1
THIRD DIVISION[G.R. No. 115286. August 11, 1994.]
INTER-ORIENT MARITIME ENTERPRISES, INC., SEA HORSE SHIP MANAGEMENT, INC. and TRENDA WORLD SHIPPING (MANILA), INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and RIZALINO D. TAYONG, respondents.
SYLLABUS
1. LABOR LAWS AND SOCIAL LEGISLATION; CONDITIONS OF EMPLOYMENT; CAPTAIN OF VESSEL A CONFIDENTIAL AND MANAGERIAL EMPLOYEE. — It is well settled in this jurisdiction that confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation. Such
employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has command of a vessel. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and technical director of the vessel; and (3) he is a representative of the country under whose flag he navigates. Of these roles, by far the most important is the role performed by the captain as commander of the vessel; for such role (which, to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and preservation of the vessel during its voyage and the protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipowner, the captain has authority to sign bills of lading, carry goods aboard and deal with the freight earned, agree upon rates and decide whether to take cargo. The ship captain, as agent of the shipowner, has legal authority to enter into contracts with respect to the vessel and the trading of the vessel, subject to applicable limitations established by statute, contract or instructions and regulations of the shipowner. To the captain is committed the governance, care and management of the vessel. Clearly, the captain is vested with both management and fiduciary functions.
2. ID.; TERMINATION OF EMPLOYMENT; ILLEGAL DISMISSAL ESTABLISHED IN CASE AT BAR. — It is plain from the records of the present petition that Captain Tayong was denied any opportunity to defend himself. Petitioners curtly dismissed him from his command and summarily ordered his repatriation to the Philippines without informing him of the charge or charges levelled against him, and much less giving him a change to refute any such charge. In fact, it was only on 26 October 1989 that Captain Tayong received a telegram dated 24 October 1989 from Inter-Orient requiring him to explain why he delayed sailing to South Africa. We also find that the principal contention of petitioners against the decision of the NLRC pertains to facts, that is, whether or not there was actual and sufficient basis for the alleged loss of trust or confidence. We have consistently held that a question of "fact" is, as a general rule, the concern solely of an administrative body, so long as there is substantial evidence of record to sustain its action. The record requires us to reject petitioners' claim that the NLRC's conclusion of fact were not supported by substantial evidence. Petitioner's rely on self-serving affidavits of their own officers and employees predictably tending to support petitioners' allegation that Captain Tayong had performed acts inimical to petitioners' interests for which, supposedly, he was discharged. The official report of Mr. Clark, petitioners' representative, in fact supports the NLRC's conclusion that private respondent Captain did not arbitrarily and maliciously delay the voyage to South Africa. There had been, Mr. Clark stated, a disruption in the normal functioning of the vessel's turbo charger and economizer and that had prevented the full or regular operation of the vessel. Thus, Mr. Clark relayed to Captain Tayong instructions to "maintain reduced RPM" during the voyage to South Africa, instead of waiting in Singapore for the supplies that would permit shipboard repair of the malfunctioning machinery and equipment. Under all the circumstances of this case, we, along
with the NLRC, are unable to hold that Captain Tayong's decision (arrived at after consultation with the vessel's Chief Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the requisitioned supplies needed for the welding-repair, on board the ship, of the turbo-charger and the economizer equipment of the vessel, constituted merely arbitrary, capricious or grossly insubordinate behavior on his part. In the view of the NLRC, that decision of Captain Tayong did not constitute a legal basis for the summary dismissal of Captain Tayong and for termination of his contract with petitioners prior to the expiration of the term thereof. We cannot hold this conclusion of the NLRC to be a grave abuse of discretion amounting to an excess or loss of jurisdiction; indeed, we share that conclusion and make it our own. Clearly, petitioners were angered at Captain Tayong's decision to wait for delivery of the needed supplied before sailing from Singapore, and may have changed their estimate of their ability to work with him and of his capabilities as a ship captain. Assuming that to be petitioners' management prerogative, that prerogative is nevertheless not to be exercised, in the case at bar, at the cost of loss of Captain Tayong's rights under his contract with petitioner's and under Philippine law.
3. COMMERCIAL LAW; CODE OF COMMERCE; CAPTAIN'S CONTROL OF VESSEL AND REASONABLE DISCRETION AS TO ITS NAVIGATION. — A ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly so, for such safety. He is right there on the vessel, in command of its and (it must be presumed) knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon. The applicable principle is that the captain has control of all departments of service in the vessel, and reasonable discretion as to its navigation. It is the right and duty of the captain, in the exercise of sound discretion and in good faith, to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the protection and preservation of the interests under his charge, whether those be of the shipowner, charterers, cargo owners or of underwriters. It is a basic principle of admiralty law that in navigating a merchantman, the master must be left free to exercise his own best judgment. The requirements of safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be confined within a straitjacket, even in this age of electronic communications. Indeed, if the ship captain is convinced, as a reasonably prudent and competent mariner acting in good faith that the shipowner's or ship agent's instructions (insisted upon by radio or telefax from their officers thousand of miles away) will result, in the very specific circumstances facing him, in imposing unacceptable risks of loss or serious danger to ship or crew, he cannot casually seek absolution from his responsibility, if a marine casualty occurs, in such instructions. Compagnie de Commerce v. Hamburg is instructive in this connection. There, this Court recognized the discretionary authority of the master of a vessel and his right to exercise his best judgment, with respect to navigating the vessel he commands. In Compagnie de Commerce, a charger party was executed between Compagnie de Commerce and the owners of the vessel Sambia, under which the former as charterer loaded on board the Sambia, at the port of Saigon, certain cargo destined for the Ports of Dunkirk and Hamburg in Europe. The Sambia flying the German flag, could not, in the judgment of its master, reach its ports of destination because war (World War I) had been declared between Germany and France. The master of the Sambia decided to deviate from the stipulated voyage and sailed instead for the Port of Manila. Compagnie de Commerce sued in the Philippines for damages arising from breach of the charter party and unauthorized sale of the cargo. In affirming the decision of the trial court dismissing the complaint, our Supreme Court held that the master of the Sambia had reasonable grounds to apprehend that the vessel was in danger of seizure or capture by the French authorities in Saigon was justified by necessity to elect the course which the took — i.e., to flee Saigon for the Port of Manila — with the result that the shipowner was relieved from liability for the deviation from the stipulated route and from liability for damage to the cargo. 4. ID.; ID.; COMMERCIAL LAW; CODE OF COMMERCE; CAPTAIN'S CONTROL OF VESSEL AND REASONABLE DISCRETION AS TO ITS NAVIGATION. — "The danger from
2
which the master of the Sambia fled a real and not merely an imaginary one as counsel for shipper contends. Seizure at the hands of an 'enemy of the King', though not inevitable, was a possible outcome of a failure to leave the port of Saigon; and we cannot say that under the conditions existing at the time when the master elected to flee from that port, there were no grounds for a 'reasonable apprehension of danger' from seizure by the French authorities, and therefore no necessity for flight. The word 'necessity' when applied to mercantile affairs, where the judgment must in the nature of things be exercised, cannot, of course, mean an irresistible compelling power. what is meant by it in such cases is the force of circumstances which determine the course of a man ought to take. Thus, where by the force of circumstances, a man has the duty cast upon him of taking some action for another, and under that obligation adopts a course which, to the judgment of a wise and prudent man, is apparently the best for the interest of the persons for whom he acts in a given emergency, it may properly be said of the course so taken that it was in a mercantile sense necessary to take it." Compagnie de Commerce contended that the shipowner should, at all events, be held responsible for the deterioration in the value of the cargo incident to its long stay on board the vessel from the date of its arrival in Manila until the cargo was sold. The Supreme Court, in rejecting this contention also, declared that: "But it is clear that the master could not be required to act on the very day of his arrival; or before he had a reasonable opportunity to ascertain whether he could hope to carry out his contract and earn his freight; and that he should not be held responsible for a reasonable delay incident to an effort to ascertain the wishes of the freighter, and upon failure to secure prompt advice, to decide for himself as to the course which he should adopt to secure the interests of the absent owner of the property aboard the vessel. The master is entitled to delay for such a period as may be reasonable under the circumstances, before deciding on the course he will adopt. he may claim a fair opportunity of carrying out a contract, and earning the freight, whether by repairing or transshipping. should the repair of the ship be undertaken, it must be proceeded with diligently; and if so done, the freighter will have no ground of complaint, although the consequent delay be a long one, unless, indeed, the cargo is perishable, and likely to be injured by the delay. Where that is the case, it ought to be forwarded, or sold, or given up, as the case may be, without waiting for repairs. A shipowner or shipmaster (if communication with the shipowner is impossible), will be allowed a reasonable time in which to decide what course he will adopt in such cases as those under discussion; time must be allowed to him to ascertain the facts, and to balance the conflicting interests involved, of shipowner, cargo owner, underwriter on ship and freight. But once the time has elapsed, he is bound to act promptly according as he has elected either to repair, or abandon the voyage, or tranship. If he delays, and owing to that delay a perishable cargo suffers damage; he cannot escape that obligation by pleading the absence of definite instructions from the owners of the cargo or their underwriters, since he has control of the cargo and is entitled to elect."D E C I S I O N FELICIANO, J p:
Private respondent Rizalino Tayong, a licensed Master Mariner with experience in commanding ocean-going vessels, was employed on 6 July 1989 by petitioners Trenda World Shipping (Manila), Inc. and Sea Horse Ship Management, Inc. through petitioner Inter-Orient Maritime Enterprises, Inc. as Master of the vessel M/V Oceanic Mindoro, for a period of one (1) year, as evidenced by an employment contract. On 15 July 1989, Captain Tayong assumed command of petitioners' vessel at the port of Hongkong. His instructions were to replenish bunker and diesel fuel, to said forthwith to Richard Bay, South Africa, and there to load 120,000 metric tons of coal. On 16 July 1989, while at the Pork of Hongkong and in the process of unloading cargo, Captain Tayong received a weather report that a storm code-named "Gordon" would shortly hit Hongkong. Precautionary measures were taken to secure the safety of the vessel, as well as its crew, considering that the vessel's turbo-charger was leaking and the vessel was fourteen (14) years old.
On 21 July 1989, Captain Tayong followed-up the requisition by the former captain of the Oceanic Mindoro for supplies of oxygen and acetylene, necessary for the welding-repair of the turbo-charger and the economizer. 1 This requisition had been made upon request of the Chief Engineer of the vessel and had been approved by the shipowner. 2
On 25 July 1989, the vessel sailed from Hong Kong for Singapore. In the Master's sailing message, Captain Tayong reported a water leak from M.E. Turbo Charger No. 2 Exhaust gas casing. He was subsequently instructed to block off the cooling water and maintain reduced RPM unless authorized by the owners. 3
On 29 July 1989, while the vessel was en route to Singapore, Captain Tayong reported that the vessel had stopped in mid-ocean for six (6) hours and forty-five (45) minutes due to a leaking economizer. He was instructed to shut down the economizer and use the auxiliary boiler instead. 4
On 31 July 1989 at 0607 hrs., the vessel arrived at the port of Singapore. 5 The Chief Engineer reminded Captain Tayong that the oxygen and acetylene supplies had not been delivered. 6 Captain Tayong inquired from the ship's agent in Singapore about the supplies. The ship agent stated that these could only be delivered at 0800 hours on August 1, 1989 as the stores had closed. 7
Captain Tayong called the shipowner, Sea Horse Ship Management, Ltc., in London and informed them that the departure of the vessel for South Africa may be affected because of the delay in the delivery of the supplies. 8
Sea Horse advised Captain Tayong to contact its Technical Director, Mr. Clark, who was in Tokyo and who could provide a solution for the supply of said oxygen and acetylene. 9
On the night of 31 July 1989, Mr. Clark received a call from Captain Tayong informing him that the vessel cannot said without the oxygen and acetylene for safety reasons due to the problems with the turbo charger and economizer. Mr. Clark responded that by shutting off the water to the turbo charger and using the auxiliary boiler, there should be no further problem. According to Mr. Clark, Captain Tayong agreed with him that the vessel could sail as scheduled on 0100 hours on 1 August 1989 for South Africa. 10
According to Captain Tayong, however, he communicated to Sea Horse his reservations regarding proceeding to South Africa without the requested supplied, 11 and was advised by Sea Horse to wait for the supplies at 0800 hrs. of 1 August 1989, which Sea Horse had arranged to be delivered on board the Oceanic Mindoro. 12 At 0800 hours on 1 August 1989, the requisitioned supplies were delivered and Captain Tayong immediately sailed for Richard Bay.
When the vessel arrived at the port of Richard Bay, South Africa on 16 August 1989, Captain Tayong was instructed to turn-over his post to the new captain. He was thereafter repatriated to the Philippines, after serving petitioners for a little more than two weeks. 13 He was not informed of the charges against him. 14
On 5 October 1989, Captain Tayong instituted a complaint for illegal dismissal before the Philippine Overseas Employment Administration ("POEA"), claiming his unpaid salary for the unexpired portion of the written employment contract, plus attorney's fees.
Petitioners, in their answer to the complaint, denied that they had illegally dismissed Captain Tayong. Petitioners alleged that he had refused to said immediately to South Africa to the prejudice and damage of petitioners. According to petitioners, as a direct result of Captain Tayong's delay, petitioners' vessel was placed "off-hire" by the charterers refused to pay the
3
charter hire or compensation corresponding to twelve (12) hours, amounting to US $15,500.00, due to time lost in the voyage. They stated that they had dismissed private respondent for loss of trust and confidence.The POEA dismissed Captain Tayong's complaint and held that there was valid cause for his untimely repatriation. The decision of the POEA placed considerable weight on petitioners' assertion that all the time lost as a result of the delay was caused by Captain Tayong and that his concern for the oxygen and acetylene was not legitimate as these supplies were not necessary or indispensable for running the vessel. The POEA believed that the Captain had unreasonably refused to follow the instructions of petitioners and their representative, despite petitioner's firm assurances that the vessel was seaworthy for the voyage to South Africa.
On appeal, the National Labor Relations Commission ("NLRC") reversed and set aside the decision of the POEA. The NLRC found that Captain Tayong had not been afforded an opportunity to be heard and that no substantial evidence was adduced to establish the basis for petitioners' loss of trust or confidence in the Captain. The NLRC declared that he had only acted in
accordance with his duties to maintain the seaworthiness of the vessel and to insure the safety of the ship and the crew. The NLRC directed petitioners to pay the Captain (a) his salary for the unexpired portion of the contract at US$1,900.00 a month, plus one (1) month leave benefit; and (b) attorney's fees equivalent to ten percent (10%) of the total award due.
Petitioners, before this Court, claim that the NLRC had acted with grave abuse of discretion. Petitioners allege that they had adduced sufficient evidence to establish the basis for private respondent's discharge, contrary to the conclusion reached by the NLRC. Petitioners insist that Captain Tayong, who must protect the interest of petitioners, had caused them unnecessary damage, and that they, as owners of the vessel, cannot be compelled to keep in their employ a captain of a vessel in whom they have lost their trust and confidence. Petitioners finally contend that the award to the Captain of his salary corresponding to the unexpired portion of the contract and one (1) month leave pay, including attorney's fees, also constituted grave abuse of discretion.
The petition must fail.
We note preliminary that petitioners failed to attach a clearly legible, properly certified, true copy of the decision of the NLRC dated 23 April 1994, in violation of requirement no. 3 of Revised Circular No. 1-88. On this ground alone, the petition could have been dismissed. But the Court chose not to do so, in view of the nature of question here raised and instead required private respondent to file a comment on the petition. Captain Tayong submitted his comment. The Office of the Solicitor General asked for an extension of thirty (30) days to file its comment on behalf of the NLRC. We consider that the Solicitor General's comment may be dispensed with in this case.
It is well settled in this jurisdiction that confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate
investigation. 15 Such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws.
The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has command of a vessel. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and technical director of the vessel; and (3) he is a representative of the country under whose flag he navigates. 16 Of these roles, by far the most important is the role performed by the captain as commander of the vessel; for such role (which, to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and preservation of the vessel during its voyage and the
protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipowner, the captain has authority to sign bills of lading, carry goods aboard and deal with the freight earned, agree upon rates and decide whether to take cargo. The ship captain, as agent of the shipowner, has legal authority to enter into contracts with respect to the vessel and the trading of the vessel, subject to applicable limitations established by statute, contract or instructions and regulations of the shipowner. 17 To the captain is committed the governance, care and
management of the vessel. 18 Clearly, the captain is vested with both management and fiduciary functions.
It is plain from the records of the present petition that Captain Tayong was denied any opportunity to defend himself. Petitioners curtly dismissed him from his command and summarily ordered his repatriation to the Philippines without informing him of the charge or charges levelled against him, and much less giving him a change to refute any such charge. In fact, it was only on 26 October 1989 that Captain Tayong received a telegram dated 24 October 1989 from Inter-Orient requiring him to explain why he delayed sailing to South Africa.
We also find that the principal contention of petitioners against the decision of the NLRC pertains to facts, that is, whether or not there was actual and sufficient basis for the alleged loss of trust or confidence. We have consistently held that a question of "fact" is, as a general rule, the concern solely of an administrative body, so long as there is substantial evidence of record to sustain its action.
The record requires us to reject petitioners' claim that the NLRC's conclusion of fact were not supported by substantial evidence. Petitioner's rely on self-serving affidavits of their own officers and employees predictably tending to support petitioners' allegation that Captain Tayong had performed acts inimical to petitioners' interests for which, supposedly, he was discharged. The official report of Mr. Clark, petitioners' representative, in fact supports the NLRC's conclusion that private respondent Captain did not arbitrarily and maliciously delay the voyage to South Africa. There had been, Mr. Clark stated, a disruption in the normal functioning of the vessel's turbo charger 19 and economizer and that had prevented the full or regular operation of the vessel. Thus, Mr. Clark relayed to Captain Tayong instructions to "maintain reduced RPM" during the voyage to South Africa, instead of waiting in Singapore for the supplies that would permit shipboard repair of the malfunctioning machinery and equipment.
More importantly, a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly so, for such safety. He is right there on the vessel, in command of it and (it must be presumed) knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon. The applicable principle is that the captain has control of all departments of service in the vessel, and reasonable discretion as to its navigation. 20 It is the right and duty of the captain, in the exercise of sound discretion and in good faith, to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the protection and preservation of the interests under his charge, whether those be of the shipowners, charterers, cargo owners or of underwriters. 21 It is a basic principle of admiralty law that in navigating a merchantman, the master must be left free to exercise his own best judgment. The requirements of safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be confined within a straitjacket, even in this age of electronic communications. 22 Indeed, if the ship captain is convinced, as a reasonably prudent and competent mariner acting in good faith that the shipowner's or ship agent's instructions (insisted upon by radio or telefax from their officers thousand of miles away) will result, in the very specific circumstances facing him, in imposing unacceptable risks of loss or serious danger to ship or crew, he cannot casually seek absolution from his responsibility, if a marine casualty occurs, in such instructions. 23
4
Compagnie de Commerce v. Hamburg 24 is instructive in this connection. There, this Court recognized the discretionary authority of the master of a vessel and his right to exercise his best judgment, with respect to navigating the vessel he commands. In Compagnie de Commerce, a charter party was executed between Compagnie de Commerce and the owners of the vessel Sambia, under which the former as charterer loaded on board the Sambia, at the port of Saigon, certain cargo destined for the Ports of Dunkirk and Hamburg in Europe. The Sambia flying the German flag, could not, in the judgment of its master, reach its ports of destination because war (World War I) had been declared between Germany and France. The master of the Sambia decided to deviate from the stipulated voyage and sailed instead for the Port of Manila.Compagnie de Commerce sued in the Philippines for damages arising from breach of the charter party and unauthorized sale of the cargo. In affirming the decision of the trial court dismissing the complaint, our Supreme Court held that the master of the Sambia had reasonable grounds to apprehend that the vessel was in danger of seizure or capture by the French authorities in Saigon was justified by necessity to elect the course which the took — i.e., to flee Saigon for the Port of Manila — with the result that the shipowner was relieved from liability for the deviation from the stipulated route and from liability for damage to the cargo. The Court said:
"The danger from which the master of the Sambia fled a real and not merely an imaginary one as counsel for shipper contends. Seizure at the hands of an 'enemy of the King', though not inevitable, was a possible outcome of a failure to leave the port of Saigon; and we cannot say that under the conditions existing at the time when the master elected to flee from that port, there were no grounds for a 'reasonable apprehension of danger' from seizure by the French authorities, and therefore no necessity for flight.
The word 'necessity' when applied to mercantile affairs, where the judgment must in the nature of things be exercised, cannot, of course, mean an irresistible compelling power. What is meant by it in such cases is the force of circumstances which determine the course of a man ought to take. Thus, where by the force of circumstances, a man has the duty cast upon him of taking some action for another, and under that obligation adopts a course which, to the judgment of a wise and prudent man, is apparently the best for the interest of the persons for whom he acts in a given emergency, it may properly be said of the course so taken that it was in a mercantile sense necessary to take it." 25 (Emphasis supplied)
Compagnie de Commerce contended that the shipowner should, at all events, be held responsible for the deterioration in the value of the cargo incident to its long stay on board the vessel from the date of its arrival in Manila until the cargo was sold. The Supreme Court, in rejecting this contention also, declared that:
"But it is clear that the master could not be required to act on the very day of his arrival; or before he had a reasonable opportunity to ascertain whether he could hope to carry out his contract and earn his freight; and that he should not be held responsible for a reasonable delay incident to an effort to ascertain the wishes of the freighter, and upon failure to secure prompt advice, to decide for himself as to the course which he should adopt to secure the interests of the absent owner of the property aboard the vessel.
The master is entitled to delay for such a period as may be reasonable under the circumstances, before deciding on the course he will adopt. He may claim a fair opportunity of carrying out a contract, and earning the freight, whether by repairing or transshipping. Should the repair of the ship be undertaken, it must be proceeded with diligently; and if so done, the freighter will have no ground of complaint, although the consequent delay be a long one, unless, indeed, the cargo is perishable, and likely to be injured by the delay. Where that is the case, it ought to be forwarded, or sold, or given up, as the case may be, without waiting for repairs.
A shipowner or shipmaster (if communication with the shipowner is impossible), will be allowed a reasonable time in which to decide what course he will adopt in such cases as those under discussion; time must be allowed to him to ascertain the facts, and to balance the conflicting interests involved, of shipowner, cargo owner, underwriter on ship and freight. But once the time has elapsed, he is bound to act promptly according as he has elected either to repair, or abandon the voyage, or tranship. If he delays, and owing to that delay a perishable cargo suffers damage, the shipowner will be liable for that damage; he cannot escape that obligation by pleading the absence of definite instructions from the owners of the cargo or their underwriters, since he has control of the cargo and is entitled to elect." 26 (Emphasis supplied)
The critical question, therefore, is whether or not Captain Tayong had reasonable grounds to believe that the safety of the vessel and the crew under his command or the possibility of substantial delay at sea required him to wait for the delivery of the supplies needed for the repair of the turbo-charger and the economizer before embarking on the long voyage from Singapore to South Africa.
In this connection, it is especially relevant to recall that, according to the report of Mr. Robert Clark, Technical Director of petitioner Sea Horse Ship Management, Inc., the Oceanic Mindoro had stopped in mid-ocean for six (6) hours and forty-five (45) minutes on its way to Singapore because of its leaking economizer. 27 Equally relevant is the telex dated 2 August 1989 sent by Captain Tayong to Sea Horse after Oceanic Mindoro had left Singapore and was en route to South Africa. In this telex, Captain Tayong explained his decision to Sea Horse in the following terms:
"I CAPT R.D. TAYONG RE: UR PROBLEM IN SPORE (SINGAPORE) I EXPLAIN AGN TO YOU THAT WE ARE INSECURITY/DANGER TO SAIL IN SPORE W/OUT HAVING SUPPLY OF OXY/ACET. PLS UNDERSTAND HV PLENTY TO BE DONE REPAIR FM MAIN ENGINE LIKE TURBO CHARGER PIPELINE, ECONOMIZER LEAKAGE N ETC WE COULD NOT FIX IT W/OUT OXY/ACET ONBOARD. I AND MR. CLARK WE CONTACTED EACH OTHER BY PHONE IN PAPAN N HE ADVSED US TO SAIL TO RBAY N WILL SUPPLY OXY/ACET UPON ARRIVAL RBAY HE ALSO EXPLAINED TO MY C/E HOW TO FIND THE REMEDY W/OUT OXY/ACET BUT C/E HE DISAGREED MR. CLARK IDEA, THAT IS WHY WE URG REQUEST[ED] YR KIND OFFICE TO ARRANGE SUPPLY OXY/ACET BEFORE SAILING TO AVOID RISK/DANGER OR DELAY AT SEA N WE TOOK PRECAUTION UR TRIP FOR 16 DAYS FM SPORE TO RBAY. PLS. UNDERSTAND UR SITUATION." 28 (Emphasis partly in source and partly supplied) Under all the circumstances of this case, we, along with the NLRC, are unable to hold that Captain Tayong's decision (arrived at after consultation with the vessel's Chief Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the requisitioned supplies needed for the welding-repair, on board the ship, of the turbo-charger and the economizer equipment of the vessel, constituted merely arbitrary, capricious or grossly insubordinate behavior on his part. In the view of the NLRC, that decision of Captain Tayong did not constitute a legal basis for the summary dismissal of Captain Tayong and for termination of his contract with petitioners prior to the expiration of the term thereof. We cannot hold this conclusion of the NLRC to be a grave abuse of discretion amounting to an excess or loss of jurisdiction; indeed, we share that conclusion and make it our own.
Clearly, petitioners were angered at Captain Tayong's decision to wait for delivery of the needed supplies before sailing from Singapore, and may have changed their estimate of their ability to work with him and of his capabilities as a ship captain. Assuming that to be petitioners'
management prerogative, that prerogative is nevertheless not to be exercised, in the case at bar, at the cost of loss of Captain Tayong's rights under his contract with petitioner's and under Philippine law.
5
ACCORDINGLY, petitioners having failed to show grave abuse of discretion amounting to loss or excess of jurisdiction on the part of the NLRC in rendering its assailed decision, the Petition for Certiorari is hereby DISMISSED, for lack of merit. Costs against petitioners.SO ORDERED.
Bidin, Romero, Melo and Vitug, JJ., concur. EN BANC
[G.R. No. L-23791. November 23, 1966.]
CHUNG TE, petitioner, vs. NG KIAN GIAB and THE HONORABLE DIRECTOR OF PATENTS, respondents.
Generoso V. Jacinto for petitioner. Federico Diaz for respondent. SYLLABUS
1. PATENT OFFICE; FACTUAL FINDING CONCLUSIVE ON SUPREME COURT. — The rule is that the findings of fact by the Director of Patents are conclusive on the Supreme Court, provided they are supported by substantial evidence (Anchor Trading Co, vs. Director of Patents, G.R. No. L-8004, May 30, 1956).
2. ID.; APPLICATION FOR TRADEMARK; FILLING DATES OF APPLICATION AS PROOF OF THE DATE OF FIRST USE. — Where the testimonial evidence for both parties has been entirely disregarded, and reliance is placed solely on the filing dates of the applications as proof of the respective dates of first use, then the abandoned application filed by the junior party applicant becomes cogent evidence to show that he first used the trademark as of the date of its filing (Smith vs. Hall, 81 L. ed. 1049).
3. ID.; ID.; BURDEN OF PRESENTING CLEAR AND CONVINCING EVIDENCE OF ADOPTION AND USE AT EARLIER DATE OF TRADEMARK. — Where an applicant for
registration of a trademark states under oath the date of his earliest use, and later on he wishes to carry back his first date of use to an earlier date, he then takes on the greater burden of presenting "clear and convincing evidence" of adoption and use as of that earlier date, (B. R.. Baker Co. vs. Lebow Bros., 150 F. 2d. 580).
4. TRADEMARKS AND TRADENAMES; ESTABLISHMENT OF FIRST USE; DECISION OF DIRECTOR OF PATENTS, EFFECT ON. — Where it appears that petitioner has established prior use and adoption of questioned trademark for which reason he and not respondent Ng Giab is entitled to registration thereof, the decision of the Director of Patents is reversed. Petitioner is adjudged prior user of the trademark MARCA PIÑA and representation thereof, and its registration in his name is hereby ordered.
D E C I S I O N MAKALINTAL, J p:
Petitioner Chung Te interposed this appeal from the decision of the Director of Patents giving due course to the application of respondent Ng Kian Giab for registration of the trademark "Marca
Piña" and representation thereof, and rejecting his own application for registration of the same trademark and a similar representation.
Petitioner filed his application on November 25, 1958, alleging therein that since January 8, 1951 he had been using the trademark on undershirts (de hilo), T-shirts, and baby dresses. Because of the confusing similarity between said trademark and that applied for on July 16, 1957 by Ng Kian Giab, an interference was declared as existing between the two applications. 1 Ng Kian Giab stated in his application that he had been using the trademark on undershirts since December 6, 1955. At the hearing both parties presented testimonial as well as documentary evidence to prove their respective claims of priority of adoption and use. Respondent Director of Patents, however, declared that neither of them "satisfactorily adduced definite and conclusive proof of their asserted dates of first use of the trademark "Marca Piña"; and relying on the rule that "in inter plates cases, when neither of the parties have (has) satisfactorily proven the date of first use alleged in their applications, such date shall be confined to the filing date of the said application," 2 granted the application of senior party applicant Ng Kian Giab. Junior party applicant Chung Te moved for reconsideration of the decision, but the Director declined to reconsider, hence this appeal. Chung Te avers that respondent Director erred (1) in not giving due weight to his documentary evidence which tends to prove that he has been using the trademark since 1951; (2) in not finding that respondent Ng Kian Giab had admitted he first used the trademark only in 1955; (3) in disregarding petitioner's prior application No. 5544 and thus finding that respondent had filed his application earlier then petitioner; and (4) in declaring respondent as the prior user when there is no substantial evidence in support thereof.
The rule is that the findings of fact by the Director of Patents are conclusive on the Supreme Court provided they are supported by substantial evidence. 3
Respondent Director disregarded all the evidence submitted by both parties and relied exclusively on the filing dates of the applications in reaching his conclusion as to the dates of first use by the senior party applicant and the junior party applicant, respectively. Even if the evidence for both parties were entirely unreliable — and we do not find it so — we cannot completely disregard the fact that on March 13, 1957 an application for the registration of the same trademark "MARCA PIÑA. and Representation" was filed by Chung Te (Application No. 5544), although it was subsequently considered abandoned by reason of his failure to answer 4 the communication of the Principal Trademark Examiner dated September 25, 1957. 5 To be sure, for the purpose of determining who was the junior party applicant in the interference 6 the filing date of said abandoned application may not properly be considered. But in the peculiar situation obtaining in this case, where the testimonial evidence for both parties has been entirely disregarded, and reliance is placed solely on the filing of the applications as proof of the respective dates of first use, then the abandoned application filed by the junior party applicant becomes cogent evidence to show that he first used the trademark as of the date of its filing. 7 Chung Te's petition in said abandoned case was duly submitted in evidence and forms part of the record. (Exhibits X, X-1, to X-3).
The fact, however, is that there is other substantial evidence adduced by petitioner tending to show that he first used the trademark in question as early as February 1952. For a long time petitioner was the purchasing agent for his father-in-law, who owned the Liong Bee Shirt Factory. Afterwards he decided to go into the same business for himself. His father-in-law, who theretofore had been using the trademark "Marca Piña," transferred it to him. In January 1951 he started laying the groundwork for his own factory. Jose Lim, 8 whom he had engaged the previous year, helped him with the preliminary paper work, registered the factory's first books of accounts with the Bureau of Internal Revenue, and when the business was officially launched in 1952, continued therein as bookkeeper. In January 1951 petitioner started producing undershirts labeled "Marca
6
Piña". However, he sold them under the firm name of his father-in-law because he had yet no license in his own name.Julieta Francisco testified that she started working with petitioner in 1951. Her job was to sew skippers and "sandos" and to affix the trademark "Marca Piña" (Exhibit B-1) and "Pineapple" on the nape of the neck of each finished undershirt. The trademark, (Exhibit B-2), she added, as well as the legend indicating the size of the undershirt (Exhibit B-3) were pressed on the lower portion of the garment (Exhibits E and E-1). The undershirts were then placed inside cellophane wrappers (Exhibit C), put together in half dozens by means of paper labels (Exhibits F and F-1), and then placed on box containers (Exhibit D). All these exhibits (Exhibits C, F, F-1 and D) bear the trademark in question.
On November 20, 1951 the factory became a member of the Philippine Chinese Underwear Manufacturers Association (certificate of membership, Exhibit N). According to Juanito Vitug, secretary of the association, before a firm was admitted as member it was required to inform the association of the trademark it was using to identify its products; and he found that among the files of the association the sample labels "Marca Piña" (Exhibit O) submitted by petitioner when he applied for membership were included.
On January 31, 1952 the City of Manila granted petitioner a permit to operate a shirt factory (Exhibit T). On February 1, 1952 he paid the corresponding business taxes (Exhibits U, 1 to U-3). On February 5, 1952 the Bureau of Commerce issued to him a certificate of registration as private merchant (Exhibit V) and two days later a certificate of registration of the business name "Liong Sun Shirt Factory" (Exhibit W). It appears from his application that he had commenced business on February 1, 1952.
He obtained the labels he was using from the Asiatic Press. On February 7, 1952 he bought 5000 pieces of "Marca Piña" box labels (Exhibit Q). On December 29, 1952 he purchased 100,000 "Marca Piña" shirt labels and 10,000 "Marca Piña" cover labels (Exhibit Q-1). And on July 21, 1954 he bought 100,000 sheets of "Pineapple Brand" shirt labels (Exhibit Q-2). The box labels were delivered by him to the Avenue Paper Box Factory, which used them in covering the cardboard boxes (a sample is Exhibit D) which petitioner had ordered from it (Exhibit S, dated March 17, 1952; Exhibits S-1 to S-7). Petitioner also ordered boxes from the De Luxe Cardboard Box from Factory (Exhibits AA and AA-1). Co In, manager of the Asiatic Printing Press, affirmed that petitioner had purchased "Marca Piña" labels from him, while Tan Dy, manager of the Avenue Paper Box Factory, attested that he used the "Marca Pina" box covers in covering the boxes which petitioner had ordered from him. 9
On November 19, 1952 petitioner ordered from the Victory Printing Company 500 calendars (Exhibit Z), one of which (Exhibit Z-1) was submitted in evidence. Written thereon are the words: "LIONG SUN Shirt Factory, Manufacturer of the well known brand 'Pineapple and Piña' the best cotton and De Hilo Skippers."
Petitioner first sold skippers under his firm name "Liong Sun Shirt Factory" on February 1, 1952 to Tay Liong Kian (Receipt No. 1, Exhibit Z) and Yap Suy Yu (Receipt No. 2, Exhibit R). Both of these customers regularly bought skippers and undershirts by the dozens as shown by receipt dated from that time up to July 14, 1952 (Exhibits L-1 to L-9, R-1 to R-10). Although the receipts do not state that the merchandise purchased bore the trademark "Marca Piña", both customers testified that what they bought had that label. At the time of the hearing Tay Liong Kian 10 had a store in Yangco Market. On the other hand, at the time he bought undershirts, Yap Suy Yu had a store at Tabora Market.
According to the statement (Exhibit G-1) attached to the application (Exhibit G) of respondent Ng Kian Giab he first used the trademark on December 6, 1955. At the hearing he sought to prove
that his family had been using it since 1946. Where an applicant for registration of a trademark states under oath the date of his earliest use, and later on he wishes to carry back his first date of use to an earlier date he then takes on the greater burden of presenting "clear and convincing evidence" of adoption and use as of that earlier date. 11
To prove such earlier date respondent relies purely on testimonial evidence consisting of the declarations of his father Ng Kian Soy, his brother Ng Kian Kee, their supposed seamstress Genoveva Santos, and two customers Diego Magpantay and Cleto Sarmiento. The substance of their testimony is as follows: since 1946 Ng Kian Soy operated a general merchandise store, the Sin Kian Ning Store, 12 in Batangas, Batangas, where he sold polo shirts bearing the trademark. After the fire in 1953 the family rebuilt their store and expanded the business by including undershirt with the same trademark. The name of the store was changed to Hongkong Bazar. From 1946 to 1955 they merely bought ready made polo shirts and undershirts to each of which they then sewed the label "Marca Piña" before resale to the public. In 1955 the father transferred the business to Ng Kian Kee, who put up a factory — the Hongkong T-Shirt Manufacturer — and started producing undershirts bearing the trademark. When he decided to continue his studies in 1957, he, in turn, transferred the business to respondent.
Such testimonial evidence falls short of the kind of proof required of respondent. It is doubtful that respondent's father would pay Genoveva Santos as high as P0.02 per label (which did not even bear his name) on polo shirts which he had purchased ready-made, and which he could very well have sold without any label. Santos testified that the stamped label used was only "Marca Piña" without any representation or name of the owner (Exhibit 1-D), while Magpantay said there was the representation of a pineapple on the labels used by respondent's family. To explain the discrepancy, Sarmiento, who testified later, declared that there were ,three kinds of labels used (Exhibits 1-A, 1-B and 1-C), two of which bore the representation of a pineapple, and these were attached to goods of better quality.
While Ng Kian Kee declared that they rebuilt their store several months after the fire in 1953, Sarmiento, who was supposed to be a regular customer, said they had no store in 1954, and they resumed selling garments only in 1955. Santos declared that from 1954 up to the time the business moved to Manila (in 1958) her job was to sew labels on ready made polo shirts. In answer to a leading question, she added "undershirts". But in 1955 the factory was already in operation and producing undershirts to which labels were attached in the process of production, thus rendering her services unnecessary.
The documentary evidence show clearly that respondent's use began only in 1955. The business tax receipt in the name of Ng Kian Kee is dated October 18, 1955 (Exhibit 6). In his application for original registration of the business name "Hongkong T-Shirt Manufacturer," Ng Kian Kee stated that his business was that of Manufacturing T-shirts, and that as of that date, October 25, 1955, the same was not yet in operation. It seems that it actually started operations on December 3, 1955, the date of its Receipt No. 1 (Exhibit 4-A). It sold its first half dozen undershirts bearing the trademark on December 5, 1955 (Receipt No. 7, Exhibit 4-G). Noteworthy is the fact that in his statement attached to the application respondent alleged that he first used the trademark "on or about December 6, 1955," which statement appears to be the truth.
From all the foregoing we are convinced that petitioner has established prior use and adoption of the questioned trademark, for which reason he and not respondent Ng Giab is the one entitled to registration thereof.
WHEREFORE, the decision of the Director of Patents is reversed. Petitioner is adjudged prior user of the trademark MARCA PIÑA and representation thereof, and its registration in his name is hereby ordered; and the resolution of this Court dated December 24, 1965, enjoining petitioner to comply with the decision appealed from is set aside. Costs against respondent Ng Kian Giab.
7
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur.Footnotes
1. An interference is a proceeding instituted for the purpose of determining the question of priority of adoption and use of a trademark, tradename, or service mark between two or more parties claiming ownership of the same or substantially similar trademark, tradename, or service mark.
Whenever application is made for the registration of a trademark, tradename or service mark which so resembles a mark or tradename previously registered by another, or for the registration of which another had previously made application, as to be likely when applied to the goods or when used in connection with the business or services of the applicant to cause confusion or mistake or to deceive purchasers, the director may declare that an interference exists. Section 10-A, Republic Act No. 166, as amended.
An interference will not be declared between two applications or between an application and a registration, unless the junior party alleges in his application a date of use prior to the filing date of the senior party. Rule 180, Revised Rules of Practice before the Philippines Patent Office in Trademark Cases.
2. In all inter partes proceedings, the allegations of date of use in the application for registration of the applicant or of the registrant cannot be used as evidence in behalf of the party making the same. In case no testimony is taken as to the date of use, the party will be limited to the filing date of the application as the date of his first use. Rule 73, id.
3. A finding of the Director of Patents, in connection with an application to cancel a registered trademark, that the registrant was not the first user and is therefore not the owner of the trademark, and that the petitioner for cancellation was the first user and is the rightful owner of the trademark is a finding of fact which cannot be overturned upon review unless it is shown that the Director overlooked some matter of substance in evaluating the evidence. Anchor Trading Co. vs. Director of Patents, May 30, 1956, L-8004.
4. The applicant has three months, from the date of the mailing of any action of the Principal Examiner, to respond thereto. (Rule 93, id.)
If an applicant fails to respond or to respond completely within three months after the date an action of the Principal Examiner was mailed, the application shall be deemed to have been abandoned. (Rule 97, id.)
5. In his communication, the Principal Trademark Examiner stated that examination ex parte of the application disclosed the following defects: (1) the word "Marca" being commonly used in the trade to indicate mark, must be duly disclaimed in the "Statement"; (2) the application would be declared in interference with the application of Ng Kian Giab (Serial No. 4765) filed on July 16, 1957; and (3) for verification purposes of trademark use, the applicant or his duly authorized representatives was required to submit a sample of the goods bearing "Marca Piña and Representation," within ten days from receipt of the communication.
6. The party whose application or registration involved in the interference has the latest filing date is the junior party and will be regarded as having the burden of proof. (Rule 184, id.)
7. While the Patent Office file on the abandoned claim is not relied on as a prior
publication, it is competent and cogent evidence to determine the nature and date of the invention which the inventor claims to have embodied in working form. Smith vs. Hall, 81 L. ed. 1049. 8. Actually petitioner engaged the services of Lim and his nephew Jose Tantioco, although he paid the salary of only one employee. The two alternated in keeping the books of the factory. 9. The Director found that the mere purchase of labels and boxes. without more, cannot be regarded as trademark use. Such purchase of labels together with proof of sale of garments produced by petitioner, reasonably gives rise to the presumption of the use of the labels on the products sold.
10. Respondent Director did not believe this witness on the ground that since he was only 23 years old at the time he testified on August 7, 1962, then he was only 10 years old in 1949 when he first became a merchant, and he was only 13 years old in 1952 when he started purchasing undershirts from petitioner, which facts naturally render his testimony suspect. It is apparent, however, that the stenographer who took down his testimony had misheard his age when he stated it. He was 33 years old when he testified. He could not have been less than 18 years old when he made the purchases in 1952, because some of the receipts show that he already had a residence certificate then. The same thing happened with respect to Julieta Francisco, who, according to the stenographic notes was only 24 years old when she testified on June 16, 1961, thus leading respondent Ng Kian Giab to brand her testimony as unworthy of credence because she was only 14 years old when she first started working for petitioner in 1951. During the course of her testimony she, however, clearly stated that she was then almost 34 years old.
11. Where one has under oath stated his earliest use and then amends his oath and by proof attempts to show an earlier date, he is then under a heavy burden, and his proof must be "clear and convincing." B.R. Baker Co. v. Lebow Bros. 150 F. 2d 580.
Mr. McKay, who had been a member of the firm for many years, verified the application for registration No. 168, 074, which was filed in the Patent Office on January 24, 1922, by Hall, Hartwell & Co., and in the application stated that the mark had been used since about October 1, 1921. It will be seen that this application was made within a few months of the date set out in the application as the first date of use, and was made by a member of the firm who certainly should have knowledge produced of the date of first use far greater than any of the witnesses produced. When such as affidavit has been made at about the time of the event, a greater burden of proof should be, and is required in order to carry the date of use back to a prior date. Elder Mfg. Co. vs. International Shoe Co. 194 F. 2d 114.
12. Respondent presented a certificate to the effect that on April 15, 1948 Ng Kian Soy was granted a municipal license for his general merchandise store (Exhibit 16), which certificate does not in any way prove use of the trademark as of the time. Note also that at the hearing Ng Kian Soy emphasized that he sold only polo shirts in his store.
8
FIRST DIVISION[G.R. No. 115106. March 15, 1996.]
ROBERTO L. DEL ROSARIO, petitioner, vs. COURT OF APPEALS AND JANITO CORPORATION, respondents.
Quisumbing Torres & Evangelista for petitioner. J.P. Villanueva & Associates for private respondent. SYLLABUS
1. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION; ITS NATURE. — Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The application of the writ rests upon an alleged existence for an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation.
2. ID.; ID.; ID.; WHEN INJUNCTION MAY BE GRANTED; REQUISITES FOR ITS ISSUANCE. — A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's rights. Thus, there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and that the facts against which the injunction is to be directed are violative of said right. For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right, a legal right which must be shown to be clear and positive.
3. COMMERCIAL LAW; THE PATENT LAW; WHEN A UTILITY MODEL IS NOT CONSIDERED "NEW" UNDER SECTION 55 OF THE PATENT LAW. — Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if before the application for a patent it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country, or if it is substantially similar to any other utility model so known, used or described within the country.
4. ID.; ID.; WHEN ANY NEW MODEL OF IMPLEMENTS OR TOOLS IS ENTITLED TO A PATENT FOR UTILITY MODEL. — The Patent Law expressly acknowledges that any new model of implements or tools of any industrial product even if not possessed of the quality of invention but which is of practical utility is entitled to a patent for utility model.
5. ID.; ID.; RIGHTS OF A PATENTEE UNDER SECTION 37 OF THE PATENT LAW. — The rights of petitioner as a patentee have been sufficiently established, contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of The Patent Law, petitioner as a patentee shall have the exclusive right to make, use and sell the patented machine, article or product for the purpose of industry or commerce, throughout the territory of the
Philippines for the term of the patent, and such making, using or selling by any person without authorization of the patentee constitutes infringement of his patent.
6. ID.; ID.; WHAT CONSTITUTES AN INFRINGEMENT OF A PATENT. — It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are taken or appropriated, or the device, machine or other subject matter alleged to infringe is substantially identical with the patent invention. In order to infringe a patent, a machine or device must perform the same function, or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same. 7. ID.; PETITIONER HAD SUFFICIENTLY ESTABLISHED A PRIMA FACIE PROOF OF VIOLATION OF HIS RIGHTS AS PATENTEE. — It may be noted that respondent corporation failed to present before the trial court a clear, competent and reliable comparison between its own model and that of petitioner, and disregarded completely petitioner's Utility Model No. 6237 which improved on his first patented model. Notwithstanding the differences cited by respondent corporation, it did not refute and disprove the allegations of petitioner before the trial court that: (a) both are used by a singer to sing and amplify his voice; (b) both are used to sing with a minus-one or multiplex tapes, or that both are used to play minus-one or standard cassette tapes for singing or for listening to; (c) both are used to sing with a minus-one tape and multiplex tape and to record the singing and the accompaniment; (d) both are used to sing with live accompaniment and to record the same; (e) both are used to enhance the voice of the singer using echo effect, treble, bass and other controls; (f) both are equipped with cassette tape decks which are installed with one being used for playback and the other, for recording the singer and the accompaniment, and both may also be used to record a speaker's voice or instrumental playing, like the guitar and other instruments, (g) both are encased in box-like cabinets; and (h) both can be used with one or more microphones. Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of operation and produce substantially the same if not identical results when used. In view thereof, we find that petitioner had established before the trial court prima facie proof of violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of the main suit for damages resulting from the alleged infringement. D E C I S I O N
BELLOSILLO, J p:
Roberto del Rosario petitions this Court to review the decision of the Court of Appeals 1 which set aside the order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against private respondent Janito Corporation. 2 Roberto L. del Rosario alleged that he was a patentee of an audio equipment and improved audio equipment commonly known as the sing-along system or karaoke under Letters Patent No. 5269 dated 2 June 1983 as well as Letters Patent No. UM-6237 dated 14 November 1986 issued by the Director of Patents. The effectivity of both Letters Patents was for five (5) years and was extended for another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He described his sing-along system as a handy multi-purpose compact machine which incorporates an amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with features to enhance one's voice, such as the echo or reverb to stimulate an opera hall or a studio sound, with the whole system enclosed in one cabinet casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along system bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-along system covered by the patents issued in his favor. Thus he sought from the trial court
9
the issuance of a writ of preliminary injunction to enjoin private respondent, its officers andeverybody elsewhere acting on its behalf, from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be made permanent after trial, and praying for damages, attorney's fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing, using and/or selling and advertising the miyata sing-along system or any sing-along system substantially identical to the sing-along system patented by petitioner until further orders. On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its finding that petitioner was a holder of a utility model patent for a sing-along system and that without his approval and consent private respondent was admittedly manufacturing and selling its own sing-along system under the brand name miyata which was substantially similar to the patented utility model 3 of petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary restraining order before respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of the trial court. It expressed the view that there was no infringement of the patents of petitioner by the fact alone that private respondent had manufactured the miyata karaoke or audio system, and that the karaoke system was a universal product manufactured, advertised and marketed in most countries of the world long before the patents were issued to petitioner. The motion to reconsider the grant of the writ was denied; 4 hence, the instant petition for review. This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in a certiorari proceeding; (b) the Court of Appeals erred in taking judicial notice of private respondent's self-serving presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the trial court; and, (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in favor of private respondent. 5
Petitioner argues that in a certiorari proceeding, questions of fact are not generally permitted the inquiry being limited essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave abuse of discretion; that respondent court should not have disturbed but respected instead the factual findings of the trial court; that the movant has a clear legal right to be protected and that there is a violation of such right by private respondent. Thus, petitioner herein claims, he has satisfied the legal requisites to justify the order of the trial court directing the issuance of the writ of injunction. On the other hand, in the absence of a patent to justify the manufacture and sale by private respondent of sing-along systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the trial court to have committed grave abuse of discretion in enjoining private respondent from manufacturing, selling and advertising the miyata karaoke brand sing-along system for being substantially similar if not identical to the audio equipment covered by letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard
of compensation. The application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation. 6
A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's rights. Thus, there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and that the facts against which the injunction is to be directed are violative of said right. 7
For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right, a legal right which must be shown to be clear and positive. In this regard Sec. 55 of R.A. 165 as amended, known as The Patent Law, provides —
Sec. 55. Design patents and patents for utility models. — (a) Any new, original, and ornamental design for an article of manufacture and (b) new model of implements or tools or of any industrial product or of part of the same, which does not possess the quality of invention but which is of practical utility by reason of its form, configuration, construction or composition, may be protected by the author thereof, the former by a patent for a design and the latter by a patent for a utility model, in the same manner and subject to the same provisions and requirements as relate to patents for inventions insofar as they are applicable, except as otherwise herein provide . . . Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term of five (5) years from the grant of a Utility Model herein described —
The construction of an audio equipment comprising a substantially cubical casing having a window at its rear and upper corner fitted with a slightly inclined control panel, said cubical (casing) having a vertical partition wall therein defining a rear compartment and a front compartment, and said front compartment serving as a speaker baffle; a transistorized amplifier circuit having an echo section and writhed in at least the printed circuit boards placed inside said rear compartment of said casing and attached to said vertical partition wall, said transistorized amplifier circuit capable of being operated from outside, through various controls mounted on said control panel of such casing; a loud speaker fitted inside said front compartment of said casing and connected to the output of the main audio amplifier section of said transistorized amplifier circuit and a tape player mounted on the top wall of said casing and said tape player being connected in conventional manner to said transistorized amplifier circuit. 8
Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term of five (5) years from the grant of a Utility Model described as —
In an audio equipment consisting of a first cubical casing having an opening at its rear and upper rear portion and a partition therein forming a rear compartment and a front compartment serving as a loud speaker baffle, a control panel formed by vertical and horizontal sections, a
transistorized amplifier circuit wired in at least two printed circuit boards attached at the back of said control panel, a first loud speaker fitted inside said first compartment of such first casing and connected to the output of said transistorized amplifier circuit; the improvement wherein said control panel being removably fitted to said first cubical casing and further comprises a set of tape recorder and tape player mounted on the vertical section of said control panel and said recorder and player are likewise connected to said transistorized amplifier circuit; a second cubical casing