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464 Phil. 517


[ G.R. No. 152927, January 14, 2004 ]




Before the Court is the petition for review on certiorari filed by Pepsi Cola Products (Phils.), Inc. seeking to reverse and set aside the Decision[1] dated October 18, 2001, of the Court of Appeals in CA-G.R. CV No. 60383 insofar as it directed the petitioner to pay the respondents five hundred pesos (P500) each solely on the ground of equity. Likewise sought to be reversed and set aside is the appellate court's Resolution dated April 10, 2002, denying the petitioner's motion for reconsideration.

The case arose from the following facts:

Some time in 1991, the petitioner, Pepsi Cola Products (Phils.), Inc. launched the "Number Fever" under-the-crown promotional campaign for its bottled soft drink products including Pepsi, 7-Up, Mirinda and Mountain Dew. With the prior approval and under the supervision of the Department of Trade and Industry (DTI), winning crowns or resealable caps were printed and seeded into the market nationwide. These crowns were identified by specific number combinations, consisting of a three-digit number and an alpha-numeric code, and were randomly pre-selected by computer.

In compliance with the terms and conditions set by the DTI, a list of the winning crowns were placed in the safety deposit box of the United Coconut Planters Bank (UCPB) in Makati City. The DTI-approved printed posters advertising the "Number Fever" promotional campaign enjoined the participants to look for the winning three-digit number and security code under the crowns or resealable caps.

On May 25, 1992, during the extended period of the promotional campaign, the petitioner announced "349" as the first three digits of the number combination identifying the winning crowns for the next day. A few hours after the announcement was made, the petitioner received reports that a number of people were trying to redeem non-winning crowns bearing the number "349" and security codes "L-2560-FQ" and "L-3560-FQ" in the amounts of P100,000 and P1,000,000 each crown. On May 28, 1992, the DTI and the petitioner jointly opened the safety deposit box where the list of winning crowns had been kept and it was verified that crowns bearing the number "349" and security codes "L-2560-FQ" and "L-3560-FQ" were not winning crowns.

To appease the holders of the non-winning "349" crowns, and to avert the escalating violence against its employees and properties, the petitioner offered P500 for every non-winning "349" crown that would be presented on or before June 12, 1992. A total of 490,116 holders of non-winning "349" crowns availed themselves of the offer.

Respondents Rustico Patan, Jr., Gregorio Apanto, Jr., Genelyn Pongcol and Dennis Pestano, holders of non-winning "349" crowns, refused the offer. Instead, they filed their respective complaints for specific performance and recovery of winning prize with damages against the petitioner with the Regional Trial Court of Surigao City. The cases, docketed as Civil Case Nos. 4112, 4130, 4146 and 4193, were consolidated and jointly tried.

After trial on the merits, the court a quo, in its Joint Decision dated February 27, 1998, dismissed the complaints against the petitioner for lack of cause of action and/or insufficiency of evidence.

The respondents elevated the case to the Court of Appeals (CA). However, for failure of respondents Apanto, Jr. and Pongcol to pay the necessary docket fees within the prescribed period despite notice, their respective appeals were deemed abandoned and consequently dismissed. Only respondent Patan, Jr. filed an appellant's brief.

On October 18, 2001, the CA rendered the assailed decision.  It substantially affirmed the findings of the court a quo that the respondents did not win in the petitioner's "Number Fever" promotional campaign as their crowns were not the winning crowns. The CA, like the court a quo, found that the petitioner had not been negligent in the implementation of its "Number Fever" promotional campaign. Nonetheless, the CA awarded all the respondents P500 each "in the interest of justice and equity."[2]

It is that latter portion of the CA decision that the petitioner now assails. The petitioner alleges that:

The Court of Appeals grossly deviated from applicable jurisprudence when it ordered PCPPI to pay respondents the amount of P500.00 each simply on the basis of equity, despite finding that PCPPI was neither at fault nor negligent in the conduct of the Number Fever Promotion. Unless reversed, the award of P500:00 can serve as precedent for the thousands of other "349" claimants and translate to millions in pesos in liability for PCPPI.


The Court of Appeals grossly deviated from applicable jurisprudence when it accorded affirmative relief to respondents APANTO, PONGCOL AND PESTANO, whose respective appeals were never perfected.


The Court of Appeals violated the fundamental principles of res judicata and stare decisis as laid down by the Supreme Court in Ginzon vs. Municipality of Murcia, 158 SCRA (1958) and Negros Navigation Co. Inc. vs. Court of Appeals, 281 SCRA 534 (1997), when it refused to follow previous, final and executory judgments on the same facts and issues, rendered by its other divisions, one of which is the decision in Rodrigo, et al. vs. Pepsi Cola Products Philippines, Inc. and PepsiCo, Inc., which has been affirmed by this Honorable Court in G.R. No. 149411.[3]
The foregoing allegations may be subsumed under this issue: whether or not the CA committed reversible error in ordering the petitioner to pay the respondents P500 each solely "in the interest of justice and equity" despite finding that the petitioner was neither at fault nor negligent in the conduct of its "Number Fever" promotional campaign.

The Court rules in the affirmative.

It is not disputed that in its Resolution of December 22, 1999, the CA already dismissed the respective appeals of respondents Apanto, Jr. and Pongcol in view of their failure to pay the requisite docket fees. The assailed CA decision itself acknowledged this fact as it mentioned that "for failure of respondents Apanto, Jr. and Pongcol to pay the necessary appellate docket fees within the prescribed period, their appeal was deemed abandoned and consequently dismissed."[4] The said Resolution of December 22, 1999, had become final and had been recorded in the Book of Entries of Judgment on January 19, 2000.

For his part, respondent Pestano failed to file his appeal brief with the appellate court. This omission, likewise, constituted an abandonment of his appeal therewith.

Having failed to perfect their respective appeals, respondents Apanto, Jr., Pongcol and Pestano could not obtain affirmative relief from the appellate court other than what they had obtained, if any, from the lower court.[5] The CA thus committed reversible error in modifying the judgment of the court a quo by awarding respondents Apanto, Jr., Pongcol and Pestano P500 each since the rule is clear that no modification of judgment could be granted to a party who did not appeal,[6] or in this case, who failed to perfect the appeal.

Neither is the award of P500 to respondent Patan, Jr. "in the interest of justice and equity" warranted. Respondent Patan, Jr. had consistently refused the petitioner's offer of P500 for his non-winning "349" crown. Unlike the other holders of the non-winning "349" crowns, around 490,116 of them, who availed themselves of the goodwill money offered by the petitioner, respondent Patan, Jr. rejected the same. Then again, during the pre-trial in the court a quo, the petitioner manifested its willingness to consider any offer from respondent Patan, Jr. for a reasonable settlement of the case. No offer was made by the latter.

As this Court enunciated in Rural Bank of ParaƱaque, Inc.  vs. Remolado:[7]
Justice is done according to law. As a rule, equity follows the law. There may be a moral obligation, often regarded as an equitable consideration (meaning compassion), but if there is no enforceable legal duty, the action must fail although the disadvantaged party deserves commiseration or sympathy.

The choice between what is legally just and what is morally just, when these two options do not coincide, is explained by Justice Moreland in Vales vs. Villa, 35 Phil. 769, 788 where he said:
"Courts operate not because one person has been defeated or overcome by another, but because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable judgement, and lose money by them.- indeed, all they have in the world; but not for that alone can the law intervene and restore. There must be, in addition, a violation of law, the commission of what the law knows as an actionable wrong before the courts are authorized to lay hold of the situation and remedy it."[8]
In this case, the petitioner's offer of P500 for every non-winning "349" crown had long expired on June 12, 1992. The petitioner cannot now be compelled to pay respondent Patan, Jr. P500 as a "goodwill gesture," since he had already rejected the same.

WHEREFORE, the Decision dated October 18, 2001, of the Court of Appeals in CA-G.R. CV No. 60383 is AFFIRMED with MODIFICATION. The award of P500 to each of the respondents is DELETED


Puno, (Chairman), Quisumbing, and Austria-Martinez, JJ., concur.
Tinga, J., no part. I participated in a legislative investigation involving the same case.

[1] Penned by Associate Justice Juan Q. Enriquez, Jr. with Associate Justices Ruben T. Reyes and Mercedes Gozo-Dadole concurring.

[2] Rollo, p. 92.

[3] Id. at 33.

[4] Id. at 83.

[5] Tangalin vs. Court of Appeals, 371 SCRA 49 (2001).

[6] Batingal vs. Court of Appeals, 351 SCRA 60 (2001)

[7] 135 SCRA 409 (1985).

[8] Id. at 412.

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