RULE OF CAVEAT EMPTOR What Does Caveat Emptor Mean?

Latin for "let the buyer beware."

A doctrine that often places on buyers the burden to reasonably examine property before purchase and take responsibility for its condition. A warning that notifies a buyer that the goods he or she is buying are "as is," or subject to all defects.

RULE OF CAVEAT EMPTOR IN SALES OF IMMOVABLES

The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendors title takes all the risks and losses consequent to such failure. (Caram vs. Laureta, 103 SCRA 16 [1981]; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005; see also Sps. Mathay vs. Court of Appeals, 356 Phil. 870 [1998]).

A person dealing with registered land has a right to rely upon the face of the certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of the facts and circumstances that would impel a reasonably cautious man to make an inquiry.

One who purchases real property which is in actual possession of others should, at least, make some inquiry concerning the rights of those in possession. The actual possession by people other than the vendor should, at least, put the purchaser upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as a bona fide purchaser as against such possessions. (Rep. vs. CA, 102 SCRA 331; Conspecto vs. Fuerto, 31 Phil. 144)

G.R. No. 145561.

June 15, 2005

Honda Philippines Inc., vs Samahan ng Malayang Manggagawa sa Honda

YNARES-SANTIAGO, J.:
Facts: The case stems from the collective bargaining agreement between Honda and the respondent union that it granted the computation of 14th month pay as the same as 13th month pay. Honda continues the practice of granting financial assistance covered every December each year of not less than 100% of the basic salary. In the latter part of 1998, the parties started to re-negotiate for the fourth and fifth years of the CBA. The union filed a notice of strike on the ground of unfair labor practice for deadlock. DOLE assumed jurisdiction over the case and certified it to the NLRC for compulsory arbitration. The striking employees were ordered to return to work and management to accept them back under the same terms prior to the strike staged. Honda issued a memorandum of the new computation of the 13th month and 14th month pay to be granted to all its employees whereby the 31 long strikes shall be considered unworked days for purpose of computing the said benefits. The amount equivalent to of the employees basic salary shall be deducted from these bonuses, with a commitment that in the event that the strike is declared legal, Honda shall pay the amount. The respondent union opposed the pro-rated computation of bonuses. This issue was submitted to voluntary arbitration where it ruled that the companys implementation of the pro-rated computation is invalid. Issue: WON the pro-rated computation of the 13th and 14th month pays and other bonuses in question are valid and lawful. Held: The pro-rated computation is invalid. The pro-rated computation of Honda as a company policy has not ripened into a company practice and it was the first time they implemented such practice. The payment of the 13th month pay in full month payment by Honda has become an established practice. The length of time where it should be considered in practice is not being laid down by jurisprudence. The voluntary act of the employer cannot be unilaterally withdrawn without violating Article 100 of the Labor Code. The court also rules that the withdrawal of the benefit of paying a full month salary for 13th month pay shall constitute a violation of Article 100 of the Labor Code.

MENARD KILITO