FIRST
DIVISION
DISTILLERIA
WASHINGTON, INC.chanrobles virtual law library
OR WASHINGTON DISTILLERY, INC.,
Petitioner,
G. R. No. 120961
October 2, 1997
-versus-
LA
TONDEÑA DISTILLERS, INC.chanrobles virtual law library
and HON. COURT OF APPEALS,
Respondents.
R
E S O L U T I O N
KAPUNAN, J.:
On October 17,
1996, this Court rendered a decision
in the above-entitled case, the dispositive portion of which reads as
follows:
WHEREFORE, the decision of the appellate
court
is MODIFIED by ordering LTDI to pay petitioner just compensation for
the
seized bottles. Instead, however, of remanding the case to the Court of
appeals to receive evidence on, and thereafter resolve, the assessment
thereof, this Court accepts and accordingly adopts the quantification
of
P18,157.00 made by the trial court. No costs.
With the denial
of the motion for reconsideration,
petitioner sought a second reconsideration with leave of court of our
decision
raising new issues, to wit:
1.01.d. The Supreme Court, in its
Decision of
October 17, 1996, modified the decision of the Court of Appeals. It
held
that ownership of the bottles had passed to the consumer, ultimately,
to
Washington Distillery, Inc., thereby upholding the finding of the
Regional
Trial Court and reversing the ruling of the Court of Appeals;
nonetheless,
while ruling that the ownership over the bottles had passed to
Washington
Distillery, Inc., it held that Washington Distillery, Inc. may not use
the bottles because of the "trademark protection to the registrant" [La
Tondeña Distillers, Inc.]. Instead of directing the return of
the
bottles to Washington Distillery, Inc., the Court ordered La
Tondeña
Distillers, Inc. to pay Washington Distillery, Inc. the amount of
P18,157.00.
2.00. The decision of the Supreme Court itself
therefore
raises new issues. As owner of the bottles, should not Washington
Distillery,
Inc. be given possession of the bottles? Would its use of the bottles
violate
the "trademark protection of the registrant," La Tondeña
Distillers,
Inc. afforded by R. A. No. 623, as amended?
3.00. The "Motion for Reconsideration"
of
the
petitioner Washington Distillery, Inc. is addressed to these new
issues.
They had not been previously addressed by the parties. They could not
have
been previously passed upon. It could hardly be said that "no
substantial
argument," not previously raised, is made in the "Motion for
Reconsideration"
to warrant a modification of the Court's decision.
On May 21,
1997, the Court resolved to set for hearing
the motion for reconsideration on May 28, 1997 for its judicious
disposition.
Thereafter, the parties as required by the Court filed their
simultaneous
memoranda "to expound and lay particular emphasis on the provision of
Section
5 of R. A. 623 which proscribes the filing of an action against any
person
to whom registered manufacturer, bottler or seller has transferred by
way
of sale, any of the containers." The parties complied.
A reexamination
of the arguments raised by petitioner
in its Second Motion for Reconsideration filed on February 13, 1997, in
the hearing on May 28, 1997 and in the subsequent memorandum filed
thereafter,
convinces Us of the merits of its position.cralaw:red
To recall, La
Tondeña Distillers, Inc.
[La Tondeña, for short] filed before the Regional Trial Court
for
the recovery, under its claim of ownership, of possession or replevin
against
Distilleria Washington, Inc. or Washington Distillery, Inc.
[Distilleria
Washington] of 18,157 empty "350 c.c. white flint bottles" bearing the
blown-in marks of "La Tondeña Inc." and "Ginebra San Miguel,"
averring
that Distilleria Washington was using the bottles for its own "Gin
Seven"
products without the consent of Distilleria Washington in violation of
Republic Act No. 623.cralaw:red
The trial court
in its decision dismissed the
complaint, upholding Distilleria Washington's contention that a
purchaser
of liquor pays only a single price for the liquor and the bottle and is
not required to return the bottle at any time. The Court of
Appeals
reversed the trial court's decision, ruling that under Republic Act No.
623, the use of marked bottles by any person other than the
manufacturer,
bottler or seller, without the latter's written consent, is unlawful.
It
emphasized that the marks of La Tondeña's ownership stamped or
blown-in
to the bottles are sufficient notice to the public that the bottles are
La Tondeña's property; hence, Distilleria Washington cannot be
considered
a purchaser in good faith.cralaw:red
While Our
decision of October 17, 1996 affirmed
with modification the Court of Appeals' decision, We, at least,
implicitly
acknowledged that there was a valid transfer of the bottles to
Distilleria
Washington, except that its possession of the bottles without the
written
consent of La Tondeña gives rise to a prima facie presumption of
illegal use under R. A. 623. In seeking reconsideration of the
decision
of this Court, petitioner advances, among others, the following
arguments:
[1] If, as the Court found in its
decision of
October 17, 1996, Distilleria Washington had acquired ownership of the
bottles, La Tondeña's suit for replevin, where the sole issue is
possession, should be denied.
[2] Since the right of ownership over
the
bottles
gives rise, according to the Court's own language, to its own elements
of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus
abutendi,
along with the applicable jus lex, to allow La Tondeña to keep
the
bottles is to deny Distilleria Washington, the very attributes or
elements
of its ownership.
[3] There is no showing and it
cannot
be
assumed that if Distilleria Washington would have possession of
the
bottles, it will exercise the other attributes of ownership, along with
the applicable jus lex over the "marks of ownership stamped or marked"
on the bottles.
[4] The provision in Sec. 3 of
Republic Act
623
to the effect that the use by any person other than the registered
manufacturer,
bottler or seller without the written permission of the latter of any
such
bottle, etc. shall give rise to a prima facie presumption that such use
or possession is unlawful, does not arise in the instant case because
the
Court has itself found Section 5 of the same law applicable.
Additionally,
petitioner argues with persuasion the
following points in its memorandum:
[5] It is absurd to hold the buyer such
as
Distilleria
Washington, liable for the possession and use of its own bottles
without
the written consent of La Tondeña who is no longer the owner
thereof
and for which it has received payment in full.
[6] To hold the buyer liable under
Sections
2
and 3 would grant La Tondeña the extraordinary right not only of
possession and use of the bottles which it has sold and no longer owns,
but also to sell said bottles ad infinitum, thus enriching itself
unjustly.
[7] It is manifestly unjust and
unconscionable
that millions of buyers of Ginebra San Miguel, who pay not only for the
gin but also for the bottles containing it should run the risk of
criminal
prosecution by the mere fact of possession of the empty bottles after
consuming
the liquor.
Distilleria
Washington's motion raises the novel
issue that if, as we ruled in our decision of October 17, 1996,
petitioner
became the owner over the bottles seized from it by replevin, then it
has
the right to their possession and use as attributes of ownership,
unless
their use violates the trademark or incorporeal rights accorded private
respondent by R.A. 623 which has not really been established in this
case.
As pointed out in
Our decision:
Parenthetically, petitioner is not here
being
charged with violation of Sec. 2 of R. A. 623 or the Trademark Law. The
instant case is one for replevin [manual delivery] where the claimant
must
be able to show convincingly that he is either the owner or clearly
entitled
to the possession of the object sought to be recovered. Replevin is a
possessory
action. The gist of which focuses on the right of possession that in
turn,
is dependent on a legal basis that, not infrequently, looks to the
ownership
of the object sought to be replevied.
Since replevin,
as a possessory action, is dependent
upon ownership, it is relevant to ask: Did La Tondeña
Distillers,
Inc. transfer ownership of its marked bottles or containers when it
sold
its products in the market? Were the marked bottles or containers part
of the products sold to the public?
In Our decision sought to be reconsidered,
We
categorically answered the question in the affirmative in this wise:
R. A. No. 623 does not disallow the sale
or
transfer
of ownership of the marked bottles or containers. In fact, the contrary
is implicit in the law thus:
Sec. 5.
Sec. 6.
Scarcely disputed are certain and specific
industry
practices in the sale of gin. The manufacturer sells the product in
marked
containers, through dealers, to the public in supermarkets, grocery
shops,
retail stores and other sales outlets. They buyer takes the item; he is
neither required to return the bottle nor required to make a deposit to
assure its return to the seller. He could return the bottle and get a
refund.
A number of bottles at times find their way to commercial users. It
cannot
be gainsaid that ownership of the containers does pass on the consumer
albeit subject to the statutory limitations on the use of the
registered
containers and to the trademark rights of the registrant. The statement
in Section 5 of R.A. 623 to the effect that the "sale of beverage
contained
the said containers shall not include the sale of the containers unless
specifically so provided" is not a rule of proscription. It is a rule
of
construction that, in keeping with the spirit and intent of the law,
establishes
at best a presumption (of non-conveyance of the container) and which by
no means can be taken to be either interdictive or conclusive in
character.
Upon the other hand, LTDI's sales invoice, stipulating that the "sale
does
not include the bottles with the blown-in marks of ownership of La
Tondeña
Distillers,' cannot affect those who are not privies thereto.
In plain terms,
therefore, La Tondeña not
only sold its gin products but also the marked bottles or containers,
as
well. And when these products were transferred by way of sale, then
ownership
over the bottles and all its attributes (jus utendi, jus abutendi, just
fruendi, jus disponendi) passed to the buyer. It necessarily follows
that
the transferee has the right to possession of the bottles unless he
uses
them in violation of the original owner's registered or incorporeal
rights.
After practically
saying that La Tondeña
has surrendered ownership and consequently, possession of the marked
bottles
or container, it is incongruous and, certainly, it does not seem fair
and
just to still allow La Tondeña, citing the prima facie
presumption
of illegal use under Sec. 3 of R.A. 623., to retain possession of the
seized
bottles by simply requiring payment of just compensation to petitioner.
The pertinent provisions of R. A. 623 are
as
follows:
Sec. 2. It shall be unlawful for any
person,
without the written consent of the manufacturer, bottler, or seller
(emphasis
supplied) who has successfully registered the marks of ownership in
accordance
with the provisions of the next preceding section, to fill such
bottles,
boxes, kegs, barrels, steel cylinders, tanks, flasks, accumulators, or
other similar containers so marked or stamped, for the purpose of sale,
or to sell, dispose of, buy or traffic in, or wantonly destroy the
same,
whether filled or not to use the same for drinking vessels or glasses
or
drain pipes, foundation pipers, for any other purpose than that
registered
by the manufacturer, bottler or seller. Any violation of this section
shall
be punished by a fine of not more than one thousand pesos or
imprisonment
of not more than one year or both.
Sec. 3. The use by any person other than
the
registered manufacturer, bottler or seller, without written permission
of the latter (emphasis supplied) of any such bottle, cask, barrel,
keg,
box, steel cylinders, tanks, flask, accumulators, or other similar
containers,
or the possession thereof without written permission of the
manufacturer,
by any junk dealer or dealer in casks, barrels, keg, boxes, steel
cylinders,
tanks, flask, accumulators or other similar containers, the same being
duly marked or stamped and registered as herein provided, shall give
rise
to a prima facie presumption that such use or possession is unlawful.
Sec. 5. No action shall be brought under
this
Act (emphasis supplied) against any person to whom the registered
manufacturer,
bottler or seller, has transferred by way of sale, (emphasis supplied)
any of the containers herein referred to, but the sale of the beverage
contained in the said containers shall not include the sale of the
containers
unless specifically so provided.
In resolving
that petitioner is the owner of the
bottles, this Court applied Section 5 of R. A. 623; and in withholding
possession of the bottles from the petitioner and in concluding that
use
or possession thereof without the written permission of the registered
owner would constitute prima facie presumption of illegal use, this
Court
invoked Sections 2 and 3 of the same law.
A careful reading
of Sections 2, 3 and 5 of R.
A. 623 would lead to the conclusion that they contemplate situations
separate
and distinct from each other. Section 2 prohibits any person from
using,
selling or otherwise disposing of registered containers without the
written
consent of the registrant. Such rights belong exclusively to the
registrant.
Under Section 3, mere possession of such registered containers without
the written consent of the registrant is prima facie presumed unlawful.cralaw:red
It appears
and this is the critical point
that Sections 2 and 3 apply only when the "filling" up of the bottle or
the "use" of the bottle is "without the written permission" of the
"registered
manufacturer, bottler, or seller," who has registered the marks of
"ownership"
of the bottles. It is thus implicit that Sections 2 and 3 apply only
when
the "registered manufacturer, bottler, or seller" retain ownership of
the
bottles.cralaw:red
Upon the other
hand, when the bottles have been
"transferred by way of sale," Section 5 applies, thereby precluding the
institution of any action "under this Act," meaning to say, any action
under Sections 2 and 3.cralaw:red
The general rule
on ownership, therefore, must
apply and petitioner be allowed to enjoy all the rights of an owner in
regard the bottles in question, to wit: the jus utendi or the right to
receive from the thing what it produces; the jus abutendi or the right
to consume the thing by its use; the jus disponendi or the power of the
owner to alienate, encumber, transform and even destroy the thing
owned;
and the jus vindicandi or the right to exclude from the possession of
the
thing owned any other person to whom the owner has not transmitted such
thing. What is proscribed is the use of the bottles in infringement of
another's trademark or incorporeal rights.cralaw:red
Since the Court
has found that the bottles have
been transferred by way of sale, then La Tondeña has
relinquished
all its proprietary rights over the bottles in favor of Distilleria
Washington
who has obtained them in due course. Now as owner, it can exercise all
attributes of ownership over the bottles. This is the import of the
decision
that La Tondeña had transferred ownership over its marked
bottles
or containers when it sold its gin products to the public. While others
may argue that Section 5 is applicable only to the immediate transferee
of the marked bottles or container, this matter is best discussed where
the applicability of Sec. 5, R. A. 623 is squarely raised. It must be
recalled,
however, that this is a case of replevin, not a violation of the
"trademark
protection of the registrant" under R. A. 623 or of the Trademark Law.cralaw:red
A query may be
posed: Would use of the bottles
constitute a violation of the incorporeal rights of La Tondeña
Distillers,
Inc. over its "marks of ownership" embossed on the bottles? While
apparently
relevant, it would be improper and premature for this Court to rule on
the point because:
First, violation of the "marks of
ownership"
of La Tondeña Distillers, Inc. on the bottler has not been put
in
issue, the parties did not have the opportunity to ventilate their
respective
positions on the matter. Thus, a ruling would be violative of due
process.cralaw:red
Second, the
question calls for a factual investigation
which this Court has generally not taken upon itself to undertake
because
it is not a trier of facts; and
Third,
disregarding the above, the facts before
this Court do not provide a sufficient basis for a fair and intelligent
resolution of the question.cralaw:red
Moreover, Our
decision added that "the Court sees
no other insistence to keep the bottles, except for such continued
use."
This, to Our mind, is rather speculative at this point; something which
was never touched upon in the proceedings below.cralaw:red
We cannot also be
oblivious of the fact that if
La Tondeña's thesis that every possession of the bottles without
the requisite written consent is illegal, thousands upon thousands of
buyers
of Ginebra San Miguel would be exposed to criminal prosecution by the
mere
fact of possession of the empty bottles after consuming the content.cralaw:red
One last point.
It may not be amiss to state that
La Tondeña is a big and established distillery which already has
captured a big share of the gin market, estimated to be 90%.
Distilleria
Washington, on the other hand, together with other small
distillers-around
40 in number-concedes that it cannot fight this giant but only asks a
share
of the market. It cannot afford to manufacture its own bottles and just
have to rely on recycled bottles to sell its products. To disallow the
use of these recycled products would necessarily deprive it a share of
the market which La Tondeña seeks to monopolize.cralaw:red
We recognize the
role of large industry in the
growth of our nascent economy. However, small industries likewise play
a vital role in economic growth, playing a significant part in the
success
of such tiger economies as Korea, Taiwan and Thailand. Industries big
and
small, should adopt symbiotic relationship, not the animosity of
Goliath
and David. Our holding today merely recognizes that in the country's
march
toward economic development and independence, it is essential that a
balance
protecting small industries and large scale businesses be maintained.cralaw:red
IN VIEW OF THE
FOREGOING, the Court resolved to
RECONSIDER its Decision promulgated on October 17, 1996 and render
another
judgment REVERSING in toto the Decision of the Court of Appeals
promulgated on January 11, 1995 and its Resolution of June 23, 1995.
The
decision of the Regional Trial Court of December 3, 1991 is REINSTATED.cralaw:red
SO ORDERED.cralaw:red
Bellosillo and
Hermosisima, Jr., JJ., concur.
Davide, Jr., J.,
took no part.
Separate Opinion
VITUG, J.,
dissenting:
I regret that I am unable to join my
colleagues
in the modification of the decision under reconsideration. The Court's
ruling did say that the ownership of the "marked bottles" passed on to
the consumer but it was understood to be subject to the "statutory
limitations
on the use of registered containers and to the trademark rights of the
registrant." Republic Act No. 623, which is the law applicable,
prohibits
the use of registered bottles or containers without the written consent
of the manufacturer.[1]
This enactment has heretofore been upheld by the Court in Cagayan
Valley
Enterprise, Inc. vs. Court of Appeals.[2]
The marked
bottles in the instant case were evidently
being used by petitioner for its own "Gin Seven" products without the
consent
of La Tondeña Distillers, Inc. ["LTDI"]. The Court of Appeals
itself
made such a finding of unauthorized commercial use by petitioner. Our
ponencia
did not, thus, rely merely, albeit not at all unwarranted had it been
otherwise,
on the statutory prima facia presumption of illegal use. The matter is
on record, and it cannot just be ignored. For how else would petitioner
insist on keeping the marked bottles, if it were not for its own
continued
use.cralaw:red
Given the
circumstances, the unavoidable alternative
would be, such as arrived at in the ponencia sought to be reconsidered,
for LTDI [the registrant of the trademark] to simply pay petitioner
just
compensation for the seized marked bottles.cralaw:red
WHEREFORE, I am
constrained to vote most respectfully
for the denial of the second motion for reconsideration.cralaw:red
__________________________
Endnotes
VITUG,
J., dissenting:
[1]Section 2, Republic Act No. 623.
[2]
179 SCRA 213. |