Victorias Planters Assn. v. Victorias Milling Co.
REITERATIONFacts
The Antecedents: Petitioners, representing sugar cane planters, filed an action for declaratory judgment seeking an interpretation of milling contracts entered into with respondent Victorias Milling Co., Inc. (and its predecessor, North Negros Sugar Co., Inc.). These contracts, executed between 1917 and 1934, stipulated a 30-year term from the first milling. The planters contended that their contracts expired in crop years 1947-1948 and 1948-1949, respectively. The respondent, however, argued that the 30-year period should be interpreted as 30 "milling years," and that the 6-year period (4 years of WWII and 2 years of post-war reconstruction) during which milling was suspended should be added to the contract term, thus extending its expiration. Procedural History: The trial court rendered judgment in favor of the petitioners, declaring that the milling contracts had expired upon the lapse of the stipulated 30-year period and that the respondent was not entitled to any extension based on the war and reconstruction years. The Petition: The respondent corporation appealed the trial court's decision.
Issue(s)
Whether the 30-year period stipulated in the milling contracts refers to calendar years or milling years. Whether the respondent corporation is entitled to an extension of the contract term by six years due to the suspension of milling during World War II and the subsequent reconstruction period.
Ruling
The Supreme Court affirmed the judgment of the trial court. It declared that the milling contracts expired upon the lapse of the stipulated 30-year period and that the respondent corporation is not entitled to claim any extension or addition to the said 30-year term by virtue of the six years during which there was no milling due to war and reconstruction.
Ratio Decidendi
On the interpretation of the contract term (calendar vs. milling years): The Court held that the phrase "thirty (30) years from the first milling" in the contracts was for the purpose of reckoning the thirty-year period and did not mean "thirty milling years." The use of "first milling" was merely to establish a starting point for the calendar year calculation. The Court emphasized that even if it were construed as milling years, the deduction or extension of six years would not be justified. The obligation to deliver sugar cane was suspended during the war and reconstruction, but this suspension did not halt the running of the contract's calendar term. The Court cited the principle of nemo tenetur ad impossibilia, stating that the obligee cannot demand performance of an obligation that was impossible to fulfill at the time it became due. Therefore, the respondent could not demand fulfillment of the planters' part of the contract during those years and could not later claim an extension based on that impossibility. On the entitlement to an extension due to fortuitous events: The Court ruled that fortuitous events, such as war or force majeure, relieve the obligor from fulfilling their contractual obligations during the period of the event, but they do not stop the running of the stipulated contract term. The contracts provided for suspension of obligations during such events, not an extension of the contract's duration. The Court reiterated its stance in Lacson vs. Diaz, where it held that a lease contract term stipulated in agricultural years did not entitle the lessee to an extension for the period of Japanese occupation during which no planting occurred. Similarly, the six years of non-milling due to war and reconstruction could not be added to the 30-year term of the milling contracts. The judgment appealed from was affirmed, with costs against the appellant.
Main Doctrine
The stipulated 30-year period in milling contracts, reckoned from the first milling, refers to calendar years and not milling years. Fortuitous events like war or reconstruction do not justify an extension of the contract term beyond the stipulated period, as they merely suspend the performance of obligations, not the running of the period itself.