G.R. No. 113564; June 20, 2001
INOCENCIA YU DINO and her HUSBAND doing business under the trade name “CANDY CLAIRE FASHION GARMENTS”, petitioners, vs. COURT OF APPEALS and ROMAN SIO, doing business under the name “UNIVERSAL TOY MASTER MANUFACTURING”, respondents.

FACTS

Petitioners, spouses Dino, engaged in manufacturing and selling shirts, entered into a contract with respondent Roman Sio, part owner and general manager of Universal Toy Master Manufacturing. The contract stipulated that respondent would manufacture 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads at P7.00 per piece according to samples approved by petitioners, for attachment to petitioners’ shirts. Respondent delivered the 40,000 pieces in several installments, with the last delivery made on September 28, 1988, and petitioners fully paid the agreed price. Subsequently, petitioners returned 29,772 pieces of the frogs and mooseheads on different dates (December 12, 1988, January 11, 1989, and January 17, 1989) for failing to comply with the approved sample, alleging hidden defects discovered when customers complained the figures were torn. Petitioners demanded a refund of P208,404.00 for the returned goods. Upon respondent’s refusal to pay, petitioners filed an action for collection of a sum of money in the Regional Trial Court of Manila on July 24, 1989. The trial court ruled in favor of petitioners. On appeal, the Court of Appeals initially affirmed the decision but, upon respondent’s motion for reconsideration raising the defense of prescription, reversed itself and dismissed the complaint for having been filed beyond the prescriptive period.

ISSUE

Whether the petitioners’ action to recover the purchase price of the returned goods, based on breach of warranty against hidden defects, had already prescribed.

RULING

Yes, the action had prescribed. The Supreme Court affirmed the amended decision of the Court of Appeals dismissing the complaint. The Court ruled that the contract between the parties was a contract for a piece of work, as the vinyl products were manufactured specially upon petitioners’ order and according to their approved samples, not for the general market. Regardless, whether classified as a contract of sale or a piece of work, the provisions on warranty against hidden defects in a contract of sale apply pursuant to Article 1714 of the Civil Code. By returning the goods and demanding a refund, petitioners elected to withdraw from the contract, a remedy available under Article 1567 for breach of warranty against hidden defects. The prescriptive period for such an action is six months from the delivery of the thing sold, as provided in Article 1571. The last delivery was on September 28, 1988, and the complaint was filed on July 24, 1989, which is beyond the six-month prescriptive period. The defense of prescription, though not raised in the answer, may be considered if apparent from the face of the complaint, as it was in this case. Therefore, the petition was denied.