Willaware ProCorp. vs Jesichris ManuCorp. (28)

Caption:

G.R. No. 195549               September 3, 2014

WILLAWARE PRODUCTS CORPORATION, Petitioner,
vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.

Facts:

Jesichris Manufacturing Company the respondent filed this present complaint for damages for unfair competition with prayer for permanent injunction to enjoin Willaware Products Corporation the petitioner from manufacturing and distributing plastic-made automotive parts similar to Jesichris Manufacturing Company. The respondent, alleged that it is a duly registered partnership engaged in the manufacture and distribution of plastic and metal products, with principal office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since its registration in 1992, Jesichris Manufacturing Company has been manufacturing in its Caloocan plant and distributing throughout the Philippines plastic-made automotive parts. Willaware Products Corporation, on the other hand, which is engaged in the manufacture and distribution of kitchenware items made of plastic and metal has its office near that of the Jesichris Manufacturing Company. Respondent further alleged that in view of the physical proximity of petitioner’s office to respondent’s office, and in view of the fact that some of the respondent’s employees had transferred to petitioner, petitioner had developed familiarity with respondent’s products, especially its plastic-made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner] had been manufacturing and distributing the same automotive parts with exactly similar design, same material and colors but was selling these products at a lower price as [respondent’s] plastic-made automotive parts and to the same customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the manufacture of automotive under chassis parts such as spring eye bushing, stabilizer bushing, shock absorber bushing, center bearing cushions, among others. [Petitioner’s] manufacture of the same automotive parts with plastic material was taken from respondent’s idea of using plastic for automotive parts. Also, [petitioner] deliberately copied [respondent’s] products all of which acts constitute unfair competition, is and are contrary to law, morals, good customs and public policy and have caused [respondent] damages in terms of lost and unrealized profits in the amount of 2,000,000 as of the date of respondent’s complaint.

Issue: 

1. Whether or not there is unfair competition under human relations when the parties are not competitors and there is actually no damage on the part of Jesichris?

2. Consequently, if there is no unfair competition, should there be moral damages and attorney’s fees?

3. Whether or not the addition of nominal damages is proper although no rights have been established?

Held:

Article 28 of the Civil Code provides that "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 high-handed method shall give rise to a right of action by the person who thereby suffers damage."

From the foregoing, it is clear that what is being sought to be prevented is not competition per se but the use of unjust, oppressive or high handed methods which may deprive others of a fair chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair competition and not competition where the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand Pesos (P50,000.00).