Joseph Harry Walter Poole-Blunden v. Union Bank of the Philippines

Summary

Union Bank advertised a foreclosed condominium unit as having 95 square meters and sold it to Poole-Blunden for P2,650,000.00. After full payment, Poole-Blunden discovered the actual interior area was only 74.4 square meters. The Supreme Court found Union Bank committed causal fraud by misrepresenting the unit's area, as the advertised 95 square meters improperly included common areas contrary to the Condominium Act. The Court ruled that banks must observe the highest degree of diligence given their fiduciary nature, and Union Bank's gross negligence amounted to bad faith. The 'as-is-where-is' clause could not excuse fraud or cover defects requiring specialized knowledge to detect. The 21.68% area deficiency was substantial enough to constitute determining cause for the contract. The Court annulled the contract and ordered full refund plus exemplary damages, establishing important precedent on bank fiduciary duties and limitations of 'as-is-where-is' clauses in real estate transactions.