FIRST DIVISION

G.R. No. 188225 : November 28, 2012

SHIRLEY F. TORRES, Petitioner, v. IMELDA PEREZ and RODRIGO PEREZ, Respondents.

DECISION

SERENO, C.J.:

These are Petitions for Review on Certiorari under Rule 45 of the Rules of Court. The petition docketed as G.R. No. 188225 assails the Decision1ςrνll
of the Court of Appeals (CA) in CA-G.R. SP No. 103846 dated 11 March 2009. The CA Decision nullified the Orders dated 12 February 20082ςrνll and
11 April 20083ςrνll of the Regional Trial Court (RTC) of Makati, Branch 149. The RTC Orders had denied the Motion to Dismiss and/or Withdraw
Information filed against respondents for unfair competition (violation of Section 168 in relation to Section 170)4ςrνll under Republic Act No. (R.A.)
8293 (Intellectual Property Code of the Philippines).

On the other hand, the petition docketed as G.R. No. 198728 assails the Decision5ςrνll in CA-G.R. SP No. 111903 dated 29 September 2011, which
affirmed the RTC Orders dated 29 July 20096ςrνll and 19 October 2009,7ςrνll this time quashing the Information against respondents.

Respondents Imelda and Rodrigo are spouses who own RGP Footwear Manufacturing (RGP), which supplies ladies shoes to Shoe Mart (SM).8ςrνll
They met petitioner when she sold them business-class plane tickets to the United States in 2002.9ςrνll She was also interested in doing business
with SM, and they suggested that she form a partnership with their daughter Sunshine, nicknamed Sasay.10ςrνll

Petitioner and Sunshine formed Sasays Closet Co. (SCC), a partnership registered with the Securities and Exchange Commission on 17 October 2002.
SCC was engaged in the supply, trading, retailing of garments such as underwear, childrens wear, womens and mens wear, and other incidental
activities related thereto.11ςrνll

For its products, SCC used the trademark "Naturals with Design," which it filed with the Intellectual Property Office on 24 August 2005 and
registered on 26 February 2007.12ςrνll These products were primarily supplied to SM,13ςrνll which assigned to them the vendor code "190501"
for purposes of identification.14ςrνll

SCC used the facilities and equipment owned by RGP, as well as the latters business address (No. 72 Victoria Subdivision, Barangay Dela Paz, Bin,
Laguna), which was also the residential address of respondents.15ςrνll

In August 2003, Sunshine pulled out of the partnership, because she was hired to work in an international school.16ςrνllRespondent Imelda took
over Sunshines responsibilities in the partnership.17ςrνll

On 14 December 2005, petitioner sent an email to respondent Imelda asking to be reimbursed for expenses incurred in the formers travel to
China.18ςrνllRespondent Imelda replied the following day, stating that the partnership could not reimburse petitioner, because the trip was
personal and not business-related.19ςrνll In the same email, respondent Imelda vented her frustration over the fact that she, together with
respondent Rodrigo, had been doing all the work for SCC and incurring expenses that they did not charge to the partnership.20ςrνllRespondent
Imelda then informed petitioner of the formers decision to dissolve the partnership.21ςrνll Despite the objections of petitioner to the dissolution
of SCC, various amounts were paid to her by respondents from January to April 2006 representing her share in the partnership assets.22ςrνll

Meanwhile, on 27 March 2006, petitioner established Tezares Enterprise, a sole proprietorship engaged in supplying and trading of clothing and
accessories except footwear.23ςrνll Also in March 2006, she discovered that underwear products bearing the brand "Naturals" were being sold in
SM with vendor code "180195."24ςrνll This code was registered to RGP,25ςrνll a fact confirmed by test buys conducted by her lawyers on 13 and
14 May 2006.26ςrνll

On 5 June 2006, a search warrant for unfair competition under Section 168 in relation to Section 170 of R.A. 8293 was issued by the RTC of Manila,
Branch 24, against respondents at their address.27ςrνll The search warrant called for the seizure of womens undergarments bearing the brand
"Naturals," as well as equipment and papers having the vendor code "180195" or the inscription "RGP." The search warrant was implemented on
the same day. However, it was quashed by the same court on 20 October 2006 upon motion of respondents. The trial court ruled that respondents
did not pass off "Naturals" as the brand of another manufacturer. On the contrary, they used the brand in the honest belief that they owned SCC,
the owner of the brand.

On 9 June 2006, petitioner filed a criminal complaint for unfair competition against respondents and Sunshine before the City Prosecution Office of
Makati City.28ςrνll Assistant City Prosecutor Imelda P. Saulog found probable cause to indict respondents for unfair competition.29ςrνll She ruled
that they had clearly passed off the "Naturals" brand as RGPs even if the brand was owned by SCC. According to the prosecutor, SCC was indeed
dissolved when respondent Imelda manifested her intention to cease from the partnership in an email sent to petitioner on 15 December
2005.30ςrνll The prosecutor said, however, that it remained operational, since the process of winding up its business had not been completed.
Thus, SCC remained the owner of the "Naturals" brand, and petitioner being a legitimate partner thereof had a right to file the complaint against
respondents. The prosecutor found no probable cause against Sunshine, as it was established that she had withdrawn from SCC as of August 2003.

The indictment was raffled to RTC Makati City, Branch 149. On 23 October 2006, it issued an Order finding probable cause for the issuance of a
warrant of arrest against respondents.31ςrνll

Respondents filed a petition for review of the prosecutors resolution before the Department of Justice (DOJ), which on 13 December 2006 issued its
own Resolution32ςrνll reversing the finding of existence of probable cause against them. Contrary to the prosecutors finding, the DOJ found that
SCC had effectively wound up the latters partnership affairs on 24 April 2006 when petitioner was reimbursed for her trip to China. That was the last
of the payments made to her to cover her share in the partnership affairs, which started after respondent Imelda manifested her intention to cease
from the partnership business on 15 December 2005. Thus, when the criminal complaint for unfair competition was filed on 9 June 2006, there was
"no longer any competition, unfair or otherwise, involving the partnership."33ςrνll

Furthermore, the DOJ ruled that even if SCC had not yet terminated its business and therefore still existed, respondents had the right to use the
"Naturals" brand, as they were already the exclusive owners of SCC following the completion of payments of petitioners share in the partnership
affairs. Also, the establishment by petitioner of Tezares Enterprise which directly competed with SCC in terms of products and its subsequent
accreditation as supplier of intimate apparel for SM in April 2006 were regarded by the DOJ as apparent indications that she no longer had any share
in SCC. Thus, the petition for review was granted, and the city prosecutor of Makati was ordered to withdraw the Information against respondents
for unfair competition.
The DOJ denied the motion for reconsideration filed by petitioner on 28 March 2007.34ςrνll Hence, she filed a petition for certiorari before the CA,
where it was docketed as CA-G.R. SP No. 98861. In her petition, she questioned the DOJ Resolution, but later withdrew the same on 6 December
2007 for an unknown reason.35ςrνll

Following the directive of the DOJ, the prosecutor filed before the RTC of Makati City, Branch 149, a Motion to Dismiss and/or Withdraw Information
on 3 April 2007.36ςrνll The trial court denied the motion in an Order37ςrνll dated 12 February 2008. It maintained the correctness of its finding of
existence of probable cause in the case and ruled that the findings of the DOJ would be better appreciated and evaluated in the course of the trial.

Respondents moved for reconsideration,38ςrνll but their motion was denied39ςrνll by the RTC. Aggrieved, they filed a Petition for Certiorari (with
Prayer for the Issuance of a Temporary Restraining Order and thereafter a Preliminary Injunction)40ςrνll before the CA. They argued that probable
cause for the issuance of a warrant of arrest is different from probable cause for holding a person for trial. The first is the function of the judge,
while the second is the prosecutors.41ςrνll Thus, respondents claimed that it was wrong for Presiding Judge Cesar O. Untalan to deny the
prosecutors motion to dismiss for lack of probable cause on the basis of the judges own finding that there was probable cause to issue a warrant of
arrest against respondents. Furthermore, the Judge Untalan based his finding solely on the evidence submitted by petitioner without evaluating the
evidence of respondents.

In the first assailed Decision in CA-G.R. SP No. 10384642ςrνll dated 11 March 2009, the CA granted the petition. It found that the trial judge
committed grave abuse of discretion amounting to lack or excess of jurisdiction when he denied the prosecutors motion to dismiss for lack of
probable cause. The CA sustained the position of respondents that the finding of probable cause for the filing of an information is an executive
function lodged with the prosecutor. It also found that the trial judge did not make an independent assessment of the evidence on record in
determining the existence of probable cause for the offense of unfair competition, as opposed to the exhaustive study made by the DOJ before
arriving at its finding of lack of probable cause.

The CA also ruled that in determining probable cause, the essential elements of the crime charged must be considered, for their absence would
mean that there is no criminal offense. In determining probable cause for unfair competition, the question is "whether or not the offenders by the
use of deceit or any other means contrary to good faith passes off the goods manufactured by him or in which he deals, or his business, or services
for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result."43ςrνll The CA affirmed the
findings of the DOJ and the RTC of Manila, Branch 24 that respondents used the "Naturals" brand because they believed that they were the owners
of SCC, which owned the brand. Furthermore, the partnership had been terminated as of April 2006; hence, the filing of the criminal complaint on 9
June 2006 could no longer prosper. Even if SCC had not yet terminated its business, respondents, having bought petitioner out of SCC, were already
its exclusive owners and, as such, had the right to use the "Naturals" brand.

According to the CA, the filing of the criminal complaint for unfair competition was nothing but an offshoot of the misunderstanding and quarrel
that arose when respondents initially refused to reimburse the expenses incurred by petitioner in her trip to China and further escalated when
respondent Imelda decided to dissolve SCC.

Petitioner moved for reconsideration44ςrνll of the CA Decision, but the motion was denied on 1 June 2009.45ςrνll She then brought the matter
before this Court via a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court and docketed as G.R. No. 188225.46ςrνll Without
giving due course to the petition, the Court required47ςrνll respondents to comment thereon. Upon their compliance,48ςrνll petitioner was
required49ςrνll to file a reply,50ςrνll which was later received on 11 December 2009. On 19 May 2011, she filed her Memorandum.51ςrνll

Meanwhile, following the promulgation of the Decision in CA-G.R. SP No. 103846, respondents filed an Urgent Motion to Dismiss the criminal
complaint for unfair competition before the RTC on 1 April 2009.52ςrνll The motion was duly opposed by petitioner, arguing that the CA Decision
had not yet attained finality in view of her pending petition before this Court; thus, the motion was premature.53ςrνll The RTC denied the motion
to dismiss for lack of merit.54ςrνll However, upon motion for reconsideration55ςrνll filed by respondents, it issued the Order dated 29 July
200956ςrνll ordering the quashal of the Information against them. The trial court issued another Order on 19 October 200957ςrνll denying
petitioners Motion for Reconsideration.58ςrνll

Petitioner filed a Petition for Certiorari59ςrνll before the CA on the ground that the trial judge committed grave abuse of discretion amounting to
lack or excess of jurisdiction when he quashed the Information against respondents based on a CA Decision that was not yet final and executory,
being the subject of a petition still pending before this Court.

On 29 September 2011, the CA issued the second assailed Decision in CA-G.R. SP No. 111903 affirming the RTC Orders dated 29 July 2009 and 19
October 2009. The appellate court ruled that while its Decision in CA-G.R. SP No. 103846 was still under review before this Court, neithercourt had
issued a restraining order or injunction that would prevent the RTC from implementing the said Decision ordering the dismissal of the information
against respondents. Furthermore, the CA ruled that since petitioner had withdrawn her petition in CA-G.R. SP No. 98861 questioning the DOJ
Resolution, the issue of whether there was probable cause had "already been resolved with finality in the negative."60ςrνll Thus, the trial court
cannot be faulted for following the CA directive to dismiss the Information against respondents.

Opting not to file a motion for reconsideration,61ςrνll petitioner again comes before us on a Petition for Review on Certiorari questioning the
Decision in CA-G.R. SP No. 111903.62ςrνll In her petition docketed as G.R. No. 198728, she argues that Presiding Judge Cesar O. Untalan committed
grave abuse of discretion amounting to lack or excess of jurisdiction when he dismissed the criminal case against respondents for unfair competition
based on CA findings that were not yet final. The trial judge was fully aware that those findings were still subject to a pending petition before this
Court.

On 23 November 2011, the Court consolidated G.R. Nos. 198728 and 188225.63ςrνll

ISSUE

Despite the extensive legal battle that petitioner and respondents have waged heretofore, these petitions will be settled simply through a ruling on
whether there exists probable cause to indict respondents for unfair competition (violation of Section 168 in relation to Section 170) under R.A.
8293.

OUR RULING

No probable cause to indict respondents

At the outset, it is worth noting that Judge Untalan acted well within the exercise of his judicial discretion when he denied the Motion to Dismiss
and/or Withdraw Information filed by the prosecution. His finding that there was probable cause to indict respondents for unfair competition, and
that the findings of the DOJ would be better appreciated in the course of a trial, was based on his own evaluation of the evidence brought before
him. It was an evaluation that was required of him as a judge.

Thus, in Yambot v. Armovit,64ςrνll this Court reiterated the mandate of judges to make a personal evaluation of records submitted in support of
criminal complaints filed before their respective salas:chanroblesvirtuallawlibrary

Crespo v. Mogul instructs in a very clear manner that once a complaint or information is filed in court, any disposition of the case as to its dismissal,
or the conviction or acquittal of the accused, rests on the sound discretion of the said court, as it is the best and sole judge of what to do with the
case before it. While the resolution of the prosecutorial arm is persuasive, it is not binding on the court. It may therefore grant or deny at its option
a motion to dismiss or to withdraw the information based on its own assessment of the records of the preliminary investigation submitted to it, in
the faithful exercise of judicial discretion and prerogative, and not out of subservience to the prosecutor.65ςrνll x x x. (Emphasis supplied)

Judge Untalan stood firm on this finding in his denial of the motion for reconsideration and even initially after the CA had made a ruling on the
matter. He only performed a task he was called upon to do, and his judgment on the matter although erroneous cannot be regarded as capricious
and whimsical. Thus, he did not commit grave abuse of discretion amounting to lack or excess of jurisdiction.

However, while we recognize that Judge Untalan did not commit grave abuse of discretion, we take note of his apparent loss of steam when he
issued the Order dated 29 July 2009 granting respondents motion for reconsideration of his earlier ruling denying the Urgent Motion to Dismiss. The
good judge yielded, even though he was well aware that the CA Decision had not yet attained finality pending review by this Court.

We now rule on the issue of probable cause.

Probable cause, for purposes of filing a criminal information, is described as "such facts as are sufficient to engender a well-founded belief that a
crime has been committed and the respondent is probably guilty thereof, and should be held for trial."66ςrνll

Thus, the determination of the existence of probable cause necessitates the prior determination of whether a crime or an offense was committed in
the first place. Here, we find that there was no probable cause to indict respondents, because the crime of unfair competition was not committed.

In positing that respondents were guilty of unfair competition, petitioner makes a lot of the fact that they used the vendor code of RGP in marketing
the "Naturals" products. She argues that they passed off the "Naturals" products, which they marketed under RGP, as those of SCC; thus, they
allegedly prejudiced the rights of SCC as owner of the trademark. She also claims that she has the personality to prosecute respondents for unfair
competition on behalf of SCC.

When Judge Untalan denied the Motion to Dismiss and/or Withdraw Information filed by the prosecution and thereby sustained the position of
petitioner, his error lay in the fact that his focus on the crime of unfair competition was unwarranted. In this case, much more important than the
issue of protection of intellectual property is the change of ownership of SCC. The arguments of petitioner have no basis, because respondents are
the exclusive owners of SCC, of which she is no longer a partner.

Based on the findings of fact of the CA and the DOJ, respondents have completed the payments of the share of petitioner in the partnership affairs.
Having bought her out of SCC, respondents were already its exclusive owners who, as such, had the right to use the "Naturals" brand.

The use of the vendor code of RGP was resorted to only for the practical purpose of ensuring that SMs payments for the "Naturals" products would
go to respondents, who were the actual suppliers.

Furthermore, even if we were to assume that the issue of protection of intellectual property is paramount in this case, the criminal complaint for
unfair competition against respondents cannot prosper, for the elements of the crime were not present. We have enunciated in CCBPI v.
Gomez67ςrνll that the key elements of unfair competition are "deception, passing off and fraud upon the public."68ςrνll No deception can be
imagined to have been foisted on the public through different vendor codes, which are used by SM only for the identification of suppliers
products.ςηαοblενιrυαllαωlιbrαr

WHEREFORE, the Decisions dated 11 March 2009 in CA-G.R. SP No. 103846 and 29 September 2011 in CA-G.R. SP No. 111903, finding lack of
probable cause for respondents alleged violation of Section 168 in relation to Section 170 of Republic Act No. 8293 (unfair competition), are
AFFIRMED. The Information against respondents for unfair competition is

DISMISSED.ςrαlαωlιbrαr

SO ORDERED.
[G.R. No. 8032. January 22, 1914. ]
FINLAY, FLEMING & CO., Plaintiff-Appellee, v. ONG TAN CHUAN, Defendant-Appellant.

DECISION

MORELAND, J. :

This is an action to recover damages caused to the plaintiff by the unfair competition of the defendant. The plaintiff, through its agent Bhen, Meyer
& Co., Limited, was the sole vendor of a certain kind of wax candles. They were put up in packages of two sizes, wrapped in blue paper, to which was
affixed a price of paper, in the form of a label, upon which were printed and impressed the trade name and style of that class of candles, consisting
of certain peculiar and special pictures, signs, forms, designs, and colors which, taken together, distinguished a package containing that class of
candles from all others then on the market.

The allegations of the complaint are that the defendant knowing that the plaintiff, by industry and expense and by long lapse of time, had
established a large trade in these candles, obtained the manufacture in Japan of a trade name, mark or label approximating very closely both in
scheme, form, pictures, design color, and style that of the plaintiff in this case. While different in many of the minuter details, the trade label on
defendant’s candles was so similar in general appearance to that of the plaintiff that one would very readily be taken for the other. Taking this in
connection with the fact that the packages were put up in substantially the same size and form and wrapped in exactly the same kind and color of
paper, and we have a situation presented which demonstrates that the ordinary purchaser of that article would very probably be deceived into
purchasing defendant’s candles instead of plaintiff’s although he had therefore been a regular customer of the latter and at the moment desired to
purchase its candles.

The trial court found that the similarity between the trade label of the two classes of candles was such as to produce unfair competition and upon
an accounting by the defendant found the damages to be P661.56. This appeal is from that judgment.

Section 7 of Act No. 666 provides that "Any person who in selling his goods shall give them the general appearance of goods of another
manufacturer of 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, and who clothes the goods with such appearance for the purpose of deceiving the public and defrauding
another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like
purpose, shall be guilty of unfair competition, and shall be liable to an action for damages, in which the measure shall be the same as that provided
for a violation of trademark rights, together with discretionary power in the court to impose double damages, if the circumstances call for the same .
. ."cralaw virtua1aw library

We believe that the evidence fully sustains the trial court in the conclusion that this section was violated by the defendant in this case. A glance at
the packages as they come before us shows a striking similarity, both in form, color and general appearance, in the trade label attached to the
packages. Moreover, we find the boxes in which the candles are shipped to be substantially the same in both cases. Those of the defendant
approximate very closely those of the plaintiff in size, appearance and method of fastening, as well as the words printed thereon. Taken all in all, the
attempt to imitate is so clear that we do not go into a discussion of the particular details which constitute the similarity.

The judgment appealed from is affirmed, with costs against the Appellant.

Arellano, C.J., Carson, Trent, and Araullo, JJ., concur.

108 F. Supp. 845 (1952)
Q-TIPS, INC.
v.
JOHNSON & JOHNSON (two cases).
Civ. A. 10415, 28449.
United States District Court D. New Jersey.

November 20, 1952.

*846 *847 *848 Shanley, Congleton & Fisher, Newark, N. J. (Pennie, Edmonds, Morton, Barrows & Taylor, by W. Brown Morton, and W. Brown
Morton, Jr., all of New York City, Stanton Lawrence, Jr., Rutherford, N. J., of counsel), for plaintiff.

Kenneth Perry, New York City (Stewart W. Richards and Arnold S. Worfolk, New York City, Herbert E. Bailey, New Brunswick, N. J., of counsel), for
defendant.

FORMAN, Chief Judge.

Plaintiff, Q-Tips, Inc., a New York corporation, instituted two suits against defendant, Johnson & Johnson, a New Jersey corporation. The complaint
in Civil Action No. 10,415 alleged infringement of plaintiff's Patent No. 1,921,604 of August 8, 1933,[1] relating to a machine for manufacturing
medical swabs (hereinafter referred to as cotton tipped applicators or applicators) by defendant's making, selling, and using a similar cotton tipped
applicator machine. Plaintiff demanded an injunction and damages.

Johnson & Johnson's answer denied infringement and urged invalidity of the patent in view of the prior art, lack of invention, non-compliance with
the patent statutes with respect to describing and claiming the alleged improvement, and failure of the Patent Office to cite and properly apply the
most relevant art. In addition, the answer alleged misuse of the patent and also certain grounds of unfair competition including false patent marking
of the unpatented goods with respect to which the parties compete, interference with defendant's stick supply and advertising to the trade in such a
manner as to cause defendant's customers to believe defendant was infringing a product patent. A counterclaim alleged that Q-Tips, Inc., had
attempted unlawfully to restrain trade and commerce and to secure for itself an unlawful monopoly of the business of selling cotton tipped
applicators. Defendant demanded that the complaint be dismissed, that Q-Tips, Inc.'s patent be adjudged invalid and not infringed and that an
injunction issue restraining it from prosecuting any claim for infringement of the patent or from doing other enumerated acts involving Johnson &
Johnson or its privies and that it pay treble damages.

Q-Tips, Inc., brought its second suit (Civil Action No. 284-49) under the United States trade-mark laws, alleging as a first cause of action that since
prior to January 1, 1926, it had engaged in the "manufacture and sale of swabs for use as medical applicators, in baby care, for cosmetic purposes
and many other uses;" that the swabs consist of sanitary absorbent cotton attached to one or both ends of small sticks of wood and are packaged
and sold under the trade-mark "Q-Tips", for which a certificate of registration had been issued on July 9, 1934, under serial no. 309256 and that
Johnson & Johnson subsequent to November of 1948 has infringed upon its trade-mark rights by using in commerce the name "Cotton Tips" in
connection with the sale of applicators for the same purposes as those of Q-Tips, Inc., and in competition therewith.

For a second count Q-Tips, Inc., complained that Johnson & Johnson by its use of the name "Cotton Tips" and the appearance of its packages caused
confusion upon *849 the part of the buying public and unfairly competes with the Q-Tips product.

Q-Tips, Inc., prayed for an injunction to restrain Johnson & Johnson from using the name "Cotton Tips"; from infringing upon its trade-mark "Q-Tips";
from unfairly competing with it in the use of the name "Cotton Tips" or in any other name having the dominant word "tips" in it or in using a
package having the dress and appearance of its package and from continuing its campaign of "wilful and malicious dilution of the distinctiveness and
value of plaintiff's trade-mark by using and inducing others to use the word `tips' as a term generically descriptive of swabs or applicators." It also
sought an accounting.

Subsequent to the filing of the original complaint Q-Tips, Inc., filed an amended and supplementary complaint incorporating the first two counts as
originally filed, and adding a third cause of action in which it alleged that Johnson & Johnson had formulated a plan or scheme, wilfully and
maliciously, to destroy the value of the plaintiff's trade-mark "Q-Tips" in furtherance of which it embarked upon a campaign to create for the word
"tips" a new meaning which it had never theretofore had, namely, swab or applicator. It alleged that Johnson & Johnson designed to cause the word
"tips" to become accepted as the principal generic term for the article described, thus diluting the value and distinctiveness of plaintiff's trade-mark
"Q-Tips". It prayed for damages (compensatory and punitive) on account of the infringement and a judgment that damages should be trebled.

Johnson & Johnson filed an answer to the amended and supplementary complaint in which it denied the validity and infringement of the trade-mark
"Q-Tips" or that by the use of the words "Cotton Tips" or the appearance of its packages it has unfairly competed with Q-Tips, Inc., and sought to
create for the word "tips" a new meaning designed to dilute or destroy the value and distinctiveness of the trade-mark of Q-Tips, Inc. It averred that
its use of the words "cotton" and "tips" individually or together in the form of "Cotton Tips" is a use other than as a trade-mark, of a term or device
which is descriptive of and used fairly and in good faith only to describe to users a product manufactured and sold by it which consisted "of a small
stick of which one or both tips are provided with absorbent cotton."

The answer also alleged that the term "cotton tips" has been used by manufacturers for years to describe such goods without objection by plaintiff;
that because of plaintiff's conduct the word "Tips" in "Q-Tips" has never had any significance as an indication of origin and that "tips" has been used
by the trade and public to indicate such goods; that the term "Q-Tips" has become the common descriptive name of a product on which a product
patent has expired; that as a result of plaintiff's abandonment of the alleged trade-mark "Q-Tips", said mark has lost its significance as an indication
of origin and has been used by the trade and public as the generic name of such product; that plaintiff has used the term "Q-Tips" exclusively in
connection with this type of product so that the term now means to the public a certain type of applicator that may be made by any manufacturer;
that plaintiff has engaged in false patent marking and an attempt to secure a monopoly as noted in connection with the patent suit; and that when
plaintiff adopted the mark "Q-Tips", the use of the word "tip" or "tips" by its predecessors and others had been such as to already have diluted any
value or distinctiveness in said mark on cotton tipped applicators, and since then, and long before defendant began to use the term "Cotton Tips",
plaintiff by acts of commission and omission continued to dilute and destroy any alleged value and distinctiveness of the mark.

A counterclaim was entered similar to that filed with the answer in the patent suit. The defendant sought judgment dismissing the complaint,
adjudicating that the mark "Q-Tips" is invalid, that plaintiff's registration of "Q-Tips" be cancelled, that the plaintiff be enjoined from prosecuting the
patent suit, that plaintiff be enjoined from engaging in restraint of trade and unfair competition with respect to defendant, and that the defendant
be awarded treble damages, costs and attorneys' fees in consequence *850 of plaintiff's monopolistic and unfair practices.

Defendant moved for summary judgment in the patent case grounded on the contention that plaintiff was barred from suing on its patent having
misused it by licensing applicator making machinery embodying the alleged invention of Patent No. 1,921,604, in which licenses plaintiff limited
either the use of the licensed machines to the manufacture of unpatented applicators having a cotton tip at one end of the stick only, or the number
of the unpatented applicators that could be made by the licensee where the license permitted manufacture of applicators with cotton swabs at both
ends of the stick. Defendant moved for summary judgment in the trade-mark case on the ground that various of its defenses were supported by
such an overwhelming assemblage of evidence that there was no issue as to any material fact and that visual comparison of plaintiff's packages with
those of the defendant conclusively negated any inference of fraud or unfair competition. The motion was denied in each case for the reasons set
forth in an opinion filed September 4, 1951.

At a pretrial conference held in both cases they were consolidated for trial.

The Patent Case (C-10,415)

Both plaintiff and defendant manufacture a product consisting of a stick one-tenth of an inch in diameter,[2] two and seven-eighths of an inch
long,[3] and with a swab of cotton wrapped around each end of the stick. The primary use of these double tipped applicators is in the care of babies,
where they are employed for such purposes as cleaning nostrils and ears.[4] It would appear that the first commercial producer of cotton tipped
applicators was a Mrs. Forbis, who manufactured them in her home.[5] She also owned a patent on the article, numbered 1,652,108, dated
December 6, 1927, and sold the product under the appellation Baby Nose-Gay.[6] In 1925 The Leo Gerstenzang Co., Inc. purchased an assignment of
the product patent from Mrs. Forbis.[7]

Plaintiff, Q-Tips, Inc., was incorporated in New York on January 30, 1929,[8] and on February 6, 1929, The Leo Gerstenzang Co., Inc. transferred its
business to plaintiff.[9] On January 2, 1937, plaintiff's president, Mr. Leo Gerstenzang, and his wife Mrs. Ziuta Gerstenzang formed a partnership and
purchased from plaintiff "All merchandise, machinery and fixtures now contained in the premises132 W. 36th Street and used by said Q-Tips, Inc.,
for the manufacture of Q-Tips or medicated swabs together with the accounts receivable of said Q-Tips, Inc." The contract recited that plaintiff was
the owner of patents covering the manufacture of applicators.[10]

The partnership manufactured and sold the product until December 28, 1945, when by agreement it sold back to the plaintiff certain assets used in
the manufacture and sale of its applicators.[11] Plaintiff then resumed the manufacture and sale of the product. On December 5, 1945, Q-Tips Sales
Corporation was organized in New York,[12] and on December 29, 1945, the partnership sold the Sales Corporation certain assets in exchange for
stock.[13] During all this time Mr. and Mrs. Gerstenzang had been the principal owners of the business and in control of it.[14]

Cotton-tipped applicators were originally manufactured by hand,[15] at which time the average worker could produce about 800 during an eight
hour day.[16] Mr. Gerstenzang then developed a machine consisting of two wheels between which an applicator *851 stick would be held by a fork
device and by means of which the stick would be twirled. As the stick was twirled an operator would apply cotton to its ends.[17] Two operators
were required to run this machine, one to insert the stick between the wheels and one to apply the cotton.[18] There resulted an increase in
production to about 2,500 or 3,000 applicators per day per girl.[19]

Following this initial mechanization of the manufacturing process, Mr. Gerstenzang developed an apparatus for making applicators which is
embodied in the United States Patent 1,721,815, issued to the plaintiff July 23, 1929, and which must be described in some detail as it is so closely
related to the plaintiff's subsequent machine which is in suit and to the accused machine owned by Johnson & Johnson.

This mechanism, which shall hereinafter be referred to as the Gerstenzang machine, was designed so that it could twirl applicator sticks, leaving
their ends exposed in such a position that a single operator could apply a wad of cotton at each end of the twirling stick. The machine was provided
with a hopper to supply untreated sticks. A roller drew these sticks from the hopper one at a time and introduced them into the so-called stick
carrier, which consisted of two parallel discs mounted about two inches apart so that the ends of the two and seven-eighths wooden sticks
protruded slightly to permit placing cotton wads thereon. In each of the discs was a series of grooves or notches into which the sticks fitted.

Between the discs of the stick carrier and mounted on the same axle was a revolving roller. Its radius was less than that of the discs; so that the
sticks were not prevented from falling into the grooves. Another revolving roller was in place above the first one, constructed in such a manner that
it could be moved away from the lower one to permit a stick to be brought between the two rollers. The upper roller could then be lowered into
contact with the stick in order to twirl the stick rapidly.

Though the rollers moved constantly in a counter-clockwise direction, the stick carrier, between whose discs was mounted the lower roller, moved
only intermittently. When the machine commenced operation, a stick would be fed from the hopper into the first set of stick carrier grooves. Next
the stick carrier would step one position. The stick would be advanced to a spot between the rollers, the top one of which would be lowered in
relation to the bottom roller so as to twirl the stick. The operator would apply a wad of cotton at each end of the twirling stick. Simultaneously
another stick would be fed from the hopper into the second set of stick carrier grooves. At the next step of the stick carriers the second stick would
reach the twirling position, the first would be carried beyond it, and a third would be fed into the third set of grooves of the stick carrier. Continued
operation of the machine would result in the constant repetition of this process.

The stepping, or indexing, of the stick carrier of the Gerstenzang machine was accomplished by means of a rotating arm, which engaged a series of
spaced pins protruding from the external surfaces of the stick carrier. As the arm rotated, it hit a pin, pushed it upward until the arm became
disengaged. The upward motion of the pin advanced the stick carrier one step. The arm completed its circle while the stick carrier was held
stationary by a spring detent provided for the purpose. As the arm came around once more to engage the next pin and push it upward, the stick
carrier would step again. While the stick carrier was in repose, the stick twirling function was performed.

The Gerstenzang machine was used for about four years and resulted in a substantially increased output.[20] The next step was the elimination of
the manual operations. About the year 1929 Mr. Gerstenzang approached Mr. Earl Bunnell and Mr. Leslie Barnes, designers of automatic machinery,
to request that they effect this improvement,[21] which they undertook to *852 do and which, after over one-half of a year's work,[22] resulted in
the machine in suit, covered by United States Patent 1,921,604, which will hereinafter be referred to as the Bunnell machine.

What, in effect, the Bunnell machine accomplished was to add to the Gerstenzang machine a device to break off bits of cotton and provide
mechanical fingers on arms to carry the cotton wads to the ends of the twirling stick and shape the swabs. In describing the operation of this
machine it is convenient to catagorize it as consisting of three mechanisms. The first is the stick carrying and stick twirling mechanism. This
incorporates almost unchanged the entire Gerstenzang machine just described, including the method of stepping the stick carrier.

The second mechanism is the cotton feeding and cotton breaking mechanism, one of which is mounted on each side of the stick carrying and stick
twirling mechanism. It consists of a cotton feed and two pairs of jaws located one behind the other. A strand of cotton is introduced into these jaws
and is fed forward thereby. With both pairs of jaws in the forward position and with the continuous strand of cotton located between them, the rear
jaws first and then the front jaws close to grip the strand. The rear jaws then move rearwardly while the front jaws remain stationary to break off a
wad of cotton. Thereafter, the front jaws move rearwardly to feed the cotton strand ahead.
The third mechanism involves the transfer of the wad so broken off to the ends of the twirling stick, and, like the cotton feeding and breaking
mechanism, one is mounted on each side of the stick carrier and stick twirling device. It consists of a pair of steel fingers which aproaches to receive
the wad of cotton broken off by the jaws. As the fingers approach a wad inserter arm moves laterally from the opposite side and tucks the wad
between the fingers. The rear pair of cotton gripping jaws swings open to release the broken off wad of cotton as it is grasped by the fingers, and
simultaneously therewith the front pair of jaws swings open too. Both pairs of jaws then move forwardly along the cotton strand to their initial
positions ready to repeat the cycle. The fingers with the broken off cotton wad grasped between them move outwardly and rearwardly until located
in axial alignment with the twirling stick in the stick carrier. The fingers move inwardly toward the end of the twirling stick to apply the wad thereto
and to form it into a cotton swab in a manner closely simulating the actions of human fingers performing the same operation.

After forming the cotton swab on the end of the stick, the fingers move forwardly away from the stick and then forwardly and outwardly to their
initial position ready to grasp the next wad of cotton in the next cycle.

All that is necessary to connect Bunnell's contribution to the Gerstenzang machine is to lengthen the drive shaft of the latter.[23] The proper timing
of the many operations of the Bunnell machine and the advancing and retreating of its mechanisms is effected by means of numerous, varied
shaped cams, located on the turning cam shaft, which act to move parts in one direction against spring tension. The spring tension returns a part
after the cam finishes its action on that part.[24]

It appears that in about 1930 by use of the Bunnell machine the output of cotton tipped applicators was forty to fifty a minute per machine,[25] but
that plaintiff, which is still utilizing this machine, by effecting improvements thereon, has increased its rate of output somewhat.[26]

In 1947 defendant began manufacturing cotton tipped applicators, using the machine which plaintiff alleges infringes the Bunnell patent, and which
is itself patented in United States Patent 2,576,068. This machine also employs a stick carrier similar to that in the original Gerstenzang invention. It
receives sticks from a hopper; the carrier *853 contains eight notches in its circumference devised to hold the sticks. It operates intermittently,
moving one-eighth of a revolution at a time. Cotton wads are picked up in a manner which will be described in more detail, and the stick twirling
operation is performed. There are rubber tired rollers which twirl the sticks as they are introduced between them, but they are not located one
above the stick carrier and one between the two discs forming the outer edges of the carrier as in the Gerstenzang machine. Instead, there is
located on each side of the stick carrier, at an interval of four steps or five notches of the machine beyond the opening of the hopper, a pair of
rubber tired rollers continuously rotating in the same direction. These normally are spaced so as to admit the oncoming stick between them. When a
stick dwells in the twirling position, the rollers move in to engage opposite sides of the stick, inwardly from its ends, and twirl it rapidly.
Appropriately shaped roll sections adjacent to and outside of the rubber-tired rollers reduce the cotton wads on the protruding stick ends into the
desired swab form.

Intermittent motion of the stick carrier is effected by a somewhat different mechanism than that in the Gerstenzang machine and this different
mechanism is described in the Ganz Patent 2,521,211. Instead of employing a rotating arm to contact and advance a pin on the stick carrier, the
accused machine uses an arm which rocks and oscillates at one end while the other end makes a circular movement. The intermediate part of the
arm conveys a pin on the so-called indexing ring from one position to the next, causing the indexing movement. An eccentric, rotating disc at one
end of the arm fits into a curved portion of the indexing ring, locking it in position and performing the same functions as the lock pin and spring
detent in the Gerstenzang machine.[27] This locking arrangement, however, lacks the shock of engagement and release which is found in the
Gerstenzang device and permits greater operating speed.[28]

The accused machine performs the cotton feeding and breaking functions by means of a series of five pairs of rollers rather than by means of
opening and closing jaws as in the Bunnell device. A series of these pairs of rollers is located on each side of the stick carrier. A strand of cotton is fed
into these rollers from a cotton supply. The first three pairs, called draw rollers, operate intermittently but all at the same time, each moving a little
faster than the pair before it in order to draw out the cotton, thus performing the function of draw frames. The fourth and fifth pairs of rollers, the
fourth known as break off rollers and the fifth as transfer rollers, operate continuously, the fifth moving slightly more rapidly than the fourth. A wad
is broken off from the strand of cotton when the draw rollers stop while the break off and transfer rollers continue turning, tearing away the cotton
wad located therein from the main portion of the cotton strand.[29]

When a wad is torn off, the Bunnell machine would transfer it to the ends of the twirling stick by means of mechanical fingers and a wad inserter.
This mechanism is not employed by the accused machine. After a cotton wad is broken off it moves between the transfer rollers onto cotton
supports, which are shaped to provide a curved slot coinciding with the rim of the stick carrier. The outer discs of the stick carrier are at a lesser
distance from each other than the length of the sticks, so that the stick ends project beyond the discs. The slot between the cotton supports is in line
with the path of movement of the projecting ends and therefore a stick end will engage a cotton wad resting on the cotton supports midway of its
length. Continued rotation of the stick causes the cotton to fold once around the stick in the form of a U before the stick is carried between the stick
rotating *854 and cotton forming rollers, whose operation has already been touched upon.

Thus it can be seen that the accused machine uses a stick carrier and stick twirling device very similar to that used by the Gerstenzang machine. Its
intermittent motion is effected by a different type mechanism. The accused machine substitutes intermittent and continuous rollers for the moving
jaws of the Bunnell machine to tear off pieces of cotton. The accused machine does not employ mechanical fingers and arms to transfer a wad to
the end; instead it depends upon the stick ends themselves to pick up wads deposited by the transfer rollers upon cotton supports located in the
path of the stick ends. With its machine defendant is able to produce three hundred applicators a minute,[30] a considerably greater rate of
production than that of plaintiff.

Plaintiff relies upon claims 1 through 10, 16, 21, 22, and 23 of the patent in suit as those infringed by the accused machine.[31]*855 Each claim
covers some or all of the three mechanisms previously described which are employed by the Bunnell machine. The stick carrying and twirling
mechanism is included along with either the cotton feeding and breaking mechanism or the wad transfer mechanism or both in every claim except
9, 10 and 21, for with the exception of those three, each claim includes language equivalent to that in claim 3, "means for successively supporting
and twirling a plurality of sticks with exposed ends." That language must refer to the old Gerstenzang machine. Claim 9 describes only the cotton
feeding and breaking mechanism.

Claims 10 and 21 describe the cotton feeding and breaking mechanism and the wad transfer mechanism. The defendant asserts that these claims
are no more than a non-patentable aggregation of four elements (Defendant treats the wad inserter as a fourth element rather than as a part of the
wad transfer device.), each of which would operate as well whether or not the three others were present. Dispositive of the question whether a
combination patent is a mere aggregation or not is the presence or lack of invention, for if the combination shows invention it is patentable; if it
does not, it is unpatentable, or, in the language of many cases, it is a mere "aggregation." Great A & P Tea Co. v. Supermarket Equipment Corp.,
1950, 340 U.S. 147, 71 S. Ct. 127, 95 L. Ed. 162.

In that case the Supreme Court emphasized that care should be exercised when examining combination patents, stating:
"Courts should scrutinize combination patent claims with a care proportioned to the difficulty and improbability of finding invention in an assembly
of old elements. The function of a patent is to add to the sum of useful knowledge. Patents cannot be sustained when, on the contrary, their effect
is to subtract from former resources freely available to skilled artisans. A patent for a combination which only unites old elements with no change in
their respective functions, such as is presented here, obviously withdraws what already is known into the field of its monopoly and diminishes the
resources available to skillful men. * * *" 340 U.S. at pages 152, 153, 71 S.Ct. at page 130.
Lincoln Engineering Co. v. Stewart-Warner Corp., 1938, 303 U.S. 545, 58 S. Ct. 662, 82 L. Ed. 1008, concerned a patentee who invented an improved
coupling member for a well known lubrication device consisting of a fitting member, a pump, a hose and a coupler, and who patented his
improvement in combination with the old elements. The patentee sued the defendant for contributory infringement and was successful in the
District Court, Stewart Warner Corp. v. Le Vally, D.C., 15 F. Supp. 571; Id., D.C., 16 F. Supp. 778 and in the Court of Appeals, Lincoln Engineering Co. v.
Stewart Warner Corp., 7 Cir., 91 F.2d 757. Reversing, the Supreme Court wrote:

"Butler may have devised a patentable improvement in such a chuck in the respect that the multiple jaws in his device are closed over the nipple by
the pressure of the grease, but we think he did no more than this. As we said of Gullborg in the Rogers Case [Rogers v. Alemite Corp., 298 U.S. 415,
56 S. Ct. 787, 80 L. Ed. 1251], having hit upon this improvement he did not patent it as such but attempted to claim it in combination with other old
elements which performed no new function in his claimed combination. The patent is therefore void as claiming more than the applicant invented.
The mere aggregation of a number of old parts or elements which, in the aggregation, perform or produce no new *856 or different function or
operation than that theretofore performed or produced by them, is not patentable invention. And the improvement of one part of an old
combination gives no right to claim that improvement in combination with other old parts which perform no new function in the combination." 303
U.S. at pages 549, 550, 58 S.Ct. at page 664.
The reasoning employed in the Lincoln Engineering Co. case renders invalid all those claims of the patent in suit which attempt to include within
their scope the stick carrying and stick twirling mechanism covered by the Gerstenzang patent 1,721,815 which expired on July 23, 1946. The
Bunnell machine incorporates the Gerstenzang machine virtually without change. The latter machine performs no new or different function or
operation by virtue of being united with the cotton feeding and breaking mechanism and the wad transfer mechanism. Its patent having expired, the
public may employ the ideas it embodies, and may not be prevented from so doing by its being patented along with improvements as a combination
patent. Consequently, claims 1 through 8, inclusive, 16, 22 and 23 are invalid for claiming too much.

Turning to the remaining claims, 9, 10, and 21, it must be determined if the mechanisms they describe show invention. Claim 9 refers to the cotton
feeding and breaking mechanism, which includes the two pairs of jaws on each side of the machine which have already been described. Claims 10
and 21 refer to the cotton feeding and breaking mechanism and also to the wad transfer mechanism, which has also been described.

In my opinion these two mechanisms, combined, exhibit invention. Prior to their utilization an operator was needed in front of each applicator
machine of the Gerstenzang type to apply cotton by hand to the stick ends. Using the improvements described in these claims the wad forming and
applying operation was mechanized; one operator was able to tend three machines,[32] the speed of operations was increased; the resulting
product was more sanitary. Far more than the mere substitution of a machine for human hands was accomplished. See Hildreth v. Mastores, 1921,
257 U.S. 27, 42 S. Ct. 20, 66 L. Ed. 112. Examination of the mechanisms which achieved these results reveals an ingenious arrangement of cams,
levers and springs which function with precise timing. Where a patentee claims an invention separately as well as in combination with the old
elements which perform no new function, a court may allow the separate claims and disallow the combination claims. Bassick Mfg. Co. v. R. M.
Hollingshead Co., 1936, 298 U.S. 415, 56 S. Ct. 787, 80 L. Ed. 1251. Here the Bunnell improvement advanced materially the art of making cotton
tipped applicators and his contribution was worthy of protection. Claims 10 and 21, which do not include the old Gerstenzang machine, were valid.
Claim 9, directed solely to the cotton feeding and break off mechanism, adequately protected that part of the improvement which it describes.

II
The defendant maintains that the plaintiff cannot assert his invention as it has not been adequately claimed pursuant to 35 U.S.C.A. § 33,[33] which
provides that an *857 inventor shall particularly point out and distinctly claim the part, improvement, or contribution which he asserts as his
invention or discovery. Inasmuch as we are concerned only with claims 9, 10 and 21, there is no need to discuss defendant's objection to the others.
Defendant objected to 10 and 21 on the grounds that they make their claims in terms of function instead of pointing out a patentable combination.
Claim 10 was also objected to for the reason that it does not specifically include the wad inserter, without which the wad transfer mechanism will
not function, and that, therefore, claim 10 is directed to an inoperative structure.

Claims are not to be examined in vacuo; they are to be construed with the specifications in mind. The Court of Appeals, Third Circuit, has stated,
"The claims of a patent must always be explained by and read in connection with the specification and in the light of definitions and admissions
made by the applicant in the proceedings in the Patent Office." Westinghouse Electric Corp. v. Hanovia Chemical & Mfg. Co., 3 Cir., 179 F.2d 293,
296-297.

Read in connection with the specifications the phrase in claim 9 "a cotton wad forming mechanism including a plurality of means for grasping a
strand of cotton at spaced points, and mechanism for moving said means relatively for tearing off a wad of cotton" clearly refers to the pairs of jaws
located on each side of the machine which operate to tear off wads of cotton. The same device is adequately described in claim 10 by the phrase "a
cotton wad forming mechanism including a plurality of means for grasping a strand of cotton at spaced points, mechanism for moving said means
relatively for tearing off a wad of cotton" and in claim 21 by the words "a receptacle for holding a strand of cotton, means for grasping and holding
said strand, mechanism for grasping and pulling said strand away from said means thereby separating a wad therefrom." The mechanical arms and
fingers, with which the wad inserter functions to push the cotton into the fingers, are described in great detail in the specifications, and the manner
of their operation is similarly disclosed. There is no question but that they are included in claim 10 by the language "means for conveying said wad to
the point of application" and in claim 21 by the language "means for transferring the cotton wad from said last named mechanism to the point of
application."

Read in connection with the specifications it is my conclusion that these claims point out a patentable invention and that as the wad inserter is
described in the specifications as functioning in conjunction with the arms, claim 10 is not directed to an inoperative structure.

III
The defendant contends that if the language of the Bunnell claims is broad enough to include within its scope the intermittent draw rollers, the
continuous break off rollers, the continuous transfer rollers and the cotton supports of its machine, (Patent No. 2,576,068), the Bunnell claims are
invalid because they were anticipated in the prior art. Defendant cites numerous devices which it asserts incorporate these ideas.
In the Johnson & Johnson sanitary napkin machine, in use more than two years prior to the filing date of the Bunnell patent, cotton is fed over a
support through a pair of intermittent rollers and then through a pair of continuous rollers which break off the cotton and deliver the detached
pieces onto a belt. The Sewall patent 1,434,917 of November 7, 1922, covers a machine for breaking a web of cotton batting into short pieces. The
material first goes through a folding mechanism and then through intermittently operating rollers into continuously operating ones. The latter
rollers are turned by a hand crank, and at a certain point a pin hits a lever causing the intermittent rollers to stop until the cotton web has cleared
the *858 continuous rollers. The Fortier patent 1,755,109 granted April 15, 1930, concerns a machine for making dental rolls which consist of a
length of cotton rolled over itself tightly, impregnated and dried so as to form a round stick that can be cut into various lengths for use in medical or
dental work. In this device also the cotton material first passes through intermittent rollers and then through continuous ones. The pieces thus
broken off are passed out onto a belt for further processing.

Whether one narrowly confines the art to which the Bunnell machine relates to the making of cotton tipped applicators or whether one extends the
art to which it relates to all handling of cotton, it is appropriate to consider these devices in determining whether the Bunnell machine exhibits
novelty. In Miller v. Life Savers, 2 Cir., 1933, 62 F.2d 513, the court held that consideration of the bending of soft metal rods was appropriate in
ruling upon the scope of protection to be allowed a patent relating to the bending of rods of candy. The court stated:

"Miller's machine follows essentially the teachings of United States patent No. 819,543 to Hart. To be sure the Hart patent related to a shaping by
bending or curling of a rod of metal soft enough to be bent without changing its cross section, but the operation in the case of a plastic rod of candy
and a rod of soft metal is similar. * * * The validity of the Miller patent was assumed by the court below, and has hardly been questioned. We do not
say that it involved no invention over Hart, but only that the latter patent so narrowed the field of invention that Miller is not entitled to claim that
he originated the process of curling a plastic substance of predetermined length and diameter about a post and of then compressing it to eliminate
irregularities of form. * * * It is well established that, if a device in another art can be fitted by ordinary mechanical skill to perform the function of a
patent under judicial consideration, it is a pertinent reference to determine the scope of the claims. * * *" 62 F.2d at page 515.
Intermittent and continuous rollers were used to break off wads of cotton when Bunnell's machine was patented. It would not require more than
ordinary mechanical skill to adapt such rollers to a machine similar to Gerstenzang's. Bunnell's claims cannot extend as far as plaintiff contends
without being invalid on the grounds of having been anticipated in the prior or analogous art and thus being void for lack of novelty.

I do not believe, however, that Bunnell's claims include a wad forming mechanism utilizing continuous and intermittent rollers. Claims 9, 10 and 21
refer to a mechanism for grasping a strand of cotton and a mechanism for grasping and pulling said strand away from the first mechanism and
thereby pulling off a wad. From an inspection of the specification it can be seen that the mechanisms for grasping a strand of cotton at spaced
points is the forward pair of jaws numbered 29 and 30 in the drawings. The mechanism for pulling the strand away from the first mechanism is in
the rear pair of jaws numbered 29A and 30A in the drawings.

Plaintiff's contention that the claims should include rollers or gears as well as these reciprocating jaws is based upon the language starting on page
5, line 21, of the specification, which reads, "It is evident that various modifications of the present improvements may be made by those skilled in
the art without departing from the scope and purview of the invention. For example, gears provided with suitable cooperating surfaces may be
substituted for the jaws 29 and 30 without departing from the scope of the appended claims." Jaws 29 and 30 are the forward pairs of jaws only,
and it would be reading too much into the specification to hold that this suggestion that gears could be substituted for them, also carries the idea
that other gears could be substituted for jaws 29A and 30A and that one set of these gears would operate intermittently and one continuously to
form wads. Bunnell's reference to the substitution of gears for jaws 29 and 30 alone, is *859 conceivable, but action is produced by them different
from rollers or gears and there is neither suggestion or auto suggestion of the kind of devices and their action that would be substituted for the
operations that would follow that of jaws 29 and 30 and we are left in the dark as to substitutes for the employment of Bunnell's grasping and
transfer mechanisms.

With this aspect of claims 9, 10 and 21 limited to a wad forming mechanism consisting of moving jaws, the Bunnell machine was not anticipated by
the Johnson & Johnson sanitary napkin machine, by the Sewall patent 1,434,917, and by the Fortier patent 1,755,109 whose wad forming functions
was performed by rollers.

Having found that plaintiff's claims are not so broad as to have been anticipated by devices using rollers to break off cotton wads, it is unnecessary
to consider defendant's contention that plaintiff's patent is void because plaintiff failed to disclaim machines using rollers.

The defendant cited other machine patents as being a part of the prior artRichmond 525,798 dated September 11, 1894, Trundle 1,438,623 of
December 12, 1922, De Felice 1,481,314 of January 22, 1924, and De Felice 1,700,584 of January 29, 1929. They need not be described in detail
here, for their operation does not approach that of the Bunnell machine as closely as the machines just described, and consequently would not
affect Bunnell's claim to a greater extent than those.

IV
Related to the question of the scope of the Bunnell claims and the effect thereon of the prior art is the question whether the accused machine
infringes the Bunnell patent. It has been held that the Bunnell claim must be limited to a wad forming, transferring and shaping mechanism whose
functions are performed by pairs of moving jaws and by mechanical arms with steel fingers at their ends. Only if the accused machine performs
substantially the same function in substantially the same way to obtain the same result can it be held to infringe the Bunnell patent, Graver Tank
Mfg. Co. v. Linde Air Products Co., 1950, 339 U.S. 605, 70 S. Ct. 854, 94 L. Ed. 1097.

Plaintiff cites the case of Q-Tips, Inc., v. Glickston, D.C.1939, 27 F. Supp. 948 as controlling on the issue of infringement. In that case the defendant
used a machine employing a stick carrier device which operated intermittently, a pair of intermittent rollers or gears which, in conjunction with a
pair of continuously rotating gears, tore off wads of cotton prior to the swab forming operation. Q-Tips, Inc., sued defendant for infringement of
both the Gerstenzang and Bunnell patents. The court held that neither of these patents was anticipated in the prior art and that both were infringed
by defendants.

Two factors detract from the applicability of this opinion to the present case. In the first place, the Gerstenzang patent had not expired, and,
assuming its validity, it was not available for the use of that defendant as it is for this defendant. Secondly, it does not appear that the court in that
case was referred to the Johnson & Johnson sanitary napkin machine, the Sewall machine and the Fortier machine.

I am persuaded by examination of the machines in question here and of the patents and by testimony given at the trial that the wad forming,
transferring and shaping device of the Bunnell patent, the only part which is patentable, is not infringed by the system of rollers of the defendant's
machine, for the rollers perform in a substantially different manner.
The reciprocating action of the mechanical jaws of the Bunnell patent to tear off cotton wads has already been described. Use of intermittent and
continuous rollers to perform this function is a difference of substance. Whereas the Bunnell device employed a fairly complex system of springs,
cams and levers to activate the combination of reciprocating arms, mechanical fingers and wad inserter device the function of which was to transfer
the wads of cotton to the stick ends and shape them thereon, the accused machine uses a much more simple mechanism to achieve that end. As has
been indicated, the broken off wad is ejected from the transfer rollers onto the cotton supports, where the stick *860 ends themselves pick up the
wads, carrying them to the stick rotating and cotton forming rollers. Without deciding whether the accused machine exhibits invention over the
prior art, it must be held that it does not infringe the Bunnell patent.

The Trade-mark Case (C 284-49)

Originally, when cotton tipped applicators were made by Mrs. Forbis, they were sold under the name of Baby Nose-Gays.[34] In 1925, after The Leo
Gerstenzang Co., Inc. purchased an assignment of the product patent from Mrs. Forbis, the packages of applicators were labelled Baby-Gays.[35] In
1926 the legend was changed to read "Q-Tips Baby Gays",[36] and in 1927 application was made to register the mark "Q-Tips Baby Gays".[37]
Sometime after 1926 the words "Baby Gays" were dropped and the concern began to develop "Q-Tips" as its identifying mark, applying for
registration of it on September 14, 1933.[38] Packages were made up using blue paper with pictures of double tipped applicators upon them,[39]
features which have been the basis for plaintiff's packaged sign since that time. The design of the crossed applicators was made by dropping them
and then photographing the resulting pattern.[40] The "Q" in Q-Tips was used so that the name in its entirety would sound like "cute tips"[41] when
spoken. It would appear that when the mark "Q-Tips" was originated, the product to which it applied was known as a medical swab or a swab,[42]
but that thereafter the term "applicator" or "cottontipped applicator" gained currency.[43]

There has been some use by others of the word "tips" in their trade name for the product. Samuel and Irving Glickston manufactured double tipped
applicators, calling them "Twin-Tips". In 1939 the United States District Court, Eastern District of New York, issued an injunction which, among
others, restrained the Glickstons from using the name "Twin-Tips", Q-Tips, Inc., v. Glickston, supra. The Glickstons then sold the product under the
name of "Twin-etts".[44] Realmont Limited of Canada has, since 1939, produced and sold an applicator with a cotton swab on one end only under
the name of Little Baby Cherub Tips.[45] About 1947 Q-Tips Sales Corporation started selling single tipped applicators to Realmont,[46] but after it
started the trade-mark suit it made rather weak objections to Realmont's name for the product,[47] which objections were without effect.[48]

In 1947 The Mennen Company released for distribution to the trade a product designated "Mennen Tips-for-Tots".[49] After some delay in spite of
several opportunities to protest against this use of "tips", plaintiff objected to it shortly before starting the trade-mark action. Mennen voluntarily
abandoned the name.

Originally the defendant was the sole distributor of "Q-Tips" in the hospital field,[50] selling only single tipped applicators, which they bought from
Q-Tips, Inc., in three inch and six inch sizes.[51] They called this product cotton tipped applicators.[52] About 1943 the defendant became
dissatisfied with the arrangement and began to investigate alternative methods of procuring and marketing the product.[53] It decided to enter the
retail trade by making and selling its own double tipped applicators. After considerable search for an appropriate *861 name for the double tipped
items it was decided to call them "Johnson's Cotton Tipped Applicators."[54]

Johnson's Cotton Tipped Applicators were introduced to the trade in 1947,[55] packaged in a flat, light blue box which had a cover which could be
lifted off completely. On the top of the box there were pictured six applicators lined up adjacent to each other in a vertical position; there was the
legend which named the product, "Johnson's Cotton Tipped Applicators", which noted that the product was sterile and that the box contained a
certain number of double tipped swabs. In addition there was a picture of four happy children romping in play.[56] The defendant continued selling
its single tipped applicators in the hospital field under the name "Cotton Tipped Applicators".

Almost immediately the defendant became dissatisfied with this "put-up". The cost of the package was excessive; it didn't display well on store
shelves; its cover arrangement caused spilling of the contents when the box was kicked off a bathinette by a baby, or otherwise disturbed.[57] To
remedy this situation, defendant adopted the packaging which plaintiff claims infringes its trade-mark and constitutes unfair competition.
Applicators were packaged in a dress similar to that of the defendant's baby items, which use boxes with a white (or occasionally another light color)
background with an orange basket weave border along the top and bottom edges. The word "Johnson's" appeared in script and in larger block
letters was written "Cotton Tips". Beneath the new name of the product was a picture of crossed applicators.[58] The boxes came in two sizes54
applicators and 240 applicators, the same quantities as were packaged by the plaintiff. The applicators themselves were of the same dimensions and
the boxes were about the same sizes as the plaintiff's.[59]

The defendant had searched for an appropriate name to replace "Cotton Tipped Applicators", before coming up with "Cotton Tips". When it decided
upon that name for its double tipped applicators, it also decided to change the name of the hospital product, the single tipped applicators, from
"cotton tipped applicators" to "Cotton Tips".[60] Apparently this caused confusion in the hospital market and the name for the single tipped item
was changed back to "cotton tipped applicators".[61] A determined effort was made by the defendant to differentiate the terms "cotton tipped
applicators" and "cotton tips" in its theory that the single tipped applicator should be known as a "cotton tipped applicator" for it was merely in
hospital use for applying substances. It further theorized that the double tipped applicator was used for cleansing and sanitary purposes and
therefore the defendant held that the term cotton tipped applicator was inappropriate and that these should be called "Cotton Tips". As to the
double tipped product, it appears that the defendant attempted to use the "Cotton Tips" name consistently by eliminating from its publications and
the speech of its agents and employees the namesswab and applicator. The defendant devoted a considerable amount of money to advertising the
revamped packaging of the double tipped product and to publicize the name "Cotton Tips", its advertising budget being 98% of the total gross dollar
receipts from the product in 1949, 81% in 1950 and 54% in 1951.[62]

Discussion

I
A contention of defendant's which, if accepted would be dispositive of this aspect of the case, is that the term "Q-Tips" is not a valid trade-mark and
therefore cannot be infringed by "Cotton Tips". The reasons for this contention are that the word "tips" is descriptive and that the entire *862 term
"Q-Tips" has become the generic name for cotton tipped applicators with swabs on each end.

A trade-mark is an arbitrary or fanciful symbol, consisting either of words or pictures, which is designed to indicate the origin of a product. A device
which is merely descriptive of an article of trade cannot be afforded legal protection as a trade-mark. Warner & Co. v. Eli Lilly & Co., 1924, 265 U.S.
526, 44 S. Ct. 615, 68 L. Ed. 1161.

The defendant has introduced much evidence which it claims establishes that "tips" is descriptive. This evidence shows that plaintiff uses "tips" on
its packages in phrases such as "100 Tips" and in its advertising blurbs such as "A tip for each ear." It shows that when plaintiff contemplated selling
other products, it devised such names as "Q-Talc" and "Q-Soap", not "Q-Tip Talc" or "Q-Tip Soap", and that when it had products with cotton swabs
at one end of the stick only, it used "tips" in such names as "Sani-Tips". The defendant's evidence also establishes that persons other than plaintiff
have used the word "tips" in such a manner as, "* * * for economy, we recommend the 25¢ size 136 tips, or 50¢ size272 tips."

Whether a word is descriptive or has arbitrary significance must be decided, not in the abstract, but in relation to the goods in question and the
context in which it is used. See Judson Dunaway Corporation v. Hygienic Products Co., 1 Cir., 1949, 178 F.2d 461, 465, certiorari denied, 1950, 339
U.S. 948, 70 S. Ct. 802, 94 L. Ed. 1362. Restatement of the Law of Torts § 721, Comment a. The most appropriate definition of "tips" for the purpose
of this controversy appears in Websters New International Dictionary of the English Language (1947) and reads, "The pointed or rounded end or
extremity of anything." In the drug trade, where cotton tipped applicators are sold, the word "tips" without more, conveys little meaning. Until the
plaintiff popularized its product, the addition of "Q" to "tips" could hardly have rendered "tips" more meaningful to the trade.

In determining whether a mark is descriptive, the court examines it as a whole, W. G. Reardon Laboratories v. B. & B. Exterminators, 4 Cir., 1934, 71
F.2d 515. In the light of such an examination I am constrained to hold that the entire term "Q-Tips" is an arbitrary symbol which has acquired the
meaning of a cotton tipped applicator made by plaintiff.

Undeniably the word "tips" has also been used by plaintiff and others descriptively to refer to the rounded, cotton covered ends of applicators. This
is the use of the word in most, if not all, of the exhibits gathered by defendant. In this context "tip" is not used to refer to the product as a whole.
For example, in such a sentence as, "When cleaning baby ears, moisten the tip with vaseline," "tip" must refer to the cotton end, not to the whole
product.

Defendant also contends that even if "Q-Tips" were a valid trade-mark at one time, it has since lost that status because it has become the generic
name for the product, cotton tipped applicators. Defendant points out that plaintiff had a product patent which has expired and that prior to
defendant's entry into the applicator field, plaintiff sold over 90% of the double tipped variety. In addition, it points out that "Q-Tips" has been used
by plaintiff and others in a generic sense. For example, one of plaintiff's advertisements read, "Then he put a Q-Tip beside one of my shaggy, skinny
swabs. Next, he took a Q-Tip and jabbed it against my finger." Certain layette lists of baby requirements prepared by stores for distribution to the
public included the item "Q-Tips" along with admittedly generic product names.

The law on the question is stated in Singer Mfg. Co. v. June Mfg. Co., 1896, 163 U.S. 169, 16 S. Ct. 1002, 41 L. Ed. 118.

"The result, then, of the American, the English, and the French doctrine universally upheld is this: That where, during the life of a monopoly created
by a patent, a name, whether it be arbitrary or be that of the inventor, has become, by his consent, either express or tacit, the identifying and
generic name of the thing patented, this name *863 passes to the public with the cessation of the monopoly which the patent created. Where
another avails himself of this public dedication to make the machine and use the generic designation, he can do so in all forms, with the fullest
liberty, by affixing such name to the machines, by referring to it in advertisements, and by other means, subject, however, to the condition that the
name must be so used as not to deprive others of their rights, or to deceive the public; and, therefore, that the name must be accompanied with
such indications that the thing manufactured is the work of the one making it, as will unmistakably inform the public of that fact." 163 U.S. at pages
199, 200, 16 S.Ct. at page 1014.
It must now be determined whether the patentee's name "Q-Tips" has become by its consent the identifying and generic name of cotton tipped
applicators. The test for deciding whether an arbitrary name has become the generic title of a product is "What do the buyers understand by the
word for whose use the parties are contending? If they understand by it only the kind of goods sold, then * * * it makes no difference whatever
what efforts the plaintiff has made to get them to understand more." Bayer Co. v. United Drug Co., D.C.S.D.N.Y.1921, 272 F. 505, at page 509. That
case pointed out that to consumers the term "aspirin" meant only a product, not a manufacturer, and therefore "aspirin" could not be appropriated
as a trade-mark.

The situation as regards "Q-Tips" is quite different from that in the Bayer case and that in Dupont Cellophane Co. v. Waxed Products Co., 2 Cir.,
1936, 85 F.2d 75, certiorari denied E. I. Du Pont De Nemours & Co. v. Waxed Products Co., 1936, 299 U.S. 601, 57 S. Ct. 194, 81 L. Ed. 443, which
applies the same principle. Here, though plaintiff held a product patent and though he occupied a prominent role in the double tipped applicator
field, the evidence indicates that the term "Q-Tips" has not come to mean to the consumer the product double tipped applicator as distinguished
from a certain brand of applicator. There were competitors of plaintiff, each of which employed a trade-mark of its own combined with a descriptive
term such as applicator, swab or cotton tipped applicator. The evidence indicates that druggists treated "Q-Tips" as a brand name, not as a name for
a product. Instances of use of the word "Q-Tips" in a generic sense, while evidentiary, do not of themselves necessarily establish that the buyers'
understanding is that it is the name of a kind of goods sold. Use by the plaintiff itself of the name "Q-Tips" without including thereafter a generic
name for the product is the type of practice which caused "aspirin" and "cellophane" to become generic names rather than arbitrary ones indicating
the source of the goods, for public acceptance of the words was so complete that there were no other words by which the products could be
identified. In the present case, however, "Q-Tips" has not yet acquired such a hold on the minds of consumers of cotton tipped applicators.

I am led to the conclusion that plaintiff's trade-mark "Q-Tips" has not become invalidated either by reason of descriptiveness or because it has
become a generic term.

II
Having held that "Q-Tips" is a valid trade-mark, it is necessary to determine if it is infringed by defendant's use of "Cotton Tips". The question turns
upon whether defendant is using "tips" descriptively. The Supreme Court has stated:

"A name which is merely descriptive of the ingredients, qualities or characteristics of an article of trade cannot be appropriated as a trade-mark and
the exclusive use of it afforded legal protection. The use of a similar name by another to truthfully describe his own product does not constitute a
legal or moral wrong, even if its effect be to cause the public to mistake the origin or ownership of the product." Warner Co. v. Eli Lilly & Co., supra,
265 U.S. at page 528, 44 S.Ct. at page 616.
*864 Defendant has offered voluminous evidence which clearly demonstrates that "cotton tips" has been used descriptively by plaintiff and others.
But that does not settle the question whether when defendant employes the term "Cotton Tips" in large block letters on its packages of applicators
it is descriptive or whether it is used in the manner of a trade-mark. The evidence indicates that defendant was well aware that its use of "Cotton
Tips" as a product name might not go unchallenged by plaintiff and that defendant prepared to meet that challenge.

For many years plaintiff manufactured cotton tipped applicators for defendant to sell to the hospital trade. The defendant was familiar with
plaintiff's position in the market as the chief supplier of this product. There can be no doubt from the evidence that defendant was determined that
if it could not buy plaintiff out it intended to assert itself as a competitor of plaintiff in the cotton tipped applicator field. To this end it was in search
of a name which would be the maximum aid in achieving the most successful competition. It tried "cotton tipped applicators" as heretofore
mentioned but found the term wanting. Its advertising agent in this quest solicited suggestions for a name by conducting contests among its
employees. Finally the defendant fixed upon the word "tips" with not only full knowledge of its use by the plaintiff but also in the light of the close
relationship between the parties, with the anticipation that the plaintiff would resist the use of the word "tips" as the name or part of a name for
any item competing with its product. From the outset of its decision to use the word "tips" as a part of its name for its applicators defendant trained
its employees and endeavored to drill all others in the view that the double tipped applicators had always been known as "Cotton Tips", in the style
of its mark. The evidence discloses that every department of the defendant, from its legal office to its production and sales ends, taught or were
taught the use of this synthesis. Its campaign included large-scale advertising in addition to the thorough indoctrination of its own personnel in the
new terminology.

It is interesting to note that in its application for a patent on its double tipped applicator machine, the defendant itself called it a "machine for
making cotton tipped applicators", whereas after its decision to change the product name it religiously refrained from using the discarded title. The
results of defendant's effort, however, has created only a synthetic name for this product and an arbitrary distinction between the nomenclature of
the single and the double tipped items. Neither the name nor the distinction were familiar to the buying public. The only reason that can be given
for this creation of a name and for the arbitrary classification of the product is that the defendant desired to utilize a term as similar to "Q-Tips" as it
considered to be legally possible. It is my opinion that the defendant has gone too far.

There is no question that "cotton" alone is descriptive and that "tips" can be used in such a way that it refers to the ends of the sticks. But from this
observation it does not necessarily follow that the entire term "Cotton Tips" as used by defendant on his packages is merely descriptive. W. G.
Reardon Laboratories v. B & B Exterminators, supra, concerned a plaintiff which sued to enjoin a defendant from infringing its trade-marks "Mouse
Seed" and "Rat Seed", names for rodent poison. In rejecting the defendant's contention that these terms were descriptive, the court stated:

"* * * In considering this question it is plainly to be seen that the words used separately are descriptive. When one uses the word mouse there is no
doubt as to what the word describes and there is nothing unique about it; its use brings at once to the mind the picture of a small rodent, a well
known animal. Likewise the use of the word seed at once conveys to the mind something from which plants may be germinated, such as seed wheat
or tobacco seed, or something to be used as food, such as bird seed. In the *865 ordinary acceptance of the word `seed' it would never convey to
the mind by its use alone anything poisonous. But when the two words are coupled together to make `Mouse Seed' there is no immediate meaning
conveyed but a suggestion to the mind as to what the term could mean and the two words used in conjunction cease to be descriptive and become
suggestive. Mature thought would probably lead to but one conclusionthat a mouse poison was indicatedbut it requires thought to reach this
conclusion. The words used together possess an element of incongruity which make them unusual and unique and therefore, in our opinion, a valid
trade-mark. * * *" 71 F. 2d at page 517.
The reasoning of the Reardon Laboratories case is persuasive here. "Cotton Tips" is not the name by which this product has been known. The term
"Cotton Tips", as used by the defendant on its packages is not merely descriptive of the cotton tipped applicators. Because of years of advertising
and selling of the "Q-Tips" brand, the word "tips" may be suggestive of the character of the goods sold by the defendant, but that will not negative a
trade-mark use. See Telechron, Inc., v. Telicon Corp., 3 Cir., 1952, 198 F.2d 903, 906; Globe-Werniche Co. v. Brown, C.C. W.D.Pa.1903, 121 F. 185,
187.

As defendant's use of "Cotton Tips" on its box covers is not descriptive of its product, it cannot avail itself of the defense embodied in 15 U.S.C.A. §
1115(b).[63]

I conclude that defendant has unfairly appropriated the word "tips", a prominent part of plaintiff's trade-mark, and that the term "Cotton Tips", as
used by the defendant, is so similar to plaintiff's mark that it will confuse the buying public In this respect I follow the decision of the United States
District Court, Eastern District of New York, in the case of Q-Tips, Inc., v. Glickston, supra, which held that the mark "Twin-Tips" infringed "Q-Tips".

III
Plaintiff's next cause of action in the trade-mark case is based upon unfair competition. Unfair competition, which includes trade-mark infringement,
differs from it in that it does not involve the violation of an exclusive right to use a word, mark or symbol, but rather involves any violation of a right
arising from the operation of an established business, House of Westmore v. Denney, 3 Cir., 1945, 151 F.2d 261. Here plaintiff asserts that not only
has defendant adopted a name for its product which infringes upon plaintiff's trade-mark, but also that defendant has adopted a dress for its
packages that is so close to plaintiff's that the public will confuse the source of the product.

The factors which plaintiff cite as making for confusion are the identical dimensions of plaintiff's and defendant's applicators, the fact that defendant
uses boxes which are almost exactly the same size as plaintiff's boxes and which contain the same number of applicators, use of the word "Tips" in
its name for the product, and a picture of crossed applicators on the box.

The principle to be applied in this case has been well stated in Wirtz v. Eagle Bottling Co., 1892, 50 N.J.Eq. 164, 24 A. 658:

"* * * The leading principle of the law on this subject is that no man should be permitted to sell his goods *866 on the reputation which another
dealer has established in the market for his goods, and this principle applies with equal force to the case where the goods of such other dealer are
known in the market by a label, as it does to the case where they are known by a mark which is strictly a trade-mark. No dealer can lawfully adopt
the label of another dealer, or one so near like it as to lead the public to suppose that the article to which it is affixed was put upon the market by
such other dealer. * * *" 50 N.J.Eq. at page 166, 24 A. at page 658.
In the case at hand there is insufficient evidence to establish that the public has been confused by defendant's packaging; the issue must be
resolved, therefore, by a comparison of the rival "put ups".

The fact that defendant's applicators are of the same size as plaintiff's cannot of itself establish unfair competition. The Forbis patent had expired,
and anyone was free to make applicators in any size he desired. Neither do I consider the pictures of the applicators on defendant's package to be
unfair or misleading. It is well established that a seller may place a picture of his product on a package provided that the picture is not so similar to
that used on a rival's package as to cause confusion. Judson Dunaway Corp. v. Hygienic Products Co., supra. Plaintiff pictures four applicators in a
more or less upright position. Two lie across a third and the fourth does not touch the others. Defendant, on the other hand, portrays only two
applicators. They are crossed, but lie in roughly a horizontal position. This representation is not confusingly similar to plaintiff's.

The dimensions of the package are factors to be considered when determining if defendant's packaging is confusingly similar to plaintiff's. Here,
however, the other differences are so great that the similarity of shape is not objectionable. Defendant's package indicates its source by the word
"Johnson's" clearly printed on it. The defendant's package has a white background, a border of orange basket weave along the top and bottom
edges and lettering in blue except for the word "sterile", which is in red. The general appearance is in conformity with the established packaging of
defendant's baby products. The Q-Tips box has a light blue background, a dark blue streamer-like effect upon which some words appear in white
letters and some in light blue letters, and some dark blue printing at the bottom of the box. No reasonably observant person is likely to be misled
either by any single element of defendant's package, or by all the elements viewed together, with the exception of the word "Tips".

IV
In its amended and supplemental complaint the plaintiff advanced a third cause of action grounded on the theory of "dilution" of the value and
distinctiveness of its mark "Q-Tips" through the defendant's deliberate and malicious use of the word "Tips" in its mark "Cotton Tips" in connection
with its product as used in catalogs, price lists and other publications.

The "dilution" theory has been applied where the products of the parties have been dissimilar or their territories are different as in the case of
Alfred Dunhill of London, Inc., v. Dunhill Shirt Shop, Inc., D.C.S.D.N.Y.1929, 3 F. Supp. 487, where the use of "Dunhill" on shirts was ordered to be
enjoined by the manufacturer of pipes and the case of Stork Restaurant, Inc., v. Sahati, 9 Cir., 1948, 166 F.2d 348, where the use of the trade name
"Stork Club" on a saloon in California was enjoined by the owners of a night club with the same mark in non-competing territory in New York City.

Protection is afforded to the owner of a trade-mark against the use by others of imitations of his mark on a product similar enough to cause
confusion in the minds of the customers as to the source of the goods through the ordinary redress for infringement without resort to the doctrine
of "dilution". See Pro-phy-lac-tic Brush Co. v. Jordan Marsh Co., 1 Cir., 1948, 165 F.2d 549. In the instant case the products are the same and the
doctrine of "dilution", as projected by the plaintiff, *867 appears to have no application. The plaintiff goes a step further, however, and asserts that
it is entitled to relief under this doctrine by reason of a statute of the State of Massachusetts as follows:

"Likelihood of injury to business reputation or of dilution of the distinctive quality of a trade name or trademark shall be a ground for injunctive
relief in cases of trade-mark infringement or unfair competition notwithstanding the absence of competition between the parties or of confusion as
to the source of goods or services." Massachusetts General Laws (Ter.Ed.) c. 110, § 7A, approved May 2, 1947, St.1947, c. 307.
It has been suggested that the purpose of the statute was to permit injunctive relief in state courts in cases of trademark infringement or unfair
competition notwithstanding the absence of competition between the parties or of confusion as to the source of the goods or services. Sterling
Brewing, Inc., v. Gold Spring Brewing Corp., D.C.Mass.1951, 100 F. Supp. 412. As interpreted, it would not appear that the statute has enlarged the
substantive rights of a trade-mark owner in that state. Sterling Brewing, Inc., v. Cold Spring Brewing Corp., supra; Mann v. Parkway Motor Sales, Inc.,
1949, 324 Mass. 151, 85 N.E.2d 210 (Sup.Jud.Ct.Mass.). In any event, having found that defendant has infringed plaintiff's trade-mark "Q-Tips",
plaintiff is entitled to injunctive relief restraining defendant from the use of the word "tips" in any trade-mark designating its cotton tipped
applicators. I do not see that this local statute can in any way improve plaintiff's position even in Massachusetts.

The evidence before us in regards to the costs of marketing the defendant's product under the trade-mark "Cotton Tips" and the testimony of the
plaintiff showing that there has been no decisive decline in its business[64] disposes me to believe that an excursion into profits and damages would
be fruitless, and I am constrained therefore to hold that justice will be satisfied by an injunction restraining the defendant from use of the word
"tips", without awarding an accounting for profits and damages.

"* * * Under the Trade Mark Act of 1905, as under its predecessors, an accounting has been denied where an injunction will satisfy the equities of
the case. (Cases cited.) The same is true in case of unfair competition. Straus v. Notaseme [Hosiery] Co., 240 U.S. 179, 181-183, 36 S. Ct. 288, 289, 60
L. Ed. 590. Here, as we have noted, there has been no showing of fraud or palming off. * * * Moreover, as stated by the Circuit Court of Appeals, the
likelihood of damage to petitioner or profit to respondents due to any misrepresentation seems slight. In view of these various circumstances it
seems to us that the injunction will satisfy the equities of the case."[65] Champion Spark Plug Co. v. Sanders, 331 U.S. 125, at pages 131, 132, 67 S.
Ct. 1136, at page 1139, 91 L. Ed. 1386.
Affirmative Defense and Counterclaim.

I
The final matter which must be disposed of is the question of defendant's affirmative defense of unclean hands and its counterclaim. It is conceded
that prior to the defendant's entry into the cotton tipped applicator field, Q-Tips, Inc., sold at least 90% of the double tipped product distributed in
the United States. Defendant contends *868 that plaintiff engaged in various unlawful and unfair activities designed to create and foster a monopoly
in the double tipped applicator field. It was alleged that plaintiff's course of conduct included, 1st, an attempt to force the trade that purchased
applicators to buy only from plaintiff by advertising that defendant was a patent infringer; 2nd, false representations that plaintiff's product was
patented; 3rd, cutting off defendant from supplies of wooden and paper sticks; 4th, granting licenses under its machine patents which limited the
number of unpatented double tipped applicators that might be produced or restricted the use of such machines to the production of single tipped
applicators; and 5th, bringing the patent suit with knowledge of the construction of the accused machine and therefore with knowledge that it had
neither the structure nor the mode of operation of the Bunnell machine and bringing it in view of an offer made to defendant prior to its
commencement of a license at nominal fee under the Bunnell patent if defendant would stay out of the retail field and in view of an offer to
defendant made subsequent to the bringing of suit of a license under the Bunnell patent to make only restricted quantities of the double tipped
product.

II
Plaintiff's advertisement in a publication of the drug trade stated:

"We have received numerous inquiries as to the suit which we have brought against the firm of Johnson & Johnson of New Brunswick, New Jersey.
This suit is for infringement of the machine used by us in the manufacture of Q-Tips. This patent has already been upheld against another infringer
by the United States District Court in Brooklyn."
Defendant emphasizes that though this advertisement is literally true, it appeared in a publication read largely by consumers of applicators, which
were not patented, and would be construed by them to mean that defendant was accused of violating a product patent.

Defendant relies upon four cases to establish its contentions. Circle S. Products Co. v. Powell Products, 7 Cir., 1949, 174 F.2d 562; Maytag Co. v.
Meadows Mfg. Co., 7 Cir., 1930, 45 F.2d 299, certiorari denied, 1930, 281 U.S. 737, 50 S. Ct. 250, 74 L. Ed. 1151; Panay Horizontal Show Jar Co. v.
Aridor Co., 7 Cir., 1923, 292 F. 858 and Dehydro, Inc., v. Tretolite Co., D.C.N.D.Okl.1931, 53 F.2d 273. In these cases not only were the patentees'
statements false, but also their circulation was widespread. In the present case plaintiff's statements were true and, if read carefully, not misleading.
I am not prepared to say that these advertisements were not a legitimate response to questions concerning plaintiff's suit. If plaintiff had had a
cause of action for patent infringement, this behavior would not have been so unconscionable as to have required that it be barred from bringing its
suit. See A. Hollander & Son, Inc., v. Imperial Fur Blending Corp., 1949, 2 N.J. 235, 245, 66 A.2d 319.
III
Defendant contends that plaintiff falsely indicated that it had a product patent and that this is a ground to deny it relief. Originally plaintiff's product
was covered by the Forbis patent, granted in 1927, expiring in 1944, the claim of which is, "As an article of manufacture, a flexible stem of
substantially the same thickness throughout and having its ends provided with an antiseptic, and wisps of cotton treated with an antiseptic wrapped
about the ends of the stem and firmly attached thereto." Prior to utilization of the Gerstenzang machine it was the practice of the girls who
fashioned the cotton swabs of the applicators to dip the ends of the sticks in a boric acid solution and to saturate the swabs in the same
solution.[66] After machine operations were begun, the ends of the sticks were no longer dipped in the solution, but the solution was applied to the
swabs in such a quantity that it might well have penetrated to the stick ends.[67] In about 1939 cessation of the use of "boric acid" in plaintiff's
literature was ordered by the *869 Food and Drug Administrator as the quantities applied to the swabs was not sufficient to permit such
advertising.[68] The use of boric acid itself was continued until 1945.[69]

On its trade-marked package covers, dating roughly from 1927 until 1943, plaintiff employed the word "patent" or "patented".[70] From about 1940
until about 1947 there were written on plaintiff's package inserts the words "Patented U.S.Pat. Off."[71] Plaintiff contends that until 1944 it was
entitled to claim patent protection for its product under the Forbis patent, and that the application of boric acid which penetrated to the stick
satisfied the Forbis claim calling for application of an antiseptic to the cotton and to the stick ends.

It is true that the Food and Drug Administration apparently decided that the amount of boric acid used by plaintiff was not sufficient to warrant the
representations made by it in its literature. But plaintiff continued to use some boric acid until after the life of the patent and this would seem to
have met the claim that the ends of the applicators were "provided with an antiseptic", at least to the extent that the weakness of the solution
should not at this date be regarded as defeating the patent.

As to the patent markings after 1944, plaintiff admits that they were erroneous, but asserts that their use was inadvertent and was stopped as soon
as defendant's answer in the patent suit brought the error to its attention. The testimony indicates that Mr. Charles J. Gerard became associated
with Q-Tips, Inc., in 1942 and took charge of the business when Mr. Gerstenzang engaged in government service overseas during the war.[72] He
testified that he was unfamiliar with the patent situation and as a result was unaware that the patent markings on the circulars should have been
removed in 1944.[73] After defendant's answer in the patent case, and before commencement of the trade-mark action, plaintiff, upon advice of
counsel, ceased using the markings.

The question is whether this conduct bars plaintiff from suing. Defendant cites the case of Preservaline Mfg. Co. v. Heller Chemical Co.,
C.C.N.D.Ill.1902, 118 F. 103, which concerns a plaintiff suing to protect its trade-name. The plaintiff's product patent had expired but it published
trade circulars which set out that it was patented. Denying relief, the court stated:

"* * * It is a well-established rule of law that one invoking the aid of a court of equity must himself be free from fraud and misrepresentation with
regard to the matter in which he seeks relief. Therefore, if it appears that complainant in this case, at and preceding the time of the acts sought
herein to be enjoined, was itself guilty of a fraud or fraudulent act calculated to impose upon the public in regard to the same transaction, then, no
matter how impudent the act of defendant, a court of conscience will not lend itself to complainant's aid in securing to it the exclusive right to
deceive the public." 118 F. at page 104.
In this regard, see also M. B. Fahey Tobacco Co. v. Senior, D.C.E.D.Pa.1917, 247 F. 809, 818-819, modified, 3 Cir., 1918, 252 F. 579.

The nature and context of the misrepresentations are important considerations when a court decides whether to withhold relief because a plaintiff
has unclean hands; the defense is to be scrutinized with a critical eye. Coca-Cola v. Koke Co., 1920, 254 U.S. 143, 41 S. Ct. 113, 65 L. Ed. 189. Here the
misrepresentation was apparently inadvertent, without intent to deceive. It would not appear that prospective rivals were deterred from entering
the cotton tipped applicator field. As soon as plaintiff became aware of its error, it ceased making the misrepresentation. With these considerations
in mind, I do not believe that plaintiff would have been barred in the machine patent suit on this ground had it had a cause of action, even though
the misrepresentations were *870 being made at the commencement of that suit. This conclusion is suggested by Jacobs v. Beecham, 1911, 221 U.S.
263, 31 S. Ct. 555, 55 L. Ed. 729, which concerned a plaintiff suing to protect his trade name. He implied in his circulars that his product was made in
England and that a Thomas Beecham owned the company, both representations being untrue. Sustaining circuit court affirmance of a decree for the
plaintiff given by the trial court, Justice Holmes wrote:

"* * * Both of these matters are small survivals from a time when they were literally true, and are far too insignificant when taken with the total
character of the plaintiff's advertising to leave him a defenseless prey to the world." 221 U.S. at page 273, 31 S. Ct. at page 557.
See also Ansehl v. Williams, 8 Cir., 1920, 267 F. 9, 14.

It must be held that plaintiff is not prevented from recovering judgment in the trade-mark suit by the doctrine of unclean hands, for plaintiff ceased
using the objectionable circular prior to the commencement of that suit. That this is an important consideration is indicated by Justice Holmes'
statement, "The plaintiff's position must be judged by the facts as they were when the suit was begun, not by the facts of a different condition and
an earlier time." Coca-Cola v. Koke Co., supra, 254 U.S. at page 147, 41 S.Ct. at page 114. See also Restatement of the Law of Torts § 749, Comment
a.

IV
As a third ground for denying relief to plaintiff and as a basis for its counterclaim, defendant asserts that plaintiff engaged in a conspiracy to cut off
defendant's stick supply. In the first part of 1947 defendant had been relying upon the B. F. D. Co. as a supplier of sticks.[74] A Mr. Hanafee was B. F.
D. Co.'s sole distributor and as such he dealt with both plaintiff and defendant. In June, 1947, Mr. Hanafee informed the defendant that as B. F. D.
Co.'s production schedule was filled and as there was a heavy demand for ice cream sticks, its stick order could not be filled.[75] Consequently the
defendant was forced to obtain sticks elsewhere at a greater price and of inferior quality.[76]

Defendant rests heavily upon two facts to support its contention that Q-Tips conspired with B. F. D. Co. or with Mr. Hanafee to deprive it of sticks. In
the first place, shipments of the 2 7/8 inch sticks to plaintiff showed a marked increase at approximately the time defendant's order was cancelled.
Shipments were about 14 millions of sticks in January, 1947, 42 millions in February, 30 or 31 millions in March, 6.5 millions in April, 33 millions in
May, 22 millions in June, 30 millions in July, 81 millions in August, none in September, and 73 millions in October.[77] Total shipments in 1947 were
approximately 40 percent greater than the total in 1946.[78] Secondly, defendant points out that plaintiff had an arrangement with an outfit named
Setter Brothers whereby the latter made paper sticks for plaintiff and agreed not to sell such sticks to other makers of applicators.[79] For a
comparatively short period of time beginning during the war plaintiff, in its attempt to alleviate the shortage of wooden sticks, experimented under
an agreement with Setter Brothers to have the latter manufacture paper sticks. As part of the agreement whereby plaintiff and Setter Brothers
undertook the experimentation in the production of the paper sticks it was provided that they would be manufactured exclusively for the plaintiff,
but this provision was effective only a relatively short period of time until wooden sticks were again obtainable.[80] Indeed the experiment proved
unsuccessful and the use of paper sticks was entirely discontinued in 1948 for the trade would not accept them for applicator *871 purposes.[81]
Moreover the plaintiff at one time actually offered to sell paper sticks to the defendant.[82] In view of the fact that plaintiff's large stick orders were
an attempt to overcome chronic stick shortages in the face of increasing sales,[83] and that Mr. Hanafee had been unable to supply plaintiff with all
the sticks it needed prior to June, 1947,[83] there is not a sufficient basis to sustain the charge of a conspiracy by plaintiff to restrain trade in sticks
with the defendant.

V
Having failed to prove a combination of practices which, taken in their entirety, spells unlawful monopoly, defendant's objections to plaintiff's
patent licensing agreements are answered in the opinion filed herein denying its motion for summary judgment. Nor do the plaintiff's offer of a
license to defendant or its present suits against plaintiff add substance to the defendant's charges in this respect.

As the grounds for defendant's counterclaim are the same as those of its affirmative defense of unclean hands, the findings of fact and conclusions
of law with respect to the defense necessarily preclude recovery on the counterclaim.

Summary.
I hold that plaintiff cannot recover in the patent suit as defendant's machine does not infringe the Bunnell machine. Therefore defendant is entitled
to judgment in its favor in that suit. In the trade-mark suit I hold that defendant's use of the word "Tips" in "Cotton Tips" as the name of its product
infringes plaintiff's trade-mark "Q-Tips". Therefore plaintiff is entitled to an injunction restraining defendant from the use of the word "tips" as a
trade-mark or part of a trade-mark for its cotton tipped applicators. Otherwise defendant's packaging of the said product does not constitute unfair
competition. Plaintiff's cause of action for dilution is without merit. The defendant's charges of violation of the anti-trust laws and other unlawful
activities upon the part of the plaintiff have failed both as defenses to the suits of the plaintiff and as counterclaims by the defendant, and plaintiff is
entitled to judgment in its favor on the latter.

Since these cases were consolidated for trial and neither party has entirely prevailed, it would appear that each should bear its own costs.

The foregoing opinion shall constitute findings of fact and conclusions of law, as required by Rule 52, Fed.Rules Civ. Proc. 28 U.S.C.

An order for judgment in each case shall be settled in accordance with this opinion.
EN BANC
[G.R. No. L-8072. October 31, 1956.]
LIM HOA, Petitioner, vs. DIRECTOR OF PATENTS, Respondent.

DECISION

MONTEMAYOR, J.:

On April 26, 1949, the Petitioner, Lim Hoa, filed with the Patent Office an application for the registration of a trademark, consisting of a
representation of two midget roosters in an attitude of combat with the word “Bantam” printed above them, he claiming that he had used said
trademark on a food seasoning product since April 25 of that year. The application was published in the Official Gazette in its issue of February,
1953, released for circulation on April 18, of the same year. On April 30, 1953, the Agricom Development Co., Inc., a domestic corporation, opposed
the application on several grounds, among others, that the trademark sought to be registered was confusingly similar to its register mark, consisting
of a pictorial representation of a hen with the words “Hen Brand” and “Marca Manok”, which mark or brand was also used on a food seasoning
product, before the use of the trademark by the applicant.

It is a fact that the family of C. Javier Advincula, since the year 1946, had adopted and used as a trademark of said food seasoning product
manufactured by it, the pictorial representation of a hen. In 1947, the members of the Advincula family organized the Agricom Development Co.,
Inc., the Oppositor in this case, and said corporation took over the manufacture of the same food product of the Advincula family, including the use
of the brand of the pictorial representation of a hen but adding to it the word “Hen”. In the year 1948, an addition was made to the brand with the
words “Ve-Tsin, Hen Brand” and “Marca Manok,” and since then, on its food seasoning product at different times, labels were used, in different
colors but bearing the representation of a hen and the words just mentioned. So that the application to register applicant’s brand, consisting of two
roosters is an attitude of combat, with the word “Bantam” printed above them, came along after the use and registration of the mark or brand of
the Oppositor corporation and its predecessor, the Advincula family.

After considering the application and the opposition thereto, and after comparing the two brands, the Director of Patents issued his order dated
June 26, 1954, wherein he found and held that to allow the registration of the applicant’s trademark would likely cause confusion or mistake or
deceive purchasers, and he refused registration of said trademark, under Rule 178 of the Revised Rules of Practice in Trademark Cases, 1953. The
Petitioner is now appealling said order.

After a careful examination of the facts above mentioned, and after comparing the two brands, we do not hesitate to say and to hold that there is
such similarity between the two brands as to cause confusion in the mind of the public that buys the food seasoning product on the strength and on
the indication of the trademark or brand identifying or distinguishing the same. In the case of Go Tiong Sa vs. Director of Patents, (95 Phil., 1), we
had occasion to say the following:chanroblesvirtuallawlibrary

“ cralaw It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in
size, form, and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features of another,
and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; chan roblesvirtualawlibrarynor it
is necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F. 489, 495, citing
Eagle White Lead Co. v. Pflugh (CC) 180 Fed. 579). The question at issue in cases of infringement of trademarks is whether the use of the marks
involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover
Rubber Co., 107 F 2d 588, 590, citing Procter and Gamble Co. vs. J. L. Prescot Co., 49 F 2d 959, 18 CCPA, Patents, 1433; chan
roblesvirtualawlibraryPepsodent Co. vs. Comfort Manufacturing Co., 83 F 2d 906; chan roblesvirtualawlibrary23 CCPA, Patents, 124)”

The danger of confusion in trademarks and brands which are similar may not be so great in the case of commodities or articles of relatively great
value, such as, radio and television sets, air conditioning units, machinery, etc., for the prospective buyer, generally the head of the family or a
businessman, before making the purchase, reads the pamphlets and all literature available, describing the article he is planning to buy, and perhaps
even makes comparisons with similar articles in the market. He is not likely to be deceived by similarity in the trademarks because he makes a more
or less thorough study of the same and may even consult his friends about the relative merit and performance of the article or machinery, as
compared to others also for sale. But in the sale of a food seasoning product, a kitchen article of everyday consumption, the circumstances are far
different. Said product is generally purchased by cooks and household help, sometimes illiterate who are guided by pictorial representations and the
sound of the word descriptive of said representation. The two roosters appearing in the trademark of the applicant and the hen appearing on the
trademark of the Oppositor, although of different sexes, belong to the same family of chicken, known as manok in all the principal dialects of the
Philippines, and when a cook or a household help or even a housewife buys a food seasoning product for the kitchen the brand of “Manok” or
“Marca Manok” would most likely be upper most in her mind and would influence her in selecting the product, regardless of whether the brand
pictures a hen or a rooster or two roosters. To her, they are all manok. Therein lies the confusion, even deception.

We do not see why applicant could not have stretched his imagination even a little and extended his choice to other members of the animal
kingdom, as a brand to differentiate his product from similar products in the market. In a similar case decided by this Tribunal wherein, although one
brand consisting of the representation of a rooster was already being used by one party, another party wanted to register a similar brand, consisting
of two roosters on a similar product, namely, candy, this Court said:chanroblesvirtuallawlibrary

“Counsel for Defendant insists that there is no real resemblance between a picture of one rooster and a picture of two roosters; chan
roblesvirtualawlibrarythat no person could or would be deceived by the use by the Defendant of a trade-mark wholly distinct from that of the
Plaintiff; chan roblesvirtualawlibrarythat the fact that the Defendant used two roosters as its trademark clearly discloses its innocence of any intent
to deceive, since a comparison of the trade-mark of the Plaintiff with that of the Defendant makes apparent at once that was not intended to be an
imitation of the other.

“We ask, however, why, with all the birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to chose from, the
Defendant company selected two roosters as its trade- mark, although its directors, and managers must have been well aware of the long-continued
use of a rooster by the Plaintiff in connection with the sale and advertisement of his goods?

“There is nothing in the picture of one or more roosters which in itself is descriptive of the goods sold by the Plaintiff or by the Defendant
corporation, or suggestive of the quality of these goods. A cat, or dog, a carabao, a shark, or an eagle stamped upon the container in which candies
are sold would serve as well as a rooster for purposes of identification as the product of Defendant’s factory. Why did Defendant select two roosters
as its trade-mark? We cannot doubt that it was because the Plaintiff’s candies had acquired a certain reputation under the trade-mark of a rooster,
and the Defendant corporation hoped to profit unjustly by that reputation. Defendant knew that the use of a single rooster would be prohibited as a
technical infringement of Plaintiff’s trade-mark, but it hoped that it could avoid that danger by the use of two roosters; chan
roblesvirtualawlibraryand at the same time get such advantage as it must have believed it could secure from the use of a design on the containers of
its goods, not absolutely identical with that used by the Plaintiff, but so similar in the dominant idea as to confuse or mislead the purchasers cralaw
.” (Clarke vs. Manila Candy Co., 100 Phil. 36)

In view of the foregoing, the order appealed from is hereby affirmed, with costs. We do not deem it necessary to discuss and rule upon the other
questions raised in the appeal.

Paras, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., and Felix, JJ., concur.
FIRST DIVISION
G.R. Nos. 160054-55 July 21, 2004
MANOLO P. SAMSON, petitioner,
vs.
HON. REYNALDO B. DAWAY, in his capacity as Presiding Judge, Regional Trial Court of Quezon City, Branch 90, PEOPLE OF THE PHILIPPINES and
CATERPILLAR, INC., respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for certiorari is the March 26, 2003 Order1 of the Regional Trial Court of Quezon City, Branch 90, which denied petitioner’s –
(1) motion to quash the information; and (2) motion for reconsideration of the August 9, 2002 Order denying his motion to suspend the arraignment
and other proceedings in Criminal Case Nos. Q-02-108043-44. Petitioner also questioned its August 5, 2003 Order2 which denied his motion for
reconsideration.

The undisputed facts show that on March 7, 2002, two informations for unfair competition under Section 168.3 (a), in relation to Section 170, of the
Intellectual Property Code (Republic Act No. 8293), similarly worded save for the dates and places of commission, were filed against petitioner
Manolo P. Samson, the registered owner of ITTI Shoes. The accusatory portion of said informations read:

That on or about the first week of November 1999 and sometime prior or subsequent thereto, in Quezon City, Philippines, and within the
jurisdiction of this Honorable Court, above-named accused, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation located at
Robinson’s Galleria, EDSA corner Ortigas Avenue, Quezon City, did then and there willfully, unlawfully and feloniously distribute, sell and/or offer for
sale CATERPILLAR products such as footwear, garments, clothing, bags, accessories and paraphernalia which are closely identical to and/or colorable
imitations of the authentic Caterpillar products and likewise using trademarks, symbols and/or designs as would cause confusion, mistake or
deception on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following
internationally: "CATERPILLAR", "CAT", "CATERPILLAR & DESIGN", "CAT AND DESIGN", "WALKING MACHINES" and "TRACK-TYPE TRACTOR &
DESIGN."

CONTRARY TO LAW.3

On April 19, 2002, petitioner filed a motion to suspend arraignment and other proceedings in view of the existence of an alleged prejudicial question
involved in Civil Case No. Q-00-41446 for unfair competition pending with the same branch; and also in view of the pendency of a petition for review
filed with the Secretary of Justice assailing the Chief State Prosecutor’s resolution finding probable cause to charge petitioner with unfair
competition. In an Order dated August 9, 2002, the trial court denied the motion to suspend arraignment and other proceedings.

On August 20, 2002, petitioner filed a twin motion to quash the informations and motion for reconsideration of the order denying motion to
suspend, this time challenging the jurisdiction of the trial court over the offense charged. He contended that since under Section 170 of R.A. No.
8293, the penalty4 of imprisonment for unfair competition does not exceed six years, the offense is cognizable by the Municipal Trial Courts and not
by the Regional Trial Court, per R.A. No. 7691.

In its assailed March 26, 2003 Order, the trial court denied petitioner’s twin motions.6 A motion for reconsideration thereof was likewise denied on
August 5, 2003.

Hence, the instant petition alleging that respondent Judge gravely abused its discretion in issuing the assailed orders.

The issues posed for resolution are – (1) Which court has jurisdiction over criminal and civil cases for violation of intellectual property rights? (2) Did
the respondent Judge gravely abuse his discretion in refusing to suspend the arraignment and other proceedings in Criminal Case Nos. Q-02-108043-
44 on the ground of – (a) the existence of a prejudicial question; and (b) the pendency of a petition for review with the Secretary of Justice on the
finding of probable cause for unfair competition?

Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for infringement of registered marks, unfair
competition, false designation of origin and false description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty
Thousand Pesos to Two Hundred Thousand Pesos, to wit:

SEC. 170. Penalties. – Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years
to five (5) years and a fine ranging from Fifty thousand pesos (P50,000.00) to Two hundred thousand pesos (P200,000.00), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in Section 155 [Infringement], Section 168 [Unfair Competition] and Section
169.1 [False Designation of Origin and False Description or Representation].

Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under Sections 150, 155, 164, 166, 167, 168 and 169 shall
be brought before the proper courts with appropriate jurisdiction under existing laws, thus –

SEC. 163. Jurisdiction of Court. – All actions under Sections 150, 155, 164 and 166 to 169 shall be brought before the proper courts with appropriate
jurisdiction under existing laws. (Emphasis supplied)

The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The Trademark Law) which provides that jurisdiction over cases
for infringement of registered marks, unfair competition, false designation of origin and false description or representation, is lodged with the Court
of First Instance (now Regional Trial Court) –

SEC. 27. Jurisdiction of Court of First Instance. – All actions under this Chapter [V – Infringement] and Chapters VI [Unfair Competition] and VII [False
Designation of Origin and False Description or Representation], hereof shall be brought before the Court of First Instance.

We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No. 8293. The repealing clause of R.A. No. 8293, reads –

SEC. 239. Repeals. – 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as amended; Republic Act No.
166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as
amended, are hereby repealed. (Emphasis added)
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it would not have used the phrases "parts of Acts"
and "inconsistent herewith;" and it would have simply stated "Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles
188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended are hereby repealed." It
would have removed all doubts that said specific laws had been rendered without force and effect. The use of the phrases "parts of Acts" and
"inconsistent herewith" only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with R.A.
No. 8293.6 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest
jurisdiction over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so under Section 163
thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a general law and a special law, the latter must prevail.
Jurisdiction conferred by a special law to Regional Trial Courts must prevail over that granted by a general law to Municipal Trial Courts.7

In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws8 conferring jurisdiction over violations of intellectual property rights to the
Regional Trial Court. They should therefore prevail over R.A. No. 7691, which is a general law.9 Hence, jurisdiction over the instant criminal case for
unfair competition is properly lodged with the Regional Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2 to 5
years and a fine ranging from P50,000.00 to P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual property rights under R.A. No. 8293, the Court
issued A.M. No. 02-1-11-SC dated February 19, 2002 designating certain Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the
Court further issued a Resolution consolidating jurisdiction to hear and decide Intellectual Property Code and Securities and Exchange Commission
cases in specific Regional Trial Courts designated as Special Commercial Courts.

The case of Mirpuri v. Court of Appeals,10 invoked by petitioner finds no application in the present case. Nowhere in Mirpuri did we state that
Section 27 of R.A. No. 166 was repealed by R.A. No. 8293. Neither did we make a categorical ruling therein that jurisdiction over cases for violation
of intellectual property rights is lodged with the Municipal Trial Courts. The passing remark in Mirpuri on the repeal of R.A. No. 166 by R.A. No. 8293
was merely a backgrounder to the enactment of the present Intellectual Property Code and cannot thus be construed as a jurisdictional
pronouncement in cases for violation of intellectual property rights.

Anent the second issue, petitioner failed to substantiate his claim that there was a prejudicial question. In his petition, he prayed for the reversal of
the March 26, 2003 order which sustained the denial of his motion to suspend arraignment and other proceedings in Criminal Case Nos. Q-02-
108043-44. For unknown reasons, however, he made no discussion in support of said prayer in his petition and reply to comment. Neither did he
attach a copy of the complaint in Civil Case No. Q-00-41446 nor quote the pertinent portion thereof to prove the existence of a prejudicial question.

At any rate, there is no prejudicial question if the civil and the criminal action can, according to law, proceed independently of each other.11 Under
Rule 111, Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code, the
independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a
preponderance of evidence.

In the case at bar, the common element in the acts constituting unfair competition under Section 168 of R.A. No. 8293 is fraud.12 Pursuant to Article
33 of the Civil Code, in cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Hence, Civil Case No. Q-00-41446, which as admitted13 by private respondent also relate to unfair
competition, is an independent civil action under Article 33 of the Civil Code. As such, it will not operate as a prejudicial question that will justify the
suspension of the criminal cases at bar.

Section 11 (c), Rule 116 of the Revised Rules on Criminal Procedure provides –

SEC. 11. Suspension of arraignment. – Upon motion by the proper party, the arraignment shall be suspended in the following cases –

xxxxxxxxx

(c) A petition for review of the resolution of the prosecutor is pending at either the Department of Justice, or the Office of the President; Provided,
that the period of suspension shall not exceed sixty (60) days counted from the filing of the petition with the reviewing office.

While the pendency of a petition for review is a ground for suspension of the arraignment, the aforecited provision limits the deferment of the
arraignment to a period of 60 days reckoned from the filing of the petition with the reviewing office. It follows, therefore, that after the expiration of
said period, the trial court is bound to arraign the accused or to deny the motion to defer arraignment.

In the instant case, petitioner failed to establish that respondent Judge abused his discretion in denying his motion to suspend. His pleadings and
annexes submitted before the Court do not show the date of filing of the petition for review with the Secretary of Justice.14 Moreover, the Order
dated August 9, 2002 denying his motion to suspend was not appended to the petition. He thus failed to discharge the burden of proving that he
was entitled to a suspension of his arraignment and that the questioned orders are contrary to Section 11 (c), Rule 116 of the Revised Rules on
Criminal Procedure. Indeed, the age-old but familiar rule is that he who alleges must prove his allegations.

In sum, the dismissal of the petition is proper considering that petitioner has not established that the trial court committed grave abuse of
discretion. So also, his failure to attach documents relevant to his allegations warrants the dismissal of the petition, pursuant to Section 3, Rule 46 of
the Rules of Civil Procedure, which states:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. — The petition shall contain the full names and actual addresses
of all the petitioners and respondents, a concise statement of the matters involved, the factual background of the case, and the grounds relied upon
for the relief prayed for.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the
court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment,
order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or
pertinent thereto.

xxxxxxxxx
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. (Emphasis
added)

WHEREFORE, in view of all the foregoing, the petition is dismissed.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 182147 December 15, 2010
ARNEL U. TY, MARIE ANTONETTE TY, JASON ONG, WILLY DY, and ALVIN TY, Petitioners,
vs.
NBI SUPERVISING AGENT MARVIN E. DE JEMIL, PETRON GASUL DEALERS ASSOCIATION, and TOTALGAZ DEALERS ASSOCIATION, Respondents.

DECISION

VELASCO, JR., J.:

The Case

In this Petition for Review on Certiorari under Rule 45, petitioners seek the reversal of the Decision1 dated September 28, 2007 of the Court of
Appeals (CA) in CA-G.R. SP No. 98054, which reversed and set aside the Resolutions dated October 9, 20062 and December 14, 20063 of the
Secretary of Justice, and reinstated the November 7, 2005 Joint Resolution4 of the Office of the Chief State Prosecutor. Petitioners assail also the CA
Resolution5 dated March 14, 2008, denying their motion for reconsideration.

The Facts

Petitioners are stockholders of Omni Gas Corporation (Omni) as per Omni’s General Information Sheet6 (GIS) dated March 6, 2004 submitted to the
Securities and Exchange Commission (SEC). Omni is in the business of trading and refilling of Liquefied Petroleum Gas (LPG) cylinders and holds Pasig
City Mayor’s Permit No. RET-04-001256 dated February 3, 2004.

The case all started when Joaquin Guevara Adarlo & Caoile Law Offices (JGAC Law Offices) sent a letter dated March 22, 20047 to the NBI
requesting, on behalf of their clients Shellane Dealers Association, Inc., Petron Gasul Dealers Association, Inc., and Totalgaz Dealers Association, Inc.,
for the surveillance, investigation, and apprehension of persons or establishments in Pasig City that are engaged in alleged illegal trading of
petroleum products and underfilling of branded LPG cylinders in violation of Batas Pambansa Blg. (BP) 33,8 as amended by Presidential Decree No.
(PD) 1865.9

Earlier, the JGAC Law Offices was furnished by several petroleum producers/brand owners their respective certifications on the dealers/plants
authorized to refill their respective branded LPG cylinders, to wit: (1) On October 3, 2003, Pilipinas Shell Petroleum Corporation (Pilipinas Shell)
issued a certification10 of the list of entities duly authorized to refill Shellane LPG cylinders; (2) on December 4, 2003, Petron Corporation (Petron)
issued a certification11 of their dealers in Luzon, Visayas, and Mindanao authorized to refill Petron Gasul LPG cylinders; and (3) on January 5, 2004,
Total (Philippines) Corporation (Total) issued two certifications12 of the refilling stations and plants authorized to refill their Totalgaz and Superkalan
Gaz LPG cylinders.

Agents De Jemil and Kawada attested to conducting surveillance of Omni in the months of March and April 2004 and doing a test-buy on April 15,
2004. They brought eight branded LPG cylinders of Shellane, Petron Gasul, Totalgaz, and Superkalan Gaz to Omni for refilling. The branded LPG
cylinders were refilled, for which the National Bureau of Investigation (NBI) agents paid PhP 1,582 as evidenced by Sales Invoice No. 9004013 issued
by Omni on April 15, 2004. The refilled LPG cylinders were without LPG valve seals and one of the cylinders was actually underfilled, as found by LPG
Inspector Noel N. Navio of the Liquefied Petroleum Gas Industry Association (LPGIA) who inspected the eight branded LPG cylinders on April 23,
2004 which were properly marked by the NBI after the test-buy.

The NBI’s test-buy yielded positive results for violations of BP 33, Section 2(a) in relation to Secs. 3(c) and 4, i.e., refilling branded LPG cylinders
without authority; and Sec. 2(c) in relation to Sec. 4, i.e., underdelivery or underfilling of LPG cylinders. Thus, on April 28, 2004, Agent De Jemil filed
an Application for Search Warrant (With Request for Temporary Custody of the Seized Items)14 before the Regional Trial Court (RTC) in Pasig City,
attaching, among others, his affidavit15 and the affidavit of Edgardo C. Kawada,16 an NBI confidential agent.

On the same day of the filing of the application for search warrants on April 28, 2004, the RTC, Branch 167 in Pasig City issued Search Warrants No.
262417 and 2625.18 The NBI served the warrants the next day or on April 29, 2004 resulting in the seizure of several items from Omni’s premises
duly itemized in the NBI’s Receipt/Inventory of Property/Item Seized.19 On May 25, 2004, Agent De Jemil filed his Consolidated Return of Search
Warrants with Ex-Parte Motion to Retain Custody of the Seized Items20 before the RTC Pasig City.

Subsequently, Agent De Jemil filed before the Department of Justice (DOJ) his Complaint-Affidavits against petitioners for: (1) Violation of Section
2(a), in relation to Sections 3(c) and 4, of B.P. Blg. 33, as amended by P.D. 1865;21 and (2) Violation of Section 2(c), in relation to Section 4, of B.P.
Blg. 33, as amended by P.D. 1865,22 docketed as I.S. Nos. 2004-616 and 2004-618, respectively.

During the preliminary investigation, petitioners submitted their Joint Counter-Affidavit,23 which was replied24 to by Agent De Jemil with a
corresponding rejoinder25 from petitioners.

The Ruling of the Office of the Chief State Prosecutor

in I.S. No. 2004-616 and I.S. No. 2004-618

On November 7, 2005, the 3rd Assistant City Prosecutor Leandro C. Catalo of Manila issued a Joint Resolution,26 later approved by the Chief State
Prosecutor Jovencito R. Zuño upon the recommendation of the Head of the Task Force on Anti-Intellectual Property Piracy (TFAIPP), Assistant Chief
State Prosecutor Leah C. Tanodra-Armamento, finding probable cause to charge petitioners with violations of pertinent sections of BP 33, as
amended, resolving as follows:

WHEREFORE, premises considered, it is hereby recommended that two (2) Informations for violations of Section 2 [a] (illegal trading in petroleum
and/or petroleum products) and Section 2 [c] (underfilling of LPG cylinders), both of Batas Pambansa Bilang 33, as amended, be filed against
respondents [herein petitioners] ARNEL TY, MARIE ANTONETTE TY, JASON ONG, WILLY DY and ALVIN TY.27

Assistant City Prosecutor Catalo found the existence of probable cause based on the evidence submitted by Agent De Jemil establishing the fact that
Omni is not an authorized refiller of Shellane, Petron Gasul, Totalgaz and Superkalan Gaz LPG cylinders. Debunking petitioners’ contention that the
branded LPG cylinders are already owned by consumers who are free to do with them as they please, the law is clear that the stamped markings on
the LPG cylinders show who are the real owners thereof and they cannot be refilled sans authority from Pilipinas Shell, Petron or Total, as the case
may be. On the underfilling of one LPG cylinder, the findings of LPG Inspector Navio of the LPGIA were uncontroverted by petitioners.

Petitioners’ motion for reconsideration,28 was denied through a Resolution29 by the Office of the Chief State Prosecutor issued on May 3, 2006.

In time, petitioners appealed to the Office of the Secretary of Justice.30

The Ruling of the DOJ Secretary

in I.S. No. 2004-616 and I.S. No. 2004-618

On October 9, 2006, the Office of the Secretary of Justice issued a Resolution31 reversing and setting aside the November 7, 2005 Joint Resolution of
the Office of the Chief State Prosecutor, the dispositive portion of which reads:

WHEREFORE, the assailed resolution is hereby REVERSED and SET ASIDE. The Chief State Prosecutor is directed to cause the withdrawal of the
informations for violations of Sections 2(a) and 2(c) of B.P. Blg. 33, as amended by P.D. 1865, against respondents Arnel Ty, Mari Antonette Ty, Jason
Ong, Willy Dy and Alvin Ty and report the action taken within ten (10) days from receipt hereof.

SO ORDERED.32

The Office of the Secretary of Justice viewed, first, that the underfilling of one of the eight LPG cylinders was an isolated incident and cannot give
rise to a conclusion of underfilling, as the phenomenon may have been caused by human error, oversight or technical error. Being an isolated case, it
ruled that there was no showing of a clear pattern of deliberate underfilling. Second, on the alleged violation of refilling branded LPG cylinders sans
written authority, it found no sufficient basis to hold petitioners responsible for violation of Sec. 2 (c) of BP 33, as amended, since there was no
proof that the branded LPG cylinders seized from Omni belong to another company or firm, holding that the simple fact that the LPG cylinders with
markings or stamps of other petroleum producers cannot by itself prove ownership by said firms or companies as the consumers who take them to
Omni fully owned them having purchased or acquired them beforehand.

Agent De Jemil moved but was denied reconsideration33 through another Resolution34 dated December 14, 2006 prompting him to repair to the
CA via a petition for certiorari35 under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 98054.

The Ruling of the CA

The Office of the Solicitor General (OSG), in its Comment36 on Agent De Jemil’s appeal, sought the dismissal of the latter’s petition viewing that the
determination by the Office of the Secretary of Justice of probable cause is entitled to respect owing to the exercise of his prerogative to prosecute
or not.

On August 31, 2007, Petron filed a Motion to Intervene and to Admit Attached Petition-in-Intervention37 and Petition-in-Intervention38 before the
CA in CA-G.R. SP No. 98054. And much earlier, the Nationwide Association of Consumers, Inc. (NACI) also filed a similar motion.

On September 28, 2007, the appellate court rendered the assailed Decision39 revoking the resolutions of the Office of the Secretary of Justice and
reinstated the November 7, 2005 Joint Resolution of the Office of the Chief State Prosecutor. The fallo reads:

WHEREFORE, the instant petition is GRANTED. The assailed resolutions dated October 9, 2006 and December 14, 2006 are hereby REVERSED and
SET ASIDE. The Joint Resolution dated November 7, 2005 of the Office of the Chief State Prosecutor finding probable cause against private
respondents Arnel Ty, Marie Antonette Ty, Jason Ong, Willy Dy, and Alvin Ty is hereby REINSTATED.

SO ORDERED.40

Citing Sec. 1 (1) and (3) of BP 33, as amended, which provide for the presumption of underfilling, the CA held that the actual underfilling of an LPG
cylinder falls under the prohibition of the law which does not require for the underfilling to be substantial and deliberate.

Moreover, the CA found strong probable violation of "refilling of another company’s or firm’s cylinders without such company’s or firm’s written
authorization" under Sec. 3 (c) of BP 33, as amended. The CA relied on the affidavits of Agents De Jemil and Kawada, the certifications from various
LPG producers that Omni is not authorized to refill their branded LPG cylinders, the results of the test-buy operation as attested to by the NBI agents
and confirmed by the examination of LPG Inspector Navio of the LPGIA, the letter-opinion41 of the Department of Energy (DOE) to Pilipinas Shell
confirming that branded LPG cylinders are properties of the companies whose stamp markings appear thereon, and Department Circular No. 2000-
05-00742 of the DOE on the required stamps or markings by the manufacturers of LPG cylinders.

After granting the appeal of Agent De Jemil, however, the motions to intervene filed by Petron and NACI were simply noted by the appellate court.

Petitioners’ motion for reconsideration was rebuffed by the CA through the equally assailed March 14, 2008 Resolution.43

Thus, the instant petition.

The Issues

I. WHETHER OR NOT RESPONDENTS WERE ENTITLED TO THE SPECIAL CIVIL ACTION OF CERTIORARI IN THE COURT OF APPEALS.

II. WHETHER OR NOT UNDER THE CIRCUMSTANCES THERE WAS PROBABLE CAUSE TO BELIEVE THAT PETITIONERS VIOLATED SECTION 2(A) OF BATAS
PAMBANSA BLG. 33, AS AMENDED.

III. WHETHER OR NOT UNDER THE CIRCUMSTANCES THERE WAS PROBABLE CAUSE TO BELIEVE THAT PETITIONERS VIOLATED SECTION 2(C) OF BATAS
PAMBANSA BLG. 33, AS AMENDED.

IV. WHETHER OR NOT PETITIONERS CAN BE HELD LIABLE UNDER BATAS PAMBANSA BLG. 33, AS AMENDED, FOR BEING MERE DIRECTORS, NOT
ACTUALLY IN CHARGE OF THE MANAGEMENT OF THE BUSINESS AFFAIRS OF THE CORPORATION.44

The foregoing issues can be summarized into two core issues: first, whether probable cause exists against petitioners for violations of Sec. 2 (a) and
(c) of BP 33, as amended; and second, whether petitioners can be held liable therefor. We, however, will tackle at the outset the sole procedural
issue raised: the propriety of the petition for certiorari under Rule 65 availed of by public respondent Agent De Jemil to assail the resolutions of the
Office of the Secretary of Justice.

Petron’s Comment-in-Intervention

On April 14, 2009, Petron entered its appearance by filing a Motion for Leave to Intervene and to Admit Comment-in-Intervention45 and its
Comment-in-Intervention [To petition for Review on Certiorari dated 13 May 2008].46 It asserted vested interest in the seizure of several Gasul LPG
cylinders and the right to prosecute petitioners for unauthorized refilling of its branded LPG cylinders by Omni. Petitioners duly filed their
Comment/Opposition47 to Petron’s motion to intervene. It is clear, however, that Petron has substantial interest to protect in so far as its business
relative to the sale and refilling of Petron Gasul LPG cylinders is concerned, and therefore its intervention in the instant case is proper.

The Court’s Ruling

We partially grant the petition.

Procedural Issue: Petition for Certiorari under Rule 65 Proper

Petitioners raise the sole procedural issue of the propriety of the legal remedy availed of by public respondent Agent De Jemil. They strongly
maintain that the Office of the Secretary of Justice properly assumed jurisdiction and did not gravely abuse its discretion in its determination of lack
of probable cause—the exercise thereof being its sole prerogative—which, they lament, the appellate court did not accord proper latitude. Besides,
they assail the non-exhaustion of administrative remedies when Agent De Jemil immediately resorted to court action through a special civil action
for certiorari under Rule 65 before the CA without first appealing the resolutions of the Office of the Secretary of Justice to the Office of the
President (OP).

We cannot agree with petitioners.

For one, while it is the consistent principle in this jurisdiction that the determination of probable cause is a function that belongs to the public
prosecutor48 and, ultimately, to the Secretary of Justice, who may direct the filing of the corresponding information or move for the dismissal of the
case;49 such determination is subject to judicial review where it is established that grave abuse of discretion tainted the determination.

For another, there is no question that the Secretary of Justice is an alter ego of the President who may opt to exercise or not to exercise his or her
power of review over the former’s determination in criminal investigation cases. As aptly noted by Agent De Jemil, the determination of probable
cause by the Secretary of Justice is, under the doctrine of qualified political agency, presumably that of the Chief Executive unless disapproved or
reprobated by the latter.

Chan v. Secretary of Justice50 delineated the proper remedy from the determination of the Secretary of Justice. Therein, the Court, after
expounding on the policy of non-interference in the determination of the existence of probable cause absent any showing of arbitrariness on the
part of the public prosecutor and the Secretary of Justice, however, concluded, citing Alcaraz v. Gonzalez51 and Preferred Home Specialties, Inc. v.
Court of Appeals,52 that an aggrieved party from the resolution of the Secretary of Justice may directly resort to judicial review on the ground of
grave abuse of discretion, thus:

x x x [T]he findings of the Justice Secretary may be reviewed through a petition for certiorari under Rule 65 based on the allegation that he acted
with grave abuse of discretion. This remedy is available to the aggrieved party.53 (Emphasis supplied.)

It is thus clear that Agent De Jemil, the aggrieved party in the assailed resolutions of the Office of the Secretary of Justice, availed of and pursued the
proper legal remedy of a judicial review through a petition for certiorari under Rule 65 in assailing the latter’s finding of lack of probable cause on
the ground of grave abuse of discretion.

First Core Issue: Existence of Probable Cause

Petitioners contend that there is no probable cause that Omni violated Sec. 2 (a), in relation to Secs. 3 (c) and 4 of BP 33, as amended, prohibiting
the refilling of another company’s or firm’s LPG cylinders without its written authorization. First, the branded LPG cylinders seized were not traded
by Omni as its representative annotated in the NBI receipt of seized items that the filled LPG cylinders came from customers’ trucks and the empty
ones were taken from the warehouse or swapping section of the refilling plant and not from the refilling section. Second, the branded LPG cylinders
are owned by end-user customers and not by the major petroleum companies, i.e., Petron, Pilipinas Shell and Total. And even granting arguendo
that Omni is selling these LPG cylinders, still there cannot be a prima facie case of violation since there is no proof that the refilled branded LPG
cylinders are owned by another company or firm.

Third, granting that Petron, Total and Pilipinas Shell still own their respective branded LPG cylinders already sold to consumers, still such fact will not
bind third persons, like Omni, who is not privy to the agreement between the buying consumers and said major petroleum companies. Thus, a
subsequent transfer by the customers of Petron, Total and Pilipinas Shell of the duly marked or stamped LPG cylinders through swapping, for
example, will effectively transfer ownership of the LPG cylinders to the transferee, like Omni.

Fourth, LPG cylinder exchange or swapping is a common industry practice that the DOE recognizes. They point to a series of meetings conducted by
the DOE for institutionalizing the validity of swapping of all and any kind of LPG cylinders among the industry players. The meetings resulted in a
draft Memorandum of Agreement (MOA) which unfortunately was not signed due to the withdrawal of petroleum major players Petron, Total and
Pilipinas Shell. Nonetheless, the non-signing of the MOA does not diminish the fact of the recognized industry practice of cylinder exchange or
swapping. Relying on Republic Act No. (RA) 8479,54 petitioners maintain that said law promotes and encourages the entry of new participants in the
petroleum industry such as Omni. And in furtherance of this mandate is the valid practice of cylinder exchange or swapping in the LPG industry.

We are not persuaded by petitioners’ strained rationalizations.

Probable violation of Sec. 2 (a) of BP 33, amended

First. The test-buy conducted on April 15, 2004 by the NBI agents, as attested to by their respective affidavits, tends to show that Omni illegally
refilled the eight branded LPG cylinders for PhP 1,582. This is a clear violation of Sec. 2 (a), in relation to Secs. 3 (c) and 4 of BP 33, as amended. It
must be noted that the criminal complaints, as clearly shown in the complaint-affidavits of Agent De Jemil, are not based solely on the seized items
pursuant to the search warrants but also on the test-buy earlier conducted by the NBI agents.
Second. The written certifications from Pilipinas Shell, Petron and Total show that Omni has no written authority to refill LPG cylinders, embossed,
marked or stamped Shellane, Petron Gasul, Totalgaz and Superkalan Gaz. In fact, petitioners neither dispute this nor claim that Omni has authority
to refill these branded LPG cylinders.

Third. Belying petitioners’ contention, the seized items during the service of the search warrants tend to show that Omni illegally refilled branded
LPG cylinders without authority.

On April 29, 2004, the NBI agents who served the search warrants on Omni seized the following:

Quantity/Unit Description
7 LPG cylinders Totalgaz, 11.0 kg [filled]
1 LPG cylinder Petron Gasul, 11.0 kg [filled]
1 LPG cylinder Shellane, 11.0 kg [filled]
29 LPG cylinders Superkalan Gaz, 2.7 kg [empty]
17 LPG cylinders Petron Gasul, 11.0 kg [emptly]
8 LPG cylinders Marked as Omnigas with Shell emboss, 11.0 kg [empty]
5 LPG cylinders Marked as Omnigas with Totalgaz emboss, 11.0 kg [empty]
23 LPG cylinders Shellane, 11.0 kg [empty]
3 LPG cylinders Marked as Omnigas with Gasul emboss, 11.0 kg [empty]
21 LPG cylindersTotalgaz, 11.0 kg [empty]
The foregoing list is embodied in the NBI’s Receipt/Inventory of Property/Item Seized55 signed by NBI Agent Edwin J. Roble who served and
implemented the search warrants. And a copy thereof was duly received by Atty. Allan U. Ty, representative of Omni, who signed the same "under
protest" and made the annotation at the bottom part thereon: "The above items/cylinders were taken at customers’ trucks and the empty cylinders
taken at the warehouse (swapping section) of the company."56

Even considering that the filled LPG cylinders were indeed already loaded on customers’ trucks when confiscated, yet the fact that these refilled LPG
cylinders consisting of nine branded LPG cylinders, specifically Totalgaz, Petron Gasul and Shellane, tends to show that Omni indeed refilled these
branded LPG cylinders without authorization from Total, Petron and Pilipinas Shell. Such a fact is bolstered by the test-buy conducted by Agent De
Jemil and NBI confidential agent Kawada: Omni’s unauthorized refilling of branded LPG cylinders, contrary to Sec. 2 (a) in relation to Sec. 3 (c) of BP
33, as amended. Said provisos provide:

Sec. 2. Prohibited Acts.—The following acts are prohibited and penalized:

(a) Illegal trading in petroleum and/or petroleum products;

xxxx

Sec. 3. Definition of terms.—For the purpose of this Act, the following terms shall be construed to mean:

Illegal trading in petroleum and/or petroleum products—

xxxx

(c) Refilling of liquefied petroleum gas cylinders without authority from said Bureau, or refilling of another company’s or firm’s cylinders without
such company’s or firm’s written authorization; (Emphasis supplied.)

As petitioners strongly argue, even if the branded LPG cylinders were indeed owned by customers, such fact does not authorize Omni to refill these
branded LPG cylinders without written authorization from the brand owners Pilipinas Shell, Petron and Total. In Yao, Sr. v. People,57 a case involving
criminal infringement of property rights under Sec. 155 of RA 8293,58 in affirming the courts a quo’s determination of the presence of probable
cause, this Court held that from Sec. 155.159 of RA 8293 can be gleaned that "mere unauthorized use of a container bearing a registered trademark
in connection with the sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the
buyers/consumers can be considered as trademark infringement."60 The Court affirmed the presence of infringement involving the unauthorized
sale of Gasul and Shellane LPG cylinders and the unauthorized refilling of the same by Masagana Gas Corporation as duly attested to and witnessed
by NBI agents who conducted the surveillance and test-buys.

Similarly, in the instant case, the fact that Omni refilled various branded LPG cylinders even if owned by its customers but without authority from
brand owners Petron, Pilipinas Shell and Total shows palpable violation of BP 33, as amended. As aptly noted by the Court in Yao, Sr. v. People, only
the duly authorized dealers and refillers of Shellane, Petron Gasul and, by extension, Total may refill these branded LPG cylinders. Our laws sought
to deter the pernicious practices of unscrupulous businessmen.

Fourth. The issue of ownership of the seized branded LPG cylinders is irrelevant and hence need no belaboring. BP 33, as amended, does not require
ownership of the branded LPG cylinders as a condition sine qua non for the commission of offenses involving petroleum and petroleum products.
Verily, the offense of refilling a branded LPG cylinder without the written consent of the brand owner constitutes the offense regardless of the buyer
or possessor of the branded LPG cylinder.

After all, once a consumer buys a branded LPG cylinder from the brand owner or its authorized dealer, said consumer is practically free to do what
he pleases with the branded LPG cylinder. He can simply store the cylinder once it is empty or he can even destroy it since he has paid a deposit for
it which answers for the loss or cost of the empty branded LPG cylinder. Given such fact, what the law manifestly prohibits is the refilling of a
branded LPG cylinder by a refiller who has no written authority from the brand owner. Apropos, a refiller cannot and ought not to refill branded LPG
cylinders if it has no written authority from the brand owner.1avvphi1

Besides, persuasive are the opinions and pronouncements by the DOE: brand owners are deemed owners of their duly embossed, stamped and
marked LPG cylinders even if these are possessed by customers or consumers. The Court recognizes this right pursuant to our laws, i.e., Intellectual
Property Code of the Philippines. Thus the issuance by the DOE Circular No. 2000-05-007,61 the letter-opinion62 dated December 9, 2004 of then
DOE Secretary Vincent S. Perez addressed to Pilipinas Shell, the June 6, 2007 letter63 of then DOE Secretary Raphael P.M. Lotilla to the LPGIA, and
DOE Department Circular No. 2007-10-000764 on LPG Cylinder Ownership and Obligations Related Thereto issued on October 13, 2007 by DOE
Secretary Angelo T. Reyes.
Fifth. The ownership of the seized branded LPG cylinders, allegedly owned by Omni customers as petitioners adamantly profess, is of no
consequence.

The law does not require that the property to be seized should be owned by the person against whom the search warrants is directed. Ownership,
therefore, is of no consequence, and it is sufficient that the person against whom the warrant is directed has control or possession of the property
sought to be seized.65 Petitioners cannot deny that the seized LPG cylinders were in the possession of Omni, found as they were inside the Omni
compound.

In fine, we also note that among those seized by the NBI are 16 LPG cylinders bearing the embossed brand names of Shellane, Gasul and Totalgaz
but were marked as Omnigas. Evidently, this pernicious practice of tampering or changing the appearance of a branded LPG cylinder to look like
another brand violates the brand owners’ property rights as infringement under Sec. 155.1 of RA 8293. Moreover, tampering of LPG cylinders is a
mode of perpetrating the criminal offenses under BP 33, as amended, and clearly enunciated under DOE Circular No. 2000-06-010 which provided
penalties on a per cylinder basis for each violation.

Foregoing considered, in the backdrop of the quantum of evidence required to support a finding of probable cause, we agree with the appellate
court and the Office of the Chief State Prosecutor, which conducted the preliminary investigation, that there exists probable cause for the violation
of Sec. 2 (a) in relation to Sec. 3 (c) of BP 33, as amended. Probable cause has been defined as the existence of such facts and circumstances as
would excite belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime
for which he was prosecuted.66 After all, probable cause need not be based on clear and convincing evidence of guilt, as the investigating officer
acts upon reasonable belief—probable cause implies probability of guilt and requires more than bare suspicion but less than evidence which would
justify a conviction.67

Probable violation of Sec. 2 (c) of BP 33, as amended

Anent the alleged violation of Sec. 2 (c) in relation to Sec. 4 of BP 33, as amended, petitioners strongly argue that there is no probable cause for said
violation based upon an underfilling of a lone cylinder of the eight branded LPG cylinders refilled during the test-buy. Besides, they point out that
there was no finding of underfilling in any of the filled LPG cylinders seized during the service of the search warrants. Citing DOE’s Bureau of Energy
Utilization Circular No. 85-3-348, they maintain that some deviation is allowed from the exact filled weight. Considering the fact that an isolated
underfilling happened in so many LPG cylinders filled, petitioners are of the view that such is due to human or equipment error and does not in any
way constitute deliberate underfilling within the contemplation of the law.

Moreover, petitioners cast aspersion on the report and findings of LPG Inspector Navio of the LPGIA by assailing his independence for being a
representative of the major petroleum companies and that the inspection he conducted was made without the presence of any DOE representative
or any independent body having technical expertise in determining LPG cylinder underfilling beyond the authorized quantity.

Again, we are not persuaded.

Contrary to petitioners’ arguments, a single underfilling constitutes an offense under BP 33, as amended by PD 1865, which clearly criminalizes
these offenses. In Perez v. LPG Refillers Association of the Philippines, Inc.,68 the Court affirmed the validity of DOE Circular No. 2000-06-010 which
provided penalties on a per cylinder basis for each violation, thus:

B.P. Blg. 33, as amended, criminalizes illegal trading, adulteration, underfilling, hoarding, and overpricing of petroleum products. Under this general
description of what constitutes criminal acts involving petroleum products, the Circular merely lists the various modes by which the said criminal
acts may be perpetrated, namely: no price display board, no weighing scale, no tare weight or incorrect tare weight markings, no authorized LPG
seal, no trade name, unbranded LPG cylinders, no serial number, no distinguishing color, no embossed identifying markings on cylinder, underfilling
LPG cylinders, tampering LPG cylinders, and unauthorized decanting of LPG cylinders. These specific acts and omissions are obviously within the
contemplation of the law, which seeks to curb the pernicious practices of some petroleum merchants.69 (Emphasis supplied.)

Moreover, in denying the motion for reconsideration of the LPG Refillers Association of the Philippines, Inc., the Court upheld the basis of said DOE
Circular No. 2000-06-010 on the imposition of penalties on a per cylinder basis, thus:

Respondent’s position is untenable. The Circular is not confiscatory in providing penalties on a per cylinder basis. Those penalties do not exceed the
ceiling prescribed in Section 4 of B.P. Blg. 33, as amended, which penalizes "any person who commits any act [t]herein prohibited." Thus, violation
on a per cylinder basis falls within the phrase "any act" as mandated in Section 4. To provide the same penalty for one who violates a prohibited act
in B.P. Blg. 33, as amended, regardless of the number of cylinders involved would result in an indiscriminate, oppressive and impractical operation of
B.P. Blg. 33, as amended. The equal protection clause demands that "all persons subject to such legislation shall be treated alike, under like
circumstances and conditions, both in the privileges conferred and in the liabilities imposed."70

The Court made it clear that a violation, like underfilling, on a per cylinder basis falls within the phrase of any act as mandated under Sec. 4 of BP 33,
as amended. Ineluctably, the underfilling of one LPG cylinder constitutes a clear violation of BP 33, as amended. The finding of underfilling by LPG
Inspector Navio of the LPGIA, as aptly noted by Manila Assistant City Prosecutor Catalo who conducted the preliminary investigation, was indeed not
controverted by petitioners.

On the issue of manifest bias and partiality, suffice it to say that aside from the allegation by petitioners, they have not shown that LPG Inspector
Navio is neither an expert nor qualified to determine underfilling. Besides, it must be noted that the inspection by LPG Inspector Navio was
conducted in the presence of NBI agents on April 23, 2004 who attested to that fact through their affidavits. Moreover, no rules require and
petitioners have not cited any that the inspection be conducted in the presence of DOE representatives.

Second Core Issue: Petitioners’ Liability for Violations

Sec. 4 of BP 33, as amended, provides for the penalties and persons who are criminally liable, thus:

Sec. 4. Penalties. — Any person who commits any act herein prohibited shall, upon conviction, be punished with a fine of not less than twenty
thousand pesos (P20,000) but not more than fifty thousand pesos (P50,000), or imprisonment of at least two (2) years but not more than five (5)
years, or both, in the discretion of the court. In cases of second and subsequent conviction under this Act, the penalty shall be both fine and
imprisonment as provided herein. Furthermore, the petroleum and/or petroleum products, subject matter of the illegal trading, adulteration,
shortselling, hoarding, overpricing or misuse, shall be forfeited in favor of the Government: Provided, That if the petroleum and/or petroleum
products have already been delivered and paid for, the offended party shall be indemnified twice the amount paid, and if the seller who has not yet
delivered has been fully paid, the price received shall be returned to the buyer with an additional amount equivalent to such price; and in addition, if
the offender is an oil company, marketer, distributor, refiller, dealer, sub-dealer and other retail outlets, or hauler, the cancellation of his license.

Trials of cases arising from this Act shall be terminated within thirty (30) days after arraignment.

When the offender is a corporation, partnership, or other juridical person, the president, the general manager, managing partner, or such other
officer charged with the management of the business affairs thereof, or employee responsible for the violation shall be criminally liable; in case the
offender is an alien, he shall be subject to deportation after serving the sentence.

If the offender is a government official or employee, he shall be perpetually disqualified from office. (Emphasis supplied.)

Relying on the third paragraph of the above statutory proviso, petitioners argue that they cannot be held liable for any perceived violations of BP 33,
as amended, since they are mere directors of Omni who are not in charge of the management of its business affairs. Reasoning that criminal liability
is personal, liability attaches to a person from his personal act or omission but not from the criminal act or negligence of another. Since Sec. 4 of BP
33, as amended, clearly provides and enumerates who are criminally liable, which do not include members of the board of directors of a
corporation, petitioners, as mere members of the board of directors who are not in charge of Omni’s business affairs, maintain that they cannot be
held liable for any perceived violations of BP 33, as amended. To bolster their position, they attest to being full-time employees of various firms as
shown by the Certificates of Employment71 they submitted tending to show that they are neither involved in the day-to-day business of Omni nor
managing it. Consequently, they posit that even if BP 33, as amended, had been violated by Omni they cannot be held criminally liable thereof not
being in any way connected with the commission of the alleged violations, and, consequently, the criminal complaints filed against them based
solely on their being members of the board of directors as per the GIS submitted by Omni to SEC are grossly discriminatory.

On this point, we agree with petitioners except as to petitioner Arnel U. Ty who is indisputably the President of Omni.

It may be noted that Sec. 4 above enumerates the persons who may be held liable for violations of the law, viz: (1) the president, (2) general
manager, (3) managing partner, (4) such other officer charged with the management of the business affairs of the corporation or juridical entity, or
(5) the employee responsible for such violation. A common thread of the first four enumerated officers is the fact that they manage the business
affairs of the corporation or juridical entity. In short, they are operating officers of a business concern, while the last in the list is self-explanatory.

It is undisputed that petitioners are members of the board of directors of Omni at the time pertinent. There can be no quibble that the enumeration
of persons who may be held liable for corporate violators of BP 33, as amended, excludes the members of the board of directors. This stands to
reason for the board of directors of a corporation is generally a policy making body. Even if the corporate powers of a corporation are reposed in the
board of directors under the first paragraph of Sec. 2372 of the Corporation Code, it is of common knowledge and practice that the board of
directors is not directly engaged or charged with the running of the recurring business affairs of the corporation. Depending on the powers granted
to them by the Articles of Incorporation, the members of the board generally do not concern themselves with the day-to-day affairs of the
corporation, except those corporate officers who are charged with running the business of the corporation and are concomitantly members of the
board, like the President. Section 2573 of the Corporation Code requires the president of a corporation to be also a member of the board of
directors.

Thus, the application of the legal maxim expressio unius est exclusio alterius, which means the mention of one thing implies the exclusion of another
thing not mentioned. If a statute enumerates the thing upon which it is to operate, everything else must necessarily and by implication be excluded
from its operation and effect.74 The fourth officer in the enumerated list is the catch-all "such other officer charged with the management of the
business affairs" of the corporation or juridical entity which is a factual issue which must be alleged and supported by evidence.

A scrutiny of the GIS reveals that among the petitioners who are members of the board of directors are the following who are likewise elected as
corporate officers of Omni: (1) Petitioner Arnel U. Ty (Arnel) as President; (2) petitioner Mari Antonette Ty as Treasurer; and (3) petitioner Jason Ong
as Corporate Secretary. Sec. 4 of BP 33, as amended, clearly indicated firstly the president of a corporation or juridical entity to be criminally liable
for violations of BP 33, as amended.

Evidently, petitioner Arnel, as President, who manages the business affairs of Omni, can be held liable for probable violations by Omni of BP 33, as
amended. The fact that petitioner Arnel is ostensibly the operations manager of Multi-Gas Corporation, a family owned business, does not deter him
from managing Omni as well. It is well-settled that where the language of the law is clear and unequivocal, it must be taken to mean exactly what it
says.75 As to the other petitioners, unless otherwise shown that they are situated under the catch-all "such other officer charged with the
management of the business affairs," they may not be held liable under BP 33, as amended, for probable violations. Consequently, with the
exception of petitioner Arnel, the charges against other petitioners must perforce be dismissed or dropped.

WHEREFORE, premises considered, we PARTIALLY GRANT the instant petition. Accordingly, the assailed September 28, 2007 Decision and March 14,
2008 Resolution of the Court of Appeals in CA-G.R. SP No. 98054 are AFFIRMED with MODIFICATION that petitioners Mari Antonette Ty, Jason Ong,
Willy Dy and Alvin Ty are excluded from the two Informations charging probable violations of Batas Pambansa Bilang 33, as amended. The Joint
Resolution dated November 7, 2005 of the Office of the Chief State Prosecutor is modified accordingly.

No pronouncement as to costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174584 January 20, 2010
VICTORIA P. CABRAL, Petitioner,
vs.
JACINTO UY, MICHAEL UY, MARILYN O. UY, RICHARD O. UY, REY IGNACIO DIAZ, JOSE PO and JUANITO MALTO, Respondents.

ABAD, J.:

This case is about the power of courts to hear criminal violations of the law that protects subdivision buyers against developers selling lots before
they are issued licenses to sell and the effect of the subsequent issuance of such licenses to sales that land developers make before the issuance of
their licenses.

The Facts and the Case

Respondent Jacinto Uy (Uy) is the chairman of Moldex Realty, Inc. (Moldex); the other respondents are its officers and directors. Uy entered into a
joint venture agreement with Quintin Bernardo for the inclusion into Moldex’s residential subdivision project in Bulacan of two parcels of land,
totaling 20,954 square meters, that Bernardo held under two emancipation patents.1

On June 21, 2001 Moldex applied for a license to sell subdivision lots in the project mentioned with the Housing and Land Use Regulatory Board
(HLURB)2 but the latter denied the application for failure to comply with the requirements.3

On July 2, 2002 petitioner Victoria P. Cabral filed a criminal complaint4 against respondents Uy, et al. for violation of Section 5 of Presidential Decree
(P.D.) 957, alleging that she was the registered owner of the lots subject of Bernardo’s emancipation patents. She said that prior to the transaction
between Bernardo and respondent Uy, the latter offered to acquire the lots from her but she refused because of the pending case for cancellation
of the patents that she filed against Bernardo with the Department of Agrarian Reform Adjudication Board.

On April 28, 2003 the public prosecutor’s office filed a criminal information before the Regional Trial Court of Quezon City5 in Criminal Case Q-03-
116823 against respondent Uy and the other Moldex officers, namely, respondents Michael Uy, Marilyn O. Uy, Richard O. Uy, Rey Ignacio Diaz, Jose
Po, and Juanito Malto for selling subdivision lots to a certain Josefa C. Yanga without a license from the HLURB.6

Subsequently, however, or on September 17, 2003 the HLURB issued Moldex the license to sell that it needed.7

Respondents Uy, et al. filed a motion to quash the information and motion for judicial determination of probable cause8 claiming that the office of
the prosecutor and the trial court had no jurisdiction over violations of P.D. 957, such jurisdiction being with the HLURB alone and, granting that
they could take cognizance of the case, respondents Uy, et al. could not be held criminally liable because the HLURB subsequently issued them a
license to sell.9

On May 20, 2004 the trial court denied the motions of respondents Uy, et al.10 On June 15, 2005 it also denied their motion for reconsideration,11
prompting them to appeal to the Court of Appeals (CA) in CA-G.R. SP 90468, which court granted their prayer for the issuance of a temporary
restraining order.12 On June 2, 2006 the latter court rendered a decision,13 upholding the trial court’s jurisdiction over the subject case but
ordaining its dismissal, given that the subsequent issuance of a license to sell extinguished respondents Uy, et al.’s criminal liability. Petitioner Cabral
filed a motion for reconsideration but the appeals court denied14 it, hence, this petition.

Required to comment on the petition, the Office of the Solicitor General joined the petitioner in asking this Court to reverse the CA’s decision.

The Issues Presented

The issues presented in this case15 are:

1. Whether or not the office of the public prosecutor and the trial court have jurisdiction over criminal actions for violation of P.D. 957; and

2. Whether or not HLURB’s subsequent issuance to Moldex of a license to sell extinguished respondents Uy, et al.’s criminal liability for selling
subdivision lots prior to the issuance of such license.

The Court’s Rulings

First. Conformably with what this Court ruled in Sia v. People,16 the CA correctly upheld the public prosecutor’s authority to file the criminal
information for violation of P.D. 957 and the trial court’s power to hear and adjudicate the action, the penalty being a ₱20,000.00 fine and
imprisonment of not exceeding 10 years or both such fine and imprisonment. This penalty brings the offense within the jurisdiction of that court.

Second. P.D. 957 has been enacted to regulate for the public good the sale of subdivision lots and condominiums. Its Section 5 prohibits such sale
without the prior issuance of an HLURB license17 and punishes those who engage in such selling.18 The crime is regarded as malum prohibitum
since P.D. 957 is a special law designed to protect the welfare of society and ensure the carrying on of the purposes of civil life.19 It is the
commission of that act as defined by law, not its character or effect that determines whether or not its provision has been violated. Malice or
criminal intent is immaterial in such crime.20 In crimes that are mala prohibita, the forbidden acts might not be inherently immoral. Still they are
punished because the law says they are forbidden. With these crimes, the sole issue is whether the law has been violated.211avvphi1

Since the Information in this case sufficiently alleged that Moldex sold a subdivision lot when it did not yet have a license to do so, the crime was
done. Assuming the allegations to be true, the subsequent issuance of the license and the invocation of good faith cannot reach back to erase the
offense and extinguish respondents Uy, et al.’s criminal liability.

In ruling that respondents’ criminal liability has been extinguished, the CA relied on Co Chien v. Sta. Lucia Realty and Development, Inc.22 But Co
Chien is a case for refund of down payment and nullification of the contract of sale between the buyer and the developer whose license was issued
only after the execution of the contract. This Court refused to void the transaction in the case because the absence of the license was not in itself
sufficient to invalidate the contract. And while there was no fraud on the part of the developer, the HLURB directed it to pay an administrative fine
of ₱20,000.00 for selling the lot without the necessary license. This only shows that the subsequent issuance of a license, as in this case, will not
extinguish the liability of the developer for violation of Section 5 of P.D. 957.

WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the June 2, 2006 Decision and the August 22, 2006 Resolution of the
Court of Appeals in CA-G.R. SP 90468. The Court REINSTATES the May 20, 2004 Order of the Regional Trial Court of Quezon City in Criminal Case Q-
03-116823, which denied respondents’ omnibus motion to quash and motion for judicial determination of probable cause.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice
 Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 161070 April 14, 2008
JOHN HILARIO y SIBAL, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by John Hilario y Sibal (petitioner), seeking to annul and set
aside the Resolutions dated August 19, 20031 and November 28 20032 of the Court of Appeals in CA-G.R. SP No. 75820.

The antecedents are as follows:

Petitioner, together with one Gilbert Alijid (Alijid), was charged with two counts3 of Murder in the Regional Trial Court (RTC), Branch 76, Quezon City
to which petitioner, assisted by counsel de parte, pleaded not guilty.

During trial, Atty. Raul Rivera of the Public Attorney's Office (PAO), counsel of Alijid, took over representing petitioner in view of the death of the
latter's counsel.

On December 5, 2001, the RTC rendered its Decision4 finding petitioner and his co-accused Alijid guilty beyond reasonable doubt of the crime of
homicide and sentencing them to suffer imprisonment of eight (8) years and one (1) day of prision mayor to fourteen (14) years and eight (8)
months of reclusion temporal in each count.

On May 10, 2002, petitioner, this time unassisted by counsel, filed with the RTC a Petition for Relief5 from the Decision dated December 5, 2001
together with an affidavit of merit. In his petition, petitioner contended that at the time of the promulgation of the judgment, he was already
confined at Quezon City Jail and was directed to be committed to the National Penitentiary in Muntinlupa; that he had no way of personally filing
the notice of appeal thus he instructed his lawyer to file it on his behalf; that he had no choice but to repose his full trust and confidence to his
lawyer; that he had instructed his lawyer to file the necessary motion for reconsideration or notice of appeal; that on May 2, 2002, he was already
incarcerated at the New Bilibid Prisons, Muntinlupa City and learned from the grapevine of his impending transfer to the Iwahig Penal Colony,
Palawan; that believing that the notice of appeal filed by his counsel prevented the Decision dated December 5, 2001 from becoming final to
warrant his transfer, he instructed his representative to get a copy of the notice of appeal from the RTC; that no notice of appeal was filed by his
lawyer in defiance of his clear instructions; and that the RTC Decision showed that it was received by his counsel on February 1, 2002 and yet the
counsel did not inform him of any action taken thereon.

Petitioner claimed that he had a meritorious defense, to wit:

1. The Decision dated December 5, 2001, on page 16 thereof states an imprisonment term of eight (8) years and one (1) day of Prision Mayor to
fourteen (14) years and eight (8) months of Reclusion Temporal - a matter which ought to be rectified;

2. The undersigned is a first time offender;

3. No ruling was laid down on the stipulated facts (Decision, p. 3) relative to the (1) absence of counsel during the alleged inquest, and (2) absence of
warrant in arresting the accused after ten (10) days from the commission of the crime;

4. Absence of a corroborating witness to the purported lone eyewitness, as against the corroborated testimony of accused-petitioner's alibi;

5. The Commission on Human Rights investigation on the torture of the accused-petitioner;

6. and others.6

Petitioner argued that he was meted a total of 16 years imprisonment or almost equal to the previous capital punishment of 20 years which was
given an automatic review by the Supreme Court, thus it is of greater interest of justice that his case be reviewed by the appellate court; and that no
damage will be sustained if the appeal is given due course since he continues to languish in jail while the Petition for Relief is pending.

The Assistant City Prosecutor filed his Comment on the Petition for Relief where he contended that the petition should no longer be entertained;
and that perfection of appeal in the manner and within the period permitted by law was not only mandatory but jurisdictional and failure to perfect
the appeal rendered the judgment final and executory.

The records do not show that the RTC required petitioner's counsel to whom petitioner attributed the act of not filing the notice of appeal to file his
comment.

On September 30, 2002, petitioner's counsel filed a Withdrawal of Appearance7 from the case with petitioner's consent. Again, the documents
before us do not show the action taken by the RTC thereon.

In an Order8 dated December 13, 2002, the RTC dismissed petitioner's petition for relief with the following disquisition:

After a careful study of the instant petition and the arguments raised by the contending parties, the Court is not persuaded by petitioner/accused's
allegation that he was prevented from filing a notice of appeal due to excusable negligence of his counsel.

Accused's allegation that he indeed specifically instructed his counsel to file a notice of appeal of the Decision dated [sic] and the latter did not heed
his instruction is at best self-serving and unsubstantiated and thus, unworthy of credence. At any rate, even if said omission should be considered as
negligence, it is a well-settled rule that negligence of counsel is binding on the client. x x x Besides, nowhere does it appear that accused/petitioner
was prevented from fairly presenting his defense nor does it appear that he was prejudiced as the merits of this case were adequately passed upon
in the Decision dated December 5, 2001.
It must also be pointed out that in his petition for relief, he stated that he instructed his counsel to file the necessary motion for reconsideration or
notice of appeal of the Decision dated December 5, 2001, whereas in his affidavit of merit, he claimed to have told his counsel to simply file a notice
of appeal thereof.9 (Emphasis supplied)

Petitioner, again by himself, filed a petition for certiorari with the CA on the ground that the RTC committed grave abuse of discretion in dismissing
his petition for relief. He claims that the delay in appealing his case without his fault constitutes excusable negligence to warrant the granting of his
petition for relief.

In a Resolution dated August 19, 2003, the CA dismissed the petition in this wise:

It appearing that petitioner in the instant petition for certiorari failed to attach the following documents cited in his petition, namely:

1. The December 5, 2001 Decision;

2. Comment of the City Prosecutor;

3. Manifestation of petitioner's counsel de oficio signifying his withdrawal as petitioner's counsel.

The instant petition for certiorari is hereby DISMISSED pursuant to Section 2, Rule 42 of the 1997 Rules of Civil Procedure and as prayed for by the
Solicitor General.10

Petitioner's motion for reconsideration was denied in a Resolution dated November 28, 2003 for having been filed beyond the 15-day reglementary
period, in violation of Section 1, Rule 52 of the Rules of Court and for failure to attach to the petition, the relevant and pertinent documents. The CA
also stressed that procedural rules are not to be belittled simply because their non-observance may have resulted in prejudice to a party's
substantive rights.

Hence, herein recourse filed by petitioner, still unassisted by counsel, raising the following issues:

Whether or not the delay in appealing the instant case due to the defiance of the petitioner's counsel de oficio to seasonably file a Notice of Appeal,
constitutes excusable negligence to entitle the undersigned detention prisoner/ petitioner to pursue his appeal?

Whether or not pro hac vice, the mere invocation of justice warrants the review of a final and executory judgment?

Petitioner contends that the negligence of his counsel de oficio cannot be binding on him for the latter's defiance of his instruction to appeal
automatically breaks the fiduciary relationship between counsel-client and cannot be against the client who was prejudiced; that this breach of trust
cannot easily be concocted in this situation considering that it was a counsel de oficio, a lawyer from PAO, who broke the fiduciary relationship; that
the assailed CA Resolutions both harped on technicalities to uphold the dismissal by the RTC of his petition for relief; that reliance on technicalities
to the prejudice of petitioner who is serving 14 years imprisonment for a crime he did not commit is an affront to the policy promulgated by this
Court that dismissal purely on technical grounds is frowned upon especially if it will result to unfairness; and that it would have been for the best
interest of justice for the CA to have directed the petitioner to complete the records instead of dismissing the petition outright.

In his Comment, the OSG argues that the mere invocation of justice does not warrant the review of an appeal from a final and executory judgment;
that perfection of an appeal in the manner and within the period laid down by law is not only mandatory but jurisdictional and failure to perfect the
appeal renders the judgment sought to be reviewed final and not appealable; and that petitioner's appeal after the finality of judgment of conviction
is an exercise in futility, thus the RTC properly dismissed petitioner's petition for relief from judgment. The OSG further claims that notice to counsel
is notice to clients and failure of counsel to notify his client of an adverse judgment would not constitute excusable negligence and therefore binding
on the client.

We grant the petition.

The CA dismissed the petition for certiorari filed under Rule 65 of the Rules of Court, in relation to Rule 46, on the ground that petitioner failed to
attach certain documents which the CA found to be relevant and pertinent to the petition for certiorari.

The requirements to attach such relevant pleadings under Section 1, Rule 65 is read in relation to Section 3, Rule 46 of the Rules of Court, thus:

Section 1, Rule 65 provides:

SECTION. 1. Petition for certiorari. –

xxxx

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and
documents relevant and pertinent thereto x x x.

Section 3, Rule 46, provides:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. –

xxxx

[The petition] shall be x x x accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling
subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto x x x.

xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition.
The initial determination of what pleadings, documents or orders are relevant and pertinent to the petition rests on the petitioner. If, upon its initial
review of the petition, the CA is of the view that additional pleadings, documents or order should have been submitted and appended to the
petition, the following are its options: (a) dismiss the petition under the last paragraph of Rule 46 of the Rules of Court; (b) order the petitioner to
submit the required additional pleadings, documents, or order within a specific period of time; or (c) order the petitioner to file an amended petition
appending thereto the required pleadings, documents or order within a fixed period.11

The RTC Decision dated December 5, 2001, finding petitioner guilty of two counts of homicide, the Comment of the City Prosecutor as well as the
counsel's withdrawal of appearance were considered by the CA as relevant and pertinent to the petition for certiorari, thus it dismissed the petition
for failure to attach the same. However, the CA failed to consider the fact that the petition before it was filed by petitioner, a detained prisoner,
without the benefit of counsel. A litigant who is not a lawyer is not expected to know the rules of procedure. In fact, even the most experienced
lawyers get tangled in the web of procedure.12 We have held in a civil case that to demand as much from ordinary citizens whose only compelle
intrare is their sense of right would turn the legal system into an intimidating monstrosity where an individual may be stripped of his property rights
not because he has no right to the property but because he does not know how to establish such right.13 This finds application specially if the liberty
of a person is at stake. As we held in Telan v. Court of Appeals:

The right to counsel in civil cases exists just as forcefully as in criminal cases, specially so when as a consequence, life, liberty, or property is
subjected to restraint or in danger of loss.

In criminal cases, the right of an accused person to be assisted by a member of the bar is immutable. Otherwise, there would be a grave denial of
due process. Thus, even if the judgment had become final and executory, it may still be recalled, and the accused afforded the opportunity to be
heard by himself and counsel.

xxxx

Even the most experienced lawyers get tangled in the web of procedure. The demand as much from ordinary citizens whose only compelle intrare is
their sense of right would turn the legal system into an intimidating monstrosity where an individual may be stripped of his property rights not
because he has no right to the property but because he does not know how to establish such right.

The right to counsel is absolute and may be invoked at all times. More so, in the case of an on-going litigation, it is a right that must be exercised at
every step of the way, with the lawyer faithfully keeping his client company.

No arrangement or interpretation of law could be as absurd as the position that the right to counsel exists only in the trial courts and that
thereafter, the right ceases in the pursuit of the appeal.14 (Emphasis supplied)

The filing of the petition for certiorari by petitioner without counsel should have alerted the CA and should have required petitioner to cause the
entry of appearance of his counsel. Although the petition filed before the CA was a petition for certiorari assailing the RTC Order dismissing the
petition for relief, the ultimate relief being sought by petitioner was to be given the chance to file an appeal from his conviction, thus the need for a
counsel is more pronounced. To repeat the ruling in Telan, no arrangement or interpretation of law could be as absurd as the position that the right
to counsel exists only in the trial courts and that thereafter, the right ceases in the pursuit of the appeal.15 It is even more important to note that
petitioner was not assisted by counsel when he filed his petition for relief from judgment with the RTC.

It cannot be overstressed therefore, that in criminal cases, as held in Telan, the right of an accused person to be assisted by a member of the bar is
immutable; otherwise, there would be a grave denial of due process.

Cases should be determined on the merits after full opportunity to all parties for ventilation of their causes and defenses, rather than on technicality
or some procedural imperfections. In that way, the ends of justice would be served better.16

The CA denied petitioner's motion for reconsideration for having been filed late. It appears that the CA Resolution dismissing the petition for
certiorari was received at the address written in the petition on September 1, 2003, and that petitioner filed his motion for reconsideration on
September 18, 2003, or two days late.

While as a general rule, the failure of petitioner to file his motion for reconsideration within the 15-day reglementary period fixed by law rendered
the resolution final and executory, we have on some occasions relaxed this rule. Thus, in Barnes v. Padilla17 we held:

However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor or property, (b) the
existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the
party favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other party
will not be unjustly prejudiced thereby.

Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court
reflects this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself
had already declared to be final.

In De Guzman v. Sandiganbayan, this Court, speaking through the late Justice Ricardo J. Francisco, had occasion to state:

The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not to bind and chain the hand that
dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial discretion. That is precisely why courts in
rendering justice have always been, as they ought to be guided by the norm that when on the balance, technicalities take a backseat against
substantive rights, and not the other way around. Truly then, technicalities, in the appropriate language of Justice Makalintal, "should give way to
the realities of the situation.

Indeed, the emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination
of his cause, free from the constraints of technicalities.18

Moreover, in Basco v. Court of Appeals,19 we also held:

Nonetheless, procedural rules were conceived to aid the attainment of justice. If a stringent application of the rules would hinder rather than serve
the demands of substantial justice, the former must yield to the latter. Recognizing this, Section 2, Rule 1 of the Rules of Court specifically provides
that:

SECTION 2. Construction. — These rules shall be liberally construed in order to promote their object and to assist the parties in obtaining just,
speedy, and inexpensive determination of every action and proceeding.20

Petitioner claims that he actually received the CA Resolution dismissing his petition for certiorari only on September 4, 2003 even as the same
Resolution was earlier received on September 1, 2003 at the address written in his petition, i.e., c/o Robert S. Bacuraya, No. 9 Iris St., West Fairview,
1118, Quezon City, by a certain Leonora Coronel. Apparently, Bacuraya is not a lawyer. Ordinarily, petitioner being detained at the National
Penitentiary, Muntinlupa, the CA should have also sent a copy of such Resolution to his place of detention. Considering that petitioner only received
the Resolution on September 4, 2003, we find the two days delay in filing his motion for reconsideration pardonable as it did not cause any prejudice
to the other party. There is no showing that petitioner was motivated by a desire to delay the proceedings or obstruct the administration of justice.
The suspension of the Rules is warranted in this case since the procedural infirmity was not entirely attributable to the fault or negligence of
petitioner.

Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid
application of rules that would result in technicalities that tend to frustrate rather than promote substantial justice must be avoided.21

In dismissing the petition for certiorari filed before it, the CA clearly put a premium on technicalities and brushed aside the issue raised before it by
petitioner, i.e., whether the RTC committed grave abuse of discretion in dismissing petitioner's petition for relief thus preventing him from taking an
appeal from his conviction.

Even if the judgment had become final and executory, it may still be recalled, and the accused afforded the opportunity to be heard by himself and
counsel.22 However, instead of remanding the case to the CA for a decision on the merits, we opt to resolve the same so as not to further delay the
final disposition of this case.

The RTC denied the petition for relief as it found petitioner's claim that his counsel did not heed his instruction to file an appeal to be
unsubstantiated and self serving; and that if there was indeed such omission committed by the counsel, such negligence is binding on the client.

Petitioner insists that the failure of his counsel to timely file a notice of appeal of his judgment of conviction despite his explicit instruction to do so
constitutes excusable negligence and so his petition for relief should have been granted.

We find that the RTC committed grave abuse of discretion in dismissing petitioner's petition for relief from judgment.

Petitioner was represented in the RTC by Atty. Rivera of the PAO. Section 1, Article IV of PAO Memorandum Circular No.18 series of 2002, the
Amended Standard Office Procedures in Extending Legal Assistance (PAO Memorandum Circular), provides that all appeals must be made upon the
request of the client himself and only meritorious cases shall be appealed; while Section 2, Article II of PAO Memorandum Circular provides that in
criminal cases, the accused enjoys the constitutional presumption of innocence until the contrary is proven, hence cases of defendants in criminal
actions are considered meritorious and therefore, should be appealed, upon the client's request.

In this case, petitioner claims he had instructed the PAO lawyer to file an appeal. Under the PAO Memorandum Circular, it was the duty of the latter
to perfect the appeal. Thus, in determining whether the petition for relief from judgment is based on a meritorious ground, it was crucial to
ascertain whether petitioner indeed gave explicit instruction to the PAO lawyer to file an appeal but the latter failed to do so.

To determine the veracity of petitioner's claim, it was incumbent upon the RTC to have required the PAO lawyer to comment on the petition for
relief. However, it appears from the records that the RTC only required the City Prosecutor to file a comment on the petition.

The RTC Order dismissing the petition for relief did not touch on the question whether the PAO lawyer was indeed negligent in not filing the appeal
as it merely stated that even if said omission, i.e., not filing the appeal despite his client’s instruction to do so, should be considered as negligence, it
is a well-settled rule that negligence of counsel is binding on the client.

While as a general rule, negligence of counsel may not be condoned and should bind the client,23 the exception is when the negligence of counsel is
so gross, reckless and inexcusable that the client is deprived of his day in court.24 In Aguilar v. Court of Appeals,25 we held:

x x x Losing liberty by default of an insensitive lawyer should be frowned upon despite the fiction that a client is bound by the mistakes of his lawyer.
The established jurisprudence holds:

xxxx

The function of the rule that negligence or mistake of counsel in procedure is imputed to and binding upon the client, as any other procedural rule,
is to serve as an instrument to advance the ends of justice. When in the circumstances of each case the rule desert its proper office as an aid to
justice and becomes its great hindrance and chief enemy, its rigors must be relaxed to admit exceptions thereto and to prevent a manifest
miscarriage of justice.

xxxx

The court has the power to except a particular case from the operation of the rule whenever the purposes of justice require it.

xxxx

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who
otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present
his case. In a criminal proceeding, where certain evidence was not presented because of counsel's error or incompetence, the defendant in order to
secure a new trial must satisfy the court that he has a good defense and that the acquittal would in all probability have followed the introduction of
the omitted evidence. What should guide judicial action is that a party be given the fullest opportunity to establish the merits of his action or
defense rather than for him to lose life, liberty, honor or property on mere technicalities.26
The PAO lawyer, Atty. Rivera, filed his Withdrawal of Appearance on September 30, 2002, almost three months before the RTC rendered its assailed
Order dated December 13, 2002, dismissing the petition for relief. The RTC had ample time to require the PAO lawyer to comment on the petition
for relief from judgment, before issuing the questioned Order. Had the RTC done so, there would have been a factual basis for the RTC to determine
whether or not the PAO lawyer was grossly negligent; and eventually, whether the petition for relief from judgment is meritorious. If there was no
instruction from petitioner to file an appeal, then there was no obligation on the part of the PAO lawyer to file an appeal as stated in the PAO
Memorandum Circular and negligence could not be attributed to him. However, if indeed there was such an instruction to appeal but the lawyer
failed to do so, he could be considered negligent.

Thus, there was no basis for the RTC to conclude that the claim of petitioner that he instructed the PAO lawyer to file an appeal as self-serving and
unsubstantiated. The RTC's dismissal of the petition for relief was done with grave abuse of discretion amounting to an undue denial of the
petitioner's right to appeal.

The RTC faulted petitioner for claiming in his petition for relief that he instructed his counsel to file the necessary motion for reconsideration or
notice of appeal; while in his affidavit of merit, he claimed to have told his counsel to simply file a notice of appeal. We do not find such
circumstance sufficient ground to dismiss the petition considering that he filed the petition for relief unassisted by counsel.

In all criminal prosecutions, the accused shall have the right to appeal in the manner prescribed by law. The importance and real purpose of the
remedy of appeal has been emphasized in Castro v. Court of Appeals27 where we ruled that an appeal is an essential part of our judicial system and
trial courts are advised to proceed with caution so as not to deprive a party of the right to appeal and instructed that every party-litigant should be
afforded the amplest opportunity for the proper and just disposition of his cause, freed from the constraints of technicalities. While this right is
statutory, once it is granted by law, however, its suppression would be a violation of due process, a right guaranteed by the Constitution. Thus, the
importance of finding out whether petitioner's loss of the right to appeal was due to the PAO lawyer's negligence and not at all attributed to
petitioner.

However, we cannot, in the present petition for review on certiorari, make a conclusive finding that indeed there was excusable negligence on the
part of the PAO lawyer which prejudiced petitioner's right to appeal his conviction. To do so would be pure speculation or conjecture. Therefore, a
remand of this case to the RTC for the proper determination of the merits of the petition for relief from judgment is just and proper.

WHEREFORE, the petition is GRANTED. The Resolutions dated August 19, 2003 and November 28, 2003 of the Court of Appeals are REVERSED and
SET ASIDE. The Order dated December 13, 2002 of the Regional Trial Court of Quezon City, Branch 76, is SET ASIDE. The RTC is hereby ordered to
require Atty. Raul Rivera of the Public Attorney's Office to file his comment on the petition for relief from judgment filed by petitioner, hold a
hearing thereon, and thereafter rule on the merits of the petition for relief from judgment, with dispatch.

SO ORDERED.

Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 104285-86 May 21, 1993
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
VICTOR ANGELES Y RAMOS, accused-appellant.

FELICIANO, J.:

Victor Angeles appeals from a decision of the Regional Trial Court ("RTC") of Manila, Branch 25, convicting him of two (2) separate offenses: one of
rape and the other of robbery against Analie Baltazar.

Angeles was charged with rape in a complaint filed by Analie Baltazar dated 28 February 1989; he was also accused of robbery in an inhabited place
in an information filed by Assistant Prosecutor Eufrocino A. Sulla, also dated 28 February 1989. These two (2) documents read as follows:

That on or about February 24, 1989, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully and feloniously, by
means of force, violence and intimidation, to wit: by poking an ice pick against her person, dragging her outside the house and bringing her to the
Three Bird Lodge located at Sales St., Sta. Cruz, in said City, threatening to kill her should she resist and accused succeed (sic) in having carnal
knowledge of the undersigned complainant, against her will and consent.1

xxx xxx xxx

That on or about February 24, 1989, in the City of Manila, Philippines, the said accused, conspiring and confederating with two others whose true
names, identities and present whereabouts are still unknown and helping one another, did then and there, wilfully, unlawfully and feloniously break
into and enter House No. 652 (along) Algeciras St., Sampaloc, in said City, which was then occupied as a dwelling place of one ANALIE BALTAZAR Y
CORDON and other members of her family, by destroying the screen of the door of the said house and by passing through the said door, and once
inside, with intent of gain and without the knowledge and consent of the owner thereof, took, robbed and carried away one (1) Betamax Sony
valued at P10,500.00 and one Typewriter Merit valued at P5,000.00, or all valued at P15,500.00, belonging to said Analie Baltazar y Cordon to the
damage and prejudice of said owner in the aforesaid sum of P15,500.00, Philippine currency.2

The complaint and information were raffled off to two (2) different branches of the Manila RTC.3 Appellant Angeles entered a plea of not guilty to
the complaint of rape before the Manila RTC, Branch 5, on 19 July 1989.4 A few months earlier, he had pleaded not guilty to the information for
robbery before Branch 25 of the Manila RTC on 10 April 1989.5

In an order dated 13 April 1989, Judge Felix B. Mintu of Branch 5, Manila RTC, upon the ground that the two (2) criminal cases were "intimately
related," ordered that Criminal Case No. 89-70692 (the robbery case) be consolidated for joint trial with the lower numbered case (the rape case)
then pending before his sala.6

Earlier, on 12 April 1989, Angeles filed a motion to quash the rape complaint in Criminal Case No. 89-70961, upon the ground that the offense there
charged was "the same offense" for which he had been arraigned just two (2) days earlier before Branch 25 of the Manila RTC in Criminal Case No.
89-70962, and that he would be exposed to "double jeopardy" if he were arraigned anew in Criminal Case No. 89-70961.7

After hearing, Judge Mintu denied the motion to quash holding that two (2) distinct crimes of rape and of robbery were alleged to have been
committed by appellant.8 Appellant moved for reconsideration of that order, without success.

After joint trial of the rape and robbery cases, appellant was found guilty of both offenses in a decision dated 7 March 1991 of the Manila RTC, the
dispositive portion of which states:

WHEREFORE, the prosecution having proven the guilt of the accused VICTOR ANGELES Y RAMOS beyond reasonable doubt on both cases, sentences
him to suffer the penalty of:

Criminal Case No. 89-70961, Rape LIFE IMPRISONMENT and pay as damages complainant ANALIE BALTAZAR Y CORDON the sum of FIFTEEN
THOUSAND (P15,000.00) PESOS; WITH COST;

Criminal Case No. 89-70962, Robbery LIFE IMPRISONMENT, the stolen articles being not recovered, to pay as damages complainant ANALIE
BALTAZAR Y CORDON the sum of FIFTEEN THOUSAND PESOS (P15,000.00) PESOS; WITH COST.9

The basic facts as found and set out by the trial court in its decision are as follows:

Analie Baltazar testified that on or about 1:30 in the morning of February 24, 1989, while she was sleeping at the sala of the second floor of their
house in Ageceria (sic) Street, Sampaloc, Manila, she woke up to urinate. When she stood up, a person behind held and poked an icepick on her
neck. According to her, she begged not to be killed; that she was dragged towards the rear door of their house. Aside from the person who dragged
her, she also saw two persons on the ground floor carrying their typewriter and Sony Super betamax. The typewriter, according to her cost about
P10,000.00 to P11,000.00. She was dragged by the man at the railroad track towards Fermesa Street, (then) to de la Fuente Street, where she was
made to board the (sic) taxi and brought to Dakota (St.) at Recto Avenue. That while she was being dragged by the person, whom she later identified
as the accused Victor Angeles, the two other companions of the accused were on (sic) their back. According to her, the two persons placed
themselves on (sic) a dark place and she was told not to shout. That everytime she talked with a loud voice, she was being (sic) slapped. Later, the
two companions of the accused left. Accused Angeles, while still poking the ice pick on her neck, covered by the blanket she was carrying then,
brought her to the Three Bird Lodge Motel, a few steps from Dakota Recto going towards Evangelista Street, Quiapo, Manila. At the Three Bird
Lodge, accused Angeles talked with the roomboy while at that time the ice pick was still poked at her. She was brought to a room, where accused
removed her t-shirt, short and underwear. Later, she was made to lie down on the bed and the accused removed also (sic) his clothes. The room,
according to her, was well-lighted. The accused, after removing his clothes, started to kiss her on her neck, to her bust and her private parts. That
the accused forced his penis to enter her private parts. That the penis, according to her, penetrated lightly on her private parts and thereafter, she
was told to dress up and let (sic) her go home.

The following day, the accused was again seen in complainant Analie's neighborhood. The accused, according to her, was even rubbing his shoes on
the ground and looking at the direction of their house. She immediately informed her father about the presence of the accused. Her father,
according to her, immediately went to the place where then accused was, but accused has (sic) already left and thus, was able that time to escape
the wrath of her father. On February 26, 1989, at about 10:00 o'clock in the morning, again (sic), complainant Analie saw the accused in front of
their house. She immediately pointed the accused to her father, who in turn went down the house and confronted the accused. While talking, her
father gave the accused a fist blow and the people in the neighborhood chased the accused. After a brief chase, the accused was apprehended and
mauled by her neighbors. Later, the accused was brought to the police station and charged for the present crime.

Dr. Marcial Cenido, Medico-Legal Officer, Western Police District, testified that he made a physical and genital examination on the person of Analie
Baltazar y Cordon, thru the request of Lt. Generoso Javier, Western Police District, and found her hymen with deep healing laceration at 6:00 o'clock
position extending to the base at the forchette right of midline and slightly bled upon examination, Exhibit "3" (sic). Its cause, according to him, was
entry of a penis inside it.10

Appellant submitted a different story to the trial court, which summed up his story in the following terms:

Accused Victor Angeles denied emphatically the accusation against him. According to him, on February 23, 1989, at 9:00 in the evening, he was at
his house asleep. he woke up at 6:30 in the morning of February 24, 1989. On said date, he was with his mother Isabel Ramos. The mother of the
accused, Isabel Ramos Angeles, collaborated (sic) the testimony of the accused that on the night of February 24, 1989, the accused was in his house
asleep. He claimed that on February 26, 1989, he was looking for Ree, a fellow electrician near complainant Analie's house. After a brief talk with
Analie's father, about the robbery being committed in the neighborhood, the people in the neighborhood suddenly attacked him. He ran away, but
after a brief chase, was apprehended, and mauled and later brought to the police precinct. Later, he was examined by Dr. Marcial Cenido, WPD
Medico Legal Officer. Dr. Cenido admitted having examined the accused, but aside from having found scally wounds on the person of the accused,
he did not elaborate on any injury suffered by the accused.11

In this appeal, Victor Angeles claims that:

1. The trial court erred in not holding that the arraignment of the accused-appellant in Criminal case No. 89-70962, for robbery, bars the
second prosecution of the same accused-appellant in Criminal Case No. 89-70961, for rape.

2. The trial court erred in not holding that the testimony of the accused-appellant is more credible and logical than the testimony of Analie
Baltazar.

3. The trial court erred in not acquitting the accused-

appellant.12

Two (2) principal issues are posed for the Court's consideration in this case: firstly, whether or not the trial court erred in holding that two (2)
separate felonies of robbery and rape had been committed by appellant; and secondly, whether the trial court had erred in believing the testimony
of Analie Baltazar to the effect that appellant Angeles had raped her.

In respect of the first issue, we note preliminarily that appellant's argument that the prosecution for rape was barred by appellant's prosecution and
arraignment for robbery, under the doctrine of "double jeopardy," is bereft of merit. That doctrine, in general, prohibits a second prosecution for
the same offense as that charged in the first prosecution. In the case at bar, robbery and rape cannot properly be considered the same offense;
neither is one included in the other. What appellant was apparently trying to say was that he was properly chargeable, not for two (2) separate
offenses of robbery and rape, but rather of the special complex crime of "robbery with rape." In other words, appellant was probably trying to say
that the charge for robbery should have been a charge for "robbery with rape" such that separate complaint for rape was, at least partially, a
duplication of the first charge. Thus, the real issue is whether he was properly charged with and found guilty of two (2) separate offenses, or
whether he should have been charged instead with "robbery with rape." In either case, of course, the prosecution must show the presence of all the
elements of the crime of robbery, as well as all the elements of the crime of rape.

This issue, however, is not an entirely academic one. In its practical consequences, it relates to whether only one penalty should have been imposed
upon appellant under Article 294, paragraph 2 of the Revised Penal Code; or whether two (2) penalties are appropriately imposable upon appellant,
one for robbery in an inhabited house under Article 299 of the Revised Penal Code and another for rape under Article 335 of the Revised Penal Code
as amended.

Appellant contends that the case at bar is controlled by U.S. v.

Tiongco,13 where the Court held that the offense committed was the special complex crime of robbery with rape. Appellant cites the following
passages from U.S. v. Tiongco :

xxx xxx xxx

After the robbers had seized such things as they wished to carry off and when ready to go out, they took the three women below blindfolded. The
band then headed fro the river near by to embark in the banca in which they had come. When they left the house, Cristeto Ledesma and Narciso
Castano compelled two of the women, Juaneza and Eusula, to accompany them, and while the band was on its way to the banca these two men
separated from the rest, took these two women with them to a place near a marsh not far from the river bank, and there raped them, employing
force and intimidation to accomplish their purpose. Cristeto Ledesma raped Rosario Juaneza, and Narciso Castano, Nieves Eusula, after which
Cristeto and Narciso went to the banca, where the other robbers were waiting for them, and all left.

xxx xxx xxx

As the crime of the robbery, with that of rape of said two women — a crime against chastity committed on the occasion of the robbery — was
perpetrated by the malefactors in the said house of Catalino Balinon, both crimes should be punished as one single complex crime, as defined and
qualified by paragraph 2 of article 503 of the Penal Code; for, besides the robbers seizing the money and the other effects they found in said house,
two of them sullied the honor of the two women therein, and the companions of the two men who committed the rape made no opposition nor
prevented these latter from consummating this other crime, apparently unconnected with and unrelated to that robbery, but which, as well as
sanguinary crimes, is often committed on such occasions, and it is for this reason that the penal law, in odium of such offenses against property and
chastity, has considered them complex and punished them by one single penalty.14 (Emphasis supplied)

Close examination of the facts in Tiongco and of the facts in the case at bar lead us to believe that Tiongco does not control the case at bar. In the
case at bar, the robbery carried out in the house where Analie Baltazar and her parents lived was consummated and completed; the taking of the
goods from the house was completed and the three (3) robbers (including appellant Angeles) walked from Algeciras Street, Sampaloc, down the
railroad track towards Fermesa street and then to Dela Fuente Street where they boarded a taxi which brought them to Recto Avenue. At Recto
Avenue, the three (3) men and the victim Analie Baltazar got off the taxi and the two (2) co-felons of Angeles left and went their own way while
appellant Angeles proceeded to a motel located in Dakota Street not far away from recto Avenue in the direction of Quiapo District.15 The acts
constitutive of the robbery at the house of the Baltazars and the acts comprising the rape inflicted upon Analie Baltazar were separated both by
time and space. The conspiracy between the three (3) malefactors clearly covering the robbery had come to an end with the departure of two (2) of
the conspirators. The rape was carried out after the completion of the robbery and after the break up of the malefactors. The situs of the rape was
far away from the situs of the robbery. We believe and so hold that under the circumstances of this case, appellant Angeles was properly charged
with two (2) distinct offenses of robbery and of rape, rather than with the special complex crime of robbery with rape under Article 294, paragraph 2
of the Revised Penal Code. Conceptually, the robbery had not been "accompanied by rape," neither was the rape committed "by reason or on [the]
occasion of such robbery;" rather, the robbery and the rape were committed successively or in sequence.

Appellant's next contention is that in respect of the conviction of rape, the trial court erred in finding Analie Baltazar to be a credible witness and
that the trial court had misapprehended two (2) important facts of record which indicated that her testimony was incredible in itself. The two (2)
facts submitted by appellant are: firstly, at the motel, Analie had failed to make an outcry which could have attracted intervention on the part of the
roomboy; and secondly, Analie's declaration that appellant Angeles had returned to the vicinity of her family home a few hours after the robbery, at
day break of 24 February 1989, was "highly suspicious" and improbable for then appellant would have been risking discovery, denunciation and
arrest which in fact eventually came
about.16

Once more, the Court is not persuaded. Private complainant's failure to scream for help or otherwise make an outcry must be evaluated in the
context of all the surrounding circumstances of this case. When Analie woke up at her house after midnight to go to the bathroom, appellant
grabbed hold of her and her sleeping blanket and threatened her with an ice pick on her neck. She was dragged from her family home, across the
railroad tracks and across several streets by the appellant and his two (2) companions. Inside the taxi that the group boarded, Analie was put
bedside the driver, with appellant's arm on her shoulder while appellant and the other two (2) malefactors were on their rear seat. The taxi driver
did not notice that underneath the blanket draped over Analie's shoulder, appellant's ice pick remained threateningly poised at her. After alighting
from the taxi at Dakota Street, Analie was brought to a dark and unlighted place where the three (3) malefactors slapped her on the face everytime
she tried to raise her voice. At the motel, while talking to the roomboy, appellant continued to hold the ice pick against her neck or side underneath
the blanket.17 Inside the motel room, Analie, 17 years of age at the time of the trial, did not physically resist being disrobed by appellant Angeles
who had placed his ice pick nearby on top of the lavatory. She laid down on the bed when appellant threatened to kill her. She testified that she was
then already weakened, tired and worn out and feared that she would be stabbed if she struggled with appellant. Neither could she seek to grab the
icepick while appellant was on top of her on the bed, for appellant held her hands and continue to hold the icepick at her neck.18 This Court has
many times held in the past that rape is committed when intimidation is exercised upon the victim and the latter submits herself, against her will, to
the rapist's embrace because of the fear for life and personal safety.19 The reality of continuing intimidation used against Analie Baltazar is evident
all through the record of this case.

As to appellant's argument that Analie's testimony to the effect that he had returned to the scene of the robbery was improbable, it may be
observed, firstly, that even if it is conceded (and it is not necessary so to concede) that this portion of Analie's testimony was improbable, that
testimony did not relate to the material facts constitutive of the crime of rape. There is no rule of law which requires a court to disregard the
entirety of the testimony of a witness because a portion thereof may be doubtful.20 Analie declared before the trial court that she saw the
appellant at the vicinity of her house at least three (3) times after the robbery and rape and that she had immediately informed her father of
appellant's appearance.21 On the third occasion, on 26 February 1989, Analie's father was able to chase down the appellant Angeles and confront
him about his daughter's violation. A false sense of security born out of his having successfully eluded Analie's father twice before, would account
for appellant's imprudent third visit to the scene of the robbery.

Thus, appellant has failed to establish any significant fact which the trial court overlooked or misconstrued and which would change the result
reached by the trial court. This Court is thus bound to affirm the factual conclusions of the trial court, more particularly on the credit worthiness of
Analie's testimony,22 since the trial court had the opportunity to observe carefully her demeanor and deportment in court while testifying.23

Appellant's defense of denial and alibi, it is firmly established doctrine, cannot prevail over the positive identification made by Analie Baltazar. Analie
had expressly and positively stated that it was appellant Angeles who dragged her from her house in the company of two (2) other men who were
carrying away her family's typewriter and video cassette recorder, and that it was appellant Angeles who had disrobed her at the motel and then
copulated with her, with an icepick poised at her neck or within easy reach of the appellant.24 Finally, when appellant and his mother declared that
appellant was sleeping at the latter's house at Araneta Street, Tatalon estate, Quezon City, on the evening of 23-24 February 1989,25 the Court
notes that this location is only a few kilometers away from Baltazars' residence at Algeciras Street, Sampaloc, Manila, such that appellant could
move from one location to the other within a short period of time, with public transportation. Appellant's defense of alibi cannot be sustained in
view of his failure to show the physical impossibility of his being at the scene of the crime or about the time of the commission thereof.26

There are, however, two (2) errors on the part of the trial court which need to be addressed. The first error relates to the penalty properly
imposable on appellant for the crime of robbery in Criminal Case No.89-70962. Under Article 299 of the Revised Penal Code, the penalty imposable
for robbery in an inhabited place is reclusion temporal. Taking into account the provisions of the Indeterminate Sentence Law, considering that no
modifying circumstances were alleged and proved and exercising the discretion of this Court, the penalty properly imposable upon appellant
Angeles for the robbery is an indeterminate sentence, the minimum of which shall be eight (8) years and one (1) day of prision mayor and the
maximum of which shall be fourteen (14) years, eight (8) months and one (1) day of reclusion temporal.

The second error relates to the proper characterization of the offense with which appellant was charged and for which he was convicted in Criminal
Case No. 89-70961. Analie had testified before the trial court that while at the motel, the appellant had told her that he and the other malefactors
had been "tipped off that her family residence contained many appliances and that they had planned to carry away many of them but had changed
their minds." Appellant decided to take her with him because she was "more important to (sic) these things."27 The information in Criminal Case
No. 89-70961 had sufficiently alleged, and the prosecution shown at the trial, that before Analie was raped, she was taken from her house against
her will and with lewd designs. Taking all these circumstances into account, it is clear to the Court that appellant Angeles committed the complex
crime of forcible abduction with rape, defined and penalized under Article 342 (forcible abduction) and Article 335 (rape) of the Revised Penal Code
in relation to the second clause of Article 48 (complex crimes) of the same Code. The forcible abduction was, in the circumstances of this case, a
necessary means to commit the rape.28 In the case variance between the caption of the information and the allegations set out in the body thereof,
which allegations sufficiently described the offense(s) and its elements, the latter prevails over the former.29 Article 48 of the Revised Penal Code
provides that in complex crimes, the penalty for the most serious crime shall be imposed in its maximum period. In the case at bar, the more serious
of the two (2) crimes (forcible abduction and rape) established in Criminal Case No. 89-70961 was rape committed with a deadly weapon (here, the
icepick) which is punishable with reclusion perpetua to death under paragraph 3 of Article 335 of the Revised Penal code. Since no modifying
circumstances were either alleged or proved in Criminal Case No. 89-70961,30 and considering the non-enforceability of the death penalty, the
penalty properly imposable on appellant is reclusion perpetua. The trial court's reference to "life imprisonment" is, of course, wrong.
In line with recent case law, the indemnity for moral damages awarded to Analie Baltazar in Criminal Case No. 89-70961 should be increased to
P30,000.00.31

WHEREFORE, the decision of the trial court dated 7 March 1991 is hereby MODIFIED so as to read as follows:

Criminal Case No. 89-70961, Rape, Reclusion perpetua, and pay as moral damages complainant ANALIE BALTAZAR Y CORDON the sum of THIRTY
THOUSAND (P30,000.00) PESOS; WITH COSTS.

Criminal Case No. 89-70962, Robbery, Imprisonment for an indeterminate period ranging from eight (8) years and one (1) day of prision mayor as
minimum to fourteen (14) years, eight (8) months and one (1) day of reclusion temporal as maximum, the stolen articles being not recovered, to pay
complainant ANALIE BALTAZAR Y CORDON, by way of reparation, the sum of FIFTEEN THOUSAND (P15,000.00) PESOS; WITH COST.

As so modified, the decision of the trial court is hereby AFFIRMED. Costs against appellant.

SO ORDERED.

Bidin, Davide, Jr., Romero and Melo, JJ., concur.

THIRD DIVISION
G.R. No. 123541 February 8, 2000
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DIOLO BARITA y SACPA, DENVER GOLSING y DELFIN, DIONISIO CUISON y FONTANILLA, accused-appellants.

GONZAGA-REYES, J.:

Before us is an appeal from the decision1 of the Regional Trial Court (RTC) of Baguio City, Branch 6, finding accused-appellants Diolo Barita, Denver
Golsing and Dionisio Cuison guilty beyond reasonable doubt of violation of Section 4, Article II of Republic Act 6425 otherwise known as the
Dangerous Drugs Act as amended by Section 13 of Republic Act 7659.2

Diolo Barita (BARITA), Denver Golsing (GOLSING) and Dionisio Cuison (CUISON) were charged with violation of Section 4, Article II of Republic Act
6425 in an information that reads:

That on or about the 9th day of June 1994, in the City of Baguio, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring, confederating and mutually aiding one another, did then and there willfully, unlawfully and feloniously sell and deliver more or
less 2,800 grams of dried marijuana leaves with flowering tops knowing fully well that said leaves of marijuana is a prohibited drug, in violation of
the above mentioned provision of law.

CONTRARY TO LAW.3

On October 25, 1984, all three accused were arraigned and pleaded not guilty to the crime charged.4

The lower court summarized the facts as follows:

The evidence shows that on June 9, 1994 at about 12:00 o'clock noon Police Supt. Felix Cadalli of the 14th Narcotics Regional Field Unit, Camp Bado
Dangwa, La Trinidad, Benguet received a report from a civilian informer that one alias Jun, a taxi driver, who usually waits for passengers at
Nelbusco Terminal, Otek St., Baguio City is the middleman of those selling marijuana at Justice Village, Baguio City.

After evaluating the information, P/Supt. Cadalli organized a buy-bust team composed of P/Insp. Virgilio Pelaez as team leader, PO3 Teofilo Juanata
as poseur-buyer, SPO1 Edelfonso Sison driver and PO3 Rolando Gamit as back-up. A briefing ensued wherein Insp. Pelaez, PO3 Gamit and SPO1
Sison were instructed to proceed to Justice Village, and wait and position themselves strategically thereat so that they could witness the transaction
between their poseur-buyer and the drug pushers. Supt. Cadalli gave PO3 Juanata two pieces of P100.00 bills together with machine copies thereof
and pieces of paper cut into the size of money bills such that if put together with one of the two P100.00 bills on top and the other at the bottom,
the whole bunch will have the appearance of a bundle of money to be used in the purchase of marijuana for entrapment purposes. The two P100.00
bills were previous the subject of an Authentication (Exh. E) dated June 3, 1994 before Prosecutor Octavio Banta. Juanata was instructed by Cadalli
to proceed with the civilian informer to Nelbusco Terminal at Otek St., Baguio City to contact alias Jun, the middleman.

In accordance with instructions, Pelaez, Gamit and Sison left for Justice Village at about 3:00 p.m. on board the red car owned and driven by Sison. In
turn, Juanata and the civilian informer boarded a passenger jeepney and proceeded to the Nelbusco Terminal. There, they were able to see alias Jun
waiting for passengers inside his taxi. Juanata was introduced by the civilian informer to alias Jun, later identified as Dionisio Cuison, as a buyer of
marijuana. And the latter told then that the stocks of marijuana were available at Justice Village. The three proceeded to Justice Village on boards
Jun's taxicab.

Meanwhile, the Narcom team of Pelaez waited at the road junction of Justice Village and Marcos Highway. Not long after, they spotted the taxi
driven by accused Cuison carrying Juanata and the civilian informer and followed it unnoticed. The taxi stopped by the side of the road at Justice
Village. The red car of Sison following passed by the taxi and then took a U-turn at the dead end of the road such that when the red car was parked,
those inside it were facing the taxi parked around 20 meters away.

Soon after he parked his taxi, accused Cuison alighted and talked to some persons. When he returned, he informed Juanata that they have to wait
because the sellers of marijuana were not around yet. After about five minutes, two persons walked towards the taxi. Accused Cuison went out of
the taxi to meet them. And they talked. After which Juanata was introduced by Cuison to the two as a marijuana buyer. Juanata introduced himself
as Jojo while the two introduced themselves as Diolo, later identified as Diolo Barita and Denver, later identified as Denver Golsing. Juanata ordered
three kilos of marijuana and was told by accused Golsing that a kilo costs P800.00. Then accused Barita and Golsing told them to wait as they will get
the marijuana.

After about 5 minutes, accused Golsing and Barita returned. Accused Barita was carrying a transparent plastic bag which he handed to Juanata. After
examining the contents of the plastic bag (Exh. G), consisting of three bundles (Exhs. H, I, J), two wrapped in a brown paper (Exhs. H and I) and the
third wrapped in a newspaper page (Exh. J), and determining the contents thereof as marijuana, Juanata handed the boodle money to accused
Golsing and immediately gave the pre-arranged signal by removing his cap.

Forthwith, the group of Insp. Pelaez rushed to where the transaction took place, identified themselves as Narcom agents, and arrested accused
Barita, Golsing and Cuison. The accused together with the marijuana confiscated and the boodle money recovered were brought to the 14th
Narcotics Regional Field Unit at Camp Dangwa. The accused were turned over for investigation while the marijuana was turned over to the evidence
custodian after Juanata, Gamit and Sison inscribed and signed their initials on the transparent plastic bag (Exh. G) as well as on the wrappers of the
three bundles (Exhs. H, I, J) contained therein to identify the confiscated items and avoid tampering. The Booking Sheet and Arrest Reports (Exhs. B,
C, D) of the accused were made.5

On November 6, 1995, the RTC rendered its decision finding all the accused guilty beyond reasonable doubt for violating Section 4, Article II of
Republic Act 6425 as amended, the dispositive portion of which reads:

WHEREFORE the Court finds the accused Diolo Barita y Sacpa, Denver Golsing y Delfin and Dionisio Cuison y Fontanilla Guilty beyond reasonable
doubt as principals by direct participation and/or by indispensable cooperation of the offense of Violation of Section 4, Article II of Republic Act 6425
as amended by Section 13 of Republic Act 7659 (Sale of 2.8 kilos of marijuana, a prohibited drug) as charged in the Information and hereby
sentences each of them to suffer the penalty of Reclusion Perpetua and to pay a fine of P500,000.00 without subsidiary imprisonment in case of
insolvency and to pay the proportionate costs.
The marijuana confiscated from the accuses (Exhs. G, H, I, J) being the subject and instrument of the crime is declared confiscated and forfeited in
favor of the state and referred to the Dangerous Drugs Board for immediate destruction.

The accused Diolo Barita, Denver Folsing and Dionisio Cuison, being detention prisoners are entitled to be credited in the service of their sentence
4/5 of their preventive imprisonment in accordance with Article 29 of the Revised Penal Code.

SO ORDERED.6

Hence, this appeal where each of the accused-appellants filed their respective appellant's briefs.

In support of his appeal, BARITA denies any participation in the alleged sale of marijuana. He claims that no buy-bust operation was conducted and
that the accusation against him was all part of a frame-up. To prove this, BARITA alleges that the prosecution evidence is replete with numerous
flaws and glaring inconsistencies considering that:

1.) Records (requests for physical examination made by P/Supt. Felix G. Caddali, Jr.) reveal that the buy bust team allegedly arrested five (5)
persons7 yet the prosecution witnesses insist that only three (3), herein accused-appellants, were arrested. Considering that the prosecution
witnesses made no explanation concerning this, their testimonies should not be given credence. Moreover, the prosecution witnesses attempted to
hide the fact of the arrest of the other two who were arrested, SIBAYAN and BINDADAN. According to them, since the prosecution witnesses were
not able to give a sufficient explanation why only three accused were charged, they concocted the buy-bust operation.

2.) None of the accused-appellants reside or are from Justice Village, the place where the alleged sale took place and could not have
committed the crime.

3.) There is a reasonable doubt as to the existence of the civilian informer for if there really was one, the NARCOM agents would not have
taken his report without question.

4.) The events leading to the buy-bust are contrary to human experience and opposed to common sense inasmuch as the alleged sale of
marijuana was not definite to happen and that Jun supposedly knew the sellers of marijuana yet upon arrival at Justice Village, he had to inquire
about them thereat.

5.) The prosecution witnesses' accounts differ with respect to whether or not Jun alighted from the taxicab at the time when the alleged
pushers neared the taxicab.

6.) PO3 Juanata's testimony is doubtful since he could not testify as to where his companions were at the time of the sale, which negates the
existence of a buy-bust plan.

7.) There is a divergence of testimony as to where the sale took place.

8.) The prosecution witnesses gave different versions as to where the alleged sellers proceeded after they went to get the marijuana.

9.) The testimonies given with respect to the buy-bust money is shrouded with contradictions.

10.) There is a divergence of testimony as to the ownership of the red car used in the buy-bust operation.

11.) There is a divergence of testimony as to the existence of a safehouse.

12.) There is a divergence of testimony as to the participation of PO3 Gamit in the arrest of the accused-appellants.

13.) The taxicab was released without an order from the trial court and such release was never exlained.

14.) The joint affidavit of arrest does not contain the name of P/Insp. Virgilio Pelaez, the team leader, as one of the affiants.

It is contended that the foregoing inconsistencies and unexplained facts in the testimonies of the prosecution witnesses cast doubt on their
credibility. BARITA also claims that the trial court convicted the accused-appellants based on the weakness of their defense and not on the strength
of the prosecution's evidence. Moreover, BARITA questions the identity of the marijuana presented in court considering that the description of the
marijuana in the joint affidavit of arrest and the written request for laboratory examination differ and that the chain of custody of the confiscated
marijuana leaves was not clearly established. Finally, BARITA alleges that the weight of the alleged marijuana leaves was not duly proved in light of
the fact that the forensic chemist admitted that she only tested small quantities of the specimens given to her and that she could not determine
whether the whole specimen was marijuana.8

Accused-appellants GOLSING and CUISON raise substantially identical arguments for the reversal of the decision of the RTC in their briefs. Thus, for
the purpose of this appeal, we resolve to discuss their arguments jointly.

We find no merit in the appeal.

Accused-appellants' defenses consist of questioning the credibility of the witnesses for the prosecution and "frame-up".

It is well established in this jurisdiction that the findings of the trial court on the credibility of witnesses and their testimonies are accorded great
respect unless the court a quo overlooked substantial facts and circumstances which, if considered, would materially affect the result of he case.9
We find no reason to depart from this rule in the present case.

Accused-appellants were arrested by virtue of a buy-bust operation conducted by the 14th Narcotics Regional Command Field Unit. The buy-bust
operation was established by prosecution witnesses PO3 Teofilo S. Juanata, Jr. (JUANATA), Rolando Gamit (GAMIT) and Idelfonso Sison (SISON), the
apprehending officers, who positively identified BARITA and GOLSING as the two men who sold the marijuana and CUISON (the taxi driver) as the
middleman in the sale. JUANATA, who acted as poseur buyer, testified that:

PROS: CENTENO:

Q: Who was your companion in going to the Nel Bosco Terminal after the briefing was conducted by Felix Cadalig?
A: Our Civilian Informer, sir.

Q: Do you know the name of this Civilian Informer?

A: No, sir.

Q: Until now?

A: No, sir, it was my first time to see him.

Q: Were you able to reach the Nel Bosco Terminal?

A: Yes, sir.

Q: How about the group of Pelaes, Gamit and Sison, do you know where they went?

A: They proceeded, to Justice Village, Marcos Highway, Baguio City, sir.

Q: Now, what time did you reach the Nel Bosco terminal located at Otek St., Baguio City on June 9, 1994?

A: 4 p.m., sir.

Q: And what was your purpose in going to the Nel Bosco Terminal on that day?

A: To look for alias Jun, sir.

Q: Were you able to locate alias Jun at Nel Bosco Terminal?

A: Yes, sir, he was there because he is a taxi driver.

Q: What happened when you saw alias Jun at the Nel Bosco Terminal which happened to be a taxi driver?

A: I was introduced by the civilian informer as a prospective marijuana buyer, sir.

Q: And what happened after this civilian informer introduced to you to alias Jun to be a prospective buyer of marijuana?

A: Jun answered that he knows somebody who sells marijuana at Justice Vil., Marcos Highway, sir.

Q: If this alias Jun will be seen again by you, will you be able to identify him?

A: Yes, sir.

Q: Will you please look inside the courtroom and tell us if this alias Jun present?

A: (Witness pointing to a person in blue t-shirt who identified himself as Dionisio Cuison)

xxx xxx xxx

PROS: CENTENO:

Q: Now, after alias Jun left you and the civilian informer inside the taxi cab, what happened next Mr. Juanata?

A: He returned, sir.

Q: How many times lapsed when you noticed that alias June just returned to the place after he left you?

A: About five minutes, sir.

Q: Was he alone when he returned to your place?

A: Yes, sir, he was not able to see the person selling marijuana.

Q: So what happened when you saw alias Jun returned alone because he was not able to locate the person selling marijuana?

A: We waited for a while, sir.

Q: At that time when you were already at Justice Village waiting for a while as you said, did you know the other members of the buy bust
team?

A: I was not able to see them but I know they were their positioned, sir.

Q: How long did you wait at Justice Village after alias Jun returned without having located the seller of marijuana as you said?

A: About 5 minutes, sir.

Q: And what happened after the lapse of five minutes?

A: Two male persons arrived, sir.

Q: Will you tell us the appearance of these two male persons walking?

A: They look like bachelors, sir.

Q: Aside from walking toward your place, what else did you observe if any?

A: Alias Jun alighted from the taxi cab and met the two male persons sir.

Q: How about you, what did you do when you saw that alias Jun alighted from the taxi cab and met these two persons?

A: I remained inside the taxi, sir.

Q: Was alias Jun able to meet these two persons?

A: Yes, sir, they talked, sir.

Q: How far was that place where you saw alias Jun and the two male persons talking from the place where you were seated inside the taxi
cab?

A: More or less five minutes, sir.

Q: After you saw alias Jun and the two male persons talking as you said, what happened next?

A: Alias Jun introduced me to that two male persons, sir.

Q: How far were you from these two male persons when alias June introduced you to them?

A: They approached the taxi, sir and I was introduced as a marijuana buyer.

Q: After you were introduced by alias Jun to these two male persons that you were a marijuana buyer, what happened next?

A: Denver said that a kilo of marijuana cost P800.00, sir.

Q: By the way, what was the name you gave to these two male persons when you were introduced by alias Jun to them?

A: I introduced myself as Jojo, sir.

Q: And how did the two male persons introduced themselves to you?

A: Diolo and Denver, sir.

Q: If this Denver would be seen again by you, would you be able to identify him?

A: Yes, sir.

Q: If Denver is in the courtroom, will you please point to him?

A: (Witness pointed to a person inside the courtroom who identified himself as Denver Golsing)

Q: How about this other person who introduced himself to you as Diolo, if you will see him again, will you be able to identify him?

A: Yes, sir.

Q: Will you please point to him?

A: (Witness pointed to a person inside the courtroom who identified himself as Diolo Barita).

Q: You said a while ago that after you were introduced to these two male persons by this Jun, Denver told you that a price of a kilo of
marijuana is P800.00, so what did you tell Denver when he told you that a price of a kilo of marijuana is P800?

A: I told them that I will buy three kilos, sir.

Q: At the time Denver was telling you that the cost of a kilo of marijuana is P800, where was Diolo?

A: At this side, sir.

Q: What was he doing at the time Denver was telling you that the cost of a kilo of marijuana was P800.00?

A: He was there listening, sir.

Q: After you told Denver that you wanted to buy 3 kilos of marijuana after you were told that the cost of a kilo is P800, what happened next?

A: The two of them left, sir.

Q: How about alias Jun, where did he go?

A: He was left there, sir.

Q: So the person who left were Denver and Diolo?

A: Yes sir.

Q: How about your civilian informer, where was he during all the time that you were ordering 3 kilos of marijuana?

A: He was near inside the taxi cab, sir.

Q: do you know where Denver and Diolo went after they left the place where you were told that a cost of a kilo of marijuana is P800?

A: I don't know, sir.

Q: What happened after Denver and Diolo left the place where you were with Jun and the civilian informer?

A: They returned after five minutes, sir.

Q: I am just curious Mr. Juanata, everytime you answer a question regarding the time element, you have been uniformed in saying that the
interval is always five minutes. After the lapse of five minutes, you said they returned to the place, who returned to the place?

A: Denver and Diolo, sir.

Q: Did you see these two persons approach the place where you were with Jun at that time?

A: I saw them, sir.

Q: Will you tell us the appearance at that time they were returning to your place?

A: Diolo was carrying a plastic bag, sir.

Q: Could you tell us the size of this plastic bag being carried by Diolo at that time?

A: (Witness demonstrating a with the size of about 2 feet in height).

Q: How about the bulk?

A: Two feet by 1/2 feed in width.

Q: How about Denver, what was the appearance at that time?

A: He was not carrying anything, it was only Diolo who was carrying something, sir.

Q: If you see that plastic bag again which was carried by Diolo on June 9, 1994 at Justice Village, Baguio City, will you be able to identify the
same?

A: Yes, sir.

Q: Were these two persons, Diolo and Denver able to reach the place where you were on June 9, 1994?

A: Yes, sir.

Q: What happened when they reached the place where you were?

A: I alighted from the taxi cab and then Diolo handed to me the plastic bag, sir.

Q: After Diolo handed to you the plastic bag, what did you do?

A: I opened the contents of the object wrapped in a newspaper, sir.

COURT:

You are saying therefore that inside the plastic bag was an object wrapped in a newspaper?

A: Yes, sir.

COURT:

Continue, counsel.

PROS. CENTENO:

Q: Now, this plastic bag, is it transparent or not?

A: Yes, sir, transparent.

Q: What happened after you opened these items wrapped in a newspaper page found inside the transparent bag?

A: I saw a marijuana wrapped inside the newspaper and then I gave the money to Denver and also, I gave my pre-arrange signal to the back up
team, sir.
Q: By the way, what was supposed to be the pre-arrange signal to be given to the back up team?

A: by removing my yellow cap, sir.

Q: And after you have delivered the money to Denver at the same time giving your signal by removing your yellow cap as you said, what
happened?

A: I introduced myself as a Narcom Agent and gave my name as PO3 Teofilo Juanata, Jr.

Q: What happened after you gave your pre-arrange signal and at the same time you introduced yourself as a Narcom Agent to the persons?

A: The back up team arrived and we apprehended them, sir.

Q: Who were the persons whom you apprehended upon arrival of the back up team?

A: Jun, Denver and Diolo, sir.

Q: The persons you earlier identified in Court?

A: Yes, sir.10

JUANATA's testimony is corroborated by the testimonies of GAMIT11 and SISON12 who gave similar accounts of the events that transpired. The
alleged inconsistencies and/or flaws in the testimonies of the prosecution witnesses pointed out by accused-appellants are insufficient to overturn
the judgment of conviction against them inasmuch as the testimonies of these witnesses are consistent with each other on material points. Their
testimonies sufficiently establish all the facts necessary for the conviction of the accused for what is material and indispensable is the submission of
proof that the sale of the illicit drug took place between the seller and the poseur-buyer.13 At any rate, the inconsistencies pointed out by the
accused-appellants are trivial in nature and do not prove that they did not commit the crime charged.

Furthermore, the testimonies of the three police officers carry with it the presumption of regularity in the performance of official functions.14
Accused-appellants failed to convincingly prove that in testifying against them, these witnesses were motivated by reasons other than their duty to
curb the sale of prohibited drugs. In the absence of such ill motive, it is presumed that none exists.

Aside from proving the fact of the sale, the prosecution also successfully established the identity of the packages taken from the accused-appellants
in court through the testimonies of JUANATA,15 GAMIT,16 SISON17 and Forensic Chemist P/Ins. Alma Margarita Villaseñor (VILLASEÑOR).18 In
addition, JUANATA's testimony traces the chain of custody of the packages to the effect that after arresting the accused-appellants, they were
brought to Camp Dangwa together with the confiscated marijuana. The marijuana was turned over to the Investigation Division after the
apprehending officers properly initiated the bags. Thereafter, a request for laboratory exam was prepared and SPO1 Modesto Carrera delivered the
three packages to the PNP Crime Laboratory Service assigned to Camp Dangwa.19 The said office received the three packages, which were properly
identified in court by VILLASEÑOR.20

It was also proved that the substance sold by the accused-appellants was approximately 2,800 grams of marijuana. On the witness stand,
VILLASEÑOR, who was qualified as an expert witness,21 testified that she subjected samples taken from the three packages to three examinations
all of which resulted in a positive finding that the samples she tested were marijuana. She also weighed the packages and established that their total
weight came out to 2,810.5 grams.22 Her findings were placed in the chemistry report23, which states that "Qualitative examination conducted on
the above-stated specimen gave POSITIVE result to the test for the presence of Marijuana, a prohibited drug."

We are not persuaded by the claim of accused-appellants that in order for them to be convicted of selling 2,800 grams of marijuana, the whole
specimen must be tested considering that Republic Act 7659 imposes a penalty dependent on the amount or the quantity of drugs seized or taken.
This Court has ruled that a sample taken from one of the packages is logically presumed to be representative of the entire contents of the package
unless proven otherwise by accused-appellant.24

Likewise, accused-appellants' defense of "frame-up" does not convince us of their innocence. Such defense has been invariably viewed by this Court
with disfavor for it can easily be concocted but difficult to prove and is a common and standard line of defense in most prosecutions arising from
violations of the Dangerous Drugs Act.25 BARITA's26 and GOLSING's27 attempt to prove the "frame-up" by claiming that they were abused by the
police officers28 in order to confess to the crime is belied by the testimony of defense witness, Dr. Vladlmir Villaseñor. (DR. VILLASEÑOR). DR.
VILLASEÑOR testified that BARITA, GOLSING and CUISON did not exhibit any signs that they were maltreated after he examined them and that none
of them sustained any physical injuries.29 Similarly, BARITA's claim that he was arrested by the police in order to extort P200,000.00 from him is not
worthy of belief. No evidence, aside from his bare assertions was presented to establish such as fact. Neither of his co-accused, GOLSING or CUISON
substantiated this allegation. In the absence of clear and, convincing evidence to prove the alleged "frame-up" or extortion, such defenses must fail.

Finally, the fact that the requests for physical examination show that five persons were examined does not discredit the testimonies of the
prosecution witnesses that only three persons were arrested at Justice Village. As aptly observed by the trial court:

Apparently, only Barita, Golsing and Cuison were caught in the actual act of the selling the marijuana along the road in Justice Village, Sibayan and
Bindadan were not caught on the road as they were in their houses. Sibayan and Bindadan were invited and taken into custody afterwards when
implicated by Barita when the latter was asked to point to the house of his companions where they got the marijuana.

This explains why Dr. Villaseñor examined five persons instead of only the three accused. This also explains why Juanata, Sison and Gamit insisted
only three accused as they really arrested only the three accused in the actual act of selling marijuana.

This is supported by the fact that only Barita, Gosling and Cuison have booking sheet and arrest reports (Exh. B, C and D). There were no booking
sheet and arrest reports of Sibayan and Bindadan presented by both the prosecution and the defense.

If there were any booking sheet and arrest reports of Sibayan and Bindadan, the defense would have demanded their production in court by
Subpoena duces tecum. Why did not defendants do so?

Further, the two requests for physical examination (Exhs. 1 and 2) would show that Barita, Golsing and Cuison were arrested together as they were
lumped together in one request for physical examination (Exh. 1 for defense). And that Sibayan and Bindadan were not taken together with the
aforesaid 3 accused as the request for their physical examination was in a separate paper (Exh. 2 for defense).
In any event, a close scrutiny of the physical examination papers signed by Barita, Cuison, Golsing, Sibayan and Bindadan (Exh. 8 to 12) would show
that the alleged case against them is "suspected drug pushers" or "Violation of Section 4 Article II RA 6425."

Hence, even assuming 5 persons were arrested for drug pushing, the 3 accused herein, Barita, Golsing and Cuison were definitely among those
arrested. So, instead of contradicting or destroying the truth and veracity of the drug pushing charge against the 3 accused, the physical examination
papers actually confirm and strengthen the case against them because the same would show that they were really arrested for drug pushing.30

Any person who sells or acts as a broker in the sale of marijuana shall be punished with reclusion perpetua to death and a fine ranging from five
hundred thousand pesos to ten million pesos31 if 750 grams or more of marijuana is sold.32 In the Present case, BARITA, GOLSING and CUISON (as
broker) were correctly meted the penalty of reclusion perpetua and a fine of five hundred thousand pesos (P500.000.00) by the RTC considering that
the prosecution has clearly established that they delivered and sold 2,800 grams of marijuana to JUANATA, the poseur-buyer. Moreover, the RTC
also correctly ordered the confiscation and forfeiture of the marijuana in favor of the state for its immediate destruction as this is in accordance with
law.33

WHEREFORE, the appealed decision of the Regional Trial Court is hereby AFFIRMED.1âwphi1.nêt

SO ORDERED.

Melo, Vitug, Panganiban and Purisima, JJ., concur.

THIRD DIVISION
G.R. No. 131872-73 February 17, 2000
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
CHEN TIZ CHANG and CHENG JUNG SAN a.k.a. Willy Tan, accused-appellants.

PANGANIBAN, J.:

Because prosecutions involving illegal drugs depend largely on the credibility of the police officers who conducted the "buy-bust" operation, the
Court relies on the rule that the weighing of evidence, particularly conflicts in the testimonies of witnesses, is best left to the discretion of the trial
court, which had the unique opportunity to observe their demeanor, conduct and manner while testifying. Hence, its factual findings are accorded
respect, even finality, absent any showing that certain facts of weight and substance bearing on the elements of the crime have been overlooked,
misapprehended or misapplied. Once the elements of the crime are established, the hackneyed defense of frame-up or "hulidap" must be clearly
proven by the appellants. Again, the defense being factual, its tenability depends largely on the trial court's assessment of the credibility of the
testimonial evidence of the accused. In the present appeal, the defense has failed to convince us that the trial court's Decision should be disbelieved
or modified, much less reversed. On the contrary, we believe that the said Decision is clear, convincing and correct.1âwphi1.nêt

The Case

Before the Court is an appeal by Chen Tiz Chang and Chen Jung San, also known as Willy Tan,1 challenging the October 16, 1997 Decision2 of the
Regional Trial Court (RTC) of Quezon City (Branch 95) in Criminal Case No. Q-96-68250-51, finding them guilty of illegal possession and sale of
shabu3 and sentencing each of them to two counts of reclusion perpetua. The decretal portion of said Decision reads as follows:

WHEREFORE, judgment is hereby rendered in the following:

1. In Crim. Case No. Q-96-68250, the Court finds both accused, Chen Tiz Chang and Chen Jung San a.k.a. Willy Tan, GUILTY beyond reasonable
doubt of the offense of [v]iolation of Sec. 15, Rep. Act 6425, as amended by Rep Act. 7659, and hereby sentences each one of them the penalty of
reclusion perpetua and to pay a FINE of one million (P1,000,000.00) pesos each; and,

2. In Crim. Case No. Q-96-68251, the Court finds both accused, Chen Tiz Chang and Chen Jung San a.k.a. Willy Tan, GUILTY beyond reasonable
doubt of the offense of [v]iolation of Sec. 16, Rep. Act 6425, as amended by Rep. Act. 7659 and hereby sentences each one of them the penalty of
reclusion perpetua and to pay a FINE of one million (P1,000,000.00) pesos each.4

On November 4, 1996, two separate Informations were filed5 against both appellants. The first, charging them with selling or offering to sell shabu,
is reproduced below:

The undersigned accuses CHEN TIZ CHANG and CHEN JUNG SAN a.k.a. WILLY TAN [of] violation of Sec. 15, Art. III, in rel. to Sec. 2 (e), (f), (m), to), Art.
I of R.A. No. 6425 as amended by P.D. No. 1683, committed as follows:

That on or about the 31st day of October, 1996 in Quezon City, Philippines, the said accused, conspiring together, confederating with and mutually
helping each other not having been authorized by law to sell, dispense, deliver, transport or distribute any regulated drug, did then and there
willfully and unlawfully sell or offer for sale 2,017.7 grams [of] white crystalline substance known as "SHABU" containing methampethamine
hydrochloride, which is a regulated drug.6

The other Information indicted them for possession and/or use of shabu and is worded as follows:

The undersigned accuses CHEN TIZ CHANG and CHEN JUNG SAN [of] violation of Sec. 16, Art. III in relation to Section 2 (e) (2), Article 1 of R.A. 6425,
committed as follows:

That on or about the 31st day of October, 1996 in Quezon City, Philippines, the said accused, conspiring, confederating with and mutually helping
each other did then and there willfully, unlawfully and knowingly possess and/or use 943.5 grams of methamphetamine hydrochloride (shabu) a
regulated drug, without the necessary license and/or prescription therefor, in violation of said law.7

When arraigned on November 12, 1996, appellants pleaded8 not guilty.9 The Motion for Bail, filed on November 27, 1996,10 was denied by the
court a quo on February 17, 1997.11 In an Order dated June 23, 1997,12 it also denied their subsequent Motion for Reconsideration. After due trial,
it promulgated its assailed Decision.

Hence, this appeal.13

The Facts

The Prosecutor's Version

In its Brief,14 the Office of the Solicitor General presents the prosecution's version of the facts in this wise:

Prior to October 31, 1997, Police Superintendent Allan Purisima, commander of Task Force Spider, NCRPO, Camp Bagong Diwa, Taguig, Metro
Manila received reliable information about illegal activities of Chinese nationals, particularly the sale of shabu. Upon receipt of such classified
information, Police Superintendent Purisima ordered the surveillance of two (2) Chinese nationals who were reportedly members of a drug
syndicate. With the assistance of an informant, members of Task Force Spider were able to establish contact with suspected members of the drug
syndicate (TSN, December 18, 1996, p. 7), two (2) of whom are herein appellants.

In the early morning of October 31, 1996, through the informant, members of Task Force Spider were able to get in touch with appellants with a use
of a cellular phone and negotiate a drug deal with them. Appellant agreed to deliver and sell two (2) kilos of shabu at the parking lot of the
Maalikaya Health Palace located at Quezon Avenue, Quezon City (Ibid., 7).

PO2 Hilarion Juan, a member of Task Force Spider, testified that on October 31, 1996, at 7:00 o'clock in the morning, Police Superintendent Allan
Purisima conducted a briefing at Camp Bagong Diwa, Taguig, Metro Manila. The subject of the briefing was the buy-bust operation involving the sale
of shabu by appellants at the Maalikaya Health Palace parking lot at Quezon City (Ibid., 5-7; TSN, December 16, 1996, p. 4). The members of the task
force were assigned to observe and monitor the suspects at Maalikaya Health Palace (TSN, December 16, 1998, p. 3-4). The briefing, which lasted for
around 30 minutes, was attended by four police officers, namely: PO2 Hilarion Juan, SPO2 Jesus Bernal Camacho, SPO2 Bernardino Lagdameo and
PO2 Jose Bernadino Jr. (Ibid., 5-6). PO2 Hilarion Juan was designated to act as the poseur-buyer together with the informant, while the three (3)
other police officers were tasked to position themselves at some distance from the poseur-buyers and assist in the buy-bust operation (TSN,
December 18, 1996, p. 7).

After the briefing, the members of the team prepared the buy-bust money made of genuine P100.00 peso bills and P500.00 peso bills in the amount
P700,000.00, while the rest were photocopied money (Ibid., 7), all of which totaled P2,000,000.00 (TSN, April 8, 1997, p. 9). From their office at
Bagong Diwa, Taguig, Metro Manila, they proceeded to the Maalikaya Health Palace, in Quezon City.

At 11:00 o'clock that morning, PO2 Juan, the informant and other police officers positioned themselves at the Maalikaya Health Palace parking area.
After thirty (30) minutes, a red-colored Daihatsu Feroza bearing plate No. TBU-479 (Exhibits "L" to "L-3") (hereinafter described as Feroza) arrived
with the appellants on board (TSN, December 16, 1996, p. 5). PO2 Juan and the informant approached appellants who were then on board the
Feroza. Appellants conversed with PO2 Juan (TSN, December 16, 1996, p. 6) and the informant introduced PO2 Juan to appellants as an interested
buyer (TSN, December 16, 1996, p. 8). Chen Jung San left the place and drove the Feroza towards EDSA while Chen Tiz Chang was left behind (TSN,
December 16, 1996, pp. 6-7). Later, the Feroza reappeared (Ibid., pp. 5-7). Appellant Chen Tiz Chang emerged from the Feroza and initiated
conversation about the sale of shabu (TSN, December 18, 1996, p. 11).

The informant instructed PO2 Juan to hand over the suitcase containing buy-bust money to Chen Tiz Chang (Ibid., pp. 11-12) which Juan did and in
return Chen Tiz Chang handed to PO2 Juan a black bag (Exhibit "D") which contained 2 plastic transparent bags of shabu (Ibid., 12). (Exhibits "E" and
"F"). After the exchange, PO2 Juan opened the black bag (Exhibit "D"), examined the two (2) plastic bags (Ibid., id) and signaled his companions to
approach him. PO2 Juan introduced himself as a police officer (Ibid., 13) and tried to arrest appellant Chen Tiz Chang who, after Juan took hold of
him, resisted (Ibid., 13-14). Appellant Chen Tiz Chang was able to free himself from PO2 Juan and ran towards a nearby car about five (5) meters
away from where the buy-bust operation took place, and passed the suitcase containing the buy-bust money to an unidentified person on board
(Ibid., 14). Then, the car sped away with the buy-bust money (ibid., id; TSN, April 8, 1997, p. 7). Due to Chen Tiz Chang's attempt to evade arrest
(TSN, December 18, 1996, p. 14) a commotion ensued prompting the three (3) other members of the team to respond in order to assist PO2 Juan in
subduing Chen Tiz Chang (TSN, April 8, 1997, p. 7, 16). The three (3) other police officers who were positioned about 5 to 10 meters away (TSN,
December 18, 1996, p. 13), after announcing themselves as police officers (TSN, December 16, 1996, pp. 8-9), helped PO2 Juan in affecting the arrest
of Chen Tiz Chang by handcuffing him (TSN, December 18, 1998, p. 14). The police officers could not pursue the person [i]n the vehicle with the buy-
bust money, because the team was only composed of four members (TSN, December 18, 1998, p. 15) and between the money and the shabu
recovered from appellants, the police officers chose to ensure the custody of the shabu which would be used as evidence against appellant (TSN,
April 8, 1997, p. 18). PO2 Juan observed that the unidentified person who fled with the buy-bust money was already at the parking area when the
members of the Task Force Spider arrived for the buy-bust operation (TSN, December 18, 1998, p. 15). As PO2 Juan and SPO2 Camacho took Chen
Tiz Chang to the Feroza, the other members of the team, namely, SPO2 Bernardito Lagdameo and PO2 Jose Bernardito Jr., were posted by the
Feroza to guard the other passenger, appellant Chen Jung San, who himself had been arrested (TSN, December 18, 1996, 15). The police officers
searched the Feroza and found underneath the driver's seat another plastic bag containing shabu weighing 943.5 grams [Exhibit "G"] (Ibid., 16).
Whereupon, appellants, the seized shabu and the Feroza were brought to the office of the Task Force Spider (Ibid., 17) for investigation. The team
turned over appellants to SPO2 Lagdameo. Then, the police officers executed a Joint Affidavit of Apprehension (Exhibits "K" to "K2") and prepared
the routine Booking Sheet Information Sheet and Arrest Report (Exhibits "M" to "M-1" and "N" to "N-1"). The following day they prepared the
corresponding letter to the NBI requesting examination of the shabu they had recovered (Exhibits "E", "F" and "G").

Aida Pascual, Forensic Chemist in the Forensic Chemistry Division of the National Bureau of Investigation, testified that on November 1, 1996, at
1:10 p.m., she received from the Task Force Spider headed by Police Superintendent Purisima a letter request dated November 1, 1996, (Exhibit "B",
"B-1", TSN, December 9, 1996, pp. 9-10) with [the] stamp mark of the Forensic Chemistry Division indicating that the following specimens had been
received for examination (Ibid., 9-11): two (2) kilos of white crystalline substance placed in transparent plastic packs marked CTC-1, (Exhibit "E") to
CTC-2 (Exhibit "F"), and approximately one (1) kilo of white crystalline substance suspected to be shabu contained in one (1) transparent plastic pack
marked CJS (Exhibit "G") placed in a black bag (Exhibit "D") (Ibid., 13) which was in turn wrapped and sealed in an improvised brown bag with the
markings DD-96-5012, DD-96-5013 re: Chen Tiz Chang; Chen Jung San; 11/1/96 (Ibid., 11). The letter request was delivered to the NBI by PO2 Jose
Bernardino, Jr. (Exhibit "B-2").

Aida Pascual weighed each of the specimens and recorded them as follows: Exhibit "E"-971.7 grams; Exhibit "F"-1,946 grams, Exhibit "G".-943.5
grams (Ibid., 16), all of which were subjected to chemical and chromatographic examination by extracting representative samples from each
specimen and spotting it on a chromatographic plate (Ibid., 17), and then comparing it with the chromatographic plate spotted with a known
methamphetamine hydrochloride (Ibid., 32). On the same date, she issued her Certification (Exhibits "H" to "H-2") detailing her findings on the
specimens which were found positive for methamphetamine hydrochloride, a regulated drug. On November 6, 1996, she issued Dangerous Drugs
Report No. Dd-96-5012 (Exhibit "I" to "I-4"; Ibid., 21) indicating therein her findings that the substance contained in the two (2) transparent plastic
bags with a total weight of 2,017.7 grams (Exhibits "E" and "F") and respectively marked as CTC-1 and CTC-2 were found positive for
methamphetamine hydrochloride, a regulated drug. She also issued Dangerous Drugs Report No. DD-96-5013 (Exhibits "J" to "J-4") where she
indicated that the substance found in the transparent plastic bag marked as CJS (Exhibit "G") which weighed 943.5 grams was positive for
methamphetamine hydrochloride.15

The Defense's Version

On the other hand, the appellants16 narrated the facts in this manner:

The cases at bar involve the much talked about and most commonly utilized method of apprehending alleged drug users and pushers by the law
enforcing personalities, the so-called "buy-bust" operation.

Accused-appellant Chen Tiz Chang is a Taiwanese businessman engaged in the manufacture of watches and in the export and import of rattan
products and seafoods. Sometime in October, 1996, he came to the Philippines from Taiwan, for a business venture and . . . he was to charter an
airplane together with his business associates from Manila to Marshall Islands for the purpose of looking for supplies of seafoods to be shipped to
Japan and Taiwan. In support of these claims, he presented several documents issued by the government of Taiwan (Exhs. "15" to "21" to inclusive
of submarkings.)

The other accused-appellant, Chen Jung San, is a nephew of Chen Tiz Chang, and is likewise in the Philippines to pursue a business of melting scrap
coppers and mold[ing] the same into other products like water pipes. He started this business in 1993 in association with some business partners
but did not register his outfit in his name because of his Taiwan citizenship. He was involved [a] great deal with the technical side of his business
concerns, the management of the affairs of his business being undertaken by his other partners. He had his company situs at Sta. Rosa, Marilao,
Bulacan. He is married to a Filipina [with] the name of Ma. Luisa Santos with whom he has a son and was living with her in Caloocan City up to the
time of his arrest.
On October 30, 1996 at 11:00 a.m., the two accused-appellants went to the Maalikaya Health Complex along Quezon Avenue, Quezon City on board
a Feroza car which was borrowed from a friend of accused-appellant Chen Jung San. They were to have lunch with a friend of Chen Tiz Chang, a
certain Mr. Chua, who was at the nearby Mayflower restaurant along Timog Avenue, Quezon City. Said Mr. Chua called up accused-appellant Chen
Tiz Chang advising him to wait for him for a while. It was while waiting for the arrival of Mr. Chua at the parking lot of Maalikaya Health Complex
that three (3) unidentified males suddenly arrived and poked their guns at the two accused-appellants. With nary a word, both accused-appellant[s]
were handcuffed and were forced to board a vehicle en route to the Anito Lodge along EDSA.

While they were held in captivity inside the motel, some of the valuables of the accused-appellants were taken by their captors like an 18-karat gold
Rolex watch studded with diamonds worth P3,000,000.00 belonging to accused-appellant Chen Tiz Chang, a cell-phone of Chen Jung San, and some
cash. Whereupon, these supposed arresting officers demanded P20,000,000.00 from the two accused-appellants in exchange for their freedom,
with the threat that should they fail, they [would] pursue the charges against them.

In the afternoon of the following day, at about 4:00 p.m., after their plea for release was refused and their inability to produce the demanded
amount became more real, they were brought to the office of the Task Force Spider where they were ordered not to talk to anybody, and if
someone would ever ask what [was] their business in that office, they would just say, "to visit a friend". Chen Tiz Chang was then ordered by these
"officers" to call up his wife in Taiwan or anybody who could put up the necessary amount demanded by the men of Task Force Spider to buy their
freedom. But because the two accused-appellants could not really come up with the demanded amount, they were told that they [would] be
charged for violation of the Dangerous Drugs law and were thereupon brought to a room where several media men with cameras feasted on them.

Thus, the two helpless and ill-fated accused were finally charged and brought to court to answer the charges they ha[d] never probably dreamt of
committing.17

The Trial Court's Ruling

In convicting appellants, the trial court relied on the testimonies of PO2 Hilarion Juan and SPO2 Jesus Camacho. It dismissed the inconsistencies in
their testimonies as trivial. It likewise excused the non-presentation in court of the buy-bust money, which was not indispensable to the prosecution
of the case. Upholding the prosecution, the lower court explained as follows:

Culled from the evidence, the Court rules that the prosecution was able to prove the guilt of the accused beyond reasonable doubt.

The prosecution witnesses, specifically PO2 Hilarion Juan, categorically and candidly related to the Court [the] circumstances that led to the buy-bust
operation involving the two (2) accused. Al[though] it may appear surprising that the P700,000.00 buy-bust money was never recovered as the same
was allegedly taken away by another person riding in another vehicle, the same does not in [any way] affect the credibility of PO2 Juan. Persons in
illegal drug activities, in view of the risk and the large amount of money involved, now adopt ways and means in order to ensure a successful
operation and protect the buy money. It is not, therefore, surprising for drug pushers to employ other persons (not usually known to would be
buyers) who are tasked to protect the buy-bust money in case something wrong might take place during the sale, like in these cases where the
accused were apprehended. In fact, newspaper accounts show that drug pushers, although already behind bars, are still able to continue to ply their
wares inside the detention cells with the use of cellular phones and even computers.

xxx xxx xxx

Furthermore, the non-presentation of the buy-bust money does in any way prejudice the cause of the prosecution. In a catena of cases, the
Honorable Supreme Court has ruled that the non-presentation of the buy-bust money is not indispensable in the offense of "Drug Pushing" as long
as there is actual delivery of the drugs as what happened in these case. . . .

The Court s not likewise persuaded that the inconsistencies in the testimony of the prosecution's principal witness. PO2 Hilarion Juan, cast doubt on
his credibility. For if indeed there were inconsistencies, the same refer to trivial matters not sufficient to tarnish the credibility of his testimony in
fact, they serve to strengthen the credibility of his testimony . . .

xxx xxx xxx

The seeming contradiction between the testimony of PO2 Hilarion Juan that accused Chen Tiz Chang was the one who delivered the shabu and
accused Chen Jung San remained in the vehicle and the testimony of PO2 Jesus Camacho that it was accused Chan Tiz Chang who remained in the
vehicle and accused Chen Jung San was the one who delivered the stuff, does not substantially affect the credibility of PO2 Juan, the pos[eu]r-buyer.
Except for this inconsistency, all the other material and substantial testimonies of these two (2) witnesses corroborate each other. Hence, the
above-stated statements of the two (2) prosecution witnesses should not be considered to impair the credibility of each other's testimony
considering that their testimonies are identical in all other aspects and they establish the essential requirements/elements of the offenses with the
two (2) accused participating in the commission of the offenses.

xxx xxx xxx

The defense of denial of the accused cannot prevail over the positive assertions of the prosecution witnesses, as denial is a self-serving negative
evidence.

xxx xxx xxx

The contention of the accused that their arrest was made on October 30, 1996 and not on October 31, 1996 is preposterous and a last futile attempt
to convince the Court that the prosecution witnesses cannot be believed. A telephone call thru the cellular phone of accused Chen Jung San on
October 30, 1996 as appearing in the billing statement (Exhs. "2" & "2-A") of said cellular phone is not a conclusive evidence that the accused were
actually arrested on October 30, 1996. For all we know, accused Chen Jung San himself made the call on October 30, 1996, when he was not yet
arrested, [to] somebody in the office of the Task Force Spider. It is no longer unnatural for those involved in illegal drug activities to have friends
within and outside police establishments. Moreover, the accused could have asked for the issuance of a subpoena ad testificandum on this Filosopo
to compel him to testify and support the claim of both accused that he was one of the arresting officers [to] whom some of the calls were made on
October 30, 1996, as appearing on the said [billing].

It is interesting to note that the accused Chen Jung San, as admitted by him, has been using different names while in the country, thus inviting
reasonable suspicion that he did so for ulterior motive. If this accused, a Taiwanese citizen, who was afforded the privilege of staying in the country
to engage in business, can openly or brazenly disregard our laws pertaining to the use of several names, it is not far-fetched for him to commit other
violation[s] of Philippine laws and hide his true identity by the mere expedient of using several names like Chen Jung San, Willy Tan, Chan Bim Seng
and Philip Chan or Philip Chen.

The argument of the accused that the Task Force Spider has been involved in anomalies involving the arrest of Chinese nationals which appeared in
the Philippine Star (Exh. "27") is puerile considering that no other evidence was offered to substantiate said claim. And, finally, the argument that
the allegations in the Affidavit of Apprehension in these cases (Exhs. "K" to "K-2) are identical to that of the allegations in the Affidavit of
Apprehension involving another Chinese national (Exh. "1") does not necessarily mean that the allegations in both affidavits are not true.

It is an accepted practice in police buy-bust operations that the manners of their conduct are almost always identical. To argue, therefore, that
similarity in operation in two different buy-bust operations is an indicium of falsehood is a mere speculation or conjecture which can not provide
basis for the exculpation of the accused from liability.18

Assignment of Errors

In their first Brief, appellants attribute to the trial court the following alleged errors:

The lower court erred in finding that the prosecution was able to prove the guilt of the accused beyond reasonable doubt.

II

The lower court erred in its appreciation of evidence leading to the conviction of the accused given the gross inconsistencies and stark incredibility
of the prosecution's witnesses.

III

The lower court erred in holding that the accused conspired and confederated in selling and possessing several grams of shabu.

IV

The lower court erred in not at all affording the testimonies of the accused the slightest of probative weight not only to demonstrate their innocence
but more importantly, to invariably show that theirs was a simple case of kidnap and extortion.19

On the other hand, their second Brief cites this sole error for our consideration:

The verdict of guilty against appellants is a legal error in that the prosecution's evidence failed to establish the required quantum of proof beyond
reasonable doubt to overthrow the constitutional presumption of innocence in appellant's favor.20

In resolving this appeal, the Court will discuss two main questions: (1) the sufficiency of the prosecution evidence and (2) the merits of the hulidap
defense.

The Court's Ruling

The appeal has no merit.

Main Issue:
Sufficiency of Prosecution's Evidence

In People v. Cheng Ho Chua, a case with facts similar to the present one, we disposed of the appeal in this wise:

It is an established rule that the findings of the trial court on the credibility of witnesses and their testimonies are accorded great respect, unless the
court a quo overlooked substantial facts and circumstances which if considered, would materially affect the result of the case. Here, we see no
reason to depart from the general rule.21

In the present case, the appellants have not convinced us to exempt them from the general rule.

Proven Elements of the Crimes

In every prosecution, the guilt of the accused has to be established invariably by proof beyond reasonable doubt.22 The elements of the crime must
be shown to exist and be adequately proven. As we stated in People v. Boco,23 what is "material to a prosecution for illegal sale of dangerous drugs
is the proof that the transaction or sale actually took place, coupled with the presentation in court of the corpus delicti as evidence.

On the other hand, in a prosecution for illegal possession of dangerous drugs, it must be shown that (1) the accused is in possession of an item or an
object identified to be a prohibited or a regulated drug, (2) such possession is not authorized by law and (3) the accused freely and consciously
possessed the said drug.24

Here, as in Boco, the prosecution witnesses were able to establish these elements. PO2 Hilarion Juan, the designated poseur-buyer in the
entrapment operation, testified in this manner.

Q Mr. Witness, sometime on October 31, 1996, do you remember where were you?
A Yes sir.
Q Where were you on that particular date, Mr. Witness?
A I was at the office of Task Force Spider proceeding to Maalikaya parking area, sir.
Q What particular time were you at your office, if you know[,] on the said date?
A 7:00 in the morning, sir.
Q While thereat, what did you do if any?
A There was a briefing, sir.
Q And what was this briefing all about?
A Regarding buy bust operation that we [would] conduct, sir.
Q Will you kindly elaborate [on] this buy bust operation that you [were] going to conduct?
A Regarding a drug deal, sir.
Q What was this drug deal all about, Mr. Witness?
A Pertaining to the sale of shabu, sir.
Q Who conducted the briefing in your office at that time, Mr. Witness?
A Col. Allan Purisima, sir.
Q How many attended this briefing conducted by Col. Allan Purisima?
A We were four, sir.
Q And who were those four who attended the briefing?
A PO2 Jeus Camacho, SPO2 Bernardito Lagdameo, PO2 Jose Bernardino, Jr., and myself sir.
Q And for how long were you briefed by your Chief, Col. Allan Purisima?
A More or less 30 minutes, sir.

xxx xxx xxx

Q What did you do after the briefing?

A We prepared the buy bust money, sir.
Q How much buy bust money did you prepare?
A Seven hundred thousand pesos, sir.
Q In what denominations [was] this seven hundred thousand pesos, Mr. Witness?
A There were 100 and 500 peso bills and photocopied money, sir.
Q After preparing [the] seven hundred thousand pesos genuine money and some photocopied money, what did you do next, if any?
A We proceeded [to] the area at Maalikaya, Quezon City, sir.
Q Who were supposed to be the subject[s] in that drug sale?
A Chinese nationals, sir.
Q How many Chinese nationals . . . were supposed to be the subject[s] of the drug sale?
A They were actually two Chinese nationals, sir.
Q Now, of your group, who acted as the poseur buyer?
A Me, sir.

COURT: (to the witness).

Q What happened during the briefing that was conducted, what did you talk . . . about in the briefing?
A I [would] act as the poseur-buyer and my three companions [would] be positioned a little bit far from my place, Your Honor.
Q How were you able to know the subjects in that drug operation?
A With the help of our informant, we were told that they were Chinese nationals, Your Honor.
Q Where [was] that informant during the briefing [—] you only mentioned four of you who attended the briefing?
A He went ahead to the area, Your Honor.

PROS: (to the witness)

Q Did you actually go to the place as agreed upon which [was] Maalikaya Health Palace located at Quezon Avenue, Quezon City?
A Yes sir.
Q What time did you reach the place coming from your office at Taguig, Metro Manila?
A We were there at about 11 :00 in the morning of October 31, 1996, sir.
Q And when you arrived there at around 11:00 in the morning, what transpired next if any?
A After 30 minutes a Feroza type vehicle colored red arrived, sir.
Q And when this red Feroza vehicle arrived at the place agreed upon, what happened next if any?
A I was with the informant and was introduced to the persons on board the Feroza vehicle, sir.

xxx xxx xxx

PROS: (to the witness)

Q How many persons rode on this red Feroza vehicle, Mr. Witness, when the vehicle arrived in the parking area of Maalikaya Health Palace at
Quezon Avenue,Quezon City?
A There were two sir.
Q And if you will see these two persons on board the red Feroza vehicle, will you be able to identify them?
A Yes sir.
Q Kindly identify them before this Honorable Court, Mr. Witness, if they are inside the courtroom?
A (witness pointed to the two male persons wearing yellow t-shirt. The smaller one when asked . . . his name answered . . . Chen Jung San and
the taller one when asked . . . his name answered . . . Chen Tiz Chang)

ATTY. IFURUNG: (to the Court).

I would like to make it of record that the two persons were wearing the standard yellow t-shirt, so there [was] no difficulty in identifying them.

COURT:.
Put that on record.

PROS: (to the witness).

Q Who was that person, among the two, who talked to you initially at the place of the meeting?
A He is the one, sir. (witness pointed to a taller one who when asked . . . his name answered . . . Chen Tiz Chang)
Q And when the taller one was talking to [you], what was the smaller one doing at that time?
A He was inside the red Feroza vehicle, sir.
Q For how long a time, Mr. Witness, did you talk with Chen Tiz Chang?
A A few moments sir.
Q How would you estimate [those] few moments in terms of seconds, minutes or hours?
A Around two minutes, sir.
Q And what was the subject matter of your conversation if any?
A Regarding the drug deal, sir.
Q Particularly what was that drug deal all about?
A Regarding the sale of shabu, sir.
Q Who talked first, was it Chen Tiz Chang or you?
A He was the first, sir. The informant was talking with Chen Tiz Chang and then afterwards I handed over the black suitcase to Chen Tiz Chang,
sir.

COURT: (to the witness)

Q Why did you hand the black suitcase to Chen Tiz Chang?
A Because he also handed to me two plastic bags inside the black bag, Your Honor.

PROS: (to the witness)

Q What did the informant tell you after Chen Tiz Chang talked with him, if any?
A The informant told me to hand over the money in the black suitcase, sir.
Q After handing over the money placed in a black suitcase, what transpired next, if any?
A I got from him two plastic bags which were placed in a black bag, sir.

xxx xxx xxx

Q After the exchanges of the black suitcase and the black bag containing two plastic bags, what transpired next, if any?
A I got the black bag, opened it and inspect[ed] . . . the two plastic bags, sir.
Q What did you observe or see if any?
A I observed that the contents of the two plastic bag[s] were shabu, sir.
Q After having observed that the contents of the two plastic bags were shabu, what did you do next, if any?
A I introduced myself as a police officer, sir.
Q And after introducing yourself as a police officer, what followed next, Mr. Witness?
A When I got hold of him, he resisted, sir.
Q To whom were you referring to?
A The taller one, Chen Tiz Chang, sir.
Q And you were referring to the same person to whom you ha[d] give the black suitcase containing the seven hundred thousand pesos and
alleged[ly] photocopied money?
A Yes sir.
Q At the time that you ha[d] these exchanges of suitcases with Chen Tiz Chang up to the time that he resisted when you got hold of him, what
were your other companions doing, Mr. Witness?
A They were positioned near me, sir.
Q In terms of meters, how far were they from the place where you were then talking with Chen Tiz Chang?
A Five to ten meters away from us, sir.
Q When Chen Tiz Chang was resisting, what [were] your three companions doing?
A They went near me, sir.
Q And when they went near you, what did they do if any?
A They helped me in handcuffing the taller one, Chen Tiz Chang, sir.
Q And where was this smaller one Chen Jung San?
A Inside the red Feroza car, sir.
Q What happened to the suitcase that Chen Tiz Chang was holding when you handcuffed him?
A When I introduced myself as a policeman and he resisted, there was a car near his place and he gave the suitcase to the person inside the
car, sir.
Q How far was this car in relation [to] where you were then transacting the buy bust operation with Chen Tiz Chang?
A Around five meters, sir.
Q Where was this person to whom Chen Tiz Chang handed over the suitcase?
A He was inside the car, sir.
Q And after this person inside the car got hold of the black suitcase handed to him by Chen Tiz Chang, what did this person [do] if any?
A The car sped away, sir.

xxx xxx xxx

Q After handcuffing Chen Tiz Chang, what happened next. Mr. Witness, if any?
A I, together with Sgt. Camacho, brought Chen Tiz Chang to the Feroza jeep, sir.
Q What did the two other members of your team do at that time, if any?
A They were guarding the other person inside the red Feroza car [—] I am referring to Chen Jung San, sir Lagdameo and Bernardino posted
themselves near the Feroza jeep where Chen Jung San was seated.
Q When the person inside the car who sped away with the buy bust money [made his escape], what did you do next, if any?
A Nothing, we could not run after him, we were only four, sir.
Q And when you and Camacho brought Chen Tiz Chang to the Feroza vehicle, what happened next after that?
A We brought them to Task Force Spider, Camp Bagong Diwa; Taguig, Metro Manila, sir.
Q Before you boarded the vehicle, the red Feroza, what did you do, if any?
A I searched the red Feroza vehicle, sir.
Q What did you find if any?
A I found a plastic bag which was placed under the driver's seat containing suspected shabu, sir.

ATTY. IFURUNG (to the Court)

We would like to delete the word in his answer "suspected shabu" [;] that means he is not even sure if it [was] shabu or not. He is not an expert.

COURT:
That is his answer, let it remain in the records.
PROS: (to the witness)
Q And what did you do with this stuff that you found under the driver's seat?
A I brought along the plastic bag to be forwarded to the NBI, sir.25

The foregoing testimony was corroborated on material points by SPO2 Jesus Camacho.26 Aida Pascual, a forensic chemist, confirmed that the
suspected regulated drugs seized from the appellants were indeed methamphetamine hydrochloride or shabu. She declared in open court:

PROS. SOLLER:

(to the Witness)

Q After Exhibits E, F and G were turned over to you by officer Bernardino, what did you do next, Madam Witness, if any?
A I took the net weight of each specimen, Sir.
Q And what [was] the net weight of Exhibit E, Madam Witness, after conducting this weighing?
A 971.7 grams, sir.
Q And how about Exhibit F, do kindly tell this Court what [was] the weight of this after conducting this weighing, Madam Witness?
A 1,046 grams, sir.
Q And likewise, Exhibit G, please tell us?
A 943.5 grams, sir.
Q After weighing Exhibit E, F and G what did you do next, if any?
A I conducted a laboratory examination o[f] the specimens.
Q And what kind of examination, Madam Witness, did you conduct on this Exhibits E, F and G?
A Chemical and Chrom[a]tographic examination, Sir.
Q In a layman's language, would you kindly explain to us what do you mean by "chemical and chrom[a]tographic examination" that you
conducted?
A In Chemical Examination, I did the color test.
Q How about the Chrom[a]tographic?
A The Chrom[a]tographic Examination, I extracted representative sample from each specimen and then spot[ted] it on the chrom[a]tographic
plate together with the standard methamphetamine Hydrocloride and then develop[ed] it into a solvent and then I sprayed [it] with Ra test after
one hour.
Q And after conducting this examination, what was the result, Madam Witness?
A The specimen gave positive result for methamphetamine hydrochloride, sir.27

That only samples from the captured substance were examined by the chemist does not weaken the prosecution case. In People v. Tang Wai Lan,28
the Court held:

A sample taken from one (1) of the packages is logically presumed to be representative of the entire contents of the package unless proven
otherwise by accused-appellant. Therefore, a positive result for the presence of drugs is indicative that there is 1.1 kilogram of drugs in the plastic
package from which the sample was taken.

We are not persuaded by the argument that the samples examined were not taken from the drugs seized. On the contrary, the testimonies of all the
prosecution witnesses fairly established that the shabu taken from the appellants is the same substance examined by the forensic chemist and later
presented as evidence in court. Verily, the presumption of regularity must prevail over appellants' unfounded allegations and speculations.29

Appellants' behavior during the entrapment showed that there was conspiracy between them and a third person who got away with the buy-bust
money. It is an established rule that direct proof is not essential to establish conspiracy, as it may be inferred from the acts of the accused before,
during and after the commission of the crime, all of which indubitably point to or indicate a joint purpose, a concert of action and community of
interest.30

The prosecution established beyond reasonable doubt all the elements of the crime and, consequently, appellants' guilt. As a result of a valid buy-
bust operation,31 appellants were caught in flagrante selling two packs of shabu to the poseur-buyer. As a consequence of a search incident to a
lawful arrest, a third pack also containing shabu was likewise found inside their vehicle. Moreover, the substance seized from them was confirmed
to be shabu.

Alleged Inconsistencies

Appellants enumerate certain inconsistencies in the testimonies of prosecution witnesses that supposedly manifested lack of credibility: the alleged
discrepancies regarding the source of information of their alleged illegal activities, the failure to present the informant, the surveillance conducted,
the buy-bust money, the members of the buy-bust team and the time of the team's arrival at the Maalikaya Health Palace.

We agree with the trial court, however, that most of these points refer to trivial matters that have no bearing on the elements of the crime. First,
these are peripheral matters that do not detract from what has been established by the evidence for the prosecution. Hence, we have consistently
held that the prior surveillance of the suspected offender32 and the presentation of the information33 and the buy-bust money34 are not
indispensable to the prosecution of drug cases.

Second, the records show that the alleged inconsistencies as to the source of information and the time of the team's arrival at the place of arrest
were supplied by the appellants rather than implied from the prosecution witnesses' testimonies. Likewise, we find no merit in appellants' argument
regarding the surveillance, the informant and the buy-bust money. We observe that SPO2 Jesus Bernal Camacho failed to mention the existence of
the informant and the buy-bust money,35 but he did not deny their presence either. In like manner, he did not state that PO2 Hilarion Juan never
conducted a surveillance of the appellants.

To secure a reversal of the appealed judgment, the inconsistencies should have pertained to the actual buy-bust itself — that crucial moment when
the appellants were caught selling or in possession of shabu — not to peripheral matters. On this point, appellants stress that the two police officers,
who conducted the buy-bust operation, narrated two conflicting tales, as allegedly shown by the following:

1. Camacho claimed that Chen Jung San left the place for around thirty minutes while Chen Tiz Chang was conversing with the poseur-buyer;
Juan did not mention this.
2. According to Camacho, it was Appellant Chen Jung San who handed the two packs of shabu to Juan; Juan said that it was Chen Tiz Chang
who had done so.

3. Juan claimed that the informant was with him during the exchange; Camacho never mentioned this informant.

4. Juan testified that after the exchange, when he and Camacho introduced themselves as police officers, Chen Tiz Chang resisted arrest and
managed to pass on to a third person the "boodle" money; Camacho merely claimed that he and Juan had invited the appellants, but did not
mention any third person getting away with the loot.

5. Lastly, Juan stated that they discovered a third pack of shabu under a seat of the vehicle used by appellants; Camacho did not mention the
existence of this third pack.

As the trial court correctly pointed out, Camacho acted merely as a back up to Juan. This explains why the account of Camacho was rather hazy
compared to the unclouded narration of Juan. Unlike the poseur-buyer who had direct contact with the appellants during the entrapment, Camacho
was standing about ten to fifteen meters away from the scene and was thus hindered in his appreciation of the incident. Furthermore, his attention
was divided between watching Chen Tiz Chang with the poseur-buyer and keeping an eye on Chen Jung San. We must stress that the assessment of
the credibility of the two prosecution witness is best left to the discretion of the trial judge, who had observed their demeanor, conduct and
manner.36

In People v. Salinas,37 we held:

The alleged contradictions and inconsistencies are, in the main, minor and immaterial since the sale of the regulated drug was clearly and
categorically established by the testimony of the poseur-buyer, PO2 Benito Basilio, Jr. The testimony of SPO3 Ely Ramos regarding the sale of
"shabu" by the accused Rodolfo Salinas to PO2 Basilio cannot be expected to be as detailed and as accurate as the latter's account because it was
only Basilio who actually approached and transacted with Salinas while SPO3 Ely Ramos stayed some distance away and strategically positioned
himself so he could see Basilio make the pre-arranged signal for the arrest of Salinas. The minor inconsistencies as to the details of the sale of
"shabu" may be considered as badges of truth rather than of falsehood.

In view of all the foregoing, we find that appellants failed to overthrow the presumption of regularity accorded the police officers in the
performance of their official duty.38

Second Issue:
Defense of Hulidap

As adverted to at the beginning of this ponencia, appellants raise the defense of frame-up or hulidap.

We expressed our disdain for the hackneyed defense of hulidap in People v. Cheng Ho Chua,39 in which we said:

Courts generally view with disfavor this defense commonly raised in drug cases, for it is easy to concoct and difficult to prove. Moreover, there is a
presumption that public officers, including the arresting officers, regularly perform their official duties. In the present case, the defense failed to
overcome this presumption or to present clear and convincing evidence to prove "hulidap."

In the present case, we agree with the solicitor general that appellants' defense has not been established. They fail to describe the individuals
allegedly responsible for the extortion. As to the phone calls traced to one Myrna Pilosopo and to the office of Task Force Spider, we agree with the
People's counsel that these are mere speculations, since no proof was presented to show any connection between them and the kidnappers.
Indeed, appellants merely gave general descriptions of these alleged kidnappers. Moreover, no charges, criminal or administrative, were ever filed
against these alleged scalawags. In other words, we find no clear and convincing evidence to support the appellants' allegation.

In closing, we reiterate that the "[i]llegal drug trade is the scourge of society."40 Equally reprehensible is the police practice of using the law as a tool
in extorting money from hapless victims.41 In this case, however, appellants' theory of extortion was not sufficiently proven.1âwphi1.nêt

WHEREFORE, the appeal is DENIED and the appealed Decision AFFIRMED. Costs against appellants.

SO ORDERED.

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.