Submitted by: JOHN ROBERT SAM JUAN

Submitted to : Atty. Ada Abad

CBI PHILIPPINES, INC,

SPOUSES ROMULO
AND MERLINDA UY,
-versusSFM SALES CORP (AFFILIATED
MITSUBISHI MOTORS
PHILIPPINES CORP.)
LIPA CITY BATANGAS,

MEMORANDUM

FACTUAL BACKGROUND
1. Based on the said demand letter written by CBI PHILIPPINES to our behalf
they wrote in their letter that said company purchased at our clients
dealership company SFM SALES- a car dealership affiliated with
MITSUBISHI MOTORS PHILIPPINES CORPORATION a brand new white
4x2 AT MONTERO SPORT VEHICLE with Plate No. VED-598 amounting
to ONE MILLION FOUR HUNDRED FIFTEEN THOUSAND TWO
HUNDRED PESOS (1,415,200,00) last June 15, 2012. Said unit was
delivered and assigned to CBI PHILS OPERATIONS MANAGER
ROMULO UY for his personal and business use.
2. Said vehicle was nearly six months old and with only 17,047 used
mileages, it was alleged in said complaint that last March 10, 2013 Mrs.
Merlinda Uy ( WIFE OF OPERATIONS MANAGER ROMULO UY)
suddenly experienced an unintended acceleration of the MONTERO
SPORT VEHICLE at the car park of Budget Lane Supermarket in
Batangas City.
3. Mrs. Uy started the engine then shifted the gear from park to reverse
mode, and upon release of the hand brake, without yet stepping on the
gas, said vehicle suddenly revved and uncontrollably surged backward at a
high speed on its own. After shifting it to drive mode car again suddenly
revved forward while according to Mrs. Uy her foot was on the brake pedal,

as a result two cars in said carpark was damaged, Mrs. Uy was likewise
injured because airbags did not deploy.
4. On 19 May 2012, lawyers for CBI sent a demand letter to Dealer for the
replacement of the SUV or refund of the full amount of the purchase price.
ISSUE/s OF THE CASE:
5. WON there was Product liability against Mistubishi Motors?
6. WON there is human error on part of said Plaintiffs??
LEGAL CLAIMS/ DEFENSES:
7. CBI has not presented any express warranty nor has it filed an implied
warranty claim for hidden defects from the time the accident occurred.
8.

CBI does not have enough evidence to warrant a conclusion that the
SUV suffers from hidden defects.

9. CBI has not presented any document pertaining to the regular

maintenance of the SUV.
SHORT ANSWER:
10. Dealership Company may not be held liable for damages for the said
unintended acceleration incident because only the Company may be solely liable
for damages ,if any ,based on the said dealership agreement entered into by the
Company and Dealer that there is an implied warranty on the part of The
Company warranting to the Dealer that, except otherwise, the Automobiles sold
by the Company to the Dealer under the Agreement are free from defect in
material and workmanship.
11. Second , based on said agreement, no liability can be attached because
the SUV first came from the Company and SFM SALES was merely a
dealer of said vehicle. Strict Product Liability , jurisprudence under
Philippine Law provides that a manufacturer, seller, or lessor of goods will
be strictly liable, regardless of intent or the exercise of reasonable care,
for any personal injury or property damage to consumers, users, and bystanders caused by the goods it manufactures, sells, or leases.
12. Interrelating this with American Jurisprudence, 63A AM Jur 2d, it states
that, it is a principle that the failure of manufacturer or seller to provide
adequate warning as to dangers associated with its products may serves
as the basis for a cause of action against the manufacturer or seller.
Although this is the case, theory of liability involved requires that plaintiff
show that the defendant had a duty to warn , that the defendant failed to
meet that duty, and that such failure was a proximate cause of injuries to
the plaintiff. Relying upon this jurisprudence, it is safe to say that while the
Dealership can be held liable for defects of parts of the vehicles there is a

limited liability rule because in the absence of showing that there is

indeed a defect and duty to warn , then the defendant for that matter
cannot be held liable as to the defect.
13. While it is true that is the duty of Company/ Dealer (Mitsubishi Corp) to
guarantee upon physical delivery of the car to their client , that it must be
in safe, good and working condition, they cannot guarantee the said
vehicle to be 100% fully operational after delivering the said car in the
possession of the client. Certain outside factors should be considered
when the car is in the possession the third party/client.
14. While it may be true that a newly bought car is presumed to be at its
peak, prime working condition there is not exact guaranty whatsoever
seeing as vehicles are human creations capable of unforeseen errors.
Upon proper checking of the Mitsubishi Motors, it was found that the
vehicle was said to be in tiptop condition, and the only possible thing to
conclude is the drivers own negligence or fault in not properly applying
the said brakes or careful use of the car in its reverse mode or at the
proper acceleration of the car.
15. While the driver Mrs. Merlinda Uy alleged that as a defense she has been
a driver for 15 years and no such accident ever happened like this, it
cannot be used as a justification nor as a defense that she may not meet
accidents in the future similar to this. Apparently if the Uys had properly
followed the routine maintenance and check-ups then they could not have
a problem in the first place.
16. Third, human error can be attributed to the plaintiff spouses Uys for failure
to follow proper routinary check up with said vehicle.
CONCLUSION:
17. The Car Dealership cannot be attributed with any negligence whatsoever
seeing as they were as an express warranty between the Company and
the car dealership before any vehicle/car is to be sold to any third person
.Seeing as before these vehicles of high brand companies go through
proper and routinary procedures as provided in their dealer operation
standard guidelines, to ensure that the Dealer before releasing/allowing
the use of these vehicles , they have consistently given monthly
operation reports regarding the sales, service and parts and
accessories operations, including the customer database in the form
prescribed by the Company.
18. The warranty period of each Automobile of the Company shall vary and
the Company shall inform the Dealer of any change whatsoever. It is
provided in the case of De Guzman v. Toyota Cubao G.R. No. 141480
that in case there was no specification of period, then Art. 1571 of the Civil
Code provides that six months from date of delivery of the thing sold for

HIDDEN DEFECTS. We conclude that Dealership Company cannot be

held liable for any hidden defects because it was Company duties and
obligation to ensure the vehicles were in good, working condition upon
delivery of vehicle to the Dealership.
19. Human error can be attributed to the owner since first, the car was
assigned to specifically to Mr. Romulo Uy ,Operations Manager of CBI
PHILIPPINES for his personal and business use. But during said incident,
it seems his wife Mrs. Merlinda Uy was using said vehicle. While this may
seem a minor detail which may be rebutted by evidence, however this
may show negligence and fault of Mr. Romulo Uy in allowing her wife to
drive her car in the first place.
20. Second, seeing as Mr. Romulo Uy was the user of the car, It can be used
as a defense that vehicle owner/user was negligent or at fault in failing to
properly follow routinary maintenance schedule such as but not limited to
oil change, tune up, battery check, checking tire pressures, brake dusts,
checking of signal lights, etc. While this can be overcome by evidenced on
the contrary, still negligence/ fault can be used for failure of Mr. Romulo
Uy to properly maintain the car in good condition.
21. Mitsubishi Motors requires a periodic check-up of the car to their clients
based on the mileage having used. Uy spouses alleged in the report that
car was closing to 6 months old being used with 17,047 used mileages.
(Annex D) shows routine schedule of Mitsubishi Motors check up which
plaintiff failed to produce by direct evidence.
22. Uy had a duty do deliver said vehicle for maintenance and routinary
check-up seeing as Mitsubishi Motors for at the very least 3 or 4 times at
the course of 6 months which they failed to reflect in their report.
23. Human error has been defined as something not intended by the actor,
not desired by a set of rules or that led the task or system outside its
acceptable limits. It was also evidenced on Mitsubishi Motors pro forma
Vehicle Technical Evaluation Report dated April 12, 2013 attributing the
vehicles sudden unintended acceleration to human error. Mitsubishi
Motors made following comments to wit:
a) evaluation results shows vehicle software datalist conforms to the
standard specification
b) no abnormalities found on electrical and mechanical system of the
vehicle particularly on engine and, transmission, fuel and brake system. The
alleged sudden acceleration was not experienced during the evaluation and
testing of vehicle.
20. While numerous incidents have reported regarding Montero Sport

Vehicles in the public and social media involving unintended acceleration of said
sport vehicles, Mitsubishi consistently guarantees that the products sold or dealt
with are top of the line, high quality, superior brands that any anomalies or
defects if shown to have been present are remedied or corrected by the
Management or the Company owning said brand.
21. So far, Mitsubishi Motors have not found any hidden defects or anomalies
with these type of car brands because if so, then Mitsubishi Motors being a
known top of the line car brand in our country would ask for a recall of said
vehicles to fix the situation.