G.R. No. 96271 June 26, 1992
NATIVIDAD VILLOSTAS, petitioner, vs. THE HON. COURT OF APPEALS, SECOND DIVISION, THE HON. SALVADOR S. TENSUAN as Presiding Judge of RTC, Makati, Branch 146 and ELECTROLUX MARKETING, INCORPORATED, respondents.

FACTS

Petitioner Natividad Villostas purchased an Electrolux Aqua Guard water purifier on installment from private respondent Electrolux Marketing, Inc. on September 13, 1986. A Contract of Sale with Reservation of Title was signed, and a warranty certificate was issued stating the product was warranted “TO PERFORM EFFICIENTLY FOR ONE FULL YEAR FROM DATE OF ORIGINAL PURCHASE.” Shortly after delivery, Villostas complained that the unit produced dirty water with bad odor. A service technician replaced the filter and advised it be changed every six months. After further complaints and continued poor performance, Villostas, by letter dated December 9, 1986, offered to return the unit and demanded a refund, finding the required frequent filter replacements uneconomical. Electrolux offered an exchange, which was refused. Villostas stopped paying installments. Electrolux filed a collection case in the Metropolitan Trial Court (MTC) to recover the unpaid balance of P14,540.00. Villostas, in her answer, sought rescission of the contract and a refund based on breach of warranty. The MTC ruled in favor of Electrolux, ordering Villostas to pay the balance. The Regional Trial Court (RTC) affirmed the decision. The Court of Appeals denied Villostas’s appeal. Villostas elevated the case to the Supreme Court via petition for review on certiorari.

ISSUE

The main issue is whether or not the petitioner is entitled to rescind the contract on the basis of a violation of the warranty for the article delivered by the respondent.

RULING

The Supreme Court ruled in favor of the petitioner, granting rescission. The petition was impressed with merit.
The Court held that the MTC had jurisdiction over the case, as the complaint was for collection of a sum (P14,540.00) within its jurisdictional limit. Jurisdiction is determined by the allegations in the complaint, not by the defenses raised in the answer.
On the prescriptive period, the Court ruled that the action was not barred. The warranty provided was an express warranty. Article 1571 of the Civil Code, which provides a six-month prescriptive period for a redhibitory action, applies only to implied warranties. For contracts with an express warranty, the general rule on rescission under Article 1389, which provides a four-year prescriptive period, applies. The filing of Villostas’s amended answer on September 30, 1988, was within four years from the delivery date of September 13, 1986.
The Supreme Court REVERSED and SET ASIDE the appealed decision, DISMISSED the complaint of private respondent, and RESCINDED the sale of the water purifier.