Case Digest (G.R. No. 214122)
Facts:
Autozentrum Alabang, Inc. v. Spouses Miamar A. Bernardo and Genaro F. Bernardo, Jr., G.R. No. 214122, June 08, 2016, Supreme Court Second Division, Carpio, J., writing for the Court.Petitioners Spouses Miamar A. Bernardo and Genaro F. Bernardo, Jr. (Spouses Bernardo) purchased a 2008 BMW 320i from petitioner Autozentrum Alabang, Inc. (Autozentrum), an authorized BMW dealer, on 12 November 2008 for P2,990,000. Within roughly a year the vehicle experienced multiple serious malfunctions (ABS, steering column, electric warning and door lock systems, air conditioning, wishbone damage, and a fuel-tank leak). Repairs were performed by respondent service center Asian Carmakers Corporation (ACC/BMW Autohaus) under warranty; Autozentrum’s Aftersales Manager Ron T. Campilan later wrote (29 January 2011) that the vehicle was “certified pre‑owned or used.” The Land Transportation Office registration likewise indicated prior ownership by Autozentrum, and one rear tire lacked Running Flat Technology (RFT) that the others had.
On 24 February 2011 the Spouses filed a complaint with the Department of Trade and Industry (DTI) against Autozentrum, ACC, and Bayerishe Motoren Werke (BMW) A.G. for deceptive sales and defective product violations under the Consumer Act (RA 7394); a supplemental complaint added subsequent engine smoke and that Autozentrum retained custody of the car as of August 2011. In a Decision dated 30 April 2012, DTI Hearing Officer Maria Fatima B. Pacampara found Autozentrum liable for deceptive sales and defective products, ordered refund of the purchase price and imposed administrative fines, but exculpated ACC and BMW A.G. The DTI Appeals Committee, in a Resolution of 14 September 2012, affirmed liability but modified reimbursement to a depreciation-adjusted amount (Php2,221,142.90) using COA Circular No. 2003-07 and required return of the vehicle to Autozentrum.
Autozentrum appealed to the Court of Appeals (CA). In a Decision dated 30 June 2014 (and Resolution denying reconsideration dated 4 September 2014), the CA affirmed liability for deceptive sales and found the car defective, but concluded Autozentrum’s liability was under Articles 1561 and 1567 of the Civil Code rather than Articles 97–98 of RA 7394, ...(Subscriber-Only)
Issues:
- Did the DTI Hearing Officer and the DTI Appeals Committee gravely abuse their discretion in ruling that Autozentrum violated Article 97 of RA 7394 (liability for defective products)?
- Did the DTI Hearing Officer and the CA gravely abuse their discretion in ruling that Autozentrum violated Article 50 of RA 7394 (prohibition against deceptive sales acts or practices)?
- Did the DTI Hearing Officer and the CA gravely abuse their discretion in ordering Autozentrum to refund the entire purchase price of the vehicle (rescission/restitution and the amount to be returned)?
- Were the administrative penalties imposed by the DTI excessive or beyond its authority?
- Did the DTI Appeals Committee and the Court of Appeals err in their respec...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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