case where the law on sales sets a prescriptive period of only 6 months for

De Guzman v. Toyota (Vi) violation of implied warranties against hidden faults or defects. (Clarence
November 29, 2006|Azcuna, J. | Prescription Tiu Reviewer)
PETITIONER: Carlos B. De Guzman
RESPONDENTS: Toyota Cubao, Inc.
SUMMARY: On November 27, 1997, De Guzman bought from Toyota a
FACTS: (take note of the dates to see how many months passed)
brand new white Toyota Hi-Lux, 1996 model, for P508,000. De Guzman
1. This is a petition for review on certiorari under Rule 45 of the Rules
made a down payment of P152,400, leaving a balance of P355,600 which
of Court seeking to annul the Order of the RTC of Quezon City
was payable in 36 months with 54% interest. The vehicle was delivered 2
which dismissed the complaint for damages filed by petitioner
days later. On October 18, 1998 (more than 6 months from when he bought
Carlos B. De Guzman against Toyota Cubao, Inc.
it), De Guzman demanded the replacement of the engine of the vehicle
2. On November 27, 1997, De Guzman bought from Toyota a brand
because it developed a crack after traversing Marcos Highway during a
new white Toyota Hi-Lux 2.4 SS double cab motor vehicle, 1996
heavy rain. De Guzman asserted that Toyota should replace the engine with
model, for P508,000. De Guzman made a down payment of
a new one based on an implied warranty. Toyota countered that the alleged
P152,400, leaving a balance of P355,600 which was payable in 36
damage on the engine was not covered by a warranty. De Guzman filed for
months with 54% interest. The vehicle was delivered 2 days later.
damages but the RTC of Quezon City dismissed the complaint on the
3. On October 18, 1998, De Guzman demanded the replacement of the
ground that the cause of action has prescribed because for implied
engine of the vehicle because it developed a crack after traversing
warranties (when there is no express warranty or agreement), the
Marcos Highway during a heavy rain. De Guzman asserted that
prescription is 6 months. Issue: Whether De Guzman’s cause of action
Toyota should replace the engine with a new one based on an
has prescribed – YES
implied warranty. Toyota countered that the alleged damage on the
Under Art. 1599 of the Civil Code, once an express warranty is breached,
engine was not covered by a warranty.
the buyer can accept or keep the goods and maintain an action against the
4. On April 20, 1999, De Guzman filed a complaint for damages
seller for damages. In the absence of an existing express warranty, it may
against Toyota with the RTC. Toyota moved to dismiss the case on
be based on the enforcement of an implied warranty against hidden
the ground that under Article 1571 of the Civil Code, the
defects. De Guzman wants to hold Toyota responsible for breach of
petitioner's cause of action had prescribed as the case was filed
implied warranty for having sold a vehicle with defective engine. To do
more than six months from the date the vehicle was sold and/or
this, De Guzman should have exercised this right within six months from
delivered.
the delivery of the thing sold in accordance with Art. 1571. De Guzman
5. The RTC granted Toyota's motion and dismissed the complaint
also argued that what should apply is R.A. No. 7394 but under this law, in
saying that it was a consumer product because it was used for
Art. 68(e), the prescriptive period for implied warranties is not more than
personal, family, or agricultural purposes. Since there was no
one year. He filed the complaint 19 months after delivery, therefore, he is
warranty card or agreement attached to the complaint, the implied
barred from filing the case since the time has lapsed.
DOCTRINE: In actions of damages, there may also be other prescriptive
periods established by law. Art. 1146 does not always apply, such as in this
 warranty is 6 months in accordance with Article 1571 1 of the Civil
Code. Under R.A. No. 73942, the provisions of the Civil Code
govern all contracts of sale with condition and warranties. The
duration of the implied warranty (not accompanied by an express
warranty) shall endure not less than sixty days nor more than 1 year
following the sale of new consumer products. The RTC also denied
the motion for reconsideration the De Guzman later filed.
ISSUES:
1. Whether De Guzman’s cause of action has prescribed – YES
RATIO:
1. The Court denied the petition for being in violation of the hierarchy
of courts and for lack of merit.
2. Procedural Grounds (not our topic) – The Court said the petition
should be denied for violating the hierarchy of courts. De Guzman
should have appealed the decision of the RTC with the Court of
Appeals and not the Supreme Court. Also, even though he filed it
under Rule 45, the same was in effect a petition for certiorari under
Rule 65. De Guzman failed to show that special and important
reasons or exceptional and compelling circumstances exist to justify
a direct filing of the petition with this Court instead of first taking
an appeal to the Court of Appeals. He is also not raising pure
questions of law because he is assailing the RTC’s order for
dismissal on the ground of prescription which is tantamount to
adjudicating on the merits.
3. De Guzman argues that the dismissal on the ground of prescription
was erroneous because what should apply is Art. 169 of the
Consumer’s Act of the Philippines and not Art. 1571 of the Civil
Code. He neither asked for a rescission of the contract of sale nor
for a proportionate reduction of the purchase price. What he claims
1 he would not have acquired it or would have given a lower price for it; but said vendor shall not
Art. 1571. Actions arising from the provisions of the preceding ten articles shall be barred
after six months, from the delivery of the thing sold.
2
The Consumer Act of the Philippines
3 Art. 1566. The vendor is responsible to the vendee for any hidden faults or defects in the thing
Art. 1561. The vendor shall be responsible for warranty against the hidden defects which the
thing sold may have, should they render it unfit for the use for which it is intended, or should
they diminish its fitness for such use to such an extent that, had the vendee been aware thereof,
is the enforcement of the contract, that Toyota should replace either
the vehicle or its engine with a new one. Since Art. 169 should
apply, his complaint falls within the 2-year prescriptive period. He
also justifies that since this is an action based on quasi-delict, it
prescribes in 4 years.
4. The Court held that De Guzman’s argument is erroneous. Art. 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. The available remedies of a buyer against the seller on the
basis of a warranty against hidden defects are in Arts. 15613, 15664,
and 1571. Art. 1571 states: “Actions arising from the provisions
of the preceding ten articles shall be barred after six months
from the delivery of the thing sold.”
5. Under Art. 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, as in this case, the allegations are anchored on
the enforcement of an implied warranty against hidden defects,
that the engine of the vehicle which Toyota had sold to him was not
defective. De Guzman wants to hold Toyota responsible for breach
of implied warranty for having sold a vehicle with defective
engine. To do this, De Guzman should have exercised this right
within six months from the delivery of the thing sold.
6. Since he filed the complaint on April 20, 1999, or more than
nineteen months from November 29, 1997 (the date of the delivery
of the motor vehicle), his cause of action had become time-barred.
7. De Guzman claims that R.A. 7394 applies but according to Art.
68(e) of RA 7394, “Any other implied warranty shall endure not less
be answerable for patent defects or those which may be visible, or for those which are not visible
if the vendee is an expert who, by reason of this trade or profession, should have known them.
4
sold, even though he was not aware thereof. This provision shall not apply if the contrary has
been stipulated and the vendor was not aware of the hidden faults or defects in the thing sold.
 than sixty (60) days nor more than one (1) year following the sale of
new consumer products.”
8. So, even if the complaint falls under R.A. No. 7394, it should still
be dismissed since the prescriptive period for implied warranty
under that is one year, which has lapsed.