HONORABLE CORNELIO BALMACEDA, now LEONIDES
VIRATA, in his capacity as Secretary of Commerce and Industry, petitioner, vs.
UNION CARBIDE PHILIPPINES, INC., HONORABLE FEDERICO C. ALIKPALA, Presiding
Judge, Branch XXII, Court of First Instance of Manila, respondentsG.R. No. L-30442 | September 30, 1983
FACTS:
The Solicitor General filed a petition to review the
decision of then respondent Judge, the late Federico C. Alikpala, declaring
that private respondent Union Carbide of the Philippines is not engaged in the
retail business.
PD 714 amended RA 1180, The Retail Trade Act. Section
4 of which starts with an opening statement as to what the term “retail
business” shall mean, namely, “occupation or calling of habitually selling
direct to the general public merchandise, commodities or goods for consumption.”
It excludes, according to the amendment, “(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 produce
or manufacture goods which are in turn sold to them; * * *.”
Private respondent has two divisions, the Consumer
Products Division and the Industrial Products Division. As to the former, it
effected its sales through retail outlets, dealers and distributors. As to the
Industrial Products Division, its Agricultural Chemicals Department sold its
products through exclusive distributors. The products handled by the five other
departments of the Industrial Products Division, namely, the Metals and
Carbide; Plastics; Industrial Chemicals; Linde, Haynes Stellite and Carbon
Products and Polyethylene Bags were generally sold to producers, processors,
fabricators and to industries. While these departments had a limited fixed
clientele, still there was no prohibition as to the general public making similar
purchases from them.
ISSUE:
Whether or not respondent Union Carbide is engaged in
retail business
RULING:
“In the field of economics, in the area of marketing,
the interpretation given by Government agencies, and by common acceptation, the
term ‘retail’, is associated with and limited to goods for personal, family or
household use, consumption and utilization. This is also in accord with the
ruling of the Supreme Court in the Ichong case regarding the nature and kind of
goods a retailer handles. Under the situation, the Court is persuaded to hold
that the goods for consumption mentioned in Republic Act No. 1180 should be construed
to refer to the final and end [uses] of a product which directly satisfy human
wants and desires and are needed for home and daily life. Accordingly, the
goods which petitioner’s Industrial Products Division handle (commonly referred
to as intermediate goods), do not fall and cannot be classified as consumption
goods.”
What removed the 5 departments from the operation of
the Retail Trade Act was pointed out in the appealed decision in these words: “The
goods handled by the five remaining departments of petitioner’s Industrial
Products Division are generally raw materials used in the manufacture of other
goods, or if not, as one of the component raw materials, or at the least as elements
utilized in the process of production or manufacturing.”
After considering the statutory definition in the
Retail Trade Act itself, its definition by economists, and in judicial
opinions, as well as the view of former Central Bank Governor Cuaderno as to
the adverse consequences in terms of increased cost to consumers, loss of
financial assistance from producers, elimination of much needed foreign capital
and loss of technical assistance, the lower court held it was not engaged in
the retail business. The amendatory Decree removes whatever doubt there could
have been as to the correctness of the conclusion reached by the lower court.
WHEREFORE, the Court affirms the lower court decision
holding that Union Carbide Philippines, Inc. is not engaged in the “retail
business” as this term is defined in Section 4 of Republic Act No. 1180.
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