Title
Mazda Quezon Avenue vs. Caruncho
Case
G.R. No. 232688
Decision Date
Apr 26, 2021
Mazda Quezon Avenue is liable under the Consumer Act for failing to remedy a defect in a new vehicle, necessitating the replacement or reimbursement of the car.
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Case Summary (G.R. No. 232688)

Supplier Liability for Product Imperfections

  • A supplier is held liable for product imperfections that remain unresolved within the warranty period.
  • The two-year prescriptive period for actions arising from the Consumer Act begins only after the expiration of the agreed warranty period.

Background of the Case

  • Alexander Caruncho purchased a 2011 Mazda 6 sedan from Mazda Quezon Avenue on January 12, 2011.
  • Within a week, Caruncho reported a knocking and rattling sound from the vehicle and requested a refund, which was denied by Mazda.
  • Mazda's General Manager assured Caruncho that the issue would be fixed, leading to multiple replacements of the defective rack and pinion mechanism during the three-year warranty period.

Proceedings Before the Department of Trade and Industry

  • Caruncho filed a complaint with the Department of Trade and Industry (DTI) after the issue remained unresolved despite multiple repairs.
  • Mazda argued that the vehicle was usable for three years and that the knocking sound did not constitute a factory defect warranting a full refund.
  • The DTI Adjudication Officer found Mazda liable for violating the Consumer Act, ordering either a replacement or a full refund, along with administrative fines.

Appeals and Court Decisions

  • Mazda appealed the Adjudication Officer's decision to the Appeals Committee, which upheld the findings.
  • Subsequently, Mazda filed a Petition for Certiorari with the Court of Appeals, claiming grave abuse of discretion by the DTI.
  • The Court of Appeals dismissed the petition, affirming the Appeals Committee's decision.

Arguments Presented by the Parties

  • Mazda contended that the vehicle was in good condition and that the warranty only covered servicing and repairs, not a full refund.
  • Caruncho argued that his claim for a refund was based on the right to rescind a sale under the New Civil Code and the Consumer Act, which allows for remedies in case of breach of warranty.

Court's Analysis of Product Imperfection

  • The Court confirmed that the Consumer Act holds suppliers liable for product imperfections that render goods unfit for their intended use.
  • The persistent defect in the rack and pinion mechanism was deemed a product imperfection, affecting the vehicle's roadworthiness.
  • Mazda's reliance on warranty provisions did not absolve it from liability under the Consumer Act, which allows for full reimbursement.

Prescription of Action Under the Consumer Act

  • The Court addressed Mazda's argument regarding the prescription of Caruncho's claim, stating ...continue reading

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