Songco v. Sellner
REITERATIONFacts
The Antecedents: George C. Sellner (defendant-appellant) purchased sugar cane from Lamberto Songco (plaintiff-appellee) for P12,000, payable in three promissory notes. Sellner desired to mill his cane at a sugar central and, learning that Songco's cane would be milled there, bought Songco's crop. A motive for the purchase was to secure a right of way over Songco's land. Sellner paid two notes, but the action was instituted to recover on the third. Procedural History: The trial court rendered a judgment in favor of the plaintiff. The defendant appealed. The Petition: The defendant's answer contained a general denial and a special defense that the promissory note was obtained by false and fraudulent representations. The defendant assigned error to the admission of the note without proof of its genuineness and due execution, and argued that the note was procured by fraudulent representation regarding the quantity of uncut cane.
Issue(s)
Whether the genuineness and due execution of the promissory note were sufficiently proven. Whether the promissory note was obtained by fraudulent misrepresentation regarding the quantity of sugar cane. Whether the defendant is entitled to further damages for injury to his credit due to a wrongfully sued out attachment.
Ruling
The Supreme Court affirmed the judgment of the lower court, ordering the defendant-appellant to pay the outstanding promissory note. The Court held that the genuineness and due execution of the note were sufficiently established and that the misrepresentation regarding the cane's yield constituted a mere matter of opinion, not actionable deceit. The Court also affirmed the lower court's decision regarding damages for the attachment.
Ratio Decidendi
On the genuineness and due execution of the promissory note: The Court held that a general denial does not raise an issue as to the genuineness or due execution of a written instrument; a specific denial under oath is required. Furthermore, pleading that the instrument was procured by fraudulent representation is an admission of its genuineness and due execution. The fourth paragraph of the answer also expressly admitted the execution of the instrument. On the alleged fraudulent misrepresentation: The Court found that Songco's estimate of 3,000 piculs of sugar was an exaggeration, as the crop yielded only 2,017 piculs gross. However, the Court classified this statement as a mere matter of opinion, as the cane was still standing and its exact yield could not be known with certainty until harvested and milled. The Court noted that Sellner had the opportunity to inspect the fields and measure the area. The refusal of Songco to guarantee his estimate should have alerted Sellner that it was merely an opinion. The Court reiterated the principle that misrepresentations concerning matters of opinion, judgment, or expectation, rather than matters of fact substantially affecting the buyer's interest, do not constitute actionable deceit or grounds for avoiding a contract. The Court also stated that the law allows considerable latitude to seller's statements or dealer's talk, and buyers who rely on such affirmations without inquiry do so at their peril. On damages for the attachment: The Court found that the attachment was wrongfully sued out, as the defendant was a man of large resources and had not attempted to dispose of his property in fraud of creditors. However, the Court affirmed the lower court's refusal to award further damages for injury to the defendant's credit, deeming such damages remote and speculative. The Court reasoned that the complications of the defendant's affairs, which led to a creditor withholding credit and forcing a sale at a lower price, could not be foreseen as a probable consequence of the attachment. The Court also affirmed the refusal to award punitive damages for malicious suing out of the attachment.
Main Doctrine
A misrepresentation concerning a mere matter of opinion, not as to a fact substantially affecting the buyer's interest, is not an actionable deceit nor a sufficient ground for avoiding a contract. Assertions concerning property qualities are generally considered dealer's talk, and a buyer who relies on such affirmations without independent inquiry does so at his peril.