Espiritu v. Petron

DOCTRINES:

• Corporate officers or employees through whose act, default or omission the corporation commits a crime may themselves be individually held answerable for the crime. 
• Before a stockholder may be held criminally liable for acts committed by the corporation, it must be shown that he had knowledge of the criminal act committed in the name of the corporation and that he took part in the same or gave his consent to its commission whether by action or inaction. 

FACTS: Petron sold and distributed LPG in cylinder tanks that carried its trademark “Gasul.” Kristina Patricia Enterprises (KPE) is the exclusive distributor of Gasul LPGs in the whole of Sorsogon. Jose served as KPE’s manager. 

Bicol Gas was also in the business of selling and distributing LPGs in Sorsogon but theirs carried the trademark “Bicol Savers Gas.” Petitioner Audie Llona managed Bicol Gas. 

In the course of trade and competition, any given distributor of LPGs at times acquired possession of LPG cylinder tanks belonging to other distributors operating in the same area called “captured cylinders.” According to Jose, Bicol Gas agreed with KPE for the swapping of “captured cylinders” since one distributor could not refill captured cylinders with its own brand of LPG. At one time, in the course of implementing this arrangement, KPE’s Jose visited the Bicol Gas refilling plant. He noticed several Gasul tanks in Bicol Gas’ possession. He requested a swap which was given and they had a swap involving around 30 Gasul tanks held by Bicol Gas in exchange for assorted tanks held by KPE. 

Jose noticed that Bicol Gas still had a number of Gasul tanks in its yard. He offered to make a swap for these but Llona declined, saying the Bicol Gas owners wanted to send those tanks to Batangas. Later Bicol Gas told Jose that it had no more Gasul tanks left in its possession. Jose observed on almost a daily basis, however, that Bicol Gas’ trucks which plied the streets of the province carried a load of Gasul tanks. He noted that KPE’s volume of sales dropped significantly from June to July 2001. 

Jose saw in Maharlika Highway a Bicol Gas truck with one unsealed 50-kg Gasul tank and one 50-kg Shellane tank. Jose followed the truck and when it stopped at a store, he asked the driver, Leorena, and the Bicol Gas sales representative, Misal, about the Gasul tank in their truck. They said it was empty but, when Jose turned open its valve, he noted that it was not. Misal and Leorena then admitted that the Gasul and Shellane tanks on their truck belonged to a customer who had them filled up by Bicol Gas. 

KPE filed a complaint for violations of Republic Act (R.A.) 623 (illegally filling up registered cylinder tanks), as amended, and Sections 155 (infringement of trade marks) and 169.1 (unfair competition) of the Intellectual Property Code (R.A. 8293). The compaint charged the directors, officers, and stockholders of Bicol Gas. The complaint was dismissed by the Provincial Prosecutor.

Petron and KPE filed a petition for review with the Office of the Regional State Prosecutor, Region V, which initially denied the petition but partially granted it on motion for reconsideration. The Office of the Regional State Prosecutor ordered the filing of additional informations against the four employees of Bicol Gas for unfair competition. It ruled, however, that no case for trademark infringement was present. The Secretary of Justice denied the appeal of Petron and KPE and their motion for reconsideration. 

CA reversed the Secretary’s ruling and ordered the filing of additional charges of trademark infringement against the concerned Bicol Gas employees as well. 

ISSUE: Wether or not the employees and stockholders are criminally liable

HELD: No proof has been shown that Bicol Gas has gone into the business of distributing imitation Petron Gasul LPGs. There is also no showing that Bicol Gas has been giving its LPG tanks the general appearance of the tanks of Petron’s Gasul. As already stated, the truckfull of Bicol Gas tanks that the KPE manager arrested on a road in Sorsogon just happened to have mixed up with them one authentic Gasul tank that belonged to Petron. 

Bicol Gas is a corporation. As such, it is an entity separate and distinct from the persons of its officers, directors, and stockholders. It has been held, however, that corporate officers or employees, through whose act, default or omission the corporation commits a crime, may themselves be individually held answerable for the crime. 

The “owners” of a corporate organization are its stockholders and they are to be distinguished from its directors and officers. The petitioners here, with the exception of Audie Llona, are being charged in their capacities as stockholders of Bicol Gas. But the Court of Appeals forgets that in a corporation, the management of its business is generally vested in its board of directors, not its stockholders. Stockholders are basically investors in a corporation. They do not have a hand in running the day-to-day business operations of the corporation unless they are at the same time directors or officers of the corporation. Before a stockholder may be held criminally liable for acts committed by the corporation, therefore, it must be shown that he had knowledge of the criminal act committed in the name of the corporation and that he took part in the same or gave his consent to its commission, whether by action or inaction. 

The Court ordered the exclusion of the directors and officers of Bicol Gas from the charge.