GR 194533; (April, 2017) (Digest)
G.R. No. 194533. April 19, 2017.
PHILIPPINE STEEL COATING CORP., Petitioner, vs. EDUARD QUINONES, Respondent.
FACTS
Respondent Eduard Quinones, owner of Amianan Motors, filed a complaint for damages against petitioner Philippine Steel Coating Corp. (PhilSteel). Quinones alleged that in 1994, PhilSteel’s sales manager, Ferdinand Angbengco, expressly assured him that their new primer-coated galvanized iron sheets were compatible with the Guilder acrylic paint process used by his company for finishing buses. Relying on this assurance, Quinones purchased and used the sheets. In 1995, customers complained of paint peeling on the buses. Quinones contended this was due to hidden defects or incompatibility, contrary to PhilSteel’s warranties, forcing him to undertake repairs and suffer business losses.
PhilSteel denied giving such warranties, claiming Quinones initiated the purchase and that the paint damage resulted from his own erroneous painting application. The Regional Trial Court ruled for Quinones, finding that Angbengco’s assurance constituted an express warranty under Article 1546 of the Civil Code and that the damage was due to product incompatibility. The Court of Appeals affirmed the RTC decision in toto, awarding actual and moral damages and attorney’s fees.
ISSUE
The core issues were: (1) whether oral statements by the seller constituted an express warranty; (2) whether an action for breach of warranty prescribes in six months under Article 1571; (3) whether Quinones was contributorily negligent; and (4) whether non-payment of the price was justified by the breach.
RULING
The Supreme Court denied the petition, affirming the CA with modification by deleting the award of attorney’s fees. The Court held that Angbengco’s positive affirmation of compatibility, which induced Quinones to purchase, satisfied the requisites of an express warranty under Article 1546 as outlined in Carrascoso, Jr. v. CA. The warranty was not a mere opinion or “puffery” but a factual assertion by a sales manager presented as an expert, upon which the buyer relied.
On prescription, the Court ruled that the six-month period under Article 1571 applies to implied warranties, not to express warranties or to actions for breach of contract like the one filed, which prescribes in ten years. The Court found no contributory negligence on Quinones’s part, as he explicitly sought and relied on PhilSteel’s expert assurance regarding compatibility. His failure to conduct an independent test was not negligence given the specific warranty received. Finally, the Court justified the award of actual damages for repair costs and moral damages due to PhilSteel’s bad faith in unduly delaying its response to the complaints. However, attorney’s fees were deleted for lack of specific justification.