The Supreme Court has ruled that buyers of defective brand-new vehicles are not limited to just the Philippine Lemon Law when seeking remedies. Consumers can enforce their rights under various laws, including the Lemon Law, the Consumer Act of the Philippines, or any other applicable legislation.
In a decision written by Associate Justice Antonio Kho, Jr., the Court’s Second Division clarified that vehicle owners dealing with issues on brand-new purchases have multiple avenues for recourse. This ruling stemmed from a 2016 case involving Marilou Tan, who purchased a Toyota Fortuner from Toyota dealer.
Immediately after the purchase, Marilou’s husband noticed that the vehicle displayed jerky movements when shifting gears. Concerned, Marilou had the car inspected by the dealer, which found that the transmission assembly might need to be replaced or the Engine Control Unit (ECU) reprogrammed, both offered at no extra cost. However, Marilou refused these repairs, instead demanding either a replacement vehicle or a refund.
The dealer argued that under Republic Act No. 10642, also known as the Philippine Lemon Law, they were entitled to attempt repairs up to four times before replacing the car. The Lemon Law governs defective brand-new vehicles in the Philippines, requiring consumers to report defects within the first 12 months or 20,000 kilometers of use, whichever comes first.
Dissatisfied, Marilou took the case to the Department of Trade and Industry (DTI), citing Republic Act No. 7394, the Consumer Act of the Philippines. Under this law, consumers have the right to a replacement or refund if a defect cannot be resolved within 30 days. During the DTI proceedings, Marilou eventually agreed to let the dealer reprogram the ECU, which fixed the shifting issue.
Despite this resolution, the DTI ruled in favor of Marilou, ordering the dealer to either replace the vehicle or refund the purchase price. Unhappy with the decision, the dealer appealed to the Court of Appeals (CA), which ultimately sided with the appeal.
The CA argued that the Lemon Law and the Consumer Act conflicted with each other. While the Consumer Act grants suppliers a 30-day window to fix defects, the Lemon Law provides manufacturers, distributors, or dealers the opportunity to make up to four repair attempts. Given that Marilou’s case involved a brand-new car, the CA concluded that the Lemon Law took precedence over the Consumer Act, as it specifically deals with new vehicles, while the latter applies more broadly to consumer products in general. Under legal principles, a special law (Lemon Law) generally overrides a general law (Consumer Act).
Following the CA decision, the DTI Secretary pursued the case further, bringing the matter to the Supreme Court.
Although the Court acknowledged that Marilou’s vehicle issue had already been resolved through the ECU reprogramming, it took the opportunity to clarify the law for future cases. The Supreme Court emphasized that the Philippine Lemon Law is not the exclusive remedy for defective brand-new vehicles.
“Nothing prevents a consumer from availing of the remedies under RA 7394 [Consumer Act] or any other law, even if the complaint is about a brand-new vehicle,” the Court stated. “RA 10642 [Lemon Law] is an alternative remedy granted to the consumer, and they are free to enforce their rights under the Consumer Act or any other applicable law.”
However, the Supreme Court dismissed the case, stating that the DTI Secretary was not the appropriate party to file the petition. Nonetheless, the ruling serves as a significant precedent for future disputes, affirming that consumers can seek protection under various laws and are not bound solely by the provisions of the Lemon Law.
This decision highlights the Court’s commitment to ensuring consumer rights are protected, giving vehicle owners more flexibility in resolving issues with defective vehicles. Whether consumers choose to rely on the Lemon Law, the Consumer Act, or other laws, they now have clear guidance on the options available to them in such cases.
