Adamson University

College of Engineering

Mechanical Engineering Department

Group No. 8

“Cases Violating the Standards of Fuels and Lubrications of the Philippine Mechanical Code and
Code of Ethics”

Presented by:

Fernando Jr., Salvador M.

Mudag, Abdulhalim S.

Paolo, Aaron Lorenzo P.

Tolete, Stephen Louie A.

Presented to:

Engr. Fernando P. Constantino

REPUBLIC OF THE PHILIPPINES

SUPREME COURT, MANILA

THIRD DIVISION

G.R. No. 194062, June 17, 2013 - REPUBLIC GAS CORPORATION, ARNEL U. TY,
MARI ANTONETTE N. TY, ORLANDO REYES, FERRER SUAZO AND ALVIN U. TY,
Petitioners

VS

PETRON CORPORATION, PILIPINAS SHELL PETROLEUM CORPORATION, AND

SHELL INTERNATIONAL PETROLEUM COMPANY LIMITED, Respondents.

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
petitioners seeking the reversal of the Decision dated July 2, 2010, and Resolution dated October
11, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106385.

Case Background:

Petron Corporation and Pilipinas Shell Petroleum Corporation are two of the largest bulk
suppliers and producers of LPG in the Philippines. On the other hand, Republic Gas Corporation
(REGASCO) is an entity duly licensed engage in, conduct and carry on, the business of refilling,
buying, selling, distributing and marketing at wholesale and retail of Liquefied Petroleum Gas
(“LPG”).

LPG Dealers Associations received reports that certain entities were engaged in the unauthorized
refilling, sale and distribution of LPG cylinders bearing the registered tradenames and
trademarks of the petitioners. As a consequence, on February 5, 2004, Genesis Adarlo
(hereinafter referred to as Adarlo), on behalf of the aforementioned dealers associations, filed a
letter-complaint in the National Bureau of Investigation (“NBI”) regarding the alleged illegal
trading of petroleum products and/or underdelivery or underfilling in the sale of LPG products.

An investigation was thereafter conducted, particularly within the areas of Caloocan, Malabon,
Novaliches and Valenzuela, which showed that several persons and/or establishments, including
REGASCO, were suspected of having violated provisions of Batas Pambansa Blg. 33 (B.P. 33).
The surveillance revealed that REGASCO LPG Refilling Plant in Malabon was engaged in the
refilling and sale of LPG cylinders bearing the registered marks of the petitioners without
authority from the latter. Based on its General Information Sheet filed in the Securities and
Exchange Commission, REGASCO’s members of its Board of Directors are: (1) Arnel U. Ty –
President, (2) Marie Antoinette Ty – Treasurer, (3) Orlando Reyes – Corporate Secretary, (4)
Ferrer Suazo and (5) Alvin Ty (hereinafter referred to collectively as private respondents).
The confidential asset and I, together with the other operatives of [the] NBI, put together a test-
buy operation. On February 19, 2004, I, together with the confidential asset, went undercover
and executed our test-buy operation. Both the confidential assets and I brought with us four (4)
empty LPG cylinders branded as Shellane and Gasul. Since REGASCO is not an authorized
refiller, the four (4) LPG cylinders illegally refilled by respondents’ REGASCO LPG Refilling
Plant-Malabon, were without any seals, and when [weighed], were under-refilled.

Court Stated Laws:

1. Section 155 of R.A. No. 8293 identifies the acts constituting trademark infringement as
follows:cralavvonlinelawlibrary

Section 155. Remedies; Infringement. – Any person who shall, without the consent of the
owner of the registered mark:

155.1 Use in commerce any reproduction, counterfeit, copy or colorable imitation of a

registered mark of the same container or a dominant feature thereof in connection
with the sale, offering for sale, distribution, advertising of any goods or services
including other preparatory steps necessary to carry out the sale of any goods or
services on or in connection with which such use is likely to cause confusion, or to
cause mistake, or to deceive; or

155.2 Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant

feature thereof and apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the sale, offering for
sale, distribution, or advertising of goods or services on or in connection with
which such use is likely to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action for infringement by the registrant for the remedies
hereinafter set forth: Provided, That the infringement takes place at the moment
any of the acts stated in Subsection 155.1 or this subsection are committed
regardless of whether there is actual sale of goods or services using the infringing
material.
2. Section 168.3, in relation to Section 170, of R.A. No. 8293 describes the acts constituting
unfair competition as follows:

Section 168. Unfair Competition, Rights, Regulations and Remedies. x x x.

168.3 In particular, and without in any way limiting the scope of protection against
unfair competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the general appearance
of goods of another manufacturer or dealer, either as to the goods themselves or in
the wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would be likely to
influence purchasers to believe that the goods offered are those of a manufacturer
 or dealer, other than the actual manufacturer or dealer, or who otherwise clothes
the goods with such appearance as shall deceive the public and defraud another of
his legitimate trade, or any subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose

3. Section 170. Penalties. Independent of the civil and administrative sanctions imposed
by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a
fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos
(P200,000), shall be imposed on any person who is found guilty of committing any of
the acts mentioned in Section 155, Section 168 and Subsection 169.1.
Decision:
The Supreme Court finds that there is sufficient evidence to warrant the prosecution of
petitioners for trademark infringement and unfair competition considering that petitioner
Republic Gas Corporation, being a corporation, possesses a personality separate and distinct
from the person of its officers, directors and stockholders.

Violations against the Philippine Mechanical Code:

From the stated case background, the REGASCO violates the Chapter 15 of Section 8.7 of the
PMC:

 LPG are mixtures of hydrocarbons liquefied under pressure for efficient transportation,
storage and use; if leaks will result and dangerous accumulations collect and are not
dispersed by wind or any means, safety device shall be installed.
 Storage installation should be made in accordance with the requirements of local
authorities.
 Cylinders should be constructed to meet the requirements.

Violations to the R.A. 8495 and its IRR:

1. Rule XI, Section 46.2.e – unless authorized under R.A. 8495, it shall be unlawful for any
person to operate, tend or maintain, or be in-charge of the operation, tending or
maintenance of any mechanical equipment, machinery process for any mechanical works,
projects or plants of 300 kW or abouve but not more than 2000 kW unless he is a duly
licensed Professional Mechanical Engineer or Mechanical Engineer;
 Supported by Article 1, Section 3.b – Mechanical equipment or machinery –
includes fired and unfired pressure vessels.
2. Rule XIII, Section 54 – Practice of Mechanical Engineering Not Allowed in Firms and
Corporations
3. Article 1, Section 3.a.4 – Management, supervision of the manufacture, sale, supply or
distribution of any mechanical equipment, machinery or processes in mechanical work,
projects or plant.
4. Article 4, Section 36 – Practice not allow for firms and corporations. No firm, company
partnership, association or corporation may be registered or licensed as such for the
 practice of mechanical engineering: Provided, however, That persons properly registered
and licensed as mechanical engineers may form and obtain registration with Security and
Exchange Commission of a firm, partnership or association using the term "Mechanical
Engineers", and or "Architect and Mechanical Engineers" but nobody shall be a member,
partner or associate unless he is a duly registered and licensed mechanical engineer, and
the members who are mechanical engineers shall only render work and services proper
for mechanical engineers as defined in this Act.

Violations to the Mechanical Engineering Code of Ethics:

1. Fundamental Canon - Hold paramount the safety, health, and welfare of the public in
the performance of their professional duties.
2. Fundamental Canon - Avoid improper solicitation of clients of professional
employment.
3. Rule 4 – The ethical principles required to be observed by the mechanical engineers shall
equally apply to partnership, firms and entities organized and existing for the practice of
mechanical engineering.
4. Rule 15 – The mechanical engineer shall observe punctuality in his appointments,
perform honestly and good faith his contractual obligation and his duties and obligation
to his client or employer, and observe fair dealing in his relations with his clients and
employers.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 76272 July 28, 1999

JARDINE DAVIES, INC., petitioner,

VS

THE NATIONAL LABOR RELATIONS COMMISSION, JARDINE DAVIES

EMPLOYEES UNION (FFW) and VIRGILIO REYES, respondents.

This special civil action for certiorari seeks to set aside the first decision of National Labor
Relations Commission promulgated on March 17, 1986, and its Resolutions dated May 14, 1986
and August 19, 1986 which denied petitioner's motions for reconsideration.

Case Background:

Jardine Davies, the Petitioner is a domestic corporation engaged in general trading, including the exclusive
distribution in the country of the world-renowned "Union 76" lubricating oil manufactured by Unoco
Philippines, Inc. While Virgilio Reyes, the Private Respondent was a former sales representative of petitioner.

Upon the evaluation of the records of this case exposes the engagement of petitioner to a private investigation
agency to conduct surveillance and investigation of Virgilio Reyes in a hunch that he was producing a fake
Union 76. The result of the investigation showed that the apartment of the said suspect did contain counterfeit
oil, which led to a search warrant and then confiscating the counterfeit products.

Meanwhile, the products found at the apartment of Virgilio Reyes was claimed by his younger brother (Donato
Reyes) to be his property. He proved that these products was legally engaged in his business of general
merchandising under the trade name of Lubrix Conglomerate. (A single proprietorship legally licensed by the
government in dealing with oil and lubricant products.) He also presented the receipts purchases of the
products.

On the private respondent’s defense, he sued the petitioner for illegal dismissal. But the labor arbiter, Manuel
R. Caday dismissed his complaint.

In September 24, 1985, the decision of the labor arbiter stated that the property occupied by the private
respondent was certainly the location of the illegal manufacture, blending and packaging of Union 76 oil and
lubricating products. The labor arbiter concluded that the private respondent was personally involved in the
said illegal activity and committed an act of serious misconduct, fraud or willful breach of trust reposed by the
petitioner causing for termination of employment.

The private respondent appealed to the NLRC and in March 17, 1986 the NLRC reversed the labor arbiter’s
decision that there is not enough reason for the petitioner to lose its trust and confidence on the private
respondent.

The main subject now is whether the decision of the NLRC just as to both parties namely Virgilio and the
Petitioner? Some points to be considered are the date of appeal; and the lack of evidence against the private
respondent.

Court Stated Laws and Decision

1. Article 189 of Act 3815. Unfair competition, fraudulent registration of trade-mark, trade-name or
service mark, fraudulent designation of origin, and false description
a. Any person who, in unfair competition and for the purposes of deceiving or defrauding
another of his legitimate trade or the public in general, shall sell his goods giving them the
general appearance of goods of another manufacturer or dealer, either as to the goods
themselves, or in the wrapping of the packages in which they are contained or the device or
words thereon or in any other features of their appearance which would be likely to induce the
public to believe that the goods offered are those of a manufacturer or dealer other than the
actual manufacturer or dealer or shall give other persons a chance or opportunity to do the
same with a like purpose.
b. Any person who shall affix, apply, annex or use in connection with any goods or services or
any container or containers for goods a false designation of origin or any false description or
representation and shall sell such goods or services.

2. Article 223 of P.D. 442. Appeal - Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. Such appeal may be entertained of the following
ground:
a. In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the employer shall not stay the
execution for reinstatement provided herein.

3. Rule 65 of the Rules of Court. Certiorari, Prohibition and Mandamus - issues of want or excess of
jurisdiction and grave abuse of discretion on the part of the labor tribunal.
4. Article 282 of the Labor Code. Termination by employer – an employer may terminate and
employment for any of the following causes:
a. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative.

To conclude the case there are no sufficient evidence that the private respondent was indeed guilty of
counterfeiting Unoco’s product freeing him from any issues of trust and fraudulent acts.
Violations against Philippine Mechanical Code

1. Chapter 15, Section 7.1 – Storage and Handling of Fuel Oil.

 Fuel oil storage tank generally are classified by material, as steel or concrete by
size, as gallons, etc.; local regulations should be studied before installation.
2. Chapter 15, Section 11.1 – Diesel Lubricating Oils
 Classification: Crude oils are frequently described as “paraffinic,” “napthenic,” or
“mixed base,” according to the physical character of the crude.

Violations against R.A. 8495:

1. Article I, Section 3.a.5 – management or supervision of the manufacture, sale, supply or

distribution of mechanical equipment parts or components;
2. Article IV, Section 36 - Practice Not Allowed for Firms and Corporations. No firm,
company partnership, association or corporation may be registered or licensed as such for
the practice of mechanical engineering: Provided, however, That persons properly
registered and licensed as mechanical engineers may form and obtain registration with
Security and Exchange Commission of a firm, partnership or association using the term
"Mechanical Engineers", and or "Architect and Mechanical Engineers" but nobody shall
be a member, partner or associate unless he is a duly registered and licensed mechanical
engineer, and the members who are mechanical engineers shall only render work and
services proper for mechanical engineers as defined in this Act.

Violation against IRR of R.A. 8495:

1. Rule VII, Section 40 - Administrative Investigation. – the investigation of cases against a

registered PME, ME, CPM shall be conducted by the board with the assistance of the
legal/hearing officers of the commission in accordance with the pertinent provision of the
Rules and Regulations Governing the Regulation and Practice of Professionals – as
amended, issued by the commission. The Revised Rules of Court shall be suppletory to
the said Rules.
2. Rule VII, Section 41 - Grounds for the Suspension or Revocation of Certificates. – the
board may, after due notice and hearing, suspend or revoke the certificate of registration
and license of a registered PME, ME, CPM or the temporary/special permit issued to
foreign mechanical engineers allowed by law to practice mechanical engineering in the
Philippines upon the following:
a. Incompetence
b. Abetment of the illegal practice of Mechanical Engineering
3. Rule XIII, Section 54 - Practice Not Allowed for Firms and Corporations. – defined by
R.A. 8495.

Violations to the Mechanical Engineering Code of Ethics:

1. Fundamental Canon – make / issue public statements on issues only in an objective and
truthful manner.
2. Fundamental Canon – act in professional manner for each employer or client as faithful
agents of trustees.
3. Rule 1 – the mechanical engineer shall, in the practice of his profession, be guided by the
Golden Rule, the ideals of service to man and his environment, and the need to secure
unwavering public confidence in his professional competence, integrity and humanity.
4. Rule 4 – the ethical principles required to be observed by mechanical engineers shall
equally apply to partnership, firms and entities organized and existing for the practice of
mechanical engineering.
5. Rule 13 – he should be familiar with the State policies on labor and social justice, as well
as, the labor and social legislations and shall observe faithfully these policies and laws in
dealing with labor in general, and with his workmen in particular.
6. Rule 17 – he shall inform his client or employer of his business connections, interests, or
affiliations which may influence his judgment, or impair the quality or character of his
service.