Title
La Tondena Distillers, Inc. vs. Court of Appeals
Case
G.R. No. 88938
Decision Date
Jun 8, 1992
La Tondena sued a junk dealer for possessing its registered gin bottles without permission. The Supreme Court ruled La Tondena retains bottle ownership, allowing recovery under Republic Act No. 623.
replevin action
registered bottles
junk dealer

Case Summary (G.R. No. 201073)

Factual Background

La Tondena Distillers, Inc. alleged that it manufactured a gin sold in 350 c.c. white flint bottles marked “LA TONDENA, INC.” and “GINEBRA SAN MIGUEL,” which bottles had been registered under R.A. 623, as amended. The complaint averred that the sale of the beverage did not include transfer of title to the bottles. The complaint named a defendant identified as “Te Tien Ho” of 1005 Estrada Street, Singalong, Manila, and sought replevin with damages, including a writ directing seizure and delivery of the bottles and alternative recovery of their value.

Seizure and Sheriff’s Return

Upon posting of a P40,000 bond, the trial court issued a writ of delivery dated February 13, 1989. Deputy Sheriff Regio Ruefa executed the writ on February 22, 1989 and seized 20,250 empty bottles bearing the blown‑in marks from No. 1105 Estrada Street, Singalong. Sheriff Ruefa’s handwritten receipt described the seized items and identified the person from whom they were taken as “Mr. Te Tien Ho,” and the receipt was signed by one “Tee Chin Ho” as witness. The sheriff’s return stated that service and implementation occurred at 1105 Estrada Street and that the defendant requested his wife to sign his name on the original summons and writ.

Intervention, Counterclaim and Early Proceedings

No objection to the plaintiff’s bond nor counter‑bond to require return was filed within the five‑day period provided by Rule 60, Secs. 5 and 6. Instead, on March 1, 1989 an individual identifying himself as Tee Chin Ho filed an “Answer (with preliminary injunction and compulsory counterclaim)” purporting to intervene as a party with legal interest. The pleading asserted that purchasers acquired ownership of the bottles, that the bottles were seized from him at 1105 Estrada Street, and that La Tondena had caused two seizures, including an earlier police seizure of 21,600 bottles on October 6, 1988. The pleading sought injunctive relief and substantial damages.

Trial Court’s Interim Orders

The trial court issued a temporary restraining order on April 3, 1989 to preserve the status quo. On April 7, 1989 Judge Adduru‑Santillan granted leave to intervenor Tee Chin Ho and directed issuance of preliminary mandatory and prohibitory injunctions upon filing of a P45,000 bond. The court’s written findings concluded that the writ of replevin was addressed only to the person named in the complaint, “Te Tien Ho” of 1005 Estrada Street; that intervenor’s possession gave rise to a presumption of ownership under Articles 433 and 541 of the Civil Code; and that under R.A. 623, as amended by R.A. 5700, the sale of bottled products did not ipso jure carry with it the sale of the bottle and the statute negated the manufacturer’s right to recover empty bottles from persons to whom the containers had been transferred, further noting statutory exemptions for certain native products and invoking the due process clause to protect intervenor’s livelihood.

Writ of Mandatory and Prohibitory Injunction

Pursuant to the April 7 Order, the court issued on April 11, 1989 a writ ordering La Tondena Distillers, Inc. to return and restore to intervenor Tee Chin Ho all 41,850 empty bottles identified in the intervenor’s annexes—comprising the 20,250 bottles seized under the court’s writ and the 21,600 bottles alleged to have been seized earlier by the Manila Police—and enjoined plaintiff from causing further seizures from intervenor’s place of business.

Petition to the Court of Appeals and Its Disposition

La Tondena Distillers, Inc. filed a petition for certiorari, prohibition and mandamus in the Court of Appeals and obtained a temporary restraining order. The Court of Appeals, however, dismissed the petition on May 18, 1989, holding that the petition did not show prima facie grounds for certiorari and that any errors in the trial judge’s order were not the kind that could be corrected by certiorari because the proper remedy would be appeal from final judgment. The Court of Appeals characterized the trial judge’s discussion as solid and reasoned and found no grave abuse of discretion.

Issues Presented to the Supreme Court

Before the Supreme Court petitioner argued that the trial judge acted without jurisdiction and with grave abuse of discretion in: including in her order bottles not the subject of the action; violating rules on injunctions including preservation of the status quo and issuance against uncertain rights; disregarding the five‑day replevin remedy prescribed by Rule 60; misapplying R.A. 623, as amended; committing procedural infirmities in granting the injunction; and failing to recognize that Tee Chin Ho and “Te Tien Ho” were the same person.

Replevin Law and Third‑Party Remedies

The Supreme Court reviewed Rule 60, Secs. 5 to 7, emphasizing that a defendant in replevin has only two alternative remedies within five days after taking of the property: to object to the sufficiency of the plaintiff’s bond, in which case the defendant may not require return, or to file a counter‑bond in double the value of the property and serve it on the plaintiff to require return. The Court contrasted these remedies with the third‑party remedy, the terceria, which a person other than the defendant may invoke by affidavit of title or by vindicating his claim in a separate action or by intervention if proper.

Identity of the Person Seized and Rule 10 Amendment

The Court found that the trial judge had before her circumstances strongly suggesting that the person who appeared as intervenor was in fact the defendant brought into the case. The record showed that the man signing as intervenor had been served, was present at the seizure, had his wife sign process for him, and had signed the sheriff’s receipt. The Supreme Court stressed that Rule 10, Secs. 1 and 2 allowed amendment as of right to correct a mistake in the name or address of a party before a responsive pleading was served, and that petitioner’s motion to amend to correct the defendant’s name and address was timely and should have been admitted as a matter of right.

Intervention versus Proper Defendant Remedies

The Court held that the trial judge erred in admitting the intervention without first determining whether intervenor was a stranger to the action or the true defendant misnamed. By admitting intervention, the court allowed a person who had effectively been brought into the case by service to avail himself of remedies reserved for third parties, thereby permitting him to evade the five‑day limitations of Rule 60 and to recover possession of the seized property after the statutory period had expired. The Court concluded that sanctioning that procedural route was improper.

Admission of Permissive Counterclaim and Police Seizure

The Supreme Court found that the trial court should not have relied on the permissive counterclaim alleging an earlier police seizure to grant preliminary mandatory relief. The averment of an earlier police seizure rested only on a receipt and the police officers were not impleaded nor required to testify. The Court observed that the permissive counterclaim did not appear to meet the criteria for a counterclaim under Rule 9, Sec. 4, and that the trial court imprudently ordered return of items allegedly seized by the police without determining whether jurisdict

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