G.R. No. L-30266. June 29, 1984
UNIVERSAL RUBBER PRODUCTS, INC., PETITIONER, VS. HON. COURT OF APPEALS, CONVERSE RUBBER CORPORATION, EDWARDSON MANUFACTURING CO., INC. AND HON. PEDRO C. NAVARRO, RESPONDENTS.
GUERRERO, J.:
which was issued by the trial court against the treasurer of the herein
petitioner, the propriety of which was upheld by the defunct Court of
Appeals (now Intermediate Appellate Court).
The facts of this case as stated in the decision of the then Court of Appeals are as follows:
“Records disclose that the two respondent corporations herein sued
the present petitioner before the Court of First Instance of Rizal for
unfair competition with damages and attorney’s fees. In due time herein
petitioner, who was the defendant in that court suit, answered the
complaint and joined issues with the plaintiffs therein, forthwith
respondent Judge, to whom that lawsuit was assigned, proceeded with the
trial thereof.
After they have presented about nine witnesses and various pieces of
documentary evidence, herein private respondents made a request to the
respondent Judge to issue a subpoena duces tecum against the treasurer of herein petitioner. Acting favorably on that request, said respondent Judge issued a subpoena duces tecum
on February 13, 1968, directing the treasurer of the present petitioner
to bring with him to the lower court on February 26, 1968 and March 8,
1968 at 2:30 p.m. ‘all sales invoices, sales books and ledgers wherein
are recorded the sales of Plymouth Star Player rubber shoes from the
time the corporation started manufacturing and selling said shoes up to
the present.’
On March 4, 1968, petitioner filed a motion in the court below praying that the subpoena duces tecum
dated February 13, 1968 be quashed on the grounds that: (1) the said
subpoena is both unreasonable and oppressive as the books and documents
called for are numerous and voluminous; (2) there is no good cause shown
for the issuance thereof; and (3) the books and documents are not
relevant to the case pending below. The private respondents herein
opposed that motion of the petitioner. Acting on the said motion and on
the opposition thereto, respondent Judge issued the first controverted
order on May 6, 1968, denying the motion to quash the subpoena duces tecum.
On May 15, 1968, herein petitioner filed in the court a quo a motion for
reconsideration seeking the said court to reconsider its order denying
the motion to quash the subpoena duces tecum. This, too, was
opposed by the private respondents. Acting on this motion, as well as on
the opposition thereto, respondent Judge issued the second controverted
order on June 28, 1968, denying the motion for reconsideration.
Consequently, on August 6, 1968, petitioner Universal Rubber Products, Inc. filed its present petition for certiorari with preliminary injunction, alleging that in so denying its motion to quash the subpoena duces tecum
and its subsequent motion for reconsideration, respondent Judge acted
with grave abuse of discretion amounting to an excess of jurisdiction.”[1]
Pending the resolution of the appealed case, the Court of Appeals issued
on September 25, 1968 a temporary restraining order directing the
respondent Judge of the trial court to refrain from implementing his
order dated May 6, 1968 in Civil Case No. 9686.[2]
On November 12, 1966, the respondent Court rendered its decision denying the petition for certiorari filed by petitioner for lack of merit. The dispositive portion of the said decision reads:[3]
“WHEREFORE, for lack of merit, the present petition for certiorari with
preliminary injunction is hereby denied and the temporary restraining
order issued by this Court on September 25, 1968 is now lifted, with
costs against the petitioner.SO ORDERED.”
Petitioner argues three errors to support his petition, to wit:[4]
“I.
The respondent court erred when it found the fact of the petition
and its annexes as not demonstrating clear abuse of discretion by
respondent Judge.II.
The respondent court erred when it refused to sustain the contention
of petitioner that the issuance by the respondent judge of the subpoena
duces tecum was an arbitrary exercise of judicial power.III.
The respondent court erred when it did not consider the subpoena duces tecum issued by the respondent judge as a fishing bill when it refused to order its quashal.”
The issues summarized, We are called upon to answer whether the issuance of the “subpoena duces tecum” is proper in a suit for unfair competition.
Private respondent claims the affirmative because (1) the subpoena duces tecum
in question specifically designates the books and documents that should
be produced in court and they are “sales invoices, sales books and
ledgers where are recorded the sales of Plymouth Star Player Rubber
Shoes from the time the corporation started manufacturing and selling
shoes (that is from April 1, 1963) up to the present; and (2) the
relevancy of the books subject to the controverted subpoena duces tecum
cannot be seriously denied, because if and when herein respondent
corporations are ultimately adjudged to be entitled to recover
compensatory damages from the petitioner, there would be no factual
basis for the amount of such damages unless those books and documents
are laid open for the court’s scrutiny.
On the other hand, petitioner submits a contrary opinion and insists
that the question of liability of petitioner should be determined first
before discovery by means of a subpoena duces tecum is allowed;
that respondent Converse is a foreign corporation not licensed to do
business in the Philippines and that Edwardson is merely its licensee
that respondent Converse has no goodwill to speak of and that it has no
registrable right over its own names; that the questioned subpoena duces tecum issued by respondent judge was merely a “Fishing Bill.”
In the meantime, while this present petition remains pending before this Court, petitioner manifested on April 2, 1977[5]
that their establishment was totally burned together with all the
records which is sought to be produced in court by the questioned
“subpoena duces tecum” on May 3, 1970. In effect, it renders
the present petition moot and academic. However, the legal principles
arising from the issues deserve Our discussion and resolution.
As a general rule, on obtaining an injunction for infringement of a
trademark, complainant is entitled to an accounting and recovery of
defendant’s profits on the goods sold under that mark, as incident to,
and a part of, his property right, and this rule applies in cases of
unfair competition. In such case, the infringer or unfair trader is
required in equity to account for and yield up his gains on a principle
analogous to that which charges as trustee with the profits acquired by
the wrongful use of the property of the cestui que trust, and
defendant’s profits are regarded as an equitable measure of the
compensation plaintiff should receive for the past harm suffered by him.[6]
Well-settled is Our jurisprudence that, in order to entitle a party to the issuance of a “subpoena duces tecum“,
it must appear, by clear and unequivocal proof, that the book or
document sought to be produced contains evidence relevant and material
to the issue before the court, and that the precise book, paper or
document containing such evidence has been so designated or described
that it may be identified.[7] A “subpoena duces tecum”
once issued by the court may be quashed upon motion if the issuance
thereof is unreasonable and oppressive, or the relevancy of the books,
documents or things does not appear, or if the persons in whose behalf
the subpoena is issued fails to advance the reasonable cost of
production thereof.[8]
In the instant case, in determining whether the books subject to the subpoena duces tecum
are relevant and reasonable in relation to the complaint of private
respondent for unfair competition, We have to examine Republic Act No.
166,[9] which provides:
“CHAPTER V. — Rights and Remedies
xxx xxx xxx xxx
Sec. 23. Actions, and damages and injunction for infringement. – Any
person entitled to the exclusive use of a registered mark or trade name
may recover damages in a civil action from any person who infringes his
rights and the measure of the damages suffered shall be either the
reasonable profit which the complaining party would have made, had the
defendant not infringed his said rights, or the profit which the
defendant actually made out of the infringement, or in the event such
measure of damages cannot be readily ascertained with reasonable
certainty, then the court may award as damages a reasonable percentage
based upon the amount of gross sales of the defendant of the value of
the services in connection with which the mark or trade name was used in
the infringement of the rights of the complaining party. In cases where
actual intent to mislead the public or to defraud the complaining party
shall be shown in the discretion of the court, the damages may be
doubled.
The complaining party, upon proper showing may also be granted injunction.”
In recovering the loss suffered by the aggrieved party due to “unfair
competition”, Sec. 23 of R.A. 166 grants the complainant three options
within which to ascertain the amount of damages recoverable, either (1)
the reasonable profit which the complaining party would have made, had
the defendant not infringed his said rights; or (2) the profit which the
defendant actually made out of the infringement; or (3) the court may
award as damages a reasonable percentage based upon the amount of gross
sales of the defendant of the value of the services in connection with
which the mark or tradename was issued in the infringement of the rights
of the complaining party.
In giving life to this remedial statute, We must uphold the order of the
court a quo denying the motion of the petitioner to quash the “subpoena
duces tecum” previously issued against the petitioner. In a
suit for unfair competition, it is only through the issuance of the
questioned “subpoena duces tecum” that the complaining party is afforded his full rights of redress.
The argument that the petitioner should first be found guilty of unfair
competition before an accounting for purposes of ascertaining the amount
of damages recoverable can proceed, stands without merit. The complaint
for unfair competition is basically a suit for “injunction and
damages”.[10] Injunction, for
the purpose of enjoining the unlawful competitor from proceeding
further with the unlawful competition, and damages, in order to allow
the aggrieved party to recover the damage he has suffered by virtue of
the said unlawful competition. Hence, the election of the complainant
(private respondent herein) for the accounting of petitioner’s
(defendant below) gross sales as damages per R.A. 166, appears most
relevant. For Us, to determine the amount of damages allowable after the
final determination of the unfair labor case would not only render
nugatory the rights of complainant under Sec. 23 of R.A. 166, but would
be a repetitious process causing only unnecessary delay.
The sufficiency in the description of the books sought to be produced in court by the questioned “subpoena duces tecum” is not disputed in this case, hence, We hold that the same has passed the test of sufficient description.
Petitioner also assails that private respondent is a foreign corporation
not licensed to do business in the Philippines and that respondent
Edwardson is merely its licensee; that respondent Converse has no
goodwill to speak of and that it has no registrable right over its own
name. We have already answered this issue squarely in Our decision of
the case of Converse Rubber Corporation, vs. Jacinto Rubber & Plastic Co., Inc.[11] where We explained:
“The disability of a foreign corporation from suing in the
Philippines is limited to suits to enforce any legal or contract rights
arising from, or growing out, of any business which it has transacted in
the Philippine Island. x x x On the other hand, where the purpose of a
suit is ‘to protect its reputation, its corporate name, its goodwill,
whenever that reputation, corporate name or goodwill have, through the
natural development of its trade, established themselves’, an unlicensed
foreign corporation may sue in the Philippines. So interpreted by the
Supreme Court, it is clear that Section 29 of the Corporation Law does
not disqualify plaintiff-appellee Converse Rubber, which does not have a
branch office in any part of the Philippines and is not ‘doing
business’ in the Philippines, from filing and prosecuting this action
for unfair competition.”
As We said earlier, the establishment of the petitioner burned down
together with all the records sought to be produced by the questioned
“subpoena duces tecum“, hence this case has become moot and academic. We have no recourse but to dismiss the same.
WHEREFORE, the instant petition is DISMISSED for becoming moot and academic. No costs.
SO ORDERED.
Makasiar, (Chairman), Concepcion, Jr., Abad Santos, Escolin, and Cuevas, JJ., concur.
Aquino, J., in the result.
[1] Rollo, pp. 28-31.
[2] Ibid., p. 31.
[3] Ibid., p. 38.
[4] Petitioner’s Brief, Rollo, p. 410.
[5] Rollo, p. 444.
[6] 87 Corpus Juris Secundum, pp. 604-606.
[7] Arnaldo vs. Locsin, 69 Phil. 113; People vs. Topacio and Santiago, 59 Phil. 356; Liebenow vs. Philippine Vegetable Oil Co., 39 Phil. 60, 69.
[8] Sec. 4, Rule 23, Revised Rules of Court.
[9] An act to provide for the
registration and protection of trademarks, tradenames and servicemarks,
defining unfair competition and false marking and providing remedies
against the same, and for other purposes.
[10] Sec. 23, R.A. 166, supra.
[11] 97 SCRA 158, 178, citing Western Equipment and Supply Co. vs. Reyes, 51 Phil. 115.