CHUA U, ET AL., PETITIONERS AND APPELLEES, VS. HON. MANUEL LIM, ETC., ET AL., RESPONDENTS AND APPELLANTS.

Direct appeal against a decision
of the Court of First Instance of Bulacan, in a
declaratory judgment suit (Civil Case No. 2317 of the court below) filed by
petitioners-appellees, owners of factories producing
“bijon” (rice spaghetti), to annul Resolution No. 10
of the Rice and Com Board that declared that the “bijon” industry is included within the terms of Republic Act
No. 3018, nationalizing the Rice and Corn Industry. At the original petitioners’
behest, the court a quo issued a writ of preliminary injunction upon a bond of
P2,000.00, which was duly accomplished and
filed.

The case was submitted to the
court of origin upon an agreed stipulation of facts, reciting as follows:

” ‘1. That petitioners were and
are still owners and operators of the Bijon Factories
in the province of Bulacan Tons before the passage of
Republic Act No. 3018 with licenses duly paid and issued in the name of each of
the respective petitioners;

”
‘2. That in
the manufacture of Bijon, petitioners are using rice
and/or corn as the principal ingredient;

”
‘3. That in
the year 1960, the Congress of the Philippines passed a bill regulating the
trade of. palay, rice and corn, which became and is
now Republic Act No. 3018, and pursuant to said Act, the President of the
Philippine created the Rice and Corn Board to implement and carry out the
provisions of said Act and respondents are duly appointed and qualified members
of the said Rice and Corn Board;

”
‘4. That the
Federation of Chinese Chamber of Commerce in the Philippines sent a letter dated
September 20, 1960, to the Rice and Corn Board, requesting information as to
whether or not the manufacturers and/or dealers in bijon or noodle corn starch and gaugau, rice, wine and poultry or chicken feed of other
by-products of rice and corn are within the scope of the provisions of Republic
Act No. 3018. Copy of said letter is attached hereto as Annex
“A”;

”
‘ 5. That the
respondents acting as members of the Rice and Corn Board ruled that the
processing of rice and/or corn or its by-products are included in the aforesaid
Republic Act No. 3018 and the petitioners are within the purview of the said
Act, in a letter dated January 3, 1961, signed by its Acting Executive Director,
Efren V. Mendoza, copy of which letter is attached
hereto as Annex “B”;

” ‘6. That although under
Republic Act No. 3018, Section 2 thereof, persons who are not citizens of the
Philippines and associations, partnerships or corporations the capital or
capital stock of which is not wholly owned by citizens of the Philippines, who
are engaged and duly licensed to engage in the rice and/or corn industry, as of
the date of the approval of the law, shall file their statement of ownership,
assets and liabilities with the proper office within 60 days from the approval
thereof, that is, August 2, 1960; the respondent members of the Rice and Corn
Board however have extended the period of filing of applications for permit to
continue operation of aliens in the rice and corn industry up to January 31,
1961;

” ‘7. That petitioners filed”
their present petition with this Court on January 25, 1961, with a prayer for a
writ of preliminary injunction pending the determination of the present petition
on the merits which was granted on said day.

” ‘8. That petitioners and
respondents submit for determination of the issues as to whether Republic Act
No. 3018 is applicable to the bijon industry, operated
and owned by the petitioners as alleged in paragraph 1 of the complaint;’
“

The lower court found for the
petitioners, and declared that Republic Act No. 3018 did not include “bijon” manufacturers, because the latter did not deal in
rice or corn or any of its by-products, and made its injunction permanent. Whereupon, the Rice and Corn Board, through the Solicitor General,
appealed directly to this Court on points of law.

We agree with the Solicitor
General that this case for declaratory judgment should have been dismissed for
several reasons. In the first place, from the time the Rice and Corn Board
issued a ruling that the petitioners-appellees were
covered by the terms of Republic Act No. 3018, the way was open for said
petitioners to appeal the Board’s ruling its administrative superiors, and
thereafter institute an ordinary judicial action to contest the Board’s ruling
and prohibit it from enforcing the ruling. This Court has repeatedly ruled that
the remedy of declaratory judgment is proper only if adequate relief is not
available through other existing forms of action or proceeding (Ollada vs. Central Bank, 115 Phil., 284; Hoskyns vs. National City Bank, of New York, 85 Phil. 201,
cit. 1 C. J. S., 1027). As ruled in Elliott vs. American Manufacturing, Co., 138
Fed. 2d, 678, courts are loath to interfere prematurely with administrative
proceedings, and will not assume jurisdiction of declaratory judgment
proceedings until administrative remedies have been exhausted.^[1]

A second reason for denying
relief is that the declaratory judgment herein sought would necessarily affect
also other manufacturers and processors of rice and corn derivative products
(such as gaw-gaw, face powder, etc.),
which were not represented in these proceedings.

In the third place, it is also
the rule in this jurisdiction that action for declaratory judgment must be
brought before any breach of the statute or ordinance sought to be tested (Rules
66, sec. 2; Santos vs. Aquino, 94 Phil.
65).

But even if the declaratory
judgment were proper, we believe that the facts stipulated are insufficient to
warrant a verdict in this case. As observed in the appealed decision itself
(Rec. App. p. 26), the avowed purpose of Republic Act No. 3018, as shown in the
explanatory note to the original bill, was to do away with the possibility and
practice of aliens creating artificial shortages of rice and corn by hoarding
these commodities or cornering the market therefor, so
as to enable them to dictate prices thereof. It thus becomes a necessary point
of inquiry whether or not the producers of derivatives, in which rice or corn is
the main ingredient, could singly, or in combination with others, create an
artificial scarcity of the cereals at any given time; and for that purpose,
complete data of the consumption capacity of these producers are material. Such
particulars are not available in the record before us.

FOR THE FOREGOING
CONSIDERATIONS, the judgment under appeal is
reversed, and the action for declaratory judgment is ordered dismissed, without
prejudice to other remedies as may be in law available to the parties. No
costs.

Bengzon, C. J., Bautista Angelo, Concepcion, Barrera, Paredes,
Dizon, Regala, Makalintal, Bengzon,
J.P. and Zaldivar, JJ., concur.

^[1] See also Aetna Casualty & S.
Co. vs. Quarles, 92 Fed. (2d) 321; Franklin L. Ins. Co. vs.
Johnson, 157 Fed. 2d.,653.