Case Digest: Coca-Cola Bottlers Phils., Inc. vs. CA, G.R. No. 110295, October 18, 1993

 

CASE TITLE: Coca-Cola Bottlers Philippines, Inc. vs. Court of Appeals

GR No/ Date:  G.R. No. 110295. October 18, 1993

PONENTE: Davide, Jr., J.

CASE WITH THE SC:  PETITION for review on certiorari of the decision of the Court of Appeals.

PROCEDURAL ANTECEDENTS:

FACTS:

  • Lydia L. Geronimo is a school canteen proprietress of Kindergarten Wonderland Canteen located in Dagupan City, an enterprise engaged in the sale of soft drinks (including Coke and Sprite) and other goods.

  • On August 12, 1989, parents of students complained that the Coke and Sprite sold by Geronimo contained fiber-like substances and other foreign particles. 

    • Geronimo inspected her stock and found these contaminants in unopened bottles.

    • Geronimo submitted the contaminated bottles to the Department of Health, which confirmed that the samples were adulterated.

    • Due to the discovery, her sales dropped from 10 cases per day to 2-3 cases per day, leading to daily losses of P200.00 to P300.00, and ultimately, the closure of her canteen on December 12, 1989. 

    • She became jobless and destitute.

  • Geronimo demanded damages from the Coca-Cola Bottlers Philippines, Inc., which was refused. 

    • She then sought P5,000.00 as actual damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages, P10,000.00 as exemplary damages, plus attorney's fees and costs.

  • The petitioner moved to dismiss the complaint, arguing failure to exhaust administrative remedies and that the claim was based on breach of warranty, which had already prescribed.

  • RTC-Dagupan: The RTC granted the motion to dismiss, ruling that the complaint was based on a contract, not a quasi-delict, and should have been filed within six months of delivery of the goods.

  • CA: Annulled the questioned orders of the RTC and directed it to conduct further proceedings, ruling that the complaint was based on quasi-delict, with a four-year prescriptive period.

ISSUE:

Whether the Court of Appeals committed a grave and reversible error in ruling that Article 2176, the general provision on quasi delicts, is applicable in this case when the allegations of the complaint clearly show that private respondent’s cause of action is based on breach of a seller’s implied warranties under our law on sales. NO

ALLEGATIONS

DEFENSE

The petitioner contended that the case was based on breach of implied warranties under sales law, not quasi-delict, and should have been filed within six months.

Geronimo argued that her case was for damages due to a quasi-delict, not breach of contract, and thus had a four-year prescriptive period, making her filing timely

PREVAILING PARTY:  

DECISION/DOCTRINE: DENIED

We find no merit in the petition. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption."


The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides:


Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages either case.  


The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. 


Responsibility arising from negligence is also  demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. Those guilty of fraud, negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. 


The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract may also be a quasi-delict. 


Thus, in Singson vs. Bank of the Philippine Islands, this Court stated:


We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite hi first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between the passenger and a carrier is "contractual both in origin and nature . . . the act that breaks the contract may also be a tort.


Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 


Under American law, the liabilities of a manufacturer or seller of injury-causing products may be based on negligence, breach of warranty, tort, or other grounds such as fraud, deceit, or misrepresentation.


Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treaties as culpa aquiliana, culpa extra-contractual or cuasi-delitos) is homologous but not identical to tort under the common law, which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment and deceit. 


It must be made clear that our affirmance of the decision of the public respondent should by no means be understood as suggesting that the private respondent's claims for moral damages have sufficient factual and legal basis.


IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, with costs against the petitioner.


SO ORDERED.

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