G.R. No. L-29013. August 31, 1983
MOBIL OIL PHILIPPINES, INC., petitioner-appellant, vs. THE HONORABLE TEOFILO REYES, SR., in his capacity as Acting Secretary of Commerce and Industry, respondent-appellee.

FACTS

Mobil Oil Philippines, Inc. sought exemption from the provisions of Republic Act No. 1180 , the Retail Trade Nationalization Act. The lower court ruled that Mobil could not claim exemption as a corporation wholly owned by United States citizens. The court found that while 99.27% of its capital stock was owned by persons with U.S. addresses, it was not sufficiently proven that these stockholders were actually U.S. citizens. Thus, the doctrine of de minimis non curat lex could not apply to deem this substantial ownership as compliance with the “wholly owned” requirement of the law.
However, the lower court sustained Mobil’s claim that it was not engaged in retail business as defined by the Act. The evidence showed that Mobil’s sales were limited to resellers, the government, large industrial users, and public utilities. These transactions involved negotiated terms for definite periods and were ancillary to the provision of considerable specialized technical services, installation of equipment, and extension of credit facilities. The court held such sales were not “retail” within the meaning of Section 4 of R.A. 1180, reiterating its prior ruling in a related case.

ISSUE

The primary issue was whether Mobil Oil Philippines, Inc. was engaged in retail business under Republic Act No. 1180 , thereby subject to its nationalization provisions.

RULING

The Supreme Court affirmed the lower court’s decision, declaring that Mobil was not engaged in retail business within the meaning of R.A. 1180. The Court found it unnecessary to delve into the merits of the legal questions presented by both parties regarding citizenship and the application of the de minimis doctrine. The dispositive factor was the enactment of Presidential Decree No. 714, which amended the Retail Trade Act.
As originally worded, R.A. 1180 defined “retail business” as habitually selling direct to the general public, with specific exemptions. P.D. No. 714, effective May 28, 1975, added new exemptions, including paragraph (c), which explicitly excludes from the definition of retail business 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 which are in turn sold to them.”
The Court, citing its recent rulings in B.F. Goodrich Philippines, Inc. v. Reyes and Goodyear Tire and Rubber Co. v. Reyes, held that P.D. 714 had clarified the law. Mobil’s sales to industrial and commercial users, as found by the lower court, squarely fell under this new exemption. Consequently, Mobil was correctly declared not engaged in retail business. The preliminary injunction was made permanent. No costs were awarded.