Warranties attached to a contract of sale

(Conclusion)

The buyer may demand the rescission of the contract of sale, while being obliged to return the property without other encumbrances than those which it had when he acquired it in the following instances: (a) when the buyer loses, by reason of eviction, a part of the property sold of such importance, in relation to the whole, that he would not have bought it without said part; and (b) when two or more properties or things have been sold for a lump sum, or for a separate price for each of them, if it should clearly appear that the buyer would not have purchased one without the other.

The warranty against eviction can only be enforced upon the promulgation of a final judgment, in which the buyer loses the property acquired or a part thereof. Moreover, the seller shall not be obliged to make good the proper warranty, unless he is summoned in the suit for eviction, at the purchaser’s instance.

Meanwhile, the buyer may demand the rescission of the contract or the appropriate indemnity, if the property sold should be encumbered with any non-apparent burden or servitude, of such nature that it must be presumed that the buyer would not have acquired it had he been aware thereof, but which was not mentioned in the contract.

The buyer may bring the action for rescission or damages within one year, to be computed from the execution of the deed. One year having elapsed, he may only bring an action for damages with an equal period, to be counted from the date on which he discovered the burden or servitude.

Meanwhile, should the buyer be disturbed in the possession or ownership of the property, or should he have reasonable grounds to fear such disturbance, by vindicatory action or foreclosure of mortgage, he may suspend the payment of the price until the seller has caused the disturbance or danger to cease. The seller, however, may give security for the return of the price in a proper case, or it has been stipulated that, despite such contingency, the buyer shall be bound to make the payment. A mere act of trespass shall not authorize the suspension of the payment of the price.

In this regard, as held by the Supreme Court in one case, the pendency of a suit over the property sold justifies the buyer in suspending the payment of the balance of the purchase price. The sellers’ assurances that buyer need not worry about the suit because it was pure and simple harassment is not the kind of security that the seller may give to prevent the suspension of said payment.

Besides the implied warranties that usually attach to a contract of sale of real property, the contracting parties should also be mindful of the seller’s warranty against hidden defects, which applies to both movable and immovable properties. Thus, the seller shall be responsible for this warranty when the hidden defects: (a) render the property unfit for the use for which it is intended; or (b) diminish the property’s fitness for such use to the extent that, had the buyer been aware thereof, he would not have acquired it or would have given a lower price for it. The seller shall not be liable for breach of this warranty, however, in the case of patent defects, or those which may be visible, or for those which are not visible if the buyer is an expert who, by reason of his trade or profession, should have known them.

The seller is responsible to the buyer for any hidden faults or defects in the property, even though he was not aware thereof. The seller shall not be so held liable, however, if the contrary was stipulated, and he was not aware of said faults or defects.

The warranty against hidden defects shall apply to judicial sales, except that the judgment debtor shall not be liable for damages.

In case of a breach of the warranty against hidden defects, the buyer may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case. Furthermore, actions arising from the warranty against hidden defects should be initiated within six months from the delivery of the property sold, as defined by law.