A manufacturer that employs deceit, oppression, and high-handed business methods to unjustly take over the market of its own distributor, such as by using a customer list obtained through a false promise and implementing discriminatory pricing schemes, is liable for damages under the principles of abuse of rights (Articles 19, 20, and 21) and unfair competition (Article 28) of the Civil Code.

The dispute arose from a long-standing business relationship between petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI), a large-scale beverage manufacturer, and respondents Spouses Bernardo, who operated "Jolly Beverage Enterprises" as a wholesaler and exclusive distributor of CCBPI's products in certain areas of Quezon City since 1987. Their partnership, formalized through exclusive dealership agreements, deteriorated when CCBPI, towards the end of their last contract, implemented strategic actions that the respondents claimed were aimed at eliminating them as a competitor and taking over their established customer base.

• Petitioner CCBPI and respondents Spouses Bernardo had a harmonious business relationship for 13 years, starting in 1987, with respondents acting as an exclusive distributor for CCBPI.
• In late 1998 or early 1999, before their dealership contract expired, CCBPI required respondents to submit a list of their customers, promising that their contract would be renewed for a longer period if they complied.
• Respondents complied and submitted the customer list, but CCBPI did not renew the contract as promised.
• In February 1999, CCBPI began using the list to directly contact and sell to respondents' customers. Respondents reported that CCBPI agents trailed their delivery trucks to identify their clients.
• CCBPI employed a different pricing scheme, selling products to supermarkets at prices significantly lower than those offered to its own wholesalers like respondents.
• CCBPI implemented promotional schemes like the "Coke Alok" promo and "Area Market Cooperatives" which allowed direct buyers and sari-sari stores to purchase products at prices much lower than what respondents could offer.
• CCBPI also engaged a store adjacent to respondents' warehouse to sell CCBPI products at a substantially lower price, further undercutting their business.
• Due to these schemes, respondents lost their major customers, including several large restaurants, and their business suffered, leading to an inability to pay for deliveries worth P449,154.

• The trial court lacked jurisdiction to award temperate damages because respondents did not specifically pray for it in their complaint.
• Its actions did not violate Articles 19, 20, 21, or 28 of the Civil Code, and therefore the award of damages and attorney's fees was improper.
• The promotional and developmental strategies were implemented nationwide only after the dealership agreements had expired and were not intended to destroy respondents' business.
• Respondents were not assigned an exclusive territory and had no exclusive right to any customer.
• The price differences were a result of respondents no longer being able to avail of trade discounts and incentives after their agreement expired.
• There was no causal connection between its promotional activities and the losses claimed by respondents.
• The complaint was merely a ploy by respondents to evade payment of their outstanding obligation of P449,154.

• Petitioner's actions constituted dishonesty, bad faith, gross negligence, fraud, and unfair competition in commercial enterprise.
• Petitioner deceitfully obtained their customer list under the false promise of a contract renewal.
• Petitioner used this confidential information and its dominant position as a manufacturer to systematically overrun their business and take over their customers.
• Petitioner's high-handed tactics, including direct selling, trailing delivery trucks, differential pricing, and targeted promotions, were designed to eliminate them as a competitor.

• Procedural Issues:
  • Whether the trial court had jurisdiction to award temperate damages when it was not specifically prayed for in the Amended Complaint.
  • Whether the petition raises questions of fact that are beyond the scope of a petition for review on certiorari.
• Substantive Issues:
  • Whether petitioner CCBPI is liable for damages for abuse of rights and unfair competition under Articles 19, 20, 21, and 28 of the Civil Code.

• Procedural:
  • The Supreme Court held that the petition improperly raised questions of fact. Factual findings of the trial court, especially when affirmed by the appellate court, are given great weight and finality. Petitioner failed to show that the case fell under any exception to this rule.
  • The Court ruled that the award of temperate damages was proper. Respondents' prayer for "other reliefs which are just and equitable" was sufficient to grant such an award. Furthermore, Article 2224 of the Civil Code permits courts to award temperate damages when pecuniary loss is suffered, but its amount cannot be proven with certainty, which was the situation in this case regarding the loss of goodwill.
• Substantive:
  • The Court affirmed the findings of the lower courts that petitioner was liable for damages. CCBPI's actions went beyond the pale of legitimate business competition. It abused its rights by acting without honesty and good faith when it used a false promise to obtain respondents' customer list.
  • CCBPI's subsequent use of that list, coupled with its "oppressive and high-handed schemes" like discriminatory pricing and targeted promotions to directly undercut and take over its distributor's market, constituted unfair competition under Article 28 of the Civil Code. The Court concluded that these methods were strategically designed to overrun the respondents' business.
  • The awards for moral, exemplary, and attorney's fees were likewise upheld. Moral damages were justified under Article 2219(10) for acts of unfair competition under Article 28. Exemplary damages were warranted as a corrective measure against the use of oppressive commercial strategies by powerful businesses.

• Abuse of Rights Principle (Articles 19, 20, & 21, Civil Code) — This principle dictates that every person must, in the exercise of his rights and performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. In this case, the Court found that while CCBPI had the right to sell its products, it abused this right by using deceit (false promise of contract renewal) and oppressive tactics to prejudice and cripple the business of its distributor, which is contrary to justice and good faith.
• Unfair Competition (Article 28, Civil Code) — This provision grants a right of action for damages caused by unfair competition in commercial enterprises through the use of force, intimidation, deceit, machination, or any other unjust, oppressive, or high-handed method. The Court applied this doctrine by finding that CCBPI's coordinated strategy of using the customer list, differential pricing, and direct selling constituted an unjust and oppressive method designed to take over its distributor's market, not merely to compete fairly.
• Doctrine of Finality of Factual Findings — This judicial principle holds that the Supreme Court is not a trier of facts, and the factual findings of lower courts, especially when affirmed by the Court of Appeals, are binding and conclusive. The Court invoked this doctrine to dismiss CCBPI's factual arguments, stating that it would not substitute its own judgment for that of the trial court, which was in the best position to assess the credibility of witnesses.
• Temperate Damages (Article 2224, Civil Code) — These are damages awarded when a court finds that pecuniary loss has been suffered, but its amount cannot be proven with certainty. The Court applied this by affirming the award of temperate damages for the respondents' loss of goodwill and business standing, recognizing that while the financial injury was real, its precise quantification was difficult.

• "The exercise of a right ends when the right disappears; and it disappears when it is abused, especially to the prejudice of others. The mask of a right without the spirit of justice which gives it life is repugnant to the modern concept of social law. It cannot be said that a person exercises a right when he unnecessarily prejudices another or offends morals or good customs."

• Albenson Enterprises Corp. v. CA — Referenced to support the principle that any act causing injury to another in violation of Articles 19, 20, or 21 of the Civil Code can be the basis for an award of damages.
• GF Equity, Inc. v. Valenzona — Cited for its comprehensive explanation of the abuse of rights doctrine, emphasizing that rights must not be exercised to the prejudice of others or in violation of the supreme norms of justice.
• Willaware Products Corp. v. Jesichris Manufacturing Corp. — Cited to affirm that a person who starts an opposing business not for profit but for the sole purpose of driving a competitor out of business is guilty of a wanton wrong, which paralleled CCBPI's actions.
• Canada v. All Commodities Marketing Corporation — Referenced as a precedent where the Supreme Court awarded temperate damages in lieu of actual damages due to the difficulty of proving the exact amount of pecuniary loss.
• Public Estates Authority v. Chu — Cited as another example where the Court held that temperate damages should have been awarded where the plaintiff clearly suffered some pecuniary loss.

• Article 19, Civil Code — Applied as the core of the abuse of rights doctrine, requiring CCBPI to act with justice, honesty, and good faith in its business dealings.
• Article 20, Civil Code — Cited as a basis for liability for willfully or negligently causing damage to another contrary to law.
• Article 21, Civil Code — Applied to hold CCBPI liable for willfully causing loss to respondents in a manner contrary to morals and good customs.
• Article 28, Civil Code — The primary basis for finding CCBPI liable for unfair competition due to its use of unjust, oppressive, and high-handed methods.
• Article 2219(10), Civil Code — Cited as the legal basis for awarding moral damages in actions involving violations of Articles 21 and 28.
• Article 2224, Civil Code — Invoked to justify the award of temperate damages in lieu of actual damages, as respondents' pecuniary loss (loss of goodwill) was certain but its amount was not.
• Article 2229, Civil Code — Cited as the legal basis for awarding exemplary damages as a deterrent and correction for the public good against oppressive business practices.