DE GUZMAN V TOYOYA CUBAO
within six months from the delivery of the thing sold.
PETITIONER: Carlos B. De Guzman
RESPONDENT: Toyota Cubao, Inc.
DOCKET: GR No. 141480
DATE: November 29, 2006
PONENTE: Azcuna, J.
FACTS: Carlos de Guzman (petitioner) petitioner purchased from
Toyota Cubao (respondent) a brand new white Toyota Hi-Lux 2.4
SS double cab motor vehicle, 1996 model, in the amount of
P508,000.Petitioner made a down payment of P152,400, leaving
a balance of P355,600 which was payable in 36 months with 54%
interest. The vehicle was delivered to petitioner two days later.
Almost a year after, petitioner demanded the replacement of the
engine of the vehicle because it developed a crack after
traversing Marcos Highway during a heavy rain. Petitioner
asserted that respondent should replace the engine with a new
one based on an implied warranty. Respondent countered that
the alleged damage on the engine was not covered by a warranty.
The formal complaint was filed by the petitioner 17 months later.
Respondent moved to dismiss the case on the ground that under
Article 1571 of the Civil Code, the petitioners cause of action had
prescribed as the case was filed more than six months from the
date the vehicle was sold and/or delivered.
The RTC dismissed the complaint stating, “since no warranty
card or agreement was attached to the complaint, the contract of
sale of the subject pick-up carried an implied warranty that it was
free from any hidden faults or defects, or any charge or
encumbrance not declared or known to the buyer. The
prescriptive period thereof is six (6) months under the Civil Code
(Art. 1571). Under RA No. 7394, the provisions of the Civil Code
on conditions and warranties shall govern all contracts of sale
with condition and warranties (Art. 67). The duration of the implied
warranty (not accompanied by an express warranty) shall endure
not less than sixty days nor more than one (1) year following the
sale of new consumer products (Art. 68, par. [e]). The two (2) year
prescriptive period under Art. 169 cannot prevail over Art. 68
because the latter is the specific provision on the matter.”
ISSUE: WHETHER OR NOR THE CONSUMER ACT IS
APPLICABLE TO THIS CASE AND WHETHER THE PERIOD
TO FILE A COMPLAINT HAS ALREADY LAPSED
HELD: The petition should be denied. (First, on procedural
grounds, the petition should forthwith be denied for violation of
the hierarchy of courts)
Petitioner contends that the dismissal on the ground of
prescription was erroneous because the applicable provision is
Article 169 of Republic Act No. 7394 (otherwise known as The
Consumer Act of the Philippines which was approved on April 13,
1992), and not Article 1571 of the Civil Code. Respondent
maintains that petitioners cause of action was already barred by
the statute of limitations under Article 1571 of the Civil Code for
having been filed more than six months from the time the vehicle
was purchased and/or delivered. Respondent reiterates that
Article 169 of Republic Act No. 7394 does not apply.
Petitioners argument is erroneous. Article 1495 of the Civil Code
states that in a contract of sale, the vendor is bound to transfer
the ownership of and to deliver the thing that is the object of sale.
Corollarily, the pertinent provisions of the Code set forth the
available remedies of a buyer against the seller on the basis of a
warranty against hidden defects but it shall be barred after six
months from the delivery of the thing sold (Art. 1571).
Under Article 1599 of the Civil Code, once an express warranty
is breached, the buyer can accept or keep the goods and
maintain an action against the seller for damages.In the absence
of an existing express warranty on the part of the respondent, as
in this case, the allegations in petitioners complaint for damages
were clearly anchored on the enforcement of an implied warranty
against hidden defects, i.e., that the engine of the vehicle which
respondent had sold to him was not defective. By filing this case,
petitioner wants to hold respondent responsible for breach of
implied warranty for having sold a vehicle with defective engine.
Such being the case, petitioner should have exercised this right
Petitioner contends that the subject motor vehicle comes within
the context of Republic Act No. 7394. Thus, petitioner relies on
Article 68 (f) (2) in relation to Article 169 of Republic Act No. 7394.
Article 4 (q) of the said law defines consumer products and
services as goods, services and credits, debts or obligations
which are primarily for personal, family, household or agricultural
purposes, which shall include, but not limited to, food, drugs,
cosmetics, and devices. The following provisions of Republic Act
No. 7394 state:
Art. 67. Applicable Law on Warranties. The provisions of the Civil
Code on conditions and warranties shall govern all contracts of
sale with conditions and warranties.
Art. 68. Additional Provisions on Warranties. In addition to the
Civil Code provisions on sale with warranties, the following
provisions shall govern the sale of consumer products with
warranty:
e) Duration of warranty. The seller and the consumer may
stipulate the period within which the express warranty shall be
enforceable. If the implied warranty on merchantability
accompanies an express warranty, both will be of equal duration.
Any other implied warranty shall endure not less than sixty (60)
days nor more than one (1) year following the sale of new
consumer products.
f) Breach of warranties xxx
xxx
2) In case of breach of implied warranty, the consumer may retain
in the goods and recover damages, or reject the goods, cancel
the contract and recover from the seller so much of the purchase
price as has been paid, including damages. (Emphasis supplied.)
Consequently, even if the complaint is made to fall under the
Republic Act No. 7394, the same should still be dismissed since
the prescriptive period for implied warranty thereunder, which is
one year, had likewise lapsed.
ISIDRO V. NISSAN MOTOR PHILS
PETITIONER: Conrado Isidro
RESPONDENT: Nissan Motor, Philippines
DOCKET: GR No. 136500
DATE: December 3, 1999
PONENTE: Pardo, J.
Facts: On December 21, 1995, petitioner Isidro bought from
respondent a brand new Nissan Sentra with an express
manufacturer's warranty against hidden defects for a period of 24
months or 50,000 kilometers, whichever comes first.
On August 31, 1998, or 2 years and 9 months after delivery of the
car, petitioner Isidro filed with the Regional Trial Court, Quezon
City, a complaint against respondent for breach of warranty.
On October 7, 1998, respondent filed with the trial court a motion
to dismiss the complaint alleging that petitioner's cause of action
is barred by the statute of limitation under Article 1571 of the Civil
Code.
On October 9, 1998, petitioner filed with the trial court an
opposition to the motion to dismiss pointing out that Article 1571
applies only to implied warranties and not to express warranty.
On November 11, 1998, the trial court issued an order dismissing
the complaint based on the ground that plaintiffs cause of action
has prescribed since the complaint was filed more than 2 years
after delivery of the car which is the period during which
respondent expressly warranted that it would repair/replace
defective parts of the car.
1
On November 20, 1998, petitioner filed with the trial court a
motion for reconsideration of the dismissal stating that the
prescribed period of warranty is four years in case of rescission
and ten years in case of specific performance.
On December 2, 1998, respondent filed with the trial court an
opposition to the motion for reconsideration.
On December 9, 1998, the trial court denied the motion for
reconsideration. Hence, this petition for review on certiorari.
Issue: W/N the petitioner's action for enforcement of the
manufacturer's express warranty covering the subject motor
vehicle has prescribed.
Held: Yes, the action has prescribed. The Court agrees with
the trial court that petitioner's action has prescribed.
The manufacturer's warranty covering the subject motor vehicle
was for defective parts over a period of twenty four (24) months
or fifty thousand (50,000) kilometers, whichever comes first.
Where there is an express warranty in the contract, as in the case
at bar, the prescriptive period is the one specified in the express
warranty, if any.
The action to enforce the warranty was filed two and a half years
from the date of the purchase or delivery of the vehicle subject of
the warranty.
Clearly, the action has prescribed. The period of the guarantee
under the express warranty has expired.
G.A. MACHINERIES, INC. V. YAPTINCHAY
PETITIONER: GA Machineries
REPONDENT: Horacio Yaptinchay
DOCKET: GR No. L-30965
DATE: November 29, 1983
PONENTE: Gutierrez, Jr.
Facts: G. A. Machineries, Inc. (hereinafter referred to as GAMI,
Petitioner, Appellant) thru a duly authorized agent, offered to sell
a brand-new Fordson Diesel Engine to Horacio Yaptinchay
(appellee and respondent), owner of the freight hauling business
styled ‘Hi-Way Express’. Relying on the representations of
appellant’s representative that the engine offered for sale was
brandnew, appellee agreed to purchase the same.
Within the week after its delivery, however, the engine in question
started to have a series of malfunctions which necessitated
successive trips to appellant’s repair shop. Thus, it first sprang an
oil leak such that it was brought for repair.
Thereafter, the malfunctioning persisted and, on inspection,
appellee’s mechanic noticed a worn out screw which made
appellee suspicious about the age of the engine. This prompted
appellee, thru his lawyer, to write appellant a letter, protesting that
the engine was not brand-new as represented (Exhibit E).
Because of the recurring defects, the engine was again submitted
to appellant’s shop for repair.
All these notwithstanding, the engine could still not be returned
into operation because it continued not to function well. One last
effort to Remedy engine oil leaks’ (Exhibit 1) was made, but all to
no avail because, instead of improving, the engine’s condition
became worse as it developed engine knock and appellee had to
stop its operation altogether due to its unserviceability.
Yaptinchay then sought the assistance of the PC Criminal
Investigation Service to check on the authenticity of the serial
number of the engine, with due notice to appellant. Scientific
examination and verification tests revealed that the original motor
number of the engine aforesaid was tampered. Further inquiries
by appellee from the Manila Trading Company, which also
handles the importation and distribution of similar engines, also
disclosed that, unlike the engine delivered to appellee whose
engine body and injection pump were painted with two different
colors, brand-new engines are painted with only one color all
over.
Appellee made demands from appellant for indemnification for
damages and eventually instituted the present suit. In its defense,
appellant denied the imputation of misrepresentation.
TC, CA – Ruled in favor of Yaptinchay.
The petitioner takes exception to the factual findings of the
appellate court and argues: 1) the fact that the Fordson diesel
engine developed oil leaks does not necessarily imply that the
said engine was not brand new and 2) the testimony of laboratory
technician Captain Garcia of the Philippine Constabulary to the
effect that the motor or serial number of the engine was tampered
does not deserve credence.
Issue: Whether or not the factual findings of both the trial and
appellate courts as regards the subject Fordson diesel engine are
supported by evidence.
Ruling: The first argument is premised on the proposition that
even brand-new engines in many cases develop oil leaks. To
support this proposition the petitioner presented documentary
evidence consisting of job orders for allegedly brand new engines
which developed oil leaks.
An examination of the documentary evidence shows that the job
orders were for twelve (12) different engines. Moreover, the
petitioner’s witness who testified on the said job orders admitted
that some engines were repaired only after a few months. On the
other hand, the subject Fordson diesel engine was repaired
within a week after it was delivered to the respondents.
The second argument questions Captain Garcia’s findings that
the original motor number of the engine was tampered as shown
by the presence of fragmentary numbers which appeared in the
engine when he conducted a macro-etching test thereon by
applying acid on the surface of said engine. The petitioner
emphasizes Captain Garcia’s alleged testimony that." . . what he
calls fragmentary numeral" is not definitely a numeral or a
fragment of a numeral and states that the same could have been
caused by any molecular pressure applied to the area of the
metal where it appeared. In effect, the petitioner insists that the
supposed fragmentary numerals could have been merely
scratches or indentations near the serial number of the motor
which might have been caused by sparks from the welding
process.
The arguments are not well-taken. First, the statements attributed
to Captain Garcia are not accurate. An examination of the record
shows that Captain Garcia positively stated the fragmentary
numeral to be a numeral or a number but in the absence of key
portions he could not positively identify the exact number or
numeral. He discounted the possibility that such fragmentary
numerals could be mere scratches.
The Fordson diesel engine delivered to the respondent was not
brand-new.
"Indeed, it would be too much to say that the successive
malfunctions of the engine, the defects and other discrepancies
therein that cropped up so soon after its delivery, the numerous
trips it had to appellant’s repair shop, the demonstrable tampering
with its serial number, and its ultimate breakdown despite
appellant’s attempts to put it into good working order could be
attributed to mere coincidence. If all these mean anything at all,
it can only be that the engine aforesaid was not really brand new.
The petitioner committed a breach of contract against
the Respondent. The misrepresentation of the quality of the
subject Fordson diesel engine is tantamount to fraud or bad faith.
The return of the purchase price with legal interest from the date
of purchase is justified.