Case Summary (G.R. No. L-30067)
Case Background
B.F. Goodrich Philippines, Inc. initiated a declaratory relief proceeding against the Secretary of Commerce and Industry, Teofilo Reyes, Sr., contesting the applicability of a statute that prohibits certain businesses from engaging in retail sales directly to the general public. The company primarily manufactures rubber products such as automotive tires, tubes, batteries, and conveyor belts, which it sells primarily to dealers and distributors, but has also sold directly to various government entities and other organizations.
Legal Framework
Under Republic Act No. 1180, companies are restricted from entering the retail market unless they meet specific requirements. Goodrich argued it should be considered exempt from this ban, even as it admitted to selling directly to certain state government and private entities.
Pleas and Proceedings
During initial hearings, a preliminary injunction was requested, but the Office of the Solicitor General expressed the need for more time to formulate a position due to the significance of the case. A restraining order was issued by the court pending further deliberations. The principal defenses raised by Reyes included arguments pertaining to the ownership structure of Goodrich, particularly that it was not wholly owned by Filipino citizens, and thus should not be considered exempt.
Stipulation of Facts
The parties agreed to a stipulation of facts acknowledging that Goodrich sold its products to various large clientele, including automotive assembly plants and public utilities. The stipulation included an opinion from the Secretary of Justice indicating that a corporation with 99.99% Filipino ownership could retail under a leniency doctrine regarding minimal foreign ownership.
Court Decision
The lower court ultimately ruled that despite the stipulation affirming the company’s sales practices to large commercial entities, Goodrich was still subject to Republic Act No. 1180. The court focused on the nature of the transactions, emphasizing that many of Goodrich's customers were not final consumers but industrial buyers, which meant that a significant amount of its sales could not be classified as retail in the typical consumer sense.
Amendment and Affirmation
Further, the court noted the relevance of Presidential Decree No. 714, which clarified the definition of "retail business" to exclude certain types of bulk sale
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Case Citation
- 206 Phil. 291 EN BANC
- G.R. No. L-30067
- April 19, 1983
Parties Involved
- Petitioner: B.F. Goodrich Philippines, Inc.
- Respondent: Hon. Teofilo Reyes, Sr., in his capacity as Secretary of Commerce and Industry
Background of the Case
- The case revolves around a declaratory relief proceeding initiated by B.F. Goodrich Philippines, Inc. against the Secretary of Commerce and Industry concerning the applicability of Republic Act No. 1180.
- Petitioner engaged primarily in manufacturing and selling rubber products, with a focus on automotive tires, tubes, batteries, conveyor belts, and related items.
- The petitioner claimed that it does not fall under the prohibition of engaging in retail sales to the general public as stated in the statute.
Legal Issues Presented
- The primary legal issue involves the interpretation of the equal protection clause as it relates to the restrictions imposed by Republic Act No. 1180.
- The petitioner claimed that its operations should be exempt from the retail prohibition based on its ownership structure and sales practices.
- The case examined if B.F. Goodrich Philippines, Inc. could be considered engaged in retail business and if the equal protection clause had been violated.
Stipulation of Facts
- The petitioner admitted to selling directly to various entities including:
- Government agencies and instrumentalities
- Public utilities
- Agricultural enterprises
- Logging, mining, and natural resources firms
- Automotive assembly plants
- Industrial enterprises
- Employees and officers