COCA-COLA BOTTLERS PHILIPPINES, INC. vs. CA and MS. LYDIA GERONIMO G.R.

No. 110295 October 18, 1993

Petition for review on certiorari (under Rule45) the decision of the CA DAVIDE, JR., J.:

FACTS: The owners of Kindergarten Wonderland Canteen in Dagupan City was a private
respondent. Some students' parents reported to her in August 1989 that the Coke and Sprite
soft drinks she sold contained fiber-like materials and other strange elements. She brought the
said bottles for examination to DOH and it was found out that the soft drinks “are
adulterated” (contaminated and in a poor quality because other substance were added). As a
result, her everyday sales of soft drinks seriously decreased that she had to close her shop on
12 December 1989 for damages. She claimed damages from the petitioner before the
Regional trial Court, which denied her request on the basis of prescription. The Courts of
Justice rejected the Regional Trial Court’s orders on appeal.

ISSUE: The issue here is that a claim for damages won by the proprietress against the
manufacturer of softdrinks shall be deemed one for breach of implied guarantee under article
1561 of the Civil code, which takes effect 6 months after delivery of the sold item.

RULING: The petition was denied. The State Counsel agrees with the Courts of Justice's
conclusion that the cause of action in the situation at hand is based on quasi-delict under
Article 1146 of the CC, which provides a four-year limitation period, rather than breach of
warranty under Article 1562 of the same code. This is supported by the complaint's claims,
which relate to the careless and negligence manufacturing of "adulterated food items intended
for public consumption."

Tormil Realty & Development Corporation's principal owner was the late Manuel A. Torres,
Jr., while the minority stockholders were private respondents who are the children of Judge
Torres' deceased brother Antonio A. Torres.

To save money on taxes, Judge Torres used an estate planning method which he assigned to
Tormil Realty & Development Corporation the different properties he owned in return for
225,972 Tormil Realty shares. Judge Torres also executed ten deeds of assignment.

As a result, the aforementioned properties were officially documented in Tormil Realty's

inventory of assets.
Except for those in Makati and Pasay City, all of the assigned parcels of land were registered
with the name of Tormil Realty.

However, just 225,000 Tormil Realty shares remained unsubscribed at the time of the
assignments and exchange, all of which were lawfully issued to and received by Judge Torres.

On September 11, 1986, Judge Torres revoked the two (2) deeds of assignment covering the
properties in Makati and Pasay City due to the insufficient number of shares of stock issued to
Judge Torres and the refusal of private respondents to approve the needed increase in the
corporation's authorized capital stock (to cover the shortage of 972 shares due to Judge Torres
under the "estate planning" scheme).

Noticing the absence of the Makati and Pasay City properties from the corporation's inventory
of assets and financial records, private respondents filed a complaint with the SEC docketed
as SEC Case No. 3153 on March 31, 1987, to compel Judge Torres to deliver to Tormil
corporation the two (2) deeds of assignment covering the aforementioned Makati and Pasay
City properties.

And because of that, Torres was forced to return the two deed of assignment to the private
respondents.

Torres also had a partnership with the general manager and legal counsel.

Issue:
Whether the cancellation of deeds of assignment regarding the Makati and Pasay Properties is
lawful.

Whether or not the qualifying shares issued are valid.