PHILIPPINE JURISPRUDENCE -
946, provides very explicitly in its last
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G.R. No. L-52178 September 28,
1982
DEMETRIO ERNESTO vs. COURT
OF APPEALS
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-52178 September 28, 1982
DEMETRIO ERNESTO, GREGORIO DELEGADO,
ALEJANDRO DOGOLDOGOL, TIMOTEO CAWAS,
TORIBIO MONTEMAYOR, JUAN DELEGADO, FELIPE
GOLVIN, LUCAS VALLES, VICTOR REDERA, RAFOL
AGATON, and 1,000 others similarly situated as
laborers of respondents planters, petitioners,
vs.
THE COURT OF APPEALS, SAN CARLOS MILLING
CO., INC., SPOUSES CARLOS LEDESMA and
CONNIE LEDESMA, SPOUSES VICENTE GUSTILO,
JR. and AMPARO L. GUSTILO, and JULIETA
LEDESMA, respondents.
BARREDO, J.:
Petitioner for review of the decision of the Court of
Appeals in CA-G.R. No. SP-08166-R, Demetrio Ernesto,
et. al. vs. San Carlos Milling Co., et al., which affirmed
the judgment of the Court of Agrarian Relations, Branch
III, City of San Carlos dismissing the complaint of
petitioners seeking the payment of their 60% share of
the alleged contractual increase in the share of the
planters in the proceeds of sugarcane milled in
respondent's sugar mill during the crop years 1958-59 to
1967-68 and all subsequent crop years to which they
(petitioners) maintain they are entitled under the Sugar
Act of 1952 (R.A. 809).
At the threshold, We are met of an alleged obstacle to
the redress sought by the petitioners, namely, the
contention of respondents that the judgment of the Court
of Appeals which they want Us to review has long
become final and executory and beyond our authority to
alter or modify, much less reverse.
It is indeed regrettable that this situation has arisen from
an apparent oversight on the part of the Court of Appeals
in entertaining and granting two motion of petitioners for
extension of time to file a motion for reconsideration of
its decision, considering that Section 18 of Presidential
Decree No.
paragraph thus:
The decision or orders of the Court of
Appeals may be appealed to the
Supreme Court by petition for review on
certiorari only on questions of law, within
a non-extendible period of thirty (30)
days from receipt by the appellant of a
copy of the decision or order. (Emphasis
supplied)
More, said provision enjoins unequivocally that "no
motion for rehearing or reconsideration shall be allowed
in the Court of Appeals." And so, respondents maintain,
the present case being an agrarian one, obviously P.D.
946 is applicable hereto, and, therefore, all that We can
do is to dismiss the petition herein.
While respondents' posture is seemingly plausible from
the strictly literal and technical points of view, the Court
cannot see its way clear to denying the laborers herein
involved a hearing by Us on what appears manifestly to
be a meritorious claim they have. They were not the
ones who made the mistake of filing the motions for
extension of time for reconsideration of the decision of
the Court of Appeals; it was their lawyer. And how were
they to know 'there was any technical defect in their
lawyer's move when the Court of Appeals acted
favorably on them? Moreover, in its latest resolution, the
Court of Appeals expressly held that its action relative to
the two motions for extension was without prejudice to
their appealing to this Court. And in Line with such
reservation June 25, 1980, after considering the
respective arguments of the parties in their pleadings
relative to the alleged legal impediments to Our taking
cognizance of this petition, this Court gave due course to
the same. That resolution alone settled the issue of
jurisdiction raised by respondents. In fact, the parties, in
obedience to Our above-mentioned resolution filed, after
many extensions at that, their respective memoranda
dealing also on the merits of the case, albeit
respondents persisted in discussing their intention about
the finality of the decision of the Court of Appeals.
After the proceedings had already gone that far in
another evident attempt to have the Court cut short this
case in their favor, on August 5, 1981, respondent
Central filed a motion to dismiss. On September 11,
1981, the other private respondent joined the Central's
motion. We required petitioners to answer said motion,
which they did. Upon consideration of said motion and
the answer thereto of petitioners, in its resolution of
October 7, 1981, the Court resolved to deny the same.
But since the Court acted on their motion to dismiss
before they could file their reply to petitioners' answer on
November 4, 1981, respondents asked that their reply
be considered as their motion for reconsideration of Our
resolution of October 7, 1981. On November 18, 1981,
the Court resolved to deny said motion for
reconsideration.
In the light of such development related to Our
jurisdiction to entertain this petition, no one can say that
the matter has not been duly and sufficiently considered.
We are not, therefore, disposed to entertain any further
representation on said point, and We accordingly deem
that issue foreclosed. Surely, laborers should not be
made to suffer the consequences of a
miscomprehension of their counsel and the Court of
appeals of the applicable law. That would be far from
affording labor the protection the Constitution mandates
it should be accorded. This Court will never deny without
due hearing, what could be a manifestly meritorious
claim of labor, whenever the failure to secure a full
hearing on the merits of its claim is caused by a lawyer's
obvious lack of acquaintance with a technical point of
procedure contained in a relatively new statute,
specially, as in this case, where the erroneous action of
the lawyer was compounded by the Court's own
resolution betraying its own oversight of the technical
requirement involved, and because of such action of the
Court, the prescribed period within which labor may
complete its quest for redress appears to have run out.
The situation herein might have been different had not
the action of the Court of Appeals resulted in the
petitioners losing time and being lulled into believing
their case was still alive. It is Our considered opinion that
the interests of justice and the protection to labor tenent
of the constitution would be better served it. We ruled, as
We hereby rule, that under the peculiar circumstances of
this case, We have the requisite authority to entertain
the petition herein. It results, therefore, that We may now
pass on the merits of the basic claim of the petitioners.
In that regard, it appears to Us that the main issue. We
have to decide differs from those in the Talisay-Silay and
Victorias cases involving Republic Act 809 We have
heretofore decided.
In those cases, We applied Republic Act 809 in spite of
the existence of a majority of planters within the district
who, as We applied Republic ACT 809 in spite of the
existence of a majority of planters within the district who,
as We found, had written milling contracts with the mills.
In the instant case, the petitioners insist that tin the San
Carlos Milling district, there was no such majority during
all the times materials hereto, which contention is denied
by respondents. And the issue revolves solely around
the point of whether or not so-called emergency, non-
quota and non-district or accommodation planters should
be counted in determining the majority contemplated in
the law.
In Talisay-Silay, the same issue was also raised, but We
found no necessity to resolve it because even if We had
done so affirmatively, the result of the case could not
have been affected due to the small number of
emergency planters involved. In the case oat bar,
however, the determination of the issue is decisive
because the record indicates that if the emergency, or
non-quota, non-district and "accommodation" planters
are to be considered in ascertaining how many
"planters" (are those) with ?ritten milling contracts with
the sugar mill", (are those) with written milling contracts
with the sugar mill", the result would be that the planters
in the San Carlos Milling district with such written
contracts would be in the minority, in which case Section
9 of Republic Act 809 would be applicable, not in relation
to any contractual in crease in the share of the planters,
as in the Talisay-Silay and Victorias cases, but in relation
to Section 1 of the Act which provides as follows:
In the absence of written milling
agreements between the majority of
planters and the millers of sugar-cane in
any milling district in the Philippines, the
unrefined sugar produced in that district
from the milling by any sugar central of
the sugar-cane of any sugar-cane
planter or plantation owner, as we as all
by-products and derivatives thereof,
shall be divided between them as
follows:
Sixty per centum for the planter, and
forty per centum for the central in any
milling district the maximum actual
production of which is not more than
four hundred thousand piculs: Provided,
That the provisions of this section shall
not apply to sugar centrals with an
actual production of less than one
hundred fifty thousand piculs.
Sixty-two and one-half per centum for
the planter, and thirty-seven and one-
half per centum for the cetral in any
milling district the maximum actual
production of which exceeds four
hundreds thousand piculs but does not
exceed six hundred thousand piculs;
Sixty-five per centum for the planter, and
thirty-five per centum for the central in
any milling district the maximum actual
production of which exceeds six
hundred thousand piculs but does not
exceed nine hundred thousand piculs;
Sixty-seven and one-half per centum for
the planter, and thirty-two and one-half
per centum for the central in any milling
district the maximum actual production
of which exceed one million two
hundred thousand piculs;
Seventy per centum for the planter, and
thirty per centum for the central in any
milling district the maximum actual
production of which exceeds one million
two hundred thousand piculs.
 By actual production is meant the total
production of the mill for the crop year
immediately preceding.
In its decision now under review, the Court of Appeals
ruled against petitioners by adopting in toto the view of
the trial court thereon, which is that emergency, non-
quota, non-district or accommodation planters should not
be counted in determining the "majority" required in the
abvove-quoted legal provision. Indeed, although the
Appellate Court made the factual that:
In the case of the 'emergency', 'non-
quota', 'non-district, and
'accommodation' planter, it may be
mentioned in passing that, in tis milling
agreements, the defendants Central
recognizes the San Carlos Planters'
Association as the sole agents of the
planters in its mill district in all its
dealings with the latter. In practice, the
Central requires membership in said
Associaiton of any and all planters,
including thos new 'classfications' of
planters, before accepting their
sugarcane for milling. As members of
said Association, they are likewise
bound by Resolution No. 3 (Exh. 5-B-
SCMC) unanimously adopted by the
members in the annual meeting of
November 24, 1962, whereby the
members of the Association confirmed
and ratified the Memorandum
Agreement entered into by their
negotiating panel with the Central and
its Managing agents. Moreover, all these
planters, whether signatories or not, had
in manner of speaking ratified the
aforementioned act of the Association
as their agent, by accepting all the
benefits and complying with all the
planter's obligations under the said
Memorandum when they individually
signed another ten-year extension of the
milling contract, embodied in the
Memorandum Agreement for an
additional period of seven years, from
and after the 1973-74 and up to and
including the 1980-81 crop years. (Pp
53-54, Record.)
thus implying that factually such "emergency", "non-
quota", "non-district" or "accommodation" planters had
no written contracts with the Central, it held, however,
that said classes of planters may not be considered in
finding out the existence of the majority of planters with
written milling contracts within the contemplation of
Section 1 of the Act.
We are not inclined to agree with the technical
ratiocination expounded by the Court of Appeals as
follows:
Thus, in the light of the above-cited legal
definitions, we are of the opinion and so
hold that, in the determination of the
'majority' of planters in any milling
district in the Philippines for purpose of
said Act 809, only the planters-owners
of plantation within the particular mill
district who have been allocated export
and/or domestic reserve sugar quotas,
as determined in Executive Orders Nos.
900 and 901 and their Supplements are
to be considered and counted as
composing the totality of planters in that
mill district. Accordingly, the so-called
'emergency', 'non-quota', 'non-district' or
'accommodation' planters of new areas
of plantations without such sugar
allotments are to be excluded in the
determination of such 'majority'. To be
part of a 'mill district' , the 'plantation' of
the planter had to appear in the 'sugar
Audit' of 1934 as having been planter
sugarcane, and to have a sugar
allotment or quota which in tutn is a part
of the allocation for the entire 'mill
district.
...; and there cannot be a sugar
plantation owner without land to which
the quota is attached; ... (Presbitero vs.
Fernandez, et al., 7 mSCRA 625, 532I."
(Pp. 52-53, Record.)
We believe that there is no valid reason why the
statutory definition of planters under Act 4166 and
Executive Orders 900 and 901 should still be adhered to
after the factual situation to which they were addressed
had already changed, as found by the Appellate Court
itself. Discoursing on this point, the Court of Appeals
held:
But what is the majority as contemplated
by the law? Should the total number of
planters from which such majority is to
be determined be limited only to the
owners of the plantation which had been
allocated sugar quotas under the
previous laws on sugar production, or
should it include the planters who joined
the sugar industry only in the middle
1950's and who are commonly known
as 'emergency', 'accommodation', 'non-
quota', or 'non-district' planters? The
existence of this 'class' of planters can
be gathered from the cross-examination
of witness Manuel Hortillas, thus �
 ATTY. DIOLA As pointed out by the defendant Central,
(Proceeding) on July 2, 1932, by Executive Order No.
489, then Governor-General of the
Q. Now, you stated the Philippine Islands Frank Murphy
non-district planters directed the Insular Auditor to make an
were allowed to mill, examination into the business and
can you tell us who administration of all parties engaged in
allowed these non- the production, milling and/or shipping of
district planters to mill, centrifugal sugar, for the purpose of
is it the government or obtaining such information as may be
the Central? deemed necessary, useful or desirable
in making or readjusting the allotments
of quotas for sugar which may be
A. The government of
allowed to be grown and manufactured
the Sugar Quota Office.
in this country for export to the United
States, as well as for local consumption.
Q. When was that Pursuant thereto, the Insular Auditor
done? conducted, completed and delivered to
the Governor-General the 'Sugar Mill
A. Somewhere in 1954 Audit-1934' and 'Sugar Plantation Audit
and 1955. 1934'. In the meantime, the Philippine
Legislature passed Act No. 4166 entitled
Q. And in this answer 'An Act to provide for the limitation,
you have just made with regulation, and allocation of sugar
particular reference to produced in the Philippine Islands, and
non-disctrict planters, for the processing and marketing
this goes through (true) thereof, and for other purposes', on
with the so-called December 4, 1934. On October 30,
'emergency and 1935, the Governor-General
accommodation' promulgated Executive Orders No. 900
planters? (Exh. 527-SCMC) and its supplement,
allocating the Export and 'A' quota, and
A. Beginning those crop the Domestic and Reserve or 'B' and 'C'
years, they were quotas, respectively, among the
allowed by the plantations and/or planters and the mill
government. in each mill district on the basis of their
average annual production during the
particular case of the San Carlos
COURT
District, Mill District No. 38, the
allotments were made in the
Q. When were those corresponding portion of the said
crop years? Supplements denominated 'Part 38'
(Exhs. 528-SCMC and 530-SCMC),
A. Somewhere in 1954 between the defendant Central and its
or 1955. adherent planters named therein. The
limitation of sugarcane planting and
Q. About before 1982? sugar production under Act No. 4166,
and the allocation of the sugar quotas,
A. There was none, sir. both export, domestic and reserve,
(tsn, pp. 38-39, hearing among the mills and plantation owners
of September 4, 1973) continued until the year 1955. At this
time, the government, thru the Sugar
Quota Office, increased the domestic
It behooves us, then to look into the and reserve production in view of the
history of sugar production in the shortage in our sugar prduction in
Philippines, from the inception of its relation to our export and domestic
regulation and up to the passage of the requirements. In view of such relaxation
Sugar Act of 1952, in order that we may on the limitation of sugar production,
ascertain the meaning which the new areas were opened to sugarcane.
Legislative had intended to give to That was when the appellations
certain words and phrases used therein. 'emergency', 'non-quota', 'non-district',
or 'accommodation' were given to the
 planters of new areas whose sugarcane
was ordered to be milled by all sugar
centrals per directive of the Sugar Quota
Office although they had no sugar
allocation.
In the interpretation, therefore, of certain
words and phrases used in the Sugar
Act of 1952, recourse must be made to
the definitions given in Executive Orders
900 and 901 and in Act No. 4166. For it
can be safely presumed that, in drafting,
debating on and finally passing the
Sugar Act, Congress must have
intended to and did give the same
meanings to the words and phrases now
found therein as they were meant in the
aforesaid Executive Order and Act No.
4166. Since there were yet no
'emergency', 'non-district' or 'non-quota'
or 'accommodation' planters at the time
of its passage, Congress could not have
intended to include them in the
determination of a majority of the
planters in a Mill district. (Pp. 47-50,
Record).
As will noted in the above-quoted dissertation, the
limitation to sugar quotas, whether export, domestic or
reserve among all the mills continued only until 1955.
From that year, emergency, non-quota, non-district or
accommodation planterscame into being with the
blessings of the Sugar Quota Administration. With such
a change in situation, it would not be logical to continue
adhering to the previous definitions that had already lost
their legal effect. Consequently, We are of the
considered opinion that after the quota system ceased,
the definition of planters within the district for the
purposes of Section 1 of the Sugar Act should be all
planters who delivered their sugarcane to the
respondent Central who milled the same. Hence, as
such, they should all be counted in determining the total
number of planters in the sugar district in ascertaining
whether or not a majority of them have written milling
contracts with the respondent Central. And it being
ineludably implicit from the record that on that basis
those having written contracts were in the minority. We
have no alternative but to hold that Section 1 of Republic
Act 809 applies to the case at bar.
Having arrived at this conclusion, We hold that
respondent Central is liable to its co-respondent planters
for the difference between, on the one hand, what they
had paid them during crop years 1958-59 and thru all
succeeding crop years thereafter and, on the other, what
Section 1 prescribes. And in accordance with Section 9
of the Act, 60% of whatever the Central is bound to pay
the planters should be paid by said planters to their
respective laborers, under the supervision of the Minister
of Labor.
WHEREFORE, judgment is hereby rendered in favor of
petitioners and against the respondents Central and
planters in the manner set forth in the foregoing opinion,
which, summarized, is that from crop year 1958-59 and
all the crop years thereafter the Central is sentenced to
pay all the planters in the San Carlos Milling district,
regardless of their classification as emergency or non-
quota planters, the corresponding rates of share
prescribed in Section 1 of Republic Act 809 minus what
said planters have already been actually paid pursuant
to their milling contracts, which should be deemed to
include that paid to the Association for "research,
investment, development and social welfare funds to be
used by the planters for these purposes, in accordance
with their sole judgment and discretion", and the
respondent planters in turn are hereby sentenced to pay
their respective laborers, herein petitioners, 60% of such
difference they will be paid by the Central, pursuant to
Section 9 of the Act, and the Minister of Labor is hereby
directed to supervise the payments to the laborers
herein adjudged. Respondent planters are further
sentenced to pay their respective laborers 60% of what
they have already been paid by the Central during all the
crop years involved in this case.
All amounts herein ordered to be paid shall bear interest
at the legal rate from the time of the finality of this
judgment, and this case being one involving a claim of
laborers in the nature of unpaid portion of wages due
them by mandate of the law, the respondents shall pay
as attorney's fees, per Article 2208, paragraphs (7) and
(11) of the Civil Code, 10% of their respective proportion
of payments to be made as above adjudged. No costs.
Concepcion, Jr., Guerrero, De Castro, Melencio-Herrera,
Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Fernando, Teehankee, Makasiar, Aquino, Abad Santos
and Escolin, JJ., took no part.
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