Title
Yao Sr. vs. People
Case
G.R. No. 168306
Decision Date
Jun 19, 2007
MASAGANA officers challenged search warrants for alleged trademark infringement; Supreme Court upheld warrants, citing probable cause and proper issuance.
trademark infringement case
search warrant
separate corporate personality
A

Case Summary (G.R. No. 168306)

Factual Background

Petitioners were incorporators and officers of MASAGANA GAS CORPORATION (MASAGANA), a refilling, sale and distribution entity for liquified petroleum gas. Private respondents Petron Corporation and Pilipinas Shell Petroleum Corporation were bulk suppliers whose LPG products were sold under the marks “GASUL” and “SHELLANE,” respectively, and claimed exclusive authority to permit refillers to use those containers and marks. The NBI received a complaint from a law firm representing the private respondents alleging unauthorized refilling and distribution of LPG cylinders bearing Petron’s and Shell’s marks at MASAGANA’s refilling plant in Trece Martires, Cavite.

Applications for Search Warrants and Affidavits

On 3 April 2003, NBI Agent Ritche N. Oblanca filed two applications for search warrants with the RTC seeking to search the MASAGANA compound for evidence of trademark infringement under Sec. 155 in relation to Sec. 170, Republic Act No. 8293. Oblanca attached affidavits recounting surveillance, inspection of trademark registrations, confirmation from Petron and Pilipinas Shell that MASAGANA was not authorized to refill or distribute the named marks, photographs, invoices, and two test-buys conducted on 13 and 27 February 2003 in which LPG cylinders bearing GASUL and SHELLANE were allegedly purchased and refilled in the purchasers’ presence. Bernabe C. Alajar, a private investigator engaged by the private respondents for brand protection, executed corroborating affidavits and accompanied Oblanca during surveillance and the test-buys.

Issuance and Execution of Search Warrants

After conducting a preliminary examination of Oblanca and Alajar and reviewing their affidavits and annexes, Judge Melchor Q.C. Sadang found probable cause and issued Search Warrants No. 2-2003 and No. 3-2003. The warrants directed any peace officer to search the MASAGANA compound at Governor’s Drive, Barangay Lapidario, Trece Martires City, and to seize specifically described items including LPG cylinders bearing the GASUL and SHELLANE marks, enumerated machinery and equipment used in refilling, documents relating to production and distribution, and specified delivery trucks.

Seizures Made

The executing NBI operatives seized numerous filled and empty LPG cylinders bearing the marks of Pilipinas Shell and Petron, several tampered cylinders, one set of motor compressor for filling system, and one LPG refilling machine, together with photographs and invoices reflecting purchases. The inventory of seized items was divided according to the two warrants issued for the separate marks.

Motions to Quash and for Return

On 22 April 2003 petitioners filed a Motion to Quash both search warrants asserting lack of probable cause, absence of authority of the applicants to seek the warrants, falsehoods in the affidavits regarding test-buys, overbroad description of the place to be searched given the compound’s size, and that the items to be seized were lawful business fixtures. On 30 April 2003 MASAGANA, as third party claimant, sought the return of the motor compressor and LPG refilling machine, asserting ownership and legitimate business use and contending that continued seizure would jeopardize its operations.

Trial Court Proceedings and Rulings

On 5 June 2003 the RTC denied the Motion to Quash and the Motion for Return. The RTC found that Oblanca and Alajar had personal knowledge of the facts they related, that their testimony and the documentary and object evidence established probable cause for trademark infringement under Sec. 155 in relation to Sec. 170, and that the warrants were not general warrants because they specifically described the MASAGANA compound and the items to be seized. The RTC further held that MASAGANA could not shelter petitioners behind the corporate entity because petitioners were officers and stockholders using the corporation to commit the alleged infringement; that ownership of the seized items was irrelevant where the person against whom the warrant was directed exercised control or possession; and that the seized machinery and cylinders constituted instruments or corpus delicti of the offense.

Court of Appeals Decision

Petitioners filed a special civil action for certiorari under Rule 65. The Court of Appeals, in a Decision dated 30 September 2004, affirmed the RTC’s orders and ruled that petitioners failed to prove grave abuse of discretion. The Court of Appeals accepted the RTC’s findings on the sufficiency of the affidavits, the testimony at preliminary examination, the particularity of the place and items to be seized, and the propriety of denying the return of the seized machinery and cylinders.

Issues Presented to the Supreme Court

In their Rule 45 petition, petitioners raised five principal grounds: (I) the RTC and Court of Appeals erred in finding probable cause; (II) NBI Agent Oblanca lacked authority to apply for the search warrants; (III) the warrants failed to describe with particularity the place to be searched; (IV) the warrants were ambiguous as to the items to be seized; and (V) MASAGANA should be treated as a third party claimant entitled to the return of seized property.

Petitioners’ Contentions

Petitioners contended that Oblanca and Alajar lacked personal knowledge and had perjured themselves by claiming to have personally conducted the test-buys; that the test-buys were actually effected by other individuals shown in MASAGANA’s entry/exit slips; that Oblanca lacked authority because he was not assigned to the NBI’s Intellectual Property Division and did not present documentary proof of the complaint or authorizations; that the MASAGANA compound was too large and insufficiently described in the warrants; that the description of items to be seized was inadequate for failing to specify sizes; and that MASAGANA, as owner of the seized equipment, was entitled to its return under Section 20, A.M. No. 02-1-06-SC because no civil infringement action had been filed.

The Court’s Analysis on Probable Cause and Personal Knowledge

The Court reviewed the constitutional and rule-based requisites for issuance of a search warrant, invoking Art. III, Sec. 2, 1987 Constitution and Rule 126, Sec. 4. It reiterated that probable cause requires facts and circumstances which would lead a reasonably prudent person to believe an offense occurred and that the objects sought are in the place to be searched, and that such facts must be personally known to the applicant or the witnesses he produced. The Court found that Oblanca and Alajar possessed personal knowledge: they reviewed trademark registrations, confirmed lack of authorization from Petron and Pilipinas Shell, conducted surveillance, personally observed stockpiles and deliveries of multi-branded cylinders, and performed two test-buys in which cylinders bearing the contested marks were refilled in their presence. The Court held that the determination of probable cause by the examining judge deserved great weight and that the judge’s questioning at the preliminary examination was probing and sufficient under Rule 126, Sec. 5. The Court rejected petitioners’ attack that use of aliases during covert purchases negated personal knowledge, explaining that law enforcement commonly used aliases and that neither law nor Rule 126 required disclosure of such tactics in the affidavit or oral examination.

The Court’s Analysis on Authority to Apply and Documentary Requirements

The Court addressed petitioners’ contention that Oblanca lacked authority because his assignment was in the Anti-Organized Crime Division and not the Intellectual Property Division, and that the letter-complaint and board resolutions were not presented. The Court held that Rule 126 did not require that the affiant be a member of a specific division of the NBI or that the applicant produce the complaint or board resolutions; it found Oblanca’s affidavit recited the letter-complaint and the assignment and that public officers are presumed to have regularly performed their duties. The Court concluded that Oblanca’s authority to apply for the warrants was adequately shown.

The Court’s Analysis on Particularity of Place to be Searched

The Court examined the constitution’s requirement for particular description of the place to be searched and applied the rule that a description is sufficient when, with reasonable effort, officers can ascertain and identify the place and distinguish it from other places in the community. The Court found that the search warrants identified the MASAGANA compound at Governor’s Drive, Barangay Lapidario, Trece Martires City, and that the executing officers, who included the affiant familiar with the compound, reached and identified the premises without difficulty. The Court held that internal structures within the compound formed part of a single business complex and did not require further particularization.

The Court’s Analysis on Particularity of I

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