GR 111386; (August, 1995) (Digest)
G.R. No. 111386 August 28, 1995
METAL FORMING CORPORATION, petitioner, vs. OFFICE OF THE PRESIDENT, represented by the EXECUTIVE SECRETARY, VIRGILIO M. DEL ROSARIO and CORAZON PAREDES-DEL ROSARIO, respondents.
FACTS
Private respondents, spouses Del Rosario, filed a complaint with the Department of Trade and Industry (DTI) against petitioner Metal Forming Corporation for violating Section 3 of Act No. 3740 (The Anti-Fraudulent Advertising Law). The spouses alleged that in selling its “Banawe” metal roof shingles, petitioner, through brochures and advertisements, represented that the product was “STRUCTURALLY SAFE AND STRONG” and that “The BANAWE METAL TILE structure acts as a single unit against wind and storm pressure due to the strong hook action on its overlaps.” However, barely two months after installation, portions of their roof were blown away by typhoon “Ruping.”
The DTI found petitioner liable for misrepresentation and imposed an administrative fine of P10,000. The Office of the President affirmed the DTI’s decision. Petitioner argued before the Supreme Court that no misrepresentation occurred, as the damage was caused by a fortuitous event (typhoon) and that its advertisement merely highlighted the strong hook action, not an absolute guarantee against all storms.
ISSUE
Whether petitioner’s advertisement constituted a misrepresentation of the character of its product under Section 3 of Act No. 3740 .
RULING
Yes, the Supreme Court upheld the finding of misrepresentation. The Court deferred to the factual findings of the DTI and the Office of the President, which are accorded respect due to their special knowledge and expertise. The administrative bodies found that the product did not perform as advertised—the roof did not act as a single unit against storm pressure, as part was blown away while part remained. This discrepancy between the advertised characteristic and the actual performance constituted a misrepresentation under the law.
The Court rejected petitioner’s defense of fortuitous event. The claim that roofs are built in sections and that a blown-away section could still mean the tiles within it acted as a single unit was a factual defense not sufficiently established at the administrative level. Moreover, the DTI found that improper installation contributed to the damage, negating the claim that the event was entirely beyond petitioner’s control. However, the Court reduced the fine from P10,000 to P5,000, as Section 6 of Act No. 3740 , as amended, sets a maximum fine of P5,000. The petition was dismissed for lack of grave abuse of discretion.