JOSE B. GAMBOA AND ELSA O. GAMBOA, PETITIONERS AND APPELLANTS, VS. MA-AO SUGAR CENTRAL COMPANY, INC., RESPONDENT AND APPELLEE.

On July 13, 1954 petitioners Herein filed an action in the Court of
First Instance of Negros Occidental to compel the respondent Ma-ao
Sugar Central Co., Inc. to issue a certificate of shortage in the
production quotas of the haciendas “Elga” and “Oselisa” for the crop
year 1953-1954 and to declare that they have the right, as assignees of
their lessees, to cover such production quota deficiencies with their
own sugar produced from another mill district, or to order respondent
to pay petitioners the sum of P16,627.89 as damage for its refusal to
do so. In the second cause of action alleged in their complaint
petitioners also demanded issuance of a warehouse receipt for A-136.56
piculs, which represents unpaid rentals of petitioners’ hacienda
“Elga,” respondent retaining for itself the said amount of sugar for
its own benefit, and in case respondent fails to do so, to pay
petitioners P2,096.19 as damages.

In the course of the proceedings in the court below, petitioners
herein abandoned the second cause of action. After trial, the court
below, Hon. Jose S. de la Cruz, presiding, held that the right to both
the export and domestic and reserve sugar belongs to the planter only,
or plantation owner who cultivated the plantation, and an owner-lessor
who ceases to produce sugar on the plantation himself, loses the right
to fill the quotas, such that petitioners herein, who did not produce
and deliver sugar cane to the mill, have no right to the quota; that
deficiencies in the production quota can be covered from another mill
district only if there is shortage in the same mill district, the quota
being transferable only upon a joint action of both the planter and the
central. For the above reasons the court dismissed the action. Hence
this appeal.

The record discloses that petitioners are the owners of the two
haciendas “Elga” and “Oselisa”, both affiliated with the respondent
sugar central. During the crop years 1952-1953 and 1953-1954
petitioners leased the hacienda “Elga” to their son Herman Gamboa and
the hacienda “Oselisa” to their daughter Fay Gamboa and her husband
Edmond Weber. In the crop year 1952-1953 the lessees of both haciendas
failed to produce the quotas for both and so the lessees assigned their
rights to their quotas to their father, petitioner Jose B. Gamboa, and
the latter filled the shortages in the quotas from another mill
district, the Talisay-Silay Milling District. For the crop year
1953-1954 the lessees again were short in their production, so they
again assigned their rights to their quotas to their father, petitioner
herein Jose B. Gamboa (Exhibit C). But in the crop year 1953-1954 the
respondent alleged and the court found that there was enough sugar
produced from the mill district to supply the deficiency in the
production of the quotas of the two haciendas in question.

The filling of shortages occurring in a mill district is governed by Section 8 (a) of Act No. 4166, which has been added to the latter by Republic Act No. 1072, which provides:

“If after the termination of milling in each sugar
central in any milling season, the holder of any allotment is not able
to mill enough sugar to fill his allotment for that year, that amount
of such allotment which he cannot fill during such milling season shall
be reallocated by the Sugar Quota Administration to other holders of
allotments first within the same district, and then to other districts
or in such other manner as may insure the filling of the quota for that
year: Provided, That no reallocation under the provision of
this section shall diminish the allotment to which the holder may be
entitled in any subsequent crop year.”

Under the above-quoted express provision of the law, it is evident
that the shortages in the production of the two haciendas must first be
filled from the respondent Ma-ao Sugar Central Milling District.
Petitioners argue that in the crop year 1952-1953, the shortage in
filling up their production quotas were filled from another district
owned by the petitioners, but said act is explained by respondent by
saying that permission for filling it from another milling district was
granted because the shortages could not be filled up from the milling
district itself.

The act of the respondent in the previous year can not, therefore,
constitute as a precedent in the filing up of the 1953-1954 production
quotas.

The court below cited in support of its decision the case of Suarez
vs. Mount Arayat Sugar Co., Inc., 96 Phil., 707, in which case this
Court, through Mr. Justice J. B. L. Reyes, held that original sugar
allotments are indivisible and are “transferable only as a
whole, by joint action of the interested parties” (the central and the
planter). If sugar quota allocations may be disposed of only by joint
action of the interested parties, it stands to reason that the sugar
quota allocation of the haciendas belonging to the petitioners may not
be filled up from a milling district in which petitioners have another
plantation, against the express objection of the respondent milling
district.

Another argument in support of petitioners’ appeal is paragraph 3 of
Field Service Instructions No. 7, Series 1952-1953, dated February 14,
1953, which in part provides:

“* * * properly accomplished certificates of
Shortage for export of domestic sugar of one mill district shall be
used first to cover the ‘C sugar of the same district before any
certificate of shortage of the district may be used to cover
non-district ‘C’ sugar: Provided, However, that a planter in
one mill district who or whose spouse is also a planter in other mill
districts may use his spouse’s allotment shortage in one district to
cover his or her spouse’s own ‘C’ sugar in such other districts without
waiting for the district ‘C’ sugar to be covered by Certificates of
Shortage of the same district. * * *”

The above provision contained in a regulation implementing the Sugar
Quota Act can not override the express provision of the latter,
especially Section 8-A which is inserted by Republic Act No. 1072. The
above provision of the Field Service Instructions must be understood to
be applicable only in cases where shortages in one milling district may
be filled from another milling districts in accordance with Republic
Act No. 1072.

The above considerations clearly demonstrate the correctness of the
conclusion arrived at by the respondent judge below in denying the
petition for mandamus. It is not necessary for Us to consider the other
reason adduced by the trial court below, also questioned by the
petitioners in this appeal, that when an owner leases his hacienda in a
milling district, the lessee is the planter within the meaning of the
Sugar Quota Allocation Act.

The decision appealed from is hereby affirmed, with costs against petitioners-appellants.

Paras, C. J., Bengzon, Padilla, Montemayor, Concepcion, Reyes, J. B. L., Endencia, Barrera, and Gutierrez David, JJ., concur.