Iloilo Bottlers v.

Iloilo
August 19, 1988
ILOILO BOTTLERS, INC., PLAINTIFF-APPELLEE
VS.
CITY OF ILOILO, DEFENDANT-APPELLANT.
CORTES, J.:
SUMMARY: lloilo Bottles !ile" # $o%&l#i't to e$o(e &#)%e't, %#"e u'"e &otest, o! # %u'i$i&#l li$e'se t#* i%&ose" o' e'tities
"isti+uti'g, %#'u!#$tui'g o +ottli'g so!t "i',s, +) (itue o! O"i'#'$e No. - e'#$te" +) t.e Cit) o! Iloilo. It #lleges t.#t it .#s si'$e
%o(e" its &l#'t !o% Iloilo Cit) to B#io /'g$#, P#(i#, Iloilo #'" is t.us out o! Iloilo Cit)0s 1uis"i$tio' #'" t.#t it is 'ot e'g#ge" i' t.e
i'"e&e'"e't +usi'ess o! "isti+uti'g s#i" so!t"i',s. HELD: Its &l#'t is 'ot u'"e teitoi#l 1uis"i$tio' o! Iloilo Cit)2 t.us, Iloilo Bottles is
'ot li#+le !o %u'i$i&#l li$e'se t#* !o %#'u!#$tui'g #'" +ottli'g t.e so!t"i',s. 3O4EVER, it is still e'g#ge" i' t.e +usi'ess o!
"isti+uti'g t.e so!t"i',s i' Iloilo Cit) t.oug. t.e tu$, s#les o 5olli'g stoes6 #'" t.ee!oe is li#+le to &#) t.e li$e'se t#*.
DOCTRINE: A' e*$ise t#* $#' +e le(ie" +) t.e t#*i'g #ut.oit) o'l) 7.e' t.e #$ts, &i(ileges o +usi'esses #e "o'e o &e!o%e"
7it.i' t.e 1uis"i$tio' o! s#i" #ut.oit). T.e situs o! t.e #$t o! "isti+uti'g, +ottli'g o %#'u!#$tui'g so!t"i',s %ust +e 7it.i' $it) li%its,
+e!oe #' e'tit) e'g#ge" i' #') o! t.e #$ti(ities %#) +e t#*e" i' t.#t $it).
FACTS:
8#'. 11, 199:; Iloilo Cit) e'#$te" Ordinn!e No. "# Series o$ %&'( <su$$essi(el) #%e'"e" +) O"i'#'$e No. =8, Seies o! 199:2
O"i'#'$e No. 1-, Seies o! 199>2 #'" O"i'#'$e No. >-, Seies o! 199>?
o Sec. 1. - Any person, firm or corporation engaged in the distribution, manufacture or ott!ing of coca-cola, pepsi cola,
tru-orange, seven-up and other soft drinks "ithin the #urisdiction of the City of $!oi!o, sha!! pay a municipa! !icense ta% of
1& centa'os ()&.1&* for e'ery case of +, ott!es- )RO.$/E/, 0O1E.ER, that soft drin2s so!d to the pu!ic at not more
than 3 centa'os ()&.&3* per ott!e sha!! pay a ta% of 1 4 centa'os ()&.&13* per case of +, ott!es.
o Sec. 1-A. - 5or purposes of this Ordinance, a!! de!i'eries and6or dispatches emanating or made at the p!ant and a!! goods
or stoc2s ta2en out of the p!ant for distriution, sa!e or e%change irrespecti'e (of* "here it "ou!d ta2e p!ace sha!! e
co'ered y the operation of this Ordinance.
Pio to Se&t. 1999; S#'ti#go S)1u$o I'$., o7'e" #'" o&e#te" # +ottli'g &l#'t #t Muelle Lone) Street# Iloilo Cit)# 7.i$. 7#s
"oi'g +usi'ess u'"e t.e '#%e o! Se(e'-u& Bottli'g Co%&#') o! t.e P.ili&&i'es #'" +ottle" t.e so!t-"i',s Pe&si-Col# #'" @-u&
Se&t. 1>, 1999; 3o7e(e, S#'ti#go S)1u$o, I'$., i'!o%e" #ll its e%&lo)ees t.#t it #s $losi'g its Iloilo Pl#'t "ue to !i'#'$i#l losses
#'" i' !#$t $lose" t.e s#%e #'" l#te sol" t.e &l#'t to Iloilo Bottles, I'$.
T.ee#!te, Iloilo Bottles o&e#te" t.e s#i" &l#'t +) +ottli'g t.e so!t "i',s Pe&si-Col# #'" @-u&
8ul) 1998; 3o7e(e, Iloilo Bottles $lose" s#i" +ottli'g &l#'t #t Auelle Lo'e), Iloilo Cit), #'" t#'s!ee" its +ottli'g o&e#tio's to its
'e7 &l#'t i' Brrio Un*!# Muni!i+lit) o$ ,vi# ,rovin!e o$ Iloilo
Fo% t.e ti%e o! t.e e'#$t%e't o! t.e o"i'#'$e, t.e Se(e' /& Bottli'g Co%&#') o! t.e P.ili&&i'es u'"e S#'ti#go S)1u$o, I'$.,
.#" +ee' eligiousl) &#)i'g t.e Cit) o! Iloilo t.e %u'i$i&#l li$e'se t#* "ue t.ee!o% !o +ottle +e$#use its +ottli'g &l#'t 7#s t.e'
still situ#te" #t Auelle Lo'e) St., Iloilo Cit)
3o7e(e, Iloilo Bottles sto&&e" &#)i'g t.e %u'i$i&#l li$e'se t#* $ter O!t. -%# %&'. 7.e' it t#'s!ee" its &l#'t to B#io /'g$#,
P#(i#, Iloilo
8ul) B1, 1999; Iloilo Cit) "e%#'"e" !o% Iloilo Bottles t.e &#)%e't o! t.e %u'i$i&#l li$e'se t#* u'"e t.e O"i'#'$e
Iloilo Bottles e*&l#i'e" to Iloilo Cit) t.#t it $oul" 'ot #')%oe +e li#+le to &#) t.e %u'i$i&#l li$e'se !ee +e$#use its +ottli'g &l#'t
7#s not n)/ore inside t0e Cit) o$ Iloilo
o Si'$e it itsel! sol" its o7' &o"u$ts to its $usto%es "ie$tl), it $oul" 'ot +e $o'si"ee" #s # distri1utor i' li'e 7it. $#ses
<Cit) o! A#'il# (s. Bugsu, Lu%+e Co. et$?
As # esult, Iloilo Cit) "i" 'ot #')%oe &ess Iloilo Bottles to &#) t.e s#i" %u'i$i&#l li$e'se t#*
8#'. =-, 19@=; Iloilo Cit) "e%#'"e" !o% Iloilo Bottles $o%&li#'$e 7it. t.e s#i" o"i'#'$e !o 19@= i' (ie7 o! t.e !#$t t.#t it 7#s
e'g#ge" i' distri1ution o! t.e so!t"i',s i' t.e Cit) o! Iloilo, #'" it !ut.e "e%#'"e" !o% t.e Iloilo Bottles, &#)%e't o! 1!2
t3es $ro/ t0e ti/e it trns$erred its +ottli'g &l#'t to t.e P#(i#, Iloilo
A&. =:, 19@=; Iloilo Bottles &#i", u'"e &otest, t.e !ist Cu#te &#)%e't o! t.e %u'i$i&#l li$e'se t#*, !o PB,B=9.=: #'" t.ee#!te
.#s +ee' &#)i'g Iloilo Cit) e(e) Cu#te
8u'e 1-, 19@=; Iloilo Cit) i'!o%e" Iloilo Bottles t.#t it %ust &#) #ll t.e t#*es "ue si'$e 8ul), 1998 u& to t.e l#st Cu#te o! 19@1,
ot.e7ise it s.#ll +e $o'st#i'e" to $#'$el its +usi'ess o&e#tio'
Be$#use o! t.is t.e#t, Iloilo Bottles, u'"e &otest, #gee" to t.e &#)%e't o! t.e +#$, t#*es, o' st#ggee" +#sis.
8ul) 1=, 19@=; Iloilo Bottles, I'$. !ile" # $o%&l#i't 7it. CFI Iloilo &#)i'g !o t.e e$o(e) o! PB,B=9.=:, 7.i$. #%ou't #llege"l)
$o'stitute" &#)%e'ts o! %u'i$i&#l li$e'se t#*es u'"e Ordinn!e No. " t.#t t.e $o%&#') &#i" u'"e &otest.
o E'g#ge" i' t.e +usi'ess o! 1ottlin* so$t4drin2s u'"e t.e t#"e '#%e o! Pe&si Col# #'" @-u& #'" selli'g t.e s#%e to its
$usto%es, 7it. # +ottli'g &l#'t situ#te" #t Brrio Un*!# Muni!i+lit) o$ ,vi# Iloilo, #'" 7.i$. is outside t0e
5urisdi!tion o$ Iloilo CITY
o It "oes 'ot %#i't#i' #') stoe o $o%%e$i#l est#+lis.%e't i' t.e Cit) o! Iloilo !o% 7.i$. it "isti+utes its &o"u$ts, +ut +)
%e#'s o! # $leet o$ deliver) tru!2s, it distri1utes its &o"u$ts !o% its +ottli'g &l#'t #t B#io /'g$#, P#(i#, Iloilo, "ie$tl)
to its $usto%es i' t.e "i!!ee't to7's o! t.e Po(i'$e o! Iloilo #s 7ell #s t.e Cit) o$ Iloilo
o It is #le#") &#)i'g t.e N#tio'#l Do(e'%e't # &e$e't#ge T#* o! @E #s %#'u!#$tueFs s#les t#* o' #ll t.e so!t"i',s it
%#'u!#$tues.
o It is #lso &#)i'g t.e %u'i$i&#l li$e'se t#* to t.e %u'i$i&#lit) o! P#(i#, Iloilo i' t.e #%ou't o! P1:,::: e(e) )e#, &lus #
%u'i$i&#l li$e'se t#* !o e'g#gi'g i' its +usi'ess to t.e %u'i$i&#lit) o! P#(i# i' t.e #%ou't o! P=,::: e(e) )e#.
o Its so!t"i',s sol" i' Iloilo Cit) si'$e it t#'s!ee" its +ottli'g &l#'t !o% t.e Cit) o! Iloilo to B#io /'g$#, P#(i#, Iloilo i'
8ul) 1998. ()epsi 7 8 9p*
TAG D/E; P 8,8>: <1998?, P19,89: <1999?, P19,9:: <19@:?, P19,91- <19@1? TOTAL; -9, -:-
CFI: I' !#(o o! Iloilo Bottles, I'$. Co&. 'ot li#+le u'"e t.e o"i'#'$e. Cit) o! Iloilo to &#) PB,B=9.=:. /&o' #%e'"%e't, Iloilo Cit)
7#s #lso %#"e to &#) #%ou'ts &#i" +) t.e $o%&#') #!te t.e !ili'g o! t.e $o%&l#i't.
Cit) o! Iloilo #&&e#le" to CA 7.i$. $eti!ie" t.e $#se to t.is Cout.
ISSUE: 4.et.e t.e Iloilo Bottles, I'$., 7.i$. .#" its +ottli'g &l#'t i' P#(i#, Iloilo, +ut 7.i$. sol" so!t"i',s i' Iloilo Cit), is li#+le u'"e
Iloilo Cit) t#* O"i'#'$e No. -, seies o! 199:, #s #%e'"e", 7.i$. i%&oses # %u'i$i&#l li$e'se t#* o' "isti+utos o! so!t"i',sH <YES?
RATIO:
T.e t#* o"i'#'$e i%&oses # t#* o' &eso's, !i%s, #'" $o&o#tio's e'g#ge" i' t.e +usi'ess o!; 1? "isti+utio' o! so!t"i',s, =?
%#'u!#$tue o! so!t"i',s, #'" B? +ottli'g o! so!t"i',s, 6it0in t0e territoril 5urisdi!tion o$ t0e Cit) o$ Iloilo.
A!te it t#'s!ee" its &l#'t to P#(i#, Iloilo &o(i'$e, Iloilo Bottles, I'$. 'o lo'ge manufactured6ott!ed its so!t"i',s 7it.i' Iloilo
Cit). T.us, it $#''ot +e t#*e" #s o'e !#lli'g u'"e t.e se$o'" o t.e t.i" t)&e o! +usi'ess.
T.us, t.e Cuestio' is i! it is e'g#ge" i' t.e distribution o! so!t"i',s i' Iloilo Cit), e(e' #!te it .#" t#'s!ee" its +ottli'g &l#'t to
P#(i#, so #s to +e 7it.i' t.e &u(ie7 o! t.e o"i'#'$e.
Iloilo Bottlers# In!: 'ot li#+le o' = gou'"s
FIRST 7ROUND
Iloilo Bottlers: It is 'ot e'g#ge" i' t.e i'"e&e'"e't +usi'ess o! "isti+uti'g so!t"i',s, +ut t.#t its !tivit) o$ sellin* is /erel) n
in!ident to# or is ne!essr) !onse8uen!e o$ its /in or +rin!i+l 1usiness o$ 1ottlin*, t.e' it is NOT li#+le u'"e t.e $it)
t#* o"i'#'$e.
SC: No li#+le.
T.e ig.t to %#'u!#$tue i%&lies t.e ig.t to sellI"isti+ute t.e %#'u!#$tue" &o"u$ts JCentra! A:ucarera de /on )edro '. City of
;ani!a*. Fo t#* &u&oses, # %#'u!#$tue "oes 'ot 'e$ess#il) +e$o%e e'g#ge" i' t.e se&##te +usi'ess o! selli'g si%&l)
+e$#use it sells t.e &o"u$ts it %#'u!#$tues. I' $et#i' $#ses, .o7e(e, # %#'u!#$tue %#) #lso +e $o'si"ee" #s e'g#ge" i' t.e
se&##te +usi'ess o! selli'g its &o"u$ts.
To "ete%i'e 7.et.e #' e'tit) e'g#ge" i' t.e &i'$i&#l +usi'ess o! %#'u!#$tui'g, is li,e7ise e'g#ge" i' t.e se&##te +usi'ess
o! selli'g, its /r2etin* s)ste/ or sles o+ertions %ust +e loo,e" i'to.
= %#,eti'g s)ste%s;
o FIRST SYSTEA; T.e %#'u!#$tue e'tes i'to s#les t#'s#$tio's #'" i'(oi$es t.e s#les #t its %#i' o!!i$e 7.ee &u$.#se
o"es #e e$ei(e" #'" #&&o(e" +e!oe "eli(e) o"es #e se't to t.e $o%&#')Fs 7#e.ouses, 7.ee i' tu' #$tu#l
"eli(eies %#"e. No 7#e.ouse s#les #e %#"e 'o #e se&##te stoes %#i't#i'e" 7.ee &o"u$ts %#) +e sol"
i'"e&e'"e'tl) !o% t.e %#i' o!!i$e. T.e 6re0ouses onl) serve s stor*e sites nd deliver) +oints o$ t0e +rodu!ts
erlier sold t t0e /in o$$i!e.
NOT $o'si"ee" e'g#ge" i' t.e se&##te +usi'ess o! selli'g o "e#li'g i' t.ei &o"u$ts, i'"e&e'"e't o! t.ei
%#'u!#$tui'g +usi'ess
o SECOND SYSTEA; S#les t#'s#$tio's #e e'tee" i'to #'" &e!e$te" #t stoes o 7#e.ouses %#i't#i'e" +) t.e
$o%&#'). A')o'e 7.o "esies to &u$.#se t.e &o"u$t %#) go to t.e stoe o 7#e.ouse #'" t.ee &u$.#se t.e
%e$.#'"ise. T0e stores nd 6re0ouses serve s sellin* !enters.
Co'si"ee" e'g#ge" i' t.e se&##te +usi'ess o! selli'g.
CASE AT BAR: Co%&#') !#lls u'"e t.e se$o'" $#tego). It 7#s e'g#ge" i' t.e se&##te +usi'ess o! selli'g o "isti+uti'g
so!t"i',s, i'"e&e'"e'tl) o! its +usi'ess o! +ottli'g t.e%.
o T.e $o%&#') "isti+ute" its so!t"i',s +) %e#'s o! # !leet o! "eli(e) tu$,s 7.i$. 7e't "ie$tl) to $usto%es i' t.e
"i!!ee't &l#$es i' Iloilo &o(i'$e. Tu$, s#les 7ee %#"e i'"e&e'"e'tl) o! t#'s#$tio's i' t.e %#i' o!!i$e. T.e "eli(e)
tu$,s 7ee 'ot use" solel) !o t.e &u&ose o! "eli(ei'g so!t"i',s &e(iousl) sol" #t P#(i#. T.e) se(e" #s selli'g u'its.
o T.e) 7ee 7.#t 7ee $#lle", u'til e$e'tl), 9rollin* stores9. T.e "eli(e) tu$,s 7ee t.ee!oe %u$. t.e s#%e #s t.e
stoes #'" 7#e.ouses u'"e t.e se$o'" %#,eti'g s)ste%.
SECOND 7ROUND
Iloilo Bottlers: O'l) manufacturers or bottlers .#(i'g t.ei &l#'ts i'si"e t.e teitoi#l 1uis"i$tio' o! t.e $it) #e $o(ee" +) t.e
o"i'#'$e.
SC: No. It is $le# !o% t.e o"i'#'$e t.#t B t)&es o! #$ti(ities #e $o(ee"; <1? "isti+utio', <=? %#'u!#$tue #'" <B? +ottli'g o!
so!t"i',s. A &eso' e'g#ge" i' #') o #ll o! t.ese #$ti(ities is su+1e$t to t.e t#*.
LIABILITY FOR TA:
T.e t#* i%&ose" u'"e O"i'#'$e No. - is #' e*$ise t#*.
E:CISE TA:: t#* o' t.e &i(ilege o! "isti+uti'g, %#'u!#$tui'g o +ottli'g so!t"i',s.
Bein* n e3!ise t3# it !n 1e levied 1) t0e t3in* ut0orit) onl) 60en t0e !ts# +rivile*es or 1usinesses re done or
+er$or/ed 6it0in t0e 5urisdi!tion o$ sid ut0orit) ;CIR v . Britis0 Overses Air6)s Cor+<.
T0e situs o$ t0e !t o$ distri1utin*# 1ottlin* or /nu$!turin* so$tdrin2s /ust 1e 6it0in !it) li/its# 1e$ore n entit)
en**ed in n) o$ t0e !tivities /) 1e t3ed in Iloilo Cit).
CASE AT BAR: T.e s#les 7ee %#"e +) Iloilo Bottles, I'$. i' Iloilo Cit). T.us, it is li#+le u'"e t.e t#* o"i'#'$e.
DIS,OSITI=E: CA "e$isio' REVERSED. Co%&l#i't DISAISSED.