G.R. No. 120961 October 17, 1996
DISTILLERIA WASHINGTON, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS and LA TONDEÑA DISTILLERS, INC., respondents.

FACTS

La Tondeña Distillers, Inc. (LTDI) filed a replevin suit to seize 18,157 empty gin bottles bearing its blown-in marks from Distilleria Washington, Inc. LTDI claimed ownership under Republic Act No. 623 , which protects registered containers, alleging Washington used these bottles for its own “Gin Seven” product without consent. Washington defended that R.A. No. 623 does not cover alcoholic beverages like gin, only the enumerated “soda water, milk, cream, or other lawful beverages.” It also argued that ownership of the bottles passed to the buyers upon sale of the gin at a single price, and thus it lawfully acquired them.
The trial court dismissed LTDI’s complaint, ordering the return of the bottles or payment of their value to Washington. The Court of Appeals reversed, ruling in favor of LTDI’s ownership and right to retain the seized bottles under R.A. No. 623 . Washington appealed to the Supreme Court, reiterating its arguments and seeking a review of the precedent in Cagayan Valley Enterprises, Inc. vs. Court of Appeals which applied R.A. No. 623 to liquor containers.

ISSUE

Whether R.A. No. 623 applies to gin bottles, thereby protecting LTDI’s registered marks and prohibiting Washington’s unauthorized use.

RULING

Yes. The Supreme Court affirmed the applicability of R.A. No. 623 to registered liquor bottles, following its settled ruling in Cagayan Valley Enterprises. The law expressly protects duly registered containers against unauthorized use, sale, or possession, creating a prima facie presumption of unlawful use when done without the registrant’s written permission. The enumeration of beverages in the law includes the phrase “other lawful beverages,” which encompasses gin, an alcoholic beverage lawfully manufactured and sold.
The legal logic is that R.A. No. 623 grants trademark-like protection to the container itself, separate from the product sold. The sale of the beverage does not automatically include the sale of the registered container unless specifically provided. While LTDI’s sales invoice stipulating non-sale of bottles does not bind non-privies like Washington, the statutory presumption of illegal use arising from unauthorized possession under Section 3 of R.A. No. 623 applies. The Court found Washington’s continued use unauthorized. However, in equity, LTDI must pay just compensation for the bottles it seized via replevin. Adopting the trial court’s valuation, the Supreme Court modified the appellate decision by ordering LTDI to pay Washington P18,157.00 as compensation for the bottles.