38. Chan vs. Chan G.R. No.

179786, July 24, 2013

FACTS:

On February 6, 2006 petitioner Josielene Lara Chan (Josielene) filed before the Regional
Trial Court (RTC) of Makati City, Branch 144 a petition for the declaration of nullity of
her marriage to respondent Johnny Chan (Johnny), the dissolution of their conjugal
partnership of gains, and the award of custody of their children to her. Josielene
claimed that Johnny failed to care for and support his family and that a psychiatrist
diagnosed him as mentally deficient due to incessant drinking and excessive use of
prohibited drugs. Indeed, she had convinced him to undergo hospital confinement for
detoxification and rehabilitation.

During the pre-trial conference, Josielene pre-marked the Philhealth Claim Form 1 that
Johnny attached to his answer as proof that he was forcibly confined at the
rehabilitation unit of a hospital. The form carried a physician’s handwritten note that
Johnny suffered from "methamphetamine and alcohol abuse." Following up on this
point, on August 22, 2006 Josielene filed with the RTC a request for the issuance of a
subpoena duces tecum addressed to Medical City, covering Johnny’s medical records
when he was there confined. The request was accompanied by a motion to "be allowed
to submit in evidence" the records sought by subpoena duces tecum. 2

Johnny opposed the motion, arguing that the medical records were covered by
physician-patient privilege. On September 13, 2006 the RTC sustained the opposition
and denied Josielene’s motion. It also denied her motion for reconsideration, prompting
her to file a special civil action of certiorari before the Court of Appeals (CA) in CA-G.R.
SP 97913, imputing grave abuse of discretion to the RTC.

CA upheld the decision of the RTC.

(Josielene of course claims that the hospital records subject of this case are not privileged since it is the "testimonial" evidence of
the physician that may be regarded as privileged. Section 24(c) of Rule 130 states that the physician "cannot in a civil case, without
the consent of the patient, be examined" regarding their professional conversation. The privilege, says Josielene, does not cover
the hospital records, but only the examination of the physician at the trial)

ISSUE: Whether hospital records be admissible in court.

RULING: Yes with patient’s consent. No without patient’s consent.

To allow, however, the disclosure during discovery procedure of the hospital records—
the results of tests that the physician ordered, the diagnosis of the patient’s illness, and
the advice or treatment he gave him—would be to allow access to evidence that is
inadmissible without the patient’s consent. Physician memorializes all these information
in the patient’s records. Disclosing them would be the equivalent of compelling the
physician to testify on privileged matters he gained while dealing with the patient,
without the latter’s prior consent.
40. Lee v. CA, G.R. No. 177861, July 13, 2010
FACTS:
Spouses Lee (Father) and Keh (Mother) immigrants from China entered the Philippines
with their 11 children in 1930s. The 11 children are collectively known as the Lee-Keh
Children.

In 1948, Lee brought from China a young woman named Tiu Chuan (Tiu), supposedly
to serve as housemaid. The respondent Lee-Keh children believe that Tiu left the Lee-
Keh household, moved into another property of Lee nearby, and had a relation with
him.

Shortly after Keh died in 1989, the Lee-Keh children learned that Tiu’s 8 children with
Lee (collectively, the Lee’s other children) claimed that they, too, were children of Lee
and Keh.

NBI investigation ensued initiated by 11 Lee-keh’s children which resulted that Keh the
mother of the 11-children could not be the mother of the 8-children due to age
constraints. It was also found out that the father, Lee, is in a quandary in fixing the age
of KEH SHIOK CHENG possibly to conform with his grand design of making his 8
children as their own legitimate children, consequently elevating the status of his
second family and secure their future.

The NBI found, for example, that in the hospital records, the eldest of the Lee’s other
children, Marcelo Lee (who was recorded as the 12th child of Lee and Keh), was born of
a 17-year-old mother, when Keh was already 38 years old at the time. Another of the
Lee’s other children, Mariano Lee, was born of a 23-year-old mother, when Keh was
then already 40 years old, and so forth. In other words, by the hospital records of the
Lee’s other children, Keh’s declared age did not coincide with her actual age when she
supposedly gave birth to such other children, numbering eight

On the basis of this report, the respondent Lee-Keh children filed two separate
petitions, one of them before the Regional Trial Court (RTC) of Caloocan City 2 in Special
Proceeding C-1674 for the deletion from the certificate of live birth of the petitioner
Emma Lee, one of Lee’s other children, the name Keh and replace the same with the
name Tiu to indicate her true mother’s name.

The 11-Leh-keh’s children wanted Tui, the presumed mother of 8-children, to testify in
court that indeed the 8-children are hers via request for issuance of subpoena ad
testificandum. Tiu moved to quash the motion on the ground of Section 25, Rule 130 of
the Rules of Court, the rule on parental privilege, she being Emma Lee’s stepmother.
 On August 5, 2005 the RTC quashed the subpoena. CA . The CA ruled that only a
subpoena duces tecum, not a subpoena ad testificandum, may be quashed for being
oppressive or unreasonable under Section 4, Rule 21 of the Rules of Civil Procedure.

ISSUE: Whether my invoke filial privilege for she is the stepmother of Petitioner Emma
Lee.

RULING: NO.

Tiu, who invokes the filial privilege, claims that she is the stepmother of petitioner
Emma Lee. The privilege cannot apply to them because the rule applies only to "direct"
ascendants and descendants, a family tie connected by a common ancestry. 1avvphi1 A
stepdaughter has no common ancestry by her stepmother. Article 965 thus provides:

Art. 965. The direct line is either descending or ascending. The former unites the head
of the family with those who descend from him. The latter binds a person with those
from whom he descends.

Consequently, Tiu can be compelled to testify against petitioner Emma Lee.

41. AIR PHILIPPINES CORPORATION, vs. PENNSWELL, INC.

G.R. No. 172835               December 13, 2007

Facts:

Air Philippines Corporation is a domestic corporation engaged in the business of air

transportation services. On the other hand, Pennswell, Inc. was organized to engage in
the business of manufacturing and selling industrial chemicals, solvents, and special
lubricants.

On various dates, Pennswell delivered and sold to petitioner sundry goods in trade.
Under the contracts, Air Philippines Corporation’s total outstanding obligation amounted
to ₱449,864.98 with interest at 14% per annum until the amount would be fully paid.
For failure of the petitioner to comply with its obligation under said contracts,
respondent filed a Complaint for a Sum of Money on 28 April 2000 with the RTC.

Air Philippines Corporation counter claimed that its refusal to pay was valid for
Pennswell allegedly defrauded them on the amount amounting to PhP592,000 on a
claimed new line of products but was in fact identical to the old products and were just
labeled differently. According to petitioner, respondent’s products, namely Excellent
Rust Corrosion, Connector Grease, Electric Strength Protective Coating, and Anti-Seize
Compound, are identical with its Anti-Friction Fluid, Contact Grease, Thixohtropic
Grease, and Dry Lubricant, respectively. Petitioner asseverated that had respondent
been forthright about the identical character of the products, it would not have
purchased the items complained of. Moreover, petitioner alleged that when the
purported fraud was discovered, a conference was held between petitioner and
respondent on 13 January 2000, whereby the parties agreed that respondent would
return to petitioner the amount it previously paid. However, petitioner was surprised
when it received a letter from the respondent, demanding payment of the amount of
₱449,864.94, which later became the subject of respondent’s Complaint for Collection
of a Sum of Money against petitioner.

On 15 March 2004, the RTC rendered an Order granting the petitioner’s motion.

RTC reversed its ruling when reasoned by respondents that it cannot be compelled to
disclose the chemical components sought because the matter is confidential. It argued
that what petitioner endeavored to inquire upon constituted a trade secret which
respondent cannot be forced to divulge. Respondent maintained that its products are
specialized lubricants, and if their components were revealed, its business competitors
may easily imitate and market the same types of products, in violation of its proprietary
rights and to its serious damage and prejudice
CA upheld the decision of the RTC THAT THE CHEMICAL COMPONENTS OR
INGREDIENTS OF RESPONDENT’S PRODUCTS ARE TRADE SECRETS OR INDUSTRIAL
SECRETS THAT ARE NOT SUBJECT TO COMPULSORY DISCLOSURE.

ISSUE: Whether Penswell can be compelled to disclose its formula.

Ruling: NO.

Trade secrets are of a privileged nature is beyond quibble. The protection that this
jurisdiction affords to trade secrets is evident in our laws.

1. Republic Act No. 8799, otherwise known as The Securities Regulation Code,
expressly provides that the court may issue an order to protect trade secrets or
other confidential research, development, or commercial information belonging
to the debtor
2. Revised Penal Code: Art. 292. Revelation of industrial secrets. — The penalty of
prision correccional in its minimum and medium periods and a fine not exceeding
500 pesos shall be imposed upon the person in charge, employee or workman of
any manufacturing or industrial establishment who, to the prejudice of the owner
thereof, shall reveal the secrets of the industry of
the latter.
3. Republic Act No. 8424, otherwise known as the National Internal Revenue Code
of 1997
SECTION 278. Procuring Unlawful Divulgence of Trade Secrets. - Any person
who causes or procures an officer or employee of the Bureau of Internal
Revenue to divulge any confidential information regarding the business, income
or inheritance of any taxpayer, knowledge of which was acquired by him in the
discharge of his official duties, and which it is unlawful for him to reveal, and any
person who publishes or prints in any manner whatever, not provided by law,
any income, profit, loss or expenditure appearing in any income tax return, shall
be punished by a fine of not more than two thousand pesos (₱2,000), or suffer
imprisonment of not less than six (6) months nor more than five (5) years, or
both.
4. Republic Act No. 6969, or the Toxic Substances and Hazardous and Nuclear
Wastes Control Act of 1990, enacted to implement the policy of the state to
regulate, restrict or prohibit the importation, manufacture, processing, sale,
distribution, use and disposal of chemical substances and mixtures that present
unreasonable risk and/or injury to health or the environment, also contains a
provision that limits the right of the public to have access to records,
reports or information concerning chemical substances and mixtures
including safety data submitted and data on emission or discharge into
the environment, if the matter is confidential such that it would divulge
trade secrets, production or sales figures; or methods, production or
processes unique to such manufacturer, processor or distributor; or
 would otherwise tend to affect adversely the competitive position of
such manufacturer, processor or distributor

A trade secret is defined as a plan or process, tool, mechanism or compound known

only to its owner and those of his employees to whom it is necessary to confide it.
The definition also extends to a secret formula or process not patented, but known
only to certain individuals using it in compounding some article of trade having a
commercial value. A trade secret may consist of any formula, pattern, device, or
compilation of information that: (1) is used in one's business; and (2) gives the
employer an opportunity to obtain an advantage over competitors who do not
possess the information. Generally, a trade secret is a process or device intended for
continuous use in the operation of the business, for example, a machine or formula,
but can be a price list or catalogue or specialized customer list. It is indubitable that
trade secrets constitute proprietary rights. The inventor, discoverer, or possessor of
a trade secret or similar innovation has rights therein which may be treated as
property, and ordinarily an injunction will be granted to prevent the disclosure of the
trade secret by one who obtained the information "in confidence" or through a
"confidential relationship." American jurisprudence has utilized the following
factors to determine if an information is a trade secret, to wit:

(1) the extent to which the information is known outside of the employer's
business;
(2) the extent to which the information is known by employees and others
involved in the business;
(3) the extent of measures taken by the employer to guard the secrecy of the
information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in developing the
information; and

(6) the extent to which the information could be easily or readily obtained through an
independent source.