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CENTRAL BANK BOARD OF LIQUIDATORS v. BANCO FILIPINO SAVINGS

FACTS:

The case involves a dispute between two corporations, Sharp Electronics Corporation (Sharp) and Shamon Corporation (Shamon), over the ownership and use of the trademark "Sharp." Sharp, a foreign corporation, registered its trademark "Sharp" in the Philippines in 1965 and has been using it for the past 50 years. Shamon, on the other hand, is a Philippine corporation founded in 1972 and has been using the trademark "Sharp" for their products since then. Sharp filed a complaint against Shamon for trademark infringement, unfair competition, and false designation of origin. Shamon argued that they had acquired a vested right to the use of the trademark "Sharp" because they had been using it for a long time and it had become associated with their products in the Philippines. The trial court ruled in favor of Sharp, finding that Shamon's use of the trademark was indeed an infringement of Sharp's rights. Shamon appealed to the Court of Appeals, which reversed the trial court's decision, holding that Shamon had acquired a vested right to the use of the trademark "Sharp." Sharp then filed a petition for review with the Supreme Court, seeking to reverse the decision of the Court of Appeals and uphold the trial court's ruling.

ISSUES:

  1. Whether the RTC erred in admitting the Second Amended/Supplemental Complaint, which included the BSP and its MB as new parties and raised new causes of action not alleged in the original Complaint.

  2. Whether the inclusion of the BSP and its MB in the Second Amended/Supplemental Complaint is proper based on their alleged acts or omissions.

  3. Whether or not the trial court acted with grave abuse of discretion in admitting Banco Filipino's Second Amended/Supplemental Complaint.

  4. Whether or not the causes of action asserted in the Second Amended/Supplemental Complaint are different from and unrelated to the causes of action in the original complaint.

  5. Whether the RTC erred in admitting Banco Filipino's Second Amended/Supplemental Complaint in the consolidated civil cases before it.

  6. Whether the Second Amended/Supplemental Complaint constituted a separate cause of action.

  7. Whether the Second Amended/Supplemental Complaint should have been admitted.

  8. Whether the admission of the Second Amended/Supplemental Complaint violates the rules on joinder of parties and causes of action.

RULING:

  1. The RTC did not err in admitting the Second Amended/Supplemental Complaint. The admission of the complaint, which included the BSP and its MB as new parties and raised new causes of action, is within the discretion of the trial court as long as it does not unduly prejudice the rights of the parties involved.

  2. The inclusion of the BSP and its MB in the Second Amended/Supplemental Complaint is proper based on their alleged acts or omissions. The respondent sought to hold them liable for their refusal to reimburse the bank for actual damages, litigation expenses, attorney's fees, interests, and costs of suit due to their alleged malice and evident bad faith in placing the bank under conservatorship and eventually closing it down.

  3. The Court of Appeals did not err in affirming the trial court's order admitting Banco Filipino's Second Amended/Supplemental Complaint. The admission of the said complaint did not violate any procedural rules, and the causes of action asserted therein are not different from and unrelated to the causes of action in the original complaint. The BSP and its MB were properly impleaded as parties-defendants as successors-in-interest of the defunct CB and its MB.

  4. The Petition of the CB-BOL is impressed with merit. The second amendment of the Complaint was improper. The causes of action subject of the Second Amended/Supplemental Complaint only arose in 1994 well after those subject of the original Complaint. Since the acts or omissions allegedly committed in violation of respondent's rights are different, they constitute separate causes of action. The Second Amended/Supplemental Complaint raised new causes of action and asserted a new relief.

  5. The Second Amended/Supplemental Complaint should not have been admitted as it raised new and different causes of action that had no relation to the causes of action in the original Complaint.

  6. The admission of the Second Amended/Supplemental Complaint violates the rule on joinder of parties and causes of action as the BSP and its MB have different legal personalities from the defunct CB and its MB, and there is no common question of fact or law between the parties involved.

PRINCIPLES:

  • The admission of an amended or supplemental complaint is within the discretion of the trial court as long as it does not unduly prejudice the rights of the parties involved.

  • Parties who may be held liable for their acts or omissions may be properly included in an amended or supplemental complaint, provided that the causes of action against them are based on their alleged acts or omissions.

  • Courts have discretion in admitting amended or supplemental complaints, provided that the amendment or supplementation does not cause surprise or prejudice to the other party and that it does not require the presentation of additional evidence.

  • The joinder of causes of action is allowed as long as they arise from the same transaction, contract, or relation.

  • The option of a party-litigant to amend a pleading is not without limitation. If the purpose is to set up a cause of action not existing at the time of the filing of the complaint, amendment is not allowed. If no right existed at the time the action was commenced, the suit cannot be maintained, even if the right of action may have accrued thereafter.

  • A supplemental pleading only serves to bolster or add something to the primary pleading. Its usual function is to set up new facts that justify, enlarge, or change the kind of relief sought with respect to the same subject matter as that of the original complaint. The supplemental pleading must be founded on the same cause of action as that raised in the original complaint.

  • An amendment or supplement to a complaint must have a relation to the cause of action set forth in the original pleading.

  • The joinder of causes of action and parties in a complaint involving multiple parties is subject to the rules on joinder of parties and the same transaction or series of transactions and a common question of law or fact must be present.

  • The ruling is confined to procedural issues and does not address potential liability of the BSP for causes of action alleged in the original Complaint.