G.R. No. 110295 - Coca-Cola Bottlers Phil., Inc. vs. Court of Appeals

Lydia L. Geronimo, proprietress of Kindergarten Wonderland Canteen in Dagupan City, sold Coca-Cola and Sprite soft drinks to students and the public.
Coca-Cola Bottlers Philippines, Inc. (petitioner) manufactured and supplied the soft drinks.

On or about 12 August 1989, parents complained of fiber-like and plastic matter in the soft drinks. Geronimo inspected her unopened stock and found foreign substances. She submitted samples to the Department of Health’s Regional Health Office in San Fernando, La Union, which declared the beverages adulterated.
Daily sales plunged from 10 cases to 2–3 cases, causing losses of ₱200–₱300 per day. The canteen closed on 12 December 1989, leaving Geronimo jobless and destitute. She demanded damages from petitioner, but was refused.

On 7 May 1990, Geronimo filed a complaint for damages (Civil Case No. D-9629) with the Regional Trial Court (RTC) of Dagupan City, praying for actual damages (₱5,000), compensatory damages (₱72,000), moral damages (₱500,000), exemplary damages (₱10,000), attorney’s fees (30%), and costs.
Petitioner moved to dismiss for failure to exhaust administrative remedies and prescription, arguing the action was for breach of implied warranty and barred by the six-month period under Art. 1571, Civil Code.
On 23 January 1991, the RTC granted dismissal, ruling the action was contractual and prescribed in six months. Reconsideration was denied on 17 April 1991.
Geronimo sought relief from the Supreme Court, which referred the case to the Court of Appeals (CA-G.R. SP No. 25391).
On 28 January 1992, the CA annulled the RTC orders, held the action was one for quasi-delict arising from negligent manufacture of adulterated products, and ruled it prescribed in four years under Art. 1146. Reconsideration was denied on 14 May 1993.
Petitioner filed a Rule 45 petition for review on certiorari before the Supreme Court.

Whether Geronimo’s cause of action is for breach of implied warranty under Arts. 1561–1562 of the Civil Code (six-month prescription) or for quasi-delict under Art. 2176 (four-year prescription).
Whether the six-month prescriptive period under Art. 1571 applies or the four-year period under Art. 1146.
Whether exhaustion of administrative remedies was required and, if so, whether such remedy was adequate.