GR 132269; (April, 2000) (Digest)
G.R. No. 132269 ; April 27, 2000
Harrison Motors Corporation, petitioner, vs. Rachel A. Navarro, respondent.
FACTS
In June 1987, petitioner Harrison Motors Corporation, through its president Renato Claros, sold two Isuzu Elf trucks to respondent Rachel Navarro. Prior to the sale, Claros expressly represented that all BIR taxes and customs duties for the imported component parts used in assembling the trucks had been fully paid. Subsequently, in December 1988, government agents seized the trucks after discovering unpaid taxes and duties. The BIR and Bureau of Customs demanded payment from Navarro, threatening impoundment.
Navarro demanded that petitioner furnish the receipts for the alleged prior tax payments and reimburse any amounts she would be forced to pay. Petitioner refused. To secure the release of her trucks for her business, Navarro paid P32,943.00 in assessments. She then sought reimbursement from petitioner, but her demands were ignored, prompting her to file a complaint for sum of money. The trial court declared petitioner in default for failure to file a timely answer and, after ex-parte proceedings, ruled in favor of Navarro.
ISSUE
Whether petitioner Harrison Motors Corporation is liable to reimburse respondent Navarro for the taxes and duties she paid on the trucks.
RULING
Yes, petitioner is liable. The Supreme Court rejected petitioner’s argument that the subsequent memoranda and agreements between the BIR, BOC, and LTO imposed new taxes retroactively, violating the non-impairment clause. The Court clarified that these administrative issuances did not impose new taxes; they merely established procedures for verifying and voluntarily paying existing taxes on imported parts. Thus, no constitutional or statutory prohibition on retroactivity was violated.
The core of petitioner’s liability stems from the breach of an express warranty under the contract of sale. Petitioner’s pre-sale representation that all taxes were paid constituted an express warranty under Article 1546 of the Civil Code. This warranty was breached when petitioner failed to substantiate its claim with receipts upon Navarro’s demand, directly leading to the seizure of the trucks. Faced with this breach, Navarro rightfully chose to keep the goods and claim damages under Article 1599 of the Civil Code. The amount she paid to release the trucks was a direct consequence of petitioner’s breach, making reimbursement legally obligatory. The affirmance of attorney’s fees was also justified due to petitioner’s unwarranted refusal to satisfy Navarro’s valid claim.