Song Kiat Chocolate Factory vs. Central Bank of the Philippines (Case Digest)

Song Kiat Chocolate Factory vs. Central Bank of the Philippines (Case Digest)

Doctrine: Common Meaning Rule

Facts:

During the period from January 8, 1953 to October 9, 1953, the plaintiff appellant imported sun dried cocoa beans for which it paid the foreign exchange tax of 17 per cent totaling P74,671.04. Claiming exemption from said tax under section 2 of same Act, it sued the Central Bank that had exacted payment.  The suit was filed in the Manila Court of First Instance; wherein defendants submitted in due time a motion to dismiss on the ground: the complaint stated no cause of action because cocoa beans were not "chocolate".  Appellant quotes from dictionaries and encyclopedias interchangeably using the words "chocolate", "cacao" and "cocoa".

Issue: Whether or not cocoa beans had the same meaning with that of chocolate?

Held:

No. Supreme Court takes notice that the quotations refer to "cocoa" as chocolate nut" "chocolate bean" or "chocolate tree." And the legal exemption refers to "chocolate" not the bean, nor the nut nor the tree. We agree with the Solicitor General and the other counsel of respondents that in common parlance the law is presumed to refer to it (As a general rule words used in a statute are to be given their usual and commonly understood meaning .. ." C.J.S. p. 639) — chocolate is a manufactured or finished product made out of cocoa beans, or "cacao" beans as they are locally known. SC may take notice of the fact that grocery stores sell powdered cocoa beans as chocolate, labeled "cocoa powder", or simply "cocoa". They are, however, really chocolate; they are not cocoa beans. The manufacture of chocolate involves several processes, such as selecting and drying the cocoa beans, then roasting, grinding, sieving and blending.² Cocoa beans do not become chocolate unless and until they have undergone the manufacturing processes above described. The first is raw material, the other finished product.