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Go Ka Toc Sons and Co., etc. v.

Rice and Corn Board


G.R. No. L-23607
May 23, 1967
BENGZON, J.P., J.:
DESCRIPTION OF THE CASE:
This case is about the selling of rice and corn by-products by nonFilipino owned and controlled corporation.
STATEMENT OF FACTS:
Go Ka Toc Sons & Co. (Petitioner) is a duly registered partnership not
wholly owned by Filipinos. It engaged in the manufacturing, processing and
Marketing of vegetable oil extracted from different vegetable products.
On August 2, 1960, Republic Act 3018 was approved which prohibited
partnerships whose capital was not wholly owned by Filipinos from engaging,
directly or indirectly, in the rice and/or corn industry. The law takes effect on
January 1, 1951, however such partnerships, upon registration with the
municipal treasurer, are allowed to exist until 2 years after January 1, 1961
for the purpose of liquidation.
The Rice and Cord Board (RICOB) issued Resolution No. 10, defining the
term "by product", and General Circular No. 1, which defined the term Capital
Investment which limits the maximum amount of capital investments of alien
persons engaged in the rice and/or corn industry in pursuant to Republic Act
3018.
Petitioner has stopped in the sale of rice and/or corn since the lapse of
the two-year period from the effectivity of the law and has limited its
activities to the trade, processing and manufacture of corn and rice oil from
raw materials consisting of corn germ proper or embryo ("Sungo") and
"Tahup", as well as rice husk it secures from those who produce rice and
corn. Petitioner also produces "Corn Meal" or "Corn Meal Germ" which it sells
and trades.
STATEMENT OF THE CASE:
Petitioners filed an action in the Court of First Instance (CFI) to declare
the said law and RICOB Resolution No. 10 and Gen. Circulation No. 1 as
inapplicable to it. The lower court was in favor of the Petitioner and thus
issued the writ of preliminary injunction prayed for.

RICOB, through the Solicitor General has taken the instant appeal to
raise questions purely of law, hence the petition to this court.
ISSUE:
Whether or not the Petitioner, not a 100% Filipino owned corporation,
can engage in the trade, processing and manufacture of corn and rice oil
from raw materials.
RULING:
The Judgment is REVERSED
The lower court erred in the construction of the in which it proclaimed
that the issue of by-products was germane to the case at hand and on the
interpretation legislative intent of the makers of the law with the remark that
Filipino's do not depend for their survival by the eating the by-products if rice
and corn, hence the error in the decision that the Petitioners were not
included in the scope of Republic Act No. 3018.
According to Section 1 of the law:
"No person who is not a citizen of the Philippines, or association,
partnership or Corporation, the capital or capital stock of which is now wholly
owned by citizens of the Philippines, shall directly indirectly engage in the rice
and/or corn industry except as provided in Section three of this act."

Since the Law is clear and unambiguous, there is no need for construction or
interpretation, but only implementation. Only 100% Filipino owned artificial
persons may engage in the rice and/or corn industry.
In regards to the validity of Resolution No. 10 and General Circular No.
1 is is rendered moot and academic.
DISPOSITIVE PORTION:
WHEREFORE, the judgment appealed from is reversed and the writ of
injuction issued therein is annulled and set aside. No costs.
SO ORDERD.