Facts:

The case B.F. Goodrich Philippines, Inc. v. Hon. Teofilo Reyes, Sr. revolves around a legal contention regarding the applicability of Republic Act No. 1180, a statute prohibiting certain entities from engaging in retail business. B.F. Goodrich Philippines, Inc. (petitioner), primarily involved in the manufacturing and selling of rubber products, including automotive tires, rubber tubes, batteries, and conveyor belts, filed a petition for declaratory relief on June 19, 1975. The Secretary of Commerce and Industry at the time, Hon. Teofilo Reyes, Sr. (respondent), was named in the petition.

In its operations, the petitioner admitted to selling products not just to dealers and distributors, but also directly to various entities, including government agencies, public utilities, mining and logging firms, and even employees of its own company. The petitioner argued that these activities did not fall under the definition of "retail business," as stipulated in Republic Act No.

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Facts:

Parties Involved

• Petitioner: B.F. Goodrich Philippines, Inc., a corporation engaged in the manufacturing and selling of rubber products such as automotive tires and tubes, batteries, conveyor belts, heels and soles for shoes, and tiles.
• Respondent: The Honorable Teofilo Reyes, Sr., in his capacity as Secretary of Commerce and Industry.

Nature of the Business and Regulatory Context

• The petitioner’s business primarily involves manufacturing rubber products and subsequently selling them in bulk to dealers, distributors, and various large-scale industrial and governmental entities.
• Under Republic Act No. 1180, the petitioner’s engagement in retail business is restricted; retail business is defined as selling merchandise, commodities, or goods for consumption directly to the general public.
• The petitioner acknowledged that it sells not only to dealers and distributors but also directly to government agencies, public utilities, agricultural enterprises, and even its employees and officers.

Controversial Issue and Relief Sought

• The petitioner contended that, based on the equal protection clause and interpretations in previous cases (notably Ichong v. Hernandez), it did not fall within the retail ban imposed by R.A. 1180.
• It sought a declaratory relief and subsequently a plea for a preliminary injunction to challenge the application of the law to its operations.

Stipulated Facts and Expert Opinions

• The facts were stipulated in the record on appeal, which explicitly admitted that while the petitioner predominantly sold to dealers and industrial users, it also made direct sales to certain categories including its employees and officers.
• A notable submission in the stipulation was the opinion of the then Secretary of Justice, Pedro Tuason, who opined that a corporation with an overwhelmingly Filipino capital structure (99.99% Filipino and 0.01% alien) is exempt from the provisions of R.A. 1180 based on the principle of de minimis non curat lex.

Procedural History and Lower Court Ruling

• Initially, a preliminary injunction was sought and a restraining order was issued after the hearing, pending a resolution of the issues raised.
• The lower court rendered a decision which:
• Held that the petitioner is not generally exempt from the provisions of Republic Act No. 1180.
• Recognized that most sales channels of the petitioner do not constitute retail business, except for its sales to employees and officers.
• Made the restraining order permanent, subject to the modification concerning sales to employees and officers.

Statutory Amendment and Its Impact

• The case was influenced by the issuance of Presidential Decree No. 714 which amended R.A. 1180.
• Under this decree, the definition of “retail business” was expanded to specifically include or exclude certain transactions:
• It clarified that manufacturing or processing sales to industrial and commercial users for further production or service purposes are not considered retail.
• It included categories such as sales by hotel operators in their incidental restaurant operations.
• The amendment explicitly identified entities like proprietary planters and those engaged in natural resource exploitation within its ambit.

Issue:

Legal Definition of Retail Business

• Whether the petitioner’s act of selling directly to various types of customers falls within the definition of retail business as proscribed under Republic Act No. 1180.
• To what extent the amended definition under Presidential Decree No. 714 alters the scope of what constitutes retail business.

Equal Protection Clause Defense

• Whether the petitioner’s reliance on the equal protection clause, as interpreted in Ichong v. Hernandez, is sufficient to exempt it from the statutory restrictions imposed by R.A. 1180.
• The legitimacy of extending the doctrine of “de minimis non curat lex” to circumvent the limitations set forth in the law.

Application of Statutory and Jurisprudential Principles

• Whether the sale of rubber products to different classes of customers (dealers, government entities, industrial enterprises, and employees/officers) can be categorically separated between non-retail and retail transactions.
• How the nationalistic objectives underlying Republic Act No. 1180 and its subsequent amendments justify the differential treatment of sales channels.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)