G.R. No. L-15090, October 29, 1966
PHILIPPINE MILLING COMPANY, RECTO A. TORRES, and FRANCISCO M. GOMEZ, plaintiffs and appellants, vs. CELSO LLOBREGAT, JULIAN C. SINGSON, and VILLA-ABRILLE & COMPANY, defendants and appellants, LIBERATO JEQUINTO ET AL., defendants and appellees.

FACTS

Prior to World War II, the Roman Catholic Archbishop of Manila was the lessee of public lands designated as Sugar Plantations 30-5 and 30-6 in San Jose, Mindoro, each with an allotted sugar quota adhered to the Philippine Milling Company’s mill. The leases were later transferred: Plantation 30-5 to Julian C. Singson and Plantation 30-6 to Celso Llobregat. In 1950, the Archbishop transferred controlling shares of the Philippine Milling Company, private lands, and all sugar quota allowances to Hector A. Torres and Francisco Gomez. Upon learning of this, Singson and Llobregat claimed the sugar quotas for their respective plantations. The Sugar Quota Administration directed the Milling Company to register them as regular planters, but the Company refused, recognizing them only as emergency planters. Due to this impasse, Llobregat and Singson secured permission to transfer 60% of their quota (the planter’s share) to planters in a different mill district. Later, they also sought to transfer the remaining 40% (the mill share) to Villa-Abrille & Company, which was not a sugar miller, based on a Department of Justice opinion permitting such assignment to a miller. The plaintiffs (Torres, Gomez, and the Milling Company) filed an action to declare them owners of the entire quota, annul the transfers, and recover damages. The trial court upheld Singson and Llobregat’s right to the quota and the transfer of the 60% share but declared the transfer of the 40% mill share to Villa-Abrille void, awarding damages to both parties. Both plaintiffs and defendants appealed, but the plaintiffs’ appeal was dismissed for failure to file briefs on time.

ISSUE

1. Whether Singson and Llobregat could validly transfer the 40% “mill share” of the sugar quota to Villa-Abrille & Company.
2. Whether the award of damages in the trial court’s decision conforms to law and evidence.

RULING

1. Yes, the transfer of the 40% mill share was valid. The Supreme Court held that the sugar quota is split 60-40 between planter and miller as a consequence of their respective contributions (cane and industry) to sugar production. A miller that refuses to mill the planter’s cane cannot retain the 40% share without contribution, as this would unjustly enrich the miller and prejudice the planter. The Court cited Suarez v. Mount Arayat Sugar Co., which emphasized that the miller’s share is contingent on its performance. Since the Philippine Milling Company obstinately refused to mill the cane, Singson and Llobregat were entitled to transfer the entire quota, including the mill share, to avoid loss. The trial court’s declaration of nullity was reversed.
2. The award of damages was modified. The trial court’s award of damages to plaintiffs for the loss of the 40% mill share was eliminated, as the transfer was declared valid. The damages awarded to Singson and Llobregat for the Milling Company’s refusal to register them as regular planters were upheld but found insufficient. The Court noted that their claims for lost profits were speculative due to lack of evidence on planted area and consistent production. However, due to the plaintiffs’ unfounded claims and obstinate disregard of administrative directives, which compelled Singson and Llobregat to defend their interests, the Court awarded additional counsel fees. The modified judgment sentenced plaintiffs to pay Celso Llobregat and Julian Singson P10,000 each in damages and counsel fees, jointly and severally.
DISPOSITIVE PORTION:
The appealed judgment was modified: (1) declaring valid the transfer of the 40% mill share to Villa-Abrille & Co.; (2) eliminating the damages awarded to plaintiffs regarding that transfer; and (3) increasing the damages to appellants Singson and Llobregat to P10,000 each. Plaintiffs were ordered to pay costs.