Petitioner vs. vs. Respondent Manuel O Chan The Solicitor General

EN BANC
[G.R. No. L-30067. April 19, 1983.]
B.F. GOODRICH PHILIPPINES, INC. , petitioner, vs. HON. TEOFILO REYES,

SR., in his capacity as Secretary of Commerce and Industry , respondent.
Manuel O. Chan for petitioner.

The Solicitor General for respondent.
SYLLABUS
1. CONSTITUTIONAL LAW; EQUAL PROTECTION OF LAWS; RETAIL TRADE

LAW; STATUTE NOT A VIOLATION OF THE EQUAL PROTECTION CLAUSE. — There is no
need to pass upon the allegation that there is a denial of equal protection. The Retail
Trade Act. R.A. No. 1180 was conceived and is being implemented conformably to the
nationalistic spirit which underlies both the 1935 and the present Constitutions.
2. MERCANTILE LAW; RETAIL TRADE LAW; MEANING OF TERM "RETAIL
BUSINESS". — Under Presidential Decree No. 714 attending Republic Act No. 1180, the
term "retail business'' covers "any act, occupation or calling of habitually selling direct
to the general public merchandise, commodities or goods for consumption, but shall
not include; (a) a manufacturer, processor, laborer or worker selling to the general
public the products manufactured, processed or produced by him if his capital does
not exceed ve thousand pesos, or (b) a farmer or agriculturist selling the product of
his farm; (c) a manufacturer or processor selling to the industrial and commercial users
or consumers who use the products bought by them to render service to the general
public and/or to produce or manufacture goods which are in turn sold to them; (d) a
hotel-owner or keeper operating a restaurant irrespective of the amount of capital,
provided that the restaurant is necessarily included in, or incidental to, the hotel
business."
3. ID.; ID.; PETITIONER NOT ENGAGED IN RETAIL. — It is clear that
proprietary planters and persons engaged in the exploration of natural resources are
included within the amendment de ning the term "retail business." The lower court
decision declaring petitioner is not engaged in retail business within the purview of
Section 4 of R.A. 1180 in accordance with Presidential Decree No. 714 is a rmed,
except as to its sales to its employees and officers.
DECISION
FERNANDO , J : p
Relying on the equal protection clause 1 as interpreted in the leading case of

Ichong v. Hernandez, 2 petitioner B.F. Goodrich Philippines, Inc. contends in this
declaratory relief proceeding, with the then Secretary of Commerce and Industry
Teo lo Reyes, Sr. as respondent, that it does not fall within the ban. It is engaged in the
business of manufacturing and selling rubber products, principally automotive tires and
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tubes, batteries, conveyor belts, heels and soles for shoes and tiles to dealers who in
turn sells it to others. 3 Under the statute, it cannot engage in retail business, namely to
sell direct to the general public, merchandise, commodities or goods for consumption.
4 It admitted that it sold directly to the government and all its instrumentalities and/or
agencies; public utilities; agricultural enterprises; logging, mining, and natural resources
exploration rms; automotive assembly plants who buy its products in large bulk;
industrial enterprises; and employees and officers of its company. 5
There was a plea for a preliminary injunction. It was set for hearing, Upon its
being heard, the O ce of the Solicitor General manifested that it was not ready to
formulate its stand on the matter in view of the fact that the question involved was of
great importance. Accordingly, a restraining order was issued. Subsequently, the
answer was duly led, the principal a rmative defenses being that the petitioner
should not be considered exempt as it is not a corporation wholly owned by citizens of
the Philippines and that even on the assumption that such was the case, it being alleged
in the petition that only 1.46% of its capital stock was owned by aliens, non-Filipinos or
non-Americans, the Parity Amendment being still in force and effect at the time of the
ling of this petition, still Republic Act 1180 is quite clear as to its not being applicable
to petitioner considering the allegations of the petition. The plea was for dismissal. prLL
In the stipulation of facts, the allegations set forth above were admitted as to its
selling to dealers and distributors primarily but likewise selling directly to certain
entities and individuals named. Paragraph XX of the stipulation of facts made mention
of the opinion of the then Secretary of Justice, Pedro Tuason, who ruled that a
corporation whose capital stock was 99.99% Filipino and 0.01% alien was exempt from
the provisions of Republic Act No. 1180, based on the doctrine of "de minimis non curat
lex"; hence, the said corporation could retail. 6
On such stipulation of facts, the lower court rendered its decision making
permanent the restraining order issued although holding that petitioner is not exempt
from the provisions of Republic Act No. 1180. The reason for such a decision was set
forth thus: "It has been stipulated that the rubber products of the petitioner desired to
be sold in bulk to automotive assembly plants will be resold by the latter to their own
customers at a pro t without changing the form of said rubber products, together with
assembled units which are being sold; that the rubber products desired to be sold by
the petitioner to public utilities, power and communication companies, agricultural
enterprises, proprietary planters, agricultural processing plants, agricultural
cooperatives, industrial and commercial enterprises, logging, mining and persons
engaged in the exploitation of natural resources are to be used by the latter in their
operations to produce and to render goods and services to third parties and to the
general public; and that the other products desired to be sold to the Government and all
its instrumentalities and/or agencies, public utilities, agricultural enterprises,
proprietary planters, agricultural processing plants, agricultural cooperatives, logging,
mining, and other entities and persons engaged in the exploitation of natural resources,
and industrial and commercial enterprises are to be sold at prices lower than at which
they are sold to the general consuming public by dealers and distributors of said rubber
products. An examination of the types or classes of customers to which the petitioner
desires to sell its rubber products will reveal that in the great majority of such
customers, the sale to them may not be classi ed as the sale of consumer goods or
merchandise for the satisfaction of human, personal or household wants so as to be
considered as retail in the sense already discussed above. Nonetheless, it is observed
that some of the listed customers would easily fall within the purview of a nal
consumer of the product who buys the same for the satisfaction of a personal want.
Among these customers are 'proprietary planters,' 'persons engaged in the exploitation
of natural resources,' and 'employees and officers of the petitioner.'" 7
Both petitioner and respondent appealed to this Court. A ruling on the question
raised as to the precise meaning of retail business is obviated by the issuance of
Presidential Decree No. 714 8 amending Republic Act No. 1180. Under the former,
which took effect without presidential approval on June 19, 1954, the term "retail
business" covers "any act, occupation or calling of habitually selling direct to the
general public merchandise, commodities or goods for consumption, but shall not
include: (a) a manufacturer, processor, laborer or worker selling to the general public
the products manufactured, processed or produced by him if his capital does not
exceed ve thousand pesos, or (b) a farmer or agriculturist selling the product of his
farm." 9 Under the aforesaid Presidential Decree, which took effect on May 28, 1975,
two more paragraphs were included. They are: "(c) a manufacturer or processor selling
to the industrial and commercial users or consumers who use the products bought by
them to render service to the general public and/or to produce or manufacture goods
which are in turn sold to them; (d) a hotel-owner or keeper operating a restaurant
irrespective of the amount of capital, provided that the restaurant is necessarily
included in, or incidental to, the hotel business." 1 0 It is clear from the above that
proprietary planters and persons engaged in the exploration of natural resources are
included within the aforesaid amendment. The lower court decision, however, is in
accordance with law insofar as employees and o cers of petitioners are concerned.
As thus modified, the decision calls for affirmance.
In view of the above, there is no need to pass upon the allegation that there is a
denial of equal protection. At any rate, the ponencia of the late Justice Labrador in
Ichong v. Hernandez, 1 1 upholding the validity of Republic Act No. 1180, both scholarly
and comprehensive, leaves no room for doubt as to the futility of relying on the equal
protection guarantee. This Act was conceived and is being implemented conformably
to the nationalistic spirit which underlies both the 1935 and the present Constitutions.
cdphil
WHEREFORE, the lower court decision is a rmed declaring that petitioner is not
engaged in retail business within the purview of Section 4 of Republic Act No. 1180 in
accordance with Presidential Decree No. 714, except as to its sales to its employees
and o ces. The restraining order issued is likewise made permanent but subject to the
above modification. No costs.
Concepcion, Jr., Guerrero, De Castro, Melencio-Herrera, Plana, Escolin and Relova,
JJ., concur.
Teehankee and Abad Santos, JJ., reserves his vote.
Makasiar and Vasquez, JJ., took no part.
Aquino and Gutierrez, JJ., are on leave.
Footnotes
1 . According to Article IV, Section 1 of the Constitution: "No person shall be deprived of life,
liberty or property without due process of law, nor shall any person be denied the equal
protection of the laws."
2. 101 Phil. 1155 (1957).
3. Record on Appeal, Petition, par. V.
4. Ibid, par. IV.
5. Ibid, par. V.
6. Stipulation of Facts, Record on Appeal, par. XX.
7. Decision, Record on Appeal, pp. 140-141.

8. (1975).
9. Section 4, Republic Act No. 1180.

10. Presidential Decree No. 714, Section 4, pars. (c) and (d).
11. 101 Phil. 1155 (1957).

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EN BANC

[G.R. No. L-30067. April 19, 1983.]

B.F. GOODRICH PHILIPPINES, INC. , petitioner, vs. HON. TEOFILO REYES,

Manuel O. Chan for petitioner.

1. CONSTITUTIONAL LAW; EQUAL PROTECTION OF LAWS; RETAIL TRADE

Relying on the equal protection clause 1 as interpreted in the leading case of

7. Decision, Record on Appeal, pp. 140-141.

9. Section 4, Republic Act No. 1180.

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