Case Brief: Distilleria Washington vs. La Tondeña Distillers

G.R. No. 120961. October 2, 1997

DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC., petitioner

vs

LA TONDEÑA DISTILLERS, INC. and THE HONORABLE COURT OF APPEALS, respondents.

 

Facts:

La Tondeña Distillers, Inc. 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. 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 623.

In the original decision, the court 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, petitioner raises the issue that if 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.

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.

 

Issue:

Since replevin as a possessory action is dependent upon ownership, it is relevant to ask: Whether or not there was a transfer ownership of La Tondeña Distillers’ 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?

 

Held:

 The manufacturer sells the product in marked containers, through dealers, to the public in supermarkets, grocery shops, retail stores and other sales outlets. The 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.

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.

Furthermore, Sec. 5 of R.A. 623 states that when the bottles have been “transferred by way of sale,” there should not be any need of institution of any action included in the same act (where there is a need of the written consent of the manufacturer, bottler, or seller). 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.

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.

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