Case Summary (G.R. No. 168306)
Petitioners
William C. Yao, Sr., Luisa C. Yao, Richard C. Yao, William C. Yao, Jr., and Roger C. Yao, incorporators and officers of MASAGANA, challenged the issuance and execution of Search Warrants No. 2‐2003 and No. 3‐2003 and moved for the return of seized equipment.
Respondents
The People of the Philippines, Petron Corporation (owner of the GASUL trademarks) and Pilipinas Shell Petroleum Corporation (authorized user of the SHELLANE marks), alleged unauthorized use of their registered trademarks in violation of Republic Act No. 8293.
Key Dates
• Affidavits and applications filed: April 3, 2003
• Search Warrants issued by RTC, Cavite City: June 5, 2003
• RTC denied motions to quash and for return: June 5, 2003; reconsideration denied July 21, 2003
• CA affirmed RTC: Decision September 30, 2004; resolution June 1, 2005
• SC Decision: June 19, 2007
Applicable Law
1987 Philippine Constitution, Article III, Section 2; Rule 126, Sections 4–5, Revised Rules on Criminal Procedure; Section 155 and Section 170, Republic Act No. 8293 (Intellectual Property Code).
Factual Background
MASAGANA operated an LPG refilling plant in Trece Martires, Cavite. Petron owned the GASUL marks; Shell International (through Pilipinas Shell) owned the SHELLANE marks. Neither authorized MASAGANA to refill or distribute their cylinders.
Applications for Search Warrants and Affidavits
On April 3, 2003, Oblanca, with Alajar’s corroboration, filed two applications alleging probable cause under Sections 155 and 170 of RA 8293. They reviewed trademark registrations, verified non‐authorization, conducted two test‐buys using aliases, observed refilling in their presence, noted absence of valve seals, and documented deliveries of branded cylinders.
Issuance and Contents of Search Warrants
Judge Melchor Q.C. Sadang found probable cause and issued two warrants commanding search of the MASAGANA compound and seizure of: branded LPG cylinders; refilling machinery (compressors, pumps, hoses, scales, seals); accounting records; and delivery vehicles bearing specific plate numbers.
Execution of Warrants and Seized Items
NBI operatives executed the warrants, seizing dozens of filled and empty GASUL and SHELLANE cylinders (11 kg and 50 kg), a motor compressor, an LPG refilling machine, and related documents and vehicles.
Motions to Quash and for Return of Property
Petitioners moved to quash the warrants, arguing lack of probable cause, authority, and particularity, and labeling them general warrants. MASAGANA, as third‐party claimant, sought return of equipment used in its legitimate business.
RTC Orders and Rationale
On June 5, 2003, the RTC denied both motions. It held that: (1) affidavits and evidence established probable cause; (2) Oblanca and Alajar had personal knowledge from surveillance and test‐buys; (3) the compound was sufficiently described; (4) items to be seized were particularized; and (5) MASAGANA could not claim separate ownership, as petitioners used the corporation to commit infringement.
Appeal and CA Decision
Under Rule 65, petitioners sought certiorari relief at the Court of Appeals. On September 30, 2004, the CA affirmed the RTC, finding no grave abuse of discretion in the issuance or execution of the warrants; the CA denied petitioners’ motion for reconsideration on June 1, 2005.
Petitioners’ Grounds before the Supreme Court
Petitioners challenged: (I) existence of probable cause; (II) authority of Oblanca to apply for the warrants; (III) particularity of the place description; (IV) particularity of items to be seized; and (V) MASAGANA’s right as third‐party claimant to recover seized equipment.
Issue I – Probable Cause Standard
Probable cause for a search warrant under the 1987 Constitution and Rule 126 requires facts or circumstances leading a prudent person to believe an offense was committed and evidence is in the place to be searched. Affidavits must be supported by personal knowledge, not mere hearsay.
Issue I – Evidence of Personal Knowledge
Oblanca and Alajar personally reviewed trademark registrations, verified non‐authorization, conducted undercover test‐buys, witnessed refilling, and observed delivery operations. Documentary and photographic evidence corroborated their accounts. The Court held these facts sufficient to establish probable cause without applying the stricter standards of proof used at trial.
Issue II – Authority to Apply for Warrants
Petitioners argued that Oblanca lacked authority as he was not assigned to the Intellectual Property Division. The Court found no rule requiring a specific division assignment; the agent’s affidavit showed he was duly assigned following a letter‐complaint. There was no statutory obligation to present the originating complaint or board resolutions.
Issue III – Particularity of Place to be Searched
Constitutional and rule requirements demand the place be described with sufficient particularity so officers can identify it. The warrants specified the MASAGANA compound at Governor’s Drive, Barangay Lapidario, Tre
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Parties and Corporate Identities
- Petitioners: William C. Yao, Sr., Luisa C. Yao, Richard C. Yao, William C. Yao Jr., and Roger C. Yao, incorporators and officers of Masagana Gas Corporation (MASAGANA).
- Private Respondents:
- Petron Corporation (registered owner of the trademarks “GASUL” and “GASUL cylinders,” sole authorizer of refillers).
- Pilipinas Shell Petroleum Corporation (authorized user of “SHELLANE” and “SHELL device” marks for Shell International Petroleum Co. Ltd.).
- Public Respondent: The People of the Philippines, represented by the National Bureau of Investigation (NBI).
Facts of the Case
- MASAGANA, engaged in refilling, sale, and distribution of LPG, allegedly refilled and sold Gasul and Shellane cylinders without authorization.
- NBI Agent Ritche N. Oblanca and private investigator Bernabe C. Alajar conducted surveillance and two test-buys (February 13 and 27, 2003) inside MASAGANA’s Trece Martires compound under aliases.
- Observations included multi-branded LPG cylinder stockpiles, uncovered refilling pumps without valve seals, delivery trucks bearing Gasul and Shellane moving in and out, and facilities spanning approximately 7,000 to 10,000 square meters.
Applications for Search Warrants and Affidavits
- Date of filing: April 3, 2003, with RTC Branch 17, Cavite City.
- Alleged violation: Section 155 in relation to Section 170 of RA 8293 (trademark infringement).
- Attached affidavits by Oblanca and Alajar:
- Review of trademark registrations of Petron and Shell International.
- Confirmation from rights holders that MASAGANA lacked authority.
- Personal verification of illegal refilling, sale, and distribution.
- Cash invoices No. 56210 and No. 56398 for test-buy purchases.
- Photographs of cylinders, trucks, and registration papers.
Issuance and Execution of Search Warrants
- Search Warrant No. 2-2003 (Shellane marks) and No. 3-2003 (Gasul marks) issued June 5, 2003, by Judge Melchor Q.C. Sadang.
- Items commanded seized included:
- Empty and filled LPG cylinders bearing respective marks.
- Bulk storage tanks, compressors, pumps, hoses, pipelines, weighing scales, simulated seals.
- Sales and accounting documents, delivery vehicles (listed by plate numbers).
- Execution: NBI operatives served warrants immediately on MASAGANA compound.
Seizure Inventory
- Under Warrant No. 2-2003 (Shellane):
- 38 filled and 39 empty 11 kg cylinders; 8 filled and 3 empty 50 kg cylinders; one motor compressor.
- Under Warrant No. 3-2003 (Gasul):
- 6 filled and 63 empty 11 kg cylinders (without seal); 7 tampered 11 kg and 5 tampered 50 kg cylinders; one motor compressor; one LPG refilling machine.
Motions before the RTC
- April 22, 2003: Petitioners’ Motion to Quash both search warrants for lack of probable cause, lack of authority, general-warrant character, and vague place description