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