Case Digest (G.R. No. 254978-79)
Facts:
Department of Trade and Industry, G.R. Nos. 254978-79, October 11, 2023, Second Division, Kho, Jr., J., writing for the Court. The petition contests the Court of Appeals' nullification of DTI rulings that ordered respondents to replace or reimburse a defective new vehicle.Petitioner is the Department of Trade and Industry (DTI) through the DTI Secretary; respondents are Toyota Balintawak, Inc. (TBI) and Toyota Motor Philippines Corporation (TMPC); private complainant is Marilou S. Tan (Marilou), who purchased the subject vehicle.
On May 17, 2016 Marilou bought a new Toyota Fortuner from TBI. Immediately after delivery her husband observed a "jerky movement" on gear changes. Marilou reported the defect to TBI’s sales agent and sought repairs; TBI initially declined an immediate repair for lack of appointment but later diagnosed a transmission/ECU-related cause and offered to replace the transmission assembly or reprogram the ECU at no cost. Marilou demanded replacement or refund and, on July 5, 2016, filed a complaint with the DTI (Admin Case No. CC 16-256) invoking Article 100 of RA 7394 (the Consumer Act). Respondents maintained that the complaint was governed by RA 10642 (the Lemon Law) and that the statutory preconditions (four repair attempts and written notice) had not been satisfied.
On September 9, 2016 Marilou voluntarily brought the vehicle to TBI for oil change and ECU reprogramming; the reprogramming resolved the shift-shock problem and the vehicle was released the following day. Meanwhile, the DTI-Fair Trade Enforcement Bureau (Arbitration Office) issued a Decision dated October 12, 2016 ruling for Marilou, ordering replacement or refund at her option and imposing an administrative fine of PHP 240,000. The DTI Secretary affirmed that Decision on August 17, 2017.
Respondents filed separate Rule 65 petitions before the Court of Appeals (CA). In a Decision dated February 28, 2020 the CA granted the petitions, finding grave abuse of discretion by the DTI Secretary, holding RA 10642 to be the controlling special law for brand-new motor vehicles (thus precluding application of RA 7394), and noting the absence of independent expert findings and that RA 10642 does not prescribe administrative fines; the CA annulled the DTI rulings and dismissed the complaint. The CA denied the DTI Secretary’s motion for reconsideration in a Resolution dated November 18, 2020.
DTI (through the Office ...(Subscriber-Only)
Issues:
- Was the DTI Secretary the proper party to file the present petition to the Supreme Court?
- Was the controversy moot and, if so, did it fall within an exception allowing judicial resolution?
- Is RA 10642 an exclusive remedy for defects in brand-new motor vehicles, or may a consumer elect remedies under RA 7...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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