Cabigon vs. Pepsi-Cola Products Philippines, Inc.

The correct security code printed on a promotional bottle cap is an indispensable requirement for entitlement to the cash prize, and holders of caps bearing non-winning security codes are not entitled to any prize or damages.

Respondent launched its 1992 "number fever promo" with three types of crowns (winning, non-winning, and unused) bearing numbers from 000 to 999 and corresponding security codes. When the promo period was extended, the number 349 was inadvertently chosen as a winning number for the extension, but with a different security code. The original non-winning 349 crowns, bearing security code L-2560-FQ, remained in circulation, leading holders to believe they had won the grand prize.

• The Promo and the Error: Respondent conducted a "number fever promo" in 1992. The number 349 bearing security code L-2560-FQ was used during the original promo period as a non-winning crown. When the promo was extended, 349 was selected as a winning number, but with security codes specific to the extended period, not L-2560-FQ.
• The Dispute: Petitioners presented 349 crowns bearing security codes L-2560-FQ or L-3560-FQ, claiming entitlement to the cash prize. Respondent refused payment, maintaining that the security code was the sole means of verifying a winning crown.
• Lower Court Findings: The RTC found respondent guilty of gross negligence or fraud for changing the winning combination and awarded each petitioner ₱20,000 as moral damages and ₱10,000 as exemplary damages, subject to a cap of ₱30,000 total or the amount stated on the crown if less. The CA reversed, finding that the confusion arose from the extension of the promo period and that the 349 crowns with security code L-2560-FQ were never intended to be winning crowns.

• Gross Negligence or Fraud: Petitioners alleged that respondent was guilty of gross negligence or fraud in dealing with its customers by changing the winning combination and refusing to pay the prizes corresponding to the 349 crowns.

• Security Code Verification: Respondent emphasized that the alpha-numeric security code printed on each crown was the only means to verify the genuineness of a winning crown, a condition clearly stated in its promotional materials.
• Absence of Negligence: Because the security code requirement was clearly communicated, respondent maintained it was not negligent in the conduct of the promo.

• Entitlement to Prize and Damages: Whether petitioners, holding 349 crowns with non-winning security codes, are entitled to the cash prize and damages despite the incorrect security code.

• Entitlement to Prize and Damages: No prize or damages were due because the correct security code was an indispensable requirement for entitlement to the cash prize. Petitioners' crowns bore security codes L-2560-FQ or L-3560-FQ, which were not the codes for the winning 349 crowns issued during the extended promo period. The principle of stare decisis further compelled this outcome, as the Court had consistently ruled in previous cases involving the same promo that the security code was indispensable.

• Stare decisis et non quieta movere — A point of law, once established by the court, will generally be followed by the same court and by all courts of lower rank in subsequent cases involving a similar legal issue. This proceeds from the principle that, in the absence of powerful countervailing considerations, like cases ought to be decided alike. Applied to bind the Court to its prior pronouncements that the correct security code was an indispensable requirement to claim the prize in the 349 number fever promo.

• "The principle of stare decisis et non quieta movere holds that a point of law, once established by the court, will generally be followed by the same court and by all courts of lower rank in subsequent cases involving a similar legal issue."
• "We have consistently held (in previous 349 number fever promo cases) that the correct security code was an indispensable requirement to be entitled to the cash prize concerned."

• Rodrigo v. Pepsi-Cola Products, Philippines, Inc., G.R. No. 149411 — Followed. Prior ruling affirming the security code requirement.
• Mendoza v. Pepsi-Cola Products, Philippines, Inc., G.R. No. 153103 — Followed. Prior ruling affirming the security code requirement.
• Pepsi Cola Products Philippines, Inc. v. Pagdanganan, G.R. No. 167866 — Followed. Prior ruling affirming the security code requirement.
• Garcia v. JG Summit Petrochemical Corporation, G.R. No. 129925 — Cited for the definition and application of stare decisis.

• Rule 45, Rules of Court — Governed the petition for review on certiorari filed before the Supreme Court.
• Rule 41, Rules of Court — Governed the appeal from the RTC to the CA.

Reynato S. Puno, Angelina Sandoval-Gutierrez, Adolfo S. Azcuna, Teresita J. Leonardo-De Castro.