GR 173215; (May, 2009) (Digest)
G.R. No. 173215 ; May 21, 2009
CEBU WINLAND DEVELOPMENT CORPORATION, Petitioner, vs. ONG SIAO HUA, Respondent.
FACTS
Petitioner Cebu Winland Development Corporation sold two condominium units and four parking slots to respondent Ong Siao Hua. The price list indicated each unit had an area of 155 square meters at a set price per square meter. Respondent paid the full purchase price based on this representation. Upon full payment, petitioner presented Deeds of Absolute Sale for execution, which stated the unit area as only 127 square meters. A subsequent verification survey revealed the actual area was merely 110 square meters per unit.
Respondent demanded a refund for the overpayment based on the area deficiency, but petitioner refused. Respondent thus filed a complaint with the HLURB. The HLURB Arbiter dismissed the complaint, ruling the action had prescribed under Article 1543 of the Civil Code. The HLURB Board affirmed the prescription finding but alternatively granted rescission due to a mistake as to the object of the sale. The Office of the President reinstated the dismissal based solely on prescription.
ISSUE
Whether respondent’s action for the recovery of the overpayment due to the deficiency in the condominium unit area had already prescribed.
RULING
No, the action had not prescribed. The Supreme Court reversed the rulings of the lower bodies. The Court clarified that Article 1543 of the Civil Code, which provides for a six-month prescriptive period for actions arising from a breach of warranty against hidden defects, is inapplicable. The case did not involve a hidden defect (vitium) in the property’s quality. Instead, it involved a discrepancy in the area, which pertains to a breach of the vendor’s obligation to deliver the specific area stipulated. This constitutes an actionable breach of contractual stipulation.
The applicable law is Article 1542, which governs sales of real estate for a lump sum where the area is designated. Under this provision, the vendor is bound to deliver all that is included within the boundaries, and if unable, suffers a proportionate reduction in price. An action based on such a breach prescribes in ten years under Article 1144 of the Civil Code, as it arises from a written contract—the price list and related documents constituted written evidence of the agreement. Respondent filed his complaint within this ten-year period. Therefore, the action was timely, and petitioner was ordered to refund the overpayment corresponding to the deficient area.