FIRST DIVISION

[ G.R. NO. 160191, June 08, 2006 ]

TWIN ACE HOLDINGS CORPORATION, PETITIONER, VS. RUFINA AND

COMPANY, RESPONDENT.

DECISION

CHICO-NAZARIO, J.:
From the records, it appears that on 3 December 1991, Twin Ace Holdings
Corporation (Twin Ace) filed a Complaint[1] for recovery of possession of
personal property, permanent injunction and damages with prayer for the
issuance of a writ of replevin, temporary restraining order and a writ of
preliminary injunction against Rufina and Company (Rufina).

As alleged in the complaint, Twin Ace is a private domestic corporation

engaged in the manufacture of rhum, wines and liquor under the name and
style "Tanduay Distillers." It has registered its mark of ownership of its
bottles with the Bureau of Patent, Trademarks and Technology Transfer
under Republic Act No. 623. In the conduct of its business, it sells its
products to the public excluding the bottles. It makes substantial
investments in brand new bottles which it buys from glass factories and
which they use for about five times in order to recover the cost of
acquisition. Twin Ace thus retrieves its used empty bottles, washes and
uses them over and over again as containers for its products.

On the other hand, Rufina is engaged in the production, extraction,

fermentation and manufacture of patis and other food seasonings and is
engaged in the buying and selling of all kinds of foods, merchandise and
products for domestic use or for export to other countries. In
producing patis and other food seasonings, Rufina uses as containers
bottles owned by Twin Ace without any authority or permission from the
latter. In the process, Rufina is unduly benefited from the use of the
bottles.

Upon the posting of Twin Ace of the required bond, the Regional Trial
Court (RTC) of Manila, Branch 26, issued an Order dated 5 February 1992
granting the application for the issuance of a writ of replevin.[2] Upon the
implementation of the said writ, Deputy Sheriff Amado P. Sevilla was able
to seize a total of 26,241 empty bottles marked "TANDUAY DISTILLERY,
INC.,"[3] at the address of Rufina.

In its Answer with counter-application for a Writ of Preliminary Injunction,

Rufina claimed that the marked bottles it used as containers for its
products were purchased from junk dealers; hence, it became the owner
thereof.

After hearing, the trial court rendered its decision dated 20 May 1995 the
dispositive portion of which states:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in

favor of the defendant as follows:

a) dismissing the complaint for lack of merit;

b) dissolving the order of replevin;

c) ordering the plaintiff to return 26,241 bottles to the defendant in the

place where the bottles were seized at the expense of the plaintiff within 48
hours from receipt hereof;

d) ordering the plaintiff to pay the defendant the sum of P100,000.00 as

actual damages sustained by the latter to be taken from the replevin bond;

e) ordering the plaintiff to pay the defendant the sum of P1,000,000.00 as

damages for besmirched reputation;

f) ordering the plaintiff to pay the sum of P100,00.00 as nominal damages;

g) ordering the plaintiff to pay the defendant the sum of P50,000.00 as

attorney's fee; and

h) ordering the plaintiff to pay the cost of the suit.[4]

Twin Ace appealed to the Court of Appeals. On 27 September 2002, the
appellate court rendered its decision[5] modifying the decision of the trial
court as follows:
WHEREFORE, in view of all the foregoing, the appealed decision dated
May 20, 1995 of Branch 26, Regional Trial Court, Manila, in Civil Case No.
92-59862 is MODIFIED, in that the award of damages, except nominal
damages, and attorney's fees is DELETED for lack of legal and factual
basis. The award of nominal damages is reduced to P50,000.00. In all
other respects, the assailed decision is AFFIRMED.

Costs against plaintiff-appellant.[6]

A motion for reconsideration dated 19 October 2002[7] filed by Twin Ace
was denied in a resolution of the Court of Appeals dated 29 September
2003.[8] Hence, this Petition for Review.

For resolution are the following issues:

I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
RESPONDENT RUFINA IS NOT COVERED WITHIN THE EXEMPTION
PROVIDED BY SECTION 6 OF R.A. 623, AS AMENDED BY R.A. 5700.

II.
THE HONORABLE COURT OF APPEALS ERRED IN AWARDING
NOMINAL DAMAGES AGAINST PETITIONER TWIN ACE
CONSIDERING THAT IT WAS THE ONE WHOSE RIGHTS HAVE BEEN
VIOLATED OR INVADED BY RESPONDENT RUFINA.

III.
THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING
THAT PETITIONER AS OWNER OF THE SUBJECT BOTTLES IS
ENTITLED TO COMPENSATION FOR ITS UNAUTHORIZED USE BY
RESPONDENT RUFINA.[9]
Pertinent provision of Republic Act No. 623,[10] as amended by Republic Act
No. 5700,[11] is quoted hereunder for clarity:

Sec. 2. It shall be unlawful for any person, without the written consent of
the manufacturer, bottler, or seller, who has successfully registered the
marks of ownership in accordance with the provisions of the next preceding
section, to fill such bottles, boxes, kegs, barrels, steel cylinders, tanks,
flasks, accumulators, or other similar containers so marked or stamped, for
the purpose of sale, or to sell, dispose of, buy or traffic in, or wantonly
destroy the same, whether filled or not to use the same for drinking vessels
or glasses or drain pipes, foundation pipes, for any other purpose than that
registered by the manufacturer, bottler or seller. Any violation of this
section shall be punished by a fine of not more than one thousand pesos or
imprisonment of not more than one year or both.

Sec. 3. The use by any person other than the registered manufacturer,
bottler or seller, without written permission of the latter of any such bottle,
cask, barrel, keg, box, steel cylinders, tanks, flasks, accumulators, or other
similar containers, or the possession thereof without written permission of
the manufacturer, by any junk dealer or dealer in casks, barrels, kegs,
boxes, steel cylinders, tanks, flasks, accumulators, or other similar
containers, the same being duly marked or stamped and registered as
herein provided, shall give rise to a prima facie presumption that such use
or possession is unlawful.[12]

Sec. 4. The criminal action provided in this Act shall in no way affect any
civil action to which the registered manufacturer, bottler, or seller, may be
entitled by law or contract.

Sec. 5. No action shall be brought under this Act against any person to
whom the registered manufacturer, bottler, or seller, has transferred by way
of sale, any of the containers herein referred to, but the sale of the beverage
contained in the said containers shall not include the sale of the containers
unless specifically so provided.

Sec. 6. The provisions of this Act shall not be interpreted as prohibiting the
use of bottles as containers for "sisi," "bagoong," "patis," and similar native
products.[13]
In sum, Twin Ace asserts that the provision under the law affords
protection only to small scale producers/manufacturers who do not have
the capacity to buy new bottles for use in their products and cannot extend
to Rufina which had unequivocably admitted in its Answer[14] and
affirmed in the decision of the trial court that it is engaged, on a large scale
basis, in the production and manufacture of food seasonings.

For its part, Rufina counters that the law did not really distinguish between
large scale manufacturers and small time producers.

The petition is not meritorious.

The earlier case of Twin Ace Holdings Corporation v. Court of
Appeals,[15] applies to the present petition. In said case, Twin Ace filed a
Complaint for Replevin against Lorenzana Food Corporation to recover
three hundred eighty thousand bottles allegedly owned by Twin Ace but
detained and used by Lorenzana Food Corporation as containers for its
native products without its express permission, in violation of the law. In
that case, this Court acknowledged that the exemption under the law is
unqualified as the law did not make a distinction that it only applies to
small scale industries but not to large scale manufacturers. Thus, even if
the court in said case held that the exemption is primarily meant to give
protection to small scale industries, it did not qualify that the protection
therein was intended and limited only to such. The Court held:

Petitioner itself alleges that respondent LORENZANA uses the subject 350
ml., 375 ml. and 750 ml. bottles as containers for processed foods and other
related products such as patis, toyo, bagoong, vinegar and other food
seasonings. Hence, Sec. 6 squarely applies in private respondent's
favor. Obviously, the contention of TWIN ACE that the exemption refers
only to criminal liability but not to civil liability is without merit. It is
inconceivable that an act specifically allowed by law, in other words legal,
can be the subject of injunctive relief and damages. Besides, the
interpretation offered by petitioner defeats the very purpose for which the
exemption was provided.

Republic Act No. 623, "An Act to Regulate the Use of Duly Stamped or
Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers,"
as amended by RA No. 5700, was meant to protect the intellectual property
rights of the registrants of the containers and prevent unfair trade practices
and fraud on the public. However, the exemption granted in Sec. 6 thereof
was deemed extremely necessary to provide assistance and incentive to the
backyard, cottage and small-scale manufacturers of indigenous native
products such as patis, sisi and toyo who do not have the capital to buy
brand new bottles as containers nor afford to pass the added cost to the
majority of poor Filipinos who use the products as their daily condiments
or viands. If the contention of petitioner is accepted, i.e., to construe the
exemption as to apply to criminal liability only but not to civil liability, the
very purpose for which the exemption was granted will be defeated. None
of the small-scale manufacturers of the indigenous native products
protected would possibly wish to use the registered bottles if they are
vulnerable to civil suits. The effect is a virtual elimination of the clear and
unqualified exemption embodied in Sec. 6. It is worthy to note that House
Bill No. 20585 was completely rejected because it sought to expressly and
directly eliminate that which petitioner indirectly proposes to do with this
petition.[16] (Emphasis supplied.)
It is worth noting that Lorenzana Food Corporation which prevailed in the
case filed by Twin Ace against it is certainly not a small scale industry. Just
like Rufina, Lorenzana Food Corporation also manufactures and exports
processed foods and other related products, e.g., patis, toyo,
bagoong, vinegar and other food seasonings.

It is a basic rule in statutory construction that when the law is clear and free
from any doubt or ambiguity, there is no room for construction or
interpretation. As has been our consistent ruling, where the law speaks in
clear and categorical language, there is no occasion for interpretation; there
is only room for application.[17]

Notably, attempts to amend the protection afforded by Section 6 of

Republic Act No. 623, by giving protection only to small scale
manufacturers or those with a capitalization of five hundred thousand
pesos or less (P500,000.00), through then House Bill No. 20585,[18] and
subsequently through House Bill No. 30400,[19] proved unsuccessful as the
amendment proposed in both Bills was never passed.

In view of these considerations, we find and so hold that the exemption

contained in Section 6 of Rep. Act No. 623 applies to all manufacturers
of sisi, bagoong, patis and similar native products without distinction or
qualification as to whether they are small, medium or large scale.

On the issue of nominal damages, Article 2222 of the Civil Code[20] states
that the court may award nominal damages in every obligation arising from
any source enumerated in Article 1157,[21] or in every other case where any
property right has been invaded.[22] Nominal damages are given in order
that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.[23] In another
case,[24] this Court held that when plaintiff suffers some species of injury
not enough to warrant an award of actual damages, the court may award
nominal damages. Considering the foregoing, we find that the award of
nominal damages to Rufina in the amount of fifty thousand pesos
(P50,000.00) is reasonable, warranted and justified.

As to the third issue, Rule 60, Section 2(a), of the Revised Rules of Court
mandates that a party praying for the recovery of possession of personal
property must show by his own affidavit or that of some other person who
personally knows the facts that he is the owner of the property claimed,
particularly describing it, or is entitled to the possession thereof.[25] It must
be borne in mind that 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.[26] Wrongful detention by the defendant of the properties sought
in an action for replevin must be satisfactorily established. If only a
mechanistic averment thereof is offered, the writ should not be
issued.[27] In this case, Twin Ace has not shown that it is entitled to the
possession of the bottles in question and consequently there is thus no basis
for the demand by it of due compensation. As stated by the court in the
earlier case of Twin Ace Holdings Corporation v. Court of Appeals[28]:

Petitioner cannot seek refuge in Sec. 5 of RA No. 623 to support its claim of
continuing ownership over the subject bottles. In United States v. Manuel
[7 Phil. 221 (1906)] we held that since the purchaser at his discretion could
either retain or return the bottles, the transaction must be regarded as a
sale of the bottles when the purchaser actually exercised that discretion and
decided not to return them to the vendor. We also take judicial notice of
the standard practice today that the cost of the container is included in the
selling price of the product such that the buyer of liquor or any such
product from any store is not required to return the bottle nor is the liquor
placed in a plastic container that possession of the bottle is retained by the
store.
WHEREFORE, premises considered, the instant petition is DENIED for
lack of merit and the decision dated 27 September 2002 and resolution
dated 29 September 2003, in CA-G.R. CV No. 52852, both of the Court of
Appeals are Affirmed.

SO ORDERED.

Panganiban, C.J., (Chairperson), Austria-Martinez, (Acting

Chairman), and Callejo, Sr., JJ., concur.
Ynares-Santiago, J., on leave.
[1] Records, Vol. I, pp. 1-8.

[2] Id., p. 67.

[3] Rollo, Annex B, p. 83.

[4] Penned by Judge Guillermo L. Loja, Sr., Rollo, pp. 160-161.

[5]Docketed as CA-G.R. CV No. 52852, penned by Associate Justice Sergio

L. Pestaño with Associate Justices Eloy R. Bello, Jr. and Teodoro P. Regino
concurring.

[6] Rollo, p. 49-A.

[7] CA rollo, pp. 118- 129.

[8] Rollo, p. 52

[9] Id., p. 239.

AN ACT TO REGULATE THE USE OF DULY STAMPED OR MARKED

[10]

BOTTLES, BOXES, CASKS, KEGS, BARRELS AND OTHER SIMILAR

CONTAINERS.

AN ACT AMENDING CERTAIN SECTIONS OF REPUBLIC ACT

[11]

NUMBERED SIX HUNDRED TWENTY-THREE AS TO INCLUDE THE

CONTAINERS OF COMPRESSED GASES WITHIN THE PURVIEW OF
THE SAID ACT.

[12] Republic Act No. 5700.

[13] Republic Act No. 623.

"7. That with respect to paragraph 9, it admits that it produces patis on a

[14]

large scale at its big factory in 290 C. Arellano Street, Malabon, Metro
Manila and that it distributes the same to supermarkets and big grocery
stores and exports the same but denies the rest of the allegations of the
paragraph; x x x. (Rollo, p. 111.)

[15] 345 Phil. 1133 (1997).

[16] Id., pp. 1139-1140.

Rizal Commercial Banking Corporation v. Intermediate Appellate

[17]

Court, 378 Phil. 10, 22 (1999) citing Cebu Portland Cement Co. v.
Municipality of Naga, Cebu, 133 Phil. 695, 699 (1968); Carriaga v. Judge
Anasario, 444 Phil. 685, 690 (2003).

"An Act Prohibiting The Use of Duly Registered and Marked Containers
[18]

Of Liquor, Wines and Spirits As Containers For "Sisi", "Bagoong", "Patis"

and Similar Native Products Amending for the Purpose Republic Act No.
Six Hundred Twenty-Three, As Amended, And Increasing Penalty For
Violation Therefor." (Records, Vol. I, pp. 259-260.)

"An Act Prohibiting The Use of Duly Registered and Marked Containers
[19]

for any purpose other than that registered amending for the purpose of
Republic Act Numbered Six Hundred Twenty-Three, As Amended, and
Increasing The Penalty For Violation Therefor." (Records, Vol. I, p. 262).

[20]Art. 2222. The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case where
any property right has been invaded.

[21] Art. 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts.
 Cogeo-Cubao Operators and Drivers Association v. Court of
[22]

Appeals, G.R. No. 100727, 18 March 1992, 207 SCRA 343, 347.

[23]Citytrust Banking Corporation v. Intermediate Appellate Court, G.R.

No.84281, 27 May 1994, 232 SCRA 559, 565; National Power Corporation
v. Spouses Campos, 453 Phil. 79, 98 (2003).

China Airlines, Ltd., v. Court of Appeals, G.R. No. 129988, 14 July

[24]

2003, 406 SCRA 113, 134.

[25]Sec. 1. Application. - A party praying for the recovery of possession of

personal property may, at the commencement of the action or at any time
before answer, apply for an order for the delivery of such property to him,
in the manner hereinafter provided.

Sec. 2. Affidavit and bond. - The applicant must show by his own affidavit
or that of some other person who personally knows the facts:

(a) That the applicant is the owner of the property claimed, particularly
describing it, or is entitled to the possession thereof;
(b) That the property is wrongfully detained by the adverse party, alleging
the cause of detention thereof according to the best of his knowledge,
information, and belief; x x x.
(Rule 60, REPLEVIN, Revised Rules of Court.).

Distilleria Washington, Inc. v. Court of Appeals, 331 Phil. 622, 630

[26]

(1996).

[27] Factoran, Jr., v. Court of Appeals, 378 Phil. 282, 294 (1999).

[28] Supra note 15, p. 1140.