FIRST
DIVISION
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TWIN ACE HOLDINGS CORPORATION,
Petitioner, - versus
- RUFINA AND COMPANY, Respondent. |
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G.R. No. 160191 Present: PANGANIBAN, C.J. Chairperson, YNARES-SANTIAGO,* AUSTRIA-MARTINEZ,** CALLEJO,
SR., and CHICO-NAZARIO,
JJ. Promulgated: June 8, 2006 |
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CHICO-NAZARIO, J.:
From
the records, it appears that on
As alleged in the
complaint, Twin Ace is a private domestic corporation engaged in the
manufacture of rhum, wines and liquor under the name
and style “Tanduay Distillers.” It has registered its mark of ownership of
its bottles with the Bureau of Patent, Trademarks and Technology Transfer under
Republic Act No. 623. In the conduct of
its business, it sells its products to the public excluding the bottles. It makes substantial investments in brand new
bottles which it buys from glass factories and which they use for about five
times in order to recover the cost of acquisition. Twin Ace thus retrieves its used empty
bottles, washes and uses them over and over again as containers for its
products.
On
the other hand, Rufina is engaged in the production,
extraction, fermentation and manufacture of patis and other food seasonings
and is engaged in the buying and selling of all kinds of foods, merchandise and
products for domestic use or for export to other countries. In producing patis and other food seasonings, Rufina uses as containers bottles owned by Twin Ace without
any authority or permission from the latter.
In the process, Rufina is unduly benefited
from the use of the bottles.
Upon
the posting of Twin Ace of the required bond, the Regional Trial Court (
In
its Answer with counter-application for a Writ of Preliminary Injunction, Rufina claimed that the marked bottles it used as containers
for its products were purchased from junk dealers; hence, it became the owner
thereof.
After
hearing, the trial court rendered its decision dated
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of the defendant as follows:
a) dismissing the complaint for lack of merit;
b) dissolving the order of replevin;
c) ordering the plaintiff to return 26,241 bottles to the defendant in the place where the bottles were seized at the expense of the plaintiff within 48 hours from receipt hereof;
d) ordering the plaintiff to pay the defendant the sum of P100,000.00
as actual damages sustained by the latter to be taken from the replevin bond;
e) ordering the plaintiff to pay the defendant the sum of P1,000,000.00
as damages for besmirched reputation;
f) ordering the plaintiff to pay the sum of P100,00.00
as nominal damages;
g) ordering the plaintiff to pay the defendant the sum of P50,000.00
as attorney’s fee; and
h) ordering the plaintiff to pay the cost of the suit.[4]
Twin
Ace appealed to the Court of Appeals. On
WHEREFORE, in view of all the
foregoing, the appealed decision dated P50,000.00. In all other
respects, the assailed decision is AFFIRMED.
Costs against plaintiff-appellant.[6]
A
motion for reconsideration dated
For
resolution are the following issues:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT RUFINA IS NOT COVERED WITHIN THE EXEMPTION PROVIDED BY SECTION 6 OF R.A. 623, AS AMENDED BY R.A. 5700.
II.
THE HONORABLE COURT OF APPEALS ERRED IN AWARDING NOMINAL DAMAGES AGAINST PETITIONER TWIN ACE CONSIDERING THAT IT WAS THE ONE WHOSE RIGHTS HAVE BEEN VIOLATED OR INVADED BY RESPONDENT RUFINA.
III.
THE HONORABLE COURT
OF APPEALS ERRED IN NOT FINDING THAT PETITIONER AS OWNER OF THE SUBJECT BOTTLES
IS ENTITLED TO COMPENSATION FOR ITS UNAUTHORIZED USE BY RESPONDENT RUFINA.[9]
Pertinent provision of Republic Act
No. 623,[10] as
amended by Republic Act No. 5700,[11]
is quoted hereunder for clarity:
Sec. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or seller, 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 pipes, 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 of any such bottle, cask, barrel, keg, box, steel cylinders, tanks, flasks, accumulators, or other similar containers, or the possession thereof without written permission of the manufacturer, by any junk dealer or dealer in casks, barrels, kegs, boxes, steel cylinders, tanks, flasks, 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.[12]
Sec. 4. The criminal action provided in this Act shall in no way affect any civil action to which the registered manufacturer, bottler, or seller, may be entitled by law or contract.
Sec. 5. No action shall be brought under this Act against any person to whom the registered manufacturer, bottler, or seller, has transferred by way of sale, 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.
Sec. 6. The provisions of this Act shall not be
interpreted as prohibiting the use of bottles as containers for “sisi,” “bagoong,” “patis,” and similar native products.[13]
In
sum, Twin Ace asserts that the provision under the law affords protection only
to small scale producers/manufacturers who do not have the capacity to buy new
bottles for use in their products and cannot extend to Rufina
which had unequivocably admitted in its Answer[14]
and affirmed in
the decision of the trial court that it is engaged, on a large scale basis, in
the production and manufacture of food seasonings.
For
its part, Rufina counters that the law did not really
distinguish between large scale manufacturers and small time producers.
The
petition is not meritorious.
The earlier case of Twin Ace
Holdings Corporation v. Court of Appeals,[15]
applies to the present petition. In said
case, Twin Ace filed a Complaint for Replevin against
Lorenzana Food Corporation to recover three hundred
eighty thousand bottles allegedly owned by Twin Ace but detained and used by Lorenzana Food Corporation as containers for its native
products without its express permission, in violation of the law. In that case, this Court acknowledged that
the exemption under the law is unqualified as the law did not make a
distinction that it only applies to small scale industries but not to large
scale manufacturers. Thus, even if the
court in said case held that the exemption is primarily meant to give
protection to small scale industries, it did not qualify that the protection
therein was intended and limited only to such.
The Court held:
Petitioner itself alleges that respondent LORENZANA uses the subject 350 ml., 375 ml. and 750 ml. bottles as containers for processed foods and other related products such as patis, toyo, bagoong, vinegar and other food seasonings. Hence, Sec. 6 squarely applies in private respondent’s favor. Obviously, the contention of TWIN ACE that the exemption refers only to criminal liability but not to civil liability is without merit. It is inconceivable that an act specifically allowed by law, in other words legal, can be the subject of injunctive relief and damages. Besides, the interpretation offered by petitioner defeats the very purpose for which the exemption was provided.
Republic Act No. 623, “An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers,” as amended by RA No. 5700, was meant to protect the intellectual property rights of the registrants of the containers and prevent unfair trade practices and fraud on the public. However, the exemption granted in Sec. 6 thereof was deemed extremely necessary to provide assistance and incentive to the backyard, cottage and small-scale manufacturers of indigenous native products such as patis, sisi and toyo who do not have the capital to buy brand new bottles as containers nor afford to pass the added cost to the majority of poor Filipinos who use the products as their daily condiments or viands. If the contention of petitioner is accepted, i.e., to construe the exemption as to apply to criminal liability only but not to civil liability, the very purpose for which the exemption was granted will be defeated. None of the small-scale manufacturers of the indigenous native products protected would possibly wish to use the registered bottles if they are vulnerable to civil suits. The effect is a virtual elimination of the clear and unqualified exemption embodied in Sec. 6. It is worthy to note that House Bill No. 20585 was completely rejected because it sought to expressly and directly eliminate that which petitioner indirectly proposes to do with this petition.[16] (Emphasis supplied.)
It is worth noting that Lorenzana Food Corporation which prevailed in the case
filed by Twin Ace against it is certainly not a small scale industry. Just like Rufina, Lorenzana Food Corporation also manufactures and exports
processed foods and other related products, e.g.,
patis, toyo, bagoong, vinegar and other food seasonings.
It is a basic rule in statutory
construction that when the law is clear and free from any doubt or ambiguity,
there is no room for construction or interpretation. As has been our consistent ruling, where the
law speaks in clear and categorical language, there is no occasion for
interpretation; there is only room for application.[17]
Notably,
attempts to amend the protection afforded by Section 6 of Republic Act No. 623,
by giving protection only to small scale manufacturers or those with a
capitalization of five hundred thousand pesos or less (P500,000.00),
through then House Bill No. 20585,[18]
and subsequently through House Bill No. 30400,[19]
proved unsuccessful as the amendment proposed in both Bills was never passed.
In view of
these considerations, we find and so hold that the exemption contained in
Section 6 of Rep. Act No. 623 applies to all manufacturers of sisi, bagoong, patis and similar native products without distinction
or qualification as to whether they are small, medium or large scale.
On the
issue of nominal damages, Article 2222 of the Civil Code[20]
states that the court may award nominal damages in every obligation arising
from any source enumerated in Article 1157,[21]
or in every other case where any
property right has been invaded.[22] Nominal damages are given in order that a
right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.[23] In another case,[24]
this Court held that when plaintiff suffers some species of injury not enough
to warrant an award of actual damages, the court may award nominal damages. Considering the foregoing, we find that the
award of nominal damages to Rufina in the amount of
fifty thousand pesos (P50,000.00) is reasonable, warranted and justified.
As to the third issue, Rule 60,
Section 2(a), of the Revised Rules of Court mandates that a party praying for
the recovery of possession of personal property must show by his own affidavit
or that of some other person who personally knows the facts that he is the
owner of the property claimed, particularly describing it, or is entitled to
the possession thereof.[25] It must be borne in mind that 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.[26] Wrongful detention by the defendant of the
properties sought in an action for replevin must be
satisfactorily established. If only a
mechanistic averment thereof is offered, the writ should not be issued.[27] In this case, Twin Ace has not shown that it
is entitled to the possession of the bottles in question and consequently there
is thus no basis for the demand by it
of due compensation. As stated by the court in the earlier case of
Twin Ace Holdings Corporation v. Court of
Appeals[28]:
Petitioner cannot seek refuge in Sec. 5 of RA No. 623 to support its claim of continuing ownership over the subject bottles. In United States v. Manuel [7 Phil. 221 (1906)] we held that since the purchaser at his discretion could either retain or return the bottles, the transaction must be regarded as a sale of the bottles when the purchaser actually exercised that discretion and decided not to return them to the vendor. We also take judicial notice of the standard practice today that the cost of the container is included in the selling price of the product such that the buyer of liquor or any such product from any store is not required to return the bottle nor is the liquor placed in a plastic container that possession of the bottle is retained by the store.
WHEREFORE, premises considered, the
instant petition is DENIED for lack of merit and the decision dated
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
Chief Justice
Chairperson
ON LEAVE
Associate Justice
Associate Justice
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Acting Chairman |
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ROMEO J.
CALLEJO, SR. Associate Justice |
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Pursuant to Article VIII,
Section 13 of the Constitution, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
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ARTEMIO V.
PANGANIBAN Chief Justice |
* On leave.
** Acting Chairman.
[1] Records, Vol. I, pp. 1-8.
[2]
[3]
[4] Penned by Judge Guillermo L. Loja, Sr., Rollo, pp. 160-161.
[5] Docketed as CA-G.R. CV No. 52852, penned by Associate Justice Sergio L. Pestaño with Associate Justices Eloy R. Bello, Jr. and Teodoro P. Regino concurring.
[6] Rollo, p. 49-A.
[7] CA rollo, pp. 118- 129.
[8] Rollo, p. 52
[9]
[10] AN ACT TO REGULATE THE USE OF DULY STAMPED OR MARKED BOTTLES, BOXES, CASKS, KEGS, BARRELS AND OTHER SIMILAR CONTAINERS.
[11] AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SIX HUNDRED TWENTY-THREE AS TO INCLUDE THE CONTAINERS OF COMPRESSED GASES WITHIN THE PURVIEW OF THE SAID ACT.
[12] Republic Act No. 5700.
[13] Republic Act No. 623.
[14] “7. That with respect to paragraph 9, it admits that it produces patis on a large scale at its big factory in 290 C. Arellano Street, Malabon, Metro Manila and that it distributes the same to supermarkets and big grocery stores and exports the same but denies the rest of the allegations of the paragraph; x x x. (Rollo, p. 111.)
[15] 345 Phil. 1133 (1997).
[16]
[17] Rizal Commercial Banking
Corporation v. Intermediate Appellate Court, 378 Phil. 10, 22 (1999) citing
Cebu Portland Cement Co. v. Municipality of Naga,
[18] “An Act Prohibiting The Use of Duly
Registered and Marked Containers Of Liquor, Wines and Spirits As Containers For
“Sisi”, “Bagoong”, “Patis” and Similar Native Products Amending for the
[19] “An Act Prohibiting The Use of Duly Registered and Marked Containers for any purpose other than that registered amending for the purpose of Republic Act Numbered Six Hundred Twenty-Three, As Amended, and Increasing The Penalty For Violation Therefor.” (Records, Vol. I, p. 262).
[20]
[21] Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.
[22] Cogeo-Cubao Operators and Drivers Association v. Court of Appeals, G.R. No. 100727, 18 March 1992, 207 SCRA 343, 347.
[23] Citytrust Banking Corporation v. Intermediate Appellate Court, G.R. No.84281, 27 May 1994, 232 SCRA 559, 565; National Power Corporation v. Spouses Campos, 453 Phil. 79, 98 (2003).
[24] China Airlines, Ltd., v. Court of Appeals, G.R. No. 129988, 14 July 2003, 406 SCRA 113, 134.
[25] Sec. 1. Application. – A party praying for the recovery of possession of personal property may, at the commencement of the action or at any time before answer, apply for an order for the delivery of such property to him, in the manner hereinafter provided.
Sec. 2. Affidavit and bond. – The applicant must show by his own affidavit or that of some other person who personally knows the facts:
(a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof;
(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof according to the best of his knowledge, information, and belief; x x x. (Rule 60, REPLEVIN, Revised Rules of Court.).
[26] Distilleria Washington, Inc. v. Court of Appeals, 331 Phil. 622, 630 (1996).
[27] Factoran, Jr., v. Court of Appeals, 378 Phil. 282, 294 (1999).
[28] Supra note 15, p. 1140.