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884 SUPREME COURT REPORTS ANNOTATED

Twin Ace Holdings Corporation vs. Court of Appeals

*
G.R. No. 123248. October 16, 1997.

TWIN ACE HOLDINGS CORPORATION, petitioner, vs.

COURT OF APPEALS and LORENZANA FOOD
CORPORATION, respondents.

Trademarks and Tradenames; R.A. No. 623; Registered

containers of hard liquor such as rhum, gin, brandy and the like
are protected by R.A. No. 623.—The question of whether
registered containers of hard liquor such as rhum, gin, brandy
and the like are protected by RA No. 623 has already been settled
in Cagayan Valley

_____________

* FIRST DIVISION.

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Twin Ace Holdings Corporation vs. Court of Appeals

Enterprises, Inc. v. Court of Appeals. In that case, the Court dealt

squarely with the issue and ruled in the affirmative reasoning
that hard liquor, although regulated, is not prohibited by law,
hence, still within the purview of the phrase “other lawful
beverages” protected by RA No. 623, as amended. Consequently
petitioner therein Cagayan Valley Enterprises, Inc. was enjoined
from using the 350 ml. white flint bottles of La Tondeña, Inc.,
with the marks of ownership “La Tondeña, Inc.” and “Ginebra San
Miguel” for its own liquor products.
Same; Same; Injunctions; It is inconceivable that an act
specifically allowed by law, in other words legal, can be the subject
of injunctive relief and damages.—But while we adopt the
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foregoing precedent and rule in accordance therewith, we will not

decide this case in favor of petitioner because it is quite clear that
respondent falls within the exemption granted in Sec. 6 which
states: “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.” 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.
Same; Same; The exemption granted in Sec. 6 of R.A. 623 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.—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

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886 SUPREME COURT REPORTS ANNOTATED

Twin Ace Holdings Corporation vs. Court of Appeals

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
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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.
Same; Same; Evidence; Judicial Notice; The Supreme Court
takes 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.—
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 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.

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

     Ocampo, Quiroz, Pesayco & Associates for petitioner.
     Buenaluz, Urbano Law Office for private respondent.
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Twin Ace Holdings Corporation vs. Court of Appeals

BELLOSILLO, J.:

TWIN ACE HOLDINGS CORPORATION (TWIN ACE) is a

manufacturer, distiller and bottler of distillery products,
e.g., rhum, gin, brandy, whiskey, vodka, liquor and cordial
under the name and style of Tanduay Distillers, Inc.
(TANDUAY). Lorenzana Food Corporation (LORENZANA),
on the other hand, manufactures and exports processed
foods and other related products, e.g., patis, toyo, bagoong,
vinegar and other food seasonings. On 16 1
January 1992
TWIN ACE filed a complaint for replevin to recover three
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hundred eighty thousand (380,000) bottles of 350 ml., 375

ml. and 750 ml. allegedly owned by it but detained and
used by LORENZANA as containers for native products2
without its express permission, in violation of RA No. 623.
This law prohibits the use of registered bottles and other
containers for any purpose other than that for which they
were registered without the express permission of the
owner.
LORENZANA moved to dismiss the complaint on the
ground that RA No. 623 could not be invoked by TWIN
ACE because the law contemplated containers of non-
alcoholic beverages only. But, assuming arguendo that the
law applied in TWIN ACE’s favor, the right of
LORENZANA to use the bottles as containers for its patis
and
3
other native products was expressly sanctioned by Sec.
6 of the same law and upheld by this Court 4
in Cagayan
Valley Enterprises, Inc. v. Court of Appeals.
On 16 March 1992 the Regional
5
Trial Court of Manila
dismissed the complaint. TWIN ACE appealed to
respondent

________________

1 Civil Case No. 92-59863, RTC-Br. 27, Manila.

2 “An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes,
Casks, Kegs, Barrels and other Similar Containers.”
3 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.
4 G.R. No. 78413, 8 November 1989, 179 SCRA 218.
5 Order of dismissal issued by Judge Willelmo C. Fortun, RTC-Br. 27,
Manila; Rollo, pp. 82-90.

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Twin Ace Holdings Corporation vs. Court of Appeals

Court of Appeals which affirmed the action 6of the trial

court. In its Decision dated 22 December 1995 respondent
court ruled that while bottles and containers of alcoholic
beverages were indeed covered within the protective
mantle of RA No. 623, as correctly argued by TWIN ACE,
nevertheless the Supreme Court in Cagayan Valley
Enterprises, Inc. v. Court of Appeals expressly recognized
the exception granted in Sec. 6 thereof to those who used
the bottles as containers for sisi, bagoong, patis and other
native products. Hence, no injunctive relief and damages
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could be obtained against LORENZANA for exercising

what was precisely allowed by the law.
Petitioner TWIN ACE contends that Sec. 6
notwithstanding, respondent LORENZANA is obliged to
pay just compensation for the use of the subject bottles
because Sec. 6 exempts the user from criminal sanction
only but does not shield him from civil liability arising from
the use of the registered bottles without the express
consent of the registered owner. Such civil liability arises
from the fact that Sec. 5 of RA No. 623 expressly reserves
for the registered owner the ownership of the containers
notwithstanding the sale of the beverage contained therein.
Private respondent, on the other hand, contends that
petitioner’s bottles used as containers for hard liquor are
not protected by RA No. 623. But even assuming the
applicability of the law, LORENZANA invokes the
exemption granted in Sec. 6 thereof.
We deny the petition. The question of whether
registered containers of hard liquor such as rhum, gin,
brandy and the like are protected by RA No. 623 has
already been settled
7
in Cagayan Valley Enterprises, Inc. v.
Court of Appeals. In that case, the Court dealt squarely
with the issue and ruled in the affirmative reasoning that
hard liquor, although regulated, is not prohibited by law,
hence, still within the purview of the phrase “other lawful
beverages” protected by RA No. 623, as

______________

6 Decision penned by Justice Salvador J. Valdez, Jr., concurred in by

Justices Jesus M. Elbinias and Ramon U. Mabutas, Jr.; Rollo, pp. 31-51.
7 See Note 4.

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Twin Ace Holdings Corporation vs. Court of Appeals

amended. Consequently petitioner therein Cagayan Valley

Enterprises, Inc. was enjoined from using the 350 ml. white
flint bottles of La Tondeña, Inc., with the marks of
ownership “La Tondeña, Inc.” and “Ginebra San Miguel”
for its own liquor products.
But while we adopt the foregoing precedent and rule in
accordance therewith, we will not decide this case in favor
of petitioner because it is quite clear that respondent falls
within the exemption granted in Sec. 6 which states: “The
provisions of this Act shall not be interpreted as prohibiting
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the use of bottles as containers for “sisi,” “bagoong,” “patis,”

and similar native products.”
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 8
Other Similar Containers,” as amended by RA
No. 5700, was meant to protect the intellectual property
rights of the registrants of the containers and 9
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 smallscale manufacturers of
indigenous native products such as

________________

8 “An Act Amending Certain Sections of Republic Act Numbered Six

Hundred Twenty-Three as to Include the Containers of Compressed Gases
within the Purview of the said Act.”
9 Report on House Bill No. 30400, Committee on Trade and Industry,
House of Representatives, p. 21.

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Twin Ace Holdings Corporation vs. Court of Appeals

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 who10 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 bot-tles if they
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are vulnerable to civil suits. The effect is a virtual

elimination of the clear and unqualified exemption
embodied
11
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.12
Petitioner cannot seek refuge in Sec. 5 of RA No. 623 to
support its claim of continuing ownership
13
over the subject
bottles. In United States v. Manuel 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
14
the container is included in the selling price
of the product

_______________

10 Ibid.
11 “An Act Prohibiting the Use of Duly Registered and Marked Bottles of
Liquor, Wines and Spirits as containers for “Sisi,” “Bagoong,” “Patis” and
Similar Native Products, Amending for the Purpose Republic Act
Numbered Six Hundred Twenty-Three, as Amended, and Increasing the
Penalty for Violation Therefor” (italics supplied).
12 “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.”
13 7 Phil. 221 (1906).
14 See Note 9, p. 20.

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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
15
that possession of the bottle is
retained by the store.
WHEREFORE, the questioned decision and resolution of
the Court of Appeals are AFFIRMED. Costs against
petitioner.
SO ORDERED.

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          Davide, Jr. (Chairman), Kapunan and

Hermosisima, Jr., JJ., concur.
     Vitug, J., Please see separate concurring opinion.

SEPARATE CONCURRING OPINION

VITUG, J.:

Republic Act (“R.A.”) No. 623 has been enacted not only to
protect the intellectual property rights of the registrant of
marked bottles or containers but 1 to prevent unfair trade
practices and fraud on the public. While the ownership of
such marked bottles could pass on to the consumer, the
latter’s rights thereover, however, must be understood as
being subject to the statutory limitations on the use of the
registered article and to the trademark rights of the
registrant, such as that imposed by R.A. No. 623 which
prohibits the use of registered bottles or containers,
without the written consent of the registrant, except, like
in the instant case, for its filling-in of native products like
“sisi,” “bagoong,” and “patis.”
I agree, accordingly, that petitioner’s claim for just
compensation for the marked bottles is untenable given the
foregoing disquisition.
Decision and resolution affirmed.

Notes.—The mere use of registered bottles or containers

without the written consent of the manufacturer is
prohibited,

_______________

15 Id., p. 15.
1 See Sections 2 and 3, Republic Act No. 623.

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Kilosbayan, Inc. vs. Commission on Elections

the only exceptions being when they are used as containers

for “sisi,” “bagoong,” “patis” and similar native products.
(Distilleria Washington, Inc. vs. Court of Appeals, 263
SCRA 303 [1996])
It is implicit that Sections 2 and 3 of R.A. 623 apply only
when the “registered manufacturer, bottler, or seller”

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retain ownership of the bottles, and when the bottles have

been “transferred by way of sale,” Section 5 applies,
thereby precluding the institution of any action under
Sections 2 and 3. (Distilleria Washington, Inc. vs. La
Tondeña Distillers, Inc., 280 SCRA 116 [1997])

——o0o——

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