Case Digest (G.R. No. 203697)
Case Digest (G.R. No. 203697)
Facts:
Interphil Laboratories, Inc. v. OEP Philippines, Inc., G.R. No. 203697, March 20, 2019, Supreme Court Third Division, Reyes, A., Jr., J., writing for the Court. Petitioner Interphil Laboratories, Inc. (Interphil) is a contract manufacturer/packer of pharmaceutical products; respondent OEP Philippines, Inc. (OEP) is a trader/distributor of Diltelan capsules. The parties entered into a Manufacturing Agreement in 1998 under which Interphil agreed to process and package OEP’s 90‑mg and 120‑mg Diltelan capsules according to formulae, processes and packaging materials/instructions furnished by OEP; the Agreement allocated responsibilities for testing, inspection, correction or destruction of substandard batches and provided that Interphil would not be responsible for defects arising from ingredients supplied by OEP. The parties also issued a letter to the Bureau of Food and Drugs aligning with DOH Administrative Order No. 56, stating joint responsibility for quality but allocating liability to Interphil if defects arose from manufacturing/packaging and to OEP if defects arose from formulas, raw materials or instructions.From January 1999 to May 2000 Interphil accepted several lots of 90‑mg and 120‑mg Diltelan capsules and the corresponding printed foils/boxes, inspected those materials (and charged OEP a packaging‑materials inspection fee), packaged the capsules, and delivered the finished units to OEP which in turn shipped them to its client, Elan Taiwan. On August 8, 2000 Elan Taiwan notified OEP that hospitals had reported defective packaging: some 90‑mg capsules were wrapped in foils labeled 120‑mg and placed in 90‑mg boxes. Investigation showed the error was confined to Lot No. 001369 (processed by Interphil in April 2000). OEP recalled and destroyed the affected batch for public safety and incurred P5,183,525.05 in costs; it demanded reimbursement from Interphil, which refused.
OEP sued Interphil in the Regional Trial Court (RTC) of Makati, Civil Case No. 03‑907. The RTC (Judge Selma Palacio Alaras) found for OEP, applying the doctrine of res ipsa loquitur, and awarded actual/compensatory damages (P5,183,525.05), additional compensatory damages (P306,648.81), exemplary damages (P100,000), and attorney’s fees (P50,000). Interphil’s motion for reconsideration was denied on August 20, 2008. On appeal the Court of Appeals (CA) — Decision dated October 21, 2011, penned by Associate Justice Francisco P. Acosta, with Associate Justices Vicente S.E. Veloso and Angelita A. Gacutan concurring — affirmed the RTC, holding Interphil’s erroneous packaging was the proximate cause and that OEP’s recall/destruction was prudent and not in bad faith. Interphil’s CA motion for reconsideration was denied in a Resolution dated September 26, 2012.
Interphil filed a petition for review under Rule 45 to this Court. OEP opposed, asserting (inter alia) that the petition should be dismissed because Interphil failed to serve the CA with a copy of the petition before filing with the Supreme Court (Interphil admitted in a March 27, 2013 manifestation that it had only served counsel and furnished the CA only on March 25, 2013). The Supreme Court nonetheless accepted the petition and proceeded to resolve the merits.
Issues:
- Must the petition be dismissed for Interphil’s failure to serve the Court of Appeals a copy of the petition prior to filing with the Supreme Court?
- Was Interphil negligent under the doctrine of res ipsa loquitur so as to be liable for the defective packaging and resultant damages?
- Can OEP be held liable for breach of the Agreement for unilaterally recalling and destroying the defectively packaged capsules?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)