G.R. No. L-4838
THE UNITED STATES, plaintiff-appellant, vs. LIM CO, defendant-appellee.
February 3, 1909

FACTS:
On November 12, 1907, Lim Co, a Chinese national, was found in Manila without the required certificate of residence for Chinese laborers, as mandated by Act No. 702 (which enforced the Act of Congress of April 29, 1902). He was subsequently charged for this violation. The trial court found that Lim Co, who was born in China and had resided in the Philippines for about 22 years, had previously operated an opium store. Following a change in law, he then operated a pansiteria (restaurant) with an investment of P500 and held an interest of P2,000 in a vermicelli manufacturing and selling business, though the license for the latter was in his partner’s name. Based on these findings, the trial court concluded that Lim Co was not a “Chinese laborer” and, therefore, was not required to possess a certificate of registration, discharging him from custody. The United States appealed this judgment.

ISSUE:
Whether Lim Co, by virtue of his involvement in operating a pansiteria and holding an interest in a vermicelli manufacturing and selling business, should be classified as a “Chinese laborer” or a “merchant” under the Chinese Exclusion Acts (Act of Congress of April 29, 1902, and Philippine Commission Act No. 702 ), thereby determining his obligation to register for and possess a certificate of residence.

RULING:
The Supreme Court reversed the judgment of the trial court. The Court held that to qualify as a “merchant” under the Chinese Exclusion Acts, a person must be “engaged in buying and selling merchandise,” and conduct the business in his own name or a firm name that includes his own. The definition of “merchant” does not encompass those who merely fabricate or manufacture merchandise. Furthermore, a proprietor of a restaurant, who prepares and cooks raw food for serving, is considered a skilled laborer rather than a merchant, as their primary activity is not the buying and selling of merchandise in the strict sense.

Applying this interpretation, the Court found that Lim Co’s interest in the vermicelli manufacturing business did not qualify him as a merchant because manufacturing is distinct from buying and selling merchandise, and the business was not conducted in his name. Similarly, his operation of a pansiteria, even if solely owned, categorized him as a laborer because a restaurant owner who cooks and serves is engaged in skilled labor, not mercantile pursuits.

Consequently, Lim Co was deemed a “Chinese laborer” within the meaning of the Act and was legally required to obtain a certificate of residence. His failure to do so rendered him subject to deportation. The judgment of the trial court discharging him was reversed, and an order for his deportation from the Philippine Islands was issued.