Facts:

Pepsi Cola Products (Phils.), Inc. (petitioner) filed a petition for review seeking to overturn the decision of the Court of Appeals (CA) dated October 18, 2001, which directed it to pay respondents Rustico P. Patan Jr., Gregorio C. Apanto Jr., Genelyn Pongcol, and Dennis Pestano, the amount of P500 each, solely on the basis of equity. The dispute began in 1991 when the petitioner launched a promotional campaign called "Number Fever," which involved printing winning numbers on the crowns of its beverages. These promotions were regulated by the Department of Trade and Industry (DTI). Participants were encouraged to check under the caps for winning codes, culminating in significant prizes. On May 25, 1992, the petitioner announced the winning numbers, leading to an attempt by some holders to redeem caps that were not actually winning crowns. To mitigate unrest, the petitioner offered P500 for each non-winning cap, successfully compensating 490,116 claimants. However, res

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Facts:

Parties and Initiation of Proceedings

• The petitioner: Pepsi Cola Products (Phils.), Inc. (PCPPI), the organizer of the "Number Fever" promotional campaign.
• The respondents: Rustico P. Patan, Jr., Gregorio C. Apanto, Jr., Genelyn Pongcol, and Dennis Pestano, holders of non-winning crowns.
• The procedural posture: Respondents filed complaints for specific performance and recovery of winning prizes with damages against the petitioner in the Regional Trial Court of Surigao City after rejecting the petitioner's goodwill offer.

The Promotional Campaign and Its Implementation

• In 1991, PCPPI launched the "Number Fever" under-the-crown promotional campaign for its bottled soft drinks (including Pepsi, 7-Up, Mirinda, and Mountain Dew).
• The campaign was implemented with the prior approval and supervision of the Department of Trade and Industry (DTI).
• Specific mechanics:
• Winning crowns (resealable caps) were printed with designated three-digit numbers paired with an alpha-numeric security code.
• The winning combinations were pre-selected by computer and were stored in a safety deposit box at the United Coconut Planters Bank (UCPB) in Makati City.
• Advertising method: DTI-approved printed posters directed participants to look for the winning three-digit number and associated security code under the crowns.

The Controversial Announcement and Subsequent Events

• On May 25, 1992, during the extended period of the campaign, PCPPI announced “349” as the first three digits of the number combination for the next day’s winning crowns.
• Shortly after the announcement, reports emerged that participants were attempting to redeem non-winning crowns with the number “349” having security codes “L-2560-FQ” and “L-3560-FQ” for huge prizes (P100,000 and P1,000,000 respectively).

Verification and the Goodwill Offer

• On May 28, 1992, the DTI and the petitioner jointly verified the list of winning crowns from the safety deposit box at UCPB.
• It was confirmed that the crowns bearing “349” with the codes “L-2560-FQ” and “L-3560-FQ” were not winning crowns.
• As a remedy to ease the agitation and prevent potential violence, PCPPI offered a goodwill payment of P500 for each non-winning “349” crown to be presented on or before June 12, 1992.
• Approximately 490,116 holders accepted the P500 offer, but the respondents in this case refused to accept it.

Lower Court Proceedings and Appellate Developments

• The respondents, having rejected the offer, filed separate complaints seeking the delivery of winning prizes along with damages.
• The Regional Trial Court (court a quo) consolidated the cases and, after trial on the merits, dismissed the complaints for lack of cause of action or insufficiency of evidence in its Joint Decision dated February 27, 1998.
• On appeal to the Court of Appeals (CA):
• The CA confirmed that the respondents did not win in the "Number Fever" campaign.
• Despite finding that PCPPI was neither at fault nor negligent, the CA awarded each respondent P500 “in the interest of justice and equity.”
• For procedural reasons, the appeals of respondents Apanto, Jr. and Pongcol were deemed abandoned (failure to pay docket fees) and those of respondent Pestano were likewise dismissed for non-filing.

Issue:

Whether the Court of Appeals erred in awarding P500 each to the respondents solely on an equitable basis despite finding that PCPPI was neither negligent nor at fault in the conduct of its “Number Fever” promotional campaign.

• Specifically, whether the equitable award should impose a financial liability on PCPPI in the absence of any actionable wrong.
• The potential precedent effect for thousands of non-winning claimants was also a point of contention.

Whether the CA improperly extended affirmative relief to respondents whose appeals were unperfected or abandoned.

• The issue examines if modifying the lower court’s judgment to include parties who did not comply with the required procedural steps (such as payment of docket fees or filing of appeal briefs) is legally tenable.

• Whether the CA’s decision violated the principles of res judicata and stare decisis by disregarding prior, final, and executory judgments on the same facts and issues, including earlier rulings and precedents (e.g., Ginzon vs. Municipality of Murcia and Negros Navigation Co., Inc. vs. Court of Appeals).

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)