Andaya v. Manansala
REITERATIONFacts
The Antecedents: Isidro Fenis sold land to Eustaquia Llanes with a right to repurchase within five years. After the period expired, Fenis sold the same land to Maria Viloria. Viloria then sold the property, along with another parcel, to Melencio Manansala via a sale with right to repurchase within one year. Upon expiry, Manansala consolidated his title by registering an affidavit. Subsequently, Viloria sold the property absolutely to Ciriaco Casiño, Fidela Valdez, and the plaintiff spouses Ariston Andaya and Micaela Cabrito. Eustaquia Llanes filed a case to quiet title and recover possession against Casiño. Later, Llanes included Manansala, Valdez, and the Andaya spouses as defendants. The court ruled in favor of Llanes, and a writ of execution was issued against the purchasers from Viloria, leading to the attachment and sale of Fidela Valdez's properties. Procedural History: The spouses Ariston Andaya and Micaela Cabrito filed a case against Melencio Manansala for damages due to breach of warranty against eviction in their sale of the land. Manansala denied liability, claiming the plaintiffs and co-purchasers persuaded him to sell at a low price after they were sued by Llanes, knowing Manansala had registered the land. The Court of First Instance ruled that the stipulation on warranty was pro forma, given the circumstances, and ordered Manansala to return half the purchase price with interest, applying rules on rescission. The Petition: Melencio Manansala appealed the decision, arguing that if he was not liable for breach of warranty against eviction, the lower court erred in holding him liable under rescission of sale and ordering him to return the purchase price.
Issue(s)
Whether the lower court erred in holding the defendant liable for rescission of sale after finding no liability for breach of warranty against eviction. Whether the plaintiffs-appellees waived their right to warranty against eviction by knowing the danger of eviction and assuming its consequences.
Ruling
The decision of the lower court is reversed, and the complaint is dismissed. The defendant Melencio Manansala is absolved from all liability.
Ratio Decidendi
On the issue of waiver of warranty against eviction: The Court held that the vendor's liability for warranty against eviction is waivable. The lower court found that the stipulation on warranty in the contract between appellant Manansala and appellees was understood to be merely pro forma. This understanding was based on the fact that the appellees had previously purchased the land from Maria Viloria and their subsequent purchase from Manansala was primarily to enable them to register their prior deed. Furthermore, at the time of the sale between Manansala and the appellees, the property was already the subject of a pending litigation with Eustaquia Llanes, who claimed title and possession by virtue of an earlier sale. The appellees' failure to appeal the decision of the court below, which found these facts, bound them to these findings. These findings imply that the appellees not only renounced or waived the warranty against eviction but also knew of the danger of eviction and assumed its consequences. According to Article 1477 of the old Civil Code, when a vendee has waived the right to warranty in case of eviction, and eviction occurs, the vendor shall only pay the price which the thing sold had at the time of eviction, unless the vendee waived with knowledge of the danger and assumed its consequences. In this case, the appellees knew of the danger of eviction and assumed its consequences, thus exempting the appellant from any liability whatsoever, including the obligation to restore the price of the land at the time of eviction. On the issue of rescission of sale: The Court ruled that the defendant could not be condemned to return the price received on the theory of rescission. In the first place, rescission requires the party demanding it to be able to return whatever they have received under the contract. When this cannot be done, rescission cannot be carried out. The law on sales does not make rescission a remedy for total eviction, as the vendee can no longer restore the thing to the vendor. Rescission is only available when the vendee loses a part of the thing sold of such importance that they would not have purchased it without that part, and they must return the thing without other encumbrances than those it had when acquired. In the second place, the appellees assumed the risk of eviction, which prevents them from asking for rescission even if they could restore what they had received. Therefore, the lower court erred in ordering the defendant to return half the purchase price on the theory of rescission.
Main Doctrine
A vendee who, at the time of purchase, knew of the danger of eviction and assumed its consequences, cannot hold the vendor liable for breach of warranty against eviction, nor can they seek rescission of the sale.