G.R. No. L-23607 May 23, 1967
GO KA TOC SONS and CO., ETC., plaintiff-appellee, vs. RICE AND CORN BOARD, defendant-appellant.

FACTS

Plaintiff-appellee Go Ka Toc Sons & Co. is a duly registered partnership, not wholly owned by Filipinos, engaged since 1958 in the manufacture, processing, and marketing of vegetable oil extracted from corn, rice, and other products. Republic Act 3018, approved on August 2, 1960, prohibited entities not wholly owned by Filipino citizens from engaging in the rice and/or corn industry, effective January 1, 1961, but allowed a two-year liquidation period for existing businesses. The Rice and Corn Board (RICOB) issued Resolution No. 10 on November 21, 1960, defining “by-product,” and General Circular No. 1 on July 10, 1961, defining “capital investment.” Plaintiff, required to register by RICOB agents, filed an action in the Court of First Instance to declare RA 3018 and the RICOB issuances inapplicable to its business. The lower court granted a preliminary injunction. After a stipulation of facts, the lower court declared RA 3018 inapplicable to plaintiff, nullified the RICOB issuances as applied to plaintiff, and made the injunction permanent. Defendant RICOB appealed. Admittedly, plaintiff had stopped purchasing and selling rice and/or corn after the two-year period and limited its activities to processing and manufacturing corn and rice oil from raw materials like corn germ (“sungo”), “tahup,” and rice husk, also producing and selling a residue called “corn meal” or “corn meal germ.”

ISSUE

Whether the business activities of plaintiff-appellee—specifically, the trade, processing, and manufacture of oil and meal from by-products of rice and corn (“sungo,” “tahup,” rice husk)—are covered by the prohibition in Republic Act 3018.

RULING

Yes. The Supreme Court reversed the lower court’s judgment and annulled the writ of injunction. The law, under Section 1 of RA 3018, explicitly defines the “rice and/or corn industry” to include “the acquisition for the purpose of trade of rice … or corn and the by-products thereof.” The raw materials used by plaintiff (“tahup,” “sungo,” and “rice husk”) are clearly by-products of rice and/or corn. The inclusion of “by-product” in the law’s body is germane to the subject expressed in its title and is not an invalid legislative usurpation of judicial interpretation. The lower court erred in resorting to statutory construction to limit the law’s application, as the law is clear and unambiguous in its policy to restrict even the trade and acquisition of by-products to wholly Filipino-owned entities. Since plaintiff is covered by the statute, the RICOB Resolution No. 10, which merely implemented the law by enumerating examples of by-products, is valid. The question regarding General Circular No. 1 was rendered moot.