G.R. No. 31624, 31625, 31626, 31627, 31628; January 28, 1930
ANTONIO G. JAYME, ET AL. vs. THE BACOLOD-MURCIA MILLING CO., INC., ET AL. (Consolidated Cases)

FACTS

These consolidated cases arose from a dispute between the Jaymes (Antonio Jayme y Ledesma and his son Antonio G. Jayme) and the Bacolod-Murcia Milling Co., Inc. (the Central) and the Philippine National Bank (the Bank). The Jaymes, as sugar planters, entered into a “Planter’s Contract” with the Central. A key stipulation (paragraph 5) obligated the Central to construct and maintain a railway such that no part of the attached cane lands would be more than one mile from a branch line. The Central failed to extend the railroad to the Jaymes’ San Antonio and Santa Angela estates. Due to this failure, a significant portion of the 1924-1925 sugar cane harvest was allegedly lost. The Jaymes filed suits (G.R. Nos. 31624 & 31627) against the Central and the Bank, seeking damages for breach of contract and for lost rental opportunities. The Bank, in turn, filed separate collection suits (G.R. Nos. 31625, 31626, & 31628) against the Jaymes to recover various loan amounts. The trial court consolidated the cases and ruled against the Jaymes on their damage claims and in favor of the Bank on its collection suits.

ISSUE

The main issues were: (1) Whether the Central and/or the Bank are liable to the Jaymes for damages due to the Central’s failure to extend the railroad as stipulated in the Planter’s Contract; and (2) Whether the Jaymes are liable to the Bank for the loans subject of the collection suits.

RULING

The Supreme Court AFFIRMED the trial court’s decision in its entirety.

1. On the Damage Claims against the Central: The Court held the Jaymes’ claims were without merit. The Central, due to limited capital, could not fully comply with the railroad obligation. However, its Board of Directors (which included Antonio Jayme y Ledesma) passed a resolution granting compensation of 30 centavos per kilometer per ton of cane to planters lacking railroad access. Both Jaymes accepted and received this compensation. This act constituted a waiver of their right to claim damages for the same non-compliance. They could not accept the benefit of the resolution and simultaneously sue for damages for the underlying breach.

2. On the Liability of the Bank: The Court held the Bank had no liability to the Jaymes. The Bank was not a party to the Planter’s Contract and had no obligation to provide the Central with unlimited funds to build the railroad. The Bank’s role was that of a financier, not a guarantor of the Central’s contractual duties.

3. On the Collection Suits: The Court found the Jaymes’ appeals against the Bank’s collection suits to be entirely without foundation and unworthy of discussion, thus upholding their liability for the loans.

Doctrine: A party who accepts compensation offered for the non-performance of a contractual obligation, with knowledge of the facts, waives the right to claim damages for that same non-performance. One cannot accept a substituted benefit and later seek damages for the original breach.