MOBIL OIL PHILIPPINES, INC., PETITIONER-APPELLANT, VS. THE HONORABLE TEOFILO REYES, SR., IN HIS CAPACITY AS ACTING SECRETARY OF COMMERCE AND INDUSTRY, RESPONDENT-APPELLEE.

The joint record on appeal
was filed by both petitioner Mobil Oil Philippines, Inc. and respondent, the then acting
Secretary of Commerce and Industry, the late Teofilo Reyes, Sr., the lower court ruling “that
the instant petitioner may not claim exemption from the provisions of
Republic Act No. 1180, it appearing that it is not wholly owned by the citizens of the United States. Assuming
it to be true that 99.27% of its capital stock is owned by persons with United States addresses, it was not shown that said
persons are actually citizens of
the United
States. The Court is accordingly not in a position
to declare whether such ownership of 99.27%, of the capital stock of the
petitioner by persons with U.S. addresses is a substantial compliance with the
requirement of the law that the corporation must be wholly owned by citizens of the United States, under the doctrine of ‘de minimus
non curat lex.’^[1] It,
however, sustained “the
claim of petitioner that it is not engaged in the retail business,
inasmuch as its sales are limited to resellers and to a selected clientele,
such as the Government, large industrial users and public utilities. The
evidence shows that such sales are
not mere deliveries of products
on day-to-day basis but result from negotiations of terms for definite and
extended periods of time. Moreover, ancillary to such sales, petitioner renders
considerable specialized technical services including among other things,
providing purchasers with tankage facilities, pipelines, pumps and other equipment, extending technical
assistance in the use of machinery for the operation of the business of the
customer and extending huge and liberal credit facilities, all of which entail
tremendous cost or investment on the part of the petitioner. With respect to
such sales, the Court reiterates its ruling in Civil Case No. 57421
that they are not to be considered ‘retail’ within the meaning of Section 4 of
Republic Act No. 1180.”^[2]

The judgment accordingly
was for declaring the petitioner not engaged in retail business within
the meaning of Section 4 of
Republic Act No. 1180, more commonly known as the Retail Trade Act. The appeal
cannot prosper.

There is no need to pass on the merits of the legal questions presented by both petitioner
as appellant and respondent as Appellee. Whatever
doubts could have originally arisen as to whether or not it is engaged in the
retail business were set at rest by Presidential Decree No. 714 as held in B. F. Goodrich Philippines, Inc. v. Reyes,^[3] and Goodyear Tire and Rubber Co. v. Reyes.^[4] As originally worded, the term
“retail business” covers “any act, occupation or calling of
habitually selling direct to the general public merchandise, commodities or
goods for consumption, but shall
not include: (a) a manufacturer, processor, laborer or workers selling to the
general public the products manufactured, processed or produced by him if his
capital does not exceed five thousand pesos, or (b) a farmer or agriculturist selling the product of his farm.”^[5]
Under the aforesaid Presidential Decree, which took effect on May 28, 1975, two more paragraphs
were included. They are: “(c) a manufacturer or processor selling to the
industrial and commercial users or consumers who use the products bought by
them to render service to the general public and/or to produce or manufacture
goods are in turn sold to them; (d) a hotel-owner or keeper operating a
restaurant irrespective of the amount of capital, provided that the restaurant
is necessarily included in, or incidental to, to the hotel business.”^[6]
As pointed out in the aforementioned B.F. Goodrich and Goodyear Tire cases, the
matter has now been clarified. Accordingly, a similar decision is called for.

WHEREFORE, the lower court decision is affirmed declaring
the petitioner as not engaged in retail business within the meaning of Section
4 of Republic Act No. 1180 in accordance with Presidential Decree No. 714. The
preliminary injunction issued is likewise made permanent. No costs.

Teehankee, Aquino,
Concepcion, Jr., Guerrero, Melencio-Herrera,
Plana, Escolin, Relova, and
Gutierrez, Jr., JJ., concur.

Makasiar, J., no part.

Abad Santos, J., on official Leave.

De Castro, J., on sick leave.

^[1] Joint Record on Appeal, 93.

^[2] Ibid., 93-94.

^[3]
L-30067, April 19, 1983.

^[4]
L-30063, July 2, 1983.

^[5] Republic Act No. 1180,
Section 4 (1954).

^[6] Presidential Decree No. 714, Section 4, pars.
(c) and (d).