29/09/2024
Buyers of defective brand-new motor vehicles may choose to enforce their rights under any available law.
The Supreme Court’s Second Division, in a Decision written by Associate Justice Antonio Kho, Jr., ruled that consumers with brand-new motor vehicle issues may avail of the remedies under the Philippine Lemon Law, the Consumer Act, or any other applicable law.
In 2016, Marilou Tan (Marilou) bought a Toyota Fortuner from Toyota Balintawak, Inc. (TBI). While driving home after the purchase, her husband noticed a jerky movement whenever the transmission changed gears.
After a mechanical inspection, TBI informed Marilou that the transmission assembly needed to be replaced and/or the Engine Control Unit (ECU) reprogrammed at no extra cost. But Marilou refused, demanding instead that the vehicle be replaced, or she be refunded. TBI, however, argued that under Republic Act No. (RA) 10642 or the Philippine Lemon Law (Lemon Law), TBI was allowed to make up to four repair attempts before replacing the vehicle.
The Lemon Law covers brand-new motor vehicles purchased in the Philippines reported by a consumer to be defective within 12 months from the date of original delivery or up to 20,000 kilometers of operation, whichever comes first.
Marilou filed a complaint with the Department of Trade and Industry (DTI), citing RA 7394 or the Consumer Act of the Philippines (Consumer Act). Under the law, consumers have the option to request either a replacement unit or an immediate refund if a defect cannot be corrected within 30 days.
During the pendency of the proceedings, Marilou voluntarily brought the vehicle to TBI for ECU reprogramming, which addressed the shift shock problem.
The DTI later ruled in favor of Marilou and ordered TBI to either replace the vehicle or reimburse the amount paid. TBI sought to nullify the DTI rulings before the Court of Appeals (CA).
The CA ruled in favor of TBI. It held that the Consumer Act and the Lemon Law are conflicting because the first law gives the supplier 30 days to correct the defect, while the second law allows the manufacturer, distributor, or dealer at least four separate repair attempts.
Since the controversy involved a brand-new motor vehicle, the CA ruled that the Lemon Law, and not the Consumer Act, was applicable. The Lemon Law specifically applies to brand-new vehicles, while the Consumer Act covers durable and non-durable consumer products in general. As a rule, a special law prevails over a general law.
Without Marilou’s participation, the DTI Secretary filed the present petition with the Supreme Court.
While acknowledging that the case had been resolved due to the repair of the vehicle, the Court took the opportunity to settle the issue to guide future disputes. It held that the Lemon Law is not an exclusive remedy. It said:
“[T]here is nothing that prevents a consumer from availing of the remedies under RA 7394 [Consumer Act] or any other law for that matter even if the subject of the complaint is a brand new vehicle… RA 10642 [Lemon Law] is an alternative remedy granted to the consumer and the consumer is free to choose to enforce his or her rights under RA 7394 or any other law.”
However, the Court dismissed the petition because the DTI Secretary was not the proper party to file the case.
FULL TEXT of the Decision in G.R. No. 254978-79 (Department of Trade and Industry v. Toyota Balintawak, Inc. and Toyota Motor Phils. Corp.), October 11, 2023 at: https://sc.judiciary.gov.ph/254978-79-department-of-trade-and-industry-vs-toyota-balintawak-inc-and-toyota-motor-phils-corp/
(Source: SC)
