PSCC V Quinones Digest
Uploaded by
Michael Parreño VillagraciaPSCC V Quinones Digest
Uploaded by
Michael Parreño VillagraciaPhil Steel Coating Corp. vs.
Quinones GR 194533
Nature: Complaint for damages filed by Quinones against Phil Steel
Facts: Richard Lopez, a sales engineer of PSCC offered Quinones a
primer-coated, long-span, rolled galvanized iron sheets. Q was interested
but was not sure if the product was compatible with the Guilder Acrylic
Paint Process used by his company in finishing buses sold.
Lopez referred Q to his superior, Angbenco. He assured Q that the quality
of the product was superior to that of the one currently being used by his
company. AB further guaranteed that there had been a lab test that was
conducted by PSCC that the results were compatible. Q expressed
reservations but eventually was induced.
Sometime after, Q received several complaints from his customers who
had bought bus units, claiming that the paint or finish used on the bus was
breaking and peeling off.
Q sent a letter to PSCC invoking warranties that the damage were
attributable to the hidden defects of the product sold to him. Q was forced
to repair the damaged buses.
PSCC defense: Q offered to purchase the product directly w/o being
induced by any representative and that damage was caused because
erroneous application of the paint by Q.
RTC ruled for Q basing that Lopez’s testimony was damaging to the PSCC
position that Q wasn’t induced. Also ruled that assurance made by
Angbenco was an express warranty under Art. 1546 of the NCC and held
PSCC liable for damages.
CA affirmed RTC in toto.
Issues: WON the statements made by Angbenco constituted express
warranties (Yes)
WON the warranties have prescribed (No).
WON non-payment of price is justified on allegations of breach of warranty.
(Yes)
Ratio: SC agrees with the CA
(1) 1546 NCC: Any affirmation of fact or any promise by the seller
relating to the thing is an express warranty if the natural tendency of
such affirmation or promise is to induce the buyer to purchase the
same, and if the buyer purchases the thing relying thereon. No
affirmation of the value of the thing, nor any statement purporting to be a
statement of the seller's opinion only, shall be construed as a warranty,
unless the seller made such affirmation or statement as an expert and
it was relied upon by the buyer.
As held in Carrascoso, Jr. v. CA, 7 the following requisites must be
established in order to prove that there is an express warranty in a contract
of sale:
(1) the express warranty must be an affirmation of fact or any promise
by the seller relating to the subject matter of the sale;
(2) the natural effect of the affirmation or promise is to induce the
buyer to purchase the thing; and
(3) the buyer purchases the thing relying on that affirmation or
promise.
Contrary to the assertions of petitioner, the finding of the CA was that the
former, through Angbengco, did not simply make vague oral statements on
purported warranties. Petitioner expressly represented to respondent that
the primer-coated G.I. sheets were compatible with the acrylic paint
process used by the latter on his bus units. This representation was made
in the face of respondent's express concerns regarding incompatibility.
Petitioner also claimed that the use of their product by Quiñones would cut
costs.
Angbengco was so certain of the compatibility that he suggested to
respondent to assemble a bus using the primer-coated sheet and
have it painted with the acrylic paint used in Amianan Motors.
(2) Prescription period applicable to the instant case is that prescribed for
breach of an express warranty. The applicable prescription period is
therefore that which is specified in the contract; in its absence, that period
shall be based on the general rule on the rescission of contracts: four years
(see Article 1389, Civil Code). Quiñones filed the instant case on 6
September 1996 or several months after the last delivery of the thing sold.
(3) Petitioner's breach of warranty was proven by respondent.
Since what was proven was express warranty, following the ruling of this
Court in Harrison Motors Corporation v. Navarro, Article 1599 of the Civil
Code applies when an express warranty is breached. The provision reads:
Where there is a breach of warranty by the seller, the buyer may, at his
election:
(1) Accept or keep the goods and set up against the seller, the
breach of warranty by way of recoupment in diminution or extinction of
the price;
XXXXX
In the case at bar, Quiñones refused to pay the unpaid balance of the
purchase price of the primer-coated G.I. sheets PhilSteel had delivered to
him. He took this action after complaints piled up from his customers
regarding the blistering and peeling-off of the paints applied to the bus
bodies they had purchased from his Amianan Motors. The unpaid balance
of the purchase price covers the same G.I. sheets. Further, both the CA
and the RTC concurred in their finding that the seller's breach of express
warranty had been established. Therefore, this Court finds that
respondent has legitimately defended his claim for reduction in price
and is no longer liable for the unpaid balance of the purchase price of
P448,041.50.
Ruling: Petition denied.