LOUIS VUITTON S.A., COMPLAINANT, VS. JUDGE FRANCISCO DIAZ VILLANUEVA, PRESIDING JUDGE, BRANCH 36, THE METROPOLITAN TRIAL COURT AT QUEZON CITY, METRO MANILA, RESPONDENT.

This is a complaint filed by Louis Vuitton, S.A., presented by
counsel, Quasha Asperilla Ancheta Peña and Nolasco Law Office, against Judge
Francisco Diaz Villanueva the Metropolitan Trial Court of Quezon City, Branch
36, on the ground that the latter knowingly rendered a manifestly unjust
judgment.

This Court finds the following facts as relevant:

In Criminal Case No. XXXVI-62431, entitled “People of the
Philippines vs. Jose V. Rosario”, Louis Vuitton, S.A. accused the latter
of unfair competition as defined by paragraph 1 of Article 189, Revised Penal
Code. The information stated:

“x x x the above named accused, as
owner/proprietor of Manila COD Department Store x x x did then and there,
wilfully, unlawfully and feloniously
manufacture, distribute, sell and offer for sale lady’s bags, should (sic)
bags, wallets, purses and other similar goods made of leather with the labels,
trademarks and logo of ‘LOUIS VUITTON’ and ‘LV’, which are exclusive trademarks
owned and registered with the Philippine Patent Office in the name of private
complainant LOUIS VUITTON S.A. x x x
thus, giving to them the general appearance of goods or products of said
private complainant, or such appearance which would be likely to induce the public
to believe that said goods offered are those of private complainant, in unfair
competition and for the purpose of deceiving or defrauding it of its legitimate
trade or the public in general x x x.”^[1]

On February 8, 1991, before judgment, prosecution filed the
Prosecution’s Memorandum with Motion found in Annex “A” of the
Complaint, where the prosecution prayed:

“Premises considered, it is most
respectfully prayed that the accused Jose V. Rosario be declared guilty beyond
reasonable doubt of having committed the offense described in the criminal
information against him.

In the alternative, if the accused cannot be held responsible for
the criminal information against him, it is respectfully moved that the accused
be committed to answer for the proper offense of “giving other persons
(the supposed concessionaire) a chance or opportunity to commit unfair
competition” (Section 1, Article 189 of the Revised Penal Code in
conjunction with Rule 119 of the 1985 Rules on Criminal Procedure).”^[2]

The trial court summarized its factual findings as follows:

“From the records of the case, the
evidence presented and the arguments advanced by the parties, the Court finds
that the complaining witness in this case is the representative and
attorney-in-fact, counsel of Louis Vuitton, S.A. French Company with business
address at Paris, France; that private complainant is suing the accused for the
protection of the trade mark Louis Vuitton and the L.V. logo which are duly
registered with the Philippine Patent Office; that on May 10, 1989, Atty.
Felino Padlan of the Quasha Law Office brought a letter to the COD informing
the latter to cease and desist from selling leather articles bearing the trade
marks Louis Vuitton and L.V. logo as the same is the registered trade marks
belonging to the private complainant which has not authorized any person in the
Philippines to sell such articles; that on August 4, 1989, prosecution witness,
Miguel Domingo bought at the COD ladies’ bag bearing the trade mark and logo of
Louis Vuitton x x x; that again on September 6, 1989, said Mr. Domingo again
bought from the same store a wallet with a trade mark and logo of Louis Vuitton
x x x; that on September 28, 1989, the NBI, upon the request of the Quasha Law
Firm applied for a Search Warrant at the Metropolitan Trial Court in Quezon
City; that the application was granted and the Search Warrant was issued
against COD and was enforced on the same date; that from the implementation of
the said Search Warrant, about seventy-two (72) leather products were seized;
that the accused signed the inventory of the seized articles.

The accused, on the other hand,
claimed: that he is not the
manufacturer or seller of the seized articles; that the said articles were sold
in the store by a concessionaire by the name of Erlinda Tan who is doing business
under the name of Hi-Tech bags and wallets.”^[3]

In acquitting the accused, the trial court gave the following
reasons:

“From all the foregoing,
considering that the accused denied being the manufacturer or seller of the
seized articles, it is incumbent upon the prosecution to prove that said
articles are owned and being sold by the accused. The prosecution relied as their evidence against the accused the
inventory which was signed by him (accused) with a notation under his signature
“owner/representative”. An examination
of the inventory x x x would show that the same was a prepared form of the NBI
and that the accused was made to sign only on the space on the typewritten word
owner/representative. Aside from this,
no other evidence was presented by the prosecution to show that there is a link
between the manufacturer of the seized goods and the accused. Further, when the case was filed with the
Prosecutor’s Office, it stated the name of the accused as the owner of the COD,
but from the evidence presented, it appears that the accused is not the owner
but the stockholder and the executive-vice president thereof.

The prosecution evidence show that long
before the raid of September 28, 1989, surveys have been caused to be made by
the Quasha Law Firm, not only at the COD but also in other department stores as
far as Baguio City and Cebu City; that these seized products were being sold
not only at COD but also in some big deparmtnet(sic) store such as Cash and
Carry. They could have easily verified
from the Securities and Exchange Commission who the actual officers of the COD
[are] to be charged, but the prosecution did not do this and relied only on the
inventory of the seized goods prepared by the NBI agents with the typewritten
word owner/representative.

With respect to the seized goods, the
test of unfair competition is whether the goods have been made to appear that
will likely deceive the ordinary purchaser exercising ordinary care. The seized goods which were marked as exhibits
and presented to the Court would easily show that there was no attempt on the
part of the manufacturer or seller to pass these goods as products of Louis
Vuitton. From the price tags attached
to a seized bag, it could be seen that the article carried a price tag of ONE
HUNDRED FORTY-SEVEN (P147.00) PESOS, whereas, upon examination of the expert
witness presented by the prosecution, he testified that a genuine bag of Louis
Vuitton would cost about FOUR THOUSAND (P4,000.00 PESOS to FIVE THOUSAND
(P5,000.00) PESOS. It is apparent that
the seized articles did not come close to the appearance of a genuine Louis
Vuitton product. Further, the buckle of
the bag also carries the logo of Gucci, another trade mark. From the appearance of all the seized goods,
it is very apparent that these goods were roughly done. The quality and textures of the materials
used are of low quality that an ordinary purchases(sic) exercising ordinary
[care] will easily determine that they were locally manufactured and will not pass
as a (sic) genuine Louis Vuitton products. From these, the Court finds that the prosecution failed to prove that
the essential elements of unfair competition, to wit:

a. That the offender gives
his goods the general appearance of the goods of another manufacturer or
dealer;

b. That the general appearance is shown in the (1) goods
themselves, or in the (2) wrapping of their packages, or in the (3) device or
words therein, or in (4) any other feature of their a (sic) appearance.

These elements, to the mind of the Court
are absent in this case.

Further finally, the prosecution filed
this case against accused Jose V. Rosario in his personal capacity and not as
an officer of the Manila COD Department Store, which is a corporation, and has
a separate legal personality.”^[4]

In the complaint, complainant   pointed
out that the respondent Judge did not consider the motion of February 11,
1990. This omission of respondent judge
allegedly constituted a clear and gross violation of his ministerial duty in
order to allow the accused to escape criminal liability. Furthermore, complainant claimed that the
respondent judge’s failure to resolve the motion exposed his gross ignorance of
the law. Section 11, Rule 119 of the
1985 Rules on Criminal Procedure states:

Section 11. When mistake has been made in charging the proper offense.– When
it becomes manifest at any time before judgment, that a mistake has been made
in charging the proper offense, and the accused cannot be convicted of the
offense charged, or of any other offense necessarily included therein, the
accused shall not be discharged, if there appears to be good cause to detain
him. In such case, the court shall
commit the accused to answer for the proper information charged.

Complainant also assailed respondent judge’s findings that there
was no unfair competition because the elements of the crime were not met, and
that the seized articles did not come close to the appearance of a genuine
Louis Vuitton product, the counterfeit items having been poorly done. According to complainant, in making such conclusions,
respondent judge ignored the ruling in Converse Rubber Corp. vs. Jacinto
Rubber & Plastics Co., Inc.,^[5]
that “the statute on unfair competition extends protection to the goodwill
of a manufacturer or dealer”.

Thirdly, complainant criticized respondent judge for his failure
to consider the alleged lack of credibility of Felix Lizardo, the lone witness
for the defense, in rendering the assailed decision.

Lastly, complainant pointed out that respondent judge violated
the constitutional mandate that decisions should be rendered within three (3)
months from submission of the case. It
appeared that the decision was dated June 28, 1991 but it was promulgated only
on October 25, 1991.

In response to the forgoing accusations, respondent judge set
forth in his comment that:

1.  The evidence of the
prosecution was not sufficient to sustain the conclusion that Jose V. Rosario
was quilty beyond reasonable doubt. The
evidence did not prove all the elements of the offense charged. He added that in deciding criminal cases,
the trial court relies not on the weakness of the accused’s evidence but on the
strength of the evidence submitted by the prosecution.

2.  His alleged failure to
act on the motion was due to the prosecutor’s failure to point out to the court
before judgment was rendered that a mistake was made in charging the proper
offense. He also added that the
prosecutor’s evidence did not also manifest this mistake.

Citing the conclusion of the Prosecution’s Memorandum with Motion
of the complainant, respondent judge averred that the private prosecutor
himself, instead of showing to the court that the proper offense was not
charged, clearly indicated that no such mistake was committed. The cited statement says;

“It is respectfully submitted that
the prosecution has fairly proven that the accused is guilty beyond reasonable
doubt of having committed the offense outlined in the criminal Information
against him. x x x.”^[6]

3.  The prayer contained in
the Prosecution’s Memorandum with Motion should have been placed in a proper
pleading. He also said that the private
prosecutor should have conferred with public prosecutor if the former believed
that the proper offense of giving other persons a chance to commit unfair
competition would be charged against Rosario. The failure of both public and private prosecutors to take the
appropriate action provided no reason for respondent judge to commit the
accused to answer for the proper information.

The sole issue for consideration of this Court is whether or not
respondent judge is guilty of knowingly rendering a manifestly unjust judgment.

The Revised Penal Code holds a judge liable for knowingly
rendering a manifestly unjust judgment. Article 204 thereof provides:

Any judge who shall knowingly render an
unjust judgment in a case submitted to him for decision shall be punished x x
x.

The law requires that the (a) offender is a judge; (b) he renders
a judgment in a case submitted to him for decision; (c) the judgment is unjust;
(d) he knew that said judgment is unjust.^[7]
In some administrative cases^[8]
decided by this Court, We have ruled that in order to hold a judge liable, it
must be shown beyond reasonable doubt that the judgment is
unjust and that it was made with conscious and deliberate intent to do an
injustice.

In this case, We are constrained to hold that complainant failed
to substantiate its claims that respondent judge rendered an unjust judgment
knowingly. It merely relied on the
failure of respondent judge to mention the motion in the decision, on his
alleged reliance on the testimony of defense witness and on the delay in the
promulgation of the case.

But they are not enough to show that the judgment was unjust and
was maliciously rendered.

A judgment is said to be unjust when it is contrary to the
standards of conduct prescribed by law.^[9]
The test to determine whether an order or judgment is unjust may be inferred
from the circumstances that it is contrary to law or is not supported by
evidence.^[10]

The decision herein rests on two legal grounds: first, that there was no unfair competition
because the elements of the crime were not sufficiently proven; second, that
Jose V. Rosario who was accused as owner/proprietor of COD was not properly
charged as his personality is distinct from that of the COD’s.

In holding that there was no unfair competition, the respondent
judge said that “the seized articles did not come close to the appearance
of a genuine Louis Vuitton product”.^[11]
His pronouncement obviously had in mind the test to determine unfair
competition which this Court had laid down in the case of U.S. vs. Manuel,^[12]
to wit:

“x x x whether certain goods have
been clothed with an appearance which is likely to deceive the ordinary
purchaser exercising ordinary care, x x x.”

In so finding that the seized products did not come close to the
appearance of genuine Louis Vuittons because they were poorly done, the court
considered not only their appearance but other factors as well, such as the
price differences between the real and the fake products. Complainant, on the other hand, alleged that
they were good workmanship. But, this
Court is not in a position to review the evidence and thereafter conclude that
the imitation was poorly or excellently done. The findings of fact of the trial court, if supported by substantial
evidence, are binding on the Supreme Court.^[13]
Even on the assumption that the judicial officer has erred in the appraisal of
evidence, he cannot be held administratively or civilly liable for his judicial
action.^[14]

The second ground which was relied upon by the trial court in
acquitting the accused finds basis in the well­-settled doctrine that a
corporation has a distinct personality from that of its
stockholders/owners. A corporation is
vested by law with a personality of its own, separate and distinct from that of
its stockholders and from that of its officers who manage and run its affairs.^[15]
Furthermore, Section 23 of the Corporation Code provides:

x x x the corporate powers of all
corporations formed under this code shall be exercised, all business conducted,
and all property of such corporations controlled and held by the Board of
Directors x x x.

This decision is assailed to be unjust mainly because it did not
consider the Prosecution’s Memorandum with Motion and Motion for Early
Resolution filed by private prosecutor, herein complainant, on February 8, 1991
and February 11, 1991, respectively. According to complainant, had respondent judge taken the former motion
into account, he would not have acquitted the accused, Jose V. Rosario. Instead, he would have been held guilty for
giving others an opportunity to engage in unfair competition as prescribed by
Article 189 of the Revised Penal Code.

Respondent judge’s judgment cannot be rendered unjust by this
alone.

In the first place, it would not have made any difference because
Jose v. Rosario was charged as owner/proprietor. COD is not a single proprietorship but one that is run and owned
by a corporation, Rosario Bros., Inc., of which the accused is a stockholder
and Executive Vice-President. A
stockholder generally does not have a hand in the management of the corporate
affairs. On the other hand, the
Vice-President has no inherent power to bind the corporation.^[16]
As a general rule, his duties must be specified in the by-laws.^[17]
In the criminal case, the information did not specify his duties as Executive
Vice-President. The trial court had no
basis for holding that as such, the accused entered into a contract with the
concessionaire thereby giving the latter an opportunity to practice unfair
competition. Whereas, Section 23 of the
Corporation Code is explicit that the
directors, acting as a body, exercise corporate powers and conduct the
corporation’s business. The board has
the sole power and responsibility to decide whether a corporation should enter
into any contract or perform any act.^[18]
The amendment of the charge, as proposed by the private prosecutor, would not
in any way affect the application of the doctrine that the corporation has a
personality distinct from that of its owners.

Moreover, the finding of the trial court that there is no unfair
competition renders the consideration of the motions insignificant. If there was no unfair competition, so would
there be no offense of giving others an opportunity to engage in unfair
competition since there was no unfair competition to begin with.

Herein complainant also failed to prove malice and deliberate
intent on the part of respondent judge to perpetrate an unjustice. We hereby quote the decision of this
Honorable Court in Sta. Maria vs. Ubay,^[19]
stating that:

“x x x complainant failed to show
any unmistakable indication that bad faith motivated the alleged unjust
actuations of the respondent judge x x x. Absent, thus, any positive evidence on record that the respondent judge
rendered judgment in question with conscious and deliberate intent to do an
injustice, the x x x charge of the complainant must fall.”

In Mendoza vs. Villaluz,^[20]
this Court has also held:

“x x x it is a fundamental rule of
long standing that a judicial officer when required to exercise his judgment or
discretion is not criminally liable for any error he commits provided he acts
in good faith, that in the absence of malice or any wrongful conduct x x x the
judge cannot be held administratively responsible x x x for “no one,
called upon to try the facts or interpret the law in the process of
administering justice can be infallible in his judgment,” and “to
hold a judge administratively accountable for every erroneous ruling or
decision he renders assuming that he has erred, would be nothing short of
harassment or would make his position unbearable”.”

This pronouncement has been reiterated by Us in the case of Miranda
vs. Judge Manalastas,^[21]
where We said:

“Well established is the rule that
mere errors in the appreciation of evidence, unless so gross and patent as to
produce an inference of ignorance or bad faith, or that the judge knowingly
rendered an unjust decision, are irrelevant and immaterial in administrative
proceedings against him. No one called
upon to try the facts or interpret the law in the process of administering
justice is infallible in his judgment. All
that is expected of him is that he follows the rules prescribed to ensure
a fair and impartial hearing, assess the different factors that emerge
therefrom and bear on the issues presented, and on the basis of the conclusions
he find established, with only his conscience and knowledge of the law
to guide him, adjudicate the case accordingly. x x x. If in the mind of the respondent, the evidence for the defense was
entitled to more weight and credence, he cannot be held to account
administratively for the result of his ratiocination. For that is the very essence of judicial inquiry: otherwise the burdens of judicial office
will be intolerable.” (underscoring supplied).

A judge cannot be subjected to liability – civil, criminal, or
administrative – for any of his official acts, no matter how erroneous, as long
as he acts in good faith.^[22]
In Pabalan vs. Guevarra,^[23]
the Supreme Court spoke of the rationale for this immunity. We held, thus:

“x x x “it is a general
principle of the highest importance to the proper administration of justice
that a judicial officer, in exercising the authority vested in him, shall be
free to act upon his own convictions, without apprehension of personal
consequences to himself.” This concept of judicial immunity rests upon
consideration of public policy, its purpose being to preserve the integrity and
independence of the judiciary.”

Still, complainant wants Us to apply the Res Ipsa Loquitur
Doctrine as applied by this Court in the cases of People vs. Valenzuela;^[24]
Cathay Pacific Airways vs. Romillo;^[25]
In Re: Wenceslao Laureta;^[26]
and Consolidated Bank and Trust Corporation vs. Capistrano.^[27]

That doctrine, however, is not applicable to the case at
bar. In similar administrative cases
separately filed against Judge Liwag^[28]
and Judge Dizon,^[29]
We have ruled that:

“In these res ipsa loquitur
resolutions, there was on the face of the assailed decisions, an inexplicable
grave error bereft of any redeeming feature, a patent railroading of
a case to bring about an unjust decision, or a manifestly deliberate intent to
wreak (sic) an injustice against a hapless party. The facts themselves, previously proven or admitted, were of such
a character as to give rise to a strong inference that evil intent was
present. Such intent, in short, was
clearly deducible from what was already of record. The res ipsa loquitur doctrine does not except
or dispense with the necessity of proving the facts on which the inference of
evil intent is based. It merely
expresses the clearly sound and reasonable conclusion that when such
facts are admitted or are already shown by the record, and no credible
explanation that would negative the strong inference of evil intent is
forthcoming, no further hearing to establish them to support a judgment
as to the culpability of a respondent is necessary.

Thus, when asked to explain the
clearly gross ignorance of law or the grave misconduct irresistibly reflecting
on their integrity, the respondent Judges were completely unable to give any
credible explanation or to raise reasonable doubt x x x.” (underscoring
supplied).

Thus, even granting that res ipsa loquitur is appreciable,
complainant still has to present proof of malice and bad faith. Respondent judge, on the other hand, may
raise good faith as a defense. That
good faith is a defense to the charge of knowingly rendering an unjust judgment
remains to be the law.^[30]
He is also given the chance to explain his acts and if such explanation is
credible, the court may absolve him of the charge.

In this case, We find that the facts and the explanation rendered
by Judge Villanueva justify his absolution from the charge. However, while he is held to be not guilty,
he should avoid acts which tend to cast doubt on his integrity. Moreover, his delay in the promulgation of
this case deserves a reprimand from this Court as it is contrary to the mandate
of our Constitution which enshrines the right of the litigants to a speedy
disposition of their cases.

WHEREFORE, in view of the foregoing, this complaint is
hereby DISMISSED for lack of merit. Considering the delay in the promulgation of the decision of this case
by respondent judge, a reprimand is in order.

SO ORDERED.

Narvasa, C.J., (Chairman), Gutierrez, Jr., Cruz, Feliciano,
Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo,
and Melo, JJ., concur.

^[1]
Complaint, p. 2.

^[2]
Prosecution’s Memorandum and Motion, p. 54.

^[3]
MTC Decision, pp. 6-7.

^[4]
Id., at pp. 7-8.

^[5]
97 SCRA 158 (1980).

^[6]
Supra, note 2 at p. 53.

^[7]
GUEVERRA, FUNDAMENTALS OF CRIMINAL LAW 426 (8th ed., 1988).

^[8]
Pabalan vs. Guevarra, 74 SCRA 53 (1976); In Re: Rafael C. Climaco, 55 SCRA 107 (1974).

^[9]
Buenavista, Jr. vs. Garcia, 187 SCRA 598 (1990).

^[10]
Ibid.

^[11]
Supra, note 2 at p. 8.

^[12] 7 Phil. 221 (1906).

^[13]
FNCB Finance vs. Estavillo, 192 SCRA 514 (1990); People vs.
Fernandez, 165 SCRA 302 (1988); Manahan vs. People, 167 SCRA 1 (1988).

^[14]
Pabalan vs. Guevarra, supra, note 8.

^[15]
Villanueva, et. al. vs. NLRC, G.R. 80374, June 17, 1991; Sulo ng Bayan,
Inc. vs. Araneta, Inc., 72 SCRA 347 (1976); De Borja vs. Vasquez,
74 Phil. 560 (1944).

^[16]
SANTOS, CORPORATE MANAGEMENT AND LAW IN THE PHILIPPINES 76 (1987).

^[17]
Ibid.

^[18]
CAMPOS, JR. AND LOPEZ-CAMPOS, THE CORPORATION CODE 341 (v.1, 1991).

^[19]
87 SCRA 179 (1978).

^[20]
106 SCRA 664 (1981).

^[21]
A.M. MTJ-88-159, December 21, 1989, citing Vda. de Zabala vs. Hon.
Manual Pamaran, 39 SCRA 430 (1971).

^[22]
Valdez vs. Valera, 81 SCRA 246 (1978).

^[23]
Supra, note 8, citing Alzua and Arnalot vs. Johnson, 21
Phil. 308, 337-338 (1912) and Gammel vs. Ernst and Ernst, 245 Minn. 249,
N.W. 2d. 364, 54 A.L.R. 2d. 316.

^[24]
135 SCRA 712 (1985).

^[25]
142 SCRA 262 (1986).

^[26]
149 SCRA 570 (1987).

^[27]
159 SCRA 47 (1988).

^[28]
Pilipinas Bank vs. Tirona-Liwag, 190 SCRA 834 (1991).

^[29]
In Re: Petition for the Dismissal from
Service and/or Disbarment of Judge Baltazar R. Dizon, 173 SCRA 719 (1989).

^[30]
Ibid.