Universal Rubber Products, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Converse Rubber Corporation and Edwardson Manufacturing Co., Inc. (private respondents) sued Universal Rubber Products, Inc. (petitioner) for unfair competition with damages and attorney's fees before the Court of First Instance of Rizal. Procedural History: After nine witnesses and various documentary evidence were presented, the private respondents requested a subpoena duces tecum against the petitioner's treasurer for sales documents related to Plymouth Star Player rubber shoes. Petitioner moved to quash the subpoena, deeming it unreasonable, oppressive, lacking good cause, and irrelevant. The trial court denied both the motion to quash and a subsequent motion for reconsideration. The Petition: Petitioner then filed a petition for certiorari with preliminary injunction before the Court of Appeals, alleging grave abuse of discretion by the trial judge. The Court of Appeals issued a temporary restraining order, but subsequently rendered a decision denying the petition for certiorari for lack of merit and lifting the restraining order. The petitioner elevated the case to the Supreme Court, arguing that the Court of Appeals erred in upholding the trial court's denial of the motion to quash, particularly in not considering the subpoena as a "fishing bill."
Issue(s)
Whether the issuance of the subpoena duces tecum was proper in a suit for unfair competition. Whether the Court of Appeals erred in finding that the trial judge did not commit a clear abuse of discretion, and whether the issuance of the subpoena duces tecum was an arbitrary exercise of judicial power. Whether the Court of Appeals erred in not considering the subpoena duces tecum as a "fishing bill." Whether Converse Rubber Corporation, as an unlicensed foreign corporation, could sue in the Philippines.
Ruling
The Supreme Court dismissed the petition for being moot and academic due to the destruction of the records sought by the subpoena duces tecum in a fire. However, it discussed the legal principles involved. Dispositive Portion: WHEREFORE, the instant petition is DISMISSED for becoming moot and academic. No costs.
Ratio Decidendi
On the propriety of the subpoena duces tecum in an unfair competition suit: The Court affirmed the propriety of the subpoena duces tecum. It explained that in cases of unfair competition, the aggrieved party is entitled to damages, and Section 23 of Republic Act No. 166 provides three options for ascertaining these damages: (1) the profit the complaining party would have made, (2) the profit the defendant actually made, or (3) a reasonable percentage of the defendant's gross sales. The subpoena duces tecum, seeking sales records, is essential for the complaining party to exercise these rights and for the court to determine the amount of damages. The argument that liability must first be determined before discovery for damages is allowed was deemed without merit, as the suit for unfair competition inherently involves claims for injunction and damages. On the alleged abuse of discretion and "fishing bill" contention: The Court found no abuse of discretion in the issuance of the subpoena. It reiterated the well-settled jurisprudence that for a subpoena duces tecum to be issued, it must appear that the documents sought contain evidence relevant and material to the issue, and that the precise document is sufficiently described. The Court noted that the sufficiency in the description of the books sought was not disputed in this case. The argument that the subpoena was a "fishing bill" was implicitly rejected by upholding its relevance to the determination of damages in an unfair competition case. On the argument that the subpoena was a "fishing bill": The argument that the subpoena was a "fishing bill" was implicitly rejected by upholding its relevance to the determination of damages in an unfair competition case. On the standing of the foreign corporation: The Court addressed the petitioner's argument that Converse Rubber Corporation, as an unlicensed foreign corporation, could not sue in the Philippines. Citing its previous ruling in Converse Rubber Corporation vs. Jacinto Rubber & Plastic Co., Inc., the Court reiterated that an unlicensed foreign corporation may sue in the Philippines to protect its reputation, corporate name, and goodwill, even if it is not "doing business" in the country. Therefore, this ground did not disqualify the private respondent from filing the action.
Main Doctrine
In an action for unfair competition, the issuance of a subpoena duces tecum for the production of sales records is proper to ascertain damages, as provided under Section 23 of Republic Act No. 166, and the claim that such discovery should only proceed after a finding of liability is without merit.