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Goodyear vs. Sy: Vehicle Ownership Dispute

Goodyear Philippines owned a vehicle that was hijacked in 1986 but later recovered. In 1996, Goodyear sold the vehicle to Anthony Sy who then sold it to Jose L. Lee in 1997. However, Lee was unable to register the vehicle under his name because police still classified it as stolen. Goodyear requested the police remove the stolen classification, and was later impleaded in a lawsuit between Sy and Lee regarding the sale. The court ruled that Goodyear did not breach any implied warranties in the sale to Sy because at the time of sale, Goodyear was still the rightful owner of the vehicle since it had been recovered after the hijacking.

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45 views1 page

Goodyear vs. Sy: Vehicle Ownership Dispute

Goodyear Philippines owned a vehicle that was hijacked in 1986 but later recovered. In 1996, Goodyear sold the vehicle to Anthony Sy who then sold it to Jose L. Lee in 1997. However, Lee was unable to register the vehicle under his name because police still classified it as stolen. Goodyear requested the police remove the stolen classification, and was later impleaded in a lawsuit between Sy and Lee regarding the sale. The court ruled that Goodyear did not breach any implied warranties in the sale to Sy because at the time of sale, Goodyear was still the rightful owner of the vehicle since it had been recovered after the hijacking.

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Lurine Smith
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Goodyear Philippines, Inc. vs.

Sy
474 SCRA 427 November 9, 2005
Ponente: Justice Panganiban

FACTS:
The subject of this case involves a motor vehicle. The vehicle was originally owned by Goodyear Philippines, Inc.
(Goodyear) which it purchased from Industrial and Transport Equipment, Inc. in 1983.  It had since been in the service of
Goodyear until April 30, 1986 when it was hijacked.  This hijacking was reported to the Philippine National Police (PNP) which
issued out an alert alarm on the said vehicle as a stolen one.  It was later on recovered also in 1986. The vehicle was used by
Goodyear until 1996, when it sold it to Anthony Sy on September 12, 1996.

Sy, in turn, sold it to Jose L. Lee on January 29, 1997.  But the latter on December 4, 1997, filed an action for
rescission of contract with damages against Sy, because he could not register the vehicle in his name due to the certification from
the PNP Regional Traffic Management Office in Legazpi City that it was a stolen vehicle and the alarm covering the same was
not lifted.  Instead, the PNP in Legazpi City impounded the vehicle and charged Lee criminally.

Upon being informed by Sy of the denial of the registration of the vehicle in Lee’s name, Goodyear requested on the
PNP to lift the stolen vehicle alarm status.  This notwithstanding, Goodyear was impleaded as third-party defendant in the third-
party complaint filed by Sy. A motion to dismiss was then filed by Goodyear on the twin grounds that the third-party complaint
failed to state a cause of action and even if it did, such cause of action was already extinguished.  The Regional Trial Court
resolved to dismiss the third-party complaint on the basis of the first proffered ground. On the other hand, the Court of Appeals
ruled that the Third-Party Complaint had stated a cause of action. Hence, this petition.

ISSUE:
Whether or not petitioner breached any warranty in the absence of proof that at the time it sold the subject vehicle to
Sy, petitioner was not the owner thereof.

HELD:
No. In the present case, petitioner did not breach the implied warranty against hidden encumbrances.  The subject
vehicle that had earlier been stolen by a third party was subsequently recovered by the authorities and restored to petitioner, its
rightful owner.  Whether Sy had knowledge of the loss and subsequent recovery, the fact remained that the vehicle continued to
be owned by petitioner, free from any charge or encumbrance whatsoever.

The Third-Party Complaint did not allege that petitioner had a creditor with a legal right to or interest in the subject
vehicle.  There was no indication either of any debt that was secured by the vehicle.   In fact, there was not even any claim,
liability or some other right attached to the vehicle that would lessen its value.  Its impoundment, as well as the refusal of its
registration, was not the hindrance or obstruction in the contemplation of law that the vendor warranted against. 

*Gratia argumenti that there was a breach of the implied warranty against hidden encumbrances, notice of the breach
was not given to petitioner within a reasonable time.  Article 1586 of the Civil Code requires that notice be given after the breach,
of which Sy ought to have known.  In his Third-Party Complaint against petitioner, there was no allegation at all that respondent
had given petitioner the requisite notice.

Finally, the argument that there was a breach of the implied warranty against eviction does not hold water, for there
was never any final judgment based on either a right prior to the sale; or an act that could be imputed to petitioner and deprive Sy
of ownership or possession of the vehicle purchased.

* Guys, it’s up to you kung gusto niyong isama yung certain paragraph na yun. Hindi naman siya indispensable sa ruling. Sinama
ko lang siya para humaba. Hahaha! 

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