GOODYEAR PHILIPPINES, INC.

VS ANTHONY SY
G.R. No. 154554, November 9,2005
Petitioner: Goodyear Philippines Inc.
Respondent: Anthony Sy and Jose Lee
Ponente: Panganiban, J.

FACTS:
1. The subject matter of this case is a motor vehicle originally owned by Goodyear
Philippines, Inc.
2. It was in Goodyear's service from then until April 1986, when it was stolen. It was found
later on.
3. The vehicle was used by Goodyear until 1996, when he sold it to Anthony Sy, who then
sold it to Jose L. Lee.
4. Goodyear used the vehicle until 1996, when he sold it to Anthony Sy, who sold it to Jose
L. Lee in turn.
5. Lee brought an action against Sy for the termination of the harm contract because he was
unable to register the vehicle on his behalf because of the PNP Regional Traffic
Management Office’s certification that it was a stolen vehicle and that the warning
protecting that vehicle had not been raised.
6. The PNP instead impounded the car and criminally charged Lee.

ISSUE:
1. Whether or not Goodyear breached any warranty in the absence of proof that at the time
it sold the subject vehicle to Sy, it was not the owner thereof.

HELD:
1. NO. In a contract of sale, the seller is obligated to transfer ownership of and deliver the
product that is the subject of the sale. Furthermore, the implied warranties are as follows:
first, the vendor has the right to sell the thing at the time when ownership is to pass to the
vendee, as a result of which the latter shall have and enjoy legal and peaceful possession
of the thing from that point forward; and second, the thing shall be free of any charge or
encumbrance not declared or known to the vendee. Goodyear did transfer ownership of
the vehicle and deliver it to Sy after the Deed of Sale was signed. No other owner or
possessor of the vehicle had been identified, and Goodyear's ownership and possession
rights had never been questioned. Goodyear was the only owner, according to the Deed
of Sale. Therefore, at the time that ownership passed to Sy, had the right to sell the vehicle.
 Gratia argumenti that there was a breach of the implied warranty against hidden
encumbrances, notice of the breach was not given to Goodyear within a reasonable
time. Article 1586 of the Civil Code requires that notice be given after the breach,
of which Sy ought to have known. In his ThirdParty Complaint against Goodyear,
there was no allegation at all that Sy had given Goodyear the requisite notice.
More important, an action for damages for a breach of implied warranties must be
brought within six months from the delivery of the thing sold.

HARRISON MOTORS CORPORATION VS RACHEL A. NAVARRO

G.R. No. 132269, April 27,2000
Petitioner: Harrison Motors Corporation
Respondent: Rachel A. Navarro
Ponente: Bellosillo, J.

FACTS:
1. Petitioner, a known importer, assembler and manufacturer, sold 2 trucks to private
respondent.
2. Following that, the BIR and the LTO signed a Memorandum of Agreement that stated that
before registering any built or reassembled motor vehicle that used imported parts, a
Certificate of Payment must be obtained from the BIR to confirm payment of all taxes.
3. Consequently, government agents seized and detained the said trucks due to non-
payment of BIR taxes and custom duties, which prompted private respondent
(buyer) to secure from petitioner the receipts evidencing payment. However, the latter
ignored the said request.
4. The private respondent then paid the taxes and customs fees, warning that petitioner
would have to compensate her.
5. Petitioner argues that because the administrative regulations only took effect after the
execution of its contract with private respondent, it was no longer obligated to pay the
additional taxes and custom duties imposed on imported component parts by the
regulations.
6. Holding it liable would not only violate the non-impairment clause of the Constitution but
also the principle of non-retroactivity of laws under the Civil Code.
7. Petitioner also claimed that because it no longer owned the trucks when the regulations
went into effect, private respondent should be the one to pay the taxes and charges.

ISSUES:
1. Whether or not the administrative regulations impose additional taxes that impair the
obligations of contracts and violate the principle of non-retroactivity.
 2. Whether or not the importer-assembler/manufacturer is liable to pay the BIR taxes and
custom duties, which the administrative regulations sought to enforce.

HELD:
1. No. What Sec. 10, Art. III of the Constitution prohibits is the passage of a law which
enlarges, abridges or in any manner changes the intention of the contracting parties.
The Memorandum Orders and the two (2) Memoranda of Agreement do not impose
any additional taxes, which would unduly impair the contract of sale between petitioner
and private respondent. Instead, these administrative regulations were passed to
enforce payment of existing BIR taxes and customs duties at the time of importation.
While it is true that administrative rulings and regulations are generally prospective in
nature, an inspection of the 2 MOA, however demonstrates that their intent is to enforce
payment of taxes on assemblers who import component parts without paying the correct
assessments.
2. Yes. Although private respondent is the one required by the administrative regulations to
secure the Certificate of Payment for the purpose of registration, petitioner, as the importer
and the assembler/manufacturer of the 2 Elf trucks, is still the one liable for payment of
revenue taxes and custom duties. Petitioner’s obligation to pay does not arise from the
administrative regulations but from the tax laws existing at the time of importation.
It is also quite obvious that as between petitioner, who is the importer-
assembler/manufacturer, and private respondent, who is merely the buyer, it is petitioner
which has the obligation to pay taxes to the BIR and the BOC. Petitioner would be unjustly
enriched if private respondent should be denied reimbursement. It would inequitably
amass profits from selling assembled trucks even if it did not pay the taxes due on its
imported spare parts. Imposing the tax burden on private respondent would only
encourage the proliferation of smugglers who scheme to evade taxes by passing on their
tax obligations to their unsuspecting buyers.

GALVEZ VS COURT OF APPEALS

G.R. No. 157954, March 24,2006
Petitioners: Paz Galvez, Carlos Tam, and Tycoon Properties, Inc.
Respondents: Court of Appeals and Porfirio Galvez
Ponente: Chico-Nazario, J.

FACTS:
1. Timotea F. Galvez, who died intestate, had two children, Ulpiano and Paz Galvez.
2. However, Ulpiano died before Timotea and was survived by his son, Porfirio Galvez.
 3. Timotea left a parcel of land to Paz Galvez, Timotea’s daughter, and to Porfirio, Timotea’s
grandson, the latter succeeding by right of representation as the son of Ulpiano.
4. Paz Galvez signed an affidavit of adjudication saying that she is the genuine and rightful
owner of the land in question, which was sold to Carlos Tam without the knowledge of
Porfirio Galvez.
5. Carlos Tam later sold the property to Tycoon Properties, Inc.

ISSUES:
1. Whether or not respondent’s claim over the subject property, which is based on an implied
trust, has already prescribed because the action was filed 24 years after petitioner
repudiated the said trust.
2. Whether or not respondent’s claim is already barred by laches because he failed to assert
his alleged right for almost 24 years.
3. Whether or not petitioners, Carlos Tam and Tycoon Properties, are buyers in good faith.

HELD:
1. No. Prescription will not lie.
This case is governed by the rules on co-ownership since both Paz Galvez and Porfirio
Galvez are obviously co-owners of the disputed property having inherited the same from
a common ancestor. Article 494 of the Civil Code provides that “a prescription shall not
run in favor of a co-owner of co-heir against his co-owners or co-heirs as long as he
expressly or impliedly recognizes the co-ownership.”

It is a fundamental principle that a co-owner cannot acquire by prescription the share of

the other co-owners, absent any clear repudiation of the co-ownership. In Santos v.
Santos, citing earlier case of Adille v. Court of Appeals, this Court founf occasion to rule
that:
Prescription, as a mode of terminating a relation of co-ownership, must have been
preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject
to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of
repudiation is clearly made known to the other co-owners; (3) the evidence thereon is
clear and conclusive; and (4) he has been in possession through open, continuous,
exclusive, and notorious possession of the property for the period required by law.

In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-
ownership. The execution of the affidavit of self-adjudication does not constitute such
sufficient act of repudiation as contemplated under the law as to effectively exclude Porfirio
Galvez from the property. This Court has repeatedly expressed it disapproval over the
obvious bad faith of a co-heir feigning sole ownership of the property to the exclusion of
the other heirs essentially stating that one who acts in bad faith should not permitted to
profit from it to the detriment of others. In the case of Adille and Pangan where, as in this
case, a co-heir was excluded from his legal share by the other co-heir who represented
himself as the only heir, this Court held that the act of exclusion does not constitute
repudiation.
2. No. The equitable remedy of laches is unavailing in this case.
On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its
application is controlled by equitable considerations. Laches cannot be used to defeat
justice or perpetrate fraud and injustice. Neither should its application be used to prevent
the rightful owners of a property from recovering what has been fraudulently registered in
the name of another.
3. No. A purchaser in good faith and for value is one who buys the property without notice
that some other person has a right to or interest in such property and pays its fair price
before he has notice of the adverse claims and interest of another person in the same
property. So it is that the “honesty of intention” which constitutes good faith implies a
freedom from knowledge of circumstances which ought to put a person on inquiry.

Suffice it to state that both the trial and appellate courts found otherwise as “Tam did not
exert efforts to determine the previous ownership of the property in question” and relied
only on the tax declarations in the name of Paz Galvez. It must be noted that Carlos Tam
received a copy of the summons and the complaint on September 22, 1994. This
notwithstanding, he sold the property to Tycoon Properties, Inc. on September 27, 1994.
Significantly, Carlos Tam is also an owner of Tycoon Properties, Inc. to the extent of 45%.
A notice of lis pendens dated July 8, 1997 filed with the Registry of Deeds of the Province
of La Union was inscribed on TCT No. T- 40390. Despite the inscription, 11,172,600.
Tycoon Properties, Inc. mortgaged the land to Far East Bank and Trust Company for the
sum of P11,172,600. All these attendant circumstances negate petitioners’ claim of good
faith.