- Petitioner
- Pilipinas Makro
- Respondent
- Coco Charcoal Philippines
- Citation
- G.R. No. 196419
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Martires, J.
- Decided
- October 4, 2017
Summary
Pilipinas Makro, Inc. purchased two adjacent parcels of land from Coco Charcoal Philippines, Inc. and Lim Kim San for P8,500,000.00 each. After a geodetic survey revealed DPWH road widening had encroached upon 131 sq.m. and 130 sq.m. respectively, Makro demanded refunds based on contract adjustment provisions. The RTC granted refund but awarded excessive amounts. The CA reversed, finding Makro acted in bad faith due to actual knowledge of the project. The Supreme Court reversed the CA, distinguishing express contractual warranties from implied warranties against eviction. It found no bad faith since visual inspection could not determine precise encroachment extent. The Court applied the contract's adjustment formula, ordering refunds of P1,113,500.00 and P1,105,000.00 while deleting attorney's fees and exemplary damages. The decision clarifies the distinction between express and implied warranties in real estate transactions and the good faith requirement for warranty enforcement.