The Supreme Court clarified that a buyer who is evicted from a property due to a prior right held by a third party cannot claim against the seller’s warranty against eviction if the buyer failed to implead the seller in the eviction lawsuit. This duty to involve the seller as a co-defendant is crucial because it gives the seller an opportunity to defend the title and possession. The ruling emphasizes that the buyer’s failure to do so forfeits the right to claim damages from the seller related to the eviction, impacting the recourse available to property buyers in similar situations.

Buyer Beware: Did You Protect Your Right Against Eviction?

The case of Spouses Michael and Bonita Uy versus Eduardo Ariza and others began with the purchase of land. The Uys bought two parcels of land from the Arizes, with the right to choose the specific location of the land they were buying. However, it turned out that the land the Uys selected was already titled to a third party, the Delgados, who then sued the Uys for unlawful detainer. The Uys, without notifying the Arizes, entered into a compromise agreement with the Delgados and surrendered the land. Later, they sought to exercise their right to choose different land from the Arizes, leading to a lawsuit for specific performance. The core legal question is whether the Uys could still demand specific performance from the Arizes, given they had already been evicted and had failed to involve the Arizes in the eviction proceedings.

The Supreme Court determined that the Uys’ action for specific performance was not the correct remedy. The Court emphasized that the Arizes had already fulfilled their obligation by delivering the land and allowing the Uys to possess it. The subsequent issue arose because of a third party’s claim. Therefore, the proper course of action for the Uys would have been to pursue a claim based on the warranty against eviction. This warranty, as stipulated in Article 1548 of the New Civil Code, protects buyers from being deprived of the property they purchased due to a prior right.

Art. 1548. Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor, the vendee is deprived of the whole or part of the thing purchased.

The vendor shall answer for the eviction even though nothing has been said in the contract on the subject.

The contracting parties, however, may increase, diminish or suppress this legal obligation of the vendor.

However, the Supreme Court also noted that even a claim based on warranty against eviction would likely fail in this case. A crucial element for enforcing a vendor’s liability for eviction is that the vendor must be summoned in the suit for eviction at the instance of the vendee. This is mandated by Articles 1558 and 1559 of the New Civil Code.

Art. 1558. The vendor shall not be obliged to make good the proper warranty, unless he is summoned in the suit for eviction at the instance of the vendee.

Art. 1559. The defendant vendee shall ask, within the time fixed in the Rules of Court for answering the complaint, that the vendor be made a co-defendant.

In this case, the Uys compromised with the Delgados without including the Arizes in the lawsuit. The Supreme Court referenced the case of Maria Luisa De Leon Escaler and Ernesto Escaler v. Court of Appeals, et al., which clearly outlines the requisites for enforcing a vendor’s liability for eviction:

• There must be a final judgment.
• The purchaser has been deprived of the whole or part of the thing sold.
• Said deprivation was by virtue of a right prior to the sale made by the vendor.
• The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee.

Because the fourth requisite was not met, the Uys effectively forfeited their right to claim against the Arizes based on the warranty against eviction. The Supreme Court also pointed out that the Uys could have filed a third-party complaint against the Arizes, which is a procedural mechanism that would have allowed them to seek contribution, indemnity, or other relief from the Arizes in respect to the claim made by the Delgados. This third-party complaint is an important tool as described in Firestone Tire and Rubber Co. of the Philippines v. Tempongko that can be employed in situations where a defendant believes that a third party is liable for the plaintiff’s claim.

FAQs

What was the key issue in this case?	The key issue was whether the buyers (Spouses Uy) could demand specific performance from the sellers (Arizes) after being evicted from the property they purchased and failing to implead the sellers in the eviction suit.
What is a warranty against eviction?	A warranty against eviction is a guarantee by the seller that the buyer will not be deprived of the property purchased due to a prior right or act imputable to the seller. It protects buyers from losing the property they bought.
What is required for a buyer to claim against the warranty against eviction?	The buyer must ensure that the seller is summoned and made a co-defendant in the eviction suit at the buyer’s instance. This gives the seller an opportunity to defend the title and possession.
What happens if the buyer does not implead the seller in the eviction suit?	If the buyer does not implead the seller, the buyer may forfeit their right to claim against the seller based on the warranty against eviction. The seller needs to be part of the process.
What is a third-party complaint?	A third-party complaint is a procedural tool that allows a defendant to bring in a third party who may be liable for the plaintiff’s claim. This allows for the resolution of related issues in a single case.
Why is a third-party complaint relevant in eviction cases?	In eviction cases, a buyer can file a third-party complaint against the seller, seeking indemnity or contribution related to the eviction claim. This ensures that the seller bears the responsibility, if any, for the buyer’s loss.
Can a buyer compromise with the claimant without involving the seller?	Compromising without involving the seller can be detrimental, as it may waive the buyer’s rights against the seller based on the warranty against eviction. The seller’s involvement is crucial in the process.
What was the ruling in this case?	The Supreme Court ruled that the buyers’ action for specific performance was not the correct remedy and that they had lost their right to claim against the warranty against eviction. Their failure to implead the sellers in the eviction suit led to this outcome.

This case highlights the importance of understanding the proper legal procedures when faced with an eviction claim. Buyers must be diligent in protecting their rights by ensuring that the seller is involved in any legal proceedings related to the property’s title and possession. This not only upholds the principles of fairness but also ensures that all parties bear the responsibilities associated with property transactions.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses Michael Uy & Bonita Uy v. Eduardo Ariza, G.R. No. 158370, August 17, 2006