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Nutrimix Feeds Corp. V. Court of Appeals 441 SCRA 357 (2004)

The document summarizes a Supreme Court case regarding a dispute over payment for animal feed. The Court held that in order to prove a breach of implied warranty regarding the fitness of goods, the buyer must establish that: (1) they were injured by the product; (2) the injury was caused by a defect in the product; and (3) the defect existed when the product left the seller's control. In this case, the buyers could not prove the defect already existed in the feed when it was purchased from the seller.

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Rando Torregosa
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57 views

Nutrimix Feeds Corp. V. Court of Appeals 441 SCRA 357 (2004)

The document summarizes a Supreme Court case regarding a dispute over payment for animal feed. The Court held that in order to prove a breach of implied warranty regarding the fitness of goods, the buyer must establish that: (1) they were injured by the product; (2) the injury was caused by a defect in the product; and (3) the defect existed when the product left the seller's control. In this case, the buyers could not prove the defect already existed in the feed when it was purchased from the seller.

Uploaded by

Rando Torregosa
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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KARL RANDO C.

TORREGOSA
SALES 2-E

NUTRIMIX FEEDS CORP. V. COURT OF APPEALS


441 SCRA 357 (2004)

AREA OF LAW ON SALES COVERED: Warranty as to the Fitness or Quality of the


Goods.

SALIENT FACTS:

1) Spouses Evangelista (Buyer), a customer of Nutrimix Feeds, procured various


animal feeds from the latter.
2) Nutrimix gave Buyers a period in which they are to postdate checks to be issued
as payment for the feeds.
3) Initially, the spouses were good paying customers with some instances wherein
they failed to issue checks despite the delivery of goods. Consequently, the
respondents incurred an aggregate unsettled account with Nutrimix amounting to
P766,151
4) When the checks were deposited by Nutrimix, the same were dishonored due to
the Buyer Spouses closing their account, and despite several demands from the
petitioner, the spouses refused to pay the remaining balance.
5) Nutrimix then filed for a complaint against the Buyer Spouses for collection of
money.
6) Buyer Spouses admitted non-payment but impugned their liability-- contending
that inasmuch as the sudden and massive death of their animals was caused by
the contaminated products of the petitioner, the nonpayment of their obligation
was based on a just and legal ground.
7) Nutrimix alleges that the death of the respondents’ animals was
a) due to the widespread pestilence in their farm;
b) furthermore maintained that it received information that the respondents
were in an unstable financial condition and even sold their animals to
settle their obligations from other enraged and insistent creditors;
c) finally, theorized that it was the respondents who mixed poison to its
feeds to make it appear that the feeds were contaminated.

ISSUE: What facts must first be established to enforce the implied warranty that the
goods are reasonably fit and suitable to be used for the purpose the parties
contemplated?
SUPREME COURT HELD:

RESOLUTION OF THE ISSUE: The facts that are needed to be established to enforce
the implied warranty against Vendor are not present in this case.

LAW APPLICABLE TO THE ISSUE AND FACTS: Article 1561 provides that “The
vendor shall be responsible for warranty against the hidden defects which the
thing sold may have, should they render it unfit for the use for which it is
intended, or should they diminish its fitness for such use to such an extent that, had the
vendee been aware thereof, he would not have acquired it or would have given a lower
price for it; but said vendor shall not be answerable for patent defects or those which
may be visible, or for those which are not visible if the vendee is an expert who, by
reason of his trade or profession, should have known them.” The pertinent part of the
law that is in focus of this case is the part pertaining to “unfit for the use for which it is
intended.”

APPLICATION OF THE LAW CITED TO THE FACTS OF THE PROBLEM: In the sale
of animal feeds, there is an implied warranty that it is reasonably fit and suitable to be
used for the purpose which both parties contemplated and to be able to prove liability on
the basis of breach of implied warranty, three things must be established by the
respondents: that 1) they sustained injury because of the product; 2) is that the injury
occurred because the product was defective or unreasonably unsafe; and finally 3) the
defect existed when the product left the hands of the petitioner. The defect must be
present upon the delivery or manufacture of the product; or when the product left the
seller’s or manufacturer’s control; or when the product was sold to the purchaser; or the
product must have reached the user or consumer without substantial change in the
condition it was sold. The nature of the animal feeds makes it necessarily difficult for
the respondents to prove that the defect was existing when the product left the premises
of the petitioner, and thus, without establishing the 3 factors stated, above, the Animal
Feeds that were the subject of this case is not within the scope of being unfit and
unsuitable to be used for the purpose of which the parties contemplated, as
contemplated in Article 1561.

DOCTRINE OF THE CASE: In order to enforce the implied warranty that the goods are
reasonably fit and suitable to be used for the purpose which both parties contemplated,
the following must be established:
(a) that the buyer sustained injury because of the product;
(b) that the injury occurred because the product was defective or unreasonably unsafe;
and finally
(c) the defect existed when the product left the hands of the petitioner.
Without the above then, therefore, a manufacturer or seller of a product cannot be held
liable for any damage allegedly caused by the product in the absence of any proof that
the product in question is defective, which was present upon the delivery or
manufacture of the product; or when the product left the seller’s or manufacturer’s
control; or when the product was sold to the purchaser; or the product must have
reached the user or consumer without substantial change in the condition it was sold.

CRITIQUE/ANALYSIS OF THE CASE: This case laid down the requirements to


recover on account of hidden defects being that
1. Defect must:
(a) be hidden;
(b) exist at perfection of contract;
(c) ordinarily have been excluded from the contract; and
(d) be important to render the thing unfit or considerably decreases fitness; and
2. Action must be instituted within the statute of limitations.

Furthermore, the same case also qualifies what is meant by “render the thing unfit” by
also giving the following requirements (the doctrine of this case): that “In order to
enforce the implied warranty that the goods are reasonably fit and suitable to be used
for the purpose which both parties contemplated, the following must be established:
(a) that the buyer sustained injury because of the product;
(b) that the injury occurred because the product was defective or unreasonably unsafe;
and finally, that
(c) the defect existed when the product left the hands of the petitioner.”

These pronouncements are important because there needed to be a set guideline on


what constitutes “unfitness”-- without the Courts establishing this doctrine, the absurd
situation that the Buyer could have at their discretion what is fit or unfit. It would lead to
an imbalance in their bargaining positions.

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