G.R. No. 150394 . June 26, 2007.
PEPSI COLA PRODUCTS (PHILS.), INC., petitioner, vs. EFREN ESPIRITU, LOURDES CRISOSTOMO, AURORA BUENAVENTURA, ARMANDO ENRIQUEZ, JANE GERONIMO, and VICTORINO ALCANO, respondents.

FACTS

Petitioner Pepsi Cola Products (Phils.), Inc. (PCPPI) conducted the “Number Fever” promotional campaign in 1992, where consumers could win cash prizes by finding winning three-digit numbers under bottle crowns. The winning numbers and their corresponding security codes were predetermined, computer-generated, and kept in a bank safety deposit box accessible only to PCPPI and the Department of Trade and Industry (DTI). On May 25, 1992, PCPPI announced “349” as the winning number for the following day. A massive number of consumers, including respondents, presented crowns bearing the number 349 but with a security code (L-2560-FQ) not listed in the official winning records. PCPPI recalled the number, replaced it, and later refused payment on these crowns, offering instead a ₱500 goodwill gesture per crown, which respondents refused.
Respondents, holders of the non-winning 349 crowns, filed a complaint for collection of sum of money and damages before the Regional Trial Court (RTC). The RTC, while declaring respondents not entitled to the prizes, nonetheless awarded each ₱10,000 in moral damages. On appeal, the Court of Appeals affirmed the award of moral damages. PCPPI elevated the case to the Supreme Court via a petition for review.

ISSUE

Whether the Court of Appeals erred in affirming the award of moral damages to respondents despite the final judicial determination in previous Pepsi 349 cases that crowns with non-matching security codes are not winning crowns.

RULING

The Supreme Court granted the petition and reversed the Court of Appeals. The Court applied the doctrine of stare decisis, emphasizing that the legal issue had already been conclusively settled in prior final and executory decisions involving the identical “Pepsi 349” incident, such as Pepsi-Cola Products Phils., Inc. v. Pagdanganan (G.R. No. 149411) and Pepsi-Cola Products Phils., Inc. v. Court of Appeals (G.R. No. 153183). In those cases, the Court uniformly ruled that holders of 349 crowns bearing security codes not found in the official, predetermined list were not entitled to the advertised prizes. The factual backdrop, applicable laws, causes of action, and essential issues in the instant case were exactly the same.
Since the core issue of entitlement to prizes based on non-winning crowns was already settled with finality, there was no legal basis to hold PCPPI liable. Consequently, the award of moral damages, which was predicated on a finding of liability, could not stand. The principle of stare decisis ensures stability in jurisprudence by requiring courts to follow established precedents in cases with substantially identical situations, thereby barring re-litigation of the same settled questions of law. The Court held that PCPPI was not liable to pay the amounts printed on the crowns nor for any damages arising from its refusal to pay.