G.R. No. 88938 - La Tondena Distillers, Inc. vs. Court of Appeals

Case Summary (G.R. No. 88938)

Procedural Response by the Person Seized

Within the five‑day window provided by Rule 60 for certain post‑seizure actions, no bond objection or counter‑bond for return was filed. Instead, an individual identifying himself as “Tee Chin Ho” filed on March 1, 1989 an Answer (styled as Answer with Preliminary Injunction and Compulsory Counterclaim) seeking leave to intervene as a party with legal interest. The pleading asserted (a) that sale of La Tondena’s gin included the bottle and thus ownership passed to purchasers, (b) that the bottles had been seized from him at 1105 Estrada St., and (c) that there had been an earlier police seizure of bottles (Annex 5) allegedly taken from him on Oct. 6, 1988. He prayed for injunctive relief and substantial damages.

RTC Action Granting Injunctive Relief and Its Findings

Judge Adduru‑Santillan admitted the answer in intervention and granted the application for preliminary mandatory and prohibitory injunction upon bond. The RTC found (inter alia) that the replevin seizure was only against the person named in the complaint (Te Tien Ho at 1005 Estrada St.), that the two truckloads of bottles seized from intervenor were improperly taken, and that intervenor, as possessor, was presumed owner under Civil Code provisions. The RTC relied on its interpretation of R.A. 623/5700, concluding that Sections 5 and 6 limited the manufacturer’s right to recover bottles and that due process protected the intervenor’s livelihood. The RTC ordered La Tondena to return a total of 41,850 bottles (those seized by the sheriff and those earlier seized by the Manila Police) and enjoined La Tondena from further seizures at intervenor’s address.

Court of Appeals Proceedings and Rationale for Denial of Certiorari

La Tondena sought certiorari, prohibition, and mandamus in the Court of Appeals, arguing that the RTC acted without jurisdiction, violated replevin and injunction rules, misconstrued R.A. 623, and effectively decided the merits. The Court of Appeals denied the petition, holding that the petition did not show a prima facie grave abuse of discretion by the trial judge and that alleged errors were not remediable by certiorari, the proper remedy being appeal from a final judgment on the merits.

Supreme Court Issues on Review

The Supreme Court considered whether (1) the trial judge committed grave abuse of discretion by admitting intervention and issuing the preliminary injunctions without first determining whether the intervenor was in fact the defendant named in the complaint; (2) the trial judge improperly allowed correction of parties and denied the movant a right to amend its complaint under Rule 10; (3) the intervention by a person already served as defendant effectively circumvented the five‑day counter‑bond rule in Rule 60; (4) the RTC erroneously ordered return of bottles allegedly seized by the Manila Police (not the subject of the replevin); and (5) the RTC prematurely decided the merits, misapplying R.A. 623.

Analysis — Proper Remedies Under Replevin and Third‑Party Claims

The Court analyzed Rule 60 Sections 5–7. A defendant aggrieved by a replevin may within five days (a) object to the plaintiff’s bond (but if so, cannot require return by counter‑bond) or (b) file a counter‑bond in double the value to obtain return. A stranger to the action whose property has been seized may file a third‑party claim (terceria) by affidavit of title/possession served on the officer while the officer has possession; the sheriff need not deliver the property unless indemnified by plaintiff. The Court emphasized that these statutory procedures are mandatory and time‑bound.

Analysis — Identity of Parties and the Trial Court’s Duty

The Supreme Court found that the trial judge should have determined whether “Tee Chin Ho” was a stranger or the actual defendant mistakenly named as “Te Tien Ho.” The record showed facts that strongly suggested they were the same person: service at the intervenor’s junk shop, seizure at that location, intervenor’s implicit acknowledgment (wife signing), phonetic similarity of names, and La Tondena’s motion to amend asserting the mistake. Before admitting intervention, the RTC should have resolved this identification issue because the intervenor’s proper status determines whether he had the statutory remedies for defendants (counter‑bond or objection) or the third‑party remedies. The Court concluded the judge acted precipitously by admitting intervention and issuing injunctions without such determination.

Analysis — Right to Amend Under Rule 10 and Improper Handling by Trial Court

The Supreme Court noted that La Tondena sought to amend its complaint to correct the defendant’s name and address — an amendment permitted as a matter of right under Rule 10 §2 because no effective responsive pleading had been served (the answer in intervention had not been admitted/served upon La Tondena at that time). Given Rules 10(1)–(2) and 10(4), the amendment should have been permitted summarily, absent prejudice. The RTC’s refusal to promptly admit the amendment and its decision to admit intervention instead was inconsistent with the Rules and amounted to whimsical, oppressive action.

Analysis — Intervention as a Tactical Evasion of Replevin Time Limits

The Court observed that the intervenor had effectively been already brought into the action by personal service and had implicitly acknowledged the writ; yet he sought to intervene as a third party. This maneuver allowed him to avoid the mandatory five‑day counter‑bond rule and to contest the grounds for the writ, which a properly designated defendant could not do at that stage. By permitting intervention without first resolving identity and without enforcing the replevin timelines, the RTC improperly permitted procedural evasion. The Court found fault with the RTC for sanctioning that tactic.

Analysis — Permissive Counterclaim and Police Seizure Issues

The RTC ordered return of not only the bottles seized under the writ of delivery (20,250 bottles) but also bottles allegedly seized earlier by the Manila Police (21,600 bottles) based on the intervenor’s permissive counterclaim. The Supreme Court stressed that permissive counterclaims must meet Rule 9 criteria and ordinarily require proper evidence and parties (e.g., police officers) to establish the circumstances of the earlier seizure and possession. The record contained only a police receipt; no police officers were impleaded or required to testify, and no proof established that La Tondena had custody or that the police seizure was unlawful or in La Tondena’s name. Given the presumption of regularity of o

Case Syllabus (G.R. No. 88938)

Procedural Posture and Relief Sought

Petition for certiorari, prohibition and mandamus filed by La Tondena Distillers, Inc. assailing: the Order dated April 7, 1989 of the Regional Trial Court, Branch 38, Manila (Judge Natividad G. Adduru-Santillan) granting intervenor Tee Chin Ho leave to intervene and directing preliminary mandatory and prohibitory injunctions; and the Writ of Mandatory and Prohibitory Injunction dated April 11, 1989 issued pursuant thereto.
La Tondena sought nullification of the RTC order and writ, and inhibition of enforcement; it obtained a temporary restraining order from the Court of Appeals pending resolution.
The Court of Appeals dismissed the petition for lack of prima facie showing of grave abuse of discretion; the Supreme Court granted La Tondena’s petition, reversed the Court of Appeals, annulled the RTC order and writ, and restored the status quo.
Final Supreme Court disposition: petition GRANTED; Court of Appeals decision REVERSED; RTC Order (April 7, 1989) and Writ (April 11, 1989) ANNULLED and SET ASIDE; proceedings to continue as if the RTC order and writ had never been issued; costs against private respondent. Decision by Justice Narvasa; Paras, Padilla, and Regalado, JJ., concur; Justice Nocon on leave.

Core Facts (Plaintiff’s Complaint and Characterization of Property)

Plaintiff La Tondena Distillers, Inc. manufactures and sells a gin popularly known as “Ginebra San Miguel,” packaged in 350 c.c. white flint bottles bearing blown-in marks “LA TONDENA, INC.” and “GINEBRA SAN MIGUEL,” specially ordered by plaintiff from bottle manufacturers for exclusive use.
The bottles were registered with the Philippine Patent Office by plaintiff’s predecessor pursuant to Republic Act No. 623, as amended by R.A. 5700; registration had been renewed and was valid and subsisting.
Section 2 of R.A. 623, as amended, was cited: unlawful for any person, without written consent of the registered manufacturer/bottler/seller, to fill such registered bottles for sale or to sell, dispose of, buy, traffic in, or wantonly destroy such bottles, filled or not.
Plaintiff alleged that sale of its gin did not ipso jure include sale of the bottles; sales invoices did not specify that sale of the beverage included the container.
Plaintiff’s verified complaint alleged defendant “Te Tien Ho,” described as a junk dealer/second-hand store owner at “1005 Estrada St., Singalong, Manila,” had in his possession registered bottles valued at P20,000. Plaintiff prayed for: (a) writ of delivery upon posting a P40,000 bond; (b) trial adjudication of ownership and delivery or payment for bottles; and (c) damages and attorney’s fees in specific amounts.

Issuance of Writ, Seizure and Sheriff’s Return

Trial judge issued writ of delivery on February 13, 1989 after plaintiff posted a P40,000 bond.
Deputy Sheriff Regio Ruefa executed the writ and on February 22, 1989 seized 20,250 bottles with the blown-in marks at No. 1105 Estrada St., Singalong, Manila (not No. 1005 as alleged in the complaint).
Sheriff Ruefa executed a handwritten receipt dated February 22, 1989 acknowledging receipt of “405 boxes/50 (20,250) bottles” described as 350 c.c. with marks “LA TONDENA INC. and GINEBRA San Miguel,” stating location as 1105 Estrada St., Singalong, Manila.
The receipt bore a signature by “Tee Chin Ho,” who signed as a witness and was described in the receipt as “defendant,” even though the writ named “Te Tien Ho.”
Sheriff’s return (March 3, 1989) stated personal service of process and implementation of the writ was effected at 1105 Estrada St., Singalong, Manila; defendant Te Tien Ho requested his wife Perla Diolesa to sign his name on originals of the summons and writ for and in his behalf.
The five-day statutory period for objecting to the replevin bond or requiring return of the property expired without objection or counter-bond filed.

Intervention, Answer-in-Intervention and Annexes by Tee Chin Ho

On March 1, 1989 a pleading titled “ANSWER (with preliminary injunction and compulsory counterclaim)” was filed by an individual identifying himself as “Tee Chin Ho,” seeking leave to intervene as a party with legal interest and styling his filing as an “answer-in-intervention.”
Allegations in the answer-in-intervention included:
- All purchases of La Tondena’s gin included the bottles; ownership of bottles passed to purchasers; hence plaintiff’s claim to recover bottles was baseless.
- The bottles seized were taken from him, Tee Chin Ho, at 1105 Estrada St., not from Te Tien Ho at 1005 Estrada St. as alleged by plaintiff.
- La Tondena had allegedly caused two seizures against intervenor: first by the Manila police (receipt Annex 5, dated Oct. 6, 1988) and second by the sheriff (receipt Annex 6, Feb. 22, 1989).
Annex 5 (Oct. 6, 1988 receipt): record of Manila police receipt showing 432 x 50 (21,600) bottles and other items from “TEE CHIN HO JUNK SHOP,” issued by Pat. Benito De Leon, received by F. Lazaro; alleged seizure predating plaintiff’s replevin.
Intervenor prayed for preliminary mandatory and prohibitory injunctions, dismissal of complaint, and damages in substantial sums (actual P300,000; moral P1,000,000; exemplary P2,000,000; attorney’s fees P100,000).

Trial Court Proceedings, Motions and Orders (Branch 38, RTC)

La Tondena filed reply and opposed intervenor’s application for injunction; on April 5, 1989 it filed a “Motion to Admit Attached Amended Complaint with Motion to Dismiss Motion for Intervention and Petition for Preliminary Injunction,” asserting the proposed amendment would correct a mistake in the defendant’s name and address (Te Tien Ho → Tee Chin Ho).
On April 7, 1989 Judge Adduru-Santillan issued an Order “for intervenor Tee Chin Ho,” directing issuance of preliminary prohibitory and mandatory injunctions upon intervenor’s posting of a P45,000 bond.
Findings recited by the RTC included:
- The replevin seizure was only against the person named in the complaint (Te Tien Ho at No. 1005), and the two truckloads seized from intervenor were improper and unlawful.
- Intervenor, as possessor of the two truckloads of empty bottles, is presumed owner under Articles 433 and 541, Civil Code.
- Even under R.A. 623 as amended by R.A. 5700, the law negates any right of action of a registered manufacturer to recover empty bottles from any person to whom the manufacturer had transferred the containers (Section 5) and expressly exempts bottles used as containers for certain native products (Section 6).
- Due process protects intervenor’s right to earn livelihood through the junk shop business.
On April 11, 1989 the RTC issued the writs, ordering La Tondena to return and restore to intervenor Tee Chin Ho at 1105 Estrada St. all 41,850 empty bottles/containers bearing the marks “La Tondena Inc.” and “Ginebra San Miguel” allegedly seized (covering both the Feb. 22, 1989 and the Oct. 6, 1988 seizures), and enjoining plaintiff from further seizing bottles from intervenor at that address until further orders.
Judge Adduru-Santillan admitted Tee Chin Ho’s answer-in-intervention by Order of April 7, 1989; she also deferred a ruling on La Tondena’s motion to amend complaint, deeming it submitted for resolution and noting her impending retirement would suspend trial effective April 26, 1989.

Court of Appeals Proceedings and Ruling

La Tondena filed a petition in the Court of Appeals (CA-G.R. SP No. 17384) on April 19, 1989 seeking certiorari, prohibition and mandamus to annul the RTC order and writ and to command the sheriff to refrain from enforcing same; the CA issued a TR