Title
Ang Pue and Co. vs. Secretary of Commerce and Industry
Case
G.R. No. L-17295
Decision Date
Jul 30, 1962
A non-Filipino partnership sought to extend its term under Republic Act No. 1180, but the Supreme Court ruled the extension invalid, upholding the law's intent to nationalize retail trade.

Case Summary (G.R. No. 83942)

Key Dates and Documentary Acts

  • May 1, 1953: Partnership organized for an initial five‑year term, extendible by mutual consent.
  • June 16, 1953: Original articles of partnership registered with the Securities and Exchange Commission (Exhibit B).
  • June 19, 1954: Republic Act No. 1180 (Retail Trade Nationalization Law) enacted.
  • April 15, 1958: Partners amended the articles to extend the partnership term for an additional five years.
  • April 16, 1958: SEC refused registration of the amended articles on the ground that the extension violated RA 1180.
  • Lower court: Dismissed petition; judgment appealed.

Statutory Framework (Republic Act No. 1180)

  • RA 1180 regulated retail trade by restricting participation in the retail business to Filipinos and concerns wholly owned by Filipinos.
  • The statute expressly allowed partnerships and similar concerns not wholly formed by Filipinos to continue to engage in retail trade only until the expiration of their existing term of life as of the law’s enactment. The law thus barred future extensions that would prolong non‑Filipino participation in retail beyond the originally fixed term.

Legal Issue Presented

  • Whether the partners of Ang Pue & Company could, after RA 1180 had been enacted, validly amend their articles to extend the partnership term for an additional five years and thereby continue engaging in the retail business despite the nationality restrictions imposed by RA 1180.

Court’s Analysis: Nature of Business Organization and Legislative Authority

  • The Court reasoned that the creation and continued existence of juridical entities such as corporations and partnerships is a privilege subject to regulation by the State; it is not an absolute individual right. Under the Constitution and statutory law, Congress may prescribe terms and conditions for the exercise of such privileges.
  • Given this regulatory authority, Congress lawfully enacted RA 1180 to limit retail trade to Filipino citizens or wholly Filipino concerns.

Court’s Application of RA 1180 to the Facts

  • The Court emphasized that RA 1180’s saving clause — permitting non‑wholly Filipino concerns to “continue” in retail until the expiration of their then‑existing term — demonstrates Congress’s intent that existing partnerships be allowed to finish their preexisting terms but not to extend them beyond those terms.
  • Because the partners sought the extension after RA 1180 had already become law, the proposed extension was subject to the legal regime in force at the time of the amendment. The contractual provision in the original art
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