15. E. SPINNER and COMPANY vs.
NEUSS
HESSLEIN CORPORATION
G.R. No. L-31380, January 13, 1930, EN BANC
Related Article: Article 28 of NCC
Article 28. Unfair competition in agricultural,
commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Doctrine: It will be noted that Act No. 666 gives the
plaintiff a right to elect between the recovery of
damages for the harm done to the plaintiff's
business and the enforcement of an accounting
against the defendant for the profits which may be
shown to have accrued to it by reason of the sales
made in violation of the plaintiff's right. But these
two remedies are different and, where the plaintiff
has elected to sue for damages and no damages are
proved, none can be awarded.
Facts:
>Petitioner E. Spinner & Co. is a copartnership with
head offices in Manchester, England, and Bombay,
India, being represented in the Philippine Islands by
Wise & Co., a domestic corporation with principal
office in the City of Manila.
> Defendant Neuss Hesslein Corporation is
organized in 1922, under the laws of the Philippine
Islands, with its principal office in the City of
Manila. The defendant is a subsidiary of Neuss
Hesslein & Co., Inc., of New York, U. S. A., for
whom it acts as selling agent in the Philippine
Islands.
> E. Spinner & Co.has long been engaged in the
manufacture and sale of textile fabrics, including
khaki cloth, with distributing business connection in
different parts of the world. About 1900, E. Spinner
began exporting its khaki into the Philippine Islands
through local firms. Because of the superior
qualities of its goods, the E. Spinner's khaki made
favorable impression in the Philippine market,
enjoying a popular favor and preference which
resulted in a lucrative trade. Among the brands of
khaki enjoying such favor was the grade indicated
by the manufacturer as "Wigan."
> In1905, E. Spinner registered its common trade-
mark on its different grades of khaki in the Bureau
of Patents, Copyrights, and Trade-Marks of the
Philippine Government. This trade-mark consists of
a large label representing the profiles of two
elephant heads placed close to each other in the
upper middle center of the label and looking in
opposite directions, with trunks extending
respectively to the right and left. This device has for
its rectangular border a garland of leaves; while
over the point of union between the two heads
appear several flags. Inside the space formed by the
trunks of the elephants and the garland of leaves
appears a label.
> This label was pasted on the outside of each bolt
of khaki sold by the E. Spinner, the different grades
being indicated by the words "Wigan," "Stockport,"
etc., inserted with stencil in the blank space
following the word "Quality."
> E. Spinner learned in that the defendant Neuss
Hesslein Corporation, was selling a brand of khaki
in the Philippine Islands with the word "Wigan"
stenciled on the bolts below the defendant's own
trade-mark. After discovering this fact, in 1925, E.
Spinner caused its trade-mark, consisting of the two
elephant heads, to be again registered in the Bureau
of Commerce and Industry. In its essential features,
this trade-mark is identical with the trade-mark
registered in 1905, but in the latter trade-mark the
word "Wigan" is inserted after the word "Quality."
The purpose of this registration was to incorporate
the word "Wigan" as an integral part of the
registered trade-mark.
> But before the organization of the defendant the
New York house had, for several years, been selling
its khaki in the Philippine Islands, under two
different brands. These were known respectively as
the "Five Soldiers" and the "Four Soldiers," the last
named being also known as the "Wide Awake"
brand. The "Five Soldiers" trade-mark was
registered in the Bureauof Commerce and Industry
in 1916, and the "Four Soldiers" trade-mark in
1923. These two grades of khaki are marketed at a
much lower price than plaintiff's "Wigan," since it
appears that the plaintiff's "Wigan" is sold in the
Philippine market by Wise & Co. for 71 centavos
per yard, and by other firms at 70 centavos a yard,
while defendant's "Five Soldiers" sells at from 54
centavos to 55 centavos, and its "Four Soldiers"
from 35 centavos to 40 centavos a yard.
> In 1926, petitioner E. Spinner & Co., of
Manchester, England filed an action in CFI against
defendant, the Neuss Hesslein Corporation,
organized under the laws of the Philippine Islands,
for the purpose of
1. restraining the defendant from using the word
"Wigan," as applied to khaki textiles sold by the
Neuss in the Philippine Islands, and
2. to recover damages for violation of the its
trade-mark right in the word "Wigan” and for
alleged unfair competition committed by the
defendant in the use of the same.
>Trial court absolved the defendant from the
complaint
Issue:
1.Whether the defendant Neuss Hesslein
Corporation has a right to use the word "Wigan" on
khaki sold by it in the Philippine Islands. No .
2. Is E. Spinner entitled to damages (P15,000). No.
Held:
1. No
With respect to the question of infringement of
trade-mark right, it is clear that the appropriation by
the defendant of the word "Wigan" for use in the
sale of its khaki did not constitute a violation of
trade-mark prior to April, 1925, when the word
"Wigan" was first incorporated in the plaintiff's
registered trade-mark; but after that date it was
certainly illegal for the defendant to use the word
"Wigan" stamped upon the khaki sold by it; and this
act was an infringement of trade-mark right. It is
true that the plaintiff's trade-mark proper consisted
of a pictorial representation of the heads of two
elephants, embelished by leaves, and the word
"Wigan" was only a part of said trade-mark.
Nevertheless, the misappropriation of this word by
the competitor was a violation of the plaintiff's
right.
In section 2 of Act No. 666 it is declared that a
designation or part of a designation which relates
only to the name, quality, or description of the
merchandise, or geographical place of its
production or origin, cannot be made the subject of
a trade-mark; and it seems to be supposed by the
defendant that this provision disables the plaintiff
from complaining of the use made of the word
"Wigan" by the defendant.
But it will be noted that the word "Wigan" as
applied to quality, is not an English word in
common use for describing quality. The word
"Wigan" is here used in an entirely artificial sense
and its association with quality had the origin
exclusively in the use which the plaintiff has made
of it. The designation of name, quality, or
description, as used in the statute, has reference to
linguistic terms in common use. In words of this
character no particular manufacturer can acquire an
exclusive property right. Again, it will be noted that,
although "Wigan," being the name of a town, was
an original geographical term, it is not used upon
the plaintiff's khaki to indicate the geographical
place of production of the product. Even
geographical terms can be used in an arbitrary and
artificial sense, and when so used by one
manufacturer the improper appropriation of the
same term by another may be enjoined as an
invasion of trade-mark right. Of course, if the
defendant were manufacturing its khaki in the town
of "Wigan," it would be entitled to use that name to
indicate the place of manufacture of its goods. But
such is not the case here.
From what has been said it follows that the plaintiff
is entitled to an injunction for the purpose of
restraining the defendant from using the word
"Wigan" upon the bolts of khaki sold by it, whether
the wrongful act of the defendant be considered as
an act of unfair competition or as an infringement of
the trade-mark registered by the plaintiff in April,
1925.
As stated in section 7 of Act No. 666, a person is
guilty of unfair competition who "in selling his
goods shall give them the general appearance of
goods of another manufacturer or dealer, either in
the wrapping of the packages in which they are
contained, or the devices or words thereon, or in
any other feature of their appearance, which would
be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer
other than the actual manufacturer or dealer," etc.

This language is very broad; and as applied to the
case before us it is evident that, in using the word
"Wigan" on the khaki cloth sold by it, the defendant
has appropriated a word likely to lead purchasers to
believe that the goods sold by the defendant are
those of the plaintiff. The representation that the
khaki sold by the defendant is of the kind known to
the trade as "Wigan" directly tends to deceive the
purchaser and, therefore, constitutes unfair
competition as against the plaintiff.
2. No.
As in Forbes, Munn & Co., vs. Ang San To (43
Phil., 724), the provision in the complaint referring
to damages should, we think, be interpreted as a
prayer for an assessment of the compensation to
which the plaintiff might be entitled for the damage
done to its business. The proof, however, shows that
the plaintiff's business has shown a healthy growth
during the period covered by the wrongful acts
which are the subject of this action, and it is not
proved that any assessable damage has been
inflicted upon the plaintiff by the wrongful acts of
the defendant, though the infringement of legal right
is clear.
We are therefore of the opinion that no damages
should be awarded to the plaintiff. It will be noted
that Act No. 666 gives the plaintiff a right to elect
between the recovery of damages for the harm
done to the plaintiff's business and the
enforcement of an accounting against the
defendant for the profits which may be shown to
have accrued to it by reason of the sales made in
violation of the plaintiff's right. But these two
remedies are different and, where the plaintiff
has elected to sue for damages and no damages
are proved, none can be awarded. This makes it
unnecessary to analyze the proof with a view to
discovering the profits which the defendant may
have earned by the illegitimate sales.
Disposition:
The judgment appealed from will therefore be
modified, and the defendant and its agents will be
enjoined, as they are hereby enjoined, from using
the word "Wigan" upon the khaki sold by it in the
Philippine Islands, and from otherwise representing
its khaki to be of the "Wigan" brand. In absolving
the defendant from the claim for damages, the
judgment will be affirmed. So ordered, without
costs.
16. LIWAYWAY VINZONS-CHATO vs.
FORTUNE TOBACCO CORPORATION
G.R. No. 141309, June 19, 2007, THIRD
DIVISION
Related Article: Art 32 of NCC.
Doctrine: The Code Commission deemed it
necessary to hold not only public officers but also
private individuals civilly liable for violation of the
rights enumerated in Article 32 of the Civil Code. It
is not necessary that the defendant under this
Article should have acted with malice or bad faith,
otherwise, it would defeat its main purpose, which
is the effective protection of individual rights. It
suffices that there is a violation of the constitutional
right of the plaintiff.
Facts:
>Petitioner Liwayway Vinzons-Chato was then the
Commissioner of Internal Revenue while
respondent Fortune Tobacco Corporation is an
entity engaged in the manufacture of different
brands of cigarettes, among which are "Champion,"
"Hope," and "More" cigarettes.
>On June 10, 1993, the legislature enacted Republic
Act No. 7654 (RA 7654), which took effect on July
3, 1993. Prior to its effectivity, cigarette brands
‘Champion," "Hope," and "More" were considered
local brands subjected to an ad valorem tax at the
rate of 20-45%.
>On July 1, 1993, or two days before RA 7654 took
effect, petitioner Commissioner of Internal Revenue
Liwayway Vinzons-Chato issued RMC 37-93
reclassifying "Champion," "Hope," and "More" as
locally manufactured cigarettes bearing a foreign
brand subject to the 55% ad valorem tax.4 RMC
37-93 in effect subjected "Hope," "More,"
and "Champion" cigarettes to the provisions of RA
7654, specifically, to Sec. 142,5 (c)(1) on locally
manufactured cigarettes which are currently
classified and taxed at 55%, and which imposes
an ad valorem tax of "55% provided that the
minimum tax shall not be less than Five Pesos
(P5.00) per pack."
> Fortune Tobacco received a copy of RMC 37-93
sent via telefax and by ordinary mail. The same
letter assessed respondent for ad valorem tax
deficiency amounting to P9,598,334.00 (computed
on the basis of RMC 37-93) and demanded payment
within 10 days from receipt thereof. Respondent
filed a petition for review with the CTA which
issued an injunction enjoining the implementation
of RMC.
> CTA ruled that RMC 37-93 is defective, invalid,
and unenforceable. CA and SC (in Commissioner of
Internal Revenue v. Court of Appeals) affirmed. It
was held, among others, that RMC 37-93, has fallen
short of the requirements for a valid administrative
issuance.
> Fortune Tobacco filed before the RTC a
complaint for damages against petitioner in her
private capacity. Fortune contended that the latter
should be held liable for damages under Article 32
of the Civil Code considering that the issuance of
RMC 37-93 violated its constitutional right against
deprivation of property without due process of law
and the right to equal protection of the laws.
> Vinzons-Chato filed a motion to dismiss
contending that:
(1) respondent has no cause of action against her
because she issued RMC 37-93 in the performance
of her official function and within the scope of her
authority. She claimed that she acted merely as an
agent of the Republic and therefore the latter is the
one responsible for her acts;
(2) the complaint states no cause of action for lack
of allegation of malice or bad faith; and
(3) the certification against forum shopping was
signed by respondent’s counsel in violation of the
rule that it is the plaintiff or the principal party who
should sign the same.
RTC denied motion to dismiss.CA affirmed.
> Vinzons-Chato filed the instant recourse
contending that the suit is grounded on her acts
done in the performance of her functions as a public
officer, hence, it is Section 38, Book I of the
Administrative Code which should be applied.
Under this provision, liability will attach only when
there is a clear showing of bad faith, malice, or
gross negligence. She further averred that the Civil
Code, specifically, Article 32 which allows recovery
of damages for violation of constitutional rights, is a
general law on the liability of public officers; while
Section 38, Book I of the Administrative Code is a
special law on the superior public officers’ liability,
such that, if the complaint, as in the instant case,
does not allege bad faith, malice, or gross
negligence, the same is dismissible for failure to
state a cause of action.
Issues:
(1) May a public officer be validly sued in his/her
private capacity for acts done in connection with the
discharge of the functions of his/her office? YES
(2) Which as between Article 32 of the Civil Code
and Section 38, Book I of the Administrative Code
should govern in determining whether the instant
complaint states a cause of action? Art 32
(3) Should the complaint be dismissed for failure to
comply with the rule on certification against forum
shopping? No
(4) May petitioner be held liable for damages? Yes
Held:
1. Yes.
On the first issue, the general rule is that a public
officer is not liable for damages which a person
may suffer arising from the just performance of his
official duties and within the scope of his assigned
tasks. An officer who acts within his authority to
administer the affairs of the office which he/she
heads is not liable for damages that may have been
caused to another, as it would virtually be a charge
against the Republic, which is not amenable to
judgment for monetary claims without its
consent.16 However, a public officer is by law not
immune from damages in his/her personal capacity
for acts done in bad faith which, being outside the
scope of his authority, are no longer protected by
the mantle of immunity for official actions.
Specifically, under Section 38, Book I of the
Administrative Code, civil liability may arise where
there is bad faith, malice, or gross negligence on the
part of a superior public officer. And, under Section
39 of the same Book, civil liability may arise where
the subordinate public officer’s act is characterized
by willfulness or negligence. Thus –
 Sec. 38. Liability of Superior Officers. –
(1) A public officer shall not be civilly liable
for acts done in the performance of his
official duties, unless there is a clear
showing of bad faith, malice or gross
negligence.
xxxx
Section 39. Liability of Subordinate
Officers. – No subordinate officer or
employee shall be civilly liable for acts done
by him in good faith in the performance of
his duties. However, he shall be liable for
willful or negligent acts done by him which
are contrary to law, morals, public policy
and good customs even if he acts under
orders or instructions of his superior.
In addition, the Court held in Cojuangco, Jr. v.
Court of Appeals, that a public officer who directly
or indirectly violates the constitutional rights of
another, may be validly sued for damages under
Article 32 of the Civil Code even if his acts were
not so tainted with malice or bad faith.
Thus, the rule in this jurisdiction is that a public
officer may be validly sued in his/her private
capacity for acts done in the course of the
performance of the functions of the office, where
said public officer: (1) acted with malice, bad
faith, or negligence; or (2) where the public
officer violated a constitutional right of the
plaintiff.
2. Anent the second issue, we hold that the
complaint filed by respondent stated a cause of
action and that the decisive provision thereon is
Article 32 of the Civil Code.
A general statute is one which embraces a class of
subjects or places and does not omit any subject or
place naturally belonging to such class. A special
statute, as the term is generally understood, is one
which relates to particular persons or things of a
class or to a particular portion or section of the state
only.
A general law and a special law on the same subject
are statutes in pari materia and should, accordingly,
be read together and harmonized, if possible, with a
view to giving effect to both. The rule is that where
there are two acts, one of which is special and
particular and the other general which, if standing
alone, would include the same matter and thus
conflict with the special act, the special law must
prevail since it evinces the legislative intent more
clearly than that of a general statute and must not be
taken as intended to affect the more particular and
specific provisions of the earlier act, unless it is
absolutely necessary so to construe it in order to
give its words any meaning at all.
Article 32 of the Civil Code provides:
ART. 32. Any public officer or employee, or
any private individual, who directly or
indirectly obstructs, defeats, violates, or in
any manner impedes or impairs any of the
following rights and liberties of another
person shall be liable to the latter for
damages:
xxxx
(6) The right against deprivation of property
without due process of law;
xxxx
(8) The right to the equal protection of the
laws;
xxxx
The Code Commission deemed it necessary to
hold not only public officers but also private
individuals civilly liable for violation of the
rights enumerated in Article 32 of the Civil
Code. It is not necessary that the defendant
under this Article should have acted with malice
or bad faith, otherwise, it would defeat its main
purpose, which is the effective protection of
individual rights. It suffices that there is a
violation of the constitutional right of the
plaintiff.
Article 32 of the Civil Code specifies in clear and
unequivocal terms a particular specie of an "act"
that may give rise to an action for damages against a
public officer, and that is, a tort for impairment of
rights and liberties.
Indeed, Article 32 is the special provision that
deals specifically with violation of constitutional
rights by public officers. All other actionable acts
of public officers are governed by Sections 38
and 39 of the Administrative Code.

While the Civil Code, specifically, the Chapter on

Human Relations is a general law, Article 32 of the
same Chapter is a special and specific provision that
holds a public officer liable for and allows redress
from a particular class of wrongful acts that may be
committed by public officers. Compared thus with
Section 38 of the Administrative Code, which
broadly deals with civil liability arising from errors
in the performance of duties, Article 32 of the Civil
Code is the specific provision which must be
applied in the instant case precisely filed to seek
damages for violation of constitutional rights.

3. No.
Anent the issue on non-compliance with the rule
against forum shopping, the subsequent submission
of the secretary’s certificate authorizing the counsel
to sign and execute the certification against forum
shopping cured the defect of respondent’s
complaint. Besides, the merits of the instant case
justify the liberal application of the rules.

4. Yes.
The complaint in the instant case was brought under
Article 32 of the Civil Code. Considering that bad
faith and malice are not necessary in an action
based on Article 32 of the Civil Code, the failure to
specifically allege the same will not amount to
failure to state a cause of action. The courts below
therefore correctly denied the motion to dismiss on
the ground of failure to state a cause of action, since
it is enough that the complaint avers a violation of a
constitutional right of the plaintiff.