1/31/2017 G.R.No.

110295

TodayisTuesday,January31,2017

RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.110295October18,1993

COCACOLABOTTLERSPHILIPPINES,INC.,
vs.

THEHONORABLECOURTOFAPPEALS(FifthDivision)andMS.LYDIAGERONIMO,respondents.

Angara,Abello,Concepcion,Regala&CruzLawOfficesforpetitioner.

AlejandroM.Villamilforprivaterespondent.

DAVIDE,JR.,J.:

Thiscaseconcernstheproprietressofaschoolcanteenwhichhadtoclosedownasaconsequenceofthebig
dropinitssalesofsoftdrinkstriggeredbythediscoveryofforeignsubstancesincertainbeveragessoldbyit.The
interestingissueposediswhetherthesubsequentactionfordamagesbytheproprietressagainstthesoftdrinks
manufacturershouldbetreatedasoneforbreachofimpliedwarrantyagainsthiddendefectsormerchantability,
as claimed by the manufacturer, the petitioner herein which must therefore be filed within six months from the
deliveryofthethingsoldpursuanttoArticle1571oftheCivilCode,oroneforquasidelict,asheldbythepublic
respondent,whichcanbefiledwithinfouryearspursuanttoArticle1146ofthesameCode.

On 7 May 1990, Lydia L. Geronimo, the herein private respondent, filed a complaint for damages against
petitioner with the Regional Trial Court (RTC) of Dagupan City.1 The case was docketed as Civil Case No. D
9629.SheallegesinhercomplaintthatshewastheproprietressofKindergartenWonderlandCanteendocketed
aslocatedinDagupanCity,anenterpriseengagedinthesaleofsoftdrinks(includingCokeandSprite)andother
goodstothestudentsofKindergartenWonderlandandtothepubliconorabout12August1989,someparents
ofthestudentscomplainedtoherthattheCokeandSpritesoftdrinkssoldbyhercontainedfiberlikematterand
otherforeignsubstancesorparticleshethenwentoverherstockofsoftdrinksanddiscoveredthepresenceof
somefiberlikesubstancesinthecontentsofsomeunopenedCokebottlesandaplasticmatterinthecontentsof
anunopenedSpritebottleshebroughtthesaidbottlestotheRegionalHealthOfficeoftheDepartmentofHealth
atSanFernando,LaUnion,forexaminationsubsequently,shereceivedaletterfromtheDepartmentofHealth
informingherthatthesamplesshesubmitted"areadulterated"asaconsequenceofthediscoveryoftheforeign
substancesinthebeverages,hersalesofsoftdrinksseverelyplummetedfromtheusual10casesperdaytoas
lowas2to3casesperdayresultinginlossesoffromP200.00toP300.00perday,andnotlongafterthatshe
hadtoloseshopon12December1989shebecamejoblessanddestituteshedemandedfromthepetitionerthe
paymentofdamagesbutwasrebuffedbyit.SheprayedforjudgmentorderingthepetitionertopayherP5,000.00
as actual damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages, P10,000.00 as
exemplarydamages,theamountequalto30%ofthedamagesawardedasattorney'sfees,andthecosts.2

Thepetitionermovedtodismiss3thecomplaintonthegroundsoffailuretoexhaustadministrativeremediesand
prescription. Anent the latter ground, the petitioner argued that since the complaint is for breach of warranty
underArticle1561ofthesaidCode.InherComment4thereto,privaterespondentallegedthatthecomplaintis
one for damages which does not involve an administrative action and that her cause of action is based on an
injurytoplaintiff'srightwhichcanbebroughtwithinfouryearspursuanttoArticle1146oftheCivilCodehence,
thecomplaintwasseasonablyfiled.Subsequentrelatedpleadingswerethereafterfiledbytheparties.5

In its Order of 23 January 1991, 6 the trial court granted the motion to dismiss. It ruled that the doctrine of
exhaustion of administrative remedies does not apply as the existing administrative remedy is not adequate. It
also stated that the complaint is based on a contract, and not on quasidelict, as there exists preexisting
contractual relation between the parties thus, on the basis of Article 1571, in relation to Article 1562, the
complaintshouldhavebeenfiledwithinsixmonthsfromthedeliveryofthethingsold.

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HermotionforthereconsiderationoftheorderhavingbeendeniedbythetrialcourtinitsOrderof17April1991,
7theprivaterespondentcametothisCourtviaapetitionforreviewoncertiorariwhichwereferredtothepublic

respondent"forproperdeterminationanddisposition.8ThepublicrespondentdocketedthecaseasCAG.R.SP
No.25391.

In a decision promulgated on 28 January 1992,9 the public respondent annulled the questioned orders of the
RTC and directed it to conduct further proceedings in Civil Case No. D9629. In holding for the private
respondent,itruledthat:

Petitioner's complaint being one for quasidelict, and not for breach of warranty as respondent
contends,theapplicableprescriptiveperiodisfouryears.

Itshouldbestressedthattheallegationsinthecomplaintplainlyshowthatitisanactionordamages
arising from respondent's act of "recklessly and negligently manufacturing adulterated food items
intended to be sold or public consumption" (p. 25, rollo). It is truism in legal procedure that what
determines the nature of an action are the facts alleged in the complaint and those averred as a
defenseinthedefendant'sanswer(IMoran126Calov.Roldan,76Phil.445AlgerElectric,Inc.v.
CA,135SCRA340).

Secondly, despite the literal wording of Article 2176 of the Civil code, the existence of contractual
relations between the parties does not absolutely preclude an action by one against the other for
quasidelictarisingfromnegligenceintheperformanceofacontract.

InSingsonv.CourtofAppeals(23SCRA1117),theSupremeCourtruled:

It has been repeatedly held: 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
recoveryofdamagestherefor
. . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation
between a passenger and a carrier is "contractual both in origin and in nature the act
thatbreaksthecontractmayalsobeatort.

Significantly,inAmericanjurisprudence,fromwhichOurlawonSaleswastaken,theauthoritiesare
oneinsayingthatheavailabilityofanactionorbreachofwarrantydoesnotbaranactionfortortsin
asaleofdefectivegoods.10

ItsmotionforthereconsiderationofthedecisionhavingbeendeniedbythepublicrespondentinitsResolutionof
14 May 1993,11 the petitioner took his recourse under Rule 45 of the Revised Rules of Court. It alleges in its
petitionthat:

I.

THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN

II.

CORROLARILY, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND

The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basis for private
respondent's cause of action is not Article 2176 of the Civil Code on quasidelict for the complaint does not
ascribeanytortiousorwrongfulconductonitspartbutArticles1561and1562thereofonbreachofaseller's
impliedwarrantiesunderthelawonsales.Itcontendstheexistenceofacontractualrelationbetweentheparties
(arising from the contract of sale) bars the application of the law on quasidelicts and that since private
respondent'scauseofactionarosefromthebreachofimpliedwarranties,thecomplaintshouldhavebeenfiled
withinsixmonthsroomdeliveryofthesoftdrinkspursuanttoArticle171oftheCivilCode.

In her Comment the private respondent argues that in case of breach of the seller's implied warranties, the
vendeemay,underArticle1567oftheCivilCode,electbetweenwithdrawingfromthecontractordemandinga
proportionate reduction of the price, with damages in either case. She asserts that Civil Case No. D9629 is

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neitheranactionforrescissionnorforproportionatereductionoftheprice,butfordamagesarisingfromaquasi
delict and that the public respondent was correct in ruling that the existence of a contract did not preclude the
actionforquasidelict.Astotheissueofprescription,theprivaterespondentinsiststhatsincehercauseofaction
isbasedonquasidelict,theprescriptiveperiodthereforeisfour(4)yearsinaccordancewithArticle1144ofthe
CivilCodeandthusthefilingofthecomplaintwaswellwithinthesaidperiod.

Wefindnomeritinthepetition.Thepublicrespondent'sconclusionthatthecauseofactioninCivilCaseNo.D
9629isfoundonquasidelictandthat,therefore,pursuanttoArticle1146oftheCivilCode,itprescribesinfour
(4)yearsissupportedbytheallegationsinthecomplaint,moreparticularlyparagraph12thereof,whichmakes
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.InthecaseofArticles1561,1562,1564,1565and1566,thevendeemayelectbetween
withdrawingfromthecontractanddemandingaproportionatereductionoftheprice,withdamages
either
case.13

The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the
ordinaryruleonobligationsshallbeapplicable.14Underthelawonobligations,responsibilityarisingfromfraudis
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
thecircumstances.15Thoseguiltyoffraud,negligence,ordelayintheperformanceoftheirobligationsandthose
whoinanymannercontravenethetenorthereofareliablefordamages.16

The vendor could likewise be liable for quasidelict 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 preexisting contract between the parties
may,asageneralrule,bartheapplicabilityofthelawonquasidelict,theliabilitymayitselfbedeemedtoarise
fromquasidelict,i.e.,theactswhichbreaksthecontractmayalsobeaquasidelict.Thus,inSingsonvs.Bankof
thePhilippineIslands,17thisCourtstated:

Wehaverepeatedlyheld,however,thattheexistenceofacontractbetweenthepartiesdoesnotbar
the commission of a tort by the one against the other and the consequent recovery of damages
therefor.18Indeed,thisviewhasbeen,ineffect,reiteratedinacomparativelyrecentcase.Thus,in
AirFrancevs.Carrascoso, 19involvinganairplanepassengerwho,despitehifirstclassticket,had
beenillegallyoustedfromhisfirstclassaccommodationandcompelledtotakeaseatinthetourist
compartment,washeldentitledtorecoverdamagesfromtheaircarrier,uponthegroundoftorton
thelatter'spart,for,althoughtherelationbetweenthepassengerandacarrieris"contractualbothin
originandnature...theactthatbreaksthecontractmayalsobeatort.

Otherwiseput,liabilityforquasidelictmaystillexistdespitethepresenceofcontractualrelations.20

UnderAmericanlaw,theliabilitiesofamanufacturerorsellerofinjurycausingproductsmaybebasedon
negligence,21breachofwarranty, 22tort, 23orothergroundssuchasfraud,deceit,ormisrepresentation.
24Quasidelict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treaties as

culpaaquiliana,culpaextracontractualorcuasidelitos)25ishomologousbutnotidenticaltotortunderthe
commonlaw, 26whichincludesnotonlynegligence,butalsointentionalcriminalacts,suchasassaultand
battery,falseimprisonmentanddeceit.27

It must be made clear that our affirmance of the decision of the public respondent should by no means be
understoodassuggestingthattheprivaterespondent'sclaimsformoraldamageshavesufficientfactualandlegal
basis.

INVIEWOFALLTHEFOREGOING,theinstantpetitionisherebyDENIEDforlackofmerit,withcostsagainstthe
petitioner.

SOORDERED.

Cruz,BellosilloandQuiason,JJ.,concur.

GrioAquino,J.,isonleave.

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#Footnotes

1Annex"C"ofPetitionRollo,4649.

2Rollo,4648.

3Annex"D"ofPetitionRollo,5859.

4Annex"E"ofPetitionRollo,5859.

5ReplytotheComment(Annex"F"ofPetition)RejoindertoReply(Annex"G"ofPetition)
Surrejoinder(Annex"H"ofPetition).

6Annex"I"ofPetitionRollo,7778.PerJudgeEloyR.Bello,Jr.

7Annex"J"ofPetitionRollo,7981.

8Rollo,13,39.

9Annex"A"ofPetitionRollo,3643.PerAssociateJusticeRicardoL.Pronove,Jr.,concurredinby
AssociateJusticesNicolasP.Lapea,Jr.andConsueloYnaresSantiago.

10Rollo,4041.CitingCJSSupp.ProductsLiability9Guarinovs.MineSafetyApplianceCo.,44
ALR3d470,255N.E.2d173Goldbergvs.KollsmanInstrumentCorp.,12N.Y.2d432,436,191
N.E.2d8283Grecovs.S.S.KresgeCo.12N.E.2d557,561.

11Annex"B"ofPetitionRollo,45.

12Rollo,1415.

13Thefirstremedyisknownastheredhibitoryactionandthesecond,theaccionquantiminoris.
(TOLENTINO,A.M.,CommentariesandJurisprudenceontheCivilCodeofthePhilippines,Vol.V,
1992ed.,123).

14TOLENTINO,supra.

15Article1171and1172,CivilCode.

16Article1170,CivilCode.

1723SCRA1117[1968].SeealsoAranetavs.DeJoya,57SCRA59[1974].

18CitingCangcovs.ManilaRailroad,38Phil.768Yamadavs.ManilaRailroad,33Phil.8Vasquez
vs.Borja,74Phil.560.

1918SCRA155[1966].

20PARAS,E.L.,CivilCodeofthePhilippines,Vol.V,1990ed.,995996,citingAirFrancevs.
CarrascosoandSingsonvs.BankofPhilippineIslands,supra.

2163AMJUR2dProductsLiability,25.

22Id.,91.

23Id.,123.

24Id.,153.

25ReportoftheCodeCommissionontheProposedCivilCodeofthePhilippines,161.

26Vasquezvs.DeBorja,74Phil.560[1944].

27ReportoftheCodeCommissionontheProposedCivilCodeofthePhilippines,162.

TheLawphilProjectArellanoLawFoundation

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