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HARRISON MOTORS CORPORATION, PETITIONER, VS.

RACHEL A. NAVARRO, RESPONDENT.

[EXPRESS WARRANTY]

Facts:     Harrison Motors sold two trucks to Navarro through its president, Renato Claros.Prior to the sale, Renato Claros represented to private respondent that all the BIR taxes and customs duties for the parts used on the two (2) trucks had been paid for.  Subsequently, the Bureau of Internal Revenue (BIR), the Land Transportation Office and the Bureau of Customs (BOC) entered in a Memorandum of Agreement which provided that for purposes of registering vehicles, a Certificate of Payment should first be obtained from the BIR. Government agents seized and detained the two trucks of Navarro after discovering that there were still unpaid taxes. Private respondent went to Claros to ask for the receipts evidencing payment of BIR taxes and customs duties; however, Claros refused to comply. Private respondent then demanded from Claros that he pay the assessed taxes and warned him that he would have to reimburse her should she be forced to pay for the assessments herself. But wanting to secure the immediate release of the trucks to comply with her business commitments, private respondent paid the assessed BIR taxes and customs duties amounting to P32,943.00. Hence, the action for collection of sum was filed against the petitioner.

   Issue:    Whether or not the sale of the two elf trucks to private respondent relieves/releases the petitioner from unpaid taxes and custom duties.

Held:      It is true that the ownership of the trucks shifted to private respondent after the sale but petitioner must remember that prior to its consummation it expressly intimated to her that it had already paid the taxes and customs duties. Such representation shall be considered as a seller’s express warranty under Art. 1546 of the Civil Code which covers any affirmation of fact or any promise by the seller which induces the buyer to purchase the thing and actually purchases it relying on such affirmation or promise. It includes all warranties which are derived from express language, whether the language is in the form of a promise or representation Under Art. 1599 of the Civil Code, once an express warranty is breached the buyer can accept or keep the goods and maintain an action against the seller for damages. This was what private respondent did. She opted to keep the two (2) trucks which she apparently needed for her business and filed a complaint for damages, particularly seeking the reimbursement of the amount she paid to secure the release of her vehicles.

NAPOLEON ANTAZO, PETITIONER, VS. PEOPLE OF THE PHILIPPINES AND THE HON. COURT OF APPEALS, RESPONDENTS.

[EXPRESS WARRANTY]

Facts:  Antazo and Medina entered into a contract of Purchase and Sale on June 18, 1965.  Under this contract, Napoleon Antazo in consideration of the amount of P4,277.00 to be paid to him in installment by the spouses Medina, bound himself to sell the subject Lot. Napoleon Antazo likewise obliged himself to deliver to the said Spouses Medina the title to this portion of land "free from all liens and encumbrances" upon full payment by the said vendees of the purchase price.  The vendor, Napoleon Antazo, without the knowledge or consent of Mariano Medina, mortgaged to the Binañgonan Rural Bank which earlier, was agreed to be sold to the Medinas.  Upon completing the payment of the installment, Medina demanded from Napoleon Antazo, the delivery of the title for Lot 2-A-2 and the execution of the corresponding absolute Deed of Sale for said property. Napoleon Antazo executed a deed of absolute sale for the lot in question with a statement in his Deed of Conveyance that the subject land sold is "free from all liens and encumbrances". When Medinas went to the Register of Deeds of Rizal to investigate the title of the land sold to them by Antazo and it was then that they discovered that there was a mortgage lien on said land in favor of the Binañgonan Rural Bank and that aside from this encumbrance, there was also a levy on execution upon the same land by virtue of the decision of the City Court of Manila, in Civil Case No. 134430, entitled Philippine National Bank, versus Napoleon Antazo, inscribed on September 27, 1967 on the title of the land. Napoleon Antazo was charged with the crime of estafa before the Court of First Instance of Rizal, Branch VI, Makati.

Issue:  Whether or not a mere promise to perform a thing constitutes a deceit/fraud?

Held:   In the case at bar, Appellant Antazo, a former Municipal Judge of Angono, Rizal placed an express warranty in the Deed of Absolute Sale that the lot in question is free from all, liens and encumbrances, when it was not so in fact. As fraud involves acts or spoken or written words by a party to mislead another into believing a fact to be true when it is not in fact — that express warranty in the Deed of Absolute Sale covering the lot in question (Exhibit B) that said land is "free from all liens and encumbrances" constitutes the false representation or deceit and one of the elements giving rise to the crime of estafa. For said offense to be committed, it is only enough to consider his false pretenses or misrepresentations in the deed of sale that the subject Lot No. 2-A-2 is unencumbered when in fact a mortgage lien still exists in favor of the rural bank. The suppression of material information and the false representations by petitioner that the property which complainant paid for is free from liens and encumbrances is clearly a deception to put off or forestall the petitioner's appellants' concommittant obligation to deliver a clear title to the land sold.