Pepsi-Cola

Products Philippines, Incorporated v. Pagdanganan

GR. No. 167866
Pepsi-Cola Products Philippines, Incorporated and Pepsico, Incorporated, petitioners v. Pepe B. Pagdanganan and Pepito
A. Lumajan, respondent.

Supreme Court
October 16, 2006
PETITION for review on certiorari of the decision and resolution of the CA

FACTS
-Pepe B. Pagdanganan and Pepito A. Lumahan against herein petitioners Pesi-Cola Products PH, Incorporated and
PEPSICO Incorporated before the RTC of Pasig City, Branch 163, for Sim of Money and Damages.
-Petitioners PCPPI and PEPSICO launched a Department of Trade and Industry approved and supervised under-the-
crown promotional campaign entitled “Number Fever” sometime in 1992.
-It undertook to give away cash prizes to holders of specially marked crowns and resealble caps of PEPSI_COLA softdrink
product i.e. Pepsi, 7-UP, Mirinda and Mountain Dew. Specially marked crowns and resealable caps were said to contain:
a. A 3 digit number
b. A 7 digit alpha-numeric security code
c. the amount of the cash prize in any of the ff denominations: 1k, 10k, 50k, 100k, 1 million pesos
-Petitioners engaged the services of D.G. Consultores, a Mexican consultancy firm with experience in handling similar
promotion in other countries.
-From Monaday to Friday, petitioners will announce on national and local broadcast and print media a randomly pre-
selected winning 3 digit number
-On account of the success of the promotional campaign, petitioners extended the duration of the “Number Fever” for
another five weeks
-Petitioners again sought the services of D.G. Consultores to pre-select 25 winning 3 digit number with their matching
security codes.
-Petitioners announced the notorious 3 digit combination 349 as the winning number
-On the same night of the announcement, petitioners learned of reports that numerous people were trying to redeem
349 bearing crowns and/or resealable caps with incorrect security codes L-2560-FQ and L-3560-FQ.
-Petitioners said they will pay P500 for all 349 bearing crowns but having the wrong security code.
-Pagdanganan demanded from the petitioners and the DTI payment of the corresponding cash prize of his 349 bearing
crowns specifically 4 7-Up crowns and 2 mirinda crowns, each displaying the cash prize of P1,000,000 in addition to the
7-up crown showing the cash prize P100,000. Notbaly all seven crowns bore the security code of L-2560-FQ
-Lumahan similarly insisted that the petititioners pay his 2 winning crowns that is 2 7-up crowns with one exhibiting P1
million and the other P100k.
-Petitioners refused.
-Respondents filed a collective complaint for Sum of Money and Damages before the RTC of Pasig City.
-RTC decided that the plaintiffs (respondents here) fialed to establish a cause of action against defendants thus the case
is dismissed. But Pepsi needs to pay P3500 to Pagdanganan and P1k to Lumahan for the 349 crowns with the wrong
security code. It was made clear in the advertisements and posters put up by Pepsi that to win, the 3 digit number must
be matched with the proper security code.
-Pagadingan and Lumahan filed for a partial motion for reconsideration but have been denied by the RTC.
-They then filed their case to the CA.
-The CA reversed and set aside the decision of the RTC. CA likewise denied the motion for reconsideration of Pepsi.

Issues
1. Whether or not petitioners are estopped from raising stare decisis (to adhere to precedents and not to unsettle things
which are established)
2. Whether or not Rodrigo, Mendoza, Patan and De Mesa are binding although respondents were not parties therein.
Holdings and Rationale
1. Petitioners are NOT estopped from raising stare decisis.
2. The cases are BINDING even though respondent are not the same parties.
-These cases held that even though the 3 digit number is a winning number, the security code MUST be a winning code
too before claiming prize.
-Respondents justify that it is required that the legal rights and relations of the parties and the facts and the applicable
laws, the issue and evidence are exactly the same. They contend however that a comparison of the subject case show
that they are not the same. They particularly argue that the cases of their action is BREACH OF CONTRACT while that of
the Rodrigo and Mendoza cases involved complaints for SPECIFIC PERFORMANCE.
-In the case at bar, we have no alternative but to uphold the ruling that the correct security code is an essential, and
critical requirement in order to become entitled to the amount printed on a “349” bearing crown.
-Doctrine of stare decisis is founded on the necessity for securing certainty and stability in the law and does not require
identity of or privity of parties. Abandonment of the doctrine must be based only on strong ang compelling reasons.

Disposition
The instant petitions is GRANTED. Pagdanganan and Lumahan are NOT entitled to the award of P3500 and P1k
respectively as goodwill compensation.