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Showing posts with label 2003. Show all posts
Showing posts with label 2003. Show all posts

Crim Law 1 Digest: People v. Pilola 2003

People v. Pilola

G.R. No. 121828  June 27, 2003

Lessons Applicable:

Laws Applicable:

FACTS:
  • February 5, 1988 11:30 pm: Elisa Rolan was inside their store waiting for her husband to arrive. Joselito Capa and Julian Azul, Jr. were drinking beer. Although already drunk, Edmar Aguilos and Odilon Lagliba joined them.  Edmar had a heated argument with Julian.  Elisa pacified Edmar and advised them to go home as she was already going to close up. Edmar and Odilon left then returned to block Joselito and Julian.  Edmar took off his eyeglasses and punched Julian in the face.  Elisa shouted: “Tama na.  Tama na” but she was ignored as they continued until they reached the end of the street.  Odilon positioned himself on top of a pile of hollow blocks and watched as Edmar and Julian swapped punches.  As Joselito tried to stop the fight, Odilon pulled out his knife with his right hand and stepped down from his perch.  He placed his left arm around Joselito’s neck, and stabbed him.  Ronnie and Rene Gayot Pilola, who were across the street, saw their gangmate Odilon stabbing the victim and decided to join the fray.  Ronnie took a knife from the kitchen of Teresita and rushed together with Pilola to the scene and stabbed Joselito.  As Joeslito was stabbed 11 times (6 fatal stab wounds), he fell in the canal.  Odilon and Pilola fled while Ronnie went after Julian who ran dear life.  When Julian noticed that Ronnie was no longer running after him, he looked back and saw Ronnie pick up a piece of hollow block and bashed Joselito’s head.  Then, Ronnie got a piece of broken bottle and struck Joselito once more before fleing from the scene.  Joselito died on the spot.  Elisa rushed to Joselito’s house and informed his wife and brother of the incident.
  • Agripina Gloria, a female security guard, saw Ronnie repeatedly stabbed Joselito and fled towards the direction of the mental hospital.  She did not see Odilon.
  • Elisa cross-examination had an inconsistency, she stated that it was Edmar who struck the victim (before it was Ronnie)
  • RTC: Pilola GUILTY beyond reasonable doubt of Murder qualified by treachery and sentenced to reclusion perpetua

ISSUE: W/N Pilola is guilty of murder

HELD: YES.  Rene Gayot Pilola GUILTY beyond reasonable doubt of the crime of murder is AFFIRMED WITH MODIFICATION

  • The identity of the person who hit the victim with a hollow block is of de minimis importance.  Elisa’s testimony is corroborated by the autopsy report of Dr. Bienvenido Muñoz. No showing of any improper motive on the part of a witness to testify falsely against the accused or to falsely implicate the latter in the commission of the crime.  The trial court gave credence and full probative weight to Elisa’s testimony.
  • There is conspiracy when two or more persons agree to commit a felony and decide to commit it.  Conspiracy as a mode of incurring criminal liability must be proved separately from and with the same quantum of proof as the crime itself. Conspiracy need not be proven by direct evidence.  After all, secrecy and concealment are essential features of a successful conspiracy.  It may be inferred from the conduct of the accused before, during and after the commission of the crime, showing that they had acted with a common purpose and design. Conspiracy may be implied if it is proved that two or more persons aimed by their acts towards the accomplishment of the same unlawful object, each doing a part so that their combined acts, though apparently independent of each other, were, in fact, connected and cooperative, indicating a closeness of personal association and a concurrence of sentiment. There may be conspiracy even if an offender does not know the identities of the other offenders, and even though he is not aware of all the details of the plan of operation or was not in on the scheme from the beginning. One need only to knowingly contribute his efforts in furtherance of it. One who joins a criminal conspiracy in effect adopts as his own the criminal designs of his co-conspirators.  If conspiracy is established, all the conspirators are liable as co-principals regardless of the manner and extent of their participation since in contemplation of law, the act of one would be the act of all. Each of the conspirators is the agent of all the others.
  • The mere presence of an accused at the situs of the crime will not suffice. There must be intentional participation in the transaction with a view to the furtherance of the common design and purpose.
  • Even if two or more offenders do not conspire to commit homicide or murder, they may be held criminally liable as principals by direct participation if they perform overt acts which mediately or immediately cause or accelerate the death of the victim.  Art. 4.  Criminal liability. – Criminal liability shall be incurred:
o    1. By any person committing a felony (delito) although the wrongful act done be different from that which he intended.
  • Art. 18.  Accomplices. – Accomplices are the persons who, not being included in Article 17, cooperate in the execution of the offense by previous or simultaneous acts.
o    To hold a person liable as an accomplice, two elements must concur:
1.    the community of criminal design; that is, knowing the criminal design of the principal by direct participation, he concurs with the latter in his purpose;
2.    the performance of previous or simultaneous acts that are not indispensable to the commission of the crime
  • Accomplices come to know about the criminal resolution of the principal by direct participation after the principal has reached the decision to commit the felony and only then does the accomplice agree to cooperate in its execution.  Accomplices do not decide whether the crime should be committed; they merely assent to the plan of the principal by direct participation and cooperate in its accomplishment
  • However, where one cooperates in the commission of the crime by performing overt acts which by themselves are acts of execution, he is a principal by direct participation, and not merely an accomplice
    • Odilon all by himself initially decided to stab the victim. However, while Odilon was stabbing the victim, the appellant and Ronnie agreed to join. All the overt acts of Odilon, Ronnie and the Pilola before, during, and after the stabbing incident indubitably show that they conspired to kill the victim.  Since the victim is not yet dead, the crime is not yet consummated so Pilola is a principal by direct participation.
  • Alibi is a weak, if not the weakest of defenses in a criminal prosecution, because it is easy to concoct but hard to disprove.  To serve as basis for acquittal, it must be established by clear and convincing evidence.  For it to prosper, the accused must prove not only that he was absent from the scene of the crime at the time of its commission, but also that it was physically impossible for him to have been present then.
  • Pilola knew that he was charged for the stabbing but instead of surrendering to the police authorities, he evaded arrest and this flight is evidence of guilt
  • There is treachery when the offender commits any of the crimes against persons, employing means, methods or forms in the execution thereof which tend directly and specially to insure its execution, without risk to himself arising from the defense which the offended party might make.  The essence of treachery is the swift and unexpected attack on the unarmed victim without the slightest provocation on his part -  attack on the unarmed victim was sudden.  The aggravating circumstance of abuse of superior strength is absorbed by treachery

Jurisprudence: G.R. No. 121828 June 27, 2003

SECOND DIVISION
G.R. No. 121828.  June 27, 2003

PEOPLE OF THE PHILIPPINES, appellee, vs. EDMAR AGUILOS, ODILON LAGLIBA Y ABREGON and RENE GAYOT PILOLA, accused, RENE GAYOT PILOLA, appellant.
D E C I S I O N
CALLEJO, SR., J.:

Before us is the appeal of appellant Rene Gayot Pilola for the reversal of the Decision[1] of the Regional Trial Court (RTC) of Pasig City, Branch 164, convicting him of murder, sentencing him to suffer reclusion perpetua and ordering him to indemnify the heirs of the victim Joselito Capa y Rulloda in the amount of P50,000 for the latter’s death.

The Indictment

On June 7, 1998, Edmar Aguilos, Odilon Lagliba y Abregon and appellant Rene Gayot Pilola were charged with murder in an Information which reads:

That on or about the 5th day of February, 1988 in the Municipality of Mandaluyong, Metro Manila, Philippines, a place within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together with one Ronnie Diamante who is still at-large and no fixed address and mutually helping and aiding with one another, armed with double-bladed knives and a bolo and with intent to kill, treachery and taking advantage of superior strength, did then and there willfully, unlawfully and feloniously attack, assault hack and stab one Joselito Capa y Rulloda, as a result of which the latter sustained hack and stab wounds on the different parts of his body, which directly caused his death.

CONTRARY TO LAW.[2]

Of the three accused, Odilon Lagliba was the first to be arrested[3] and tried, and subsequently convicted of murder.[4] The decision of the trial court became final and executory.  Accused Edmar Aguilos remains at large while accused Ronnie Diamante reportedly died a month after the incident.  Meanwhile, herein appellant Rene Gayot Pilola was arrested.  He was arraigned on March 9, 1994, assisted by counsel, and pleaded not guilty to the charge.[5] Thereafter, trial of the case ensued.

The Evidence of the Prosecution[6]

On February 5, 1988, at around 11:30 p.m., Elisa Rolan was inside their store at 613 Nueve de Pebrero Street, Mandaluyong City, waiting for her husband to arrive.  Joselito Capa and Julian Azul, Jr. were drinking beer.  Edmar Aguilos and Odilon Lagliba arrived at the store.  Joselito and Julian invited them to join their drinking spree, and although already inebriated, the two newcomers obliged.  In the course of their drinking, the conversation turned into a heated argument.  Edmar nettled Julian, and the latter was peeved.  An altercation between the two ensued.  Elisa pacified the protagonists and advised them to go home as she was already going to close up.  Edmar and Odilon left the store.  Joselito and Julian were also about to leave, when Edmar and Odilon returned, blocking their way.  Edmar took off his eyeglasses and punched Julian in the face.  Elisa shouted: “Tama na.  Tama na.”  Edmar and Julian ignored her and traded fist blows until they reached Aling Sotera’s store at the end of the street, about twelve to fifteen meters away from Elisa’s store.  For his part, Odilon positioned himself on top of a pile of hollow blocks and watched as Edmar and Julian swapped punches.  Joselito tried to placate the protagonists to no avail.  Joselito’s intervention apparently did not sit well with Odilon.  He pulled out his knife with his right hand and stepped down from his perch.  He placed his left arm around Joselito’s neck, and stabbed the latter.  Ronnie and the appellant, who were across the street, saw their gangmate Odilon stabbing the victim and decided to join the fray.  They pulled out their knives, rushed to the scene and stabbed Joselito.  Elisa could not tell how many times the victim was stabbed or what parts of his body were hit by whom.  The victim fell in the canal.  Odilon and the appellant fled, while Ronnie went after Julian and tried to stab him.  Julian ran for dear life.  When he noticed that Ronnie was no longer running after him, Julian stopped at E. Rodriguez Road and looked back.  He saw Ronnie pick up a piece of hollow block and with it bashed Joselito’s head.  Not content, Ronnie got a piece of broken bottle and struck Joselito once more.  Ronnie then fled from the scene.  Joselito died on the spot.  Elisa rushed to Joselito’s house and informed his wife and brother of the incident.[7]

The next day, Dr. Bienvenido Muñoz, Supervising Medico-Legal Officer of the National Bureau of Investigation, conducted an autopsy on the cadaver of Joselito and prepared Autopsy Report No. N-88-375,[8] with the following findings:

POSTMORTEM FINDINGS

Pallor, conjunctivae and integument, marked and generalized.

Contused abrasions: temple, right, 3.0 x 3.0 cm.; mandibular region, right, 2.0 x 8.0 cm.; back, suprascapular region, left, 3.0 x 4.0 cm.; deltoid region, right, 1.0 x 3.0 cm.

Lacerated wound, scalp, occipital region, 4.0 cm.

Incised wounds: forehead, right side, 5.5 cm.; arm, left, upper third, posterior aspect, 1.5 cm.

Stab wounds:

1.       Elliptical, 1.8 cm., oriented almost horizontally, edges are clean-cut, medial extremity is sharp, lateral extremity is blunt; located at the anterior chest wall, level of 3rd intercostal space, right, 5.0 cm. from anterior median line; directed backward, upward and medially, non-penetrating, with an approximate depth of 3.0 cm.;

2.       Elliptical, 1.5 cm., oriented almost horizontally, edges are clean-cut, one extremity is sharp and the other is blunt; located at the antero-lateral aspect of chest, level of 3rd intercostal space, left, 3.0 cm. from anterior median line; directed backward, downward and medially, into the left thoracic cavity, penetrating the left ventricle of the heart with an approximate depth of 10.0 cm.;

3.       Elliptical, 3.0 cm., oriented almost horizontally, edges are clean-cut, one extremity is sharp and the other is blunt; located at the antero-lateral aspect of chest, level of 4th intercostal space, 12.0 cm. from anterior median line; directed backward, downward and medially, penetrating upper lobe of left lung with an approximate depth of 9.0 cm.;

4.       Elliptical, 2.0 cm., oriented almost horizontally, edges are clean-cut, one extremity is sharp and the other is blunt; located at the antero-lateral aspect of chest, level of 5th intercostal space, left, 15.0 cm. from anterior median line; directed backward, downward and medially, penetrating the left thoracic cavity and then lower lobe of left lung and then penetrating the left ventricle of the heart with an approximate depth of 11.0 cm.;

5.       Elliptical, 1.3 cm., oriented almost horizontally, edges are clean-cut, one extremity is sharp and the other is blunt; located at the lateral chest wall, level of 7th intercostal space, left, 16.0 cm. from anterior median line; directed backward, upward and medially, into the left thoracic cavity and then penetrating the lower lobe of left lung with an approximately depth of 10.0 cm.;

6.       Elliptical, 4.0 cm., oriented almost horizontally, edges are clean-cut, one extremity is sharp and the other is blunt; located at the lumbar region, left, 14.0 cm. from anterior median line; directed backward, upward and medially, into the abdominal cavity and then penetrating ileum;

7.       Elliptical, 1.5 cm., oriented almost vertically, edges are clean-cut, upper extremity is sharp, lower extremity is blunt; located at the chest, lateral, level of 9th intercostal space, left; 14.0 cm. from posterior median line; directed forward, upward and medially, non-penetrating with an approximate depth of 4.0 cm.;

8.       Elliptical, 2.0 cm., oriented almost vertically, edges are clean-cut, upper extremity is blunt, lower extremity is sharp; located at the abdomen, postero-lateral aspect, 15.0 cm. from posterior median line; directed forward, upward and laterally, into the abdominal cavity and then perforating the spleen and pancreas with an approximate depth of 13.0 cm.;

9.       Elliptical, 5.0 cm., oriented almost vertically, edges are clean-cut, upper extremity is blunt, lower extremity is sharp; located at the left arm, upper third, anterior; directed backward, downward and medially, involving skin and underlying soft tissues with an approximate depth of 6.0 cm.;

10.     Elliptical, 2.3 cm., oriented almost vertically, edges are clean-cut, upper extremity is sharp, lower extremity is blunt; located at the left forearm, upper third, anterior; directed backward, upward and medially and communicating with another wound, arm, left, medial aspect, 2.0 cm.;

11.     Elliptical, 2.0 cm., oriented almost vertically, edges are clean-cut, upper extremity blunt, lower extremity, sharp; located at the left arm, lower third, posterior aspect, directed forward, downward and medially, communicating with another wound, arm, left, lower third, posterior aspect, 1.5 cm.

Hemothorax, left – 900 c.c.

Hemopericardium – 300 c.c.

Hemoperitoneum – 750 c.c.

Brain and other visceral organs, pale.

Stomach-filled with rice and other food particles.

CAUSE OF DEATH:  Multiple stab wounds.

The Evidence of the Appellant

The appellant denied stabbing the victim and interposed the defense of alibi.  He testified that at around 11:00 p.m. of February 5, 1988, he was in the house of his cousin, Julian Cadion, at 606 Nueve de Pebrero Street, Mandaluyong City.  He suddenly heard a commotion coming from outside.  Julian rushed out of the house to find out what was going on.  The appellant remained inside the house because he was suffering from ulcer and was experiencing excessive pain in his stomach.  The following morning, the appellant learned from their neighbor, Elisa Rolan, that Joselito had been stabbed to death.  The appellant did not bother to ask who was responsible for the stabbing.[9]

Julian alias “Buboy” Cadion corroborated the appellant’s testimony.  He testified that the appellant was in their house on the night of February 5, 1988, and was suffering from ulcer.  The appellant stayed home on the night of the incident.[10]

Agripina Gloria, a female security guard residing at Block 30, Nueve de Pebrero, 612, Int. 4, Allison St., Mandaluyong City, testified that on February 5, 1988 at around 11:00 p.m., she heard a commotion outside.  Momentarily, she saw Ronnie rush into the kitchen of the house of her niece Teresita; he took a knife and run towards Nueve de Pebrero Street where Edmar and Julian were fighting.  She then followed Ronnie and saw Joselito trying to pacify the protagonists.  Ronnie grabbed Joselito and instantly stabbed the latter, who for a while retreated and fell down the canal.  Not content, Ronnie repeatedly stabbed Joselito.  Thereafter, Ronnie ran towards the direction of the mental hospital.  Agripina did not see Odilon or the appellant anywhere within the vicinity of the incident.[11]

On May 3, 1995, the trial court rendered its assailed decision, the dispositive portion of which reads, to wit:

WHEREFORE, this Court finds RENE GAYOT PILOLA of 606 Nueve de Febrero Street, Mandaluyong City, GUILTY beyond reasonable doubt of Murder punished under Article 248 of the Revised Penal Code, and there being no mitigating nor aggravating circumstances, he is hereby sentenced to reclusion perpetua.  Pilola is hereby ordered to indemnify the heirs of deceased Joselito Capa alias Jessie in the amount of FIFTY THOUSAND PESOS (P50,000.00) as indemnity for his death jointly and solidarily with Odilon Lagliba who was earlier convicted herein.  With cost against the accused.[12]

In the case at bar, the appellant assails the decision of the trial court contending that:

I

THE TRIAL COURT ERRED IN CONCLUDING THAT THERE WAS CONSPIRACY ANENT THE ASSAILED INCIDENT.

II

THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE UNRELIABLE AND INCONSISTENT TESTIMONY OF PROSECUTION WITNESS ELISA ROLAN AND IN SETTING ASIDE THE EVIDENCE PROFFERED BY ACCUSED-APPELLANT.

III

THE TRIAL COURT MANIFESTLY ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME CHARGED DESPITE THE FACT THAT HIS GUILT WAS NOT PROVED BEYOND REASONABLE DOUBT.[13]

The appellant avers that Elisa is not a credible witness and her testimony is barren of probative weight.  This is so because she contradicted herself when she testified on direct examination that Ronnie struck the head of the victim with a hollow block.  However, on cross-examination, she stated that it was Edmar who struck the victim.  The inconsistency in Elisa’s testimony impaired her credibility.

The contention of the appellant does not hold water.

First.  The identity of the person who hit the victim with a hollow block is of de minimis importance.  The victim died because of multiple wounds.  The appellant is charged with murder for the killing of the victim with a knife, in conspiracy with the other accused.

Second.  The perceived inconsistency in Elisa’s account of events is a minor and collateral detail that does not affect the substance of her testimony, as it even serves to strengthen rather than destroy her credibility.[14]

Third.  Elisa has been consistent in her testimony that the appellant was one of the men who stabbed the victim, the others being Ronnie and Odilon.  Elisa’s testimony is corroborated by the autopsy report of Dr. Bienvenido Muñoz and his testimony that the victim sustained eleven stab wounds.  The doctor testified that there were two or more assailants:

Q    Could you tell the court what instrument could have been used by the perpetrator in inflicting those two incise wounds?

A     Those incise wounds were caused by a sharp instrument like a knife or any similar instrument.


Q    Now you also found out from the body of the victim eleven stab wounds?

A     Yes, sir.

Q    Now, tell the court in which part of the body of the victim where these eleven stab wounds [are] located?

A     Shall I go one by one, all the eleven stab wounds?

Q    All the eleven stab wounds?

A     One stab wound was located at the front portion of the chest, right side.  Another stab wound was located also on the chest left side, another stab wound was located at the antero lateral aspect, it’s the front of the chest almost to the side.  And also another one, also at the chest, another stab wound was at the left side of the chest and another one was at the lumbar region of the abdomen left side or where the left kidney is located, lumbar area.  Another one at the side of the chest, left side of the chest.  Another stab wound in the abdomen, another stab wound at the left arm.  Another one at the left forearm and the last one in the autopsy report is located at the left arm.  These are all the eleven stab wounds sustained by the victim.


A     The instrument used was a sharp pointed edge or a single bladed instrument like a knife, kitchen knife, balisong or any similar instrument.

Q    Considering the number of stab wounds, doctor, will you tell us whether there were several assailants?

A     In my opinion, there were more than one assailants (sic) here because of the presence of different types of stab wounds and lacerated wounds.  This lacerated wound could not have been inflicted by the one holding the one which inflicted the instrument . . (discontinued) which inflicted the stab wounds.

Q    So there could have been two or three assailants?

A     More than one.[15]

The physical evidence is a mute but eloquent manifestation of the veracity of Elisa’s testimony.[16]

Fourth.  Even the appellant himself declared on the witness stand that he could not think of any reason why Elisa pointed to him as one of the assailants.  In a litany of cases, we have ruled that when there is no showing of any improper motive on the part of a witness to testify falsely against the accused or to falsely implicate the latter in the commission of the crime, as in the case at bar, the logical conclusion is that no such improper motive exists, and that the testimony is worthy of full faith and credence.[17]

Fifth.  The trial court gave credence and full probative weight to Elisa’s testimony.  Case law has it that the trial court’s calibration of the testimonial evidence of the parties, its assessment of the credibility of witnesses and the probative weight thereof is given high respect, if not conclusive effect, by the appellate court.

The appellant argues that the prosecution failed to prove that he conspired with Ronnie and Odilon in stabbing the victim to death.  He contends that for one to be a conspirator, his participation in the criminal resolution of another must either precede or be concurrent with the criminal acts.  He asserts that even if it were true that he was present at the situs criminis and that he stabbed the victim, it was Odilon who had already decided, and in fact fatally stabbed the victim.  He could not have conspired with Odilon as the incident was only a chance encounter between the victim, the appellant and his co-accused.  In the absence of a conspiracy, the appellant cannot be held liable as a principal by direct participation.  Elisa could not categorically and positively assert as to what part of the victim’s body was hit by whom, and how many times the victim was stabbed by the appellant.  He asserts that he is merely an accomplice and not a principal by direct participation.

We are not persuaded by the ruminations of the appellant.

There is conspiracy when two or more persons agree to commit a felony and decide to commit it.[18] Conspiracy as a mode of incurring criminal liability must be proved separately from and with the same quantum of proof as the crime itself.  Conspiracy need not be proven by direct evidence.  After all, secrecy and concealment are essential features of a successful conspiracy.  It may be inferred from the conduct of the accused before, during and after the commission of the crime, showing that they had acted with a common purpose and design.[19] Conspiracy may be implied if it is proved that two or more persons aimed by their acts towards the accomplishment of the same unlawful object, each doing a part so that their combined acts, though apparently independent of each other, were, in fact, connected and cooperative, indicating a closeness of personal association and a concurrence of sentiment.[20] There may be conspiracy even if an offender does not know the identities of the other offenders,[21] and even though he is not aware of all the details of the plan of operation or was not in on the scheme from the beginning.[22] One need only to knowingly contribute his efforts in furtherance of it.[23] One who joins a criminal conspiracy in effect adopts as his own the criminal designs of his co-conspirators.  If conspiracy is established, all the conspirators are liable as co-principals regardless of the manner and extent of their participation since in contemplation of law, the act of one would be the act of all.[24] Each of the conspirators is the agent of all the others.[25]

To hold an accused guilty as a co-principal by reason of conspiracy, he must be shown to have performed an overt act in pursuance or furtherance of the conspiracy.[26] The mere presence of an accused at the situs of the crime will not suffice; mere knowledge, acquiescence or approval of the act without cooperation or agreement to cooperate on the part of the accused is not enough to make him a party to a conspiracy.  There must be intentional participation in the transaction with a view to the furtherance of the common design and purpose.[27] Conspiracy to exist does not require an agreement for an appreciable period prior to the occurrence.  From the legal standpoint, conspiracy exists if, at the time of the commission of the offense, the accused had the same purpose and were united in its execution.[28] As a rule, the concurrence of wills, which is the essence of conspiracy, may be deduced from the evidence of facts and circumstances, which taken together, indicate that the parties cooperated and labored to the same end.[29]

Even if two or more offenders do not conspire to commit homicide or murder, they may be held criminally liable as principals by direct participation if they perform overt acts which mediately or immediately cause or accelerate the death of the victim, applying Article 4, paragraph 1 of the Revised Penal Code:

Art. 4.  Criminal liability. – Criminal liability shall be incurred:

1.       By any person committing a felony (delito) although the wrongful act done be different from that which he intended.

In such a case, it is not necessary that each of the separate injuries is fatal in itself.  It is sufficient if the injuries cooperated in bringing about the victim’s death.  Both the offenders are criminally liable for the same crime by reason of their individual and separate overt criminal acts.[30] Absent conspiracy between two or more offenders, they may be guilty of homicide or murder for the death of the victim, one as a principal by direct participation, and the other as an accomplice, under Article 18 of the Revised Penal Code:

Art. 18.  Accomplices. – Accomplices are the persons who, not being included in Article 17, cooperate in the execution of the offense by previous or simultaneous acts.

To hold a person liable as an accomplice, two elements must concur: (a) the community of criminal design; that is, knowing the criminal design of the principal by direct participation, he concurs with the latter in his purpose;  (b) the performance of previous or simultaneous acts that are not indispensable to the commission of the crime.[31] Accomplices come to know about the criminal resolution of the principal by direct participation after the principal has reached the decision to commit the felony and only then does the accomplice agree to cooperate in its execution.  Accomplices do not decide whether the crime should be committed; they merely assent to the plan of the principal by direct participation and cooperate in its accomplishment.[32] However, where one cooperates in the commission of the crime by performing overt acts which by themselves are acts of execution, he is a principal by direct participation, and not merely an accomplice.[33]

In this case, Odilon all by himself initially decided to stab the victim.  The appellant and Ronnie were on the side of the street.  However, while Odilon was stabbing the victim, the appellant and Ronnie agreed to join in; they rushed to the scene and also stabbed the victim with their respective knives.  The three men simultaneously stabbed the hapless victim.  Odilon and the appellant fled from the scene together, while Ronnie went after Julian.  When he failed to overtake and collar Julian, Ronnie returned to where Joselito fell and hit him with a hollow block and a broken bottle.  Ronnie then hurriedly left.  All the overt acts of Odilon, Ronnie and the appellant before, during, and after the stabbing incident indubitably show that they conspired to kill the victim.

The victim died because of multiple stab wounds inflicted by two or more persons.  There is no evidence that before the arrival of Ronnie and the appellant at the situs criminis, the victim was already dead.  It cannot thus be argued that by the time the appellant and Ronnie joined Odilon in stabbing the victim, the crime was already consummated.

All things considered, we rule that Ronnie and the appellant conspired with Odilon to kill the victim; hence, all of them are criminally liable for the latter’s death.  The appellant is not merely an accomplice but is a principal by direct participation.

Even assuming that the appellant did not conspire with Ronnie and Odilon to kill the victim, the appellant is nevertheless criminally liable as a principal by direct participation.  The stab wounds inflicted by him cooperated in bringing about and accelerated the death of the victim or contributed materially thereto.[34]

The trial court correctly overruled the appellant’s defense of alibi.  Alibi is a weak, if not the weakest of defenses in a criminal prosecution, because it is easy to concoct but hard to disprove.  To serve as basis for acquittal, it must be established by clear and convincing evidence.  For it to prosper, the accused must prove not only that he was absent from the scene of the crime at the time of its commission, but also that it was physically impossible for him to have been present then.[35] In this case, the appellant avers that at the time of the stabbing incident, he was resting in the house of his cousin at 606 Nueve de Pebrero Street as he was suffering from stomach pain due to his ulcer.[36] But the appellant failed to adduce any medical certificate that he was suffering from the ailment.  Moreover, Elisa positively identified the appellant as one of the men who repeatedly stabbed the victim.  The appellant’s defense of alibi cannot prevail over the positive and straightforward identification of the appellant as one of the victim’s assailants.  The appellant himself admitted that his cousin’s house, the place where he was allegedly resting when the victim was stabbed, was merely ten to fifteen meters away from the scene of the stabbing.  Indeed, the appellant’s defense of denial and alibi, unsubstantiated by clear and convincing evidence, are negative and self-serving and cannot be given greater evidentiary weight than the positive testimony of prosecution eyewitness Elisa Rolan.[37]

The appellant’s defenses must crumble in the face of evidence that he fled from the situs criminis and later left his house.  The records show that despite being informed that he was sought after by the authorities as a suspect for the killing of the victim, the appellant suddenly and inscrutably disappeared from his residence at Nueve de Pebrero.  As early as May 5, 1988, a subpoena for the appellant was returned unserved because he was “out of town.”[38] The appellant’s own witness, Julian Cadion, testified that the appellant had left and was no longer seen at Nueve de Pebrero after the incident, thus:

Q    So, how long did you stay at 606 Nueve de Pebrero after February 5, 1988?

A     One week only, sir, and then three weeks after, I returned to Nueve de Pebrero.

Q    The whole week after February 5, 1988, was Rene Pilola still living at 606 Nueve de Pebrero?

A     I did not see him anymore, sir.

Q    And then three weeks thereafter, you went back to Nueve de Pebrero.  Is that what you were then saying?

A     Yes, sir.

Q    Now, at the time that you went back to 606 Nueve de Pebrero, was Rene Pilola there?

A     I did not see him anymore, sir.[39]

The records show that the appellant knew that he was charged for the stabbing of the victim.  However, instead of surrendering to the police authorities, he adroitly evaded arrest.  The appellant’s flight is evidence of guilt and, from the factual circumstances obtaining in the case at bar, no reason can be deduced from it other than that he was driven by a strong sense of guilt and admission that he had no tenable defense.[40]

The Crime Committed by the Appellant
and the Proper Penalty Therefor

The trial court correctly convicted the appellant of murder qualified by treachery.  Abuse of superior strength likewise attended the commission of the crime.  There is treachery when the offender commits any of the crimes against persons, employing means, methods or forms in the execution thereof which tend directly and specially to insure its execution, without risk to himself arising from the defense which the offended party might make.  The essence of treachery is the swift and unexpected attack on the unarmed victim without the slightest provocation on his part.[41] In this case, the attack on the unarmed victim was sudden.  Odilon, without provocation, suddenly placed his arm around the victim’s neck and forthwith stabbed the latter.  The victim had no inkling that he would be attacked as he was attempting to pacify Edmar and Julian.  Ronnie and the appellant, both also armed with deadly weapons, rushed to the scene and stabbed the victim, giving no real opportunity for the latter to defend himself.  And even as the victim was already sprawled on the canal, Ronnie bashed his head with a hollow block.  The peacemaker became the victim of violence.

Unquestionably, the nature and location of the wounds showed that the killing was executed in a treacherous manner, preventing any means of defense on the part of the victim.  As testified to by Dr. Bienvenido Muñoz, the victim was stabbed, not just once, but eleven times mostly on the chest and the abdominal area.  Six of the stab wounds were fatal, causing damage to the victim’s vital internal organs.[42]

The aggravating circumstance of abuse of superior strength is absorbed by treachery.[43] There is no mitigating circumstance that attended the commission of the felony.  The penalty for murder under Article 248 of the Revised Penal Code is reclusion perpetua to death.  Since no aggravating and mitigating circumstances attended the commission of the crime, the proper penalty is reclusion perpetua, conformably to Article 63 of the Revised Penal Code.

Civil Liabilities of the Appellant

The trial court correctly directed the appellant to pay to the heirs of the victim Joselita Capa the amount of P50,000 as civil indemnity ex delicto, in accord with current jurisprudence.[44] The said heirs are likewise entitled to moral damages in the amount of P50,000, also conformably to current jurisprudence.[45] In addition, the heirs are entitled to exemplary damages in the amount of P25,000.[46]

WHEREFORE, the Decision, dated May 3, 1995, of Branch 164 of the Regional Trial Court of Pasig City in Criminal Case No. 73615, finding appellant Rene Gayot Pilola GUILTY beyond reasonable doubt of the crime of murder is AFFIRMED WITH MODIFICATION.  The appellant is hereby directed to pay to the heirs of the victim Joselito Capa the amount of P50,000 as civil indemnity; the amount of P50,000 as moral damages; and the amount of P25,000 as exemplary damages.

SO ORDERED.

Bellosillo, (Chairman), and Quisumbing, JJ., concur.
Austria-Martinez, J., on official leave.

Jurisprudence: G.R. No. 157216. November 20, 2003

FIRST DIVISION

G.R. No. 157216.  November 20, 2003

246 Corporation, doing business under the name and style of ROLEX MUSIC LOUNGE, petitioner, vs. hon. Reynaldo b. daway, in his capacity as Presiding Judge of Branch 90 of the Regional Trial Court of Quezon City, MONTRES ROLEX S.A. and ROLEX CENTRE PHIL. LIMITED, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing the November 28, 2002 Decision[1] of the Court of Appeals in CA-G.R. SP No. 64660 which dismissed the petition for certiorari filed by petitioner, as well as the Resolution[2] dated February 13, 2003 denying its motion for reconsideration.

The undisputed facts show that on November 26, 1998, respondents Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against petitioner 246 Corporation the instant suit for trademark infringement and damages with prayer for the issuance of a restraining order or writ of preliminary injunction[3] before the Regional Trial Court of Quezon City, Branch 90.  Respondents alleged that sometime in July 1996, petitioner adopted and, since then, has been using without authority the mark “Rolex” in its business name “Rolex Music Lounge” as well as in its newspaper advertisements as – “Rolex Music Lounge, KTV, Disco & Party Club.”

In its answer raising special affirmative defenses, petitioner argued that respondents have no cause of action because no trademark infringement exist; that no confusion would arise from the use by petitioner of the mark “Rolex” considering that its entertainment business is totally unrelated to the items catered by respondents such as watches, clocks, bracelets and parts thereof.  It also contended that the complaint was not properly verified and certified against forum shopping considering that Atty. Alonzo Ancheta, the counsel of record of respondents who signed the verification and certification, was not authorized to represent respondents.[4]

On July 21, 2000, petitioner filed a motion for preliminary hearing on its affirmative defenses.[5] Subsequently, on motion of petitioner, the trial court issued a subpoena ad testificandum requiring Atty. Alonzo Ancheta to appear at the preliminary hearing.[6] Respondents, in the meantime, filed a Comment and Opposition[7] to the motion for preliminary hearing and a motion to quash the subpoena ad testificandum.

In an Order dated October 27, 2000, the trial court quashed the subpoena ad testificandum and denied petitioner’s motion for preliminary hearing on affirmative defenses with motion to dismiss.[8]

With the denial of the motion for reconsideration on March 16, 2001, petitioner filed a petition for certiorari with the Court of Appeals contending that the trial court gravely abused its discretion in issuing the October 27, 2000 and March 16, 2001 orders.

On November 28, 2002, the Court of Appeals dismissed the petition.  The motion for reconsideration filed by petitioner was denied.  Hence, the instant petition anchored on the following grounds:

I

IN ISSUING THE ASSAILED DECISIONS, THE HONORABLE COURT OF APPEALS PERFUNCTORILY BRUSHED ASIDE THE CONTROLLING PRECEDENTS LAID DOWN BY THIS HONORABLE COURT IN ESSO STANDARD EASTERN, INC. VS. COURT OF APPEALS AND UNITED CIGARETTE CORPORATION AND OTHER COMPANION CASES HOLDING THAT NO TRADEMARK INFRINGEMENT CAN POSSIBLY OCCUR WHERE THE CONTENDING PARTIES DEAL WITH GOODS AND SERVICES THAT ARE TOTALLY UNRELATED AND NON-COMPETING WITH EACH OTHER.

II

IN ARBITRARILY AND CAPRICIOUSLY RULING THAT THE ISSUES RAISED IN PETITIONER’S CERTIORARI PETITION ARE QUESTIONS OF FACT, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONERS SUBSTANTIVE DUE PROCESS RIGHTS BUT ALSO THE WELL-SETTLED RULE THAT THE ALLEGATIONS OF THE COMPLAINT IS HYPOTHETICALLY ADMITTED WHEN THE MOTION TO DISMISS IS GROUNDED UPON LACK OF CAUSE OF ACTION.  MOREOVER, INDEPENDENT OF THE HYPOTHETICALLY ADMITTED FACTS EMBODIED IN THE COMPLAINT A QUO, THERE ARE SELF-EVIDENT FACTS AND IMPLIEDLY ADMITTED FACTS CONTAINED IN PRIVATE RESPONDENTS’ PLEADINGS THAT WOULD CLEARLY AND UNMISTAKABLY SHOW PRIVATE RESPONDENTS’ LACK OF CAUSE OF ACTION AGAINST HEREIN PETITIONER.

III

THE HONORABLE COURT OF APPEALS VIOLATED PETITIONER’S RIGHT TO SUBSTANTIVE DUE PROCESS WHEN IT ARBITRARILY AND CAPRICIOUSLY RULED THAT WHAT WAS SPECIFICALLY DENIED IN THE ASSAILED OCTOBER 20, 2000 ORDER IS PETITIONER’S MOTION FOR PRELIMINARY HEARING ON DEFENDANT’S AFFIRMATIVE DEFENSES AND NOT PETITIONER’S MOTION TO DISMISS PER SE CONSIDERING THAT:

A.    THERE IS ABSOLUTELY NOTHING IN THE ORDER DATED OCTOBER 20, 2000 OF RESPONDENT JUDGE WHICH SUGGESTS THAT THE RESOLUTION OF PETITIONER’S MOTION TO DISMISS PER SE WAS HELD IN ABEYANCE BY THE RESPONDENT JUDGE.  HENCE THE SAID ORDER DATED OCTOBER 20, 2000 ALSO CONSTITUTES A DENIAL ON THE MERITS OF PETITIONER’S MOTION TO DISMISS PER SE AND NOT MERELY OF PETITIONER’S MOTION FOR PRELIMINARY HEARING THEREON.

B.    PRIVATE RESPONDENTS’ COMMENT AND OPPOSITION DATED 11 AUGUST 2000, WHICH WAS CITED AND SUSTAINED BY RESPONDENT JUDGE, CLEARLY TRAVERSED THE MERITS OF THE GROUNDS FOR PETITIONER’S MOTION TO DISMISS PER SE.  HENCE, THE SAID 20 OCTOBER 2000 ORDER’S DENIAL OF PETITIONER’S MOTION IS NOT LIMITED TO THE MOTION FOR PRELIMINARY HEARING BUT ALSO CONSTITUTES A DENIAL OF PETITIONER’S MOTION TO DISMISS PER SE.

IV

IN ARBITRARILY AND CAPRICIOUSLY RULING THAT ATTY. ALONZO ANCHETA PROPERLY VERIFIED AND CERTIFIED PRIVATE RESPONDENTS’ COMPLAINT A QUO, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONER’S SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO THE DOCTRINE OF SEPARATE CORPORATE PERSONALITY; CONSIDERING THAT THE RECORDS OF THIS CASE IS (sic) COMPLETELY BEREFT AND DEVOID OF ANY DULY EXECUTED SPECIAL POWER OF ATTORNEY, EMANATING FROM PRIVATE RESPONDENTS, WHICH EXPLICITLY AND SPECIFICALLY AUTHORIZES ATTY. ALONZO ANCHETA TO REPRESENT PRIVATE RESPONDENTS MONTRES ROLEX S.A. IN THE FILING OF THE COMPLAINT A QUO. BY REASON THEREOF, PRIVATE RESPONDENTS COULD NOT BE DEEMED TO HAVE VOLUNTARILY APPEARED BEFORE THE RESPONDENT JUDGE; CONSEQUENTLY, THE TRIAL COURT COULD NOT HAVE VALIDLY ACQUIRED JURISDICTION OVER THE PERSON OF PRIVATE RESPONDENTS.

V

IN ARBITRARILY AND CAPRICIOUSLY AFFIRMING RESPONDENT JUDGE’S QUASHAL OF THE SUBPOENA DATED 14 AUGUST 2000 DIRECTED AGAINST ATTY. ALONZO ANCHETA, THE HONORABLE COURT OF APPEALS VIOLATED NOT ONLY PETITIONER’S SUBSTANTIVE DUE PROCESS RIGHTS, BUT ALSO SECTION 9, RULE 132 AND SECTION 7 RULE 133 OF THE 1989 REVISED RULES ON EVIDENCE, AND THE RULING OF THIS HONORABLE COURT IN THE CASE OF PEOPLE VS. RIVERA.[9]

Simply put, the issues are as follows – (1) whether the trial court denied not only petitioner’s motion for preliminary hearing on its affirmative defenses but its motion to dismiss as well; (2) if the answer is in the affirmative, whether or not the trial court gravely abused its discretion in denying said motions; and (3) whether the trial court gravely abused its discretion in quashing the subpoena ad testificandum issued against Atty. Ancheta.

Anent the first issue, we find that what was denied in the order dated October 27, 2000 was not only the motion for preliminary hearing but the motion to dismiss as well.  A reading of the dispositive portion of said order shows that the trial court neither qualified its denial nor held in abeyance the ruling on petitioner’s motion to dismiss thus –

IN VIEW OF THE FOREGOING, the aforecited Motion To Quash Subpoena Ad Testificandum is granted; and the aforecited Motion For Preliminary Hearing On Defendant’s Affirmative Defenses With Motion To dismiss The Instant Complaint Based On Said Affirmative Defenses is denied.[10] (Emphasis supplied)

In issuing the assailed order, the trial court ruled on the merits of petitioner’s Motion to Dismiss vis-à-vis respondents’ Comment and Opposition which clearly traversed the affirmative defenses raised by petitioner, to wit:

After carefully going over the pleadings, this Court finds, on the first motion that the arguments raised in the said motion and the reply filed in connection thereto appear to be meritorious; and on the second motion, that the arguments raised in the comments and opposition and the rejoinder filed by the plaintiffs likewise appear to be meritorious.[11]

Moreover, it is presumed that all matters within an issue raised in a case were passed upon by the court.  In the absence of evidence to the contrary, the presumption is that the court a quo discharged its task properly.[12]

In Municipality of Biñan Laguna v. Court of Appeals,[13] decided under the old Rules of Civil Procedure, it was held that a preliminary hearing permitted under Rule 16, Section 5, is not mandatory even when the same is prayed for.  It rests largely on the sound discretion of the trial court, thus –

SEC. 5.  Pleading grounds as affirmative defenses. — Any of the grounds for dismissal provided for in this Rule, except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as if a motion to dismiss had been filed. (Emphasis supplied)

The use of the word "may" in the aforequoted provision shows that such a hearing is not a matter of right demandable from the trial court; it is not mandatory but discretionary.  “May” is an auxiliary verb indicating liberty, opportunity, permission and possibility.[14]  Such interpretation is specifically stated under the 1997 Rules of Civil Procedure.  Rule 16, Section 6, now provides that a grant of a preliminary hearing rests on the sound discretion of the court, to wit –

SEC. 6. Pleading grounds as affirmative defenses.— If no motion to dismiss has been filed, any of the grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss had been filed.  (Emphasis supplied)

In the case at bar, the Court of Appeals did not err in finding that no abuse of discretion could be ascribed to the trial court’s denial of petitioner’s motion for preliminary hearing on its affirmative defenses with motion to dismiss.  The issue of whether or not a trademark infringement exists, is a question of fact that could best be determined by the trial court.

Under the old Trademark Law[15] where the goods for which the identical marks are used are unrelated, there can be no likelihood of confusion and there is therefore no infringement in the use by the junior user of the registered mark on the entirely different goods.[16]  This ruling, however, has been to some extent, modified by Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293), which took effect on January 1, 1998.  The said section reads:

Sec. 123.  Registrability. – 123.1.  A mark cannot be registered if it:

x x x            x x x     x x x

(f)      Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided, further, That the interest of the owner of the registered mark are likely to be damaged by such use; (Emphasis supplied)

A junior user of a well-known mark on goods or services which are not similar to the goods or services, and are therefore unrelated, to those specified in the certificate of registration of the well-known mark is precluded from using the same on the entirely unrelated goods or services, subject to the following requisites, to wit:

1.       The mark is well-known internationally and in the Philippines.  Under Rule 102 of the Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers,[17] in determining whether a mark is well known, the following criteria or any combination thereof may be taken into account:

(a)          the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

(b)          the market share in the Philippines and in other countries, of the goods and/or services to which the mark applies;

(c)          the degree of the inherent or acquired distinction of the mark;

(d)          the quality-image or reputation acquired by the mark;

(e)          the extent to which the mark has been registered in the world;

(f)           the exclusivity of the registration attained by the mark in the world;

(g)          the extent to which the mark has been used in the world;

(h)          the exclusivity of use attained by the mark in the world;

(i)           the commercial value attributed to the mark in the world;

(j)           the record of successful protection of the rights in the mark;

(k)          the outcome of litigations dealing with the issue of whether the mark is a well-known mark; and

(l)           the presence of absence of identical or similar marks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his mark is a well-known mark.

2.       The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods or services and those goods or services specified in the certificate of registration in the well known mark.  This requirement refers to the likelihood of confusion of origin or business or some business connection or relationship between the registrant and the user of the mark.

3.       The interests of the owner of the well-known mark are likely to be damaged.  For instance, if the registrant will be precluded from expanding its business to those unrelated good or services, or if the interests of the registrant of the well-known mark will be damaged because of the inferior quality of the good or services of the user.[18]

Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated to respondents’ business involving watches, clocks, bracelets, etc.  However, the Court cannot yet resolve the merits of the present controversy considering that the requisites for the application of Section 123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need to be resolved at the trial court.  The existence or absence of these requisites should be addressed in a full blown hearing and not on a mere preliminary hearing.  The respondent must be given ample opportunity to prove its claim, and the petitioner to debunk the same.

The same is true with respect to the issue of whether Atty. Alonzo Ancheta was properly authorized to sign the verification and certification against forum shopping in behalf of respondents.  This could be properly resolved during the trial together with the substantive issues raised by petitioner.

Considering that the trial court correctly denied petitioner’s motion for preliminary hearing on its affirmative defenses with motion to dismiss, there exists no reason to compel Atty. Ancheta to testify.  Hence, no abuse of discretion was committed by the trial court in quashing the subpoena ad testificandum issued against Atty. Ancheta.

Grave abuse of discretion implies such capricious and whimsical exercise of judgment as equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.  None of these was committed by the trial court; hence, the Court of Appeals correctly dismissed the petition.

WHEREFORE, in view of all the foregoing, the petition for review on certiorari filed by petitioner is DENIED.   The November 28, 2002 Decision and the February 13, 2003 Resolution of the Court of Appeals in CA-G.R. SP No. 64660 which dismissed the petition for certiorari filed by petitioner are AFFIRMED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Panganiban, Carpio and Azcuna, JJ., concur.

IPL Case Digest: 246 Corporation v. Daway G.R. No. 157216. November 20, 2003

246 Corporation v. Daway

G.R. No. 157216  November 20, 2003

Lessons Applicable: Jurisdiction of Trial court, special affirmative defences on infringement

Laws Applicable:

FACTS:
•    Montres Rolex S.A. and Rolex Centre Phil., Limited, owners/proprietors of Rolex and Crown Device, filed against 246 Corporation the instant suit for trademark infringement and damages with prayer for the issuance of a restraining order or writ of preliminary injunctionbefore the RTC of QC
o    July 1996: 246 adopted and , since then, has been using without authority the mark “Rolex” in its business name “Rolex Music Lounge” as well as in its newspaper advertisements as “Rolex Music Lounge, KTV, Disco & Party Club.”
•    246 answered special affirmative defences: no confusion would arise from the use by petitioner of the mark “Rolex” considering that its entertainment business is totally unrelated to the items catered by respondents such as watches, clocks, bracelets and parts thereof
•    RTC: quashed the subpoena ad testificandum and denied petitioner’s motion for preliminary hearing on affirmative defenses with motion to dismiss
•    CA: affirmed

ISSUE: W/N RTC performed a grave abuse of discretion

HELD: NO. petition denied. RTC affirmed
•    The issue of whether or not a trademark infringement exists, is a question of fact that could best be determined by the trial court.
•    Section 123.1(f) of the Intellectual Property Code (Republic Act No. 8293)
o    (f)      Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided, further, That the interest of the owner of the registered mark are likely to be damaged by such use
•    Section 123.1(f) is clearly in point because the Music Lounge of petitioner is entirely unrelated to respondents’ business involving watches, clocks, bracelets, etc.  However, the Court cannot yet resolve the merits of the present controversy considering that the requisites for the application of Section 123.1(f), which constitute the kernel issue at bar, clearly require determination facts of which need to be resolved at the trial court.  The existence or absence of these requisites should be addressed in a full blown hearing and not on a mere preliminary hearing.  The respondent must be given ample opportunity to prove its claim, and the petitioner to debunk the same.

International Taxation Case Digest: Bosal Holding BV v. Stratssecretaris van Financier (2003)



Case C-168/01

Lessons Applicable: Treaty as Soft Law



FACTS:

Bosal Holding BV, a limited liability holding company which engages financing and licensing/royalty related activities subjected to corporate tax in the Netherlands.  For the financial year of 1993, it wished to offset its profits with the costs of NLG 3,969,339  in relation to the financing of its holdings in subsidiary companies established in 9 other European Union Member States.   Bosal’s claim was disallowed and dismissed by the inspector of Arnhem Tax Office/Large Undertakings who dismissed Bosal’s claim on the ground that Article 13(1) of the Law on Corporation Tax of 1969 ─ 1993 version provides: In determining profit no account shall be taken of gains acquired from a holding or of the costs relating to a holding, unless it is evident that such costs are indirectly instrumental in making profit that is taxable in the Netherlands xxx
Bosal appealed to the Court  of  Justice-Arnhem by arguing that Article 13(1) restricts the freedom of establishments provided for in Article 52 of the Treaty par 1 (now Article 43 EC) which states that restrictions on the freedom of  establishments of nationals of a Member State in the territory of another Member State shall be prohibited and Article 58 of the Treaty par 1 (now Article 48 EC) which states that companies formed in accordance with the law of a Member State and having their registered office shall be treated in the same way as natural persons who are nationals of Member States.   The Court of Justice-Arnhem Netherlands upheld the Arnhem Tax Office’s decision.  

Thus, Bosal appealed to the Supreme Court of the Netherlands. Since the interpretation of Community law is necessary, the Supreme Court of the Netherlands referred the matter to the European Court of Justice.  The Netherlands together with the UK and  the  Commission  of  the European  Communities countered Bosal based on the following:

First, Netherlands argued that Article 13(1) did not discriminate because the subsidiaries of parent companies established in the Netherlands which do make taxable profits in that Member State and those which do not are not in an objectively comparable situation. For those profits made by subsidiaries themselves, it is not the whole profit that is subjected to Netherlands tax unlike those whose parents and subsidiaries that derive profit only in Netherlands.  Therefore, the distinction between the two groups is appropriate and did not violate the freedom of establishment.  

Second, Netherlands argued that Article 13(1) must be upheld to maintain the coherence of the Netherlands tax system wherein there is a direct link between tax benefit and its related tax liability.  In this case, costs have to be instrumental to profit before there can be deductions.

Third, Netherlands Government and the Commission argue that the limitation of the deductibility of costs incurred in relation to holdings is justified by the objective of avoiding an erosion of the tax base going beyond a mere diminution in tax receipts.

Finally, the Netherlands and United Kingdom Governments and the Commission argue that the 1969 Law is compatible with Article 4 of the directive that it is lawful for Member States to provide that costs in relation to holdings are not in any way deductible from the taxable profits of the parent company

ISSUE: Article 13(1) of the Law on Corporation Tax of 1969 can be upheld as it is not against the freedom of establishments.

HELD: NO. Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States, interpreted in the light of Article 52 of the EC Treaty (now, Article 43 EC) precludes a national provision which, when determining the tax on the profits of a parent company established in one Member State, makes the deductibility of costs in connection with that company's holding in the capital of a subsidiary established in another Member State subject to the condition that such costs be indirectly instrumental in making profits which are taxable in the Member State where the parent company is established.

For the first point, by discouraging parent companies from establishing subsidiaries in other Member States, it violated the freedom of establishment.  For the second point on the coherence of tax system, the court cited Baars v. Inspecteur for the proposition that there can be no direct link where the law involves two different taxpayers or two different taxes or tax treatments.  In this case, there is no link between granting of a tax deductions on the costs connected with their subsidiaries from their taxable profit of the parent company and the tax system relating to the subsidiaries of parent companies where they are established in that Member State.  Under the principle of territoriality, the difference in tax treatment in question concerns parent companies according to whether or not they have subsidiaries making profits taxable in the Netherlands.  Moreover, unlike operating branches or establishments, parent companies and their subsidiaries are distinct legal persons.  It could also result to over taxation since the limitation of the deductibility of costs is not compensated for by a corresponding advantage.  Third, such a justification does not differ in substance from that concerning the risk of a diminution in tax revenue.  It does not appear amongst the grounds listed in Article 56(1) of the EC Treaty (now, Article 46(1) EC) and does not constitute a matter of overriding general interest which may be relied upon in order to justify a restriction on the freedom of establishment.  Last, the directive does not provide for any exception concerning the territory where the profits of the subsidiaries might be taxed. In those circumstances, the directive cannot be interpreted as authorising a law such as the 1969 Law.

NOTES
In this case, the treaty is ruled over the domestic law. 
In the Philippine setting, treaties are only considered as a soft law.  It is not exactly treated as the international law mentioned in Article II, Section 2 of the Constitution provides, among others, that the Philippines adopts the generally accepted principles of international law as part of the law of the land.  Thus, it is not binding nder the doctrine of incorporation. 
In the Philippine setting, a subsidiary is also a juridical entity separate and distinct from that of its parent company.  Thus, the computation of income tax of the principal and subsidiary is also separate and distinct.  There is no allocation of profit and expenses.