092 Solid Triangle v Sherif

Nov. 23, 2001

Kapunan, J.
Short Version:
Solid Triangle sued Sanly for alleged unfair competition because the latter
imported genuine Mitsubishi Photo Paper. In this respect, it filed and was
granted a search warrant. CA ruled that there was no probable cause
because the products were genuine.
Which the SC agreed with. The parallel importation of genuine goods
cannot be considered unfair competition under Sec. 168 of the IP Code.
Sanly did not pass off the subject goods as that of another. In fact, it admits
that the goods are genuine Mitsubishi photographic paper, which it
purchased from a supplier in Hong Kong. Even assuming that this would be
a crime, there is no proof that Sanly made it appear that they were duly
authorized to sell or distribute Mitsubishi Photo Paper in the Philippines.
Facts:
1. Judge Apolinario Bruselas of Branch 93, RTC-QC issued a Search
Warrant against Sanly Corporation, for violation of Sec. 168 of RA
8293. By virtue of the search warrant, EIIB agents seized 451 boxes of
genuine Mitsubishi photographic color paper from Sanly.
Solid Triangle then filed an affidavit-complaint for unfair competition
against he members of the Board of Sanly and LWT Co, Inc. It was alleged
that ERA Radio and Electrical Supply, operated by LWT, was in conspiracy
with Sanly in selling and distributing Mitsubishi brand photo paper to the
damage and prejudice of Solid Triangle, which claims to be the sole and
exclusive distributor thereof.
Sanly, LWT and ERA moved to quash the search warrant, but the motion
was denied.
On MR, Bruselas reversed himself, on the ground that there was doubt as to
whether the case was criminal. MR to the MR denied.
2. Solid Triangle filed a case for damages and injunction against Sanly,
LWT and ERA with Branch 91 of RTC-QC. Judge Genilo of that Branch
denied the application for writs of injunction and attachment, on the

ground that the application is not supported with an affidavit by the

applicant through its authorized officer who personally knows the
fact.
3. Meanwhile, Judge Bruselas issued another order directing the EIIB
and Solid Triangle to reveal where they were keeping the goods, and
show cause why they should not be held in contempt.
These antecedents led Solid Triangle to file a petition for certiorari before
the CA challenging the orders of Judge Bruselas under 1 and 3 above, and
Judge Genilos denial of the applications of writs of attachment and
injunction under 2 above.
CA initially granted certiorari, holding that the quashing of the warrants
deprived the prosecution of vital evidence to determine probable cause.
However, it reversed on MR, holding that there was no probable cause in
this case, as the subject goods were genuine.
Hence this petition for review.
Issues:
1. WON a judge can quash a search warrant without waiting for the
findings of the prosecutor as to probable cause. (Yes)
2. WON parallel importation can be the basis of a finding of probable
cause for the crime of unfair competition. (No)
3. WON the application for a writ of attachment should be denied on the
ground that an affidavit of merits is not appended to the complaint.
(No)
4. WON Solid Triangle can be held in contempt for failure to return the
goods.(No)
Ratio:
1. Only judges have the power to issue search warrants. This function is
exclusively judicial. Inherent in such power is the power to quash
warrants already issued.
A judge can only issue a search warrant upon probable cause in
connection with one specific offense. Probable cause is defined as the
existence of such facts and circumstances which could lead a
reasonably discreet and prudent man to believe that an offense has
been committed and that he items, articles or objects sought in

connection with said offense or subject to seizure and destruction by

law is in the place to be searched.
It must be noted that prosecutors find probable cause at preliminary
investigation, not during applications for search warrants. These
proceedings are entirely independent of one another. Thus, a judge
can quash a search warrant even before the prosecutor determines
whether or not there is probably cause.
2. ***************IMPORTANT PART**********************
The parallel importation of genuine goods cannot be considered unfair
competition under Sec. 168 of the IP Code. Sanly did not pass off the
subject goods as that of another. In fact, it admits that the goods are
genuine Mitsubishi photographic paper, which it purchased from a
supplier in Hong Kong. Even assuming that this would be a crime,
there is no proof that Sanly made it appear that they were duly
authorized to sell or distribute Mitsubishi Photo Paper in the
Philippines.
*****************************
3. The trial court has yet to hear this matter. An affidavit of merit is not
necessary since the petition was verified by an authorized officer who
personally knows the facts.
4. This issue is premature, there not yet having been a hearing as to
whether there are sufficient grounds to hold Solid Triangle in
Contempt.
Petition partly granted.
Gabe.