WARRANTY AGAINST HIDDEN DEFECTS

Yap Kim Chuan v. Tiaoqui G.R. No. 10006, September 18, 1915 Torres, J.:
FACTS: The plaintiff in this case is a lessee of the defendant. During the period of lease, his
merchandise was damaged due to leaks in the roof of the storeroom in the leased building. For
this reason, he asked the defendant-lessor to indemnify him for damage caused by the leaks in
the roof. The defendant-lessor, on the other hand, argued that the building being occupied by the
plaintiff was new and was built based on standard required by the government. The leak was due
to a torrential rain the heaviest from the month of January of that year. He further argued that the
leak was not solely caused by the heavy rain but also due to improper location of said
merchandise inside the building.
ISSUE: Can the lessor be held liable for indemnity for the damage caused to the goods of lessee?
Did he fail to perform his obligations as lessor?
HELD: No. Article 1562 of the Civil 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." Moreover, 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. The fact is that neither
the lessor no 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; 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. Indeed lessor is liable for warranty against any hidden defects. 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 to the lessee.

MERCHANTIBILITY AND FITNESS

Jerry T. Moles V. Intermediate Appellate Court And Mariano M. Diolosa

FACTS: Jerry Moles bought from Mariano Diolosa owner of Diolosa Publishing House a
linotype printing machine (secondhand machine). Moles promised Diolosa that will pay the full
amount after the loan from DBP worth P50,000.00 will be released. Private respondent on return
issued a certification wherein he warrated that the machine was in A-1 condition, together with
other express warranties. After the release of the of the money from DBP, Petitioner required the
Respondent to accomplish some of the requirements. On which the dependant complied the
requirements on the same day. On November 29, 1977, petitioner wrote private respondent that
the machine was not functioning properly. The petitioner found out that the said machine was not
in good condition as experts advised and it was worth lesser than the purchase price. After
several telephone calls regarding the defects in the machine, private respondent sent two
technicians to make necessary repairs but they failed to put the machine in running condition and
since then the petitioner wan unable to use the machine anymore.
ISSUES 1. WON there is an implied warranty of its quality or fitness.
2. WON the hidden defects in the machine is sufficient to warrant a rescission of the contract
between the parties.
HELD 1. 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 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. 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: 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;" 2. 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. 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 an 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. 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.