On December 5, 1950, the Municipal Board of Manila approved Ordinance No. 3420 which imposes  a  quarterly municipal tax on wholesale dealers in general merchandise based on their quarterly sales from the preceding quarter. This ordinance was amended on May 4, 1954 by Ordinance No. 3634 by including among the wholesale dealers subject to  tax wholesale  dealers of  automobiles  and other  motor vehicles.  Pursuant to the provisions of Section  8 of Ordinance No. 3420,  the city treasurer promulgated on May 31, 1954, with the approval of the City Mayor, certain regulations for the purpose of implementing the provisions of Ordinance No. 3420, as amended by Ordinance  No. 3634.

On March 17, 1955, plaintiff received from the city treasurer a demand for payment of the tax imposed by Ordinance No. 3634 on the ground that it is a wholesale dealer within the purview of said ordinance.  On March 22, 1955, plaintiff contested this assessment on the following grounds: (1) that it is not wholesale dealer under  Ordinance No. 3420, as amended by Ordinance No. 3634; and (2) that it is  a manufacturer and not a dealer of cars and trucks and does not sell its products at a store but at  its main office. This protest was  denied  by the  city treasurer  and consequently plaintiff paid the  tax demanded.   Hence plaintiff commenced the present action before the Court of First Instance of Manila for the recovery of the tax.

After defendant had filed a written answer to the complaint, and in the course of the trial of the case, plaintiff asked that it be allowed to  amend its complaint claiming that it was not entitled to  the refund  of the rental and wholesale taxes  it paid except the amount of P121,983.47 representing the wholesale taxes covering its wholesale sales   of motor vehicles assembled by it during the quarters included in the assessment.  After  trial,  the  lower court  rendered judgment in favor  of plaintiff ordering defendants to pay the said amount of P121,983.47, with legal interest from the date of the filing of the complaint, and the   costs.  Defendants  interposed the present appeal.  

Plaintiff is a domestic corporation and has  its principal office and establishment in Port Area, Manila.  Its establishment consists of four  buildings  constructed on four   parcels of land leased by it from the National  Government.   The four lots are adjacent to each other except for the  19th, 20th and 21st streets which run across them.   The four lots are designated  as Blocks Nos. 168, 173, 174 and   179 of the cadastral plan of the City of Manila.      

The building constructed on Block No. 168 is designated as Building No. 1  and houses plaintiff's assembly plant.  The building on Block No. 173 is designated as Building No. 2 and is used as a warehouse.  The building on Block  No. 174 is designated as Building No. 3 and houses plaintiff's executive,  sales  and accounting  offices and  supply department.  The building on Block No. 179 is designated as Building No. 4 and houses its service department.

Previously, plaintiff was engaged in the importation and sale of  finished cars and trucks.   Upon  the  construction of its assembly plant, it ceased to import  finished cars and trucks and  began importing  the  necessary spare parts to be assembled  into motor vehicles.  Plaintiff  was  given a   foreign exchange  allocation  as producer by the Central Bank in order to import the raw materials needed for its assembly plant.  Most of the raw materials are imported from the United States,  which are shipped and packed in groups, that is, one case containing  crankshafts, another case containing axles, etc.  The  metal parts  imported by plaintiff  such as axles,  fenders, hoods,  frame assembly, are shipped in completely knock-down condition.  The body  parts which are also imported from the United States  are of bare metals and are also in knock-down condition.  The engine and its component parts such as cylinders, pistons, crankshafts are  also imported  in knock-down  condition. The same  is true with the seats which consist only of  the framework and springs.  The raw  materials  which  are purchased locally are the tires and tubes, batteries, grease, oil, and kapok.

The procedure followed by plaintiff in the production of the motor  cars and  trucks assembled by it is described by the trial court as follows:

" 'The steps taken by plaintiff in the manufacture and production of  cars and trucks are manifold and  complicated. The  principal operations are  as follows'  (t.s.n., pp. 34-37,  August  10, 1956): Upon opening the boxes, the body parts are taken out  and welded together in   a  jig.  After the  bodies are  constructed,  they  are taken to the metal finishing' section where they  are sandfilled,  art-welded  and  glass-welded in order to reinforce the crystal joints on  the  body.  They are latter transferred to the  whetting section where they  are cleaned with acid and water to  remove all rust, grease and dirt; then to the steam cleaning area so as to eliminate the  remaining  oil  or grease.  Thereafter, they  are dried,  treated with a rust-proofing process and taken to the paint booth for painting.  After  painting they are placed for about thirty minutes in an oven with a temperature ranging from 246 degrees to 265 degrees Fahrenheit.   Then they go  to a tram where the gadgets are installed.

" 'The frames which also come in completely knock-down condition are  at  this  time riveted by a hydraulic  riveter which delivers a pressure of 171/3 tons.   The axles are also  put together and mounted on the frames.  The frames are later taken to the engine area where the  engines  are being assembled.  In  the  tram,  the  engines  are mounted on  the chassis and are  followed  by the bodies.  They  are later taken  to  the  front-end area  where the  fenders and grills are attached.  Finally,  they undergo inspection and testing. After inspection, they are placed in Building No. 2 ready for shipment. Some of the finished cars  or trucks which  cannot be accommodated in Building  No. 2 are  placed in front  of that building' (t.s.n., p. 21,  August 10, 1956)  or in Building No. 3 (t.s.n.(  p. 35, November 7, 1956.)"

Plaintiff  does not  have a wholesale store for selling the cars and trucks assembled by it and neither does it display them.  Plaintiff takes steps to  import raw  materials and other spare parts for motor cars and trucks only after it receives the purchase orders of  its customers.   It does not undertake the assembling of cars and trucks to keep  stock on hand for  wholesale sale.

Section  1 of  Ordinance No. 3420,  as  amended by Ordinance No. 3634, under which plaintiff was required to pay the tax in question, provides:

"SECTION 1. Municipal taxes on wholesalers in general merchandise; Mayor's  Permit required. There shall be paid by  every person, firm or  corporation engaging in the business as wholesale dealer in general merchandise, a municipal tax  based on wholesale sales or on  the receipts or exchange or transfer in accordance with the following *  *  *".

The authority relied upon by the Municipal Board  of Manila  to tax wholesale dealers in general merchandise is Section 18 (o) of the Revised Charter of the City (Republic Act No. 409), which gives the municipal board the power, among others, "to tax and fix the license fees on dealers in general merchandise, including importers and indentors, except those dealers who may be  expressly subject to the payment of some other municipal tax under the provisions of this  section."

It should be  noted that the above quoted provision,  in speaking of dealers in general merchandise, expressly includes "importers  and  indentors" within its  scope, but does not include "manufacturers."  Nowhere in the Charter are  manufacturers expressly included within the  purview of the term "dealers."   Neither could it  be inferred or assumed that it was the  intention of Congress to  consider  manufacturers as dealers because these  two terms are not similar  or synonymous.  The distinction between the two are clearly defined  by jurisprudence^[1] and needs no further elaboration.

"A dealer is defined as 'a person who makes a business of buying and selling goods, especially as distinguished  from a manufacturer, without altering their condition  *  * *.*  (Webster's International Dictionary)  *  *  * A dealer, in the  popular acceptation or sense of the word, is one who buys to sell again.  He stands immediately between the producer and the consumer, and depends for his  profits not on the labor he bestows  on  his commodities,  but on  the skill and foresight with which he watches the markets.  Taylor vs. Vincent, 80 Tenn. (12 Lea) 282,  285, 47 Am. Rep. 338 (11 Words and Phrases, pp. 158-159).  Again it has been held that the word dealer 'does not  comprehend a person who merely  buys  a commodity in one  form  and converts  it by his skill  and labor  into an entirely different commodity, and then sells it, such for example, as one who buys  lumber, with which he  manufactures furniture  or any other useful commodity that he sells, cannot be termed a dealer in lumber,' (11 Words and Phrases, p. 159)."  (Central  Azucarera Don Pedro vs. City of Manila,  et al., G.  R.  No. L-7679, September 29,  1955).

The issue now to be determined is:  Should  plaintiff  be considered as a wholesale dealer in motor vehicles within the purview of the Charter of the City of Manila, or can it only be considered as a "manufacturer" insofar as the assembling and converting into finished  products the motor cars and trucks it  sells to its customers?

To answer this  question it  is  necessary to determine the  true  nature and  character of  the work being undertaken by  plaintiff in importing raw materials and in  assembling  them  later  to turn them  into finished products. To this end, suffice it to quote some representative authorities.

In the case of City of Louisville vs. Louisville Tin & Stove Co., 186 S. W. 124, 125, the court stated:

"We do  not understand  that in order for  a  business enterprise to be a  manufactory it  is necessary for it to  be  engaged in  the business of making  completed articles from materials that are altogether raw.  It is none the less  a manufactory if, as in this case, it  combines separate parts manufactured and completed by others with raw materials which it itself cuts and fashions into proper shape, and thus produces an entirely new article suitable for use.  * * *"

In the case of United States vs. Armature Exchange, Inc., 116 F. 2d. 969, 971, the court declared:

"We cannot find  any justification  for reading  into the  statute involved here, as taxpayer would have us do, the qualification that the articles 'manufactured or produced' must have been so manufactured or produced entirely from new or virgin raw materials.  * *  *"

And in the case of City of Henderson vs.  George Delker Co., 235  S. W. 732, 735, the court said:

"* * * It is not necessary, for a business enterprise to be a manufactory, that it should make completed articles from materials  that are altogether  raw, and we  may add, as intimated in that  opinion that by the term 'raw  material',  as used  in  the statute,  is not necessarily meant crude material in its natural state, but there may be included in the term a product made from the crude material, and which  has  undergone manufacturing  processes and converted  into a distinct product from which an entirely different one may be made by the application of additional scientific processes, in which  case the converted or prepared product may be regarded  as 'raw material' within the meaning of the statute."

It would therefore appear that the word "manufacturer" in its plain and ordinary meaning includes "the process of assembling  articles  which,  while  complete  and  finished, have no  independent utility, but are designed to be used in combination  as parts of  some other  article,  such as  a typewriter,  an automobile, or  the like, but when so used the process  of assembling usually,  if not  always, involves the exercise  of manual or mechanical skill  and labor  and the more or less  extensive use  of auxiliary machinery" M. H. Rowe Co. vs. Beck, 131  A. 509, 511-512).

The foregoing  definition of the nature of the  work of plaintiff  is further confirmed by the very definition  given to a "manufacturer"  by  our  National  Internal  Revenue Code when in its Section  194 (x) it defines said terms as follows:

"(x) 'Manufacturer'  includes  every  person who by physical or chemical  process alters the exterior  texture or  form or inner  substance of any raw  material or manufactured  or  partially  manufactured  product in such manner as  to prepare  it for a special use or uses to which it could not have been put in its original condition, or who by any  such process alters the quality of any such  raw material  or manufactured  or partially manufactured product so as to reduce it to marketable shape or  prepare it  for any of the  uses of industry, or who by any such process combines  any such  raw material  or manufactured  or partially manufactured products with other materials or products of the same  or of different kinds and in such manner that the finished product  of such process of manufacture can be put to  a special use or uses to which such raw material or  manufactured or  partially manufactured products in their original  condition could not have been put, and  who  in addition alters  such  raw material  or manufactured or partially manufactured products,  or  combines  the  same  to produce  such finished products  for the purpose of their sale  or  distribution  to others and not for his own use or consumption."

Tested under the above authorities, it is clear that  plaintiff  is a manufacturer and not a dealer of the cars  and trucks it assembles  and produces in its plant.  It appearing  that plaintiff does not  have  a store independent  and separate from its assembly plant wherein  it  displays  and sells the  cars  and  trucks  it  manufactures  but  delivers them  after they had been  assembled direct to its customers  who  had  placed  before  hand  their orders  for said cars and trucks, and  it  further  appearing that it does not  manufacture cars  and  trucks to keep  stock on hand for  wholesale but only after receiving orders to buy them from  its customers,  plaintiff  cannot be  considered  as dealer insofar as said  cars and trucks are  concerned  but merely  as manufacturer as interpreted  by this Court in a recent case.

*****   It may be admitted that the manufacturer becomes a dealer if he carries on  the business of selling goods  or his products manufactured  by him at a  store or  warehouse  apart from his own shop or manufactory.  But  plaintiff-appellee did not carry on  the business of selling sugar  at stores or  at its warehouses.  It entered into  the  contracts of sale  at its central office in Manila and made deliveries of sugar sold from its warehouses.  It  does not appear that the plaintiff keeps stores at its warehouses and engages in selling sugar in said stores.  Neither does it  appear that any one who desires to purchase sugar from it may go to the warehouses and there purchase sugar.   All that it does was to sell the sugar it manufactured,  it does not open stores for the sale of such sugar. Plaintiff-appellee  did not,  therefore,  engage  in  the  business of selling sugar."  (Central Azucarera Don Pedro vs.  City of  Manila, et al., G. R. No. L-7679, September 29, 1955).

Wherefore, the decision appealed from is affirmed, without pronouncement as  to  costs.

Paras, C J., Bengzon, Padilla,  Montemayor,  Labrador, and Endencia, JJ., concur.
Reyes, J., concurs in  the result.

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^[1] American Fruit Growers' Inc. V. Brogdex Company, 283 U. S. 1, 75 L. ed. 801;  City of New Orleans 4 Le Blanc, 34 La Ann. 596;  Egan 4. State,  63  S.  SW. 273,  Charles E. Russell Co. 4 Carrol, 74 S. E. 2d. 685, 687.