G.R. No. 235279 , March 02, 2020
Sunfire Trading, Inc., Petitioner, v. Geraldine Guy, Respondent.

FACTS

The controversy originated from Civil Case No. 70359, a case for breach of contract, trademark infringement, and unfair competition filed by Northern Islands Company Inc. (NICI) against 3D Industries, Inc. (3D). NICI prevailed. After the judgment was rendered on November 26, 2012, execution proceedings ensued. On May 7, 2013, the trademark “3D AND DEVICE” was auctioned to satisfy the judgment, and respondent Geraldine Guy emerged as the highest bidder, with a Certificate of Sale issued in her favor. However, the Intellectual Property Office (IPO) could not register the trademark in her name because, based on its records, the trademark had already been assigned by 3D to petitioner Sunfire Trading, Inc. on February 13, 2013 (after the judgment). Respondent discovered an earlier Deed of Assignment dated April 24, 2009, but an IPO certification showed that assignment was to a different entity, Divine Token Limited. Respondent filed an Omnibus Motion in the trial court to nullify the assignment to petitioner and direct the IPO to issue a Certificate of Registration in her name. The trial court granted the motion, ordering the IPO to cancel the assignment and registration in favor of petitioner and issue a new one to respondent. The Court of Appeals affirmed the trial court’s order. Petitioner, which was not a party to the original civil case, argued it was a purchaser in good faith and for value, the assignment was made in 2009, and the trial court had no jurisdiction over it or its properties.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in upholding the cancellation of the assignment of trademark and the corresponding Certificate of Registration of the petitioner.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that the assignment of the trademark by 3D to petitioner on February 13, 2013, was made pendente lite—after the trial court’s November 26, 2012 decision had become final and executory and during the execution stage. A transferee pendente lite stands in the shoes of the transferor and is bound by the proceedings and judgment; substitution is not required as the transferee’s interests are deemed represented by the original party. Petitioner could not be considered a purchaser in good faith and for value, as it had sufficient notice of the proceedings, being owned and controlled by the same individual as 3D (Mr. Gilbert Guy), and it did not assert its rights during the public auction. The doctrine of immutability of judgment was not violated, as the trial court’s order was issued in the exercise of its supervisory control over the execution of its final judgment to ensure its satisfaction. The Court emphasized that once a judgment becomes final, the prevailing party should not be denied its fruits by subterfuge.