Washington Distillers, Inc. vs. Court of Appeals

A search warrant proceeding is a special criminal process that cannot be used to acquire property or adjudicate its permanent status; if no criminal case is instituted after seizure, the seized property must be returned to its rightful owner or to the person from whom it was seized, and it cannot remain in perpetual custodia legis. A judge may quash a search warrant issued by another judge when the case is subsequently assigned to him, and the rule against forum shopping applies to applications for search warrants.

Washington Distillers, Inc., owned and operated by the Kehyengs, manufactured liquor products using 350cc round white flint bottles bearing blown-in marks of La Tondeña, Inc. and Ginebra San Miguel. La Tondeña, a domestic corporation engaged in the manufacture and sale of wines and liquors, had registered those marks with the Bureau of Patents, Trademark and Technology Transfer under Republic Act No. 623, as amended by Republic Act No. 5700, which regulates the use of duly stamped or marked bottles and containers. The statutory backdrop included §2 of R.A. No. 623, which makes unauthorized use of registered containers unlawful, and §5, which bars actions against persons to whom the registered manufacturer transferred containers by sale.

Washington Distillers, Inc., a domestic corporation owned and operated by Manuel Co Kehyeng, Chongking Kehyeng, Quirino Kehyeng, Jasmin Kehyeng, and Purita Kehyeng, maintained its principal office and business address at Sta. Lucia, San Fernando, Pampanga. It manufactured liquor products under the labels Gin Seven, Washington Gin 65, Luzon, and Anisado, using as containers 350cc round white flint bottles with blown-in marks of La Tondeña, Inc. and Ginebra San Miguel. La Tondeña Distillers, Inc., also a domestic corporation, manufactured and sold wines and liquors, including a gin popularly known as Ginebra San Miguel, which it bottled and sold in 350cc round white flint bottles especially ordered for its exclusive use and bearing blown-in marks of La Tondeña, Inc. and Ginebra San Miguel. La Tondeña’s trademarks were registered with the Bureau of Patents, Trademark and Technology Transfer under Republic Act No. 623.

On May 20, 1993, La Tondeña wrote the Director of the National Bureau of Investigation requesting assistance in prosecuting alleged illegal users, buyers, sellers, or traffickers of its registered bottles. In response, NBI agents Florencio Corpuz and Dante Jacinto, accompanied by Atty. Jaime de la Cruz, La Tondeña’s legal counsel, conducted surveillance operations at Washington Distillers’ premises in Sta. Lucia, San Fernando, Pampanga. In his affidavit supporting the application for a search warrant, Atty. De la Cruz stated that, by pretending to be dealers in second-hand bottles, he and the NBI agents entered Washington Distillers’ warehouse and discovered that Washington Distillers had been buying empty bottles from junk dealers at a price higher than that offered by La Tondeña for retrieving its bottles. NBI Agent Florencio Corpuz, in his own affidavit, stated that inside the warehouse they saw empty bottles, estimated to be in the thousands, placed in sacks and cartons, which they examined and found to be La Tondeña’s registered 350cc round white flint bottles.

Based on these affidavits, Atty. Dante J. Jacinto, Senior Agent of the NBI, filed with Branch XXVIII of the RTC of Manila an application for a warrant to search Washington Distillers’ premises and to seize empty and filled 350cc round white flint bottles with blown-in marks of Ginebra San Miguel and La Tondeña, Inc. On May 25, 1993, Executive Judge Rosalio G. de la Rosa issued Search Warrant No. 93-64. Pursuant to the warrant, NBI agents seized on May 26-27, 1993 from Washington Distillers’ premises in San Fernando, Pampanga 314,289 pieces of 350cc round white flint bottles, of which 3,708 were filled and 310,581 were empty, for alleged violation of Republic Act No. 623, as amended by Republic Act No. 5700. The seized bottles were deposited in La Tondeña’s warehouse in Velasquez, Tondo, Manila because there was no space for storage in the court or in the NBI compound.

On June 9, 1993, petitioners filed a motion to quash the search warrant on the ground that the RTC of Manila had no jurisdiction to issue a search warrant to be executed in San Fernando, Pampanga. They also claimed that there was no probable cause because R.A. No. 623 does not cover registered bottles of liquor manufacturers and that, even assuming it does, §5 of the law barred any action against them because the bottles had lawfully been sold to them. Petitioners further charged that La Tondeña was guilty of forum shopping because it had twice applied for a search warrant over the same subject to the RTC of San Fernando, Pampanga: the first search warrant, No. 6, was issued on August 19, 1991, and the second, No. 11, was issued on December 2, 1992 but was later quashed for lack of probable cause; on certiorari to the Court of Appeals, the trial court’s order was set aside. La Tondeña had also filed a replevin case against petitioners in 1987, but it lost and appealed, which appeal was still pending in the Court of Appeals (CA-G.R. No. 36971) when it applied for the Manila search warrant.

On August 31, 1993, Hon. Antonio L. Descallar, designated assisting judge of Branch XXVIII, granted petitioners’ motion to quash. He found La Tondeña guilty of forum shopping and ruled that the RTC of Manila had no authority to issue a search warrant effective outside its territorial jurisdiction, and he directed La Tondeña to return the bottles to petitioners within 48 hours from receipt of his order. La Tondeña’s motion for reconsideration and motion to suspend execution were denied on November 26, 1993, and the branch deputy sheriff was directed to carry out the return order. When deputy sheriff Benjamin Garrido tried to recover the seized bottles from La Tondeña’s warehouse, the bottles could not be found. La Tondeña claimed ownership of the bottles under R.A. No. 623, as amended by R.A. No. 5700, and asserted that it had applied for the search warrant to recover its own bottles after being deprived of them, while petitioners asserted ownership by lawful acquisition for value and invoked §5 of R.A. No. 623; the title to and possession of the bottles were thus very much disputed.

• Personality to File Certiorari: Petitioners argued that private respondent La Tondeña had no authority or capacity to file the petition for certiorari with the Court of Appeals because it was not a party to the search warrant proceedings, Search Warrant No. 93-64 having been issued in the name of the People of the Philippines upon the application of the NBI; the Court of Appeals should therefore have dismissed the petition outright.
• Improper Appellate Issue: Petitioners maintained that the Court of Appeals erroneously decided the petition on an issue no longer disputed by the parties, namely the lower court’s findings that Judge De la Rosa had no authority to issue a search warrant outside his court’s territorial jurisdiction and that private respondent was guilty of forum shopping, which should no longer have been disturbed in the certiorari proceeding.
• Authority of Assisting Judge: Petitioners contended that the only remaining point of contention was Judge Descallar’s authority, as assisting judge, to quash the warrant issued by Judge De la Rosa, and that he had such authority.
• Forum Shopping: Petitioners argued that Judge Descallar’s order quashing the search warrant should have been upheld because the warrant was obtained by forum shopping.
• Lack of Probable Cause and Statutory Defense: Petitioners claimed there was no probable cause because R.A. No. 623 does not cover registered bottles of liquor manufacturers and, even assuming it does, under §5 no action could be instituted against them because the bottles had lawfully been sold to them.
• Lack of Territorial Jurisdiction: Petitioners argued that the RTC of Manila had no jurisdiction to issue a search warrant to be executed in San Fernando, Pampanga.

• Authority of Assisting Judge: Respondent La Tondeña contended that Assisting Judge Antonio Descallar had no jurisdiction to quash a search warrant issued by another judge because a motion to quash should be filed with the same court which issued the search warrant, especially because Judge De la Rosa allegedly issued Search Warrant No. 93-94 in his capacity as executive judge.
• Ownership and Recovery of Property: Respondent argued that although search warrants are in the name of the People of the Philippines, La Tondeña owns the subject property under R.A. No. 623, as amended by R.A. No. 5700; unauthorized use of its bottles with the marks “Ginebra San Miguel” and “La Tondeña, Inc.” is illegal; having been deprived of its property, it applied for a search warrant with NBI assistance to recover its own bottles, only to find the warrant quashed without giving it the opportunity to submit evidence in support of its opposition to the motion to quash.
• Futility of Pampanga Application: Respondent admitted that it had previously been granted search warrants by the RTC of San Fernando, Pampanga, but asserted that to apply for a search warrant in petitioners’ home base for the third time would be an act of futility.

• Personality to File Certiorari: Whether private respondent La Tondeña had authority or capacity to file the petition for certiorari with the Court of Appeals even though it was not a party to the search warrant proceedings, which were issued in the name of the People of the Philippines upon the application of the NBI.
• Scope of Certiorari Review: Whether the Court of Appeals erroneously decided the petition on issues no longer disputed by the parties—the RTC’s lack of territorial jurisdiction and private respondent’s forum shopping—and whether those findings should have been left undisturbed.
• Authority of Assisting Judge: Whether Judge Descallar, as assisting judge of Branch XXVIII of the RTC of Manila, had authority to quash the search warrant issued by Judge De la Rosa.
• Territorial Reach of Search Warrant: Whether the RTC of Manila had authority to issue a search warrant enforceable outside its territorial jurisdiction, and whether that issue was a jurisdictional error correctible by certiorari.
• Forum Shopping in Search Warrant Proceedings: Whether private respondent was guilty of forum shopping in obtaining the search warrant from the Manila RTC after failing to obtain warrants from the Pampanga courts, and whether the rule against forum shopping applies to search warrant proceedings.
• Validity of Search Warrant and Return of Seized Property: Whether the search warrant lost validity and the seized bottles should be returned to petitioners because no criminal prosecution was commenced after the seizure.

• Personality to File Certiorari: No, not in the broad sense urged. Parties at whose instance search warrants are applied for may question quashal orders, but the contention has force where no criminal prosecution follows and the warrant proceeding is used to obtain possession.
• Scope of Certiorari Review: Yes. The Court of Appeals erred in deciding the petition on the territorial-jurisdiction issue, which private respondent did not raise; the RTC’s alleged error on the territorial reach of the warrant was not a jurisdictional error correctible by certiorari but at most an error of judgment.
• Authority of Assisting Judge: Yes. A judge may revoke the orders of another judge in a litigation subsequently assigned to him; Judge Descallar, as assisting judge, was competent to resolve the motion to quash.
• Territorial Reach of Search Warrant: Yes, under Malaloan vs. Court of Appeals, a search warrant may be enforced outside the issuing court’s territorial jurisdiction; however, the issue was not raised by private respondent and the RTC’s contrary ruling was not a jurisdictional error correctible by certiorari.
• Forum Shopping in Search Warrant Proceedings: Yes. La Tondeña was guilty of forum shopping by seeking a favorable search warrant from the Manila RTC after failing to obtain warrants from the Pampanga courts; the rule against forum shopping applies to search warrant proceedings, and the quashal should have been sustained on this ground.
• Validity of Search Warrant and Return of Seized Property: The search warrant lost validity because no criminal prosecution was commenced; the seized bottles should be returned to petitioners, absent a proper civil action, and could not remain in perpetual custodia legis or be held indefinitely by private respondent.

• Personality to File Certiorari: The broad proposition that a private party at whose instance a search warrant was applied for can never question an order quashing the warrant was rejected. Rulings recognizing that right were cited, but in those cases the private party was the complainant or offended party in a pending criminal prosecution or where at least preparatory steps had been taken to commence criminal prosecution, and the search warrant was issued as an incident of or in anticipation of that action. Here, no criminal prosecution for violation of R.A. No. 623 was ever attempted; the NBI, which applied for the warrant in 1993, filed no case, and it did not oppose the motion to quash. Only La Tondeña opposed. The warrant proceeding had effectively become the main proceeding by which La Tondeña obtained possession of bottles it claimed as its property, without a complaint or answer and contrary to Rule 126, §11, which requires seized property to be deposited in custodia legis. The NBI’s delivery of the bottles to La Tondeña, allegedly because of lack of storage, was not a good excuse and gave the impression that La Tondeña had been given possession. La Tondeña’s bare claim of ownership did not entitle it to possession through search warrant proceedings, especially since title and possession were disputed and petitioners invoked §5 of R.A. No. 623. Thus, the warrant could not be used to adjudicate possession.

• Scope of Certiorari Review: The Court of Appeals should not have resolved the territorial-jurisdiction issue because private respondent did not raise it in the petition for certiorari. Even assuming the RTC erred in ruling that the warrant could not be enforced outside the RTC of Manila’s territorial jurisdiction, that error was not a jurisdictional error correctible by certiorari. Judge Descallar did not act without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion. He issued his order on August 31, 1993, before Malaloan vs. Court of Appeals was decided on May 6, 1994; the question was primae impressionis, and there was a possible problem of retroactivity. At most, the error was an error of judgment.

• Authority of Assisting Judge: Judge Descallar had authority to quash the warrant. It is settled that a judge may revoke the orders of another judge in a litigation subsequently assigned to him. The fact that Judge De la Rosa was the executive judge was not material because jurisdiction is vested in the court, not in the judge qua executive judge; applications for search warrant are made to the executive judge only for administrative purposes. Judge Descallar, as assisting judge, was competent to resolve the motion to quash. There was no basis for the claim that he did not conduct a personal examination of the complainant before issuing his order, because the requirement of personal examination refers to the determination of probable cause for issuing a search warrant, not to resolving a motion to quash.

• Territorial Reach of Search Warrant: Under Malaloan vs. Court of Appeals, a search warrant may be enforced outside the territorial jurisdiction of the issuing court. The RTC may have erred in holding that the warrant issued by Judge De la Rosa could not be enforced outside the territorial jurisdiction of the RTC of Manila. But because the issue was not raised by private respondent and the error was not jurisdictional, certiorari was not the proper remedy. Judge Descallar did not disregard a decision of the Court because Malaloan came later. The error, if any, was an error of judgment.

• Forum Shopping in Search Warrant Proceedings: Forum shopping exists whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion, other than by appeal or certiorari, in another. La Tondeña did exactly that: after failing to obtain warrants from the Pampanga courts, it sought a search warrant from the Manila RTC. Judge Descallar’s finding of forum shopping was not assailed in the certiorari proceeding before the Court of Appeals. Although his ruling on the territorial reach of the warrant was erroneous in light of Malaloan, the Court of Appeals should have sustained the quashal on the ground of forum shopping. The rule against forum shopping is not limited to actions; it applies to applications for search warrants. Circular No. 28-91 requires a certification that no other action or proceeding involving the same issues is pending, and Malaloan implied that forum shopping is prohibited even in search warrant proceedings. If applications could be filed despite pending or denied applications in other courts, the situation would be intolerable.

• Validity of Search Warrant and Return of Seized Property: The search warrant lost validity because the NBI failed to commence criminal prosecution after the seizure. Under Vlasons Enterprises Corporation vs. Court of Appeals, if no criminal case is instituted after seizure under a search warrant, the property seized should be delivered to its rightful owner, or at least to the person from whom it was seized, and it cannot remain in a perpetual state of custodia legis. A search warrant proceeding is not a criminal action, much less a civil action; it is a special criminal process, and the order of issuance cannot adjudicate the permanent status or character of the seized property. It cannot be used as a means of acquiring property or settling a dispute over it. The proper remedy is for private respondent or the Government, as stakeholder, to bring the appropriate action. To sustain the Court of Appeals would keep the bottles in perpetual custodia legis or give custody to La Tondeña indefinitely, effectively adjudicating possession in its favor without a proper action.

• Search Warrant Proceeding as Special Criminal Process — A search warrant proceeding is not a criminal action, much less a civil action. It is a special criminal process, and the order of issuance cannot adjudicate the permanent status or character of the seized property. It cannot be resorted to as a means of acquiring property or settling a dispute over it. The proper remedy is an appropriate action by the party claiming the property or by the Government as stakeholder. Applied here, La Tondeña could not use the search warrant to obtain or retain possession of the disputed bottles.
• Return of Seized Property Absent Criminal Prosecution — If no criminal case is instituted after seizure made pursuant to a search warrant, the property seized should be delivered to its rightful owner, or at least to the person from whom it had been seized. It cannot be permitted to stay in a perpetual state of custodia legis. The Court applied this rule because the NBI never filed a criminal case against petitioners after the seizure.
• Forum Shopping in Search Warrant Proceedings — Forum shopping exists whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion, other than by appeal or certiorari, in another. The policy against multiple court proceedings applies to applications for search warrants. Circular No. 28-91 requires a certification that no other action or proceeding involving the same issues is pending, and Malaloan vs. Court of Appeals implied that forum shopping is prohibited even in search warrant proceedings. La Tondeña was guilty of forum shopping when it sought a Manila warrant after failing to obtain warrants from the Pampanga courts.
• Authority of Assisting Judge to Quash Search Warrant — A judge may revoke the orders of another judge in a litigation subsequently assigned to him. Jurisdiction is vested in the court, not in the judge qua executive judge; applications for search warrant are made to the executive judge only for administrative purposes. The requirement of personal examination of the complainant refers to the determination of probable cause for issuing a search warrant, not to resolving a motion to quash. Judge Descallar was therefore competent to quash Judge De la Rosa’s warrant.
• Custodia Legis for Seized Property — Rule 126, §11 requires property seized by virtue of a search warrant to be deposited in custodia legis. The NBI violated this requirement when it delivered the seized bottles to La Tondeña, and the lack of storage space was not a good excuse. The delivery gave the impression that La Tondeña had been given possession of the disputed bottles.
• Error of Judgment vs. Error of Jurisdiction — An erroneous ruling on the territorial reach of a search warrant is not a jurisdictional error correctible by certiorari; at most, it is an error of judgment. Judge Descallar did not act without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion, especially because his order preceded Malaloan vs. Court of Appeals.

• “A search warrant proceeding is not a criminal action, much less a civil action. It is a special criminal process, the order of issuance of which cannot and does not adjudicate the permanent status or character of the seized property. It cannot therefore be resorted to, as was done here by private respondent, as a means of acquiring property or of settling a dispute over the same. The proper remedy is for private respondent or for the Government itself, assuming the role of a stakeholder, to bring the appropriate action.” — This passage states the ratio that a search warrant cannot be used to adjudicate ownership or possession of seized property.
• “If no criminal case is instituted after the seizure made pursuant to a search warrant, the property seized should be delivered ‘to its rightful owner, or at least to the person from whom it had been seized.’ The property ‘could not be permitted to stay in a perpetual state of custodia legis.’” — This quotation from Vlasons Enterprises Corporation vs. Court of Appeals supplies the basis for returning the seized bottles to petitioners.
• “There is forum-shopping whenever as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another.” — This is the canonical definition of forum shopping applied by the Court to La Tondeña’s successive applications for search warrants.
• “It is settled that a judge may revoke the orders of another judge in a litigation subsequently assigned to him.” — This statement supports the holding that Judge Descallar had authority to quash the warrant issued by Judge De la Rosa.

• Malaloan vs. Court of Appeals, 232 SCRA 249 (1994) — Cited for the rule that a search warrant may be enforced outside the territorial jurisdiction of the issuing court. The Court noted it was decided after Judge Descallar’s order and that the issue was primae impressionis; it also implied that forum shopping is prohibited in search warrant proceedings.
• Vlasons Enterprises Corporation vs. Court of Appeals, 155 SCRA 186 (1987) — Held that if no criminal case is instituted after seizure under a search warrant, the seized property should be delivered to its rightful owner or at least to the person from whom it was seized and cannot remain in perpetual custodia legis. The Court relied on this to require return of the bottles.
• Villanueva vs. Adre, 178 SCRA 876 (1989) — Source of the definition of forum shopping applied by the Court: seeking a favorable opinion in another forum after an adverse opinion.
• La Chemise Lacoste, S.A. vs. Fernandez, 129 SCRA 373 (1984); Columbia Pictures, Inc. vs. Flores, 223 SCRA 761 (1993); 20th Century Fox Film Corp. vs. Court of Appeals, 164 SCRA 655 (1988) — Recognized the right of parties at whose instance search warrants are applied for to question orders quashing them, but the Court distinguished them because those cases involved pending criminal prosecutions or preparatory steps to commence criminal prosecution.
• Mina vs. National Labor Relations Commission, 246 SCRA 229 (1995); People vs. Court of First Instance, 227 SCRA 457 (1993); Medina vs. De Guia, 219 SCRA 153 (1993) — Cited for the rule that a judge may revoke the orders of another judge in a litigation subsequently assigned to him.
• First Philippine Int’l Bank vs. Court of Appeals, G.R. No. 115849, Jan. 24, 1996; Earth Minerals Exploration, Inc. vs. Macaraig, Jr., 194 SCRA 1 (1991); Crisostomo vs. Securities and Exchange Commission, 179 SCRA 147 (1989) — Cited as accord on the rule against forum shopping.

• Republic Act No. 623, §2 — Prohibits unauthorized filling, sale, disposal, buying, trafficking in, or wanton destruction of duly stamped or marked bottles or containers, whether filled or not, and use for purposes other than registered; violation is punishable by fine or imprisonment. The search warrant was ostensibly issued for violation of R.A. No. 623, as amended by R.A. No. 5700.
• Republic Act No. 623, §5 — Provides that no action shall be brought against any person to whom the registered manufacturer, bottler, or seller has transferred by way of sale any of the containers, but the sale of the beverage contained in the containers does not include the sale of the containers unless specifically provided. Petitioners invoked this as a defense; the Court noted that title and possession were disputed.
• Rule 126, §11, Rules of Court — Requires property seized by virtue of a search warrant to be deposited in custodia legis. The Court held that the NBI violated this when it delivered the seized bottles to La Tondeña, and lack of storage was not a good excuse.
• Constitution, Article III, §2 — Requires personal examination of the complainant in determining probable cause for issuance of a search warrant. The Court held this requirement applies to issuance, not to a motion to quash.
• Supreme Court Circular No. 28-91 — Requires parties to certify under oath that they have not commenced any other action or proceeding involving the same issues in the Supreme Court, Court of Appeals, or any other tribunal or agency, and that no such action or proceeding is pending. The Court applied the policy against forum shopping to applications for search warrants.
• Administrative Order No. 6, s. 1975; Administrative Circular No. 13, s. 1984 — Cited to show that applications for search warrant are made to the executive judge only for administrative purposes, so jurisdiction is vested in the court rather than in the executive judge personally.

Justices Regalado, Romero, and Puno concurred. Justice Torres, Jr., took no part.