CENTRAL AZUCARERA DE DON PEDRO, PLAINTIFF AND APPELLEE, VS. CITY OF MANILA AND M. SARMIENTO, AS CITY TREASURER OF MANILA, DEFENDANTS AND APPELLANTS.

This is an appeal from a judgment of the Court of First Instance of Manila,
ordering the defendant-appellant City Treasurer of Manila to refund to the
plaintiff-appellee the sum of P6,208.40, with interest at the legal rate from
May 8, 1952 until the said amount shall have been paid. The sum ordered to be
refunded was assessed and collected from the plaintiff-appellee partly under
Section 1, Municipal Ordinance No. 3420, imposing a municipal tax on wholesale
dealers, and partly under Section 1, Municipal Ordinance No. 1925, as amended by
Ordinance No. 3364, imposing a tax on retailers.

According to the stipulation of facts, plaintiff-appellee is engaged in
milling and manufacturing sugar from sugar cane, for which purpose it operates
and maintains a sugar mill where sugar cane is processed, warehouses where
manufactured sugar is stored, a main office in Manila and a branch office in the
Municipality of Nasugbu, Batangas. In November, 1950, plaintiff-appellee agreed
to sell sugar to Kim Kee, Chua Yu & Co., Inc., and pursuant thereto
deliveries of sugar were made to the purchaser on different dates in 1951. In
November, 1950, plaintiff-appellee also agreed to sell sugar to the San Miguel
Brewery, and in the year 1951 deliveries of the sugar so sold were made to the
purchaser. Kim Kee Chua Yu & Co., Inc. purchased the sugar for resale, while
the San Miguel Brewery, for the manufacture of soft drinks. The sugar sold and
delivered was taken from warehouses of the plaintiff-appellee and was delivered
partly in the City of Manila, partly in Pasay City, and partly in Nasugbu,
Batangas.

The defendant-appellant claims that the plaintiff-appellee is a dealer in
sugar in the City of Manila. Plaintiff-appellee claimed the refund of the
amounts, which it had paid under protest, contending that it has never been
engaged in the wholesale business or in the retail business in the City of
Manila or elsewhere. The Court of First Instance of Manila found that
plaintiff-appellee is not a wholesale or a retail dealer at all, but is a
manufacturer of sugar from sugar cane in its sugar central and that the sale of
the sugar from its mills does not make it a dealer in sugar. Defendant has
appealed from this decision.

It is argued that when the plaintiff-appellee made the sales to Kim Kee, Chua
Yu & Co., Inc. it made a wholesale sale and when it made sales to the San
Miguel Brewery for the manufacture of soft drinks said sales were in retail;
that as the sales were made in the City of Manila because the contracts of sale
were apparently made in Manila, the letter offering the sugar for sale having
been written from plaintiff’s office in Soriano Building, Manila,
plaintiff-appellee is taxable not as a manufacturer of sugar, but as a dealer of
sugar in the City. The case of Atlantic Refining Co. vs. Van
Valkenburg, 109 A. 208, 209, 265 Pa. 456, cited in 11 Words and Phrases, pp.
155-156, is cited in support of the above contention.

The citation does not support appellants’ contention. The citation says “One
who carries on business of selling goods, wares and merchandise, manufactured by
him at a store or warehouse apart from his own shop, or manufactory, is a dealer
therein subject to tax * * *.” It may be admitted that the manufacturer becomes
a dealer if he carries on the business of selling goods or his products
manufactured by him at a store or warehouse apart from his own shop or
manufactory. But plaintiff-appellee did not carry on the business of selling
sugar at stores or at its warehouses. It entered into the contracts of sale
at its central office in Manila and made deliveries of the sugar sold from its
warehouses. It does not appear that the plaintiff keeps stores at its warehouses
and engages in selling sugar in said stores. Neither does it appear that any one
who desires to purchase sugar from it may go to the warehouses and there
purchase sugar. All that it does was to sell the sugar it manufactured; it does
not open stores for the sale of such sugar. Plaintiff-appellee did not,
therefore, engage in the business of selling sugar.

A dealer is defined “as a person who makes a business of buying and selling
goods, especially as distinguished from a manufacturer, without altering their
condition * * *.” (Webster’s International Dictionary) It has also been held
that a dealer as used in a law taxing wholesale liquor dealers “cannot be
construed to mean a manufacturer who sells articles manufactured by him; * * *.
A manufacturer or whisky or other spirituous liquors, who sells from his place
of manufacture in unbroken packages, or as a manufacturer, is not a wholesale
dealer in whisky. A dealer is a middleman between the producer and the consumer.
A dealer, in the popular acceptation or sense of the word, is one who buys to
sell again. He stands immediately between the producer and consumer, and depends
for his profits’ not on the labor he bestows on his commodities, but on the
skill and foresight with which he watches the markets. Taylor vs.
Vincent, 80 Tenn. (12 Lea) 282, 285, 47 Am. Rep. 338.” (11 Words and Phrases,
pp. 158-159) Again it has been held that the word dealer “does not comprehend a
person who merely buys a commodity in one form and converts it by his skill and
labor into an entirely different commodity, and then sells it, such, for
example, as one who buys lumber, with which he manufactures furniture or any
other useful commodity that he sells, cannot be termed a ‘dealer in lumber.’ * *
*.”. (11 Words and Phrases, p. 159)

In the case at bar, plaintiff-appellee receives sugar cane which it mills and
converts into sugar. In making the sale of the sugar it has manufactured, it may
be liable for the manufacturer’s tax, or the producer’s tax. But the mere fact
that it sells the sugar it manufactures does not thereby make it a dealer in
sugar.

“* * *. The right to manufacture necessarily implies the right to sell the
manufactured product at the manufactory. One who thus sells the liquors
mentioned in the statute, manufactured by him, is not a ‘wholesaler’ of liquors,
within the popular or legal definition of that word. The provision that ‘no
person paying a manufacturer’s tax on brewed or malt liquors under this Act
shall be liable to pay a wholesale dealer’s tax on the same’ neither enlarges
nor restricts the right of the manufacturer to sell his product. The statute,
without this language, would give him the same right of sale that he has with
it, viz., the right to sell his product at his brewery. The manufacturer is
entitled to keep his goods in store at the place of manufacture for the purpose
of sale when receiving orders, and in so doing is not a ‘wholesaler,’ within the
popular or legal definition of that word. ‘Articles which the consumer
recognizes as single the retailer keeps wrapped up in dozens, the wholesaler
sends by the gross, and the manufacturer supplies the packages.’ 8 Cent. Diet.
Enc, under definition of the word ‘wholesaler.'” (People vs. Voarhis,
91 NW 624, 626)

We, therefore, find that the judgment appealed from is in accord with law and
we hereby affirm it, with costs against the defendant-appellant.

Bengzon, Acting C. J. Padilla, Montemayor, Reyes, A., Jugo, Bautista
Angelo, Concepcion, and Reyes, J. B. L., JJ., concur.