SC orders BMW dealer to refund buyer

The Supreme Court building PHOTO BY NIÑO JESUS ORBETA

MANILA, Philippines—The Supreme Court has affirmed and declared final a 2006 decision by the Department of Trade and Industry (DTI) that found a car dealer liable for the defects of a “brand-new” BMW that a business executive had bought for about P3.4 million in 2003.

In the ruling dated Sept. 29, 2014, and released on Thursday, the high court’s Third Division ruled that the resolution of the DTI secretary ordering PGA Cars Inc. to refund the buyer had become “final and executory” after the car dealer failed to appeal the ruling within 15 days.

The buyer, Emmanuel Moran Jr., president of Poro Point Industrial Corp. and executive vice president of Philippine Phosphate Fertilizer Corp., filed the complaint in February 2004. He died on May 17, 2010, and was substituted in the litigation by his widow Concordia.

The decision, written by Justice Martin Villarama, declared null and void the order of the Office of the President (OP), through then Executive Secretary Eduardo Ermita, which dismissed Moran’s complaint in October 2008 on an appeal by PGA.

The other division members, Justices Presbitero Velasco Jr., Diosdado Peralta, Bienvenido Reyes and Francis Jardeleza, concurred in the ruling.

To Office of President

The DTI’s consumer arbitration office (CAO) initially found PGA liable for violation of the Republic Act No. 7394, the 1992 Consumer Act of the Philippines. PGA was ordered to refund Moran the purchase price of the BMW amounting to P3.375 million and P5,000 covering the cost of litigation, and to pay the DTI a P10,000 administrative fine.

When then Trade Secretary Peter Favila affirmed the CAO’s ruling, PGA elevated the case to the Office of the President, which ruled that Favila erred in holding PGA liable for product defects that were never raised by the complainant. The OP also said that PGA could not be held liable since it was not the manufacturer, builder, producer or importer of the BMW but only its seller.

After the OP denied his motion for reconsideration, Moran went to the Court of Appeals with a petition for certiorari, saying the OP had no jurisdiction to review the DTI resolution.

The appellate court, however, ruled that Moran made an improper remedy and dismissed his petition with finality in June 2010. Moran’s widow took over as litigant and raised the issue before the Supreme Court.

The high tribunal said the OP had no jurisdiction to review the resolutions of the DTI secretary on disputes involving violations of RA 7394.

The justices pointed out that the procedure for appeals to the OP is governed by Administrative Order 18,14 Series of 1987, whose Section 1 provides that “unless otherwise governed by special laws, an appeal to the OP shall be taken within 30 days from receipt by the aggrieved party of the decision/resolution/order complained of or appealed from.”

On the other hand, Article 166 of RA 7394 states that the DTI secretary shall decide the appeal within 30 days from receipt and that its decision becomes final after 15 days, “unless a petition for certiorari is filed with the proper court”.

The high court justices said RA 7394, a special law, expressly provides for immediate judicial relief from decisions of the DTI secretary by filing a petition for certiorari with the “proper court”. Hence, PGA should have elevated the case directly to the Court of Appeals through a petition for certiorari, the justices said.