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

Antonio Jayme y Ledesma and his son Antonio G. Jayme (planters) entered into a “Planter’s Contract” with Bacolod-Murcia Milling Co., Inc. (Central). The Central obligated itself to construct, maintain, and operate a railway such that no part of the planters’ lands adapted for sugar cane would be more than one mile from a branch line. The Central failed to extend the railroad to the planters’ San Antonio and Santa Angela estates. Due to this failure, a portion of the sugar cane harvest for 1924-1925 remained unharvested and unmilled, causing alleged losses. The planters sued the Central and the Philippine National Bank (which financed the Central) for damages. The Central defended that, due to limited capital, it could not fully comply but had adopted a resolution, approved by its board (including Antonio Jayme y Ledesma), to pay planters compensation of 30 centavos per kilometer per ton of cane hauled from the imaginary point specified in the contract to the nearest station. The planters accepted such payments. The Central also filed a cross-complaint for rescission of the contract regarding the Santa Angela estate due to alleged failure to plant the required area. Separate collection suits were also filed by the Bank against the Jaymes for unpaid debts, which the Jaymes countered with claims related to the railroad issue.

ISSUE

1. Whether the Central and the Bank are liable for damages for failing to extend the railroad as stipulated in the Planter’s Contract.
2. Whether the planters, by accepting compensation under the Central’s resolution, waived their right to claim damages for the non-extension of the railroad.
3. Whether the Bank, as financier, had any obligation under the Planter’s Contract.

RULING

1. No, the Central is not liable for damages. The Central’s failure to extend the railroad was due to financial constraints. However, its board, including plaintiff Antonio Jayme y Ledesma, passed a resolution providing alternative compensation to affected planters. The Jaymes accepted such payments. By accepting the compensation, they waived their right to claim damages for the non-fulfillment of the railroad stipulation. They cannot accept the benefit of the resolution and simultaneously claim damages for the same breach.
2. No, the Bank is not liable. The Bank was not a party to the Planter’s Contract. Its role was merely that of a financier through the Philippine Sugar Central Agency. It had no contractual obligation to ensure the Central’s compliance with the railroad provision.
3. The collection suits by the Bank against the Jaymes were proper. The Jaymes’ counterclaims based on the railroad issue were without merit, as their claims for damages had been waived.
The Supreme Court affirmed the trial court’s decision in all consolidated cases, with costs against the appellants (the Jaymes).