In our previous article we discussed the warranty of latent defects when it comes to the deed of sale and how this warranty is an important characteristic of such contract.
Another important characteristic to a deed of sale is the warranty of peaceful possession.
The raison d’etre behind the warranty of peaceful possession which in Maltese is known as ‘Garanzija Paċifiku Pussess’ is built upon the foundational argument that when a person purchases a thing, that person has the right to enjoy and use peacefully the thing purchased without any burdens which were not declared at the moment of the contract of sale.
Therefore, a particular sanction is granted ‘ex lege’[1] to the buyer when he is disturbed of his free enjoyment and this remedy is referred to as the warranty of peaceful possession.
This warranty is regulated under articles 1409-1423 of Chapter 16 of the Laws of Malta.[2] Article 1409 declares that if no agreement was entered into whereby the warranty of peaceful possession is granted, the seller is in law, bound to warrant the buyer against any eviction which deprives him, in whole or in part of the thing sold and against any easement or burden on the same, claimed by others and not stated in the contract, therefore this warranty is of an automatic effect.
This was confirmed by the court in the case ‘Captain Arthur Gordon vs Don Giuseppe Żammit Falzon’ where the court held that the right of the buyer to be guaranteed against eviction derived from the very nature of a contract of sale.
The purpose of this warranty is to protect the buyer from any molestation from the seller’s side or in the event that the buyer is evicted either partially or completely, the vendor is held responsible for any consequences ensuing as a result of his failure to perform his obligation of transferring ownership as promised.
This warranty is therefore closely linked with the buyers right to have permanent enjoyment of the property in return for the price paid and should be fully indemnified if it is withdrawn from him by reason of a defective title given by the seller.
Eviction refers to the situation of the buyer where an action is instituted against him by third parties who claim to be the owner or co-owner of the thing bought. Article 1409 of Chapter 16 of the Laws of Malta speaks of partial or total eviction. When total eviction takes place the vendor would have failed to transfer the ownership of the thing bought onto the buyer. However, in the case of partial eviction, the ownership is still transferred.
The general requisites for both partial and total eviction are as follows;
In respect of cases pertaining to total eviction, article 1413 of chapter 16 of the laws of Malta states that the buyer upon eviction shall be entitled to claim from the seller:
In respect of Partial eviction, this is said to take place when; (i) The buyer suffers eviction of a material part of the thing; or (ii) Loss of an active servitude; or (iii) Existence of a passive servitude.
Partial eviction allows the buyer to demand the dissolution of the sale. However, his right to dissolve the said sale only takes place when the evicted part of the thing was of such importance in relation to the entire thing that he would not have bought it in the first place. How important a part is in relation to the whole thing sold is to be decided on a case-by-case basis. A landmark judgement on partial eviction is that of ‘Giuseppe Farruġia vs Nicoline Cachia’ where the court held that; “... Hemm l-eviżjoni parzjali, anke meta x-xerrej jiġi mtellef id-dritt għall-vantaġġ ta’ ċerta kwalitajiet...”
This right to dissolve a sale has a prescriptive period of one year from the day on which the judgement as to the eviction has become final and absolute. However, the buyer has yet another option apart from dissolving the sale. This option is laid down under article 1418 of Chapter 16 of the Laws of Malta which stipulates that the buyer has a right for refund by the seller on the evicted part. The aforementioned article then goes on to explain how the indemnity is calculated.
Finally, the buyer has the right to turn against any one of a line of successive sellers. The Actio surrogatoria may be used by the buyer to sue the vendor for the eviction that he would have suffered. However, the buyer can only exercise this action if he possesses a warranty of peaceful possession against his immediate vendor. Furthermore, if he has received the property on a contract of sale which includes a clause of non-guarantee, this action may not be utilized by him.
For more information or assistance related to Contracts and Property Law please contact Dr Robert Tufigno and Dr Delilah Vella.
[1] As a matter of law.
[2] The Civil Code.