GR 64019; (August, 1992) (Digest)
G.R. No. 64019 August 12, 1992
BACOLOD-MURCIA MILLING CO., INC., petitioner, vs. INTERMEDIATE APPELLATE COURT and ANGELA ESTATE, INC., respondents.
FACTS
Petitioner Bacolod-Murcia Milling Co., Inc. (BMMC) and the predecessor-in-interest of respondent Angela Estate, Inc. (AEI) entered into a milling contract in 1916, amended in 1936. The amendment increased the planter’s share to 60% and extended the contract to 45 years. BMMC’s Board also adopted “Acta No. 11, Acuerdo No. 1” on August 20, 1936, which contained paragraph 9. Paragraph 9 provided that if, during the contract, sugar centrals in Negros Occidental whose annual centrifugal sugar production was more than one-third of the total annual production of all centrals in the province granted their planters better conditions, those better conditions would also be granted to BMMC’s planters. Paragraph 11 of the same resolution stated that the amendments would take full effect only after all owners of haciendas or lands on which BMMC’s principal railroad tracks were located had executed and registered the Amended Milling Contract with the Register of Deeds, and that this requirement could only be dispensed with upon compliance with certain conditions agreed between Mr. R. Nolan and Mr. Alfredo Montelibano.
AEI became the owner of the adhered plantation in crop year 1953-1954. On June 2, 1958, AEI filed Civil Case No. 4650 against BMMC to compel it to increase AEI’s sugar share, invoking paragraph 9 of Acta No. 11 for crop years 1956-1957 to 1962-1963. BMMC resisted, arguing that paragraph 9 never became operative due to non-fulfillment of the conditions in paragraph 11, and that paragraph 9 referred to individual, not combined, annual production of centrals.
The trial court ruled in favor of AEI for some crop years. Both parties appealed to the Court of Appeals (CA-G.R. No. 39196-R). Meanwhile, a related case (Civil Case No. 7985, CA-G.R. No. 56570-R) involving crop years 1963-1964 and 1964-1965 reached the Supreme Court (G.R. No. L-49261, the Angela Estate case), which ruled against AEI on September 26, 1986. In the instant case (CA-G.R. No. 39196-R), the Court of Appeals modified the trial court’s decision, deleting awards for some crop years but awarding the money value of increased shares for crop years 1956-1957 to 1962-1963. BMMC filed this petition for review.
ISSUE
The main issues are: (1) the correct interpretation of paragraph 9 of Acta No. 11, specifically whether it requires at least one sugar central, individually producing more than one-third of the total provincial production, to grant better conditions; and (2) whether the conditions in paragraph 11 of Acta No. 11 for the amendments to take effect were met.
RULING
The Supreme Court reversed the decision of the Court of Appeals and dismissed AEI’s complaint.
1. On the interpretation of Paragraph 9: The Court held that the condition in paragraph 9 requires that there be at least one sugar central whose individual annual production is more than one-third of the total production of all sugar centrals in Negros Occidental, and that this central granted better conditions to its planters. The phrase “las centrales azucareras” is to be understood in a distributive sense, meaning any or each sugar central. It does not refer to the combined production of several centrals. Since AEI failed to show that this condition occurred, it is not entitled to the increased shares.
2. On the fulfillment of conditions in Paragraph 11: The Court held that the conditions in paragraph 11 were not met. Paragraph 11 required that all owners of haciendas or lands on which BMMC’s principal railroad tracks were located must execute and register the Amended Milling Contract with the Register of Deeds. This was a collective obligation essential to assure BMMC a continuous supply of cane. The Court of Appeals erred in ruling there was substantial compliance based on AEI’s actions alone. There was no showing that AEI itself had registered the contract, and more importantly, the obligation required compliance by all such owners, not just one. Therefore, the amendments in Acta No. 11, including the benefit under paragraph 9, did not take effect.
Consequently, AEI’s claim for additional shares for crop years 1956-1957 through 1962-1963 could not be granted.