G.R. No. L-27084. July 31, 1968
ANGELA ESTATE, INC. AND FERNANDO F. GONZAGA, INC., PETITIONERS, VS. COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL, BACOLOD-MURCIA MILLING CO., INC., AND THE BACOLOD-MURCIA SUGAR…
RUIZ CASTRO, J.:
This is a petition for certiorari with preliminary
injunction by the Angela Estate, Inc. and the Fernando F. Gonzaga,
Inc., against the Court of First Instance of Negros
Occidental, the Bacolod-Murcia Milling Co., Inc. and
the Bacolod-Murcia Sugar Farmers Corporation.
All the petitioners and the private respondents are domestic
corporations duly organized and existing under the laws of the Philippines. The Angela Estate, Inc. and the Fernando F. Gonzaga, Inc. (hereinafter referred to as the Landowners)
are the owners of the hacienda Helvetia, comprising
lots 1071, 1072 and 1073 of the Bacolod
cadastre.[1]
The Bacolod-Murcia Milling Co., Inc. (hereinafter
referred to as the Central) is the owner and operator of the Bacolod-Marcia sugar mill, has operated the same since the
1920-1921 crop year, and manufactures sugar from sugar cane planted and grown
by sugar cane planters in the Bacolod-Murcia mill district
and surrounding areas. The Bacolod-Marcia Sugar Farmers Corporation (hereinafter
referred to as the Planters) represents about 350 sugar planters-members, with
an annual production of over 700,000 piculs of sugar,
and a total acreage of about 10,000 hectares of land planted to sugar cane.
In 1920 the Central entered into identical printed milling
contracts with the adherent planters in the Bacolod-Murcia
mill district. In 1936 these milling
contracts were superseded by identical printed amended milling contracts. Among the signatories were the
predecessors-in-interest of the Landowners, then owners of the hacienda Helvetia.
The Central undertook to construct, maintain and operate a wharf
(which the adherent planters could use for the shipment of their sugar or the
unloading of materials needed by them), and railroad lines for the
transportation of sugar cane from the plantations to the central mill site,
these obligations being imposed by paragraphs 3 and 5 (of the milling
contracts) which provide:
“Que el Molino construira
y despues mantendra un pantalan que, sin perjudicar los intereses del
Molino, el Plantador podra utilizar pare el embarque de sus azucares y desembarque de los materiales y efectos que necesite. Entendiendose, sin
embargo, que no se permitira
al Plantador depositar sus azucares, materiales
o efectos en dicho pantalan (cuyo pantalan ha sido construido mucho antes de esta fecha).” (par. 3)
x x x x x
“Que para
el transporte de la cañadulce
desde los campos a la Central, el Molino construira,
mantendra y operara en los sitios que
crea conveniente, un ferrocarril de vapor o motor a de ambas
clases, con sus correspondicates remales y desvios, de tal manera que ninguna
parte de los terrenos adheridos a la Central como adaptables para el cultivo de la cañadulce, estara a mas de una milla
de distancia de dicho ramal. Igualmente construira y mantendra los patios convenientes pare depositar los vagones cargados
y vacios que sean necessitios. Entendiendose, sin
embargo, que no obstante todo los estipulado
en este contrato referente a la construccion y functionamiento de un ferrocarril
y desvios, queda convenido que el Molino, a sea
la Bacolod-Murcia Milling Co., Inc., debido a la situacion economica actual de la misma, en caso de que hasta
ahora no se haya puesto via ferrea en los terrenos del Plantador, queda relevado de la obligacion de construir, extender o hacer lleger su ferrocarril
a los terrenos del Plantador, y que dicho Plantador, sus herederos y causahabientes, se obligan a transportar la cañadulce que produzcan los
mencionadas terrenos y cargarla en los vagones de la Compañia en la estacion de ferrocarril que el Molino, o sea la Bacolod-Murcia
Milling Co., Inc., designe. Entendiendose ademas, que el Molino, o sea la Bacolod-Murcia Milling Co., Inc., se reserva
el derecho, cuando lo crea conveniente y su situacione conomica
lo permita, de construir, hacer funtionar y mantener el citado ferrocarril y desvios en lo que se refiere a los terrenos del Plantador arriba nombrado, de conformidad con lo estipulado en el presente contrato.” (par. 5)
Concomitant to the obligations assumed by the Central, the
adherent planters granted to it the corresponding rights of way on their lands
for the duration of the milling contracts, that is, “por
un periodo de cuarenta y cinco años o cosechas,
a contar desde la cosecha de 1920-1921.” Thus –
“Que
con el fin que el Molino puede
llevar a cabo las empresas arriba
mencionadas, el Plantador facilitara o hara que se obtenga y facilite, al Molino mediante pago a razon de TRESCIENTOS PESOS
(P300.00), por hectarea, libre de gravamen, todos los terrenos
que el Molino requiera la estacion experimental de una
extension no mayor de 10 hectareas, para el sitio de la Central,
bodegas, depositos, almacenes,
y otros edificios, para la estacion, y patios del ferrocarril; y cedera como por la presente
cede gratuitamente, y libres
de gravamen, los terrenos que el Molino requiem A para el tendido de las vias ferreas,
sus rumales, desvios y Patios, para los canales, canalizes y tuberias
para la traida de aguas, y para la construccion de los postes de telefonos. En tendiendose que el Plantador cedera, como por
el presente cede gratuitamente
y libre de gravamen, cualquiera parte de sus terrenos que
necesite el Molino para el
tendido de las vias ferreas, hasta
los terrenos contignos a los suyos a fin de que el Molino pueda moler las
cañas de otras plantaciones. Entendiendose, ademas, que todas las
servidumbres para las vias ferreas,
y para otros fines, quo el Plantador por el presente concede al Molino, seran
por un periodo de cuarenta y cinco años o cosechas, a contar des de la cosecha de
1920-1921.” (par. 9)
In the early 1920s the Central constructed railroad tracks on the
lands of the adherent planters. One
trunk thereof traversed the hacienda Helvetia,
occupying at least 3,245 lineal meters with a width of 7 meters, or a total of
22,715 square meters, more or less.
When their 1936 printed amended milling contracts expired at the
end of the 1964-1965 crop year, the Landowners required the Central to remove
the railway tracks in the hacienda and threatened to deny passage to its
cane cars.
In September of 1965 the Central filed a complaint with the
respondent Court of First Instance of Negros
Occidental (CC 7697) against the Landowners, praying that an ex parte writ of preliminary injunction issue restraining
the latter “from removing and/or destroying the railroad tracks in question and
from impeding, obstructing or in anyway preventing the passage and operation of
plaintiff’s locomotives and canecars over
defendants’ property during the pendency of this
litigation,” and that, after a hearing on the merits, the Central be
awarded “a legal easement of the right of way” over the hacienda
Helvetia, plus costs. The Planters
became a party to the suit as complainant-intervenor.
The Central took the position that it has acquired a legal
easement on the hacienda through 45 years of continuous use of the
railroad tracks under the aforesaid milling contracts and by virtue of article
649 of the Civil Code; that the hacienda completely surrounds the mill
site on the eastern side where the railroad tracks enter the sugar central;
that the continuous use of the railroad tracks is “absolutely
indispensable” for hauling cane from the adherent plantations to the
central, for the transportation of export and domestic sugar from the mill site
to the Sto. Niño dock for
shipment, and for the transportation of materials and fertilizers from said
dock to the central; that there is no other place through which the railroad
lines could reach the sugar central, except the indicated portions of the hacienda;
that the destruction and/ or removal of the railroad tracks in the hacienda
would paralyze the operations of the Central and cause irreparable damage to
it, the adherent planters, the sugar industry, and the national economy as a
whole; and that the Landowners will not suffer any damage if the railroad
tracks were allowed to remain in their hacienda.
The Landowners (Fernando F. Gonzaga,
Inc. became a party to the action as intervenor-defendant)
opposed the permanent establishment of the railroad tracks in their hacienda
as well as the issuance of a writ of preliminary injunction, averring that the
1936 milling contract their predecessors-in-interest had entered into with the
Central has ceased to have effect, its term having expired at the end of the
1064-1965 crop year; that although under article 849 of the Civil Code, an
“owner, or any person who by virtue of a real right may cultivate or use
any immovable, which is surrounded by other immovables
pertaining to other persons and without adequate outlet to a public highway, is
entitled to demand a right of way through the neighboring estates, after
payment of the proper indemnity,” the Central waived this right when, in
the aforesaid contract, it stipulated that the existence of the railroad
tracks would be coterminous with the life of the contract; that the railroad
tracks are neither necessary nor indispensable to the Central’s operations,
pointing out in this connection that at least two other sugar centrals in Negros Occidental employ trucks and truck-trailers in
transporting cane from plantations to mill sites, and the Central, in fact,
during the 1964-1965 crop year, utilized such means of transportation in
hauling cane from adherent plantations to its sugar mill; that the continued
existence of the railroad tracks in their hacienda unduly prevents them,
particularly the Fernando Gonzaga, Inc., from
utilizing the hacienda and makes it impossible for them to develop
certain portions thereof into a real estate subdivision; and that their rights
to the uninterrupted and exclusive use and enjoyment of their hacienda
are far superior to the Central’s claim of easement.
On October 4, 1965 the respondent court issued the writ of
preliminary injunction prayed for by the Central, and maintained the same in
its two subsequent orders of May 31 and November 26, 1966.
It justified the writ by stating that “the continuance of the acts
complained of during the litigation would work injustice to the plaintiff, and
that great or irreparable loss and damage would result to the plaintiff before
the matter can be heard on notice.”
Hence the present recourse by the Landowners. They ask this Court to restrain the
respondent court from enforcing the writ of preliminary injunction, and pray
that after a hearing on the merits, the restraining order be made permanent
and the orders complained of be annulled and set aside.
By resolution of January 25, 1967, we gave due course to the
petition, and, on August 10, 1967, issued a writ of preliminary injunction
enjoining the respondent court from enforcing the writ of preliminary
injunction issued by it on October 4, 1965.
On October 12, 1967, acting upon a manifestation and motion that
“through the mediation of the President of the Philippines, the parties
herein have agreed, subject to this Court’s approval, that the petitioners
shall permit during the 1967-68 milling season only, the use of the railroad
tracks passing through petitioners’ properties for the same purpose for which
they have been previously used, it being understood that this shall be without
prejudice to the respective rights and positions of the parties herein and
shall not be deemed a waiver of any of their respective claims and allegations
either in the instant case or in Civil Case No. 7697 of the Court of First
Instance of Negros Occidental or in any other case
between the same parties, future or pending,” this Court resolved to
approve the motion, and “as prayed for by the parties, the writ of
preliminary injunction issued by this Court is temporarily lifted up to and
including June 30, 1968, to give effect to this agreement, and shall be deemed
automatically reinstated beginning July 1, 1968.”
On March 12, 1968
the Central filed a motion to admit supplemental memorandum. Attached to it as part thereof is a copy of
the amended complaint it filed with the respondent court, which presents
several “new issues.” The first six, relied upon by the Central to
sustain the writ of injunction issued by the respondent court, are quoted
hereunder:
“a) That under Sec. 7, Act 2479, the milling
contracts that should be executed between the PLANTERS and the CENTRAL should
‘convey to the Central such right of way as the Central may deem necessary for
roads and railroad connecting the mill with the fields’ which provision of law
must be read into the said contract, and since a conveyance of a railroad right
of way is not only an easement, but is a conveyance in fee simple of the strip
of land covered thereby, then the provision of the milling contracts limiting
the existence of the said right of way to 45 crop years or harvests is null and
void, as being in conflict with the law and public policy, and since the Central
is the owner of the said railroad right of way, then, it may not be prevented
from using the same;
“b) That assuming arguendo
that there is no conveyance in fee simple of the strip of land over the right
of way, and the limitation of 45 crop years or harvests is valid, the same has
not yet expired for there were no harvests during the six years from 1940-41 to
1946-47, hence, the said 45 crop-years will expire only in 1971-1972, hence,
landowners’ threat of closing the right of way is premature;
“c) That assuming that the 45 year-period has
already expired, nevertheless, since according to sec. 1(a), subpar. 4(c) of ACT 4166, ‘a plantation is adherent to a
sugar mill by virtue of the sugar cane delivered to the mill regardless of the
contract relations,’ and that according to Asturias Sugar Co. vs. Montinola (69 Phil. 725) the contractual relations of
planter and miller continues by operation of law even after the expiration of
the contract, then, the contractual obligation of the defendants to give such
right of way to plaintiff Central continues up to the present, hence, closing
a said right of way is an impairment of that obligation;
“d) That, moreover, the contract for rights of way
between the Central and the adhered planters, and the adhered planters
themselves, is one entire and indivisible contract, considering that the
performance of the Planters in granting the rights of way is the consideration
in the performance of the plaintiff in putting up the railways, without which
collective promises or commitments, the plaintiff could not have built said
railways, and since the contract is entire, it may not be terminated
piecemeal, for an entire contract stands or falls together, hence, since the
contracts or rights of way of most adhered Planters have not expired (assuming
those of the defendants have expired), the entire contract is not deemed to
have expired;
“e) That assuming that the defendants can now
possess the land constituting the right of way, nevertheless, under art. 448 of
the New Civil Code, the plaintiff being a possessor in good faith of the right of
way and have built construction thereon in the form, of railway tracks, the
same may not be removed without payment of the value the said railway tracks as
well as the locomotives and cane cars using the same amounting to not less than
P7 million, while on the other hand, the plaintiff is willing to buy the land
covered by the railway tracks in Hacienda ‘Helvetia’ at the price that may be
fixed by the court,, being smaller in value than the cost of improvements
attached to the land, hence, impeding the passage thereof, which will amount to
appropriating said improvements, without compensation, and without a hearing,
hence, a denial of due process of law (sec. 1[1 & 2], ART. III,
Constitution);
“f) That assuming that plaintiff Central is a
possessor in bad faith, nevertheless, it is entitled to a legal easement under
art. 649 of the New Civil Code, after payment of the proper indemnity.”
In the said amended
complaint, the Central prays that the Landowners (Fernando F. Gonzaga, Inc. was made a party defendant therein) be
ordered, jointly and severally, to pay attorney’s fees and expenses of
litigation plus costs. This amended
complaint was admitted by the respondent court on April 5, 1968. The
Planters, on its part, manifested that “it adopts and incorporates by reference
all the allegations contained in the Amended Complaint.”
As required in our resolution of April 23, 1968, the Landowners, on May 1968, filed their
reply to the supplemental memorandum. The Central, in turn, filed a
rejoinder-memorandum.
The basic issue, to which all other issues are subsidiary, is
whether the respondent court acted in excess of jurisdiction and/ or with grave
abuse of discretion in issuing the questioned writ of preliminary injunction.
Pertinent at this juncture
is a summary of the whys and wherefores of a writ of preliminary injunction.
The writ may be issued at any time after the commencement of an
action and before judgment, when it is established that the plaintiff is
entitled to the relief demanded and only when his complaint shows facts
entitling him to such relief.[2]
This extraordinary writ is not designed to protect contingent or future rights.[3]
“An injunction will not issue to protect a right not in esse and which may never arise or to restrain an act
which does not give rise to a cause of action.
(32 C.J. pp. 34, 35)”[4]
“Injunction, like other equitable remedies, will issue only at the
instance of suitor who has sufficient interest or title in the right or
property sought to be protected. For the
court to act, there must be an existing basis of facts affording a present
right which is directly threatened by the act sought to be
enjoined. An impending or threatened
invasion of some legal right of the complainant, and the interest in
preventing the wrong sought to be perpetrated must be shown. It is always a ground for denying
injunction that the party seeking it has insufficient title or interest to sustain
it, and no claim to the ultimate relief sought – in other words, that he
shows no equity. Want of equity on the
part of the plaintiff in attempting to use the injunctive, process of the court
to enforce a mere barren right will justify the court in refusing the relief
even though the defendant has little equity on his side. The complainant’s right or title, moreover,
must be clear and unquestioned, for equity, as a rule, will
not take cognizance of suits to establish title, and will not lend its
preventive aid by junction where the complainant’s title or right is doubtful
or disputed. He must stand on the
strength of his own right or title, rather than on the weakness of that claimed
by his adversary.”[5]
If he possibility of irreparable damage, without proof of violation of an
actually existing right, is no ground for an injunction, being a mere damnum absque injuria.”[6]
Viewed in the light of the time-honored principles above
restated, the problem at hand may be narrowed down to the inquiry: Has the Central made allegations in its
complaints (original as well as amended) sufficient in law to entitle it to the
principal relief therein sought, that is, “a legal easement of the right
of way” over the hacienda Helvetia, so as to justify the lower
court’s issuance of the disputed preliminary writ of injunction?
By express provision of articles 649 and 650 of the new Civil
Code, the owner of an estate may claim a compulsory right of way only after he
has established the existence of four requisites, namely, (1) the estate is
surrounded by other immovables and is without
adequate outlet to a public highway; (2) after payment of the proper indemnity;
(3) the isolation was not due to the proprietor’s own acts; and (4) the right
of way claimed is “at a point least prejudicial to the servient estate, and in so far as consistent with this
rule, where the distance from the dominant estate to a public high-way may be
the shortest.” The onus is upon the owner of the dominant estate
to show by specific averments in his complaint the existence of the requisites
or pre-conditions enumerated. And in
granting a writ of preliminary injunction, the order of the court must show by
specific finding, even preliminary, that the pre-conditions exist. Thus –
“By express provision of law [Arts. 649 650, N.C.C.],
therefore, a compulsory right of way can not be obtained unless the four requisites
enumerated are first shown to exist, and the burden of proof to show their
existence was on the Central. Nowhere in the complaint is any specific
averment, nor is there in the Court of First Instance orders for the issuance
of the writ of temporary injunction, and denying its reconsideration, any
specific finding, even preliminary, that each and everyone of the four
preconditions do exist. * * * This deficiency
made the issuance of a preliminary injunction improvident and arbitrary, for
the first condition for the granting of the writ is ‘that the plaintiff is
entitled to the relief demanded’ (sec. 3(a), Rule 58, Revised Rules) and
‘that the complaint in the action is verified, and shows facts entitling the
plaintiff to the relief demanded‘ (sec. 4[a], Rule 58).”[7]
Let us now take a look at the original complaint.
The Central alleged therein that the hacienda Helvetia
completely surrounds the mill site “at its eastern side where the railroad
tracks enter.” This allegation hardly satisfies requisite (1) above, for
it fails to aver that it is “without adequate outlet to a public
highway.” The Central’s own “Sketch” (annex A) conclusively
shows that the mill site is easily accessible from various points through the
existing provincial roads of Bacolod
City, Bago
and Murcia,
aside from the main roads in Bacolod
City itself.
The allegation in the complaint that the railroad tracks are
“absolutely indispensable” for the operation of the Central is belied
by the fact that during the 1964-1965 crop year, most of the sugar cane
harvested in the adherent plantations was hauled to the Central by the use of
trucks and truck-trailers. This is the
same means of transportation used by two new sugar centrals in Negros Occidental – the First Farmers Milling Company and
the AIDSISA – following the universal practice in Hawaii.[8]
It may be true that the railroad tracks provide an economical and convenient
means of transportation to and from the mill site. Unfortunately, our Civil Code speaks of
necessity and not of comfort and convenience.[9]
The Central also alleged that it is willing to pay a
“reasonable compensation to be fixed by the Court,” corresponding to
the value of the 22,712-sq.m. portion of the hacienda traversed by the
railroad tracks, as well as the resultant damages. We observe, however, that this manifestation
of willingness to pay was made for the first time only in the Central’s
complaint, and this only after the Landowners had made known their intention to
make full use of their hacienda for their own purposes. The Central, before then, made no genuine
attempt to negotiate with the Landowners for the continued use of the railroad
tracks, and kept on using them for its benefit, totally disregarding the
proprietary rights of the landowners.
Likewise the Central has not demonstrated that the isolation of
the mill site – assuming that isolated it is – was due to the Landowners’
acts. With full awareness that the
conventional easement of right of way would expire at the end of the crop year
1964-1965 – which means that from then on the Landowners would be freed from
the burdens imposed by the covenants entered into by their
predecessors-in-interest – the Central did not seasonably pursue step to
prevent the inevitable isolation consequent to the termination of the printed
amended milling contracts of 1936.
Apparently realizing that its original complaint fails to state a
solid cause of action upon which may be legally predicated the issuance of the
writ of injunction in question, the Central abandoned its original
theory. In its amended complaint is the
altogether new thematic insistence that the Central, by virtue of specifically
named laws and legal principles, has become the owner of the strip of
land’ traversed by the railroad tracks in the hacienda Helvetia, which
dominion sufficiently invests the disputed writ of injunction with intrinsic
validity.
This new development has compelled us to examine the allegations
of the amended complaint and their implications. After mature deliberation, we reach the view
that the said amended complaint does not render the Central’s position any less
untenable.
The Central initially maintains therein that its right to the
continued use of the railroad tracks traversing the hacienda, after the
printed amended milling contracts of 1936 expired with the 1964-1865 crop year,
is authorized by sections 2 and 7 of Act 2479 (enacted February 5, 1913),
otherwise known as the “Sugar Central Act.” These sections read:
“SEC. 2. It shall be
the duty of this board to promote and aid in the establishment of sugar
centrals with their machinery, equipment, rights of way, railroads, and other
appurtenances for the manufacture of sugar and industries derived therefrom in the sugar-producing provinces, if in its
judgment the local conditions warrant the establishment of a sugar
central.”
“SEC. 7. A sum not to
exceed two million pesos of the gold standard fund shall be available for
investment by the Insular Treasurer, with the approval of the Governor-General,
in accordance with the provisions of this Act:
Provided, That the central sugar board shall not purchase bonds
of any corporation except under the following terms and conditions, among
others: That the amount of bonds issued by the corporation shall not exceed
sixty per centum of the value of the property offered as security; that before
such purchase is made, such corporation shall have contracts with the owners
of not less than one thousand hectares of land suitable for the cultivation of
sugar, obligating such owners to cultivate in sugar cane a reasonable area of
their holdings and to deliver and sell to the corporation all the sugar cane
produced on such land and to convey to the corporation may deem necessary
for roads and rail roads connecting the mill with the fields; * * *.”
It is argued that Act 2479 envisioned a
sugar central and “railroads connecting the same to the plantations and
rights of way for the said railroads;” that the Central having been
created and financed by the said Act, the printed amended milling contracts of
1936 were also entered into in accordance with the intendment and provisions
thereof; that the underscored words of section 7 above, reading “to convey
to the corporation such rights of way as the corporation may deem necessary for
roads and railroads connecting the mill with the fields,” must be
construed to mean “to transfer title,” and the words “such
rights of way” include not only the easement of railroad rights of way but
also the strips of land traversed thereby; that, therefore, the quoted portion
of section 7 should be understood to mean to transfer to the Central title to
such rights of way as it may deem necessary for railroad tracks, including the
strips of land of the hacienda Helvetia and other areas surrounding the
mill site traversed by the railroad tracks; and that the amended milling
contract of 1936 in so far as it did not provide for such transfer or
conveyance, but instead provided for “45-year contractual limitation,”
is null and void, and in violation of sections 2 and 7 of the said Act, in
relation to article 1300[10]
of the new Civil Code.
The construction given by the Central to the word
“convey” is its broad and comprehensive meaning, that is, to transfer
property or title to property from one person to another.[11]
The word “convey” may, however, include any other transaction by
which any interest in real estate is created, short of transferring title
thereto.[12]
And construing the word in reference to the entire context of section 7, supra,
more specifically in the light of the words, “rights of way,” we hold that
when the Philippine Legislature used the word “convey, it intended merely
to allow, to permit, to grant, the Central “such rights of way” in
the hacienda Helvetia and other surrounding areas, short of transferring
ownership of the strips of land traversed by such rights of way.
A “right of way” is an easement, an encumbrance
on a servient estate, a real right of limited use
without possession and ownership of the land upon which the easement was
established.[13]
This, we are persuaded, is the meaning of the word “servidumbres”
as used by the parties in the printed amended milling contract of 1936, which
word, we must assume, was deliberately employed by them to express the real
intention of the Act itself and of their own:
“x x x que todas las servidumbres para las vias
ferreas, y para otros fines, clue el Plantador por el presente concede al
Molino, seran por un periodo de cuarenta y cinco años o cosechas,
a contar desde la cosecha de 1920-1921.” This conclusion is fortified by
the admonition of the Civil Code that conveyance should be interpreted to
effect “the least transmission of rights”[14]
– and is there a better example of least transmission of rights than merely
allowing or permitting the use without transfer of possession and ownership of
the strip of land traversed by the railroad tracks? At all events, if we are to follow the theory
espoused by the Central, the use of the term “rights of way” in
sections 2 and 7 of Act 2479 would be a patent superfluity. For if the said sections already conveyed to
the Central the ownership of the land on which the railroad tracks are laid,
the law itself would have dispensed with any mention or reference to
“rights of way.” We surmise that the law advisedly did not purport to
convey in fee simple the affected strips of land because if it did so it would
perhaps be afflicted with constitutional infirmity.
The next contention of the Central is that in view of the
provisions of sections 2 and 7 of Act 2479, supra the milling contracts
of 1930 are null and void insofar as they provided a contractual limitation of
45 years. To our mind, this does not
merit extended attention. For there is
nothing in the entire context of the said Act nor in article 1306 of the new
Civil Code (cited by the Central in connection with the Act) that supports,
either expressly or inferentially, this proposition. Moreover, we regard the argument as pure
casuistry. In the long span of 45 years,
the Central not only did not question the validity of any single provision of
the milling contracts but, as far as we gather from the record, even
unremittingly exacted compliance therewith from the signatories thereto. Now that the term of the contracts has
expired, and the Central finds itself beset with difficulties, it executes a
complete turn- about and invokes the invalidity of the said contracts to
relieve itself of the inconveniences and vicissitudes confronting it.
The next argument of the Central is that, assuming that the
milling contracts are valid, its “right of way has not yet expired”
for the reason that there were no harvests during the crop years 1941-42 to
1946-47, and for this reason the 45 crop years envisioned in the contracts
would expire only with the crop year 1971-72.
This argument is likewise specious.
A close scrutiny of the milling contracts can yield no inference that
the inability on the part of the adhered plantations to raise sugar cane during
the crop years alluded to automatically extended the contractual period of 45
years, Besides, the issue presented is not really one of first impression. In Nueno vs.
Angeles,[15]
we held that the occupation of the Philippines by the Japanese Imperial Forces
did not suspend the running of the term of office of the members of the
municipal board of Manila, and in two other cases,[16]
we ruled that the terms of contracts of lease of urban properties were not
suspended by the fact that the lessees did not enjoy the possession of the
leased properties during such occupation.
Reasoning by analogy, we hold the view that the intendment of the
rulings in the cases adverted to applies with equal force to resolve the issue
at bar against the Central’s pretension.
The Central further maintains that pursuant to section 1,
subparagraph 4(c) of Act 4166, otherwise known as “the Sugar Limitation
Law” (approved December 14, 1934), providing that
“(c) The term “mill district’ is used to mean a
centrifugal sugar mill together with all plantations adherent thereto. A plantation is adhered by virtue of sugar
cane being delivered therefrom to a mill regardless
of contract relations between the mill company and the plantation owner and/ or
any other person cultivating sugar cane on the plantation,”
and the following pronouncement made in
Asturias Sugar Co. vs. Montinola (69 Phil. 725),
”Fue en virtud
de las mencionadas Leyes No. 213 del Congreso de los Estados Unidos,
y No, 4166 de la Legislatura Filipino, como los recurridos
se vieron obligados a moler sus cañas
en la Central de la recurrente. Hubo por consiguiente una indeclinable reasuncion tanto por los
recurridos como por la recurrente de su contrato celebrado
antes de la zafra de 1931-1932, reanudando
entre si, las relaciones que entre ellos
entonces existian, y viendose necesariamente obligadas a las prestaciones que se habian prometido mutuamente. Esto es obvio porque
las obligaciones no solamente nacen de los contratos y cuasi contratos, y de los actos y omisiones
ilicitos, o culposos o negligentes sino tambien y mas principal-mente, de la ley. (Art. 1089, Codigo
Civil.)”,
the expiration of the term of the amended
milling contracts of 1936 has not resulted in the absence of a contract between
the parties, for Act 4166 stepped in to effect renewal of the said contracts,
and because the rights of way are a part thereof, these perforce continue to
exist.
It is our view that the Sugar Limitation Law is erroneously
invoked as authority to sustain the above proposition. Unlike sections 2 and 7 of Act 2479 which
expressly provided for the establishment of “such rights of way as the
corporation may deem necessary for roads and railroad connecting the mill with
the fields,” Act 4166, even with the amendments introduced by Commonwealth
Acts 77 and 323 and Republic Acts 1072 and 1825, contains no provision
conferring upon the Central the right to establish rights of way in the lands
of the adherent planters. It would
appear from its title and declaration of policy that Act 4166 was enacted
solely for the purposes of limiting and allocating the production of sugar in
the Philippines as well as regulating the processing and marketing thereof.
For disparity in factual settings, the doctrine enunciated in Asturias
is inapplicable. That case referred to a
planter who had a verbal milling contract with a central before the crop
year 1931-1932. Under this contract the
former received from the latter a certain form of bonus as additional
participation. In the crop years
1932-1933 and 1933-1934, the planter milled his sugar cane with another
central. After the passage of Act 4166
in 1934, the planter resumed milling his sugar cane with the first
central. Resolving the question whether
the planter was entitled to the same bonus which the central had given him in
the 1931-1932 and previous crop years, this Court ruled in the affirmative,
holding that there was an indeclinable reassumption
both by the central and the planter of their contract subsisting before the
1931-1932 crop year, renewing the relations which between the then existed,
they finding themselves necessarily obligated by the undertakings which they
had mutually assumed. Apart, therefore,
from the fact that the issue therein posed is completely alien to the main
issue in the present case, which is, whether the Central is entitled to a right
of way over the hacienda Helvetia, the inescapable, fundamental and
decisive difference is that the verbal milling contract of the parties in Asturias
was deemed renewed to govern the relationship which existed between them; while
in the case at bar, the amended milling contracts of 1936 were not renewed
after they expired at the end of the 1964-65 crop year.
The Central further maintains that the amended milling contracts
of 1936 constitute “one entire and indivisible contract,” for the
collective performance of the planters in granting the rights of way was the
consideration of the Central in laying the railways, without which collective
commitment the latter would not have built the tracts, and for this reason the
“entire and indivisible contract” may not be terminated piecemeal, as
to terminate the same would require the collective action of all the adhered
planters.
The novelty of this argument does not imply its validity. The amended milling contracts were distinct
contracts entered into by the Central separately with the individual
planters. To say, in effect, that all
the contracts created obligations not only between each individual planter and
the Central but also between the planters themselves, is to offend against
logic and common sense. But in any
event, the rights of way granted by the so-called “entire and indivisible
contracts” all expired collectively at the same time at the end of the
1964-1965 crop year, so that whatever collective and indivisible obligations
and covenants were supposedly agreed upon ceased to have any force and effect.
The Central finally contends that it is a possessor in good
faith of the right of way traversing the hacienda Helvetia. Invoking article 448 of the new Civil Code,[17]
it argues that the railroad tracks may not be removed without payment by the
Landowners of their value as well as that of the locomotives and cane cars
using the same, all amounting to not less than P7 million, and asserts that on
the other hand, “the Central is willing to buy the land covered by the
railway tracks in Hacienda ‘Helvetia’ at the price that may be fixed by the
court, being smaller in value than the cost of improvements attached to the
land.”
Good faith is one of the basic concepts articulated in article
448 of the Civil Code. It is present
where one builds or sows or plants on land in which he believes himself
to have a claim of title.”[18]
In this case, the Central cannot validly lay claim to that good faith, because
it knew and recognized from as early as 1920 that the strip of land traversed
by its railroad tracks was owned and possessed by the Landowners.
After an assiduous analysis and examination of the order a
quo of October 4, 1965, the allegations of the complaint and the amended
complaint, and the other pleadings in the record, we conclude that the
Central’s conventional right of way over the hacienda Helvetia ceased
with the expiration of the amended milling contracts at the end of the
1964-1965 crop year. In the absence of a
renewal contract or the establishment of a compulsory servitude of right of way
on the same spot and route which must be predicated on the satisfaction of the
preconditions required by law, there subsists no right of way to be protected.
In our view, the following pronouncements made by Mr. Justice
J.B. L. Reyes in Bacolod-Murcia Milling Co. vs.
Capitol Subdivision, supra, control the present case:
“In truth, the court of origin seems to have proceeded on the
erroneous assumption that, even after expiration of its contractual right of
way, petitioner Central was entitled to a compulsory right of way in the same
location and route it had been using up to the present. This is, not true: the Central’s use of the present railway for
the preceding 45 years was based on the assent of the Subdivision’s
predecessors-in-interest, as evidenced by their milling contract, while a
compulsory servitude of right of way on the same spot and route must be
predicated on the minimum inconvenience to the would-be servient
estate, in addition to the other requisites above set forth. There is no specific finding by the court of
origin that the prerequisites exist, and the lack of it suffices to negate the
Central’s right to the servitude claimed, as it likewise negates the propriety
of the temporary injunction issued.
“In issuing the preliminary writ for defendant to permit the
Central to use its railway, in the manner established under the milling
contract, the court of origin in effect extended that corresponding part of
the contract even beyond the term stipulated by the parties. Such action is not warranted by law. The function of an injunction is the
maintenance of the status quo as of the time of its issuance, and
at that time, the right of the Central under the milling contract had
uncontrovertibly expired. It needs no
emphasizing that the court can not create contracts between the parties.
x x x x x
“[T]he preliminary injunction was issued on an erroneous
premise, ‘the premature assumption that respondent Bacolod-Murcia
Milling Co., Inc., is entitled to the legal easement prayed for by it’, since
the existence of the statutory requisites for such easement had not been
properly averred or proved, x x x
Of course, petitioner may duly show at the hearing on the merits that the
preconditions required by the Civil Code do actually exist; but until that is
done, the right to the legal servitude is not clear, and the writ of injunction
is unwarranted, and issued in grave abuse of discretion.”[19]
ACCORDINGLY, the petition for certiorari is
granted, and the three orders of October
4, 1965, May 31 and November
26, 1966 of the respondent court are annulled and set aside. The writ of preliminary injunction issued by
this Court on August 10, 1967
is hereby made permanent. Costs against
the private respondents.
Concepcion, C.J., Reyes, JBL, Dizon, Zaldivar, Sanchez,
Angeles, and Fernando, JJ., concur.
Makalintal, J., did not take part.
[1]
Lot-1073 and a portion of lot 1072 [lot 1072-C-3-B2] belong to the Angela
Estate, Inc; lot 1071 and portions of lot 1072 [lot 1072-C-3-A and lot
1072-C-3-B-1] belong to the Fernando F. Gonzaga, Inc.
[2]
Sec. 3(a), in relation to sec. 4(a), Rule 58 of the Rules of Court.
[3] Bacolod-Murcia Milling Co., Inc., et al., vs.
Capitol Subdivision, et al, L-25887, July
26, 1966, 17 SCRA 736.
[4]
Cited in North Negros Sugar Co. vs. Hidalgo,
63 Phil. 671, 677.
[5]
28 American Jurisprudence sec. 26, p. 517.
(italics ours)
[6]
Note 3, 17 SCRA at p. 737.
[7] Bacolod-Murcia Milling Co., Inc. et al. vs. Capitol
Subdivision, Inc., supra, 17 SCRA at p. 736.
[8]
See Opposition Central’s Urgent Petition to Dissolve Preliminary Injunction on Counterbond.
[9] Manresa, 5th ed., pp. 653-654.
[10]
“ART. 1306. The contracting parties
may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public
order, or public policy.”
[11]
9-A Words and Phrases, pp. 215-216.
[12]
Cf. Monte, et al. vs. Angeles, et al., 101 Phil. 563, 564-565, citing 13
C.J. 900, and 18 C. J. S. 92.
[13]
II Civil Law, by Reyes and Puno, 67 ed., pp. 149,
151; 17-A Am. Jur., 619; Hicks Brothers vs.
Swift Creek Mill Co., 57 L.R.A., 720,
721.
[14]
Art. 1378, 1st sent., N.C.C.; Cf. Olino vs. Medina,
13 Phil. 379.
[15]
76 Phil. 12.
[16]
Lo Chung vs. Court of Appeals, 81 Phil. 601; American Far Eastern School
of Aviation vs. Aguila y Cia, 89 Phil. 292.
[17]
“The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building or trees
after proper indemnity. The parties
shall agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.”
[18] Alburo vs. Villanueva, 7 Phil. 277, 280.
[19]
17 SCRA, pp. 738 and 739.