Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-47710 December 28, 1942
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
FRANCISCO ABAYA, defendant-appellee.

PARAS, J.:

In civil case No. 6190 of the Court of First Instance of Laguna, Zosimo Fernandez obtained on January 10, 1933, a judgment against the herein
defendant, Francisco Abaya, for the sum of P4,000, with interest at the rate of 10 per cent. To satisfy this judgment, the provincial sheriff sold at
public auction the defendant's undivided half interest in certain parcels of land to Zosimo Fernandez for the sum of P4,382.99. On March 28, 1934,
the sheriff executed the corresponding certificate of absolute sale. Thereafter, Felicita Abaya, sister of the defendant and owner of the other
undivided half of the aforesaid land, instituted in the Court of First Instance of Laguna an action against Zosimo Fernandez to recover the interest
which the latter bought at the public auction, on the ground that, prior to said sale, the defendant had conveyed the latter's interest to Felicita
Abaya. On January 28, 1936, judgment was rendered in favor of Zosimo Fernandez, which judgment was affirmed by the Court of Appeals on
December 9, 1937. Subsequently, or on February 28, 1938, the defendant filed a petition for voluntary insolvency in the Court of First Instance of
Laguna. In the schedule of debts accompanying the petition, the defendant included the item of P4,000 as a debt to Zosimo Fernandez; and in the
inventory of properties, he listed his undivided half in the land above referred to as being among the properties "registered in his name in the
Registry of Property of the Province of Laguna." Both the schedule and the inventory were under oath.

On May 4, 1940, the defendant was charged in the Court of First Instance of Laguna with a violation of article 183 of the Revised Penal Code, in that
he — so the information alleged — wilfully, maliciously and feloniously stated under oath in his insolvency case that the undivided half of the land
therein mentioned was his, when he fully knew that the same no longer belonged to him, as it was and still is owned by Zosimo Fernandez. The
lower court, sustaining the defendant's motion to quash, dismissed the information on the ground that the acts charged therein do not constitute
false testimony as defined in article 183 of the Revised Penal Code. Hence this appeal by the Government.

The appealed judgment is correct. The record fails to show that the defendant maliciously committed the acts imputed to him. They could not be
malicious because, at the time the petition for insolvency was filed, the land in fact was still registered in the name of the defendant; and it might
have been included in the inventory for fear that he might be accused of concealing property standing in his name in the registry of property, in
violation of the Insolvency Law. In other words, the defendant — who could not be expected to determine the propriety, from a legal point of view,
of the inclusion — merely stated a fact in said inventory. The acts charged could not be malicious as against the defendant's creditors because,
instead of concealing assets, he listed property which should not be included in the inventory. They could not be malicious as against Zosimo
Fernandez because the Torrens titles covering the land and specified in the inventory, bore annotations of the writ of execution issued in civil case
No. 6190 and of the auction sales in favor of Zosimo Fernandez, which of course duly protected the latter's rights; and the defendant has not made
any allegation either in the petition for insolvency or in the inventory which could militate against or defeat said rights. On the contrary, the
defendant made particular reference in the inventory to civil case No. 6190 and to the auction sales. He included his indebtedness to Zosimo
Fernandez in the schedule, probably in his very desire to be consistent with the inclusion of the land in the inventory and to safeguard the rights of
Zosimo Fernandez.lawphil.net

The appealed order is hereby affirmed, with costs de oficio.

Yulo, C.J. Moran, Bocobo and Imperial, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. L-21493-94 April 29, 1966
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
WILFREDO G. CAINGLET, defendant-appellee.

BENGZON, J.P., J.:

On December 13, 1962 Wilfredo G. Cainglet was prosecuted before the Court of First Instance of Zamboanga del Sur for falsification of public
and/or official documents in Criminal Cases Nos. 2230 and 2231 under two informations which we quote hereunder:

That on or about April 22, 1959, in the municipality of Ipil, province of Zamboanga del Sur, Philippines, and in other places within the jurisdiction of
this Honorable Court, the herein accused, Wilfredo G. Cainglet, a private individual, in order to deceive the Court of First Instance of Zamboanga del
Sur in rendering a decision in Cadastral Case No. N-19, LRC Cad. Rec. No. N-184, declaring Lot No. 8492, Pls-248 and its improvements as the private
property of the herein accused, through false and fraudulent representations, did then and there willfully, unlawfully and feloniously, with full
knowledge of the falsity of its contents, prepare and/or caused to be prepared the hereinbelow described document, to wit:

Judicial Form No. 106, otherwise known as an Answer under Section 9 of Act No. 2259, duly subscribed and sworn to before Notary Public Andres
Bersales, a person duly authorized by law to administer oath, wherein the accused deliberately made the following untruthful statement of facts:
(1) That he is the owner of Lot No. 8492, Pls-248; (2) That he is the owner of the buildings and improvements existing on the land; (3) That he has
been in possession of said land as owner for over 3 years; (4) That the said land was acquired by occupation and purchase from a predecessor-in-
interest; (5) That his predecessor-in-interest had been in possession thereof for almost thirty (30) years; (6) That there is no person having interest
to the said land; which allegation of facts as contained in the above-mentioned document are necessary and essential, as required under Section 9
of Act No. 2259, otherwise known as the Cadastral Act, in order that any person claiming to have an interest on the land subject of the cadastral
proceedings, may present his claim and thus preventing the Court from declaring the land as public land;"

once the above document was accomplished, the herein accused, with full knowledge of the falsity of any and all his allegations, and knowing fully
well that he has never possessed nor occupied the land at anytime, as in fact, the land is actually possessed and occupied by Mindet Elon since
before the war, did then and there file and/or caused the same to be filed in Cadastral Case No. 19, LRC Cad. Record No. L-184 for Lot No. 8492, Pls-
248, which cadastral proceedings was then pending in the Court of First Instance of Pagadian, Zamboanga del Sur, with a view of misleading the
Court in issuing an order declaring Lot No. 8492, Pls-248 as the private property of the herein accused, as in fact, a decision dated October 30, 1959
was rendered by the Honorable Judge Tito V. Tizon of the Court of First Instance of Pagadian, Zamboanga del Sur, declaring among others that Lot
No. 8492, Pls-248 with its improvements is the private property of the accused WILFREDO G. CAINGLET.

On January 16, 1963, before arraignment, the accused moved to quash the afore-quoted informations on the ground that they contain averments,
which if true, would constitute an excuse or justification, invoking Section 2(g) of Rule 133 of the Rules of Court.1 The averments referred to consist
in the statements in the informations that in Cadastral Case No. 19, LRC Cadastral Record No. N-184 the Court of First Instance of Zamboanga del
Sur declared Lots Nos. 8479 and 8492 with improvements thereon to be the private properties of Wilfredo G. Cainglet. Such judicial
pronouncement which has become final, as can be inferred from the information, allegedly runs counter to the charge that accused falsely claimed
said real estate to be his own private properties.

The lower court granted the motion and dismissed the aforequoted informations. Hence the provincial fiscal appealed to this Court.

The issue is whether or not the final judgment in Cadastral Case No. 19, LRC Cadastral Record No. N-184 declaring Wilfredo G. Cainglet owner of
Lots Nos. 8479 and 8492 bars his subsequent prosecution for falsely stating in his answers in said Cadastral Case that he possessed and owned Lots
Nos. 8479 and 8492.

The lower court holds the opinion and appellee maintains that for the falsification cases to prosper, the trial court must necessarily find that the
latter's allegations of possession and ownership in his answers filed in Cadastral Case No. 19, LRC Cadastral Record No. N-184 are false. Allegedly,
this matter has already been directly adjudged in said cadastral case, and the judgment therein is conclusive in subsequent proceedings, pursuant
to Sections 44 and 45 of Rule 39 in relation to Section 48 of Rule 123 of the Rules of Court. Appellee then submits to the proposition that a
judgment of guilt of the accused in the falsification cases would nullify the validity and conclusiveness of the previous cadastral proceedings,
subject the cadastral titles to collateral attack and destroy the indefeasibility of the Torrens titles issued.1äwphï1.ñët

It is fundamental and well-settled that a final judgment in a cadastral proceeding — a proceeding in rem — is binding and conclusive upon the
whole world, reason is that public policy and public order demand not only that litigations must terminate at some definite point but also that titles
over lands under the Torrens system should be given stability for on it greatly depends the stability of the country's economy. Interest reipublicae
ut sit finis litium. However, this conclusiveness of judgment in the registration of lands is not absolute. It admits of exceptions. Public policy also
dictates that those unjustly deprived of their rights over real property by reason of the operation of our registration laws be afforded remedies.
Thus, the aggrieved party may file a suit for reconveyance of property2 or a personal action for recovery of damages against the party who
registered his property through fraud,3 or in case of insolvency of the party who procured the registration through fraud, an action against the
Treasurer of the Philippines for recovery of damages from the Assurance Fund.4 Through these remedial proceedings, the law, while holding
registered titles indefeasible, allows redress calculated to prevent one from enriching himself at the expense of others. Necessarily, without setting
aside the decree of title, the issues raised in the previous registration case are relitigated, for purposes of reconveyance of said title or recovery of
damages.

In the same way, therefore, the State may criminally prosecute for perjury the party who obtains registration through fraud, such as by stating false
assertions in the sworn answer required of applicants in cadastral proceedings. For Section 116 of the Land Registration Act states:

SEC. 116. Whoever knowingly swears falsely to any statement required to be made under oath by this Act shall be guilty of perjury and liable to the
penalties provided by laws for perjury.

And in this case, Section 116 of the Land Registration Act is applicable to cadastral proceedings under Act 2259, by virtue of Section 11 thereof.
From its wording, Section 116 applies to all and does not distinguish between those who make false statements and successfully procure
registration by such statements, and those whose statements were not given credence by the land registration court. The law therefore applies
with equal brunt on both types of offenders. This is rightly so, for to give immunity from prosecution to those successful in deceiving the
registration court would, in effect, be putting a premium on perjury and making the punishment therefor dependent upon the non-realization of
the object of its commission.

For the Court, therefore, to sustain appellee's view would be to unduly discriminate in the prosecution of persons charged with falsification or
perjury. While public policy, on one hand, demands an end to litigation, and hence puts forward the doctrine of res judicata, yet, on the other
hand, every interest of public policy demands that perjury be not shielded by artificial refinements and narrow technicalities. For perjury strikes at
the very administration of the laws.5 It is the policy of the law that judicial proceedings and judgments shall be fair and free from fraud, and that
litigants and parties be encouraged to tell the truth, and that they be punished if they do not.6

As afore-stated, a judgment on the guilt of the appellee would not undermine the indefeasibility of the titles over Lots Nos. 8479 and 8492. Neither
would the criminal proceeding for falsification or perjury be a collateral attack on the titles in question. The prosecution for falsification or perjury
is a proceeding in personam which inquires into the criminal liability of the accused. Not being an attack on the validity of the titles in question, any
judgment rendered therein would leave said titles undisturbed.

Wherefore, the order appealed from is set aside and this case is hereby remanded to the court of origin for further proceedings. No costs. So
ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Sanchez, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15001 March 15, 1920
THE UNITED STATES, plaintiff-appellee,
vs.
BARBARA CAPISTRANO, defendant-appellant.

ARAULLO, J.:

On the 29th of April, 1918, Barbara Capistrano made a sworn declaration before the fiscal of the city of Manila, accusing her father, Alejo
Capistrano, of the crime of rape committed upon her person. After the corresponding preliminary investigation was conducted by said fiscal, the
latter, on April 29, 1918, filed an information with the Court of First Instance of the same city against the said Alejo Capistrano for the crime of rape
alleged to have been committed upon the person of his said daughter. On May 11 of the same year, several days before the hearing of the cause
No. 16900 instituted upon said information, the said Barbara Capistrano filed a motion with the court praying for the dismissal of the cause against
her father on the ground that it was not the latter who had raped her, as she has previously stated before the fiscal of the city, but a Spaniard
named Juan, an employee of the Lerma Park Cabaret, Caloocan, Rizal Province, and that if she had made a different statement before at the police
station, it was on account of the instructions of the said Spaniard Juan. At the hearing of the cause aforementioned, after recognizing having stated
before the fiscal concerning the fact of her father having raped her on the night of April 26, 1918, saying having made similar statement before the
fiscal because the Spaniard had instructed her to denounce her said father, the same Barbara Capistrano said that this statement was not true and
that the truth was that which she was telling before the court, or rather that it was the Spaniard Juan who abused her person, and not her father.
From this testimony, the fiscal having been obliged to move for the dismissal of the cause, same was dismissed by the court in his decree of the
15th of the same month of May, ordering Alejo Capistrano's immediate release. In view thereof, the fiscal filed against said Barbara Capistrano the
information giving rise to the present cause for the crime of perjury. Said information read as follows:

The undersigned accuses Barbara Capistrano of the crime of perjury committed as follows:

That on or about the 27th day of April, 1918, in the city of Manila, Philippine Islands, the said accused, declaring before the assistant fiscal of the
city of Manila, Luciano de la Rosa, affirmed under oath, before the said fiscal who was duly authorized to receive oaths, that one called Alejo
Capistrano, the father of the said accused, had raped her on the 26th day of April, 1918; that later after said date, or on May 15, 1918, the
aforementioned accused, testifying before his Honor, Manuel Vivencio del Rosario, as the principal witness for the prosecution in the criminal
cause No. 16900 of the Court of First Instance of the city of Manila, said that the real author of the crime of rape of which she had complained
before the aforesaid assistant fiscal, Luciano dela Rosa, was not her aforesaid father, Alejo Capistrano, as she had then previously stated before the
said fiscal, but one called Juan, Spaniard by nationality; that this last testimony, taken before the Honorable Judge, Manuel Vivencio del Rosario, is
a false testimony for the said accused knew very well upon testifying before said judge that the real author of the rape of which she was the victim
was not the so-called Juan but her father called Alejo Capistrano; that the sworn statements made by said accused before the said assistant fiscal,
Luciano de la Rosa, on the 27th day of April, 1918, where very essential to the investigations conducted by the latter, inasmuch as without said
statements, said fiscal would not have filed, as he did, the information for the crime of rape against the said Alejo Capistrano, which information is
now pending before the Court of First Instance of this city of Manila and bearing R. G. No. 16900. Acts committed against the law.

The accused demurred to the foregoing information on the ground that same was fatally defective for the reason that in said information it does
not appear that the testimony — taken by the accused before the court at the hearing of the aforesaid cause for the crime of rape and which was
false according to the information, and expressive of the fact that the real author of the crime of rape denounced by her before the fiscal was not
her father, as she had previously declared under oath before the said fiscal, but one called Juan, a Spaniard — was a statement important and
essential to the question involved in said criminal cause or raised at the hearing thereof. This demurrer was overruled by the trial court and the
accused excepted to this ruling and pleaded not guilty. After the hearing of this present cause, the Court of First Instance aforesaid rendered his
judgment on April 25, 1918, declaring the accused guilty of the aforementioned crime of perjury mentioned and penalized in section 3 of Act No.
1697. But in view of the fact that the accused was below 18 years of age, the court suspended the judgment, ordering the commitment of the said
accused in the government's reformatory until she becomes of age, and sentencing her, furthermore, to be forever disqualified from testifying
before any court of these Islands. From this judgment the accused appealed and her defense alleges that the trial court erred:

1. In overruling the demurrer interposed against the information in question.

2. In not reciting in the judgment that the statement of the accused before the fiscal of the city of Manila was not freely and voluntarily made but
was made under third party's threats and duress.

3. In not acquitting the accused.

It is said in the information, as has already been seen, that when the accused testified under oath on May 15, 1918, before the Honorable Manuel
Vivencio del Rosario, as a witness for the prosecution in the criminal cause No. 16900 of the Court of First Instance of the city of Manila, she said
that the real author of the crime of rape which she had denounced before the assistant fiscal, Luciano de la Rosa, was not her father, Alejo
Capistrano, as she previously stated under oath before the said fiscal, but one called Juan, a Spaniard, and that this last testimony taken before the
Honorable Manuel Vivencio del Rosario was false for the said accused knew very well upon testifying before the said judge that the real author of
the crime of which she was the victim was not the aforementioned Juan but her own father called Alejo Capistrano. But it is not alleged in the
information, as the Attorney-General admitted in his brief, expressly or impliedly, that the aforesaid testimony, taken by the accused at the hearing
of the cause for rape against her father, was essential and important in said cause. Wherefore, the fact alleged by the accused to support her
demurrer to said information is true

For the crime of perjury to be punishable, the false testimony willfully taken or subscribed contrary to the oath must related to, or concern, "any
material matter which he (the witness) does not believe to be true." "Perjury, as modified by statute (Act No. 1697), may be defined to be the
willful and corrupt assertion to a falsehood, under oath or affirmation administered by authority of law, in a material matter, the offense being
enlarged and made to extend to false oaths other than those taken in the course of judicial proceedings," such was what this court said in the case
of United States vs. Estraña (16 Phil. Rep., 520), citing 30 Cyc., 1433, and other cases mentioned therein. In the main body of said decision, this
court said:

In the absence of a statute to the contrary, it is well settled that an indictment for perjury must show conclusively that the testimony given or
assertation made by the defendant and charged to be false was material to the issue on the trial in which he was sworn or it will be fatally
defective. This may be done either by a direct allegation that it was material, or by allegations of facts from which its materiality will appear. (30
Cyc., 1433, and U. S. vs. Singleton, 54 Feb. Rep., 488; U. S. vs. Cowing, 25 Fed. Cas., No. 14880, 4 Cranch C. C., 613; Hembree vs. State, 52 Ga., 242;
State vs. Anderson, 103 Ind., 170; State vs. Gibson, 26 La. Ann., 71; State vs. Williams, 60 Kan., 837; People vs. Ah Bean, 77 Cal., 12; Gibson vs.
State, 47 Fla., 16; State vs. Cunnigham, 66 Iowa, 94; People vs. Collier, 1 Mich., 137; Wood vs. People, 59 N. Y., 177; Buller vs. State, 33 Tex. Cr., 551,
and numerous other cases cited.)

The complaint upon which the aforesaid cause of United States vs. Estraña was instituted, was wanting of an allegation that the testimony of the
accused, alleged to have been given falsely under oath, was material to the issue involved therein, and this court said in that cause:

The complaint in the case at bar is fatally defective for the want of an allegation that the testimony, alleged to be false, was material to the issues
involved in the murder case. Our statute (section 3 of Act No. 1697, supra) specifically makes materiality an essential element of the crime of
perjury and without this crime can not legally exist.

It is, therefore, necessary that in the information filed in this instant case against Barbara Capistrano and inserted in the beginning of this decision,
it should have been expressly and definitely stated that the testimony — alleged to be false according to said information, and given by the accused
Barbara Capistrano before the Court of First Instance whereby she stated that the real author of the crime denounced by her was not her father
Alejo Capistrano but one Juan, a Spaniard — was important and material to the issues involved in the said case for rape against Alejo Capistrano.
The want of this allegation in the information makes the latter fatally defective, and in no way can it be accepted, as the Attorney-General so
understands in his brief, that such an omission, in the instant case, had been cured by the allegation in same information that said testimony was
false and by the admission in evidence, without the objection on the part of the defense, of the record of the case for rape against Alejo Capistrano
whereby it appears, according to the fiscal, that the false testimony taken by the accused in the said case was so material that same was dismissed
by the order of the court (in support of his opinion the Attorney-General invoking the aforementioned case of U. S. vs. Estraña and the case of Serra
vs. Mortiga [204 U. S., 470; 11 Phil., 762]), because in either of the cases cited by the Attorney-General (the informations thereof not having
mentioned the material averments, to wit. In the first of said cases that the testimony alleged to be false was material, and in the second, an
adultery case, that concerning the place and the knowledge of the accused that the woman was married) no objection was inter[posed in the lower
court at the proper stage of the proceedings to the sufficiency of the information, no demurrer was set up against said information due time, and,
consequently, in the first of the cases aforementioned, this court said: "As no objection to the sufficiency of the complaint was raised this fatal
defect could have been supplied by competent testimony on the trial." Naturally, the court overruled the appellant's objection on the ground that
said defect was first raised before this court when the case was before us on appeal, and this court further said (syllabus);

Where a complaint is fatally defective, either in form or in substance, and no objection is taken at the trial but is raised for the first time on appeal,
it is not error for this court to refuse to sustain such object when the fatal defects are supplied by competent proofs. (Serra vs. Mortiga, 204 U. S.,
470, reported in 11 Phil. Rep., 762.)

In the case of Serra vs. Mortiga no objection was raised at the trial to the sufficiency of the complaint for adultery filed against the accused
notwithstanding that same was defective, as has been already said. This court also overruled the objection for the first time raised on appeal by the
accused against said complaint, and decided the case on its merits, taking into consideration the evidence presented at the hearing. Said decision
was affirmed by the Supreme Court of the United States holding in the syllabus thereof the following:

While a complaint on a charge of adultery under the Penal Code of the Philippine Islands may be fatally defective for lack of essential averments as
to the place and knowledge on the part of the man that the woman was married, objections of that nature must be taken at the trial, and if not
taken, and the omitted averments are supplied by competent proof, it is not error for the Supreme Court of the Philippine Islands to refuse to
sustain such objections on appeal.

What occurred in the instant case is just the reverse from that which took place in the two cases aforementioned for the reason that, the fiscal
having filed the information against Barbara Capistrano for the crime of perjury on May 15, 1918, and the accused having appeared thru her
counsel two days after or May 17, on the 21st of same month, three days after receiving notice of the information, said accused filed a demurrer (c
copy of which was received by the fiscal and which we have already mentioned hereinbefore) on the ground that said information was defective
for the want of the allegation aforementioned concerning the importance and materiality of the testimony alleged as false therein, praying for this
reason the amendment thereof and the dismissal of the case with costs de officio. On the 5th of June following, this prayer was overruled by the
court as improper. On the 8th of the same month the accused interposed her exception in writing to this decision. The said case was duly heared
and the accused appealed from the judgment rendered thereon. She now assigns in her brief before this court as the first error alleged to have
been committed by the lower court the fact that the latter has overruled the demurrer aforementioned.

Wherefore, the doctrines laid down in the two cases aforesaid are not applicable to the instance case. And if anything at all can be inferred from
said doctrines, it is in the sense contrary to what the Attorney-General has said, i. e., the accused having demurred in due time to the information
for being fatally and essentially defective, and having excepted to the ruling dismissing said demurrer, the omission in the information of the
aforesaid allegation — the materiality and importance of the statement alleged as false therein had not been cured by the filing of an amended
information. Nor was such a defect cured by the allegation in the information that the aforementioned statement was false or by the admission in
evidence without defendant's objection of the record of the aforementioned cause for rape against Alejo Capistrano. The overruling of the
demurrer aforementioned having been assigned by the appellant in her brief before us as the first error committed by the lower court, this court
cannot set aside the consideration of said objection in view of the appellant's appeal interposed against such decision. And one of the essential
elements of the crime of perjury created by the law (art. 5392, Rev. Stat.) being the materiality and importance of the fact alleged as having been
falsely uttered (U. S. vs. Landsberg, 23 Fed. Rep., 585), as was stated by this court in United States vs. Estraña (supra), and there being no allegation
in the information relative to the materiality and importance of the testimony taken by the accused at the hearing of the case for rape against Alejo
Capistrano to the issues therein involved, said information is null and void ab initio and the criminal proceedings must be dismissed.

However, it being undeniable that the testimony taken under oath by the accused before the Court of First Instance at the hearing of the cause for
rape against Alejo Capistrano and alleged as false in the information, dealt with an important and essential matter involved therein, for by virtue of
said testimony the cause was dismissed by the court, and the accused having raised in her appeal, discussed by the Attorney-General in his brief,
the question whether or not the appellant was guilty of the crime of perjury and should be convicted of said crime, we now proceed to the
consideration of this particular.

For this object we hereby reproduce the brief statement of facts incorporated by the trail court in his judgment and taken from the results of the
evidence adduced at the trial, in the following terms:

When this cause was called for a hearing, the accused appeared with her counsel Gonzales, and the Government was represented by Assistant
Fiscal De la Rosa.
The evidence adduced in this cause conclusively establish the fact that on the 27th of April of this year, the accused Barbara Capistrano and the
policeman Varsovia appeared before the office of the prosecuting attorney of this city to file a complaint against one Alejo Capistrano, the father of
the accused Barbara Capistrano, for the crime of rape committed by the former upon the person of the latter.

After taking the oath required by law before the corresponding official or the assistant fiscal of this city, Luciano de la Rosa, Barbara Capistrano
declared before the said officer the following: that between 11 and 12 o'clock on the night of April 26 of the present year, she was raped by her
father Alejo Capistrano in a house on calle Dimas-Alang, Caloocan.

In view of the foregoing statement of Barbara Capistrano the assistant fiscal De la Rosa, having found reasonable grounds for proceeding against
the person mentioned by Barbara Capistrano in her said statement, filed the corresponding information appearing on page 1 of the criminal cause
No. 16900, accusing Alejo Capistrano of the crime of rape.

The case for rape was heared before this court on May 15, 1918, and after taking the necessary oath, the offended party, Barbara Capistrano,
testified before the court in substance as follows: that she made a statement before the prosecuting attorney accusing her father of the crime of
rape for the reason that her statement before the fiscal that her father was the author of the rape upon her person was not true; that her father
was not the one who raped her but the Spaniard aforesaid.

At the hearing of this crime the accused testified and again swore before the court that what she in reality stated before the fiscal was what the
said Spaniard, Juan Sol by name, had insinuated to her; that when she declared before the fiscal, the Spaniard aforesaid was not present; that her
statement before the said Fiscal was not the truth but that, for her fear of Juan Sol, on account of the latter's threat upon her, she stated the
person who raped her was her father.

If follows, therefore, that the accused Barbara Capistrano stated under oath two contradictory statements: one before the assistant prosecuting
attorney of the city who conducted the preliminary investigation before filing the information against her father Alejo Capistrano for rape,
statement whereby she was accusing the latter of the said crime; and another before the Court of First Instance at the hearing of the same cause
for rape, saying that the one who raped her was not her father but one called Juan Sol, and that for her fear to the latter who had threatened her,
she made the former statement before the fiscal of the city, imputing the commission of the said crime to her father.

According to section 3 of Act No. 1697, a person is guilty of the crime of perjury and must be punished by the penalty mentioned in said Act, "who,
having taken an oath before a competent tribunal, officer, or person, in any case in which the law of the Philippine Islands authorizes an oath to be
administered, that he will testify, declare, deposed or certify truly, or that any written testimony, declaration, deposition, or certificate by him
subscribed is true, willfully and contrary to such oath states or subscribes any material matter which he does not believe to be true. . . ."

The testimony of the accused taken under oath, which is alleged as false in the information, was the second statement or that one taken by her
before the Court of First Instance at the hearing of the cause for rape, and the one alleged in said information as true was her statement under
oath before the fiscal of the city at the preliminary investigation. Wherefore, in order to hold the accused guilty of the crime of perjury, it was
necessary to prove that she did not believe said testimony as true or, what amounts to the same thing, that which she testified to before the Court
of First Instance was not true.

A conviction for perjury cannot be sustained merely on the contradictory sworn statements of the defendant, but the state must prove which of
the two statements is false and must show that statement to be false by other evidence than the contradictory statement. . . . Of course where
perjury is charged in giving testimony contrary to that given on a prior examination, the accused is entitled to show that his statements on the prior
examination were induced by threats and duress; and after adducing evidence in support of this contention, he properly may insist that the court
explicitly instruct the jury to determine whether or not such testimony was voluntary. (21 R. C. L., 271, citing People vs. McClintic [Mich.], 160 N.
W., 461; L. R. A. [1917C], 52 and note; Billingsley vs. State. 49 Tex. Crim., 620, 95 S. W., 520, 13 ann. Cas., 730.)

In People vs. McClintic (supra) the court held the following:

1. Perjury; Contradictory Statements; Effect. — Contradictory statements under oath will not alone convict one of perjury. (For other cases, see
Evidence XII l, in Dig. 1-52 N. S.)

2. Evidence; Perjury; Cause of Contradictory Statements. — Upon trial of one for perjury, evidence is admissible that statements contradictory to
those alleged to be false, which were made under oath before a committing magistrate, were induced by threats and duress. (For other cases, see
Evidence XI t, in Dig. 1-52 N. S.)

3. Criminal Law; Perjury; Instructions. — Instructions in a prosecution for perjury in giving testimony at a criminal prosecution contrary to that given
before a committing magistrate, and which is claimed to have been given under duress, must explicitly inform the jury to determine whether or not
such testimony was voluntary. (For other cases, see Trial III e, 5, in Dig. 1-52 N. S.)

In the syllabus of Billingsley vs. State the following is said:

4. Perjury; Evidence; Contradictory Statements. — A conviction for perjury cannot be sustained merely upon the contradictory sworn statements of
the defendant, but the state must prove which of the two statements is false and must show that statement to be false by other evidence than the
contradictory statement.

The evidence adduce by the prosecution in this cause consisted: 1. In presenting the transcription of the stenographic notes certified to by the
respective stenographers and taken at the hearing of the cause for rape against Alejo Capistrano. In this transcription appears the fiscal's exposition
of the motion filed by the accused for the dismissal of the said cause (rape) on the ground that her father was not the autor of the said crime but
one called Juan a Spaniard, in contradiction with her statement at the preliminary investigation conducted by the said fiscal; the fiscal's prayer to
accept the said statement of the accused; the said testimony under oath taken by her before the court wherein she made the same statement
which is briefly and substantially mentioned in a paragraph of the judgment hereinbefore inserted. 2. In presenting the cause No. 16900 of the said
court against Alejo Capistrano for the aforementioned crime of rape, wherein the information against the latter and the aforesaid testimony of the
accused appear, and the decision or order of the court dismissing said cause in view of said testimony. 3. And the testimony of the policeman
Osmundo Varsovia taken at the hearing of the present cause for perjury, the terms of which appear in the paragraph of the judgment hereinbefore
inserted, and the testimony of the stenographer who took the record in the said cause and transcribed the testimony of the accused, certifying this
last particular and the fact that said accused testified under oath.
In short, therefore, the prosecution confined itself in proving that the accused stated under oath the two contradictory statements aforementioned
and that the accused stated to the policeman Varsovia, on the morning of April 27, 1918, that her father Alejo Capistrano raped her between the
hours of 11 and 12 of the previous night, as well as the fact that the same policeman was present when the accused took her oath before the fiscal
prior to the latter's taking the declaration of the accused in the aforesaid preliminary investigation. The foregoing is not proving, as it can be clearly
seen which of the two contradictory statements of the accused was the false statement or showing the falsity of either upon other evidence
distinct from the same contradictory statements. It is simply showing or exposing said two statements in order to point out that the accused,
declaring under oath in one or the other, made two statements contradictory with each other and involving one and the same fact.

But, moreover, the accused in her testimony at the hearing of the case for rape said, among other things, that nothing took place between her and
her father on the 26th of April of that year, 1918; that on the next day she went to the fiscal's office to file a complaint against her father, accusing
the latter what the Spaniard told her to do; that the Spaniard, after having abused her person, told her to accuse her father before the fiscal, and
recounted what she then told the fiscal against her father; that on April 26 she did not sleep in the house No. 25 on calle Dimas-Alang but in the
dance hall, in the house of one Pedro de los Santos; that everything she had said before the fiscal relative to the case of her father being the author
of the said crime of rape was not true; that she knew the Spaniard called Juan, who was not a cook in the Dimas-Alang dance hall; that it was not
her father who abused her person but the said Spaniard; that all that she stated before the fiscal was what she receive from the instruction of the
said Spaniard Juan; and that before going to the fiscal's office she had been instructed by the Spaniard to declare against her father, and the real
author of said rape was not her father but the said Spaniard, called Juan. And finally, upon being asked by the fiscal "Which is true, your statement
before the fiscal accusing your father as the author of the crime of rape or this statement of yours before the court accusing the said Spaniard?"
she replied: "The truth is what I have stated here." In view of this statement the court handed down the order aforementioned, dismissing the case
for rape and decreeing the release of the accused Alejo Capistrano.

In the testimony given by her at the hearing of the present cause for perjury, the accused reiterated what she has said before, i. e., that it was not
her father who raped her but a Spaniard; that she stated before Fiscal De la Rosa that her father had committed upon her the said rape, but that
afterwards she said that it was not her father because she was told by her aunt to tell the truth; that the Spaniard was the real author of said rape;
that she does not know the name of the Spaniard for she could not remember it, but that she could recognize him should she see him. And when
asked by counsel for the defense to look around that place whether she could find the Spaniard to whom she was referring and to tell where the
latter was, she answered: "There he is," pointing at Juan Sol, who was then present at the hearing; and upon being immediately asked why it was
that she told the fiscal it was her father who raped her when in reality it was that Juan Sol, the Spaniard, who committed said crime, she replied:
"Because this gentlemen was threatening to kill me in case I would not tell it was my father;" she further said that said threat took place on the day
the rape was committed and that under this influence she made the statement before Fiscal De la Rosa accusing her said father; that the Spaniard
Juan Sol was then carrying a penknife with which he threatened her, and that this threat was made by said Spaniard after the consummation of the
criminal act.

As it appears from the foregoing facts, the accused has explained why at the preliminary investigation before the fiscal of this city she accused her
father as the author of the crime of rape of which she was the victim, her reason being that she was instructed, intimidated and threatened by said
Spaniard with a penknife, which he had at the time she was raped and after this act had been committed, in order that she should declare in that
sense. She also said that after having given said statement, her aunt Petra de Los Santos told and admonished her to tell the truth. She had
repeatedly stated at the hearing of the case for rape as well as at the hearing of this case for perjury that the Spaniard Juan Sol was the one who
raped her and not her father Alejo Capistrano. Finally, at the hearing of this case and in the presence of Juan Sol himself, she had the courage to
point out the latter as the author of the crime of rape, saying furthermore that this gentlemen was threatening to kill her should she not say that it
was her father who had raped her.

With the means within her reach, the accused then proved that her statement at the preliminary investigation before the fiscal of the city, accusing
her father and not the Spaniard Juan Sol, as the author of the rape of which she was the victim, was made on account of the duress and threats the
latter made upon her so that she should declare in that sense — a fact which, having taken place without any eyewitness, was not possible to be
related by any one other than the own testimony of the accused taken under oath as a witness in her own behalf at the hearing. But she presented
another evidence of great importance at the very time of the hearing by pointing out Juan Sol, who was present at the moment, as the very person
who had raped her and who afterwards had intimidated and threatened her in order that she should declare in the manner she did before the
fiscal of the city, as has been said before. Moreover, counsel for the defense presented in evidence on that very occasion the proceeding No. 3511
of the Court of First Instance of Rizal entitled "The United States vs. Juan Sol" for rape, consisting of 12 pages, i.e., the criminal cause against said
Juan Sol for the rape committed upon the person of the accused. And when the defense rested, they stated that there appears in the said criminal
proceeding a prosecution for rape against said individual (Juan Sol). However, the said proceeding was not forwarded, together with the present
case, to this court.

On the other hand, the prosecution presented no other evidence, as has been said before, than the two contradictory statements of the accused;
and according to the doctrines laid down by American courts in the two decisions hereinbefore inserted, it must prove by other evidence than the
two contradictory statements themselves, which of them was false or more properly speaking, that the false statement, according to the allegation
in the information, was the one given by the accused before the court of first instance at the hearing of the cause for rape aforementioned and in
which she testified that it was not her father who raped her but the Spaniard Juan Sol. The prosecution did not only fail to present evidence
tending to prove the existence of said falsehood, but when it should have produced as a witness Juan Sol, who was in the court room and was
pointed out by the accused with her finger as the author of the rape of which she had been the victim, and when it was within its power to produce
said man on the witness-stand, who must be the first to protest and reject the said imputation in the presence of the court, did not avail itself of
these evidence in order to contradict and belie the clear and definite statement made by the accused against the said Spaniard not only in the
sense that the latter had raped her but also in that he had induced and compelled her, by threats and duress, to declare at the preliminary
investigation before the fiscal that which was true according to the information, an affirmation which the prosecution was in duty bound to prove
by producing the said Juan Sol as a witness. And having failed to do so, such a failure is fatal to the prosecution.

In the judgment appealed from, the lower court did not pass upon the question whether the statement of the accused at the preliminary
investigation before the fiscal of this city was given voluntarily or not. This the lower court must have done according to the doctrine laid down in
People vs. McClintic (supra) mentioned in the above-inserted paragraph of 21 R. C. L., 271, and, even disregarding this doctrine, in view of what the
accused has testified to relative to the threats and duress made upon her by Juan Sol, in connection with the absence of any evidence on the part
of the prosecution to rebut the testimony of the accused respecting that particular.

On the other hand, after considering as real and true the facts recited by the accused at the preliminary investigation before the fiscal of the city in
the presence of the policeman Varsovia, the lower court in the same decision declares that later when they had possessed their right spirit, and by
means of undue influence, undoubtedly the influence exercised by the father of the accused, the latter falsely took her oath at the hearing of the
case for rape, saying that she was not raped by her said father but by a Spaniard called Juan Sol. The court further adds that the father of the
accused induced her daughter to tell a falsehood at the hearing of the said cause in order to free himself thereof. These assertions of the trial court
do not find any support or basis in the evidence for there is not a word of record expressing, or even indicating, that Alejo Capistrano, the father of
the accused, has exercised upon the latter undue influence or employed means to induce her to tell a falsehood at the hearing of the case for rape
aforementioned, as the judgment of the lower court speaks. The lower court's assertion in this sense is completely inaccurate and with this
inaccuracy is certainly contrasted the fact that in the said judgment no mention has been made, for the just and upright appreciation of the facts
submitted during the trial, concerning the insufficiency of the evidence of the prosecution in not presenting as witness Juan Sol in order to rebut
and impugn, as has been already said, what the accused has testified to regarding the particular aforementioned.

In the face of the notorious insufficiency of the evidence for the prosecution and the effect of the evidence adduced by the accused, it not being,
on the other had, improbable that the accused, a young woman 14 years of age, would have declared in the terms she did before the fiscal of the
city at preliminary investigation of the cause for rape against her father Alejo Capistrano, compelled by threats alleged by her to have been made
upon her by Juan Sol, nor is it also improbable that the latter was the one who raped her and not her own father, and it not being proven that
when the accused testified under oath before the court of first instance at the hearing of the said cause for rape, giving the statements which gave
rise to the dismissal of said cause, she would have transgressed the truth, and there being on the contrary, sufficient reasons leading us to believe,
with sufficient ground, that she (the accused) was induced or compelled by threats and duress, to state what she had stated before the fiscal of the
city at the preliminary investigation of the cause for rape aforesaid — it is not proper to hold the accused guilty of the crime of perjury
aforementioned nor to impose upon her any penalty for said crime.

For the foregoing reasons and considerations, we reverse the judgment appealed from the acquit the accused, with the costs of both instances de
officio. So ordered.

Arellano, C.J., Johnson, Street, Malcolm and Avanceña, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6294 February 10, 1911
THE UNITED STATES, plaintiff-appellee,
vs.
LEONCIO BALLENA, defendant-appellant.

TRENT, J.:

On the 21st of September, 1909, there was tried in the Court of First Instance of the subprovince of Masbate criminal case No. 163, entitled
"United States vs. Ana Ramirez," in which the defendant was charged with the crime of perjury. The basis of this prosecution was the false
testimony given by the defendant in a certain criminal case tried in that court wherein one Ciriaco Pellejera was defendant, charged with homicide,
in that the said Pellejera did, by means of blows, cause the death of the husband of Ana Ramirez. In this homicide case Ana Ramirez was called as a
witness, and, after being duly sworn, testified that her husband died of fever and that during his illness, which lasted more than two weeks, she
observed no contusions or other injuries on his body. She denied having testified under oath before the provincial fiscal in the town of Dimasalang,
contrary to her testimony in this case, and she also denied having been in the house of one Jose Largo for the purpose of testifying with reference
to the death of her husband. Whereas, as a matter of fact, she did testify, under oath, before the said fiscal, in that town, that her husband died as
a direct result of the blows inflicted by Pellejera and that his death occurred within three days after having received these blows. Ana Ramirez was
found guilty as charged and sentenced accordingly.

In the trial of this perjury case on Estefania Barruga, mother of the defendant Ana, was a witness for the defendant, and at the instigation of one
Leoncio Ballena she testified that the fiscal, Señor Bailon, at the time he was in Dimasalang making the investigation into the cause of the death of
Ana's husband, attempted to rape her daughter Ana, and asked for the hand of the girl in marriage, but she did not desire to accept this
proposition of the fiscal because he was a married man.

Subsequently thereto, and on the 29th of September, 1909, the fiscal filed an information in the Court of First Instance of that province against the
said Leoncio Ballena, charging him with the crime of subornation of perjury. Upon this complaint the defendant was duly tried, found guilty, and
sentenced to six month's imprisonment, to pay a fine of P500, to the corresponding subsidiary imprisonment is case of insolvency, to the accessory
penalties provided for by law, and to pay the costs. From this sentence and judgment the defendant appealed, and now insists that the testimony
by given by Estefania Barruga in that perjury case was immaterial to the issues involved therein. If this contention be true, the defendant is not
guilty.

There are certain well-defined and indispensable requisites which must be established in every case of subornation of perjury before an accused
person, charged with the commission of this crime, can be convicted. Every essential element constituting the crime of perjury must be established
by competent testimony. The prosecution must show the nature of the proceedings in which the alleged perjury was committed, the court, or
officer, in which, or before whom, the false oath was taken; that the witness was duly sworn; that the testimony was material, and false; that the
defendant knowingly and willfully procured another to swear falsely, and that the witness suborned did testify under circumstances rendering him
guilty of perjury.

In the case at bar the record shows beyond any question of a doubt that the witness Barruga, after being duly sworn, did knowingly and willfully
testify falsely in a criminal case before a duly constituted tribunal; that this witness so testified at the instigation of the defendant Ballena; and that
the defendant knew that the testimony given by the witness Barruga was false. The witness so informed the defendant. Notwithstanding this
information, the defendant strongly insisted that by the witness Barruga testifying that the fiscal committed those acts would be the only was to
save her daughter from imprisonment. The defendant not only knowingly and willfully induced this witness to swear falsely, but he did so
maliciously, as it appears from the record that he was an enemy of the fiscal at that time, the fiscal having prosecuted him previous to this trial. So
the only question to be determined is, as we have said, Was the testimony of Barruga material to the issues involved in that criminal case against
her daughter for perjury? Materiality is an essential element in the crime of perjury. (U. S. vs. Estraña, 16 Phil. Rep., 520.) It, therefore, necessarily
follows that materiality is likewise an indispensable requisite in the crime of subornation of perjury, as the latter is derived from the former.

The term 'material matter' means the main fact which was the subject of the inquiry, or any circumstance which tends to prove that fact, or any
fact, or circumstance, which tends to corroborate or strengthen the testimony relative to such inquiry, or which legitimately affects the credit of
any witness who testifies. (Quoted with approval in U. S. vs. Estraña, supra.)

In the criminal case in which the witness Barruga gave that false testimony, the main question involved was whether or not Ana Ramirez testified
before the provincial fiscal that her husband died as a result of the blows inflicted by Ciriaco Pellejera, as she had testified in the trial of the case
against Pellejera that she did not so testify before the fiscal. It is clear that the false testimony of Ana Ramirez against Pellejera was material. In the
trial of the case against Ana for perjury there was presented a question of fact as to whether or not Ana testified, under oath, before the fiscal in
that investigation that her husband did in fact die as a result of the wounds inflicted by Pellejera. The court found this to be true. It was important
to know whether or not the fiscal, at the time Ana testified before him, attempted to rape her or asked her mother for permission to marry her. If
the fiscal had committed these acts they would have constituted a strong circumstance showing the innocence of Ana. The fiscal was the moving
party in the perjury case and it was upon his sworn complaint that Ana was prosecuted. If he should have attempted to prosecute Ana after having
committed these acts the court would not only have disbelieved the fiscal, testifying as a witness, but it would have looked upon the whole
prosecution as a fabrication.

The judgment appealed from being in accordance with the law and the merits of the case, same is hereby affirmed, with costs against the
defendant. So ordered.

Arellano, C. J., Mapa, Carson and Moreland, JJ., concur.

EN BANC
[G.R. No. 45618. October 18, 1938.]
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, v. ESMINIA PUDOL and ALBERTO REYES, Defendants, ALBERTO REYES, Appellee.

DECISION

CONCEPCION, J.:

An information had been filed in the Court of First Instance of Ilocos Sur charging Esminia Pudol and Alberto Reyes with having committed the
crime of perjury, the former by subscribing a false affidavit by induction and with the further cooperation of the latter.

When the case was called for trial, the provincial fiscal filed a motion asking for the discharge of Esminia Pudol in order to be utilized as a witness
for the prosecution against her coaccused. Upon arraignment, Alberto Reyes pleaded not guilty, although his plea was withdrawn shortly
thereafter. The court, acting on the fiscal’s motion, dismissed the case as to Esminia Pudol for the purpose intended by said fiscal. The accused
Alberto Reyes, in turn, asked for the dismissal of the case as to him, alleging: (1) That once the case is dismissed as to Pudol, the alleged principal by
direct participation, there is no longer any ground for prosecuting the case against the suborner Reyes, and (2) that the Revised Penal Code does
not penalize subornation of perjury, as it was formerly penalized by section 4 of Act No. 1697, which has expressly been repealed by article 367 of
said Revised Penal Code. The court, favorably sustaining the first ground of the motion and deeming it unnecessary to pass upon the second
ground, also dismissed the case as to the accused Alberto Reyes, in an order of December 16, 1936, from which the fiscal appealed.

The first question to be decided in this appeal is that raised indirectly by the accused in his memorandum citing authorities, to the effect that the
order appealed from is an order of dismissal of the case upon its merits, from which the fiscal cannot appeal. Such contention is untenable: (1)
Because as the accused withdrew his plea of not guilty, he has not yet pleaded to the information, and in such condition of the case it is legally
impossible to decide it upon its merits, and (2) because the order of dismissal of the court is not an acquittal of the accused. Therefore, it is
appealable (sec. 44, General Orders, No. 58; U. S. v. Ballentine, 4 Phil., 672).

The second question is that discussed by the Solicitor-General in the two errors attributed to the court. The order of dismissal is based on the
following considerations:jgc:chanrobles.com.ph

"In the above-quoted motion of the fiscal, it is stated that there is absolute necessity of the testimony of said accused’ Esminia Pudol, because
’there is no other direct evidence to support the information.’ The allegation assumes that it cannot be proven and there is no means of showing
that Esminia Pudol has committed perjury or has given false testimony. If the principal act, which must be the result of subornation, cannot be
proven, it seems clear that even if it should be shown that there has been subornation, after all the latter does not constitute a crime."cralaw
virtua1aw library

In the first place, it cannot be inferred from the motion of the fiscal that "there is no means of showing that Esminia Pudol has committed perjury
or has given false testimony." The only thing stated in the motion is "that there is no other direct evidence to support the information except the
testimony of said accused can be substantially corroborated in its material points." Consequently, there is no basis for the conclusion laid down by
the court that: "If the principal act, which must be the result of the subornation, cannot be proven, it seems clear — according to it — that even if it
should be shown that there has been subornation, after all the latter does not constitute a crime."cralaw virtua1aw library

The court further states: "if the guilt of the latter (Pudol) cannot be proven and the dismissal of this case, as to her, restores and places her under
the protection of a strong presumption of innocence, it would seem soundly logical that her said innocence cannot be made the basis of a
judgment of guilt for Reyes."cralaw virtua1aw library

The court was not right in affirming that the order of dismissal restores to the accused (Pudol) the presumption of innocence. The fiscal did not ask
for the dismissal of the case on the ground of Pudol’s innocence, but because she did not appear to be the most guilty. The fiscal has asked for her
discharge in order to be utilized as a witness for the prosecution against the accused. If she really testifies in support of the allegations of the
information, Act No. 2709 affords her certain immunity, but this is not tantamount to restoring the presumption of her innocence, and her
discharge does not affect the status of the accused Reyes (U. S. v. Abanzado, 37 Phil., 658).

As to the second point of the motion of the accused, that is, that the Revised Penal Code does not penalize subornation of perjury, as it was
formerly penalized by section 4 of Act No. 1697, which has expressly been repealed by article 367 of the Revised Penal Code, suffice it to state that,
according to article 17 of said Code, the following are considered principals:jgc:chanrobles.com.ph

"1. . . .

"2. Those who directly force or induce others to commit it. (Emphasis ours.)

"3. Those who cooperate in the commission of the offense by another act without which it would not have been accomplished."cralaw virtua1aw
library

The information charges Alberto Reyes not only with having directly induced Esminia Pudol to testify falsely under oath and to subscribe the
affidavit before a person authorized by law to administer oath, but also with having cooperated and taken a direct part in the execution of said
false affidavit, without which induction, cooperation and participation the false affidavit in question would not have been accomplished.

Therefore, the fact that subornation of perjury is not expressly penalized in the Revised Penal Code does not mean that the direct induction of a
person by another to commit perjury has ceased to be a crime, because said crime is fully within the scope of that defined in article 17, subsection
2, of the Revised Penal Code. Furthermore, Alberto Reyes, as already stated, is charged in the present case not only as suborner of the perjury
committed by his coaccused but also as principal by cooperation and participation in the preparation of the false affidavit subscribed by Esminia
Pudol.

The order appealed from is reversed and this case is ordered remanded to the Court of First Instance of Ilocos Sur, so that it may proceed with the
hearing thereof and decide the same in accordance with law, with the costs to the appellee. So ordered.

Avanceña, C.J., Villa-Real, Abad Santos, Imperial, Diaz and Laurel, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-65006 October 31, 1990
REOLANDI DIAZ, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and INTERMEDIATE APPELLATE COURT, respondents.

PARAS, J.:

In Criminal Case No. 934 of the Court of First Instance of Pampanga, Fifth Judicial District, Branch VI, San Fernando, Pampanga, petitioner Reolandi
Diaz was charged with the crime of Falsification of Official Document committed as follows:

That on or about the 5th day of December 1972, in the Municipality of San Fernando, Province of Pampanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, Reolandi M. DIAZ, then a Senior Clerk at the Jose Abad Santos High School and, therefore, a
public employee, did then and there willfully, unlawfully and feloniously commit falsification of official documents, to wit: by executing and filing in
the office of the Civil Service Commission of said municipality a Personal Data Sheet, CS Form No. 212(65), an official document, stating and malting
it appear therein that he was a fourth year Bachelor of Arts student in 1950-54 at the Cosmopolitan and Harvardian Colleges which document is a
requirement for his reappointment as School Administrative Assistant I of the Jose Abad Santos High School and wherein the academic
requirement to said Position is at least a fourth year college undergraduate, when in truth and in fact, the said accused well knew that the
statement is false and he did not reach the fourth year in a Bachelor of Arts degree course, and consequently, by reason of said untruthful
narration of facts, his appointment to the said position was approved by the Civil Service Commission.

All contrary to law. (p. 44, Rollo)

After trial following a plea of not guilty upon arraignment, petitioner was found guilty as charged. The dispositive portion of the trial court's
decision is as follows:

WHEREFORE and in view of all the foregoing, this Court finds the accused Reolandi M. Diaz guilty as charged of the crime of falsification of official
document penalized under Article 171, paragraph 4, of the Revised Penal Code, and he is therefore sentenced to suffer the indeterminate penalty
of imprisonment of two (2) years, four (4) months and one (1) day of prision correccional, as minimum, to six (6) years and (1) day of prision mayor,
as maximum, and to pay a fine of ONE THOUSAND (P1,000.00) PESOS without subsidiary imprisonment in case of insolvency.

Costs against the accused. (pp. 55-56, Rollo)

Petitioner appealed the aforesaid judgment of conviction to the Intermediate Appellate Court, said appeal being docketed thereat as CA-G.R. No.
24580- Cr.

In its Decision promulgated on April 7,1983, the respondent court modified the trial court's decision by increasing the maximum of the
indeterminate penalty of imprisonment in the event of non-payment of the fine due to insolvency, but affirmed the verdict of conviction in all
other respects. The pertinent and dispositive portions of respondent court's decision read:

The penalty for the offense of falsification of an official document committed under Article 171, paragraph 4 of the Revised Penal Code is (prision
mayor) and a fine not to exceed P5,000.00. The correct penalty that should be imposed on the appellant applying the Indeterminate Sentence Law
is imprisonment of Two (2) Years, Four (4) Months and One (1) Day of (prison correctional) as minimum to Eight (8) Years and One (1) Day of
(prision mayor) as maximum In cam of non-payment of the fine of P1,000.00 due to insolvency, the appellant should be subject to subsidiary
imprisonment.

WHEREFORE, with the above modification as to the penalty and the imposition of subsidiary imprisonment in case of insolvency, the decision
appealed from is affirmed in all other respects with costs against accused- appellant' (P. 68, Rollo)

Petitioner's motion for reconsideration was denied, hence, the present recourse.

It is the contention of petitioner that he is entitled to an acquittal because—

1. The findings of the lower court adopted by the respondent intermediate Appellate Court that he was not a fourth year A-B. College
student is contrary to the evidence presented.

2. The respondent intermediate Appellate Court gravely commuted an error of law in convicting him as he did not have any legal obligation
to state in CS Form 212 that he was a fourth year college student.

3. The Intermediate Appellate Court committed a grave abuse of discretion in finding that the transcript of records (Exhibit I) is spurious.

Upon the following facts, found by both the trial court and respondent Intermediate Appellate Court, to have been sufficiently and satisfactorily
established by the evidence on record, it appears that petitioner Reolandi Diaz was a senior clerk at the Jose Abad Santos High School in San
Fernando, Pampanga.

In 1972 he sought appointment as School Administrative Assistant I of the same school and as one of the requirements for appointment to said
position, filled up the prescribed personal information sheet, Civil Service Form 212, and swore to the truth and veracity of the data and
information therein furnished by him before the proper administering officer. As one of the required informations, he indicated in Exh "A" that his
highest educational attainment was Fourth Year A.B. (Liberal Arts) allegedly pursued or obtained at the Cosmopolitan and Harvardian Colleges,
respectively, during the years 1950 to 1954 inclusive. On the basis thereof, he was extended an appointment as School Administrative Assistant I
(Exh. "B"). His personal information sheet (Exh. "A") together with his appointment paper (Exh. "B"), the certification as to the availability of funds
for the position (Exh. "C") and the resolution of the Provincial Board of Pampanga creating the position (Exh. "D") were all forwarded to the Civil
Service Commission for the approval of petitioner's appointment.
But contrary to petitioner's claim that his highest educational attainment was Fourth Year A.B. which he allegedly took at the Cosmopolitan and
Harvardian Colleges during the years 1950 to 1954, he was never enrolled at the Cosmopolitan Colleges which later became the Abad Santos
Educational Institution and still later the Ortanez University-at any time during the period covering the years from 1950 to 1954, inclusive as
certified to by the Registrar of Ortanez University, Mr. Atilano D. Solomon. Likewise, petitioner was never a student at the Harvardian Colleges in
Tondo, during the first quarter of school year 1953-1954, inclusive, as certified to by the school's President, Mrs. Virginia King vda. de Yap.

Neither did petitioner ever enroll as a collegiate student at the Harvardian Colleges in San Fernando, Pampanga after he finished his secondary
course in the same school in June 1950, as certified to by its Executive Director, Atty. Arnulfo Garcia.

Also, the name of petitioner was not included in all the enrollment lists of college students submitted to the then Bureau of Private Schools of the
Department of Education by the Harvardian Colleges at San Fernando, Pampanga and at Tondo, Manila, during the period during which petitioner
claimed to have been enrolled. The same thing is true with the list submitted by the Cosmopolitan Colleges to the said bureau.

The petitioner did not take the witness stand. He only presented in evidence an alleged transcript of record (Exh. 1) purporting to show that he
took up collegiate courses at the Philippine Harvardian College in Tondo, Manila, beginning from the first quarter of the school year 1951-1952 up
to the first quarter of school year 1953-1954 which transcript of record was allegedly signed by Mrs. Virginia King vda. de Yap, for and in behalf of
the then President of the school, Ildefonso Yap. But Mrs. Virginia Yap, testifying for the prosecution disowned the said signature. Besides, at the
bottom portion of the transcript is a printed notation reading — this is only valid with the college seal and signature of Pres. Ildefonso D. Yap.
Exhibit "I" lacks the imprint of the college seal and the signature of President Ildefonso Yap himself. No other corroborating piece of evidence was
presented by petitioner.

Contrary to petitioner's posture, there was ample, solid and conclusive evidence adduced by the prosecution to prove that he was not a fourth year
A.B. undergraduate.

It was clearly established that the statement made by the accused — that he reached fourth year A.B. and that he studied for this course (Liberal
Arts) at the Cosmopolitan Colleges and the Harvardian Colleges from the years 1950-1954, is devoid of truth. The records of these colleges do not
at all reveal that petitioner was even enrolled at any time from 1950 to 1954 in its College of Liberal Arts. His name does not appear and could not
be found in the enrollment lists submitted to the Bureau of Private Schools by these colleges.

While the petitioner in his defense presented an alleged transcript (Exh. purporting to show that he took up collegiate course at the Philippine
Harvardian College in Tondo, Manila, beginning from the first quarter of the school year 1951-1952 up to the first quarter of the school year 1953-
1954, both the trial court and the respondent court correctly disregarded said transcript as having emanated from a spurious source. The transcript
presented lacks the authenticating marks-the imprint of the college seal and the signature of the President of the college.

As correctly observed by the trial court —

It is also quite significant to note in this score that the accused in his defense failed to present any corroborating piece of evidence which will show
that he was indeed enrolled in the Philippine Harvardian Colleges from the first quarter of the school year 1953- 1954. If he had enrolled as a
student during this period of time and he was positive that the transcript of records issued to him and in his possession is genuine and valid, it
could have been easy for him to introduce corroborating evidence, i.e., the testimony of any of his classmates or teachers in the different subjects
that he took to support his claim that he studied and passed these collegiate courses at the said school. But this he failed to do despite all the
opportunities open to him and in the face of damning evidence all showing that he had not really enrolled in this school or in the other school
mentioned by him the personal information sheet that he filed up as requirement for his appointment. (p. 53, Rollo)

Following the doctrine laid down, however, in the case of People v. Rufo B. Cruz, No. L-15132, May 25,1960,108 Phil. 255 and the earlier case of
United States v. Tupasi Molina, 29 Phil. 119, the crime committed under the foregoing facts, is perjury. This offense, as defined in Article 183 of the
Revised Penal Code is the willful and corrupt assertion of a falsehood under oath or affirmation administered by authority of law on a material
matter. The said article provides —

Art. 183. False testimony in other cases and perjury in solemn affirmation. The penalty of arresto mayor in its maximum period to prision
correccional in its minimum period shall be imposed upon any person who, knowingly making untruthful statements and not being included in the
provisions of the next preceding articles, shall testify under oath or make an affidavit upon any material matter before a competent person
authorized to administer an oath in cases in which the law so requires.

Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any of the falsehoods mentioned in this and the three
preceding articles of this section shall suffer respective penalties provided therein.

In that case of People v. Cruz, supra, the accused Rufo B. Cruz failed up an application form (Civil Service Form No. 2) for the patrolman
examination. He stated therein that he had never been accused, indicted or tried for violation of any law, ordinance or regulation before any court,
when in truth and in fact, as the accused well knew, he had been prosecuted and tried before the Justice of the Peace of Cainta, Rizal, for different
crimes. The application was signed and sworn to by him before the municipal mayor of Cainta, Rizal.

This Court in that case held:

This article is similar to Section 3 of Act No. 1697 of the Philippine Commission, which was formerly the law punishing perjury. Under said section 3
of that Act, this Court, in the case of United States v. Tupasi Molina (29 Phil. 119), held that a person, who stated under oath in his application to
take police examination that he had never been convicted of any crime, when as a matter of fact he has previous convictions, committed perjury.
The facts in that case are almost exactly analogous to those in the present, and we find no reason, either in law or in the arguments of the Solicitor
General to modify or reverse the conclusion of this Court therein. More so, because all the elements of the offense of perjury defined in Art. 183 of
the Revised Penal Code concur in the present case.

The elements of the crime of perjury are —

(a) That the accused made a statement under oath or executed an affidavit upon a material matter.
(b) That the statement or affidavit was made before a competent officer, authorized to receive and administer oath.
(c) That in that statement or affidavit, the accused made a and deliberate assertion of a falsehood.
(d) That the sworn statement or affidavit containing the falsity is required by law or made for a legal purpose.
All the foregoing elements are present in the case at bar.

Perjury under Art. 183 of the Revised Penal Code carries a lesser penalty. The penalty for this crime is arresto mayor in its maximum period to
prision correccional in its minimum period. Since there is no mitigating and aggravating circumstance the penalty should be imposed in its medium
period. Applying the Indeterminate Sentence Law, the penalty should be from four (4) months of arresto mayor as minimum to one (1) year and
one (1) day of prision correccional as maximum.

WHEREFORE, in view of the foregoing considerations, the decision appealed from is modified as follows:

(a) The accused Reolandi Diaz is found guilty of the crime of perjury defined and penalized under Art. 183 of the Revised Penal Code; and

(b) The accused is hereby sentenced to suffer the penalty of from four (4) months of arrests mayor as minimum to one (1) year and one (1)
day of prision correccional as maximum.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

FIRST DIVISION
[G.R. No. 164443 : June 18, 2010]
ERIBERTO S. MASANGKAY, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

DECISION

Every criminal conviction must draw its strength from the prosecution's evidence. The evidence must be such that the constitutional presumption
of innocence is overthrown and guilt is established beyond reasonable doubt. The prosecutorial burden is not met when the circumstances can
yield to different inferences. Such equivocation betrays a lack of moral certainty to support a judgment of conviction.

This Petition for Review[1] assails the March 16, 2004 Decision[2] and the July 9, 2004 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CR No.
25775. The dispositive portion of the assailed Decision reads:

WHEREFORE, the petition is DENIED, and the appealed Decision is AFFIRMED with the MODIFICATION that Eriberto Masangkay is instead meted
the penalty of imprisonment for a term of Six (6) months and One (1) day of prision correccional minimum.

SO ORDERED.[4]

Factual Antecedents

Petitioner Eriberto Masangkay (Eriberto), his common-law wife Magdalena Ricaros (Magdalena), Cesar Masangkay (Cesar) and his wife Elizabeth
Masangkay (Elizabeth), and Eric Dullano were the incorporators and directors of Megatel Factors, Inc. (MFI) which was incorporated in June
1990.[5]

On December 29, 1993 Eriberto filed with the Securities and Exchange Commission (SEC) a Petition for the Involuntary Dissolution[6] of MFI for
violation of Section 6 of Presidential Decree (PD) No. 902-A. The named respondents were MFI, Cesar and Elizabeth.[7] The said petition was made
under oath before a notary public, and alleged among others:

3. At or around September 1, 1993, respondent Elizabeth A. Masangkay prepared or caused to be prepared a Secretary's Certificate which states:

That at a special meeting of the Board of Directors of the said corporation held at its principal office on December 5, 1992, the following resolution
by unanimous votes of the directors present at said meeting and constituting a quorum was approved and adopted:

RESOLVED, as it is hereby resolved that Lot No. 2069-A-2 situated at Bo. Canlalay, Biñan, Laguna containing an area of 3,014 square meters
covered by Transfer Certificate of Title No. T-210746 be exchanged with 3,700 shares of stock of the corporation worth or valued at P370,000.00 by
way of a "Deed of Exchange with Cancellation of Usufruct".

xxxx

4. Said secretary's certificate is absolutely fictitious and simulated because the alleged meeting of the Board of Directors held on December 5, 1992
did not actually materialize.

xxxx

5. Using the said falsified and spurious document, x x x respondents executed another fictitious document known as the "Deed of Exchange with
Cancellation of Usufruct".

The contract purporting to be a transfer of 3,700 shares of stock of MFI in return for a piece of a land (Lot No. 2064-A-2) located at Canlalay,
Biñan, Laguna and owned by minor child Gilberto Ricaros Masangkay is void.

Article 1409 of the New Civil Code states:

"Art. 1409. The following contracts are inexistent and void from the beginning.

xxxx

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time of the transaction;

xxxx

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived."

The aforementioned contract is indeed simulated and fictitious because they defrauded minor child Gilberto Ricaros Masangkay and deprived him
of his own property without any consideration at all.

Records of the MFI revealed that minor child Gilberto Ricaros Masangkay [or] his alleged guardian Magdalena S. Ricaros never became a
stockholder at any point in time of MFI.

x x x x[8]

The case remains pending to date.[9]

Claiming that Eriberto lied under oath when he said that there was no meeting of the Board held on December 5, 1992 and that the Deed of
Exchange with Cancellation of Usufruct is a fictitious instrument, the respondent in the SEC case, Cesar, filed a complaint for perjury[10] against
Eriberto before the Office of the Provincial Prosecutor of Rizal.
Eriberto raised the defense of primary jurisdiction. He argued that what is involved is primarily an intra-corporate controversy; hence, jurisdiction
lies with the SEC pursuant to Section 6 of PD 902-A, as amended by PD No. 1758. He also insisted that there was a prejudicial question because the
truth of the allegations contained in his petition for involuntary dissolution has yet to be determined by the SEC. These defenses were sustained by
the assistant provincial prosecutor and the complaint for perjury was dismissed for lack of merit.[11]

It was however reinstated upon petition for review[12] before the Department of Justice.[13] Chief State Prosecutor Zenon L. De Guia held that the
petition for involuntary dissolution is an administrative case only and thus cannot possibly constitute a prejudicial question to the criminal case. He
also rejected the claim that the SEC has exclusive authority over the case. The Chief State Prosecutor explained that the prosecution and
enforcement department of the SEC has jurisdiction only over criminal and civil cases involving a violation of a law, rule, or regulation that is
administered and enforced by the SEC. Perjury, penalized under Article 183 of the Revised Penal Code (RPC), is not within the SEC's authority.[14]
Thus, he ordered the conduct of a preliminary investigation, which eventually resulted in the filing of the following information:

That sometime in the month of December 1992,[15] in the City of Mandaluyong, Philippines, a place within the jurisdiction of this Honorable Court,
the above-named accused, did then and there, willfully, unlawfully and feloniously commit acts of perjury in his Petition for Involuntary Dissolution
of Megatel Factors, Inc. based on violation of Section 6 of Presidential Decree 902-A against Megatel Factors, Inc., Cesar Masangkay, Jr. and
Elizabeth Masangkay which he made under oath before a notary authorized to receive and administer oath and filed with the Securities and
Exchange Commission, wherein he made willful and deliberate assertion of a falsehood on a material matter when he declared the following, to
wit: a) the secretary certificate dated September 1, 1993, proposed by Elizabeth Masangkay is fictitious and simulated because the alleged
December 5, 1992, meeting never took place; and, b) the Deed of Exchange with Cancellation of Usufruct is a fictitious document, whereby the
respondents defrauded the minor child Gilberto Ricaros Masangkay, by exchanging the child's 3,014 square meters lot with 3, 700 shares of stock
of the corporation, when in fact no consideration for the transfer was made as Gilberto Ricaros Masangkay or his guardian Magdalena Ricaros has
never been a stockholder of the Corporation at any point in time, when in truth and in fact the accused well knew that the same statements he
made in his petition and which he reaffirmed and made use as part of his evidence in the Securities and Exchange Commission (SEC) are false.[16]

The information was docketed as Criminal Case No. 56495 and raffled to the Metropolitan Trial Court (MeTC) of Mandaluyong City, Branch 59.

Eriberto filed a motion to quash,[17] insisting that it is the SEC which has primary jurisdiction over the case. He also argued that the truth of the
allegations contained in the information is still pending resolution in SEC Case No. 12-93-4650, thereby constituting a prejudicial question to the
perjury case.

The MeTC denied the motion to quash for lack of merit.[18] It held that the fact that the parties to the criminal case are mostly stockholders of the
same corporation does not automatically make the case an intra-corporate dispute that is within the SEC jurisdiction. It likewise held that the fact
that the parties are stockholders is merely incidental and that the subject of the case is a criminal act and hence within the general jurisdiction of
the MeTC. As regards the issue of prejudicial question, the MeTC ruled that the petition before the SEC has nothing to do with the criminal case.
The truth of the statements for which he is being indicted is a matter of defense which the defendant may raise in the criminal case.

Eriberto filed a petition for certiorari before Branch 158 of the Pasig City Regional Trial Court (RTC) to assail the denial of his motion to quash. The
denial was affirmed.[19] He then filed a petition for certiorari before the CA, which was denied for being a wrong mode of appeal.[20]

Failing to suspend the criminal proceedings, Eriberto entered a plea of not guilty during arraignment.[21] He then waived the conduct of a pre-trial
conference.[22]

During trial, the prosecution presented the private complainant Cesar as its sole witness.[23] He testified that on December 5, 1992, a meeting of
the Board of Directors was held at 9:00 o'clock in the morning at the office of MFI in Canlalay, Biñan, Laguna. He presented the minutes of the
alleged meeting and reiterated the details contained therein indicating that the Board unanimously approved Magdalena's proposal to exchange
her son's (Gilberto Masangkay [Gilberto]) property with MFI shares of stock.[24] The prosecution established that one of the signatures appearing
in the minutes belongs to Eriberto.[25] This allegedly belies Eriberto's statement that the December 5, 1992 meeting "did not actually materialize,"
and shows that he knew his statement to be false because he had attended the meeting and signed the minutes thereof. The prosecution also
pointed out that in the proceedings before the guardianship court to obtain approval for the exchange of properties, Eriberto had testified in
support of the exchange.[26] The guardianship court subsequently approved the proposed transaction.[27] The resulting Deed of Exchange
contained Eriberto's signature as first party.[28]

As for Eriberto's statement that the Deed of Exchange was simulated, the prosecution disputed this by again using the minutes of the December 5,
1992 meeting, which states that the property of Gilberto will be exchanged for 3,700 MFI shares.

For his defense, Eriberto asserted that the December 5, 1992 meeting did not actually take place. While he admitted signing, reading and
understanding the minutes of the alleged meeting, he explained that the minutes were only brought by Cesar and Elizabeth to his house for
signing, but there was no actual meeting.[29]

To support the claim that no meeting took place in 1992, the defense presented Elizabeth, the MFI corporate secretary, who could not remember
with certainty if she had sent out any notice for the December 5, 1992 meeting and could not produce any copy thereof.

The defense also presented a notice of meeting dated October 19, 1993, which called for the MFI board's initial meeting "since its business
operations started," to be held on November 9, 1993. Emphasizing the words "initial meeting," Eriberto argued that this proves that prior to
November 9, 1993, no meeting (including the December 5, 1992 meeting) had ever taken place.

As for the charge that he perjured himself when he stated that the Deed of Exchange was fictitious and simulated for lack of consideration, Eriberto
explained that MFI never issued stock certificates in favor of his son Gilberto. Corporate secretary Elizabeth corroborated this statement and
admitted that stock certificates were never issued to Gilberto or any of the stockholders.[30]

While he admitted supporting the proposed exchange and seeking its approval by the guardianship court, Eriberto maintained that he did so
because he was convinced by private complainant Cesar that the exchange would benefit his son Gilberto. He however reiterated that, to date,
Gilberto is not a stockholder of MFI, thus has not received any consideration for the exchange.

On rebuttal, the prosecution refuted Eriberto's claim that the board had its first actual meeting only on November 9, 1993. It explained that the
November 9, 1993 meeting was the initial meeting "since business operations began", because MFI obtained permit to conduct business only in
1993. But the November 9, 1993 meeting was not the first meeting ever held by the board of directors. The prosecution presented the secretary's
certificates of board meetings held on April 6, 1992[31] and September 5, 1992[32] -- both before November 9, 1993 and both signed by
Eriberto.[33] At this time, business operations have not yet begun because the company's hotel building was still under construction. The said
secretary's certificates in fact show that MFI was still sourcing additional funds for the construction of its hotel.[34]

Ruling of the Metropolitan Trial Court

On October 18, 2000, the MeTC rendered a judgment[35] holding that the prosecution was able to prove that the December 5, 1992 meeting
actually took place and that petitioner attended the same as evidenced by his signature in the minutes thereof. As for Eriberto's statement that the
Deed of Exchange was "fictitious," the MeTC held that his participation in the approval and execution of the document, as well as his avowals
before the guardianship court regarding the proposed exchange all militate against his previous statement. Petitioner was thus found guilty as
charged and sentenced to imprisonment of two months of arresto mayor minimum and medium, as minimum, to one year and one day of arresto
mayor maximum and prison correccional minimum, as maximum.[36]

Ruling of the Regional Trial Court

Eriberto appealed[37] his conviction to the RTC of Mandaluyong City, Branch 213, which eventually affirmed the appealed judgment.[38] The fallo
of the Decision states that:

WHEREFORE, the decision of October 18, 2000 by Metropolitan Trial Court, Branch 59, Mandaluyong City, convicting the accused-appellant
Eriberto S. Masangkay of the crime of perjury under Article 183 of the Revised Penal Code is hereby affirmed in toto.

SO ORDERED.[39]

Ruling of the Court of Appeals

The CA affirmed the appealed ruling of the trial courts, holding that the prosecution was able to prove that the falsehoods in the petition for
involuntary dissolution were deliberately made. It explained that Eriberto's signatures on the two allegedly fictitious documents show that he
participated in the execution of the Deed of Exchange and was present in the December 5, 1992 meeting. Having participated in these two matters,
Eriberto knew that these were not simulated and fictitious, as he claimed in his verified petition for involuntary dissolution of MFI. Thus, he
deliberately lied in his petition.[40]

The CA rejected petitioner's argument that the two statements were not material. It ruled that they were material because petitioner even cited
them as principal basis for his petition for involuntary dissolution.[41]

The appellate court found no merit in the issue of prejudicial question. It held that the result of the petition for involuntary dissolution will not be
determinative of the criminal case, which can be resolved independently.[42]

The CA however, corrected the imposed penalty on the ground that the trial court was imprecise in its application of the Indeterminate Sentence
Law. The CA meted the penalty of imprisonment for a term of six months and one day of prision correccional minimum.[43]

Petitioner moved for reconsideration[44] which was denied.[45]

Hence, this petition.[46]

Issues

Petitioner submits the following issues for review:

Whether there was deliberate assertion of falsehood

II

Whether the TRUTHFUL allegation in the petition for involuntary dissolution that there was no meeting is material to the petition

III

Whether perjury could prosper while the main case remains pending[47]

Since this is a case involving a conviction in a criminal case, the issues boil down to whether the prosecution was able to prove the accused's guilt
beyond reasonable doubt.

Our Ruling

We rule that the prosecution failed to prove the crime of perjury beyond reasonable doubt.

Article 183 of the RPC provides:

False testimony in other cases and perjury in solemn affirmation. - The penalty of arresto mayor in its maximum period to prision correccional in its
minimum period shall be imposed upon any person who, knowingly making untruthful statements and not being included in the provisions of the
next preceding articles shall testify under oath, or make an affidavit, upon any material matter before a competent person authorized to administer
an oath in cases in which the law so requires.

Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any of the falsehoods mentioned in this and the three
preceding articles of this section, shall suffer the respective penalties provided therein.
For perjury to exist, (1) there must be a sworn statement that is required by law; (2) it must be made under oath before a competent officer; (3) the
statement contains a deliberate assertion of falsehood; and (4) the false declaration is with regard to a material matter.[48]

The presence of the first two elements is not disputed by the petitioner and they are indeed present in the instant case. The sworn statements
which contained the alleged falsehoods in this case were submitted in support of the petition for involuntary dissolution, as required by Sections
105 and 121 of the Corporation Code.

The petition was also verified by the petitioner before a notary public[49]--an officer duly authorized by law to administer oaths. This verification
was done in compliance with Section 121 of the Corporation Code.[50]

It is the elements of deliberate falsehood and materiality of the false statements to the petition for involuntary dissolution which are contested.

On the element of materiality, a material matter is the main fact which is the subject of the inquiry or any fact or circumstance which tends to
prove that fact, or any fact or circumstance which tends to corroborate or strengthen the testimony relative to the subject of inquiry, or which
legitimately affects the credit of any witness who testifies.[51]

Petitioner filed a petition for involuntary dissolution of MFI based on Section 105 of the Corporate Code, which states:

Section 105. Withdrawal of stockholder or dissolution of corporation. - In addition and without prejudice to the other rights and remedies available
to a stockholder under this Title, any stockholder of a close corporation may, for any reason, compel the said corporation to purchase his shares at
their fair value, which shall not be less than their par or issued value, when the corporation has sufficient assets in his books to cover its debts and
liabilities exclusive of capital stock: Provided, That any stockholder of a close corporation may, by written petition to the Securities and Exchange
Commission, compel the dissolution of such corporation whenever any of the acts of the directors, officers or those in control of the corporation is
illegal, or fraudulent, or dishonest, or oppressive or unfairly prejudicial to the corporation or any stockholder, or whenever corporate assets are
being misapplied or wasted.

He stated in his petition for involuntary dissolution that:

xxxx

4. Said secretary's certificate is absolutely fictitious and simulated, because the alleged meeting of the Board of Directors held on December 5,
1992 did not actually materialize.

xxxx

5. Using the said falsified and spurious document, x x x respondents executed another fictitious document known as the Deed of Exchange with
Cancellation of Usufruct.

xxxx

The aforementioned contract is indeed simulated and fictitious because they defrauded minor child Gilberto Ricaros Masangkay and deprived him
of his own property without any consideration at all.

xxxx

8. The foregoing acts and deeds of the respondents, done in evident bad faith and in conspiracy with one another, are seriously fraudulent and
illegal because they constitute estafa through falsification of documents, punishable under Articles 315 and 171 of the Revised Penal Code.

9. Likewise, said acts and deeds are feloniously prejudicial to the stockholders of MFI, including petitioner, as corporate assets are being misapplied
and wasted.

10. MFI should therefore be ordered dissolved after appropriate proceedings before this Honorable Commission, in accordance with Sections 105
and 121 of the New Corporation Code x x x.[52]

The statements for which the petitioner is tried for perjury are the very grounds he relied upon in his petition for corporate dissolution. They refer
to acts of the MFI directors which are allegedly fraudulent, illegal and prejudicial, and which would allegedly justify corporate dissolution under
Section 105 of the Corporation Code. Evidently, these statements are material to his petition for involuntary dissolution. The element of materiality
is therefore present.

The prosecution, however, failed to prove the element of deliberate falsehood.

The prosecution has the burden of proving beyond reasonable doubt the falsehood of petitioner's statement that the December 5, 1992 meeting
"did not actually materialize." In other words, the prosecution has to establish that the said meeting in fact took place, i.e., that the directors were
actually and physically present in one place at the same time and conferred with each other.

To discharge this burden, the prosecution relied mainly on the minutes of the alleged December 5, 1992 meeting, signed by the accused, which are
inconsistent with his statement that the December 5, 1992 meeting did not actually materialize. According to the minutes, a meeting actually took
place. On the other hand, according to the petitioner's statement in the petition for dissolution, the meeting did not actually materialize or take
place. The two statements are obviously contradictory or inconsistent with each other. But the mere contradiction or inconsistency between the
two statements merely means that one of them is false. It cannot tell us which of the two statements is actually false. The minutes could be true
and the sworn statement false. But it is equally possible that the minutes are false and the sworn statement is true, as explained by the petitioner
who testified that the minutes were simply brought to his house for signature, but no meeting actually transpired. Given the alternative
possibilities, it is the prosecution's burden to affirmatively prove beyond reasonable doubt that the first statement (the minutes) is the true one,
while the other statement (in the petition for dissolution) is the false one.

We have held before that a conviction for perjury cannot be obtained by the prosecution by merely showing the inconsistent or contradictory
statements of the accused, even if both statements are sworn. The prosecution must additionally prove which of the two statements is false and
must show the statement to be false by evidence other than the contradictory statement.[53] The rationale for requiring evidence other than a
contradictory statement is explained thus:

x x x Proof that accused has given contradictory testimony under oath at a different time will not be sufficient to establish the falsity of his
testimony charged as perjury, for this would leave simply one oath of the defendant as against another, and it would not appear that the testimony
charged was false rather than the testimony contradictory thereof. The two statements will simply neutralize each other; there must be some
corroboration of the contradictory testimony. Such corroboration, however, may be furnished by evidence aliunde tending to show perjury
independently of the declarations of testimony of the accused.[54]

In this case, however, the prosecution was unable to prove, by convincing evidence other than the minutes, that the December 5, 1992 meeting
actually took place. It merely presented, aside from the minutes, the testimony of private complainant Cesar, who is a respondent in the corporate
dissolution case filed by the petitioner and is therefore not a neutral or disinterested witness.[55] The prosecution did not present the testimony of
the other directors or participants in the alleged meeting who could have testified that the meeting actually occurred. Neither did the prosecution
offer any explanation why such testimony was not presented. It likewise failed to present any evidence that might circumstantially prove that on
December 5, 1992, the directors were physically gathered at a single place, and there conferred with each other and came up with certain
resolutions. Notably, the prosecution failed to present the notice for the alleged meeting. The corporate secretary, Elizabeth, who was presented
by the petitioner, could not even remember whether she had sent out a prior notice to the directors for the alleged December 5, 1992 meeting.
The lack of certainty as to the sending of a notice raises serious doubt as to whether a meeting actually took place, for how could the directors have
been gathered for a meeting if they had not been clearly notified that such a meeting would be taking place?

The insufficiency of the prosecution's evidence is particularly glaring considering that the petitioner had already explained the presence of his
signature in the minutes of the meeting. He testified that while the meeting did not actually take place, the minutes were brought to his house for
his signature. He affixed his signature thereto because he believed that the proposed exchange of the assets, which was the subject of the minutes,
would be beneficial to his child, Gilberto. Acting on this belief, he also supported the approval of the exchange by the guardianship court.

Under these circumstances, we cannot say with moral certainty that the prosecution was able to prove beyond reasonable doubt that the
December 5, 1992 meeting actually took place and that the petitioner's statement denying the same was a deliberate falsehood.

The second statement in the petition for involuntary dissolution claimed to be perjurious reads:

5. Using the said falsified and spurious document, respondents executed another fictitious document known as the Deed of Exchange with
Cancellation of Usufruct.

The contract purporting to be a transfer of 3,700 shares of stock of MFI in return for a piece of land (Lot No. 2064-A-2) located at Canlalay, Biñan,
Laguna and owned by minor child Gilberto Masangkay is void.

Article 1409 of the New Civil Code states:

Article 1409. The following contracts are inexistent and void from the beginning:

xxxx

(2) those which are absolutely simulated or fictitious;

(3) those whose cause or object did not exist at the time of the transaction;

xxxx

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.

The aforementioned contract is indeed simulated and fictitious because they defrauded minor child Gilberto Ricaros Masangkay and deprived him
of his own property without any consideration at all.

Records of the MFI revealed that minor child Gilberto Ricaros Masangkay [or] his alleged guardian Magdalena S. Ricaros never became a
stockholder at any point in time of MFI.

In short, the petitioner is being charged with deliberate falsehood for his statement that the deed of exchange is fictitious. To support the
accusation, the prosecution proved that petitioner assented to the said Deed of Exchange by virtue of his signatures in the minutes of the alleged
December 5, 1992 meeting and on the instrument itself, and his participation in procuring the guardianship court's approval of the transaction.
These allegedly show that the exchange was not fictitious and that Eriberto knew it.

We cannot agree with this line of reasoning. Petitioner's imputation of fictitiousness to the Deed of Exchange should not be taken out of context.
He explained in paragraph 5 of his petition for involuntary dissolution that the Deed of Exchange is simulated and fictitious pursuant to Article 1409
of the Civil Code, because it deprived Gilberto Masangkay of his property without any consideration at all. To justify his allegation that Gilberto did
not receive anything for the exchange, he stated in the same paragraph that Gilberto never became a stockholder of MFI (MFI stocks were
supposed to be the consideration for Gilberto's land). This fact was subsequently proven by the petitioner through the corporate secretary
Elizabeth, who admitted that MFI never issued stocks in favor of the stockholders. This testimony was never explained or rebutted by the
prosecution. Thus, petitioner's statement that the exchange was "simulated and fictitious x x x because they x x x deprived [Gilberto] of his own
property without any consideration at all" cannot be considered a deliberate falsehood. It is simply his characterization of the transaction, based on
the fact that Gilberto did not receive consideration for the exchange of his land.

As importantly, petitioner's statements in paragraph 5 of the petition for involuntary dissolution about the nature of the Deed of Exchange are
conclusions of law, and not factual statements which are susceptible of truth or falsity. They are his opinion regarding the legal character of the
Deed of Exchange. He opined that the Deed of Exchange was fictitious or simulated under Article 1409 of the Civil Code, because MFI supposedly
did not perform its reciprocal obligation to issue stocks to Gilberto in exchange for his land. His opinion or legal conclusion may have been wrong
(as failure of consideration does not make a contract simulated or fictitious),[56] but it is an opinion or legal conclusion nevertheless. An opinion or
a judgment cannot be taken as an intentional false statement of facts.[57]
We recognize that perjury strikes at the very administration of the laws; that it is the policy of the law that judicial proceedings and judgments shall
be fair and free from fraud; that litigants and parties be encouraged to tell the truth, and that they be punished if they do not.[58] However, it is
also at the heart of every criminal proceeding that every person is presumed innocent until proven guilty beyond reasonable doubt.

Given the foregoing findings, there is no more need to discuss the issue involving the propriety of proceeding with the perjury case while the civil
case for corporate dissolution is pending.

WHEREFORE, the petition is GRANTED. The assailed March 16, 2004 Decision of the Court of Appeals in CA-G.R. GR No. 25775 and its July 9, 2004
Resolution, are REVERSED and SET ASIDE. Petitioner Eriberto S. Masangkay is ACQUITTED of the charge of perjury on the ground of REASONABLE
DOUBT.

SO ORDERED.

Corona, C.J., (Chairperson), Velasco, Jr., Leonardo-De Castro, and Perez, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 192565 February 28, 2012

UNION BANK OF THE, PHILIPPINES and DESI TOMAS, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BRION, J.:

We review in this Rule 45 petition, the decision1 of the Regional Trial Court, Branch 65, Makati City (RTC-Makati City) in Civil Case No. 09-1038. The
petition seeks to reverse and set aside the RTC-Makati City decision dismissing the petition for certiorari of petitioners Union Bank of the
Philippines (Union Bank) and Desi Tomas (collectively, the petitioners). The RTC found that the Metropolitan Trial Court, Branch 63, Makati City
(MeTC-Makati City) did not commit any grave abuse of discretion in denying the motion to quash the information for perjury filed by Tomas.

The Antecedents

Tomas was charged in court for perjury under Article 183 of the Revised Penal Code (RPC) for making a false narration in a Certificate against Forum
Shopping. The Information against her reads:

That on or about the 13th day of March 2000 in the City of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there willfully, unlawfully and feloniously make untruthful statements under oath upon a material matter
before a competent person authorized to administer oath which the law requires to wit: said accused stated in the
Verification/Certification/Affidavit of merit of a complaint for sum of money with prayer for a writ of replevin docketed as [Civil] Case No. 342-00 of
the Metropolitan Trial Court[,] Pasay City, that the Union Bank of the Philippines has not commenced any other action or proceeding involving the
same issues in another tribunal or agency, accused knowing well that said material statement was false thereby making a willful and deliberate
assertion of falsehood.2

The accusation stemmed from petitioner Union Bank’s two (2) complaints for sum of money with prayer for a writ of replevin against the spouses
Eddie and Eliza Tamondong and a John Doe. The first complaint, docketed as Civil Case No. 98-0717, was filed before the RTC, Branch 109, Pasay
City on April 13, 1998. The second complaint, docketed as Civil Case No. 342-000, was filed on March 15, 2000 and raffled to the MeTC, Branch 47,
Pasay City. Both complaints showed that Tomas executed and signed the Certification against Forum Shopping. Accordingly, she was charged of
deliberately violating Article 183 of the RPC by falsely declaring under oath in the Certificate against Forum Shopping in the second complaint that
she did not commence any other action or proceeding involving the same issue in another tribunal or agency.

Tomas filed a Motion to Quash,3 citing two grounds. First, she argued that the venue was improperly laid since it is the Pasay City court (where the
Certificate against Forum Shopping was submitted and used) and not the MeTC-Makati City (where the Certificate against Forum Shopping was
subscribed) that has jurisdiction over the perjury case. Second, she argued that the facts charged do not constitute an offense because: (a) the third
element of perjury – the willful and deliberate assertion of falsehood – was not alleged with particularity without specifying what the other action
or proceeding commenced involving the same issues in another tribunal or agency; (b) there was no other action or proceeding pending in another
court when the second complaint was filed; and (c) she was charged with perjury by giving false testimony while the allegations in the Information
make out perjury by making a false affidavit.

The MeTC-Makati City denied the Motion to Quash, ruling that it has jurisdiction over the case since the Certificate against Forum Shopping was
notarized in Makati City.4 The MeTC-Makati City also ruled that the allegations in the Information sufficiently charged Tomas with perjury.5 The
MeTC-Makati City subsequently denied Tomas’ motion for reconsideration.6

The petitioners filed a petition for certiorari before the RTC-Makati City to annul and set aside the MeTC-Makati City orders on the ground of grave
abuse of discretion. The petitioners anchored their petition on the rulings in United States v. Canet7 and Ilusorio v. Bildner8 which ruled that venue
and jurisdiction should be in the place where the false document was presented.

The Assailed RTC Decision

In dismissing the petition for certiorari, the RTC-Makati City held:

[I]nsofar as the petitioner’s stance is concerned[,] the more recent case of [Sy Tiong Shiou v. Sy] (GR Nos. 174168 & 179438, March 30, 2009)
however, reaffirms what has been the long standing view on the venue with respect to perjury cases. In this particular case[,] the high court
reiterated the rule that the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was
committed, or where any of its essential ingredients occurred. It went on to declare that since the subject document[,] the execution of which was
the subject of the charge[,] was subscribed and sworn to in Manila[,] then the court of the said territorial jurisdiction was the proper venue of the
criminal action[.]

xxxx

x x x Given the present state of jurisprudence on the matter, it is not amiss to state that the city court of Makati City has jurisdiction to try and
decide the case for perjury inasmuch as the gist of the complaint itself which constitute[s] the charge against the petitioner dwells solely on the act
of subscribing to a false certification. On the other hand, the charge against the accused in the case of Ilusorio v. Bildner, et al., based on the
complaint-affidavits therein[,] was not simply the execution of the questioned documents but rather the introduction of the false evidence through
the subject documents before the court of Makati City.9 (emphasis ours)

The RTC-Makati City ruled that the MeTC-Makati City did not commit grave abuse of discretion since the order denying the Motion to Quash was
based on jurisprudence later than Ilusorio. The RTC-Makati City also observed that the facts in Ilusorio are different from the facts of the present
case. Lastly, the RTC-Makati City ruled that the Rule 65 petition was improper since the petitioners can later appeal the decision in the principal
case. The RTC-Makati City subsequently denied the petitioner’s motion for reconsideration.10
The Petition

The petitioners pray that we reverse the RTC-Makati City decision and quash the Information for perjury against Tomas. The petitioners contend
that the Ilusorio ruling is more applicable to the present facts than our ruling in Sy Tiong Shiou v. Sy Chim.11 They argued that the facts in Ilusorio
showed that the filing of the petitions in court containing the false statements was the essential ingredient that consummated the perjury. In Sy
Tiong, the perjurious statements were made in a General Information Sheet (GIS) that was submitted to the Securities and Exchange Commission
(SEC).

Interestingly, Solicitor General Jose Anselmo I. Cadiz shared the petitioners’ view. In his Manifestation and Motion in lieu of Comment (which we
hereby treat as the Comment to the petition), the Solicitor General also relied on Ilusorio and opined that the lis mota in the crime of perjury is the
deliberate or intentional giving of false evidence in the court where the evidence is material. The Solicitor General observed that the criminal intent
to assert a falsehood under oath only became manifest before the MeTC-Pasay City.

The Issue

The case presents to us the issue of what the proper venue of perjury under Article 183 of the RPC should be – Makati City, where the Certificate
against Forum Shopping was notarized, or Pasay City, where the Certification was presented to the trial court.

The Court’s Ruling

We deny the petition and hold that the MeTC-Makati City is the proper venue and the proper court to take cognizance of the perjury case against
the petitioners.

Venue of Action and Criminal Jurisdiction

Venue is an essential element of jurisdiction in criminal cases. It determines not only the place where the criminal action is to be instituted, but also
the court that has the jurisdiction to try and hear the case. The reason for this rule is two-fold. First, the jurisdiction of trial courts is limited to well-
defined territories such that a trial court can only hear and try cases involving crimes committed within its territorial jurisdiction.12 Second, laying
the venue in the locus criminis is grounded on the necessity and justice of having an accused on trial in the municipality of province where
witnesses and other facilities for his defense are available.13

Unlike in civil cases, a finding of improper venue in criminal cases carries jurisdictional consequences. In determining the venue where the criminal
action is to be instituted and the court which has jurisdiction over it, Section 15(a), Rule 110 of the 2000 Revised Rules of Criminal Procedure
provides:

(a) Subject to existing laws, the criminal action shall be instituted and tried in the court or municipality or territory where the offense was
committed or where any of its essential ingredients occurred. [emphasis ours]

The above provision should be read in light of Section 10, Rule 110 of the 2000 Revised Rules of Criminal Procedure which states:

Place of commission of the offense. – The complaint or information is sufficient if it can be understood from its allegations that the offense was
committed or some of its essential ingredients occurred at some place within the jurisdiction of the court, unless the particular place where it was
committed constitutes an essential element of the offense charged or is necessary for its identification.

Both provisions categorically place the venue and jurisdiction over criminal cases not only in the court where the offense was committed, but also
where any of its essential ingredients took place. In other words, the venue of action and of jurisdiction are deemed sufficiently alleged where the
Information states that the offense was committed or some of its essential ingredients occurred at a place within the territorial jurisdiction of the
court.

Information Charging Perjury

Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended, contains the requirement for a Certificate against Forum Shopping. The
Certificate against Forum Shopping can be made either by a statement under oath in the complaint or initiatory pleading asserting a claim or relief;
it may also be in a sworn certification annexed to the complaint or initiatory pleading. In both instances, the affiant is required to execute a
statement under oath before a duly commissioned notary public or any competent person authorized to administer oath that: (a) he or she has not
theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
or her knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the
present status thereof; and (c) if he or she should thereafter learn that the same or similar action or claim has been filed or is pending, he or she
shall report that fact within five days therefrom to the court wherein his or her aforesaid complaint or initiatory pleading has been filed. In relation
to the crime of perjury, the material matter in a Certificate against Forum Shopping is the truth of the required declarations which is designed to
guard against litigants pursuing simultaneous remedies in different fora.14

In this case, Tomas is charged with the crime of perjury under Article 183 of the RPC for making a false Certificate against Forum Shopping. The
elements of perjury under Article 183 are:

(a) That the accused made a statement under oath or executed an affidavit upon a material matter.

(b) That the statement or affidavit was made before a competent officer, authorized to receive and administer oath.

(c) That in the statement or affidavit, the accused made a willful and deliberate assertion of a falsehood.

(d) That the sworn statement or affidavit containing the falsity is required by law or made for a legal purpose.15 (emphasis ours)

Where the jurisdiction of the court is being assailed in a criminal case on the ground of improper venue, the allegations in the complaint and
information must be examined together with Section 15(a), Rule 110 of the 2000 Revised Rules of Criminal Procedure. On this basis, we find that
the allegations in the Information sufficiently support a finding that the crime of perjury was committed by Tomas within the territorial jurisdiction
of the MeTC-Makati City.
The first element of the crime of perjury, the execution of the subject Certificate against Forum Shopping was alleged in the Information to have
been committed in Makati City. Likewise, the second and fourth elements, requiring the Certificate against Forum Shopping to be under oath
before a notary public, were also sufficiently alleged in the Information to have been made in Makati City:

That on or about the 13th day of March 2000 in the City of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there willfully, unlawfully and feloniously make untruthful statements under oath upon a material matter
before a competent person authorized to administer oath which the law requires to wit: said accused stated in the
Verification/Certification/Affidavit x x x.16

We also find that the third element of willful and deliberate falsehood was also sufficiently alleged to have been committed in Makati City, not
Pasay City, as indicated in the last portion of the Information:

[S]aid accused stated in the Verification/Certification/Affidavit of merit of a complaint for sum of money with prayer for a writ of replevin docketed
as [Civil] Case No. 342-00 of the Metropolitan Trial Court[,] Pasay City, that the Union Bank of the Philippines has not commenced any other action
or proceeding involving the same issues in another tribunal or agency, accused knowing well that said material statement was false thereby making
a willful and deliberate assertion of falsehood.17 (underscoring ours)

Tomas’ deliberate and intentional assertion of falsehood was allegedly shown when she made the false declarations in the Certificate against
Forum Shopping before a notary public in Makati City, despite her knowledge that the material statements she subscribed and swore to were not
true. Thus, Makati City is the proper venue and MeTC-Makati City is the proper court to try the perjury case against Tomas, pursuant to Section
15(a), Rule 110 of the 2000 Revised Rules of Criminal Procedure as all the essential elements constituting the crime of perjury were committed
within the territorial jurisdiction of Makati City, not Pasay City.

Referral to the En Banc

The present case was referred to the En Banc primarily to address the seeming conflict between the division rulings of the Court in the Ilusorio case
that is cited as basis of this petition, and the Sy Tiong case that was the basis of the assailed RTC-Makati City ruling.

The Cited Ilusorio and Sy Tiong Cases

The subject matter of the perjury charge in Ilusorio involved false statements contained in verified petitions filed with the court for the issuance of
a new owner’s duplicate copies of certificates of title. The verified petitions containing the false statements were subscribed and sworn to in Pasig
City, but were filed in Makati City and Tagaytay City. The question posed was: which court (Pasig City, Makati City and/or Tagaytay City) had
jurisdiction to try and hear the perjury cases?

We ruled that the venues of the action were in Makati City and Tagaytay City, the places where the verified petitions were filed. The Court
reasoned out that it was only upon filing that the intent to assert an alleged falsehood became manifest and where the alleged untruthful
statement found relevance or materiality. We cited as jurisprudential authority the case of United States. v. Cañet18 which ruled:

It is immaterial where the affidavit was subscribed and sworn, so long as it appears from the information that the defendant, by means of such
affidavit, "swore to" and knowingly submitted false evidence, material to a point at issue in a judicial proceeding pending in the Court of First
Instance of Iloilo Province. The gist of the offense charged is not the making of the affidavit in Manila, but the intentional giving of false evidence in
the Court of First Instance of Iloilo Province by means of such affidavit. [emphasis and underscoring deleted]

In Sy Tiong, the perjured statements were made in a GIS which was subscribed and sworn to in Manila. We ruled that the proper venue for the
perjury charges was in Manila where the GIS was subscribed and sworn to. We held that the perjury was consummated in Manila where the false
statement was made. As supporting jurisprudence, we cited the case of Villanueva v. Secretary of Justice19 that, in turn, cited an American case
entitled U.S. v. Norris.20 We ruled in Villanueva that –

Perjury is an obstruction of justice; its perpetration well may affect the dearest concerns of the parties before a tribunal. Deliberate material
falsification under oath constitutes the crime of perjury, and the crime is complete when a witness' statement has once been made.

The Crime of Perjury: A Background

To have a better appreciation of the issue facing the Court, a look at the historical background of how the crime of perjury (specifically, Article 183
of the RPC) evolved in our jurisdiction.

The RPC penalizes three forms of false testimonies. The first is false testimony for and against the defendant in a criminal case (Articles 180 and
181, RPC); the second is false testimony in a civil case (Article 182, RPC); and the third is false testimony in other cases (Article 183, RPC). Based on
the Information filed, the present case involves the making of an untruthful statement in an affidavit on a material matter.

These RPC provisions, however, are not really the bases of the rulings cited by the parties in their respective arguments. The cited Ilusorio ruling,
although issued by this Court in 2008, harked back to the case of Cañet which was decided in 1915, i.e., before the present RPC took effect.21 Sy
Tiong, on the other hand, is a 2009 ruling that cited Villanueva, a 2005 case that in turn cited United States v. Norris, a 1937 American case.
Significantly, unlike Canet, Sy Tiong is entirely based on rulings rendered after the present RPC took effect.22

The perjurious act in Cañet consisted of an information charging perjury through the presentation in court of a motion accompanied by a false
sworn affidavit. At the time the Cañet ruling was rendered, the prevailing law on perjury and the rules on prosecution of criminal offenses were
found in Section 3, Act No. 1697 of the Philippine Commission, and in Subsection 4, Section 6 of General Order No. 5823 for the procedural aspect.

Section 3 of Act No. 1697 reads:

Sec. 3. Any person who, having taken oath before a competent tribunal, officer, or person, in any case in which a law of the Philippine Islands
authorizes an oath to be administered, that he will testify, declare, depose, or certify truly, or that any written testimony, declaration, disposition,
or certificate by him subscribed is true, willfully and contrary to such oath states or subscribes any material matter which he does not believe to be
true, is guilty of perjury, and shall be punished by a fine of not more than two thousand pesos and by imprisonment for not more than five years;
and shall moreover, thereafter be incapable of holding any public office or of giving testimony in any court of the Philippine Islands until such time
as the judgment against him is reversed.

This law was copied, with the necessary changes, from Sections 539224 and 539325 of the Revised Statutes of the United States.26 Act No. 1697
was intended to make the mere execution of a false affidavit punishable in our jurisdiction.27

In turn, Subsection 4, Section 6 of General Order No. 58 provided that the venue shall be the court of the place where the crime was committed.

As applied and interpreted by the Court in Cañet, perjury was committed by the act of representing a false document in a judicial proceeding.28
The venue of action was held by the Court to be at the place where the false document was presented since the presentation was the act that
consummated the crime.

The annotation of Justices Aquino and Griño-Aquino in their textbook on the RPC29 interestingly explains the history of the perjury provisions of
the present RPC and traces as well the linkage between Act No. 1697 and the present Code. To quote these authors:30

Art. 180 was taken from art. 318 of the Old Penal Code and art. 154 of Del Pan’s Proposed Correctional Code, while art. 181 was taken from art.
319 of the old Penal Code and Art. 157 of Del Pan’s Proposed Correctional Code. Said arts. 318 and 319, together with art. 321 of the old Penal
Code, were impliedly repealed by Act 1697, the Perjury Law, passed on August 23, 1907, which in turn was expressly repealed by the
Administrative Code of 1916, Act 2657. In view of the express repeal of Act 1697, arts. 318 and 321 of the old Penal Code were deemed revived.
However, Act 2718 expressly revived secs. 3 and 4 of the Perjury Law. Art. 367 of the Revised Penal Code repealed Act Nos. 1697 and 2718.

It should be noted that perjury under Acts 1697 and 2718 includes false testimony, whereas, under the Revised Penal Code, false testimony
includes perjury. Our law on false testimony is of Spanish origin, but our law on perjury (art. 183 taken from sec. 3 of Act 1697) is derived from
American statutes. The provisions of the old Penal Code on false testimony embrace perjury committed in court or in some contentious
proceeding, while perjury as defined in Act 1697 includes the making of a false affidavit. The provisions of the Revised Penal Code on false
testimony "are more severe and strict than those of Act 1697" on perjury. [italics ours]

With this background, it can be appreciated that Article 183 of the RPC which provides:

The penalty of arresto mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any person, who
knowingly makes untruthful statements and not being included in the provisions of the next preceding articles, shall testify under oath, or make an
affidavit, upon any material matter before a competent person authorized to administer an oath in cases in which the law so requires. [emphasis
supplied; emphases ours]

in fact refers to either of two punishable acts – (1) falsely testifying under oath in a proceeding other than a criminal or civil case; and (2) making a
false affidavit before a person authorized to administer an oath on any material matter where the law requires an oath.

As above discussed, Sy Tiong – decided under Article 183 of the RPC – essentially involved perjured statements made in a GIS that was subscribed
and sworn to in Manila and submitted to the SEC in Mandaluyong City. Thus, the case involved the making of an affidavit, not an actual testimony
in a proceeding that is neither criminal nor civil. From this perspective, the situs of the oath, i.e., the place where the oath was taken, is the place
where the offense was committed. By implication, the proper venue would have been the City of Mandaluyong – the site of the SEC – had the
charge involved an actual testimony made before the SEC.

In contrast, Cañet involved the presentation in court of a motion supported and accompanied by an affidavit that contained a falsity. With Section
3 of Act No. 1697 as basis, the issue related to the submission of the affidavit in a judicial proceeding. This came at a time when Act No. 1697 was
the perjury law, and made no distinction between judicial and other proceedings, and at the same time separately penalized the making of false
statements under oath (unlike the present RPC which separately deals with false testimony in criminal, civil and other proceedings, while at the
same time also penalizing the making of false affidavits). Understandably, the venue should be the place where the submission was made to the
court or the situs of the court; it could not have been the place where the affidavit was sworn to simply because this was not the offense charged in
the Information.

The case of Ilusorio cited the Cañet case as its authority, in a situation where the sworn petitions filed in court for the issuance of duplicate
certificates of title (that were allegedly lost) were the cited sworn statements to support the charge of perjury for the falsities stated in the sworn
petitions. The Court ruled that the proper venue should be the Cities of Makati and Tagaytay because it was in the courts of these cities "where the
intent to assert an alleged falsehood became manifest and where the alleged untruthful statement finds relevance or materiality in deciding the
issue of whether new owner’s duplicate copies of the [Certificate of Condominium Title] and [Transfer Certificates of Title] may issue."31 To the
Court, "whether the perjurious statements contained in the four petitions were subscribed and sworn in Pasig is immaterial, the gist of the offense
of perjury being the intentional giving of false statement,"32 citing Cañet as authority for its statement.

The statement in Ilusorio may have partly led to the present confusion on venue because of its very categorical tenor in pointing to the
considerations to be made in the determination of venue; it leaves the impression that the place where the oath was taken is not at all a material
consideration, forgetting that Article 183 of the RPC clearly speaks of two situations while Article 182 of the RPC likewise applies to false testimony
in civil cases.

The Ilusorio statement would have made perfect sense had the basis for the charge been Article 182 of the RPC, on the assumption that the
petition itself constitutes a false testimony in a civil case. The Cañet ruling would then have been completely applicable as the sworn statement is
used in a civil case, although no such distinction was made under Cañet because the applicable law at the time (Act No. 1697) did not make any
distinction.

If Article 183 of the RPC were to be used, as what in fact appears in the Ilusorio ruling, then only that portion of the article, referring to the making
of an affidavit, would have been applicable as the other portion refers to false testimony in other proceedings which a judicial petition for the
issuance of a new owner’s duplicate copy of a Certificate of Condominium Title is not because it is a civil proceeding in court. As a perjury based on
the making of a false affidavit, what assumes materiality is the site where the oath was taken as this is the place where the oath was made, in this
case, Pasig City.

Procedurally, the rule on venue of criminal cases has been subject to various changes from the time General Order No. 58 was replaced by Rules
106 to 122 of the Rules of Court on July 1, 1940. Section 14, Rule 106 of the Rules of Court provided for the rule on venue of criminal actions and it
expressly included, as proper venue, the place where any one of the essential ingredients of the crime took place.1âwphi1 This change was
followed by the passage of the 1964 Rules of Criminal Procedure,33 the 1985 Rules of Criminal Procedure,34 and the 2000 Revised Rules of
Criminal Procedure which all adopted the 1940 Rules of Criminal Procedure’s expanded venue of criminal actions. Thus, the venue of criminal cases
is not only in the place where the offense was committed, but also where any of its essential ingredients took place.

In the present case, the Certification against Forum Shopping was made integral parts of two complaints for sum of money with prayer for a writ of
replevin against the respondent spouses Eddie Tamondong and Eliza B. Tamondong, who, in turn, filed a complaint-affidavit against Tomas for
violation of Article 183 of the RPC. As alleged in the Information that followed, the criminal act charged was for the execution by Tomas of an
affidavit that contained a falsity.

Under the circumstances, Article 183 of the RPC is indeed the applicable provision; thus, jurisdiction and venue should be determined on the basis
of this article which penalizes one who "make[s] an affidavit, upon any material matter before a competent person authorized to administer an
oath in cases in which the law so requires." The constitutive act of the offense is the making of an affidavit; thus, the criminal act is consummated
when the statement containing a falsity is subscribed and sworn before a duly authorized person.

Based on these considerations, we hold that our ruling in Sy Tiong is more in accord with Article 183 of the RPC and Section 15(a), Rule 110 of the
2000 Revised Rules of Criminal Procedure. To reiterate for the guidance of the Bar and the Bench, the crime of perjury committed through the
making of a false affidavit under Article 183 of the RPC is committed at the time the affiant subscribes and swears to his or her affidavit since it is at
that time that all the elements of the crime of perjury are executed. When the crime is committed through false testimony under oath in a
proceeding that is neither criminal nor civil, venue is at the place where the testimony under oath is given. If in lieu of or as supplement to the
actual testimony made in a proceeding that is neither criminal nor civil, a written sworn statement is submitted, venue may either be at the place
where the sworn statement is submitted or where the oath was taken as the taking of the oath and the submission are both material ingredients of
the crime committed. In all cases, determination of venue shall be based on the acts alleged in the Information to be constitutive of the crime
committed.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. Costs against the petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-44573 July 15, 1937
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
LUCIO CAPINLAC, defendant-appellee.

DIAZ, J.:

This is an appeal taken from the order of the Court of First Instance of Tarlac, sustaining the defendant's demurrer to the information filed by the
fiscal, which reads as follows:

That on or about February 6, 1931, in the municipality of Tarlac, Province of Tarlac, Philippine Islands, and within the jurisdiction of this Honorable
Court, the abovenamed defendant willfully, maliciously and feloniously, knowingly making untruthful statements, made and subscribed an affidavit
before the register of deeds, Mr. Marcelo M. Sibal, who is authorized by law to receive and administer oaths, upon facts pertinent to the issuance
of an order of the Court of First Tarlac for the purpose of causing the register of Deeds of said province to issue to him a new copy of his homestead
title No. 201 (Patent No. 3555), knowing such facts stated by him in the affidavit in question to be false.

Contrary to law.

The defendant's demurrer was based principally upon the averment that the facts alleged in the information do not constitute a crime. The lower
court, being of the opinion that the fact alleged in the information do not constitute either the crime of false testimony under article 183 of the
Revised Penal Code or that of offering false testimony in evidence defined in article 184 of said Code, held that the demurrer was well founded and
ordered the dismissal of the case. The provincial fiscal appealed from the other of dismissal.

While the Solicitor-General agrees to the conclusions arrived at by the lower court to the effect that the facts enlarged do not really constitute false
testimony under any of the two above cited articles, he contends, for the first time in this instance, that the appealed order is not in accordance
with law and that the defendants demurrer should have been overruled on the ground that the facts alleged in the information constitute
falsification of a public document. This court is of the opinion that the conclusion of the lower court is correct, but not precisely for the reason that
the fact alleged in the information do not constitute any of the crimes defined in articles 183 and 184 of the Revised Penal Code, but because they
do not constitute the crime of perjury defined and punished in section 3 of Act No. 1697. It should be taken into consideration that the acts
imputed to the defendant took place on February 6, 1931, according to the allegations of the information, and the law then in force in the matter
of perjury was said Act No. 1697 because the Revised Penal Code, articles 184 et seq. of which punish false testimony, took effect only on January
1, 1932.

Even, if this court were to consider the question under the provision of said section 3 of Act No. 1697, the conclusion arrived at would be the same
on the ground that the information do not allege facts constituting perjury. In order that this crime could exist, it was necessary that the false
statements of the defendant referred to material matter and not merely to facts pertinent to the case in connection with which they were made.
The allegation contained in the information in question is to the effect that the defendant's false statements referred only to facts pertinent to the
case mentioned by him without stating, however, in what said facts consist. The provisions of the Revised Penal Code are not applicable to the case
at bar because they are more severe and strict than those of Act No. 1697. The rule is that penal laws have a retroactive effect only in so far as they
favor the person guilty of a felony (article 22, Revised Penal Code).

Without making it understood that this court sanctions the practice of raising for the first time in this instance a question which could have very
well been raised in the lower court, it is held that neither is the information sufficient to impute to the defendant the crime of falsification of a
public document. It does the effect that such is the charge against the defendant. On the contrary, he is clearly false testimony or perjury. As stated
in the case of United States vs. Enriquez (1 Phil., 179), one of the purposes of every information is to notify the defendant of the criminal acts
imputed to him so that he can duly prepare his defense. The information should state the facts and the circumstances constituting the crime
charged in such a way that a person of common understanding may easily comprehend and be informed of what it is about.

For the foregoing consideration, this court holds that the defendant's demurrer to the information filed against him in accordance with law.

Let the costs be assessed de oficio. So ordered.

Avanceña, C.J., Villa-Real, Abad Santos, Imperial, Laurel and Concepcion, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
VICENTE DIAZ, complainant,
vs.
RUPERTO KAPUNAN, respondent.

MALCOLM, J.:

This action for malpractice brought by Vicente Diaz against Attorney Ruperto Kapunan, has to do with the conduct of Attorney Kapunan during the
legal proceedings which followed the business troubles of Vicente Diaz and Secundino de Mendezona, and particularly relates to the conduct of
Attorney Kapunan in civil case No. 2098 of the Court of First Instance of Leyte. The ultimate question on which we would concentrate attention
concerns the agreement between Diaz and Kapunan at the time of the sale of the property of Mendoza, whereby Kapunan, on the promise of Diaz
to pay him P1,000, agreed to desist from further participation in the sale, all in alleged violation of article 1459 of the Civil Code and article 542 of
the Penal Code.

Omitting the irrelevant matter interjected into this case, the principal facts of record are the following:

In 1917, Vicente Diaz and Secundino de Mendezona formed a partnership and entered into extensive business transactions in the Province of
Leyte. The capital of the partnership was P380,000. Unfortunately, however, the business failed to prosper, with the result that on liquidation, it
was found to have suffered a loss of P67,000. When Diaz and Mendezona came to settle up their affairs, they eventually formulated a document of
sale and mortgage in which Mendezona recognized a debt in favor of Diaz in the sum of P80,000 and an additional sum of P10,000 owing to Diaz,
laid upon the hacienda "Mapuyo," and to be paid within the term of one year. When the year had expired Mendezona was not to be found and his
family was unable to meet the payment. There followed the usual proceedings for foreclosure and sale, which, after considerable delay, resulted in
the hacienda's being offered for sale at public auction.

At the time fixed for the sale, December 23, 1922, there appeared Vicente Diaz, accompanied by his lawyer Emilio Benitez, and Attorney Ruperto
Kapunan. Luis Velarde, the deputy sheriff of Leyte, is authority for the statement that Kapunan told him that he, Kapunan, was ready to bid on the
property up to P16,000 in order to assist the Mendezona family which was in financial straits. At any rate, the bidding was opened by Kapunan
offering P12,000 for the property and with Diaz and Kapunan raising the bids until finally Diaz offered P12,500. There the bids stopped on account
of Diaz and Kapunan entering into the agreement, of decisive importance, which we next quote in full:

We, Vicente Diaz and Ruperto Kapunan, both being the bidders at the auction held for the sale of the properties of Secundino Mendezona, do
hereby agreed that Don Ruperto Kapunan should withdraw his bid and refrain from bidding at the said auction as he does hereby withdraw his bid,
and in consideration thereof, the said Mr. Diaz offers him a premium of one thousand pesos (P1,000) which, out of consideration to said Don
Vicente Diaz, Mr. Kapunan accepts and has, for this reason, refrained from bidding in competition with said Mr. Diaz.lawphi1.net

Tacloban, Leyte, December 23, 1922.

(Sgd.) "V. DIAZ. (Sgd.) RUPERTO KAPUNAN."

Following the termination of the sheriff's sale, Diaz on December 26, 1922, gave Kapunan P500 of the P1,000 mentioned in the above quoted
document. Diaz further followed the usual procedure to take over the property of Mendezona pursuant to his bid of P12,500, which covered the
amount of the mortgage with its accumulated interest and with the judicial expenses.

Although it was on December 23, 1922, that Diaz and Kapunan entered into the agreement, Diaz could only wait until January 4, 1923, following, to
lay before this court charges against Attorney Kapunan for alleged unprofessional conduct. Undoubtedly, before Kapunan had knowledge of the
disbarment proceedings, on January 10, 1923, he presented a motion in the Court of First Instance of Leyte asking that he be permitted to retain
the P500 in question, in part payment of his professional fees. Later, on February 4, 1923, when Kapunan must have had knowledge of the
disbarment proceedings, he filed another motion, withdrawing his former motion and asking the court to permit him to turn over the P500 to Diaz,
which Judge Causing refused to do on the ground that it was a personal matter. Nevertheless, on July 10, 1923, the clerk of the Court of First
Instance of Leyte handed the P500 to Diaz who, in turn, receipted for that amount. lawphil.net

From correspondence, it further is evident that the family of Mendezona was led to believe that the P500 would shortly be sent them. Without
doubt, the Mendezona family would have been gratified to receive even the P500 pittance out of the business wreck in Leyte of the senior
Mendezona.

During much of the time here mentioned, Kapunan was the attorney of Mendezona. Kapunan was given extensive authority by the letter of
Mendezona of April 12, 1919. When Kapunan took part in the sale, it must be assumed that he was bidding in representation of his client and for
the benefit of the client.

It remains to be said that following the presentation of the charges against Attorney Kapunan in this court, he was given an opportunity to answer,
and the usual investigation of his professional conduct was made by the provincial fiscal of Leyte acting under the supervision of the Attorney-
General. From the report of the fiscal, indorsed by the Attorney-General, three charges seem to have been considered. The first two, relating to
Kapunan's attempt to represent both the parties in the case, and to molest and disturb Diaz by frivolous motions, the law officer of the
Government finds not substantiated; and with this conclusion we fully agree. The third charge is more serious and has to do with Kapunan having
intervened in the manner in which he did in the sale of the property of his client Mendezona. The Attorney-General is of the opinion on this point
that the facts constitute a flagrant violation of the provisions of article 1459 of the Civil Code and article 542 of the Penal Code. "In view thereof, it
is recommended that corrective measures commensurate with the irregularity committed by Attorney Kapunan, be taken against him."

Article 1459 of the Civil Code was held in force in the case of Hernandez vs. Villanueva ([1920], 40 Phil., 775). It provides that the following persons,
naming them, "cannot take by purchase, even at a public or judicial auction, either in person or through the mediation of another." The provision
contained in the last paragraph of said article is made to include lawyers, with respect to any property or rights involved in any litigation in which
they may take party by virtue of their profession and office. We do not believe this article has been infringed by the respondent because he has not
purchased property at a public or judicial auction and because his participation in the auction was in representation of his client. It has been held
that an execution sale to the attorney of the defendant is not unlawful if made in good faith, with the consent of the client, and without any
purpose of defrauding the latter's creditors. (2 R. C. L., 1011; 1 Thornton on Attorneys at Law, pp. 298, 299; Smith vs. Smith [1848], 1 Iowa, 307.)
The more puzzling question relates to the alleged violation by Attorney Kapunan of article 542 of the Penal Code. This article punishes "any person
who shall solicit any gift or promise as a consideration for agreeing to refrain from taking part in any public auction." The crime is consummated by
the mere act of soliciting a gift or promise for the purpose of abstaining from taking part in the auction. Not permitting our minds to be confused
by the varied explanations of Diaz and Kapunan, the document formulated by them and hereinbefore quoted, demonstrates that Kapunan, on the
promise of Diaz to pay P1,000, refrained from further participation in the sale of the property of Mendezona, which is exactly the situation covered
by article 542 of the Penal Code.

Public policy discountenances combinations or agreements on the part of bidders at execution sales, the objects and effects of which are to stifle
competition. The courts will consider an agreement between a judgment creditor and one claiming an interest in the thing about to be sold under
an execution, that neither shall bid against the other, as void, unless all parties concerned know of the arrangement and consent thereto. Execution
sales should be open to free and full competition, in order to secure the maximum benefit for the debtor. Article 542 of the Penal Code is,
therefore, a wise provision even though rarely invoked, and should be used to discourage the stifling of bids at judicial sales. (23 C.J., 647; Packard
vs. Bird and Chapman [1870], 40 Cal., 378; 3 Viada, Codigo Penal, 594.)

We conclude that Attorney Kapunan has been guilty of a technical violation of article 542 of the Penal Code. But we cannot adopt the vigorous
recommendation of the Attorney-General, for we consider present certain mitigating circumstances which exert an influence in favor of the
respondent. In the first place, as disclosed by the judicial records, no reported prosecution under article 542 has been attempted, which is eloquent
proof of the practical disuse of this article; and the Spanish jurisprudence, while indicative of the meaning of the article, relies principally on the
decisions of the French Court of Cassation. (See Code of Napoleon, arts. 222, 223; decisions of the French Court of Cassation of October 16, 1844,
May 15, 1857, and January 8, 1863.) In the next place, the complainant Diaz is equally guilty with the respondent Kapunan. And lastly, Kapunan
appears to have been acting in good faith for his client, although adopting an irregular procedure, and although attempting to make tardy
restitution of the money received by him.

Our judgment is that Attorney Ruperto Kapunan shall stand reprimanded and that the complainant, Vicente Diaz, shall immediately return to the
clerk of the Court of First Instance of Leyte the P500 received by Diaz from the clerk and receipted for by Diaz, and the clerk of court shall transmit
the P500 to Secundino de Mendezona or, in case of his absence, to Miss Carmen de Mendezona. Costs shall be taxed in accordance with the
provisions of the Code of Civil Procedure. So ordered.

Johnson, Avanceña, Villamor, Ostrand and Johns, JJ., concur.

Romualdez, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-40203 August 21, 1990
PATERNO J. OUANO, petitioner,
vs.
COURT OF APPEALS and FRANCISCO B. ECHAVEZ, respondents.

NARVASA, J.:

The appellate proceedings at bar treat of a parcel of land with an area of about 3,710 square meters, situated in Mandawe, Cebu, Identified as
Philippine Railway Lot No. 3-A-1 It was covered by Torrens Title No. 7618 in the name of the registered owner, Rehabilitation 'Finance Corporation
(RFC), now the Development Bank of the Philippines (DBP). Adjoining Lot 3-A-1 are lands belonging to Francisco Echavez, private respondent
herein, and petitioner Paterno J. Ouano. What will have to be resolved are the conflicting claims over this lot by the vendee thereof, Echavez, and
Ouano.

The property was offered for sale by public bidding by the RFC on April 1, 1958.1 Actually this was the second public bidding scheduled for the
property. The first 2 in which both Ouano and Echavez participated, together with others was nullified on account of a protest by Ouano. 3

Now, it appears that prior to the second bidding, Ouano and Echavez orally agreed that only Echavez would make a bid, and that if it was accepted,
they would divide the property in proportion to their adjoining properties. To ensure success of their enterprise, they also agreed to induce the
only other party known to be interested in the property-a group headed by a Mrs. Bonsucan to desist from presenting a bid.4 They broached the
matter to Mrs. Bonsucan's group. The latter agreed to withdraw, as it did in fact withdraw from the sale; and Ouano's wife paid it P2,000 as
reimbursement for its expenses. 5

As expected, the highest bid submitted, and thus accepted by the RFC, was that of Francisco Echavez, who offered P27,826.00 for the land .6
Echavez paid the sum of P5,565.00 representing 20% deposit of the prefferred price. 7

A week later, Echavez sent a letter to Ouano regarding the P2,000.00 paid by the latter's wife to the Bonsucan group. 8 It said:

Because the owner of the money which I deposited for your share has stipulated that today is the last day for the return of his money ... I would
like to request you that for the P2,000.00 which you have advanced to Mrs. Bonsucan and company, I will just give you 250 sq. meters right in front
of your house at P8.05 per sq. meter ... (N.B. 250 x P8.05 equals P2,012.50.)

Still later, or two weeks after Echavez won the bid, a document simply entitled "Agreement," was signed by him and Ouano. 9 That document,
prepared by Echavez in his own handwriting, reads as follows: 10 |par KNOW ALL MEN BY THESE PRESENTS:

Inasmuch as it was Francisco B. Echavez who won in the public bidding held at the RFC office for Lot 3-A-1 last April, 1958, it is hereby agreed
between us, Francisco B. Echavez and Paterno J. Ouano, that we share the said lot between us according to the herein sketch:

(Sketch omitted ...)

That each of us takes care in paying direct to the RFC office Cebu Branch, the installments, interests and amortizations on a ten-year plan in our
respective names, such that we would request the RFC to have the said Lot 3-A-1 subdivided into two portions: A portion of Lot 3-A-1 for Francisco
B. Echavez to contain 1882.5 sq. m. more or less depending on the actual survey based on the above sketch, and another portion of Lot 3-A-1 for
Paterno J. Ouano to contain 1827.5 sq. m. more or less also based on the above sketch.

That they have agreed to share proportionately all legal expenses that may be assessed and incurred in connection with the acquisition of the said
lot in case such expenses are levied as a whole against Francisco B. Echavez, but if such expenses are levied separately after the RFC consents to the
subdivision and registration in our respective names our share of the said lot, then we take care individually of paying such expenses if there be
any.

In witness whereof, we hereby set our hand and sign this agreement this 15th day of April, 1958 at Mandawe, Cebu, Philippines, subject to the
approval of the RFC, Cebu Branch and Manila.

On the same day that the "Agreement" was executed, Echavez set down in writing a computation of the sharing of expenses of his joint venture
with Ouano, viz.: 11

1827.5 — No. of sq. meters for Paterno Ouano 7.50 91375 127925

P13706.25 .20 P 2741.25

-1016.55 — Share of Echavez for the P2,000.00 given to Mrs. Bonsucan & Companions

P1,724.70 — Balance payable by Mr. Ouano to FB Echavez for the deposit made by the latter at the RFC. This is subject to the approval of the RFC,
Cebu Branch.

Mandawe, April 15, 1958.

(Sgd.) F.B. ECHAVEZ.

Thereafter, on various dates, Ouano and/or his wife delivered sums of money to Echavez aggregating P1,725.00, obviously in payment of the
balance indicated in Echavez's computation just mentioned, viz.: P500.00 on April 19,1958, another P500.00 on April 20, and P725.00 on April
27,1958. Receipts therefor were given by Echavez, all similarly worded to the effect that the money was being received "as part of their
reimbursement for the deposit (of P5,565.00) I have made with the RFC for Lot 3-A-1 which I won in the bidding and which lot I have consented to
share with Mr. Paterno J. Ouano, subject to the approval of the RFC. 12
However, the RFC never approved the sharing agreement between Echavez and Ouano concerning Lot 3-A-1. It approved the sale of the lot to
Echavez only, on May 9, 1958, on the condition that the purchase price of P27,825.00 be paid in cash. Apparently Echavez found great initial
difficulty in complying with this condition. It took all of four years, and patient negotiation and diligent effort on his part, for him ultimately to
acquire title to the property, which came about in December, 1963. His travails are succinctly narrated by the Trial Court as follows: 13

... Apparently, the successful bidder was caught flatfooted, for he was not able to comply with this condition, notwithstanding the fact that he has
been making efforts to acquire the property (See Exhibit 21, letter of March 29, 1958; also Exhibit 22). So, he exerted much effort to change the
terms of the sale from cash to monthly amortization plan (Exhs. 24 and 10). But the Rehabilitation Finance Corporation was adamant. The terms of
the bid giving the option to pay the balance of the purchase price either in cash or within ten years on monthly amortization plan at 6% interest
notwithstanding, said Corporation denied defendant's request in a letter dated September 18, 1958 signed by Chairman Romualdez (Exh. 11). This
went on for more than 4-½ years, with none of the parties herein having secured the conformity of the RFC or DBP to a novation of the original
terms of the sale. Thus, the said sale was finally cancelled, and the deposit of P5,549.72 made by the defendant to the RFC forfeited as of April 4,
1962 (Exh. 12). However, on July 18, 1962, upon request of the defendant, this cancellation was considered under the condition, among others,
that the price of the sale of P27,825.00 be payable 20% down and the balance in 5 years at 8% interest per annum on the monthly amortization
plan, commencing retroactively on June 9, 1958, and that a payment of P2,000.00 be applied to the total arrearages of P25,799.00, which had to be
paid within 90 days. The defendant paid on August 28, 1962 a further amount of P2,000.00. On September 3, 1962, the deed of conditional sale,
covering the property in question, was entered into by the DBP and the defendant (Exh. D, same as Exh. 4), culminating in the signing of the
corresponding promissory note dated September 7,1962 (Exh. E, same as Exh. 5). It is admitted that the defendant is now the registered owner of
the property, after having fully paid P29,3218.87 on account of the price to the Development Bank of the Philippines, as per Deed of Absolute Sale
dated December 9,1963 (Exhs. 14 and 34).

It was pursuant to the absolute sale of December 9, 1963 just mentioned, that a Torrens title (TCT No. 10776) was issued in Echavez's name. 14

Ouano, in his turn, tried to have DBP either accept and implement his sharing agreement with Echavez, or allow him to pay the full price of the lot
in Echavez's behalf. By his own account, he sent a letter dated June 3, 1 963 to the DBP, "handcarried by his wife," "requesting among others, that
he be permitted to pay immediately either for his share in the aforesaid lot comprising 1,828 sq. meters at the bid price of P7.50 per sq. meter
including charges, or for the whole lot;" and that he in fact tried to make such payment but the Bank turned down his request.15

Shortly after his representation with the DBP were rebuffed more precisely on June 24, 1963, months before the deed of absolute sale was
executed by the DBP in Echavez's favor Paterno J. Ouano filed suit for "specific performance and reconveyance" in the Court of First Instance of
Cebu against Francisco Echavez and the Development Bank of the Philippines (DBP).16

In his complaint,17 Ouano recited substantially the facts just related, and further alleged that —

... on June 3, 1963 plaintiffs wife and his attorney conferred with defendant ... Echavez for the purpose of again requesting said defendant to sign a
document which would be notarized and to permit plaintiff to pay for his share direct to the defendant DBP, but said defendant refused and
instead informed them that there had been no agreement regarding joint bidding and joint ownership of Lot 3-A-l.

The complaint was amended a few weeks later, chiefly to allege that DBP was on the point of rescinding its contract with Echavez; and that Ouano's
offer to the DBP to pay in Echavez's behalf the price of the lot in full (P28,206.61), had been rejected; and that consequently, and "to show his good
faith," he had consigned the amount with the Court "for and in behalf of defendant ... Echavez.18 The amended complaint specifically prayed that
—

1) pending trial, and upon such bond as may be fixed by the Court, a writ of preliminary injunction issue to restrain Echavez and RFC "from
rescinding, cancelling or in any way terminating the conditional sale contract with respect to Lot 3-A-1 TCT 7618;"

2) after trial, Echavez be ordered" to sign an agreement in accord with Annex A and the foregoing allegations which should be notarized;"

3) by virtue of aforesaid agreement and his deposit in Court of P28,206.61, Ouano be declared as "legally subrogated to the rights, interest
and participation of defendant ... Echavez in Lot 3-A-1 to the extent of 1,828.5 sq. m.

4) Echavez be ordered to reimburse Ouano P14,358.37 corresponding to defendant ... Echavez' share of 1,882.5 sq. m.

5) should Echavez be unable to pay said amount within 15 days, Ouano be declared "legally subrogated to the rights, interest and
participation of ... Echavez in Lot 3-A-1 to the extent of 1,882.5 sq. m.;"

6) DBP be ordered to consider the deposit made by Ouano for and in behalf of Echavez as "complete and valid payment of Lot 3 — A-1 and
to execute the necessary documents of sale in (the former's) favor ... for 1,827.5 sq. m. and in favor of ... Echavez for 1,882.5 sq. m.

7) DBP be ordered to hold the deed of sale in favor of Echavez for 1,882 sq. m. in abeyance until the latter has reimbursed Ouano "the
amount of P14,385.3 7 corresponding to ... Echavez's share of 1,882.5 sq. m and should Echavez be unable to do so within 15 days, DBP be ordered
to "execute said deed of sale in favor of plaintiff and

8) Echavez be ordered to pay Ouano P1,000.00 as attorney's fees, P5,000.00 as moral damages, and P5,000.00 as exemplary damages, as
well as the costs of suit.

The DBP moved to dismiss the amended complaint, alleging that no cause of action was therein stated against it.19 The Court found the motion to
be well taken, overruled Ouano's opposition thereto, dismissed the amended complaint and dissolved the writ of preliminary injunction, by Order
dated August 27, 1963. 20 It subsequently denied Ouano's motion for reconsideration. 21 Ouano appealed but on learning of the absolute sale of
Lot 3-A-1 executed by DBP in Echavez's favor on December 9, 1963-which according to him rendered moot the case for legal subrogation and
injunction as far as DBP was concerned he withdrew the appeal and moved instead for admission of a second amended complaint, 22 which the
Court admitted in the absence of opposition thereto. In the second amended complaint, dated January 4, 1964, 23 the DBP was no longer included
as a party. Echavez was the sole defendant. The second amended complaint adverted to the dismissal of the case as against the DBP and
additionally alleged that Echavez, "in gross and evident bad faith, mortgaged the whole of Lot 3-A-1 to one Dr. Serafica." It prayed particularly that
Echavez be commanded:
1. To execute a public document embodying and confirming the oral contract of joint ownership of Lot 3-A-1, TCT 7618, of April 1, 1958
between plaintiff and defendant...;

2. To execute a deed of reconveyance of 1,827.5 sq. m. of Lot 3-A-1 ... after reimbursement of the sum of P14,821.24 by the plaintiff;

3. To pay plaintiff P1,000 as attorney's fees, P5,000.00 as moral damages, P5,000.00 as exemplary damages and the expenses of litigation;
and

4. To pay the costs.

Trial ensued after which the Trial Court rendered judgment on June 29,1968. It found that the sharing agreement between Ouano and Echavez
could not be enforced in view of the absence of consent of the RFC (DBP) which the latter never gave; apart from this, the agreement had an
unlawful cause and hence could "Produce no effect whatever" in accordance with Article 1352 of the Civil Code, because involving a felony defined
in Article 185 of the Revised Penal Code, to wit:

ART. 185. Machinations in public auctions. — any person who shall solicit any gift or promise as a consideration for refraining from taking part in
any public auction, and any person who shall attempt to cause bidders to stay away from an auction by threats, gifts, promises, or any other
artifice, with intent to cause the reduction of the price of the thing auctioned, shall suffer the penalty of prision correccional in its minimum period
and a fine ranging from 10 to 50 per centum of the value of the thing auctioned.

The decision accordingly dismissed the Second Amended Complaint, ordered Ouano, "to vacate the portion of Lot No. 3-A-1 he occupied pursuant
to Exhibit C," and also dismissed Echavez's counterclaim.

Ouano appealed to the Court of Appeals. Here he fared no better. He enjoyed initial success, to be sure. Judgment was promulgated on February
28, 1974" setting aside the Trial Court's judgment, and directing: (a) Echavez "to execute a deed of conveyance in favor of plaintiff of 1827. 5
square meters as the latter's share in the property in controversy and (b) Ouano "to pay defendant the amount of P14,821.24 representing the cost
of his share." However, on a second motion for reconsideration presented by Echavez, the Appellate Court, on November 21, 1974, reconsidered
its decision of February 28, 1974 and entered another "affirming in toto the decision appealed from without costs.25 This second decision found
that the documentary evidence 26 preponderantly established that "the parties have manifested their intention to subordinate their agreement to
the approval of the RFC." "Consequently," the decision stated,

... had the plaintiffs and defendant's proposal been accepted by the RFC (DBP) two separate contracts, covering the two segregated lots according
to the sketch would have come into existence, to be executed by the RFC separately in favor of the pi plaintiff and the defendant. But
unfortunately, the RFC disapproved the proposal as the sale was to be for cash. As a result, the obligatory force of the 'agreement' or the consent
of the parties, which was subordinated to the taking effect of the suspensive condition that the agreement be subject to the approval of the RFC
never happened. This being the case, the agreement never became effective. The rule is settled that:

When the consent of a party to a contract is given subject to the fulfillment of a suspensive condition, the contract is not perfected unless the
condition is first complied with' (Ruperto vs. Cosca 26 Phil. 227).

And when the obligation assumed by a party to a contract is expressly subjected to a condition, the obligation cannot be enforced against him
unless the condition is complied with (Wise & Co. vs. Kelly, 37 Phil. 696; Philippine National Bank vs. Philippine Trust Co., 68 Phil. 48).

At best, the non-fulfillment of the suspensive condition has the effect of negating the conditional obligation. It has been held that what
characterizes a conditional obligation is the fact that its efficacy or obligatory force is subordinated to the happening of a future and uncertain
event, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed Gaite vs.
Fonacier, L-11827, July 31, 1961, 2 SCRA 831).

Motions for reconsideration and for oral argument filed by Ouano were denied by Resolutions dated February 6, February 11, and February 21,
1975, the last containing a suggestion "that appellant go to the Higher Court for relief. 27

Ouano is now before this Court, on appeal by certoriari to seek the relief that both the Trial Court and the Court of Appeals have declined to
concede to him. In this Court, he attempts to make the following points, to wit:

1. The verbal agreement between the parties to acquire and share the land in proportion to their respective abutting properties, and
executed by the immediate occupation by the parties of their respective shares in the land, is a perfected consensual contract and not "a mere
promise to deliver something subject to a suspensive condition" (as ruled in the second decision of the Court of Appeals); hence the petitioner is
entitled to compel private respondent to execute a public document for the registration in his name of the petitioner's share in the land in question
pursuant to Art. 1315 of the Civil Code (as held in the first decision of the Court of Appeals).

2. The agreement to acquire and share the land was not subject to a suspensive condition.

3. Assuming in gratia argumenti the agreement to be subject to a suspensive condition, since the condition consisted in obtaining the
approval of the RFC-a third party who could not in any way be compelled to give such approval the condition is deemed constructively fulfilled
because petitioner had done all in his power to comply with the condition, and private respondent, who also had the duty to get such approval, in
effect prevented the fulfillment of the condition by doing nothing to secure the approval.

4. The circumstances show that Echavez clearly acted in bad faith, and it is unjust to allow him to benefit from his bad faith and ingenious
scheme.

Two material facts, however, about which Ouano and Echavez are in agreement, render these questions of academic interest only, said facts being
determinative of this dispute on an altogether different ground. These facts are:

1) that they bad both orally agreed that only Echavez would make a bid at the second bidding called by the RFC, and that if it was accepted,
they would divide the property in proportion to their adjoining properties; and
2) that to ensure success of their scheme, they had also agreed to induce the only other party known to be interested in the property a
group headed by a Mrs. Bonsucan to desist from presenting a bid, 28 as they did succeed in inducing Mrs. Bonsucan's group to withdraw from the
sale, paying said group P2,000 as reimbursement for its expenses. 29

These acts constitute a crime, as the Trial Court has stressed. Ouano and Echavez had promised to share in the property in question as a
consideration for Ouano's refraining from taking part in the public auction, and they had attempted to cause and in fact succeeded in causing
another bidder to stay away from the auction. in order to cause reduction of the price of the property auctioned In so doing, they committed the
felony of machinations in public auctions defined and penalized in Article 185 of the Revised Penal Code, supra.

That both Ouano and Echavez did these acts is a matter of record, as is the fact that thereby only one bid that of Echavez was entered for the 'land
in consequence of which Echavez eventually acquired it. The agreement therefore being criminal in character, the parties not only have no action
against each other but are both liable to prosecution and the things and price of their agreement subject to disposal according to the provisions of
the criminal code. This, in accordance with the so-called pari delicto principle set out in the Civil Code.

Article 1409 of said Code declares as "inexistent and void from the beginning" those contracts, among others, "whose cause, object or purpose is
contrary to law, morals, good customs, public order or public policy," or "expressly prohibited ... by law." Such contracts "cannot be ratified "the
right to set up the defense of illegality (cannot) be waived;" and, Article 1410 adds, the "action or defense for the declaration of the inexistence ...
(thereof) does not prescribe." Furthermore, according to Article 1411 of the same Code 30 —

... When the nullity proceeds from the illegality of the cause or object of the contract, and the act constitutes a criminal offense, both parties being
in pari delicto, they shall have no action against each other, and both shall be prosecuted. Moreover, the provisions of the Penal Code relative to
the disposal of effects or instruments of a crime shall be applicable to the things or the price of the contract.

xxx xxx xxx

The dismissal of Ouano's action by both the Trial Court and the Court of Appeals was thus correct, being plainly in accord with the Civil Code
provisions just referred to.31 Article 1411 also dictates the proper disposition of the land involved, i.e., "the forfeiture of the proceeds of the crime
and the instruments or tools with which it was committed," as mandated by the provisions of Article 45 of the Revised Penal Code, this being
obviously the provision "of the Penal Code relative to the disposal of effects or instruments of a crime" that Article 1411 makes "applicable to the
things or the price of the contract."

WHEREFORE, the appealed decision of the Court of Appeals is MODIFIED, so that in addition to affirming the Trial Court's judgment dismissing
Ouano's complaint and Echavez's counterclaim in Civil Case No. R-8011, Lot No. 3-A-1 subject of said case is ordered FORFEITED in its entirety in
favor of the Government of the Philippines. No pronouncement as to costs. Let copy of this Decision be furnished the Solicitor General.

SO ORDERED.

Cruz, Griño-Aquino and Medialdea, JJ., concur.

Gancayco, J., took no part.

EN BANC
[G.R. No. 2176. April 18, 1905. ]
THE UNITED STATES, Complainant-Appellee, v. CANDIDO FULGUERAS, Defendant-Appellant.

DECISION

MAPA, J. :

The defendant is charged with the crime of seeking to alter the price of things, committed, according to the complaint, as
follows:jgc:chanrobles.com.ph

"That the defendant in the months of March to July, 1904, attributed to himself a supernatural power and, pretending to hold a commission from a
powerful chief in pretending to hold a commission from a powerful chief in Manila, went about distributing papers and proclamations to the
people of Oroquieta, Province of Cagayan de Misamis, spreading subversive and fanatical ideas, and with orders from his alleged chief to lower the
prices of needful commodities and to reform the customs under the penalty of being visited with flood and calamities. That by these machinations
and deceits the defendant succeeded in deceiving ignorant people and causing them to provide themselves with instruments of measure larger
than they formerly had and different from the regular size and also succeeded in making them lower the prices of commodities of everydaylife, all
with violation of law."cralaw virtua1aw library

The court below found all these charges well proven and sentenced the defendant to the penalty of six months’ arresto mayor and to pay a fine of
5,000 pesetas, in accordance with the provisions of article 544 of the Penal Code.

We agree with the conclusions of law and fact set forth in the judgment appealed from, the former being in accordance with the facts in the case
and the latter with the provisions of the mentioned code. In the commission of the penalty prescribed therefor, and it therefore should be imposed
on the defendant in its medium degree and not in its maximum degree as was done by the judgment appealed from.

We affirm the judgment appealed from, it being understood that the penalty imposedd on the defendant shall be four months’ arresto mayor and
a fine of 1,250 pesetas. The defendant shall be credited in the fulfillment of this penalty with one-half of the time which he has remained in prison,
and the imprisonment which he shall suffer by reason of subsidiary liability in case of insolvency shall not exceed one-third of the time of his
principal imprisonment, in accordance with rule 1 of article 50 of the Penal Code. We also impose on defendant the costs in this instance. So
ordered.

Arellano, C.J., Torres, Johnson and Carson, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-9458 November 24, 1914
THE UNITED STATES, plaintiff-appellee,
vs.
J. KYBURZ, defendant-appellant.

CARSON, J.:

Kyburz, the defendant and appellant in this case, was convicted in the court below of a violation of section 6 of Act No. 666 of the Philippine
Commission, which defines and penalizes the fraudulent use of trade-marks and trade names, and was sentenced to pay a fine P200 and costs.

The information charges the commission of the alleged offense as follows:

That on or about and during the period included between the 4th and the 22d days of September, 1913, in the city of Manila, Philippine Islands, the
said J. Kyburz was a merchant and the proprietor of the business known as the Manila Jewelry Store, engaged in the sale of watches, among other
things; that during the same period, and for a number of years prior thereto in the said city of Manila, the commercial firm known by the name of
Greilsammer Hermanos, a partnership duly licensed to do business therein, was also engaged in the sale of watches, including those known as
Meridian watches, the trade-mark in the Philippine Islands for which was then and there owned and registered exclusively by the said firm of
Greilsammer Hermanos, under the laws of the Philippine Islands, which trade-mark consisted of a sphere with the word Meridian in its center,
applied to the case and movements of the Meridian watches; and that during the aforesaid period, in the said city of Manila, Philippine Islands, the
said J. Kyburz, with intent to defraud the public and the said firm of Greilsammer Hermanos, owner of the above-described trade-mark, did then
and there unlawfully, willfully, and feloniously use the word Meridian on cards placed on in connection with his watches, for the purpose of selling
the same as genuine Meridian watches, at his place of business, the said Manila Jewelry Store and with the intention of the making purchasers
believe that the said watches thus offered for sale and sold by the said J. Kyburz, were genuine Meridian watches when in truth and inn fact they
were watches of some other make, to the damage and prejudice of the aforesaid Greilsammer Hermanos. All contrary to law.

Greilsammer Hermanos is a regularly organized partnership engaged in the retail jewelry business in Manila. Since the year 1903 it has imported
from a manufacturing firm in Europe a certain class of watches upon which after due inspection it engraves a trade-mark consisting of a sphere
across which runs a scroll bearing the word Meridian. The watches thus inspected and marked have been advertised and put on sale in this country
for several years under the trade name of Meridian watches. The trade-mark above described was duly registered on or about December, 1908.

In this month of September, 1913, Kyburz, the defendant in this case was the owner of two retail jewelry stores in Manila, located within about two
minutes' walk of each other. He spent most of his time in one of them known as EL Zenith, the other, known as the Manola Jewelry Store, being in
charge of a manager. The defendant admitted that he visited the Manila Jewelry Store several times a week, and it would appear to have been at
all times under his supervision and control.

During the month of September, 1913, a number of watches were displayed in a prominent place in one of the show windows of the Manila
Jewelry Store under a show card or placard (Exhibits B and C) which reads as follows:

MERIDIAN
Ten jewels 20 years guaranty.
At P13.50. Before P16.50.

It appears that the watches thus put on the sale in the defendant's jewelry store purchased from the same manufacturer in Europe from whom
Greilsammer Hermanos purchased the watches upon which they engraved their trade-mark and which they sold under the trade name of Meridian
watches. It would appear furthermore that these watches are substantially identical in quality and design, and apparently are shipped by the
manufacturer from one and the same stock.

The witness Wolfson purchased one of these watches from a clerk employed in the Manila Jewelry Store, who issued to him a written guaranty in
which this watch was described as a Meridian sin marca (unmarked). This guaranty before the signature of both clerk who issued it and the
defendant, the owner of the store. It would appear, however, that the defendant signed the guaranty in blank, leaving it to be filled out by the clerk
at the time of the sale.

The defendant testifying in his own behalf, swore that the clerk was not instructed or authorized to set forth in the guaranty that these watches
were Meridian watches. The clerk himself, who testified that he was not a watch-maker but that he had been working for the defendant for about
four months, said that he first discovered the identity of the Meridian watches with those sold by the defendant upon an occasion he made a
comparison of the two watches and satisfied himself that they were of the same make in every respect. Upon cross-examination, he was unable to
describe the Meridian mark, and his testimony to the effect that he himself made the discovery as to the identity of origin of these watches does
not impress us favorably, and was not accepted as true by the court below. Both the manager of the branch store and the defendant himself
admitted that they were aware of the identity in origin of the two watches, and the defendant went so far as to say that when prospective
purchasers asked him for a meridian watch he informed them that he had the same watch but without the mark Meridian.

The first contention of counsel for appellant is that the trial court in holding Kyburz criminally responsible for the acts of his employees in the
Manila Jewelry Store in offering for sake and in selling watches under the trade name of Meridian watches. It is urged that the trial court erred in
holding that Kyburz directed or authorized the action erred in holding that Kyburz directed or authorized the action of his employees in the Manila
Jewelry Store, in view of the positive denials of that fact by both Kyburz and the clerk who made the sale above mentioned. After a careful review
of the whole record we find nothing which would justify us in holding that the trial court erred in refusing to believe the testimony of these
interested witnesses, and upon the whole record we do not think that we would be justified in disturbing the finding of the trial judge that the offer
to sell and the sale of watches under the trade name of Meridian watches were made with the knowledge and consent, if not by the express
direction of the defendant.
While it is true that in cases of this kind the master cannot be held criminally responsible for the acts of his employees unless they are done by his
direction or with his consent, nevertheless, there can be no question that he is amendable to the criminal law when he assents, either expressly or
impliedly, to the commission of the act, whether he is present or not.

The doctrine, supported by authority, is set forth as follows in 7 Labatt's Master and Servant, section 2566: "So the master is criminally responsible
if he causes the illegal act to be done, or requests, commands, or permits it, or in any manner authorizes it, or aids and abets the servant in its
commission. He cannot, without rendering himself amenable to the criminal law, participate in the offense, or have knowledge of it, or exercise any
control over it, or in any manner assent to it, whether he is present at the time the unlawful act is committed or not."

It is contended on various grounds that the trial court erred in holding that the facts as found by him constituted a violation of the provisions of
section 6 of Act No. 666.

Counsel insists that since defendant did not place the trade-mark or trade name on the watches sold by him, he cannot be held liable for an
infringement of the penal provisions of section 6 of the Act, which prescribe that "any person who, with intent to defraud the public or the owner
of a trade-mark or trade name, shall use the trade-mark of another on his goods offered for sale, . . . shall be punished by a fine of not exceeding
two thousand five hundred dollars, or by imprisonment not exceeding three years, or both, in the discretion of the court. . . ."

But this contention is manifestly untenable in view of the fact that the penal provisions of the statute are extended also in express terms to one
who uses the "trade name of another in his business, occupation, or profession." Indeed one of the distinguishing characteristics of a trade name is
that, unlike trade-marks, they are not necessarily attached or affixed to the goods of the owner.lawph!1.net

Section 5 of the Act provides that: "A trade name is the name, device, or mark by which is intended to be distinguished from that of others the
business, profession, trade, or occupation in which one may be engaged and in which goods are manufactured or sold to the public, work is done
for the public, or professional services are rendered to the public. It is not essential that the trade name should appear on the goods manufactured
or dealt in by the person owning or using the same. It is sufficient if the trade name is used by way of advertisements, signs over the place of
business, upon letter heads, and in other ways to furnish to the public a method of distinguishing the business, trade, or occupation of the person
owning and using such name. Property in trade names shall be as fully protected as property in a trade-mark by the civil remedies provided in
section three of this Act for the protection of property in trade-marks."

Trade names have been frequently confused with trade-marks, and, broadly considered, they do include names which may constitute trade-marks.

More accurately, however, trade names are names which are used in trade to designate a particular business of certain individuals considered is
located, or of a class of goods, but which are not technical trade-marks either because not applied or affixed to goods sent into the market, or
because not capable of exclusive appropriation by anyone as trade-marks. Such trade names may, or may not, be exclusive. Exclusive trade names
are protected very much upon the same principles are trade-marks, and the same rules that govern trade-marks are applied in determining what
may be an exclusive trade name. (38 Cyc., 764, and cases there cited.)

It is further contended that the evidence does not disclose a violation of the penal provisions of section 6 of the Act because it does not appear that
the public was in fact deceived as to the quality of the watches purchased form the defendant, the watches sold by the defendant and the
complaining company having been made by the same manufacturer, and being in fact of exactly the same standard and quality. It is to be
observed, however, that the statute penalizes the use of trade-marks and trade names with intent to defraud either the public or the owner of
such trade-mark or trade name.

Trade names are protected against use or imitation upon the ground of unfair competition, and an examination of the statute clearly indicates its
purpose to protect the manufacturer or dealer as well as the public.

The rule which protects against unfair competition is primarily for the protection of the party against whom such competition is directed, and only
incidentally for the protection of the public. In some of the case language is used which would suggest that the public is under the protection of the
court, but in fact the liability of the article to mislead the public from being misled, except in so far as it is necessary to protect the owner of a
business from its fraudulent invasion by others. If what is done tends to mislead the public, it naturally diverts customers from the complainant, to
the injury of his business. The prohibition is upon so acting as to beguile the public, and thus mislead an intending purchaser into buying the goods
of one person under the belief that he is buying those of a rival. (Paul on Trade-marks, sec. 215.)

The same author in section 209 says that "the law of unfair competition rests upon the simple principle that no person has the right to sell his own
goods as those of another. In other words, the basic rule is that no one shall, by imitation or any unfair device, induce the public to believe that the
goods he offers for sale are the goods of another, and thereby appropriate to himself the value of the reputation which the other has acquired for
his own products or merchandise."

We think that the following citation from the opinion of the Supreme Court of the United States in the case of Menendez vs. Holt (128 U.S., 514),
written by Chief Justice Fuller, quite clearly the grounds upon which the decision of the court below must be sustained:

The fact that Holt & Co. were not the actual manufacturers of the flour upon which they had for years placed the brand in question does not
deprive them of the right to be protected in the use of that brand as a trade-mark.

They used the words La Favorita to designate flour selected by them, in the exercise of their best judgment as equal to a certain standard. The
brand did not indicate by whom the flour was manufactured but it did indicate the origin of its selection and classification. It was equivalent to the
signature of Holt & Co. to a certificate that the flour was the genuine article which had been determined by them to possess a certain degree of
excellence. It did not, of course, in itself indicate quality, for it was merely a fancy name and in a foreign language, but it evidenced that the skill,
knowledge, and judgment of Holt & Co. had been exercised in ascertaining that the particular flour so marked was possessed of a merit rendered
definite by their examination and of a uniformity rendered certain by their selection.

Greilsammer Hermanos import watches of a certain make and standard, stamp them with their trade-mark, put them on the market under the
trade name of Meridian watches, and have advertised them and established a market for them. By so doing they give the public to understand that
watches known in Manila as Meridian watches are of a certain make, standard, and quality, guaranteed by them. A sale of Meridian watches by
them carries with it the guaranty that in their best judgment it is equal to the standard thus established. They do not claim to be the manufacturers
of these watches, but every sale by them of a watch under the trace name thus adopted and advertised implies that their skill and judgment, as
watchmakers and jewelers, has been exercised in ascertaining that this watch is up to the standard established for watches known as Meridian
watches.
Trade names are acquired by adoption and user, and belong to the one who first uses them and gives them value. (Viano vs. Baccigalupo, 183
Mass., 160; Chardron Opera house Co. vs. Loomer, 71 Neb., 785., Liebig's Extract of Meat Co. vs. Liebig Extract Co., 172 Fed., 158.) We think that
there can be no doubt that Greilsammer Hermanos have acquired the exclusive ownership of the trade name Meridian as applied to this class of
watches, and that they are clearly entitled to protection from the use of this trade name by others, not only under the express provisions of section
6 of the Act, but also upon the general grounds which afford protection against unfair competition.

Of course, nothing that has been said should be construed as a holding that Greilsammer Hermanos have ab exclusive right to sell watches of the
make or standard of those on which they engrave their trade-mark, and which are thereafter sold by them under the trade name of Meridian
watches. There is nothing in the record which would indicate that, by contract with the manufacturer or otherwise, they have acquired any such
exclusive right in and to this make of watches or in and to their sale. We hold only that no person is entitled in these Islands to sell watches,
whether of the same make and quality as those of the defendant or of any other make and quality, under the trade name of Meridian watches,
which by adoption and user has become the property of Greilsammer Hermanos. With the infinity of distinguishing names, marks and signs which
are subject to the use and appropriation of makers and dealers in watches, the use of the trade name Meridian by any other firm than Greilsammer
Hermanos can have but one reasonable explanation, and that is the intent to take advantage of the favorable opinion formed by the public of the
quality and standard of the watches sold by that firm under the trade name adopted by it for advertising purposes, and as a guaranty to the public
that such watches have passed through its hands and are up to the standard set by it for watches advertised and sold as Meridian watches.

We find no error in the proceedings prejudicial to the rights of the accused. The judgment entered in the court below should therefore be affirmed,
with the costs of this instance against the appellant. So ordered.

Arellano, C.J., Torres and Araullo, JJ., concur.

Moreland, J., dissents.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-31380 January 13, 1930
E. SPINNER and COMPANY, plaintiff-appellant,
vs.
NEUSS HESSLEIN CORPORATION, defendant-appellee.

STREET, J.:

This action was instituted in the Court of First Instance of Manila on November 23, 1926, by E. Spinner & Co., of Manchester, England, for the
purpose of restraining the defendant, the Neuss Hesslein Corporation, organized under the laws of the Philippine Islands, from using the word
"Wigan," as applied to khaki textiles sold by the defendant in the Philippine Islands, and to recover damages for violation of the plaintiff's trade-
mark right in the word "Wigan" and for alleged unfair competition committed by the defendant in the use of the same. Upon hearing the cause the
trial court absolved the defendant from the complaint, with costs against the plaintiff, and the plaintiff appealed.

There is little or no dispute upon the determinative facts of the case which are subtantially these: E. Spinner & Co. is a copartnership with head
offices in Manchester, England, and Bombay, India, being represented in the Philippine Islands by Wise & Co., a domestic corporation with principal
office in the City of Manila; while the defendant is a corporation organized in December, 1922, under the laws of the Philippine Islands, with its
principal office in the City of Manila. The defendant is a subsidiary of Neuss Hesslein & Co., Inc., of New York, U. S. A., for whom it acts as selling
agent in the Philippine Islands. The plaintiff, E. Spinner & Co., has long been engaged in the manufacture and sale of textile fabrics, including khaki
cloth, with distributing business connection in different parts of the world. Soon after the American occupation of the Philippine Islands, or about
1900, the plaintiff began exporting its khaki into the Philippine Islands through local firms, notable Holliday, Wise & Co., (now Wise & Co.), Smith,
Bell & co., Ltd., and others. Because of the superior qualities of its goods, such as the fastness of its color, the consistency of its texture, and its
proven durability, the plaintiff's khaki made favorable impression in the Philippine market, enjoying a popular favor and preference which resulted
in a lucrative trade. Among the brands of khaki enjoying such favor was the grade indicated by the manufacturer as "Wigan." A higher grade was
marketed by the plaintiff under the brand "Stockport;" while still other grades were put upon the market under the brands "Jackton" and
"Ashford."

All of these different grades of khaki were marketed by the plaintiff under a common trade-mark, which was first registered in the Bureau of
Patents, Copyrights, and Trade-Marks of the Philippine Government in the year 1905. This trade-mark consists of a large label representing the
profiles of two elephant heads placed close to each other in the upper middle center of the label and looking in opposite directions, with trunks
extending respectively to the right and left. This device has for its rectangular border a garland of leaves; while over the point of union between the
two heads appear several flags. Inside the space formed by the trunks of the elephants and the garland of leaves appears a label consisting of the
following words:

LEEMANN & GATTY'S

ORIGINAL
PATENTED FAST
KHAKI DRILL

Agents: Messrs. E. SPINNER & CO.

MANCHESTER & BOMBAY
Quality:................................Yds.

REGISTERED
No. 50,275.

This label was pasted on the outside of each bolt of khaki sold by the plaintiff, the different grades being indicated by the words "Wigan,"
"Stockport," etc., inserted with stencil in the blank space following the word "Quality." The trade-mark proper, as thus used, was a general mark
covering various brands. This practice was followed for more than twenty years, but the plaintiff learned in 1924 that the defendant, the Neuss
Hesslein Corporation, was selling a brand of khaki in the Philippine Islands with the word "Wigan" stenciled on the bolts below the defendant's own
trade-mark. As thus employed by the defendant, the word "Wigan" purports to show the color of the defendant's khaki, but the proof shows that
the word was thus used by the defendant upon khaki of different shades. After discovering this fact, the plaintiff, in April, 1925, caused its trade-
mark, consisting of the two elephant heads, to be again registered in the Bureau of Commerce and Industry, as per certificate No. 4807. In its
essential features, this trade-mark is identical with the trade-mark registered by the plaintiff in 1905, but in the latter trade-mark the word "Wigan"
is inserted after the word "Quality." The purpose of this registration was of course to incorporate the word "Wigan" as an integral part of the
registered trade-mark.

As already stated, the defendant, the Neuss Hesslein Corporation, was organized in the Philippine Islands in December, 1922, as subsidiary of Neuss
Hesslein & Co., Inc., of New York; and beginning with 1923, the defendant has been marketing khaki in the Philippine Islands for the New York
house. But before the organization of the defendant the New York house had, for several years, been selling its khaki in the Philippine Islands,
under two different brands. These were known respectively as the "Five Soldiers" and the "Four Soldiers," the last named being also known as the
"Wide Awake" brand. The "Five Soldiers" trade-mark was registered in the Bureau of Commerce and Industry in 1916, and the "Four Soldiers"
trade-mark in February, 1923. These two grades of khaki are marketed at a much lower price than plaintiff's "Wigan," since it appears that the
plaintiff's "Wigan" is sold in the Philippine market by Wise & Co. for 71 centavos per yard, and by other firms at 70 centavos a yard, while
defendant's "Five Soldiers" sells at from 54 centavos to 55 centavos, and its "Four Soldiers" from 35 centavos to 40 centavos a yard.

After the defendant corporation had assumed the agency in the Philippine Islands for the products of the New York house, the manger of the
defendant, at the request of Chinese customers, began to give orders to the New York house for the printing of the word "Wigan" conspicuously
upon the bolts of khaki intended for sale in Philippine Islands; and in the latter part of 1923 or in the early part of the year 1924, the defendant's
khaki began to be marketed here with the word "Wigan" thereon.
It appears that the words "Wigan," "Stockport," "Jackton," and "Ashford," adopted by the plaintiff to indicate different qualities of khaki, are the
names of manufacturing towns of minor importance in England; but the brand of khaki with which the defendant associates the name "Wigan"
does not appear to be manufactured in the town of Wigan. It also appears that the term "Wigan" is used in commercial parlance as the name of a
canvass-like cotton fabric used to stiffen parts of garments. But it is clear that in adopting the word "Wigan" to indicate a brand of khaki, the
plaintiff did not use the word "Wigan" either in its geographical sense or in the trade sense of a material for stiffening. The use made by the
plaintiff of the term "Wigan" is therefore arbitrary and artificial, in that it departs from any previously accepted sense.

It will be noted that the plaintiff uses the word "Wigan" to indicate quality, while the defendant purports to use the term to indicate color, though
the defendant's practice in this usage is somewhat loose. There is some proof in the record tending to show that American dealers are accustomed
to use the word "Wigan" to indicate a color or certain shades of color of khaki cloth. But it is evident that the plaintiff first adopted the word
"Wigan" in connection with khaki cloth, and this was done for the purpose of indicating quality. In this sense the word "Wigan" has accompanied
the plaintiff's khaki for years in the different markets of the world, and the term has become associated in the minds of merchants who deal in this
material with the standard of quality maintained by the plaintiff in the "Wigan" brand.

This action involves a question of trade-mark right and a further question of unfair competition, and the problem is to determine whether, upon
the facts above stated, the defendant corporation has a right to use the word "Wigan" on khaki sold by it in the Philippine Islands. The law
governing trade-mark rights as well as unfair competition in this jurisdiction is found in Act No. 666 of the Philippine Commission, which is a
reduction to statutory form of the jurisprudence developed by the courts of England and the United States in connection with the subjects
mentioned; and to the summary of substantive law expressed in the statute are added the provisions relative to the registration of trade-marks.
Act No. 666 has been from time to time amended, but none of the amendatory provisions adopted prior to the beginning of this lawsuit have any
bearing on the problem before us.

Though the law concerning infringement of trade-marks and that concerning unfair competition have a common conception at their root, which is
that one person shall not be permitted to misrepresent that his goods or his business are the goods or the business of another, the law concerning
unfair competition is broader and more inclusive. On the other hand, the law concerning the infringement of trade-mark is of more limited range,
but within its narrower range recognizes a more exclusive right derived from the adoption and registration of the trade-mark by the person whose
goods or business are first associated therewith. One who has identified a peculiar symbol or mark with his goods thereby acquires a property right
in such symbol or mark, and if another infringes the trade-mark he thereby invades this property right. Unfair competition cannot be placed on the
plane of invasion of property right. The tort is strictly one of fraud. It results that the law of trade-marks is specialized subject distinct from the law
of unfair competition, though, as stated above, the two subjects are entwined with each other and are dealt with together in Act No. 666.
Inasmuch as the principles applicable to trade-marks were precisely defined at an earlier date than the principles applicable to unfair competition,
it is not surprising that confusion should be found in the earlier decisions between the legal doctrines relating to the two subjects. Of late years,
however, the term "trade-mark" has been restricted to its proper technical meaning and the term "unfair competition" is used to include wrongful
acts of competition not involving any violation of trade-mark right proper. As the tort of unfair competition is broader than the wrong involved in
the infringement of a trade-mark, one who fails to establish the exclusive property right which is essential to the validity of a trade-mark, may yet
frequently obtain relief on the ground of his competitor's unfairness or fraud. Any conduct may be said to constitute unfair competition if the
effect is to pass off on the public the goods of one man as the goods of another. It is not necessary that any particular means should be used to this
end. The most usual devices are the simulation of labels and the reproduction of the form, color and general appearance of the package used by
the pioneer manufacturer or dealer. But unfair competition is not limited to these forms. The general principle underlying the law of unfair
competition is that a competitor in business cannot be permitted to do acts which have deceived, or are reasonably designed to deceive, the public
into buying his goods as those of another.

As stated in section 7 of Act No. 666, a person is guilty of unfair competition who "in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either 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," etc. This language is very broad; and as applied to the case before us it is
evident that, in using the word "Wigan" on the khaki cloth sold by it, the defendant has appropriated a word likely to lead purchasers to believe
that the goods sold by the defendant are those of the plaintiff. The representation that the khaki sold by the defendant is of the kind known to the
trade as "Wigan" directly tends to deceive the purchaser and, therefore, constitutes unfair competition as against the plaintiff.

It is no doubt true that the adoption of the word "Wigan" by the defendant does not deceive merchants or tailors buying from the defendant. But
the person most to be considered in this connection is the consumer, and when the word "Wigan" is found upon a bolt of khaki, the ultimate
buyer, or consumer, would naturally be led to suppose that the goods sold under this name is the goods sold by the plaintiff. In the case before us
it is revealed that the word "Wigan" was first stamped upon the khaki sold by the defendant at the suggestion or request of a Chinese customer,
presumably a tailor or merchant, and the purpose behind the suggestion undoubtedly was that, if this term were found stamped upon the khaki
thus sold it could be represented to the ultimate purchaser that the khaki thus sold was the plaintiff's "Wigan." In this connection it should be
noted that, in the action to enjoin unfair competition, the fraudulent intention on the part of the defendant may be inferred from the similarity of
the goods offered for sale by him to the goods of the plaintiff (Act No. 666, sec. 7, end). In the case before us the use of the word "Wigan," stamped
by the defendant upon the bolts of khaki sold by it, sufficiently discloses an intention to mislead the consumer. Moreover, as was observed by the
Court of Appeals of the Third Circuit in Barton vs. Rex-Oil Co., (40 A. L. R., 424), it makes no difference that dealers in the article are not deceived.
They are informed and usually know what they are buying. The law concerns itself with the casual purchaser who knows the commodity only by its
name. In obtaining what he asks for he is entitled to protection against unfair dealing. (Citing National Biscuit Co. vs. Baker, 95 Fed., 135; Eli Lilly &
Co., vs. Wm. R. Warner & Co., 275 Fed., 752; William R. Warner & Co. vs. Eli Lilly & Co., 265 U. S., 526.)

With respect to the question of infringement of trade-mark right, it is clear that the appropriation by the defendant of the word "Wigan" for use in
the sale of its khaki did not constitute a violation of trade-mark prior to April, 1925, when the word "Wigan" was first incorporated in the plaintiff's
registered trade-mark; but after that date it was certainly illegal for the defendant to use the word "Wigan" stamped upon the khaki sold by it; and
this act was an infringement of trade-mark right. It is true that the plaintiff's trade-mark proper consisted of a pictorial representation of the heads
of two elephants, embelished by leaves, and the word "Wigan" was only a part of said trade-mark. Nevertheless, the misappropriation of this word
by the competitor was a violation of the plaintiff's right. It has been held in the Supreme Court of the United States that the use of only one of the
words constituting a trade-mark may be sufficient to constitute an infringement, and it is not necessary to this end that all of the words comprising
the trade-mark should be appropriated (Saxlehner vs. Eisner & Mendelson Co., 179 U.S., 20; 45 Law. ed., 60).

In section 2 of Act No. 666 it is declared that a designation or part of a designation which relates only to the name, quality, or description of the
merchandise, or geographical place of its production or origin, cannot be made the subject of a trade-mark; and it seems to be supposed by the
defendant that this provision disables the plaintiff from complaining of the use made of the word "Wigan" by the defendant. But it will be noted
that the word "Wigan" as applied to quality, is not an English word in common use for describing quality. The word "Wigan" is here used in an
entirely artificial sense and its association with quality had the origin exclusively in the use which the plaintiff has made of it. The designation of
name, quality, or description, as used in the statute, has reference to linguistic terms in common use. In words of this character no particular
manufacturer can acquire an exclusive property right. Again, it will be noted that, although "Wigan," being the name of a town, was an original
geographical term, it is not used upon the plaintiff's khaki to indicate the geographical place of production of the product. Even geographical terms
can be used in an arbitrary and artificial sense, and when so used by one manufacturer the improper appropriation of the same term by another
may be enjoined as an invasion of trade-mark right. Of course, if the defendant were manufacturing its khaki in the town of "Wigan," it would be
entitled to use that name to indicate the place of manufacture of its goods. But such is not the case here.

From what has been said it follows that the plaintiff is entitled to an injunction for the purpose of restraining the defendant from using the word
"Wigan" upon the bolts of khaki sold by it, whether the wrongful act of the defendant be considered as an act of unfair competition or as an
infringement of the trade-mark registered by the plaintiff in April, 1925. But the plaintiff further seeks to recover damages in the estimated amount
of P15,000 for the injury sustained by the plaintiff. As in Forbes, Munn & Co., vs. Ang San To (43 Phil., 724), the provision in the complaint referring
to damages should, we think, be interpreted as a prayer for an assessment of the compensation to which the plaintiff might be entitled for the
damage done to its business. The proof, however, shows that the plaintiff's business has shown a healthy growth during the period covered by the
wrongful acts which are the subject of this action, and it is not proved that any assessable damage has been inflicted upon the plaintiff by the
wrongful acts of the defendant, though the infringement of legal right is clear. We are therefore of the opinion that no damages should be awarded
to the plaintiff. It will be noted that Act No. 666 gives the plaintiff a right to elect between the recovery of damages for the harm done to the
plaintiff's business and the enforcement of an accounting against the defendant for the profits which may be shown to have accrued to it by reason
of the sales made in violation of the plaintiff's right. But these two remedies are different and, where the plaintiff has elected to sue for damages
and no damages are proved, none can be awarded. This makes it unnecessary to analyze the proof with a view to discovering the profits which the
defendant may have earned by the illegitimate sales.

The judgment appealed from will therefore be modified, and the defendant and its agents will be enjoined, as they are hereby enjoined, from using
the word "Wigan" upon the khaki sold by it in the Philippine Islands, and from otherwise representing its khaki to be of the "Wigan" brand. In
absolving the defendant from the claim for damages, the judgment will be affirmed. So ordered, without costs.

Ostrand, Johns, Romualdez and Villa-Real, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17501 April 27, 1963
MEAD JOHNSON and COMPANY, petitioner,
vs.
N. V. J. VAN DORP, LTD., ET AL., respondents.

BAUTISTA ANGELO, J.:

On June 2, 1956, N. V. J. Van Dorp, Ltd. a corporation organized under the laws of Netherlands, located and doing business at Gouda, Netherlands,
filed an application for the registration of the trademark "ALASKA and pictorial representation of a Boy's Head within a rectangular design (ALASKA
disclaimed)." The trademark was published in an issue of the Official Gazette which was officially released on June 5, 1956.

Mead Johnson & Company, a corporation organized under the laws of Indiana, U.S.A., being the owner of the trademark "ALACTA" used for
powdered half-skim milk, which was registered with the Patent Office on June 12, 1951, filed an opposition on the ground that it will be damaged
by the said registration as the trademark "ALASKA" and pictorial representation of a Boy's Head within a rectangular design (ALASKA disclaimed),
used for milk, milk products, dairy products and infant's foods, is confusingly similar to its trademark "ALACTA".

In answer to the opposition the applicant alleged that its trademark and product "ALASKA" are entirely different from oppositor's trademark and
product "ALACTA", since applicant's product covers milk, milk products, dairy products and infant's foods which fall under Class 47 Foods and
Ingredients of Foods, while oppositor's products cover pharmaceutical preparations for nutritional needs which fall under Class 6, which refers to
Medicines and Pharmaceutical Preparations.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without
prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

After issues were joined, and after due hearing, the Director of the Patent Office, on August 26, 1960, rendered decision dismissing the opposition
and holding that the trademark sought to be registered does not sufficiently resemble oppositor's mark "as to be likely when applied to the goods
of the parties to cause confusion or mistake or to deceive purchasers" even if oppositor's goods, half-skim powdered and powdered whole milk and
those of applicant's condensed and evaporated milk are similar as they have the same descriptive properties, both goods being milk products.

Hence, oppositor filed the present petition for review.

Petitioner contends that the Director of the Patent Office erred (1) in holding that the mark which respondent seeks to register does not resemble
petitioner's mark as to be likely when applied to the goods to cause confusion or mistake or to deceive purchasers, and (2) in holding that the
trademark sought to be registered has become distinctive based on its extensive sales.

Anent the first point, petitioner seems to dispute the finding of the Director of the Patent Office by emphasizing the striking similarities existing
between the trademark "ALASKA" which is sought to be registered and that of "ALACTA" which petitioner has long registered for the protection of
its products. Thus, it is argued, in appearance and sound the trademarks "ALASKA" and "ALACTA" are sufficiently close. The three vowels are the
same in both and the public would pronounce them short accenting on the second syllable. Both marks have the same number of letters and the
vowels are placed on the same position. The general form and sound of the words are of marked similarity so as to suggest the likelihood of
confusion. While "ALACTA" and "ALASKA" differ entirely in meaning, they are confusingly similar in appearance. The three letter prefixes of both
marks are identical. Both marks end with the same letter "A". The only difference lies in the letters "CT" in "ALACTA" and "SK" in "ALASKA". And in
support of its contention, petitioner cites the case of Esso Standard Oil Company v. Sun Oil Company, et al., 46 TMR 444, wherein it was held that
SUNVIS and UNIVIS are quite different in sound and meaning but in their entireties they are confusingly similar in appearance. Said the Court:

As already noted, it found on the basis of the evidence before it that the two marks are quite different in sound and meaning but that in their
entireties the marks are confusingly similar in appearance, because of their having identical suffixes and three letter prefixes with the same two
letters UN in the same order.

On the other hand, respondent contends that it is not correct to say that in passing on the question as to whether the two marks are similar only
the words "ALASKA" and "ALACTA" should be taken into account since this would be a most arbitrary way of ascertaining whether similarity exists
between two marks. Rather, respondent contends, the two marks in their entirety and the goods they cover should be considered and carefully
compared to determine whether petitioner's opposition to the registration is capricious or well-taken. In this connection, respondent invokes the
following rules of interpretation: (1) appellant's mark is to be compared with all of the oppositor's marks in determining the point of confusion;1 (2)
the likelihood of confusion may be determined by a comparison of the marks involved and a consideration of the goods to which they are
attached;2 and (3) the court will view the marks with respect to the goods to which they are applied, and from its own observation arrive at a
conclusion as to the likelihood of confusion.3

It is true that between petitioner's trademark "ALACTA" and respondent's "ALASKA" there are similarities in spelling, appearance and sound for
both are composed of six letters of three syllables each and each syllable has the same vowel, but in determining if they are confusingly similar a
comparison of said words is not the only determinant factor. The trademarks in their entirety as they appear in the respective labels must also be
considered in relation to the goods to which they are attached. The discerning eye of the observer must focus not only on the predominant words
but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other.
Having this view in mind, we believe that while there are similarities in the two marks there are also differences or dissimilarities which are glaring
and striking to the eye as the former. Thus we find the following dissimilarities in the two marks:

(a) The sizes of the containers of the goods of petitioner differ from those of respondent. The goods of petitioner come in one-pound container
while those of respondent come in three sizes, to wit: 14-ounce tin of full condensed full cream milk; 14-1/2-ounce tin of evaporated milk; and 6-
ounce tin of evaporated milk.
(b) The colors too differ. One of petitioner's containers has one single background color, to wit: light blue; the other has two background colors,
pink and white. The containers of respondent's goods have two color bands, yellowish white and red.

(c) Petitioner's mark "ALACTA" has only the first letter capitalized and is written in black. Respondent's mark "ALASKA" has all the letters capitalized
written in white except that of the condensed full cream milk which is in red.

Again, coming to the goods covered by the trademarks in question, we also notice the following dissimilarities:

In the petitioner's certificate of registration, it appears that the same covers "Pharmaceutical Preparations which Supply Nutritional Needs" which
fall under Class 6 of the official classification as Medicines and Pharmaceutical Preparations", thus indicating that petitioner's products are not
foods or ingredients of foods but rather medicinal and pharmaceutical preparations that are to be used as prescribed by physicians. On the other
hand, respondent's goods cover "milk, milk products, dairy products and infant's foods" as set forth in its application for registration which fall
under an entirely different class, or under Class 47 which refers to "Foods and Ingredients of Foods", and for use of these products there is no need
or requirement of a medical prescription.

In view of the above dissimilarities, the Director of the Patent Office overruled petitioner's opposition in the following wise:.

Considering the substantial difference in the marks as displayed on the respective labels of the parties and considering the distinctiveness of the
mark of applicant, acquired from its extensive sales, it is concluded that the applicant's mark does not resemble opposer's mark as to be likely
when applied to the goods of the parties to cause confusion or mistake or to deceive purchasers.

We have examined the two trademarks as they appear in the labels attached to the containers which both petitioner and respondent display for
distribution and sale and we are impressed more by the dissimilarities than by the similarities appearing therein in the same manner as the
Director of the Patent Office, and because of this impression we are persuaded that said Director was justified in overruling petitioner's opposition.
Hence, we are not prepared to say that said Director has erred in overruling said opposition.

WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.

Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, and Makalintal JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20635 March 31, 1966
ETEPHA, A.G., petitioner,
vs.
DIRECTOR OF PATENTS and WESTMONT PHARMACEUTICALS, INC., respondents.

SANCHEZ, J.:

To the question: May trademark ATUSSIN be registered, given the fact that PERTUSSIN, another trademark, had been previously registered in the
Patent Office? — the Director of Patents answered affirmatively. Hence this appeal.

On April 23, 1959, respondent Westmont Pharmaceuticals, Inc., a New York corporation, sought registration of trademark "Atussin" placed on its
"medicinal preparation of expectorant antihistaminic, bronchodilator sedative, ascorbic acid (Vitamin C) used in the treatment of cough". The
trademark is used exclusively in the Philippines since January 21, 1959.1

Petitioner, Etepha, A. G., a Liechtenstin (principality) corporation, objected. Petitioner claims that it will be damaged because Atussin is so
confusedly similar to its Pertussin (Registration No. 6089, issued on September 25, 1957) used on a preparation for the treatment of coughs, that
the buying public will be misled into believing that Westmont's product is that of petitioner's which allegedly enjoys goodwill.

1. The objects of a trademark are "to point out distinctly the origin or ownership of the articles to which it is affixed, to secure to him who has been
instrumental in bringing into market a superior article or merchandise the fruit of his industry and skill, and to prevent fraud and imposition."2 Our
over-all task then is to ascertain whether or not Atussin so resembles Pertussin "as to be likely, when applied to or used in connection with the
goods ... of the applicant, to cause confusion or mistake or to deceive purchasers".3 And, we are to be guided by the rule that the validity of a
cause for infringement is predicated upon colorable imitation. The phrase "colorable imitation" denotes such a "close or ingenious imitation as to
be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser, giving such attention as a
purchaser usually gives, and to cause him to purchase the one supposing it to be the other."4

2. That the word "tussin" figures as a component of both trademarks is nothing to wonder at. The Director of Patents aptly observes that it is "the
common practice in the drug and pharmaceutical industries to 'fabricate' marks by using syllables or words suggestive of the ailments for which
they are intended and adding thereto distinctive prefixes or suffixes".5 And appropriately to be considered now is the fact that, concededly, the
"tussin" (in Pertussin and Atussin) was derived from the Latin root-word "tussis" meaning cough.6

"Tussin" is merely descriptive; it is generic; it furnishes to the buyer no indication of the origin of the goods; it is open for appropriation by anyone.
It is accordingly barred from registration as trademark. With jurisprudence holding the line, we feel safe in making the statement that any other
conclusion would result in "appellant having practically a monopoly"7 of the word "tussin" in a trademark.8

While "tussin" by itself cannot thus be used exclusively to identify one's goods, it may properly become the subject of a trademark "by combination
with another word or phrase".9 And this union of words is reflected in petitioner's Pertussin and respondent's Atussin, the first with prefix "Per"
and the second with Prefix "A".1äwphï1.ñët

3. A practical approach to the problem of similarity or dissimilarity is to go into the whole of the two trademarks pictured in their manner of
display. Inspection should be undertaken from the viewpoint of a prospective buyer. The trademark complained of should be compared and
contrasted with the purchaser's memory (not in juxtaposition) of the trademark said to be infringed. 10 Some such factors as "sound; appearance;
form, style, shape, size or format; color; ideas connoted by marks; the meaning, spelling, and pronunciation, of words used; and the setting in
which the words appear" may be considered. 11 For, indeed, trademark infringement is a form of unfair competition. 12

We take a casual look at the two labels — without spelling out the details — bearing in mind the easy-to-remember earmarks thereof.
Respondent's label underscores the trademark Atussin in bold, block letters horizontally written. In petitioner's, on the other hand, Pertussin is
printed diagonally upwards and across in semiscript style with flourishes and with only the first letter "P" capitalized. Each label plainly shows the
source of the medicine: petitioner's at the foot bears "Etepha Ltd. Schaan Fl", and on top, "Apothecary E. Taeschner's"; respondent's projects
"Westmont Pharmaceuticals, Inc. New York, USA" at the bottoms, and on the lower left side the word "Westmont" upon a white diamond shaped
enclosure and in red ink — a color different from that of the words above and below it. Printed prominently along the left, bottom and right edges
of petitioner's label are indications of the use: "for bronchial catarrh — whopping-cough — coughs and asthma". Respondent's for its part briefly
represents what its produce actually is - a "cough syrup". The two labels are entirely different in colors, contents, arrangement of words thereon,
sizes, shapes and general appearance. The contrasts in pictorial effects and appeals to the eye is so pronounced that the label of one cannot be
mistaken for that of the other, not even by persons unfamiliar with the two trademarks. 13

On this point the following culled from a recent decision of the United States Court of Customs and Patent Appeals (June 15, 1956) is persuasive: 14

Confusion is likely between trademarks, however, only if their over-all presentations in any of the particulars of sound, appearance, or meaning are
such as would lead the purchasing public into believing that the products to which the marks are applied emanated from the same source. In
testing this issue, fixed legal rules exist — if not in harmony, certainly in abundance — but, in the final analysis, the application of these rules in any
given situation necessarily reflects a matter of individual judgment largely predicated on opinion. There is, however, and can be no disagreement
with the rule that the purchaser is confused, if at all, by the marks as a whole.

4. We now consider exclusively the two words — Pertussin and Atussin — as they appear on the respective labels. As previously adverted to, these
words are presented to the public in different styles of writing and methods of design. The horizontal plain, block letters of Atussin and the
diagonally and artistically upward writing of Pertussin leave distinct visual impressions. One look is enough to denude the mind of that illuminating
similarity so essential for a trademark infringement case to prosper.

5. As we take up Pertussin and Atussin once again, we cannot escape notice of the fact that the two words do not sound alike — when pronounced.
There is not much phonetic similarity between the two. The Solicitor General well-observed that in Pertussin the pronunciation of the prefix "Per",
whether correct or incorrect, includes a combination of three letters P, e and r; whereas, in Atussin the whole starts with the single letter A added
to suffix "tussin". Appeals to the ear are disimilar. And this, because in a word combination, the part that comes first is the most pronounced. An
expositor of the applicable rule here is the decision in the Syrocol-Cheracol controversy. 15 There, the ruling is that trademark Syrocol (a cough
medicine preparation) is not confusedly similar to trademark Cheracol (also a cough medicine preparation). Reason: the two words "do not look or
sound enough alike to justify a holding of trademark infringement", and the "only similarity is in the last syllable, and that is not uncommon in
names given drug compounds".

6. In the solution of a trademark infringement problem, regard too should be given to the class of persons who buy the particular product and the
circumstances ordinarily attendant to its acquisition. 16 The medicinal preparation clothed with the trademarks in question, are unlike articles of
everyday use such as candies, ice cream, milk, soft drinks and the like which may be freely obtained by anyone, anytime, anywhere. Petitioner's
and respondent's products are to be dispensed upon medical prescription. The respective labels say so. An intending buyer must have to go first to
a licensed doctor of medicine; he receives instructions as to what to purchase; he reads the doctor's prescription; he knows what he is to buy. He is
not of the incautious, unwary, unobservant or unsuspecting type; he examines the product sold to him; he checks to find out whether it conforms
to the medical prescription. The common trade channel is the pharmacy or the drugstore. Similarly, the pharmacist or druggist verifies the
medicine sold. The margin of error in the acquisition of one for the other is quite remote.

We concede the possibility that buyers might be able to obtain Pertussin or Attusin without prescription. When this happens, then the buyer must
be one throughly familiar with what he intends to get, else he would not have the temerity to ask for a medicine — specifically needed to cure a
given ailment. In which case, the more improbable it will be to palm off one for the other. For a person who purchases with open eyes is hardly the
man to be deceived.

For the reasons given, the appealed decision of the respondent Director of Patents — giving due course to the application for the registration of
trademark ATTUSIN is hereby affirmed. Costa against petitioner. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala, Makalintal, Bengzon, J. P., and Zaldivar, JJ., concur.
Dizon, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18337 January 30, 1965
CHUA CHE, petitioner,
vs.
PHILIPPINES PATENT OFFICE and SY TUO, respondents.

PAREDES, J.:

This is a petition to review the decision of the Director of Patents, in Inter Partes Case No. 161, denying the application of petitioner Chua Che for
the registration of "T.M. X-7" for use on soap Class 51, being manufactured by said Chua Che, upon the opposition of respondent Sy Tuo.

Under date of October 30, 1958, Chua Che presented with the Philippines Patent Office a petition praying for the registration in his favor the trade
name "X-7". The petition, states:

The undersigned CHUA CHE, a citizen of China, a resident of 2804 Limay St., Tondo, Manila, and doing business at same address, has adopted and
used the trademark "X-7" shown in the accompanying Drawing.

In accordance with the requirements of law, the undersigned declares that this trademark —

1. Was first used by him on June 10, 1957.

2. Was first used by him in commerce in or with the Philippines on June 10, 1957.

3. Has been continuously used by him in trade in or with the Philippines for more than one year.

4. Is, on the date of this application, actually used by him on the following goods, classified according to the Official Classification of Goods (Rule
82):

Class 51 — Soap

5. Is applied to the goods or to the packages containing the same, by placing thereon a printed label on which the trademark is shown, or by
directly impressing the mark to the goods.

The corresponding declaration, which was under oath, contained, among others, the following:

3. That he believes himself to be the lawful owner of the trademark sought to be registered.

4. That the said trademark is in actual use in commerce in or with the Philippines not less than two months before this application is filed.

5. That no other person, partnership, corporation, or association, to the best of his knowledge and belief, has the right to use said trademark in the
Philippines, either in the identical form or in any such near resemblance thereto as might be calculated to deceive.

Under date of July 6, 1959, an Examiner of the Department of Commerce and Industry, submitted a report recommending the allowance of the
application, which report was approved by the Supervising TM Examiner. After the Notice of allowance was published in the Official Gazette, as
required, respondent Sy Tuo presented a "Notice of Opposition," dated October 15, 1959, anchoring said opposition on the following allegations:

1. The registration of the trademark "X-7" as applied for by CHUA CHE will not only violate the rights and interests of the Oppositor over his
registered trademark "X-7" covered by Certificate of Registration No. 5,000, issued April 21, 1951, but will also tend to mislead the purchasing
public and make it convenient for unscrupulous dealers to pass off the goods of the applicant CHUA CHE, for those of the oppositor SY TUO, to the
injury of both the oppositor and the public.

2. The registration of the said trademark "X-7" in the name of CHUA CHE will be in violation of, and will run counter to, Section 4 (d) of Republic Act
No. 166, as amended, because it is confusingly similar to the trademark "X-7" covered by Registration No. 5,000 previously registered to, and being
used by the oppositor and is not abandoned.

The Oppositor SY TUO, doing business as the Western Cosmetic Laboratory will rely on the following facts:

(a) Oppositor has prior use of the trademark "X-7" as he has been using it extensively and continuously since July 31, 1952, while the applicant,
Chua Che, allegedly used his trademark only since June 10, 1957.1äwphï1.ñët

(b) Oppositor's mark "X-7" is distinctive and his invented mark and not merely an ordinary, common and weak mark.

(c) The oppositor and the applicant use the trademark "X-7" for allied and closely related products.

(d) The oppositor has spent a huge amount by way of advertising and advertising his "X-7" brand.

(e) The oppositor has spent a big amount in expanding his business for the manufacture of toilet soap and crystal laundry soap with his already
popular "X-7" brand.

(f) The trademark applied for by the applicant Chua Che consists of the trademark "X-7" and anyone is likely to be misled as to the source or origin
by the close resemblance or identity with the trademark "X-7" of the oppositor.
Attached to the Opposition were labels (samples) being used by oppositor on his products, which clearly show "X-7".

Petitioner herein presented an Answer to Notice of Opposition, claiming among others that the grounds of opposition are not correct, since
although it is admitted that "X-7" is registered in the name of oppositor, said trademark is not being used on soap, but purely toilet articles. After
the presentation of the Answer the case was heard, wherein the parties presented their respective evidence, both testimonial and documentary. In
the memoranda of the contenders, they limited the principal issues, thus —

Oppositor SY TUO —

The registration of the trademark "X-7" in the name of applicant CHUA CHE will likely mislead the public so as to make them believe that said goods
are manufactured or sponsored by or in some way in trade associated with opposer.

Applicant CHUA CHE —

In Inter Partes proceedings, the principal issue is "priority of adoption and use." Since opposer has not yet used "X-7" mark on soap, but will still use
it, applicant should be entitled to the registration of the same.

The Director of Patents rendered judgment on January 18, 1961, the pertinent portions of which read:

Based on those facts there is no question that opposer's first use of the trademark X-7 on July 31, 1953, is prior to applicant's first use of the mark
on June 10, 1957. The only question then in this case is whether or not purchasers of X-7 perfume, lipstick and nail polish would likely upon seeing
X-7 laundry soap, attribute common origin to the products or assume that there existed some kind of trade connection between applicant and
opposer.

Opposer's record shows that he has been using since July 31, 1953 the trademark X-7 on perfume, lipstick and nail polish; that he has spent
substantial amounts of money in building upon the goodwill of this trademark through advertisements in all kinds of media — through newspapers
of general circulation, by means of billboards in various places in the Philippines, and also over the radio and television. In these advertisements
opposer has spent about P120,000.00. There is no question that opposer enjoys a valuable goodwill in the trademark X-7.

The products of the parties, while specifically different, are products intended for use in the home and usually have common purchasers.
Furthermore, the use of X-7 for laundry soap is but a natural expansion of business of the opposer. In fact, herein opposer in 1956, prior to the
alleged date of first use by respondent-applicant of the trademark X-7 for laundry soap on June 10, 1957, had made steps in expanding the use of
this trademark to granulated soap. Under these circumstances, it is concluded that the average purchasers are likely to associate X-7 laundry soap
with X-7 perfume, lipstick and nail polish or to think that the products have common origin or sponsorship.

IN VIEW OF THE ABOVE FINDINGS, the opposition in this case should be as it is hereby sustained and consequently Application Serial No. 6941, of
Chua Che, is also hereby rejected.

OPPOSITION SUSTAINED

The above judgment is now before Us, applicant-appellant claiming that it was error for the Director to conclude that opposer SY TUO had priority
to use the trademark in question, and that the use by appellant of the trademark "X-7" on granulated soap to be manufactured and sold by him,
would likely mislead purchasers.

At the very outset, we would like to state that in cases of the nature of the one at bar, only questions of law should be raised, and the only
exception to this rule, meaning that findings of facts may be reviewed, is when such findings are not supported by substantial evidence (Sec. 2, Rule
44, Revised Rules). The finding of the Director of Patents Office to the effect that opposer-appellee Sy Tuo had priority of use and adoption of the
trademark "X-7", is for all intents and purposes, one of fact. This being the case, such finding becomes conclusive to this Court. Even on this sole
issue alone, the petition for review must fall.

However, there are other matters which must be clarified. For instance, the fact that appellee has not yet used the trademark "X-7" on granulated
soap, the product on which appellant wants to use the said trademark. The circumstance of non-actual use of the mark on granulated soap by
appellee, does not detract from the fact that he has already a right to such a trademark and should, therefore, be protected. The observation of the
Director of Patents to the effect that "the average purchasers are likely to associate X-7 laundry soap with X-7 perfume, lipstick and nail polish or to
think that the products have common origin or sponsorship," is indeed well taken. It has been pointed out by appellant that the product upon
which the trademark X-7 will be used (laundry soap) is different from those of appellee's, and therefore no infringement and/or confusion may
result. We find no merit in the above contention, for it has been held that while it is no longer necessary to establish that the goods of the parties
possess the same descriptive properties, as previously required under the Trade Mark Act of 1905, registration of a trademark should be refused in
cases where there is a likelihood of confusion, mistake, or deception, even though the goods fall into different categories. (Application of Sylvan
Sweets Co., 205 F. 2nd, 207.) The products of appellee are common household items nowadays, in the same manner as laundry soap. The
likelihood of purchasers to associate those products to a common origin is not far-fetched. Both from the standpoint of priority of use and for the
protection of the buying public and, of course, appellee's rights to the trademark "X-7", it becomes manifest that the registration of said trademark
in favor of applicant-appellant should be denied.

PREMISES CONSIDERED, the decision sought to be reviewed should be, as it is hereby affirmed in all respects, with costs against appellant CHUA
CHE in both instances.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.
Concepcion, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23023 August 31, 1968
JOSE P. STA. ANA, petitioner,
vs.
FLORENTINO MALIWAT and TIBURCIO S. EVALLE, in his capacity as Director of Patents, respondents.

REYES, J.B.L., J.:

Petition for review of the decision of the respondent Director of Patents in an interference proceeding1 (Inter Partes Case No. 291), finding for the
senior party applicant, Florentino Maliwat, the herein private respondent, and against the junior party applicant2 Jose P. Sta. Ana, the herein
petitioner.

On 21 June 1962, Florentino Maliwat filed with the Patent Office an application for registration of the trademark FLORMANN, which is used on
shirts, pants, jackets and shoes for ladies, men, and children, claiming first use in commerce of the said mark on 15 January 1962. The claim of first
use was subsequently amended to 6 July 1955.

On 18 September 1962, Jose P. Sta. Ana filed an application for the registration of the tradename FLORMEN SHOE MANUFACTURERS (SHOE
MANUFACTURERS disclaimed),3 which is used in the business of manufacturing ladies' and children's shoes. His claim of first use in commerce of
the said tradename is 8 April 1959.

In view of the admittedly confusing similarity between the trademark FLORMANN and the tradename FLORMEN, the Director of Patents declared
an interference. After trial, the respondent Director gave due course to Maliwat's application and denied that of Sta. Ana. The latter, not satisfied
with the decision, appealed to this Court.

The petitioner assigned the following errors:

I. The Director of Patents erred in not finding that respondent (senior party-applicant) failed to establish by clear and convincing evidence earlier
date of use of his mark FLORMANN than that alleged in his application for registration, hence, respondent is not entitled to carry back the date of
first use to a prior date.

II. The Director erred in holding that respondent is the prior adopter and user of his mark and in concluding that this is strengthened with
documentary evidence that respondent has been using his mark since 1953 as tailor and haberdasher.

III. The Director of Patents erred in not finding false and fabricated respondent's testimonial and documentary evidence and Director should have
applied the rule "Falsus in uno, falsus in omnibus" and should have disregarded them.

IV. The Director of Patents erred in declaring that Maliwat has the prior right to the use of his trademark on shoes and such right may be carried
back to the year 1953 when respondent started his tailoring and haberdashery business and in holding that the manufacture of shoes is within the
scope of natural expansion of the business of a tailor and haberdasher.

V. The Director of Patents erred in failing to apply the stricture that parties should confine use of their respective marks to their corresponding
fields of business, and should have allowed the concurrent use of tradename FLORMEN SHOE MANUFACTURERS and the trademark FLORMANN
provided it is not used on shoes.

The findings of the Director that Maliwat was the prior adopter and user of the mark can not be contradicted, since his findings were based on facts
stipulated in the course of the trial in the interference proceedings. The recorded stipulation is as follows:

ATTY. FRANCISCO: Your Honor please, with the mutual understanding of the counsel for the Junior Party and the counsel for the Senior Party in
their desire to shorten the proceedings of this case, especially on matters that are admitted and not controverted by both parties, they have
agreed and admitted that Mr. Jose P. Sta. Ana, the Junior Party Applicant in this case, is engaged solely in the manufacture of shoes under the firm
name FLORMEN SHOE MANUFACTURERS since April 1959; that the name FLORMEN SHOE MANUFACTURERS is registered with the Bureau of
Commerce on April 8, 1959, as shown by Exhibits "A" and "A-2". That Mr. Florentino Maliwat has been engaged in the manufacture and sale of
menswear shirts, polo shirts, and pants, since 1953, using FLORMANN as its trademark. That Mr. Florentino Maliwat began using the trademark
FLORMANN on shoes on January 1962 and the firm name FLORMANN SHOES under which these shoes with the trademark FLORMANN were
manufactured and sold was first used on January 1962, having also been registered with the Bureau of Commerce on January 1962 and with other
departments of the government, like the Bureau of Labor, the Social Security System and the Workmen's Compensation in 1962.

ATTY. MARAVILLA: On behalf of the Senior Party Applicant, represented by this humble representation, I respectfully concur and admit all those
stipulations above mentioned.

HEARING OFFICER: The court reserves the resolution on those stipulations. We can proceed now with the redirect examination. (T.s.n., 9 August
1963, pp. 33-34).

And the Rules of Court provide:1äwphï1.ñët

Sec. 2. Judicial admissions. — Admission made by the parties in the pleadings, or in the course of the trial or other proceedings do not require proof
and can not be contradicted unless previously shown to have been made through palpable mistake." (Rule 129, Revised Rules of Court).

Since the aforequoted stipulation of facts has not been shown to have been made through palpable mistake, it is vain for the petitioner to allege
that the evidence for respondent Maliwat is false, fabricated, inconsistent, indefinite, contradictory, unclear, unconvincing, and unsubstantial.
The rule on judicial admissions was not found or provided for in the old Rules but can be culled from rulings laid down by this Court previous to its
revision (Irlanda v. Pitargue, 22 Phil. 383; 5 Moran 57-59, 1963 Ed.). It was the law, then and now, being an application of the law on estoppel.

To be true, petitioner Sta. Ana, through counsel, filed with this Court, on 24 December 1964, a motion entitled "MOTION TO ORDER
STENOGRAPHER TO PRODUCE STENOGRAPHIC NOTES AND TO CORRECT TRANSCRIPT OF STENOGRAPHIC NOTES; TO ALLOW PETITIONER TO
WITHDRAW FROM STIPULATION OF FACTS AND BE ALLOWED TO PRESENT ADDITIONAL EVIDENCE; AND TO SUSPEND PERIOD FOR FILING
PETITIONER'S BRIEF." The reason given was that "counsel for Mr. Jose P. Sta. Ana does not recall making any stipulation or agreement of facts with
the counsel of Mr. Florentino Maliwat on 9 August 1963." Opposition thereto was filed by Maliwat, asserting that the stenographer took down
notes on those things which were stated and uttered by the parties; that movant should have moved for reconsideration in the Patent Office,
instead of here in the Supreme Court, which is both untimely and unhonorable.

Upon requirement by this Court, stenographer Cleofe Rosales commented on petitioner's motion that what she had taken down were actually
uttered by counsel for Sta. Ana, no more, no less; that it was practically and highly impossible for her to have intercalated into the records the
questioned stipulation of facts because of the length of counsel's manifestations and the different subject matters of his statements, aside from
the concurrence of Maliwat's counsel and the reservation on the resolution made by the hearing officer; and that despite her length of service,
since 1958, as stenographic reporter, there had been no complaint against her, except this one.

Counsel for Sta. Ana replied to the foregoing comments, alleging, among others, that after his receipt of the decision, after 5 May 1964, he bought
the transcript and requested the stenographer to verify the contents of pages 33 and 34 of her transcript but, despite several requests, and for a
period of seven (7) months, for her to produce the stenographic notes, she has failed to produce said notes.

On 2 April 1965, stenographer Rosales sent to the clerk of this Court the transcript of stenographic notes.

This Court, on 2 February 1965, denied, for being late the motion to present additional testimonial and documentary evidence, and, on 8 April
1965, deferred action on the objection to a portion of the transcript until after hearing.

We find no substantiation of the charge that the stipulation of facts appearing on pages 33 to 34 of the transcript of stenographic notes taken on 9
August 1963 had been intercalated; hence, the presumption that the stenographer regularly performed her duty stands. The integrity of the record
being intact, the petitioner is bound by it. We can not overlook that even if his charges were true, it was plain and inexcusable negligence on his
part not to discover earlier the defect he now complains of, if any, and in not taking steps to correct it before the records were elevated to this
Court.

An application for registration is not bound by the date of first use as stated by him in his application, but is entitled to carry back said stated date
of first use to a prior date by proper evidence; but in order to show an earlier date of use, he is then under a heavy burden, and his proof must be
clear and convincing (Anchor Trading Co., Inc. vs. The Director of Patents, et al., L-8004, 30 May 1956; Chung Te vs. Ng Kian Giab, et al.,
L-23791, 23 November 1966). In the case at bar, the proof of date of first use (1953), earlier than that alleged in respondent Maliwat's application
(1962), can be no less than clear and convincing because the fact was stipulated and no proof was needed.

Petitioner would confine the respondent to the use of the mark FLORMANN to tailoring and haberdashery only, but not on shoes, on the ground
that petitioner had used the name FLORMEN on shoes since 1959, while the respondent used his mark on shoes only in 1962; but the Director
ruled:

. . . I believe that it is now the common practice among local tailors and haberdashers to branch out into articles of manufacture which have, one
way or another, some direct relationship with or appurtenance to garments or attire to complete one's wardrobe such as belts, shoes,
handkerchiefs, and the like, . . . It goes without saying that shoes on one hand and shirts, pants and jackets on the other, have the same descriptive
properties for purposes of our Trademark Law.

Modern law recognizes that the protection to which the owner of a trademark mark is entitled is not limited to guarding his goods or business from
actual market competition with identical or similar products of the parties, but extends to all cases in which the use by a junior appropriator of a
trademark or tradename is likely to lead to a confusion of source, as where prospective purchasers would be misled into thinking that the
complaining party has extended his business into the field (see 148 ALR 56 et seq; 52 Am. Jur. 576) or is in any way connected with the activities of
the infringer; or when it forestalls the normal potential expansion of his business (v. 148 ALR, 77, 84; 52 Am. Jur. 576, 577). It is on this basis that
the respondent Director of Patents adverted to the practice "among local tailors and haberdashers to branch out into articles of manufacture which
have some direct relationship" . . . "to garments or attire to complete one's wardrobe". Mere dissimilarity of goods should not preclude relief
where the junior user's goods are not too different or remote from any that the owner would be likely to make or sell; and in the present case,
wearing apparel is not so far removed from shoes as to preclude relief, any more than the pancake flour is from syrup or sugar cream (Aunt Jemima
Mills Co. vs. Rigney & Co., LRA 1918 C 1039), or baking powder from baking soda (Layton Pure Food Co. vs. Church & Co., 182 Fed. 35), or cosmetics
and toilet goods from ladies' wearing apparel and costume jewelry (Lady Esther Ltd. vs. Lady Esther Corset Shoppe, 148 ALR 6). More specifically,
manufacturers of men's clothing were declared entitled to protection against the use of their trademark in the sale of hats and caps [Rosenberg
Bros. vs. Elliott, 7 Fed. (2d) 962] and of ladies shoes (Forsythe & Co. vs. Forsythe Shoe Corp., 254 NYS 584). In all these cases, the courts declared
the owner of a trademark from the first named goods entitled to exclude use of its trademark on the related class of goods above-referred to.

It may be that previously the respondent drew a closer distinction among kinds of goods to which the use of similar marks could be applied; but it
can not be said that the present ruling under appeal is so devoid of basis in law as to amount to grave abuse of discretion warranting reversal.

Republic Act No. 166, as amended, provides:

Sec. 4. . . . The owner of a trademark, tradename or service-mark used to distinguish his goods, business or services from the goods, business or
services of others shall have the right to register the same on the principal register, unless it:

xxx xxx xxx

xxx xxx xxx

(d) Consists of or comprises a mark or tradename which resembles a mark or tradename registered in the Philippines or a mark or tradename
previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business or
services of the applicant, to cause confusion or mistake or to deceive purchasers;
xxx xxx xxx

Note that the provision does not require that the articles of manufacture of the previous user and the late user of the mark should possess the
same descriptive properties or should fall into the same categories as to bar the latter from registering his mark in the principal register (Chua Che
vs. Phil. Patent Office, et al., L-18337, 30 Jan. 1965.4 citing Application of Sylvan Sweets Co., 205 F. 2nd, 207).5 Therefore, whether or not shirts and
shoes have the same descriptive properties, or whether or not it is the prevailing practice or the tendency of tailors and haberdashers to expand
their business into shoes making, are not controlling. The meat of the matter is the likelihood of confusion, mistake or deception upon purchasers
of the goods of the junior user of the mark and the goods manufactured by the previous user. Here, the resemblance or similarity of the mark
FLORMANN and the name FLORMEN and the likelihood of confusion, one to the other, is admitted; therefore, the prior adopter, respondent
Maliwat, has the better right to the use of the mark.

FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, with costs against the petitioner.

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.1äwphï1.ñët
EN BANC
G.R. No. L-3952 December 29, 1953
MASSO HERMANOS, S.A., Petitioner, vs. DIRECTOR OF PATENTS, Respondent.

JUGO, J.:

Masso Hermanos, S.A., is the registered owner under Act No. 666 of the trademark composed of the word "Cosmopolite" used on canned fish. Said
trademark was first registered and the certificate of registration No. 1881 issued therefor on March 16, 1917, by the Director of the Philippine
library and museum for a period of thirty years, under the provisions of Act No. 666. A renewal of the certificate of registration was applied for and
issued on June 6, 1947 by the Director of the Bureau of Commerce also under the provisions of said Act.chanroblesvirtualawlibrary chanrobles
virtual law library

On June 14, 1948, the petitioner, Masso Hermanos, applied to the Director of Patents for a new certificate of registration of said trademark under
the provisions of section 41 (a) of Republic Act No. 166.chanroblesvirtualawlibrary chanrobles virtual law library

A trademark examiner of the Patents Office denied the petition on the ground that the word "Cosmopolite", as a trademark for canned fish is
descriptive of said goods and, therefore, could not have been legally registered as a trademark under the provisions of Act No. 666 and,
consequently, is not entitled to registration under section 41 (a) of Republic Act No. 166. The petitioner appealed from said ruling to the Director of
Patents on the ground that the examining officer was not authorized to re-examine certificates which were originally issued under Act No. 666 and
surrendered for re-registration under section 41(a) of Republic Act No. 166. The Director of Patents affirmed the ruling of the trademark examiner;
hence, the present petition for certiorari was filed in his court. Section 41 of Republic Act No. 166 reads as follows:

Reservation in favor of prior registration - Owners of marks or trade-names registered under the provisions of the laws in force prior hereto, the
registrations of which are still subsisting under the said laws, are hereby granted the right;chanrobles virtual law library

(a) Within one year after the taking effect of this Act to surrender their certificates of registration and procure the issuance of new
certificates in which event they shall be entitled to the benefits and subject to the provisions of this act; orchanrobles virtual law library

(b) Within one year before the expiration of the period for which the certificate of registration was issued or renewed the registrant may
renew the registration upon filing an application therefore, as provided in section fifteen, Chapter III hereof. If said application is granted, a renewal
certificate shall be issued by the Director in accordance with the provisions of This Act.

It is clear that the renewal of the registration under section 41 of Republic Act No. 166 is subject to the following requirements:

(1) The trademark must have been registered under the old laws:chanrobles virtual law library

(2) The registration must be subsisting under said laws; andchanrobles virtual law library

(3) The certificate issued under the old laws must have been surrendered to the Patents Office within one year from the time Republic Act
No. 166 went into effect, which was on June 20, 1947.

There is no question that the above requirements nos. (1) and (3) have been complied with by the petitioner. The question is whether the
condition required under No (2) exists in favor of the petitioner.chanroblesvirtualawlibrary chanrobles virtual law library

]The respondent Director of Patents contends that the original registration of the trademark under Act No. 666 was "null and void ab initio"
because the word "cosmopolite" is descriptive and, therefore, the registration thereunder is not subsisting.chanroblesvirtualawlibrary chanrobles
virtual law library

Is the word "Cosmopolite" descriptive? Section 13 of Act No. 666 provides that - ". . . But no alleged trademark . . . shall be registered which is
merely the name, quality or description of the mechandise upon which it is to be used . . .. In an application for registration, the Director of the
Bureau of Commerce shall decide the presumptive lawfulness of claim to the alleged trademark.'chanrobles virtual law library

The word "Cosmopolite" does not give the name, quality or description of the canned fish for which it is used. It does not even describe the place
of origin, for it does not indicate the country or place where the canned fish was manufactured. it is a very general term which does not give the
kind or quality of the goods. For example, a dealer in shoes cannot register a trademark "Leather Shoes" because that would be descriptive and it
would be right to use the same words with reference to their merchandise.chanroblesvirtualawlibrary chanrobles virtual law library

The court is, therefore, of the opinion that the registration of the trademark "Cosmopolite" under Act No. 666 was valid and is subsisting. The
Director of Patents should not for light and unsubstantial reasons reverse the ruling of the former officer in charge of trademark registration, which
has been accepted and in force since 1917 up to the present.chanroblesvirtualawlibrary chanrobles virtual law library

In view of the foregoing, the ruling of the respondent Director of Patents is set aside and he is ordered to issue to the petitioner a new certificate of
registration of the trademark in exchange for the old one No. 1881 surrendered to him on June 18, 1948. Without pronouncement as to costs. So
ordered.chanroblesvirtualawlibrary chanrobles virtual law library

Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Reyes, Bautista Angelo and Labrador, JJ concur
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-4531 January 10, 1953
ANG SI HENG and SALUSTIANA DEE, plaintiffs-appellants,
vs.
WELLINGTON DEPARTMENT STORE, INC., BENJAMIN CHUA, S.R. MENDINUETO, and FELIMON COSIO, defendants-appellees.

LABRADOR, J.:

The plaintiffs-appellants herein are engaged in the business of manufacturing shirts, pants, drawers, and other articles of wear for men, women,
and children. They have been in that business since the year 1938, having obtained the registration for the said articles the trademark of
"Wellington." In the year 1940 they registered the business name "Wellington Company," and this registration of the name was renewed on June
11, 1946. Their invoices, stationery, and signboard bear the trade name "Wellington Company," and in newspaper advertisements they described
their business as "Wellington Shirt Factory." It does not appear, however, that their trademark for their articles of wear was again registered after
August 27, 1938, nor their trade name registered after 1946.

Defendant Benjamin Chua applied for the registration of the business name "Wellington Department Store" on May 7, 1946. His application
therefor was approved by the Bureau of Commerce, and a certificate issued in his favor. On June 8, 1946, this business name was transferred to
Wellington Department Store, Inc., of which he is the president. It does not appear, however, that his application with the Bureau of Commerce for
the registration of the business name "Wellington Department Store" has been renewed, and neither does it appear that the business name
"Wellington Company" applied for by plaintiffs-appellants has also been renewed.

The plaintiffs-appellants allege that the use of the words "Wellington Department Store" as a business name and as a corporate name by the
defendant-appellee deceives the public into buying defendant corporation's goods under the mistaken belief that the names are the plaintiff's or
have the same source as plaintiffs' goods, thereby resulting in damage to them. They, therefore, pray that the defendant corporation be enjoined
from using the business name "Wellington Department Store" and the corporate name "Wellington Department Store, Inc"; that the Director of
Commerce be ordered to cancel the registration of said business name, and the Securities and Exchange Commissioner be also ordered to cancel
the corporate name "Wellington Department Store, Inc." In their answer the defendants Wellington Department Store, Inc., and Benjamin Chua
allege, by way of special defense, that the plaintiffs are engaged in the manufacture or production of shirts, pants, drawers, and other articles of
wear for men, women, and children, and keep a dry goods store for the sale of the same, whereas they (the defendants) are not engaged in the
same business or in the manufacture or sale of articles with the trademark "Wellington," and that they are keeping a store for articles such as
shoes, hats, toys, perfumes, bags, apparels, and the like, most of which are different from those manufactured and sold by plaintiffs-appellants.

Upon the above issues the parties went to trial, and thereafter the court a quo dismissed the complaint and absolved the defendants therefrom,
holding that the corporate name "Wellington Department Store Inc.," has not been previously acquired and appropriated by any person or
corporation, citing the case of Compañia General de Tabacos vs. Alhambra Cigar & etc. Co., 33 Phil., 485, and Walter E. Olsen & Co. vs. Lambert, 42
Phil., 633. Against this decision the plaintiffs have prosecuted this appeal, contending that the appellees' business is similar and identical to that of
the appellants; that the use of the business name "Wellington Department Store, Inc.," misleads and confuses the public; that plaintiffs-appellants
have acquired a property right in the name "Wellington;" and that if the defendants-appellees are not liable for any infringement of tradename, at
least they are liable for unfair competition.

The term "Wellington" is either a geographical name (see Webster's International Dictionary, where it is said to be the capital of New Zealand;
urban district of Shropshire, England and of Somersetshire, England; co. seat, of Summer co., Kans, etc.), or the surname of a person. But mere
geographical names are ordinarily regarded as common property, and it is a general rule that the same cannot be appropriated as the subject of an
exclusive trademark or trade name. (52 Am. Jur., 548.) Even if Wellington were a surname, which is not even that of the plaintiffs-appellants, it
cannot also be validly registered as a trade name. (Section 4, Paragraph (e), Republic Act. No. 166.) As the term cannot be appropriated as a
trademark or a trade name, no action for violation thereof can be maintained, as none is granted by the statute in such cases. The right to damages
and for an injunction for infringement of a trademark or a trade name is granted only to those entitled to the exclusive use of a registered
trademark or trade name. (Section 23, Republic Act No. 166.) It is evident, therefore, that no action may lie in favor of the plaintiffs-appellants
herein for damages or injunctive relief for the use by the defendants-appellees of the name "Wellington."

The complaint, however, alleges that the defendants-appellees have the actual intent to mislead the public and to defraud the plaintiffs, as by the
use of the name "Wellington Department Store, "they have deceived the public into buying its goods under the mistaken belief that the same are
the plaintiffs' or have the same source as the plaintiffs' goods. The action is evidently one for unfair competition, which is defined in Chapter VI,
Section 29, of Republic Act No. 166, not one for violation of a trademark or a tradename. In order to determine whether defendants are liable in
this respect and have deceived the public into believing that the goods they sell are of plaintiffs' manufacture or proceed from the same source as
plaintiffs' goods, all the surrounding circumstances must be taken into account, especially the identity or similarity of their business, how far the
names are a true description of the kind and quality of the articles manufactured or the business carried on, the extent of the confusion which may
be created or produced, the distance between the place of business of one and the other party, etc. (Chas S. Higgins Co. vs. Higgins Soap Co., 144
N.Y. 462, 39 N.E. 490, 27 L.R.A. 42, 43 Am. St. Rep. 769.)

While there is similarity between the trademark or trade name "Wellington Department Store," no confusion or deception can possibly result or
arise from such similarity because the latter is a "department store," while the former does purport to be so. The name "Wellington" is admittedly
the name of the trademark on the shirts, pants, drawers, and other articles of wear for men, women and children, whereas the name used by the
defendant indicates not these manufactured articles or any similar merchandise, but a department store. Neither can the public be said to be
deceived into the belief that the goods being sold in defendant's store originate from the plaintiffs, because the evidence shows that defendant's
store sells no shirts or wear bearing the trademark "Wellington," but other trademarks. Neither could such deception be by any possibility
produced because defendant's store is situated on the Escolta, while plaintiffs' store or place of business is located in another business district far
away from the Escolta. The mere fact that two or more customers of the plaintiffs thought of the probable identity of the products sold by one and
the other is not sufficient proof of the supposed confusion that the public has been led into by the use of the name adopted by the defendants. No
evidence has been submitted that customers of the plaintiffs-appellants had actually been misled into purchasing defendant's articles and
merchandise, for the very witnesses who have supposedly noted the use of plaintiffs' trade name do not claim to have actually purchased any
articles from defendant's store.
The concept of unfair competition has received the attention of this Court in two previous cases, that of Ang vs. Teodoro1 (2 Off. Gaz., No. 7, 673)
and Teodoro Kalaw Ng Khe vs. Lever Brothers Co.2 (G.R. No. 46817, promulgated on April 18, 1941.) In the first case this Court stated that even a
name or phrase not capable of appropriation as trademark or trade name may, by long and exclusive use by a business with reference thereto or to
its products, acquire a proprietary connotation, such that the name or phrase to the purchasing public becomes associated with the business or the
products and entitled to protection against unfair competition. But in the case at bar, the principle therein enunciated cannot be made to apply
because the evidence submitted by the appellants did not prove that their business has continued for so long a time that it has become of
consequence and acquired a goodwill of considerable value, such that its articles and products have acquired a well-known reputation and
confusion will result by the use of the disputed name by the defendants' department store. It is true that appellants business appears to have been
established a few years before the war and appellees' after liberation, yet it seems appellees' business and goodwill are the products of their own
individual initiative, not wrested by unfair competition from appellants' business and goodwill.

In the case of Kalaw Ng Khe vs. Lever Brothers Co., this Court citing a well-considered opinion of the Court of Appeals published in 39 Off. Gaz.,
1479-1486, No. 62, May 21, 1941, declared that it is not necessary that the articles of the petitioner be exactly similar to those handled by
respondents in order that unfair competition may be said to arise, and that it is sufficient for the articles to fall under the general category of toilet
articles. It might be true that, inasmuch as appellees' department store deals on shirts and other articles of wear while appellants produce the
same articles, some competition would arise between them. It is not, however, competition that the law seeks to prevent, but unfair competition,
wherein a newcomer in business tries to grab or steal away the reputation or goodwill of the business of another. As the court stated in said case,
"the tendency of the courts has been to widen the scope of protection in the field of unfair competition. They have held that there is no fetish in
the word "competition," and that the invocation of equity rest more vitally on the element of unfairness." As we have stated, appellant have not
shown any well-established reputation or goodwill previous to the establishment of appellees' business, such that it can be said that something
was unfairly taken by the use of such reputation by the appellees' department store.

We agree, therefore, with the trial court that plaintiffs-appellants have not been able to show the existence of a cause of action for unfair
competition against the defendants-appellees.

The judgment appealed from is, therefore, affirmed, with costs against the plaintiffs-appellants.
Paras, C.J., Pablo, Bengzon, Tuason, Montemayor, Jugo and Bautista Angelo, JJ., concur.