EN
BANC
THE
CITY OF
MANILA,
Plaintiff-Appellee,
G.
R.
No. 31162
January
13, 1930
-versus-
CARLOS
PALANCA,
Defendant-Appellant.
D
E C I S I
O N
VILLA-REAL,
J :
This is an appeal taken
by defendant Carlos Palanca from the judgment of the Court of First
Instance
of Manila, the dispositive part of which is as follows:
"Let judgment be
entered
against the defendant for the payment of the license fees as prescribed
in Sections 745 to 747 of the new Revised Ordinances of the City to the
City of Manila, for the years from 1922 to 1928, inclusive, or, the
amount
of four thousand two hundred pesos [P4,200], with legal interest
thereon
at the rate of six per cent per annum, from the twelfth day of May,
1928,
when the complaint was filed, plus the costs of the action. So ordered."
In support of his appeal,
the appellant assigns the following alleged errors as committed by the
Court below in its judgment, to wit:
"1. The trial court
erred in holding that the license issued by plaintiff to defendant,
under
and by virtue of Section 2530 of the Administrative Code [Manila
Charter],
to distill alcoholic liquors and to sell, give away, or otherwise
dispose
of his products, did not authorize him to rectify the alcohol distilled
by him and convert it into wines and other alcoholic liquors.
"2. The trial court
erred in not finding that in order to produce a finished, saleable
product
defendant had to rectify and convert into liquor the alcohol distilled
by him.
"3. The trial court
erred in not finding that the plaintiff has no authority to apply to
the
business of the defendant both Section 2530 of the Manila Charter and
Section
747 of the Revised Ordinances."
When the hearing of the
present case began, the parties submitted it for decision upon the
following
agreed statement of facts:
"AGREED
STATEMENT
OF FACTS
"1. That the
plaintiff
is a municipal corporation duly organized and existing under the laws
of
the Philippine Islands with principal office at the City Hall, Manila,
and with power to sue and be sued; and that defendant is of lawful age
and a resident of the City of Manila.
"2. That in the year
1918, the plaintiff in the exercise of the power granted by the Manila
Charter to regulate and fix the amount of the license fees for
rectifiers,
enacted Ordinance No. 717 which is embodied as Sections 745 to 747,
Chapter
75, of the new Revised Ordinances of the City of Manila.
"3. That during the
period comprised between the years 1922 and 1928, inclusive, the
defendant
has been engaged in, or has conducted, the business of a distiller of
alcoholic
liquors, under and by virtue of a license issued by the plaintiff to
him
from year to year pursuant to Section 2530 of the Administrative Code,
and that in order to be able to sell and dispose of the products of
defendant's
distillery establishment, defendant rectifies said products.
"4. That the process
by which the defendant manufactures alcoholic liquors is as follows:
(1)
Molasses, which is the only raw material used, is fermented and
distilled
into alcohol by either or both of two processes: (a) The fermented
molasses
is pumped into a distilling apparatus, and by continuous process comes
out of the apparatus, rectified alcohol: or (b) the fermented molasses
is pumped into a distilling apparatus and comes out crude alcohol,
which
is again pumped into another distilling apparatus and comes out
rectified
alcohol. (2) The rectified alcohol is then made into wines and other
alcoholic
liquors, by mixing various ingredients.
"5. That rectified
alcohol converted into wines and other alcoholic liquors in the manner
above described are the products which defendant sells to the public.
"6. That during the
period above-mentioned defendant has not obtained nor paid the fees for
the rectifier's license provided for by the above-mentioned Ordinance
No.
717, notwithstanding due demands made upon him therefor by plaintiff.
"7. That during the
period from 1922 to 1927, inclusive, the defendant has paid internal
revenue
taxes for rectifiers, as evidenced by Rectifier Privilege Tax Receipts
Nos. B-3-13, B-3-12, B-3-11, B-3- 10, B-3-10 and B-3-9, besides the
internal
revenue privilege taxes for distillers as evidenced by receipts Nos.
B-2-4,
B-2-3, B-2-3, B-2-3, B-2-3, and B-2-3."
The only question to be
decided in the instant appeal is whether or not by virtue of the
license
issued to the defendant under Section 2530 of the Administrative Code,
he is authorized to rectify the alcoholic liquors distilled by him.
Section 2530 of the
Administrative Code provides as follows:
"Sec. 2530. Distiller's
License. - Licenses for periods of one year may be issued to any
person
or persons of good character, authorizing him or them to conduct the
business
of a distiller of alcoholic liquors and to sell, give away, or
otherwise
dispose of his or their products in the distillery, in quantities of
four
liters or more, upon payment in advance of the sum of six hundred
pesos.
A license of this class shall be known as a 'distiller's license,' and
it shall be unlawful for any person or persons to conduct any
distillery
for the manufacture of alcoholic liquors without such license, or,
having
secured such license, to sell, give away, or otherwise dispose of the
products
of such distillery except as herein prescribed."
It will be noted that the
legal provision just quoted, besides being entitled "Distiller's
license,"
deals with the distillation of alcoholic liquors, and the sale, gift,
or
disposal of the distilled products, and makes it unlawful for any
person
or persons to conduct a distillery for the manufacture of alcoholic
liquors
without such license.
Section
1465 of the
said Administrative Code defines "distiller of spirits" in subsection
(a)
as follows:
"(a) 'Distiller of
spirits' comprises all who distill spirituous liquors by original and
continuous
distillation from mash, wort, wash, sap, or sirup through continuous
closed
vessels and pipes until the manufacture thereof is complete."
The same Section defines
"rectifier" in subsection (c) as follows:
"(c) 'Rectifier'
comprises every person who rectifies, purifies, or refines distilled
spirits
or wines by any process other than by original and continuous
distillation
from mash, wort, wash, sap, or sirup through continuous closed vessels
and pipes until the manufacture thereof is complete. Every wholesale or
retail liquor dealer who has in his possession any still or mash tub,
or
who keeps any other apparatus for the purpose of distilling spirits or
in any manner refining distilled spirits, and every person who without
rectifying, purifying, or refining distilled spirits shall, by mixing
such
spirits, wine, or other liquor with any materials except water,
manufacture
any intoxicating beverage whatever, shall also be regarded as a
rectifier
and as being engaged in the business of rectifying."
Section 745 of the Revised
Ordinances of the City of Manila, defines "rectifier of distilled
spirits"
as follows:
"Sec. 745. 'Rectifier
of distilled spirits' defined. - For the purposes of this chapter
the
term 'rectifier of distilled spirits' shall be construed to include
every
person who rectifies, purifies, or refines distilled spirits or wines
by
any process other than by original and continuous distillation from
mass,
wort, wash, sap, or syrup through continuous closed vessels and pipes
until
the manufacture thereof is complete; every wholesale or retail liquor
dealer
who has in his possession any steel or mass tub, or who keeps any other
apparatus for the purpose of distilling spirits or in any manner
refines
distilled spirits; and every person who, without rectifying, purifying
or refining distilled spirits shall, by mixing such spirits, wine, or
other
liquor with any materials except water, manufacture any intoxicating
beverage
whatever."
It will be seen that there
is an essential difference between a distiller and a rectifier, and the
word "rectifier" is given the same definition in Section 1465 of the
Administrative
Code and in Section 745 of the Revised Ordinances of the City of
Manila.
Subsections (1) and (2) of paragraph IV of the agreed statement of
facts
read as follows:
"(1) Molasses, which
is the only raw material used, is fermented and distilled into alcohol
by either or both of two processes: (a) The fermented molasses is
pumped
into a distilling apparatus, and by continuous process comes out of the
apparatus, rectified alcohol; or (b) the fermented molasses is pumped
into
a distilling apparatus and comes out crude alcohol, which is again
pumped
into another distilling apparatus and comes out rectified alcohol.
"(2) The rectified
alcohol is then made into wines and other alcoholic liquors, by mixing
various ingredients."
Thus,
the defendant distills
and rectifies alcohol either by a continuous process of distillation
first
and then rectification, or by both processes, one of distillation and
the
other of rectification, afterwards converting the rectified alcohol
into
wines and other alcoholic liquors by mixing with various ingredients.
The fact that under
his distiller's license, he is by Section 2530 of the Administrative
Code,
permitted to sell and dispose of alcoholic liquors manufactured in his
distillery, does not authorize him to rectify said spirituous liquors,
since we have seen that to distill and to rectify are two essentially
different
processes in the manufacture of alcoholic liquors. The fact that in
order
to be able to sell his alcoholic products he must rectify them, does
not
mean that to distill and to rectify the one and the same thing, and
that
distilled spirituous liquors cannot be sold. Perhaps the defendant
would
rather continue the manufacture of alcoholic liquors rectifying them
after
distillation, in order thus to obtain a higher price at a lower cost.
The court below, then,
did not commit the first alleged error imputed to it.
As to the third
assignment
of error, as Section 2530 of the Manila Charter, contained in the
Administrative
Code, only regulates the business of distilling spirituous liquors, and
not of rectifying them, and as the municipal board is authorized by
Section
2444, subsection [l] of the same Code, to regulate and fix the amount
of
the license fee to be paid by rectifiers, the trial court has not
incurred
the third assignment of error in holding that Section 747 of the
Revised
Ordinances of the City of Manila does not seek to tax the business of
rectifying
spirituous liquors, but only to regulate it by requiring a license not
provided for by Section 2530 of the Manila Charter.
For the foregoing
considerations,
We are of opinion and so hold: (1) That a distiller of spirituous
liquors
who has secured a license under Section 2530 of the Manila Charter,
contained
in the Administrative Code, is not exempt from the payment of the
license
fee required of all rectifiers of distilled spirits under Section 747
of
the Revised Ordinances of the City of Manila, if he rectifies the
spirituous
liquors distilled by himself, thus being at the same time a distiller
of
spirituous liquors and a rectifier of distilled liquors; and (2) that
said
Section 747 of the Revised Ordinances of the City of Manila does not
create
a tax on the business of rectifying distilled spirits, but simply
requires
a license to regulate the same.
In virtue whereof,
and finding no error in the judgment appealed from, the same is hereby
affirmed in toto, with costs against the appellant. So ordered.
Avanceña, C.J.,
Street, Malcolm, Ostrand and Romualdez, JJ., concur.
Johns, J.,
dissents. |