Case Digest (G.R. No. 164282)
Facts:
In Toyota Shaw, Inc. vs. Carolina Valdecañas and Department of Trade and Industry (G.R. Nos. 249660 & 249714, Oct. 6, 2021), Carolina Valdecañas purchased a brand-new 2016 Toyota RAV4 from Toyota Shaw, Inc. (TSI) for ₱1,246,000, paying a downpayment of ₱497,200 and financing the balance through a bank loan. On July 25, 2016, TSI delivered the vehicle (Engine No. 2AR-F240010; Serial No. JTMZF9EV5GD091039). Beginning August 24, 2016, Valdecañas reported a persistent rattling sound in the center console and a malfunctioning seatbelt indicator during multiple service visits to TSI and to Toyota Motor Philippines (TMP), totaling five unsuccessful repair attempts by October 29, 2016. After failed mediation, she invoked her rights under the Philippine Lemon Law (RA 10642) and filed a complaint before the Department of Trade and Industry’s Fair Trade Enforcement Bureau (FTEB) for violations of RA 10642 and the Consumer Act of the Philippines (RA 7394). On December 9, 2016, the FTEB ordeCase Digest (G.R. No. 164282)
Facts:
- Sale and delivery of the vehicle
- Toyota Shaw, Inc. (TSI) sold a brand-new 2016 Toyota RAV4 (Engine No. 2AR-F240010; Serial No. JTMZF9EV5GD091039; Stock No. VG3480) to Carolina Valdecañas for ₱1,246,000.00.
- Carolina paid a downpayment of ₱497,200.00 and financed the balance through a bank loan; delivery occurred on July 25, 2016.
- Reports of defects and repair attempts
- August 24 & 30, 2016 – First checkup: rattling sound at center console reported; TSI assured issue was fixed.
- September 5–7, 2016 – Seatbelt indicator warning light and sound malfunction reported; TSI reassured that it posed no safety risk.
- September 14–16, 2016 – Recurrence of indicator flashing (without sound) and persistent rattling; TSI’s third repair attempt failed.
- September 28–October 1, 2016 – Fourth repair attempt by TSI per TMP advice; problem persisted.
- October 25, 2016 – Fifth and final road test by Toyota Motor Philippines (TMP); rattling sound still evident.
- Administrative proceedings under RA 10642 and RA 7394
- October 29, 2016 – Carolina served Notice of Intention to Invoke Lemon Law Rights (RA 10642) and demanded final repair; defect remained unresolved.
- November 21, 2016 – Mediation failed; Carolina filed complaint with DTI’s Fair Trade Enforcement Bureau (FTEB) alleging violations of RA 10642 and the Consumer Act (RA 7394).
- December 9, 2016 – FTEB Decision ordered TSI to refund ₱1,246,000.00 and pay an administrative fine of ₱240,000.00, finding the vehicle defective and unfit for intended use.
- May 28, 2018 – DTI upheld the FTEB Decision, citing due process, TSI’s failure to submit position paper, and joint liability with TMP.
- March 27, 2019 – Court of Appeals (CA) partly granted TSI’s petition: affirmed refund but deleted the ₱240,000.00 fine and remanded for computation of refund including bank interest.
- October 2, 2019 – CA denied motions for reconsideration.
- Parties filed Petitions for Review on Certiorari before the Supreme Court.
Issues:
- Whether the Court of Appeals erred in deleting the administrative fine of ₱240,000.00 imposed on TSI despite finding product imperfection.
- Whether TSI was denied due process and whether Carolina proved the vehicle was defective, warranting relief under RA 7394.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)