Prescriptive Period to File Breach of Implied Warranty

What is the prescriptive period to file breach of implied warranty?

This is a very interesting story.

On July 28, 1992, Jay Trinidad (Jay) bought a Mitsubishi GSR sedan 1982 model from Brian Sales (Brian) through a Deed of Absolute Sale.

Jay, a buyer and seller of used vehicles, later sold the vehicle on August 14, 1992 to Paul Cruz (Paul) for P225,000.  Before the deed could be registered in the name of Paul, the vehicle was seized by virtue of a writ of replevin issued by the Regional Trial Court on account of the alleged failure of the owner of the vehicle (Ronald Paz) prior to Brian, to pay the mortgage debt constituted thereon. (A writ of replevin is a legal remedy used to recover personal property that is being wrongfully detained by another.)

In order to secure the release of the vehicle, Jay paid the Bank. But Brian refused to reimburse the amount paid by Jay despite repeated demands.

Hence, Jay filed on July 15, 1996 a complaint with the Municipal Trial Court in Cities.  After trial, the MTCC dismissed the complaint on the ground of prescription.

Jay appealed to the RTC. The RTC affirmed the dismissal (on the ground of prescription) but rendered judgment in favor of Jay “for the sake of justice and equity and in accordance with the principle of non-enrichment at another’s expense”.

The Court of Appeals reversed and set aside the decision of the RTC.   The CA held that Brian’s obligation ended when he delivered the vehicle to Jay upon the perfection of the contract of sale.  And the action being one arising from breach of warranty, had prescribed having been filed beyond the 6-month prescriptive period.

In the Supreme Court, Jay maintained that his cause of action had not yet prescribed when he filed the complaint.

But the SC ruled in the following tenor:

“ x x x.

Warranties by the seller may be express or implied.  Art. 1546 of the Civil Code defines express warranty as follows: “Art. 1546. 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.

On the other hand, an implied warranty is that which the law derives by application or inference from the nature of the transaction or the relative situation or circumstances of the parties irrespective of any intention of the seller to create it. 

Among the implied warranty provisions of the Civil Code are:  as to the seller’s title (Art. 1548), against hidden defects and encumbrances (Art. 1547), as to fitness or merchantability (Art. 1562), and against eviction (Art. 1548).

Given ___, business of buying and selling used vehicles, he could not have merely relied on ________ affirmation that the car was free from liens and encumbrances.  He was expected to have thoroughly verified the car’s registration and documents.

Since, what ________ , as seller, gave was an implied warranty, the prescriptive period to file a breach thereof is six months after the delivery of the vehicle, following Art. 1571. 

x x x.”

It is important to remember that resolution of the sole issue of whether the complaint had prescribed hinges on a determination of what kind of warranty was provided in the Deed of Absolute Sale subject of the transaction.

Next story please.  And stay safe.