Facts:

The case of Ang Pue & Company, et al. vs. Secretary of Commerce and Industry (G.R. No. L-17295) was decided on July 30, 1962, by the Supreme Court of the Philippines. The plaintiffs, Ang Pue and Tan Siong, both Chinese citizens, organized a partnership named Ang Pue & Company on May 1, 1953, for a term of five years, with the possibility of extension by mutual consent. The partnership was established for the purpose of engaging in general merchandising, specifically in the wholesale and retail trade of lumber, hardware, and other construction materials. The articles of partnership were duly registered with the Securities and Exchange Commission on June 16, 1953.

However, on June 19, 1954, Republic Act No. 1180 was enacted, which regulated the retail business in the Philippines. This law stipulated that partnerships not wholly composed of Filipino citizens could continue their retail operations only until the expiration of their original term. On April 15, 1958, p...

Facts:

Background of the Case

• Ang Pue & Company, along with Ang Pue and Tan Siong, filed an action for declaratory relief in the Court of First Instance of Iloilo.
• The relief sought was to secure a judgment declaring that the plaintiffs were allowed to extend the term of their partnership for an additional five years pursuant to an amendment to their articles of copartnership.

Formation and Nature of the Partnership

• On May 1, 1953, Chinese citizens Ang Pue and Tan Siong organized the partnership known as Ang Pue & Company.
• The partnership was established for a term of five years starting from May 1, 1953, with an inherent provision that allowed extension by the mutual consent of the partners.
• The business purpose was to engage in general merchandising, specifically the buying and selling (both wholesale and retail) of items such as lumber, hardware, and other construction materials for commerce either for natives or foreigners.
• The articles of partnership (referred to as Exhibit B) were duly registered with the Office of the Securities & Exchange Commission on June 16, 1953.

Intervention of Republic Act No. 1180

• On June 19, 1954, Republic Act No. 1180 was enacted with the purpose of regulating the retail business sector.
• Under the act, partnerships not wholly composed of Filipinos were allowed to engage in retail business only until the expiration of their initially set term.
• This legislative measure was intended to restrict non-Filipino participation in the retail sector beyond the fixed term limits.

The Amendment and Its Registration

• Prior to the expiration of the original five-year term, on April 15, 1958, the partners amended the original articles of partnership to extend the life of the partnership for an additional five years.
• The amended articles were presented for registration with the Securities & Exchange Commission on April 16, 1958.
• The registration was refused on the grounds that the extension violated the provisions of Republic Act No. 1180.

Litigation and Appeal

• Following the refusal to register the amendment, the decision of the lower court dismissing the action (with costs) served as the basis for the plaintiffs’ appeal.
• The central contention was whether the extension provision, originally contemplated by the parties, could be honored despite the enactment of RA 1180.

Issue:

Validity of the Amendment

• Whether the extension of the partnership term for another five years, as provided in the amendment to the articles, is valid in light of the already enacted Republic Act No. 1180.

Supremacy of the Statutory Regulation over Contractual Provisions

• Whether the contractual right to extend the partnership term, as initially agreed upon by the parties, can prevail over the statutory restrictions imposed by RA 1180.
• Whether such extension constitutes an inalienable property right that cannot be overridden by subsequent legislation.

Application of the Law to Existing Partnerships

• Whether the provisions of RA 1180, which were intended to limit the participation of non-Filipino entities in the retail business, apply retroactively or only prospectively.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)