GR 21783; (March, 1970) (Digest)
G.R. No. L-21783 March 25, 1970
PACIFIC FARMS, INC., plaintiff-appellee, vs. SIMPLICIO G. ESGUERRA, ET AL., defendants, CARRIED LUMBER COMPANY, defendant-appellant.
FACTS
The plaintiff-appellee, Pacific Farms, Inc., filed a motion for reconsideration of the Supreme Court’s decision dated November 29, 1969. Pacific Farms argued it should not be liable for the unpaid price of lumber and construction materials furnished by the defendant-appellant, Carried Lumber Company, to Pacific Farms’ predecessor-in-interest, Insular Farms, Inc., because Pacific Farms was a purchaser in good faith and for value of the six buildings constructed with those materials. The Supreme Court, in its prior decision, had applied Article 447 of the Civil Code by analogy, treating the buildings as the principal and the materials as the accessory, and held Pacific Farms liable to pay the value of the unpaid materials to Carried Lumber Company. The Court noted Pacific Farms had knowledge, after its purchase on March 21, 1958, of the pending suit by Carried Lumber against Insular Farms for the unpaid balance but took no action to intervene or hold Insular Farms accountable.
ISSUE
Whether the plaintiff-appellee, Pacific Farms, Inc., being a purchaser in good faith of the buildings, is liable to pay the unpaid supplier, Carried Lumber Company, for the value of the lumber and construction materials used in the buildings’ construction.
RULING
The motion for reconsideration is denied. The Supreme Court clarified that its initial decision holding Pacific Farms liable was precisely based on the assumption that it was a purchaser in good faith. Because Pacific Farms was in good faith, it was not held liable for damages but only for payment of the unpaid price of the materials, as it benefited from the accession of those materials into the buildings it owned. The Court affirmed that Carried Lumber Company, which could not remove the materials without damaging the buildings, had the right to recover the value of the unpaid materials. The decision, which upheld a sheriff’s sale of the buildings but granted Pacific Farms the option to redeem them by paying the unpaid balance to Carried Lumber, was found to be in consonance with justice and equity.