machine was
merely "dealer's talk". Private respondent was not a dealer of
printing or linotype machines to whom could be ascribed the
supposed resort to the usual exaggerations of trade in said items.
His certification as to the condition of the machine was not made
to induce petitioner to purchase it but to confirm in writing for
purposes of the financing aspect of the transaction his
representations thereon. Ordinarily, what does not appear on the
face of the written instrument should be regarded as dealer's or
trader's talk;

25

conversely, what is specifically represented as

true in said document, as in the instant case, cannot be

considered as mere dealer's talk.
On the question as to whether the hidden defects in the machine
is sufficient to warrant a rescission of the contract between the
parties, we have to consider the rule on redhibitory defects
contemplated in Article 1561 of the Civil Code. A redhibitory
defect must be an imperfection or defect of such nature as to
engender a certain degree of importance. An imperfection or

defect of little consequence does not come within the category of

being redhibitory.

26

As already narrated, an expert witness for the petitioner

categorically established that the machine required major repairs
before it could be used. This, plus the fact that petitioner never
made appropriate use of the machine from the time of purchase
until an action was filed, attest to the major defects in said
machine, by reason of which the rescission of the contract of sale
is sought. The factual finding, therefore, of the trial court that the
machine is not reasonably fit for the particular purpose for which
it was intended must be upheld, there being ample evidence to
sustain the same.
At a belated stage of this appeal, private respondent came up for
the first time with the contention that the action for rescission is
barred by prescription. While it is true that Article 1571 of the
Civil Code provides for a prescriptive period of six months for a
redhibitory action, a cursory reading of the ten preceding articles
to which it refers will reveal that said rule may be applied only in
case of implied warranties. The present case involves one with
and express warranty. Consequently, the general rule on
rescission of contract, which is four years

27

shall apply.

Considering that the original case for rescission was filed only one
year after the delivery of the subject machine, the same is well
within the prescriptive period. This is aside from the doctrinal rule
that the defense of prescription is waived and cannot be
considered on appeal if not raised in the trial court,

28

and this

case does not have the features for an exception to said rule.
WHEREFORE, the judgment of dismissal of the respondent court
is hereby REVERSED and SET ASIDE, and the decision of the
court a quo is hereby REINSTATED.

SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento,
JJ., concur.
(Moles v. Intermediate Appellate Court, G.R. No. 73913, [January
31, 1989], 251 PHIL 711-725)
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