HONORABLE CORNELIO BALMACEDA, NOW LEONIDES VIRATA, IN HIS CAPACITY AS SECRETARY OF COMMERCE AND INDUSTRY, PETITIONER, VS. UNION CARBIDE PHILIPPINES, INC., HONORABLE FEDERICO C. …

The question raised in this petition filed by the Solicitor
General to review the decision of then respondent Judge, the late Federico C.
Alikpala declaring that private respondent Union Carbide of the Philippines is
not engaged in the retail business does not pose any difficulty.  The answer is supplied by the case of B. F.
Goodrich Philippines, Inc. v. Teofilo Reyes, Sr.,^[1]
Goodyear Tire and Rubber Co. v. Teofilo Reyes, Sr.,^[2]
and Mobil Oil Philippines, Inc. v. Teofilo Reyes, Sr.^[3]
The doctrine therein announced applying the Presidential Decree^[4]
amend­ing the Retail Trade Act^[5]
is directly in point.  The decision calls for affirmance.

The amendatory Presidential Decree added two more paragraphs, the
first of which was the basis for the three previous decisions of this
Court.  The entire section 4 was
reproduced.  The Section starts with an
opening statement as to what the term “retail business” shall mean,
namely, “occupation or calling of habitually selling direct to the general
public merchandise, commodities or goods for consumption.”^[6]
It excludes, according to the amendment, “(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 produce
or manufacture goods which are in turn sold to them; * * *.”^[7]
The appealed decision, which is quite comprehensive and scholarly, could be
commended for in the main anticipating that the above category should be
excluded from “retail business.” Thus:  “In the field of economics, in the area
of marketing, the interpretation given by Government agencies, and by common
acceptation, the term ‘retail’, is associated with and limited to goods for
personal, family or household use, consumption and utilization.  This is also in accord with the ruling of the
Supreme Court in the Ichong case regarding the nature and kind of goods a
retailer handles.  Under the situation,
the Court is persuaded to hold that the goods for consump­tion mentioned in
Republic Act No. 1180 should be construed to refer to the final and end [uses]
of a product which directly satisfy human wants and desires and are needed for
home and daily life.  Accordingly, the goods
which petitioner’s Industrial Products Division handle (commonly referred to as
intermediate goods), do not fall and cannot be classified as consumption
goods.”^[8]

There was a need for such clarification.  Private respondent has two divisions, the
Consumer Products Division and the Industrial Products Division.  As to the former, it effected its sales
through retail out­lets, dealers and distributors.  Thus there was no question as to the
character of its business.  It was not
embraced in the category of retail.  As
to the Industrial Products Division, its Agricultural Chemicals Department sold
its products through exclusive distri­butors. 
Again, it could be concluded that such Depart­ment was not covered by
the Act even before its amendment.  The
products handled by the five other departments of the Industrial Products
Division, namely, the Metals and Carbide; Plastics; Industrial Chemicals;
Linde, Haynes Stellite and Carbon Products and Polyethylene Bags were generally
sold to producers, processors, fabricators and to industries.  While these departments had a limited fixed
clientele, still there was no prohibition as to the general public making
similar purchases from them.  What
removed these departments from the operation of the Retail Trade Act was
pointed out in the appealed decision in these words:  “The goods handled by the five remaining
departments of petitioner’s Industrial Products Division are generally raw
materials used in the manufacture of other goods, or if not, as one of the
component raw materials, or at the least as elements utilized in the process of
pro­duction or manufacturing.”^[9]
After considering the statutory definition in the Retail Trade Act itself, its
definition by economists, and in judicial opinions, as well as the view of
former Central Bank Governor Cuaderno as to the adverse consequences in terms
of increased cost to consumers, loss of financial assistance from producers,
elimination of much needed foreign capital and loss of technical assistance,
the lower court held it was not engaged in the retail business.  The amendatory Decree removes whatever doubt
there could have been as to the correctness of the conclusion reached by the
lower court.

WHEREFORE, the Court affirms the lower court decision
holding that Union Carbide Philippines, Inc. is not engaged in the “retail
business” as this term is defined in Section 4 of Republic Act No. 1180
and making permanent the restraining order of June 22, 1964 issued in this
case.  No costs.

Aquino, Guerrero, Abad Santos, Melencio-Herrera, Plana, Escolin,
and Relova, JJ., concur.

Makasiar, J., no part.

Teehankee and Gutierrez,
Jr., JJ., on official leave.

Concepcion, Jr., J., on leave.

De Castro, J., on sick leave.

^[1]
G. R. No. L-30067, April 19, 1983, 121 SCRA 363.

^[2]
G. R. No. L-30063, July 2, 1983.

^[3]
G. R. No. L-29013, August 31, 1983.

^[4]
Presidential Decree No. 714 (1975).

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

^[6]
Presidential Decree No. 714, Section 1.

^[7]
Ibid, Section 1(b).

^[8]
Decision, Annex C to Petition, 11.

^[9]
Ibid, 8.