G.R. No. L-27195 March 30, 1970
PHILIPPINE MARKETING & MANAGEMENT CORPORATION, petitioner, vs. HON. ANDRES REYES, as Judge of the Court of First Instance of Rizal, Br. VI, CONVERSE RUBBER CORPORATION and EDWARDSON MANUFACTURING CORPORATION, respondents.

FACTS

Private respondents Converse Rubber Corporation and Edwardson Manufacturing Corporation filed an unfair competition case against Jacinto Rubber and Plastics Co., Inc. and Ace Rubber & Plastics Corporation. Respondent Judge Andres Reyes decided the case favorably for the private respondents on November 2, 1966, issuing a permanent injunction restraining the defendants, their agents, employees, and persons acting on their behalf from manufacturing and selling rubber shoes with specific features confusingly similar to Converse’s “Chuck Taylor All Star” shoes. Subsequently, private respondents filed an urgent ex-parte motion alleging that the defendants and petitioner Philippine Marketing & Management Corporation, as the exclusive distributor of the defendants, continued to manufacture, advertise, and sell the infringing “Custombuilt” rubber shoes in defiance of the injunction. Respondent Judge then issued an order setting the motion for hearing and requiring the defendants and petitioner to explain why they should not be held in contempt of court. Petitioner challenged this order via prohibition, arguing that: (1) it is a separate entity not a party to the original case and thus cannot be cited for contempt; (2) respondent Judge lost jurisdiction after the approval of the appeal bonds and records on appeal on December 14, 1966; and (3) the contempt proceedings would deny it procedural due process.

ISSUE

Whether respondent Judge acted without or in excess of jurisdiction in citing petitioner for contempt and ordering it to show cause, despite petitioner not being a party to the original case and despite the perfection of the appeal.

RULING

The Supreme Court denied the petition for prohibition, holding that respondent Judge acted within his jurisdiction.
1. On petitioner being a non-party: The Court ruled that persons not parties to a proceeding may be held in contempt for willful violation of a court order if they are guilty of conspiracy with any of the parties in violating the order, citing Ferrer v. Rodriguez. The urgent motion alleged petitioner was the exclusive distributor of the defendants, and petitioner’s counsel admitted in a stipulation of facts that it handled advertisement for defendant Jacinto Rubber and had the same stockholders and incorporators. Thus, sufficient grounds existed for the lower court to require petitioner to show cause.
2. On jurisdiction after appeal: The Court held that while a lower court loses jurisdiction over a case upon perfection of appeal, it retains the power under Rule 41, Section 9 of the Rules of Court to issue orders for the protection and preservation of rights that do not involve matters litigated on appeal. Moreover, under Rule 39, Section 4, an injunction judgment is not stayed by appeal unless otherwise ordered by the court. Since no motion to suspend the injunction was filed, the injunction remained executory, and the lower court retained jurisdiction to enforce it through contempt proceedings, as analogized in Manila Railroad Company v. Yatco.
3. On due process: The Court found no denial of procedural due process, as the challenged order explicitly set the motion for hearing, giving petitioner an opportunity to be heard and explain its side before any condemnation.
Prohibition does not lie. Costs against petitioner.