Philippine Steel Coating Corp. v. Eduard Quiñones

Summary

This case involved a commercial dispute between Philippine Steel Coating Corp. and Eduard Quiñones over primer-coated galvanized iron sheets purchased for bus manufacturing. Quiñones initially expressed concerns about compatibility with his acrylic paint process, but PhilSteel's sales manager Ferdinand Angbengco provided express oral warranties of compatibility based on alleged laboratory tests. After purchase and use, customers complained of paint blistering and peeling due to incompatibility between the epoxy primer coating and acrylic paint. The Supreme Court held that Angbengco's oral assurances constituted an express warranty under Article 1546 of the Civil Code, as they were positive affirmations of fact that induced the buyer's purchase and were made by an expert whose word could be relied upon. The Court ruled that PhilSteel breached this warranty and that Quiñones could legitimately refuse to pay the unpaid balance of P448,041.50 as recoupment under Article 1599. The decision clarified that express warranties can be oral when they constitute positive affirmations relied upon by buyers, that the four-year prescription period applies to express warranty cases rather than the six-month period for hidden defects, and established the remedies available to buyers for breach of express warranty in commercial transactions.