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
Case Syllabus (G.R. No. 83942)
Citation and Procedural Posture
- Reported at 115 Phil. 629; G.R. No. L-17295; decided July 30, 1962.
- Action: Declaratory relief filed in the Court of First Instance of Iloilo by Ang Pue & Company, Ang Pue, and Tan Siong (plaintiffs/appellants) against the Secretary of Commerce and Industry (defendant/appellee).
- Relief sought: Judgment declaring that the plaintiffs could extend for five years the term of the partnership pursuant to the provisions of the plaintiffs’ Amendment to the Articles of Copartnership.
- Lower court: Dismissed the action, with costs.
- Appeal: Plaintiffs appealed to the Supreme Court. Decision authored by Justice Dizon. Judgment of the lower court affirmed, with costs.
Parties and Corporate/Partnership Identity
- Plaintiffs and appellants: Ang Pue & Company (a partnership), Ang Pue, and Tan Siong.
- Defendant and appellee: Secretary of Commerce and Industry.
- Nature of plaintiffs: Partnership organized by Ang Pue and Tan Siong, both Chinese citizens.
- Juridical character at issue: Partnership organized to claim juridical personality and to transact business.
Facts — Formation, Purpose, and Registration of the Partnership
- Organization date: The partnership Ang Pue & Company was organized on May 1, 1953 by Ang Pue and Tan Siong.
- Term: The partnership’s original term was five years from May 1, 1953, expressly stated to be extendible by the mutual consent of the partners.
- Purpose of partnership: To maintain a business of general merchandising, buying and selling at wholesale and retail, particularly of lumber, hardware, and other construction materials for commerce, whether native or foreign.
- Original articles of partnership: Referred to as Exhibit B; these corresponding articles were registered in the Office of the Securities and Exchange Commission on June 16, 1953.
Legislative Context — Republic Act No. 1180
- Enactment date: Republic Act No. 1180 was enacted on June 19, 1954.
- Subject matter: Regulation of the retail business.
- Key provisions (as presented in the source): After its enactment, a partnership not wholly formed by Filipinos could continue to engage in the retail business only until the expiration of its term.
- Effect on existing partnerships: The statute expressly afforded partnerships already existing at the time of enactment the right to continue engaging in their retail business until the expiration of their then-current term.
Amendment Attempt and Administrative Action
- Amendment date: On April 15, 1958, prior to the expiration of the five-year term but after the enactment of Republic Act No. 1180, the partners amended the original articles of partnership (Exhibit B) to extend the term of the partnership for another five years.
- Registration attempt: The amended articles were presented for registration in the Office of the S