KAY B. CHANG, ET AL., Plaintiffs-Appellees, v. ROYAL EXCHANGE ASSURANCE CORPORATION OF LONDON, Defendant-Appellant.
Del-Pan, Ortigas & Fisher, for Appellant.
John W. Sleeper, for Appellees.
SYLLABUS 1. FIRE INSURANCE; CONDITION PRECEDENT. policy of fire insurance contained a clause providing that in the event of a loss under the policy, unless the company should deny all liability, as a condition precedent to the bringing of any suit by the insured upon the policy the latter should first submit the question of liability and indemnity to arbitration. Such a condition is a valid one in law, and unless it be first complied with no action can be brought.
2. ID.; ID.; WAIVER. If in the course of the settlement of a loss. however, the action of the company or its agents amounts to a refusal to pay, the company will be deemed to have waived the condition precedent with reference to arbitration and a suit upon the policy will lie.
D E C I S I O N
WILLARD, J . :
The arbitration clause in the fire policy in question in this case is in part as follows:jgc:chanrobles.com.ph
"If a disagreement should at any time arise between the corporation and the assured . . . respect of any loss or damage alleged to have been caused by fire, every such disagreement, when it may occur (unless the corporation shall deny liability by reason of fraud or breach of any of the conditions, or because the claimant has by some other means waived his rights under the policy), shall be referred to the arbitration of some person to be selected by agreement of both parties . . . And by virtue of these presents it is hereby expressly declared to be a condition of this policy, and an essential element of the contract between the corporation and the insured that unless the corporation shall demand exemption from liability by reason of fraud, breach of conditions, or waiver, as stated, the assured, or claimant, shall have no right to commence suit or other proceedings before any court whatever upon this policy until the amount of the loss or damage shall have been referred, investigated, and determined as above provided, and then only for the amount awarded, and the obtaining of such an award shall be a condition precedent to the institution of any suit upon this policy and to the liability and obligation of the corporation to pay or satisfy any claim or demand based upon this policy."cralaw virtua1aw library
The conditions contained in this clause of the policy are valid, and no action can be maintained by the assured unless as award has been made or sought, or unless the company has denied liability on some of the grounds stated therein. (Hamilton v. Liverpool, London and Globe Insurance Company, 136 U.S., 242.) The duty of asking a submission to arbitration does not rest exclusively upon the company. If it takes no action in that respect it is the duty of the assured to do so, and to ask that arbitrators be appointed for the purpose of determining the amount of the loss, in accordance with the provisions of this policy. The company may, however, by its conduct, waive the provisions of this clause relating to arbitration. In fact, this is expressly stated in the policy itself, as will be seen from the quotation above made, and the principal question in this case is whether there has been such waiver or not.
Simple silence of the company is not sufficient. If it remains passive, it is the duty of the assured to take affirmative action to secure arbitration. Neither will the failure of the company to return proofs of loss, or its failure to point out defects therein, amount to a waiver of the arbitration clause. These acts may amount to a waiver of the clause requiring the furnishing of proofs of loss, but such an action can not constitute proof that the company has refused to pay the policy because the defendant has failed to comply with the terms and conditions thereof.
It is claimed, however, by the plaintiffs and appellees, that affirmative action was taken by the company indicating its purpose not to pay anything to the insured.
The property insured, consisting of a stock of goods, was entirely destroyed by a fire on the 11th day of March, 1905. On the same day the plaintiffs notified the agent of the defendant of the loss and within fifteen days thereafter presented to the company a detailed statement of the articles which had been destroyed and of their value. Plaintiffs were notified by the company that this proof was insufficient and that they must obtain the sworn certificates of two merchants to the truth of their statement. This was done within a few days. Plaintiffs were again notified that their proof was insufficient. Various interviews were had between the agent of the defendant and the plaintiff Chang and the plaintiffs lawyer between the latter part of March and the 21st of June, 1905. During this time the plaintiffs furnished additional evidence relating to the justice of their claim and were told that their proofs were still insufficient. No indication was made by the companys agent as to what other proofs should be furnished, he offering, however, at one of the interview to settle the claim for 3,000 pesos. This offer was refused by the plaintiffs. In the final interview on June 21, between the companys agent and the counsel for the plaintiffs, the former said:jgc:chanrobles.com.ph
"I can not go on with your case, Mr. Sleeper; I have not enough proof.
"Q. What did Mr. Sleeper state?
"A. I think, so far as I can remember, that he said he wanted to bring the matter to a basis, but I would not say so to the court."cralaw virtua1aw library
This action was commenced on the 24th of June, 1905. The plaintiffs at no time requested the appointment of arbitrators. After the suit had been commenced, and on the same day, the defendant requested in writing that arbitrators be appointed in accordance with the terms of the policy. This was the first communication in writing which the defendant made to the plaintiffs after the loss.
Under all the circumstances in the case, we think that the statement made by the companys agent on the 21st day of June amounted to a denial of liability on the ground that proper proofs of loss had not been presented and that, therefore, there had been a failure of the assured to comply with one of the terms of the policy. The delay of the company in taking any affirmative action between the 11th day of March and the 21st day of June; its repeated statements that the proofs were insufficient without indicating in any way what other proofs should be furnished, and its final statement that it could go no further with the case, was sufficient evidence to show that it did not intend to pay. This view is somewhat confirmed by what took place afterwards before the arbitrators, both of whom were appointed by the defendant in accordance with the terms of the policy. At the first meeting of these arbitrators the defendant objected to any award being made upon the ground that the proof of loss which had been furnished was sworn to before a notary public and not before the municipal judge, as required by the provisions of the Code of Commerce.
In the case of The Phenix Insurance Company v. Stocks (149 Ill., 319) the company wrote two letters to the insured, in the first of which they said:jgc:chanrobles.com.ph
"The circumstances under which this fire occurred are such that we do not feel justified in extending to you any measure of grace, in considering your claim, which you may not fairly demand under the terms of the policy. There is at least one fact that looks very peculiar, and until our minds are relieved of the doubts which we have come to receive in regard to the integrity of this loss, we shall offer you no benefits that you may not demand under a strict construction of the policy."cralaw virtua1aw library
In the other letter the company said:jgc:chanrobles.com.ph
"Replying to your letter of August 23d, received this morning, we beg to say that our views of this matter have been fully expressed in our previous correspondence, and have nothing at this time to add."cralaw virtua1aw library
The court said (p. 334):jgc:chanrobles.com.ph
"The mere silence of the company would not amount to a waiver of its right to insist upon the condition [as to arbitration], but when it placed its determination upon the grounds stated in the correspondence, which were such as could not be submitted to arbitration under the provisions of the policy, it must be held to have waived the condition requiring arbitration (German Ins. Co. v. Gueck, 130 Ill., 345), and especially is this so where the assured would be misled to their prejudice into bringing suit upon the policy without first having obtained an award. The company was not bound to speak at all., but when asked in effect, what its determination was, if it answered, good faith required that it should disclose the true ground of its defense."cralaw virtua1aw library
It is apparent in the case at bar that the counsel for the plaintiffs sought the interview of June 21 for the express purpose of finding out what the decision of the company was, and after receiving the answer which has been heretofore quoted, the plaintiffs were fully justified in bringing the action at once, without seeking any arbitration.
Judgment was entered in the court below in favor of the plaintiffs for the sum of 5,265 pesos and 25 centavos, with interest from the 24th of June, 1905, and costs. It is claimed by the appellant that the finding of the court below as to the amount of the loss is not justified by the evidence. A great many witnesses were presented by each side, but the only persons who had any real knowledge as to the amount of stock in the store at the time of the fire, and as to its value, were the plaintiff Chang and his clerk. They testified that it was worth more than 10,000 pesos, the amount named in the policy. No one of the witnesses for the defendant fixed the value of the stock then on hand at more than 500 pesos. The arbitrators appointed by the defendant found that the value was 2,106 pesos. The defendants agent testified that during negotiations he offered to settle for 3,000 pesos. That the plaintiff (Chang) was carrying on a business of some importance was proved at the trial by the introduction of the records of the customs in Cebu, by which it appeared that between the month of July, 1904, and February, 1905, he had imported through the custom-house goods which with the duty added were of the value of 4,758 dollars and 48 cents, money of the United States, and the plaintiff, Chang, testified that he had no hand at the time of the fire a large amount of property, products of the country, which were not imported through the customs.
In view of all the evidence in the case, we can not say that it preponderates against the finding of the judge below as to the amount of the loss.
The judgment of the court below is hereby affirmed, with the costs of this instance against the Appellant.
Torres, Johnson, and Tracey, JJ., concur.
G.R. No. L-21549 October 22, 1924 TEODORO VEGA, plaintiff-appellee, vs. THE SAN CARLOS MILLING CO., LTD., defendant-appellant. Fisher, Dewitt, Perkins, & Brady, John R. McFie, Jr., Jesus Trinidad, and Powell & Hill for appellant. R. Nolan and Feria & La O for appellee.
ROMUALDEZ, J .: This action is for the recovery of 32,959 kilos of centrifugal sugar, or its value, P6,252, plus the payment of P500 damages and the costs. The defendants filed an answer, and set up two special defenses, the first of which is at the same time a counterclaim. The Court of First Instance of Occidental Negros that tried the case, rendered judgment, the dispositive part of which is as follows: By virtue of these considerations, the court is of opinion that with respect to the complaint, the plaintiff must be held to have a better right to the possession of the 32,959 kilos of centrifugal sugar manufactured in the defendants' central and the latter is sentenced to deliver them to the plaintiff, and in default, the selling price thereof, amounting to P5,981.06 deposited in the office of the clerk of the court. Plaintiff's claim for damages is denied, because it has not been shown that the defendant caused the plaintiff any damages. Plaintiff is absolved from defendant's counterclaim and declared not bound to pay the such claimed therein. Plaintiff is also absolved from the counterclaim of P1,000, for damages, it not having been proved that any damages were caused and suffered by defendant, since the writ of attachment issued in this case was legal and proper. Without pronouncement as to costs. So ordered. The defendant company appealed from this judgment, and alleges that the lower court erred in having held itself with jurisdiction to take cognizance of and render judgment in the cause; in holding that the defendant was bound to supply cars gratuitously to the plaintiff for the cane; in not ordering the plaintiff to pay to the defendant the sum of P2,866 for the cars used by him, with illegal interest on said sum from the filing of the counterclaim, and the costs, and that said judgment is contrary to the weight of the evidence and the law. The first assignment of error is based on clause 23 of the Mill's covenants and clause 14 of the Planter's Covenant as they appear in Exhibit A, which is the same instrument as Exhibit 1. Said clauses are as follows: 23. That it (the Mill Party of the first part) will submit and all differences that may arise between the Mill and the Planters to the decision of arbitrators, two of whom shall be chosen by the Mill and two by the Planters, who in case of inability to agree shall select a fifth arbitrator, and to respect and abide by the decision of said arbitrators, or any three of them, as the case may be. x x x x x x x x x 14. That they (the Planters--Parties of the second part) will submit any and all differences that may arise between the parties of the first part and the parties of the second part of the decision of arbitrators, two of whom shall be chosen by the said parties of the first part and two by the said party of the second part, who in case of inability to agree, shall select a fifth arbitrator, and will respect and abide by the decision of said arbitrators, or any three of them, as the case may be. It is an admitted fact that the differences which arose between the parties, and which are the subject of the present litigation have not been submitted to the arbitration provided for in the above quoted clauses. Defendant contends that as such stipulations on arbitration are valid, they constitute a condition precedent, to which the plaintiff should have resorted before applying to the courts, as he prematurely did. The defendant is right in contending that such covenants on arbitration are valid, but they are not for the reason a bar to judicial action, in view of the way they are expressed: An agreement to submit to arbitration, not consummated by an award, is no bar to suit at law or in equity concerning the subject matter submitted. And the rule applies both in respect of agreements to submit existing differences and agreements to submit differences which may arise in the future. (5 C. J., 42.) And in view of the terms in which the said covenants on arbitration are expressed, it cannot be held that in agreeing on this point, the parties proposed to establish the arbitration as a condition precedent to judicial action, because these clauses quoted do not create such a condition either expressly or by necessary inference. Submission as Condition Precedent to Suit. Clauses in insurance and other contracts providing for arbitration in case of disagreement are very similar, and the question whether submission to arbitration is a condition precedent to a suit upon the contract depends upon the language employed in each particular stipulation. Where by the same agreement which creates the liability, the ascertainment of certain facts by arbitrators is expressly made a condition precedent to a right of action thereon, suit cannot be brought until the award is made. But the courts generally will not construe an arbitration clause as ousting them of their jurisdiction unless such construction is inevitable, and consequently when the arbitration clause is not made a condition precedent by express words or necessary implication, it will be construed as merely collateral to the liability clause, and so no bar to an action in the courts without an award. (2 R. C. L., 362, 363.) Neither does not reciprocal covenant No. 7 of said contract Exhibit A expressly or impliedly establish the arbitration as a condition precedent. Said reciprocal covenant No. 7 reads: 7. Subject to the provisions as to arbitration, hereinbefore appearing, it is mutually agreed that the courts of the City of Iloilo shall have jurisdiction of any and all judicial proceedings that may arise out of the contractual relations herein between the party of the first and the part is of the second part. The expression "subject to the provisions as to arbitration, hereinbefore appearing" does not declare such to be a condition precedent. This phrase does not read "subject to the arbitration," but "subject to the provisions as to arbitration hereinbefore appearing." And, which are these "provisions as to arbitration hereinbefore appearing?" Undoubtedly clauses 23 and 14 quoted above, which do not make arbitration a condition precedent. We find no merit in the first assignment of error. The second raises the most important question in this controversy, to wit: Whether or not the defendant was obliged to supply the plaintiff which cars gratuitously for cane. The Central, of course, bound itself according to the contract exhibit A in clause 3 of the "Covenant by Mill," as follows: 3. That it will construct and thereafter maintain and operate during the term of this agreement a steam or motor railway, or both, for plantation use in transporting sugar cane, sugar and fertilizer, as near the center of the can ands as to contour of the lands will permit paying due attention to grades and curves; that it will also construct branch lines at such points as may be necessary where the present plantations are of such shape that the main line cannot run approximately through the center of said plantations, free of charge to the Planters, and will properly equip said railway with locomotives or motors and cars, and will further construct a branch line from the main railway line, mill and warehouses to the before mentioned wharf and will further construct yard accomodations near the sugar mill. All steam locomotives shall be provided which effective spark arresters. The railway shall be constructed upon suitable and properly located right-of-way, through all plantations so as to give, as far as practicable, to each plantations equal benefit thereof; said right-of-way to b two and one- half meters in width on either said from the center of track on both main line and switches and branches. By this covenant, the defendant, the defendant bound itself to construct branch lines of the railway at such points on the estate as might be necessary, but said clause No. 3 can hardly be construed to bind the defendant to gratuitously supply the plaintiff with cars to transport cane from his fields to the branch lines agreed upon on its estate. But on March 18, 1916, the defendant company, through its manager Mr. F. J. Bell, addressed the following communication to the plaintiff: DEAR SIR: In reply to yours of March 15th. Yesterday I tried to come out to San Antonio to see you but the railway was full of cars of San Jose and I could not get by with my car. I will try again as soon as I finish shipping sugar. The steamer is expected today. I had a switch built in the big cut on San Antonio for loading your cane near the boundary of Santa Cruz. will not this sufficient? We have no another switch here and I hope you can get along with the 3 you now have. Some of the planters are now using short switches made of 16-lb. portable track. These can be placed on the main line at any place and cars run off into the field and loaded. I think one on your hacienda would repay you in one season. The rain record can wait. Sincerely yours, SAN CARLOS MILLING CO., LTD. (Sgd.) F.J. BELL "Manager" It is suggested to the plaintiff in this letter that he install a 16-lb. rail portable track switch, to be used in connection with the main line, so the cars may run on it. It is not suggested that he purchase cars, and the letter implies that the cars mentioned therein belong to the defendant. As a result of this suggestion, the plaintiff bought a portable track which cost him about P10,000, and after the track was laid, the defendant began to use it without comment or objection from the latter, nor payment of any indemnity for over four years. With this letter Exhibit D, and its conduct in regard to the same, the defendant deliberately and intentionally induced the plaintiff to believe that by the latter purchasing the said portable track, the defendant would allow the free use of its cars upon said track, thus inducing the plaintiff to act in reliance on such belief, that is, to purchase such portable track, as in fact he did and laid it and used it without payment, the cars belonging to the defendant. This is an estoppel, and defendant cannot be permitted to gainsay its own acts and agreement. The defendant cannot now demand payment of the plaintiff for such use of the cars. And this is so, not because the fact of having supplied them was an act of pure liberality, to which having once started it, the defendant was forever bound, which would be unreasonable, but because the act of providing such cars was, under the circumstances of the case, of compliance of an obligation to which defendant is bound on account of having induced the plaintiff to believe, and to act and incur expenses on the strenght of this belief. The question of whether or not the plaintiff was under the necessity of first showing a cooperative spirit and conduct, does not affect the right which he thus acquired of using the cars in question gratuitously. We do not find sufficient reason to support the second assignment of error. The point raised in the third assignment of error is a consequence of the second. If the plaintiff was entitled, as we have said, to use the cars gratuitously, the defendant has no right to demand any payment from him for the use of said cars. The other assignments of error are consequences of the preceding ones. We find nothing in the record to serve as a legal and sufficient bar to plaintiff's action against the defendant for the delivery of the sugar in question, or its value. A discussion as to the retention of this deposit to apply upon what is due by reason thereof made in the judgment appealed from, is here necessary. The parties do not raise this question in the present instance. Furthermore, it has not been proven that the plaintiff owes the defendant anything by reason of such deposit. The judgment appealed from is hereby affirmed with the costs of this instance against the appellant. So ordered. Johnson, Street and Villamor, JJ., concur.
G.R. Nos. L-26216 and 26217 March 5, 1927 MONICO PUENTEBELLA, ET AL., plaintiffs-appellants, vs. NEGROS COAL CO., LTD., ET AL., defendants-appellants. H. V. Bamberger and Simeon Bitanga for plaintiffs-appellants. Eliseo Hervas for defendants-appellants. OSTRAND, J .: These are appeals by both parties from the following decision of the Court of First Instance of Occidental Negros: Due to the close connection between these two cases, they were tried jointly by agreement of the parties. They are actions for there recovery of damages for the sum of P50,000 and P40,000, respectively. It is alleged that the plaintiffs, having bound themselves to plant sugar cane which the defendants, in turn, promised to mill in a sugar central which they were to erect, complied with their contract, but the latter did not erect the central in due time, this delay causing the former to lose all of the said crop. It is further prayed that the contracts executed for that purpose be cancelled. It is alleged in the answer of the defendants that the Negros Coal Co., Ltd., was dissolved on June 16, 1923, by an order of the Court of First Instance of Iloilo, but that its rights, actions and obligations were placed in charge of the commercial firm of Hijos de I. de la Rama & Co., of which the defendant Esteban de la Rama is the manager; that due to force majeure, fortuitous events, and other circumstances independent of the will of the defendants, they were unable to complete the construction of the sugar central within due time and that the plaintiffs, after the construction of the central, refused to mill their cane and did nothing to lessen their losses. In the first case, they presented a counterclaim for P18,000 in damages for violation of the milling contract, and a cross- complaint for the foreclosure of the mortgage credits against Juliana Puentebella Vda. De Ferrer, for the sum of P39,114.63 and a penalty of P5,867.19; against Pedro Ferrer, for the sum of P19,557.30, and against Francisco Ferrer for the sum of P19,557.30, plus P2,933.59 for attorney's fees and expenses of litigation. In the second case, they likewise presented a counterclaim of P1,800 as damages for violation of the milling contract, and a cross-complaint for the foreclosure of the mortgage credit for the sum of P44,169.90, plus a penalty of P6,625.48. And, moreover, in the first case it is alleged as a special defense, that it having been agreed in the contract upon which the plaintiffs base their action, that before commencing any litigation they would submit their differences to arbitrators, the plaintiffs have done nothing to comply with this stipulation. Indeed, paragraph 17 of the contract, Exhibit A, reads as follows: "That they shall submit each and every one of the differences that may arise between the party of the first part and the party of the second part to the decision of arbitrators, two of whom shall be selected by the party of the first part and two by the party of the second part, who, in case of a disagreement, shall select a fifth arbitrator, and they shall respect and abide by the decision of said arbitrators or any three of them, as the case may be." As may be seen, this clause states absolutely, and not as a mere condition precedent to judicial action, that all differences between the contracting parties shall be submitted to arbitrators, who decision the parties shall respect and abide by, and the clause is, therefore, void. (Rudolph Wahl & Co. vs. Donaldson, Sims & Co., 2 Phil., 301, and Teodoro Vega vs. San Carlos Milling Co., Ltd., G.R. No. 21549, promulgated October 23, 1924.) This is on one hand, while on the other are the documents, Exhibits 19, 20 and 21 executed separately by the plaintiffs on the same date as Exhibit A, all representing mortgage loans, and with the exception of Exhibit 20, they further more contain a stipulation on the part of Hijos de I. dela Rama to finance the farm laborers of the plaintiffs and to mill the cane in the sugar central of the Negros Coal Co., Ltd., but contain no agreement to submit the differences that might arise between the parties to arbitrators. These documents constitute a transaction of binding force, because they define the duty and obligation of each party, which is not the case in Exhibit A, in which an option is left to the plaintiffs to miss or not to mill their sugar cane in said central because, as may be inferred from its context, the purpose was only to obtain, as the Negros Coal Co., Ltd., did obtain, the right of way on the plaintiffs' land. At the trial of these cases the parties submitted a stipulation of facts, paragraph 5 of which, literally, reads as follows: "That the partnership denominated "Hijos de I. de la Rama" was organized in the 1907 for a period of ten years; that said period having expired in 1917, Esteban de la Rama was appointed liquidator of the property of the partnership by agreement between the members; that after the liquidation had commenced, and before the year 1920, Esteban de la Rama bought all the rights of his copartners in the property of the said firm in liquidation, to be paid in installments, with the right to use the firm name, but with the obligation no to dispose of the property of the firm in liquidation while the price stipulated in the contract of sale of rights remained unpaid;" Esteban de la Rama being, therefore, according to this agreement, the sole owner of the firm of Hijos de I. de la Rama, and having taken over the rights, actions and obligations of the Negros Coal Co., Ltd., as alleged in the first paragraph of the answer, it appears that he is at present in possession of all the rights, actions and obligations which originated from contractual relations entered into both cases by the plaintiffs on the one side and the, then, corporation, known as the Negros Coal Co., Ltd., and the Hijos de I. de la Rama on the other, by virtue of the documents, Exhibits A, B, 19, 20 and 21. On March 7, 1924, after the plaintiffs had filed their complaint in case No. 2911, the plaintiff Pedro Ferrer died, and intestate proceedings having been instituted, the court, upon motion, and under date of August 23, 1924, ordered the substitution, in this case, of the deceased Pedro Ferrer by Francisco Ferrer, judicial administrator of his estate. Exhibit A is a contract executed in Iloilo by Esteban de la Rama, in his capacity as President of the Negros Coal Co., Ltd., on the one hand, and by Juliana Puentebella, Pedro Ferrer and Francisco Ferrer on the other, which contract contains, among other things, a stipulation that the party of the first part shall erect a sugar central in the sitio denominated Labilabi, Escalante, Occidental Negros, with a railway across the land of the party of the second part for the transportation of sugar cane to the central, the said party of the second part binding itself to mill the sugar cane in said central, receiving 45 per cent of the total amount of the sugar manufactured; and the party of the second part grants an easement of way on their land to the party of the first part and, at its option, 'to mill or not to mill' its cane in the said sugar central. Exhibits 19, 20 and 21, as has already been stated, are contracts of mortgage loan executed separately, the first by Juliana Puentebella, the second by Pedro Ferrer and the third by Francisco Ferrer, as debtors, and by the Hijos de I. dela Rama, as creditor in each of said contract, it being further stipulated in the first and the third contract that the loans were to be used exclusively in the production of sugar cane on the mortgaged land; that the mortgagors bound themselves to mill their sugar cane every year in course of construction, the central to receive 45 per cent of the total sugar manufactured from said cane, and that the amounts borrowed should be amortized by an annual payments during ten agricultural harvests; and while, as has been said, Exhibit 20 is simply a mortgage loan by reason of its date, notwithstanding that it is the same as that of Exhibits A, 19 and 21, or July 23, 1920, from the date of the notarial acknowledgment in connection with Exhibit A, executed jointly by the plaintiffs in case No. 2911, it can be inferred that this loan, as the others, was made by the commercial firm of Hijos de I. de la Rama for the purpose of financing the haciendas of the plaintiffs for the cultivation of sugar cane and to supply the sugar central of the Negros Coal Co., Ltd. Exhibit B executed on June 17, 1920, by and between Monico and Luis Puentebella on the one hand and Hijos de I. de la Rama on the other, is practically the same as Exhibits 19, and 21, and provides for a mortgage loan for agricultural purposes and milling in said central, but with the following additional clause: In case the proposed sugar central of the Negros Coal Co., Ltd., is not in position the first year to mill the sugar cane of the mortgagor in time, the mortgagee binds itself to furnish the mortgagor with the sum of from P20,000 to P pesos, Philippine currency, for the erection, under the supervision of the mortgagors, of a 12-horse-power mill for grinding muscovado sugar, and to install and equip the same with all the necessary material for the operation and milling of muscovado sugar; in that case of their sugar cane planted in Jonobjonob, Escalante, Occidental Negros, and the said mortagagees will receive one-third of the sugar manufactured by the mortgagors in consideration of all of the foregoing. By virtue of said contracts A, B, 19, 20 and 21, all of the plaintiffs in both cases tilled the mortgaged land and planted sugar cane during the months of September, October, November and December of 1920 and January of 1921 and, at about the time the cane was ripe Monico Puentebella at various times advised De la Rama, by letter, that his cane was ripening and he, therefore, demanded the erection of a mill for muscovado sugar in accordance with the agreement in the clause quoted from Exhibit B, which brought forth the following reply: PROGRESO 28, ILOILO, March 29, 1921 MR. MONICO PUENTEBELLA Bacolod, Occidental Negros MY DEAR SIR: Replying to your letter of the 25th inst. which I have just received, I wish to state the following: That the Escalante Central will be erected; in fact, it is also wish to state that about two weeks ago all of the plans of said central were forwarded to Mr. Fortunato Fuentes, and that long ago all of the bricks, both common and fireproofs, as well as the cement and lime were sent there. Therefore, there is no need for you to worry about your sugar cane planted in Cervantes, for I have more interest than you in milling it in order to recover the P30,000 which I have advanced to you for said purpose. Very respectfully, E. DE LA RAMA Mrs. Juliana Puentebella, in company with her son Francisco Ferrer, also made a trip to Iloilo in March, 1922, for a conference with Esteban de la Rama and to advise him that their cane, as well as the cane of her sons Pedro and Francisco was ripe and some of it over-ripe, and asked permission to mill it in the San Carlos sugar Central, Occidental Negros, in view of the fact that neither the sugar central of the Negros Coal Co., Ltd., nor the railway had been constructed, but Mr. De la Rama laid down certain conditions which the petitioner considered burdensome; so nothing was done about milling the cane in the San Carlos Central. Esteban de la Rama while testifying concerning the petition of Mr. Monico Puentebella for the construction of a muscovado sugar mill , said: For various reasons. Because when Mr. Monico Puentebella required me to comply with this clause of the contract, he did so at a time when I was building the central and I figured that the machinery would be installed in my mill, as work had already been begun and Mr. Fuentes was looking for the machinery and was to install it before Mr. Puentebella's cane had ripened and the P20,000 would not be needed. In the second place, before that date, when Mr. Puentebella demanded the P20,000 of me, I had received a letter from the Bank of the Philippine Islands. From the contents of the letter received from the Bank of the Philippine Islands, I was of the opinion that said Bank was the owner of the land and held Torrens title thereto, and that it did not understand why Mr. Puentebella was cultivating this land which belonged to it without its permission, and that it did not understand why Mr. Puentebella to make a contract with it; and as Mr. Puentebello refused to do so, I thought it useless for us to meddle with a property which was not ours. It having been positively stated in Exhibit B that the mortgagors Monico and Luis Puentebella are the undivided coowners with the Hijos de I. de le Rama and the Bank of the Philippine Islands of the mortgaged property, the last statement of Esteban de la Rama, in his testimony aboved quoted, that he considered it useless to build the mill on the said land, appears to be merely an excuse for not voluntarily complying with his obligation, and his estimate as to the completion of the central which he was building having been made by himself alone, and without the concurrence of the other contracting party, is not a sufficient reason for excusing him, for the fulfillment of a contract cannot be left to the will of one of the contracting parties. The result was that on account of the said reasoning of Mr. de la Rama with respect to the Puentebellas and his demands upon the Ferrers, the cane belonging to both of them was left in the fields without being milled, and with the exception of a small quantity belonging to the Puentebellas which they had sent to the San Carlos Central for milling was drying out and deteriorating and became a complete loss. It is alleged, nevertheless, that the delay in the construction of the central was due to force majeure, fortuitous events and other circumstances independent of the will of the defendants, in support of which they attempted to prove that there had been a strike in the factory of George Fletcher & Co., Ltd., Derby, England, from whom they had ordered their machinery, which strike delayed matters, but the evidence in this particular respect consists of reports from the agent of the defunct firm of the Cooper Company, with offices in the Philippine Islands, through which company the said machinery was contracted for, and, naturally, as it comes from an interested party and is, moreover, hearsay, it is of little or no value. And even if it be considered competent evidence, the total loss of the plaintiffs' crop cannot be attributed to force majeure, fortuitous events or other circumstances, for it was provided in the construction of the central, a mill would be furnished for the manufacture of muscovado sugar which would not only mill the cane of the Puentebellas, but also that of the defendant Esteban de la Rama, and the same would have been done with the cane of the Ferrers, because their lands adjoin. It is also claimed that the frequent rains, inundations and crumbling of the earth considerably interrupted the construction of the earth considerably interrupted the construction of the central, and, judging from Exhibits 6-A to 6-X, which are all letters from the person in charge of its construction, and which include the period from November 5, 1920 to January 22, 1922, approximately one year and four months, it rained almost incessantly, which appears to have been an unusual occurrence of which the Weather Bureau should have had knowledge, and whose opinion would have been more impartial. Conceding, however, a certain value to this contention, it would, nevertheless, seem that these circumstances should have caused Mr. De la Rama to take all the necessary precautions for the purpose of insuring the milling of the plaintiffs' crop, especially so as it appears from the following letter that he himself foresaw losses: February 18, 1921 THE COOPER COMPANY Iloilo, Iloilo , P. I. MY DEAR SIRS: In view of the long delay in the manufacture of the equipment which we have contracted for our central at Escalante, a delay which is almost double the time specified in the contract and which is causing us a great loss in not being able to mill at present, we have decided to cancel the order for said equipment, and you will do us the favor of returning the P50,000 which we advanced at the time of signing the contract, together with the interest thereon. Yours sincerely, HIJOS DE I. DE LA RAMA BY E. DE LA RAMA It is likewise alleged that after the central had been constructed the plaintiffs refused to mill their cane there and did nothing to minimized their losses, but the delay in constructing the said central having been expressly admitted in their previous defense, the conclusion is that it was completed after the season was over and the cane was over-ripe, for which reason, although the defendants were notified that the central would begin to operate within the first fifteen days of September, 1922, they cease to cut their cane, because it was already useless and dried out as stated in the following letters of the plaintiffs: BACOLOD, September 2, 1922. Messrs. HIJOS DE I. DE LA RAMA P. O. Box 298 Iloilo, Iloilo MY DEAR SIRS: In answer to your letter of the 26th of last month, I have to inform you that my cane is completely dried out and useless for milling purposes. You are not ignorant of cause of this unfortunate result of my efforts in planting cane on the Cervantes Estate, for I have not even been able to produce muscovado sugar from it on account of your failure to comply with that part of our contract which binds you to make us a further loan of P20,000 in order to obtain machinery for that purpose in case of delay in the completion of your central, as, in fact, was the case. This advice from you has come extremely late and at a time when it is impossible to remedy the situation, as it is impossible to revive dead cane. You know very well that these disastrous consequences of my affairs are due to no fault of mine, but are due to your failure in not complying with your part. Very respectfully, ESCALANTE, OCCIDENTAL NEGROS, November 2, 1925
MR. FORTUNATO FUENTES Manager of the H. I. R. Central Labilabi, Escalante, Occidental Negros. MY DEAR SIR: In answer to your favor of September 28th last, I must advise you that the fields planted with sugar cane, according to the terms of our contract to mill it in the H. I. R. Central, are completely dead on account of not having been milled in said central at the proper time, for which reason it has been impossible to plant again, the non-fulfillment of said contract having caused unconsiderable damage. Very respectfully, FRANCISCO FERRER Administrator of J. Vda. de Ferrer and Pedro Ferrer It is said in these exhibits that the cane was useless, dried out and dead, which fact is proven by Exhibits D, E and F, communications to Monico Puentebella from the San Carlos Central to which Central, as already stated, Mr. Puentebella sent a few tons of cane for milling, which letters, dated from April 2 to 9, 1922, imply that they sent the cane there not later than the month of March, and, as may be seen from the letters, the milling was a failure and a complete loss, because said cane was already over-ripe and because it was sent from Escalante to the municipality of San Carlos for shipment, which is the only means of transportation, even today, between the said towns, and very costly; and considering that the cane which was sent to idea may be formed of the condition of the plaintiffs' sugar- cane fields in said month of April, and so disastrous was this shipment that, according to the testimony of Luis Puentebella, the share of the agriculturist was not even sufficient to cover the expenses. On the other hand, Francisco Ferrer, after the conference of him and his mother with Esteban de la Rama, attempted to mill his cane in the sugar mill on the neighbor boring estate belonging to Rosario Sanz, but the latter refused to do so because the season was over. If therefore, the plaintiffs' cane was over-ripe in March, 1922 it seems certain that when they were notified on September 28, 1922 (Exhibit P addressed to the Ferrers) and on August 26, 1922 (Exhibit 16 addressed to Monico to mill next September), or when the central commenced to produce sugar on September 15, 1922, in accordance with the stipulation of facts, the cane at the end of this period and useless for milling, and moreover if in March, according to the result of the milling at the San Carlos, it did not given an average yield and was milled at a loss, we are more than justified in saying that five and a half months afterwards the yield would have been almost nothing. The witnesses for the defendants testified, however, that cane on virgin land used for the cultivation of sugar cane, lasts about eighteen months and Mr. De la Rama stretched it to 24 months, which implies that the plaintiffs cane was still in condition to be milled when the central commenced to operate in September, 1922, because according to the evidence, the plaintiffs' cane was planted in September, October, November and December, 1920; and in January, 1921; but applying this same theory to the plaintiffs first plantings, in April, 1922, they twenty months old, or more than eighteen, for which reason, were sent to San Carlos in March they could no longer yield an average production, as stated by the Central, and, naturally, the best evidence as to whether the cane is still use full is not the theory of how long it will last, but the result of the milling. In "Cane Sugar," by Noel Deerr, page 29, it is said: The harvest season generally extends over a period of four to six months and exceptionally in the arid localities may be continued over the whole year with such stops only as are required for overhaul and repairs. At the beginning of the crop an unripe cane of lower sugar content is harvested; the percentage of sugar gradually increases and is usually at a maximum in the third and fourth months of harvest, after which it increases as the cane becomes over-ripe. Taking Cuba as an example, in December the cane will contain from 10 per cent toll per cent of sugar, the maximum of 14-15 per cent being obtained in March and April, after which a fall occurs, which is very rapid if the crop is prolonged after the seasonal mid-year rains fall. It is easy to see that the combined questions of factory capacity, capital lost, duration of harvest, and yield per cent on cane form a most important economic problem, which is usually further complicated by a deficiency in the labour supply. Early observations, later confirmed by chemists upon the establishment of sugar centrals in this province, coincide with Mr. Deerr's theory, because, after the cane is ripe, what is called a "reversion" takes place in the juice or the saccharose is converted into glucose, which takes place very rapidly, the cane becoming more fibrous each time, until it finally dries up and dies. The plaintiffs Ferrer claim to have lost 120 lacsas of sugar cane, and the plaintiffs Puentebella, allege a loss of 115 lacsas (a lacsa a unit of 10,000 sugar-cane plants) which they both testified having planted in their respective fields. In regard to the former's plants in the affidavit of Antonio M. Lizares, then an employee of Esteban de la Rama, defendants' Exhibit 4, it is said that the witness inspected the Canquinto Estate of Francisco Ferrer and found about 60 lacsas of stalks which, according to his calculation, should produce from 25 to 30 piculs of sugar each, which corroborates the testimony of Francisco Ferrer that he planted 70 lacsas on the Canquinto Estate, and does to contradict the testimony of this same witness that his mother, Juliana Puentebella, planted thirty lacsas on the Mamposod land, while his brother planted twenty lacsas on the Ampanan land, making a total of 120 lacsas, which lands in Canquinto, Mamposod and Ampanan, according to the testimony of Francisco Ferrer himself, are respectively, those mortgaged by them to the Hijos de I. de la Rama by virtue of the documents, Exhibits 19, 20 and 21 and that, according to the stipulations made in Exhibits 19, and 21 and the interpretation that has been given to Exhibit 20, the mortgagors bound themselves to plant sugar cane. This testimony of Francisco Ferrer is also corroborated by Rosario Sanz, who testified having seen 100 lacsas of sugar cane on Ferrer's land in March, 1922, which were over-ripe, but if milled in said month would, nevertheless, have produced 40 piculs of sugar per lacsa, and would have produced 50 piculs had they been milled at the proper time. In regard to the cane of the plaintiffs Puentebella, it appears that in March, 1922, they asked the witness Simeon S. de Paula to inspect their fields. He testified not less than 100 lacsas and which might have produced 50 when it was ripe, but they were then going out of season. In exhibit 5, the affidavit of Gerardo Alunan, Uldarico Suison and Antonio Lizares, them employees of Mr. De la Rama, it is stated that they went to a place called Baldosa where they received the information that there was a field of 17,000 plants, and that they were informed at the Cervantes Estate that 48 lacsas of sugar-cane plants had been brought from Cadiz and had been planted in five fields, and that more than 7,000 plants were brought from Jonobjonob, making, therefore, a total of fifty lacsas and four thousand sugar cane plants. But, it may be seen, that all that is stated in this affidavit in regard to the quantity of plants is mere hearsay and is not a act personally observed by the informants. It does not controvert the estimate of Simeon S. de Paula, nor of Dionisio Patrata who accompanied the former on the inspection of the fields of the plaintiffs Puentebella, in March, 1922, who likewise estimated that there were 100 lacsas of cane on the Cervantes Estate, which should have produced 5,000 piculs of sugar had the cane been milled in due time; nor does it contradict the testimony if Jose Alemani to the effect that at a place higher up adjoining his land, the plaintiffs then had three fields planted with thirteen or fourteen lacsas. It is true that Esteban de la Rama testified that the Puentebella fields visited by him contained only about seven lacsas, but it appears that this assertion is of little value, as it may be inferred that his visit did not extend to all of the planted fields; besides, his estimate does not come anywhere near that contained in the affidavit of his representatives, Exhibit 5. Antonio M. Lizares, in his affidavit, Exhibit 4, estimates an average of thirty piculs of sugar per lacsa from Ferrer's cane, but made no estimate in his affidavit Exhibit 5, in regard to Puentebella's cane. But from this estimate , as compared with that of German Carballo, Simeon S. de Paula, Rosario Sanz, and Dionisio Patrata, all sugar growers, some with considerable experience in the cultivation of sugar cane, who also inspected the plaintiffs' cane , and who unanimously stated that a lacsa of cane produces 50 piculs of sugar, none of them having a any interest in these cases nor any proven motives for favoring or opposing any of the parties, it seems that the preponderance of judgment is in favor of the latter. Consequently, the 120 lacsas of sugar-cane stalks belonging to the plaintiffs Ferrer should have produced 6,000 piculs of sugar, from which 45 per cent must be deducted which, in accordance with the contracts, belongs to the central, leaving a balance of 3,300 piculs. The 115 lacsas of the plaintiffs Puentebella should have produced 5,750 piculs of sugar, of which 45 per cent belongs to the central, leaving a balance of 3,162.50 piculs. The parties having agreed in the stipulation of facts that the price of the 1921-22 crop was P10.50 a picul of centrifugal sugar, the plaintiffs Ferrer should have obtained, as a product, P34,650 and the Puentebellas P33,206.25. From these amounts must be deducted the expenses of raising the crop and putting the sugar on the market in Iloilo, at the rate of P1.50 per picul, or P9,000 and P8,625, respectively, leaving a net balance, therefore, of P25,650 for the former and P24,631.25 for the latter. The plaintiffs allege, furthermore, that on account of not having harvested their crops, they could not prepare their fields for the cultivation of the ratoon crop for the agricultural year of 1922-23, an having lost the crop for that year, they pray for damages for such loss. The defendants likewise set up a counterclaim for damages for the loss of the central's share of the plaintiffs's crop for the agricultural year of 1922-1923 by reason of the plaintiffs' failure to prepare their fields. The plaintiffs, not having prepared their fields for the ratoon crops or to cultivate the same, the ratoons requiring as much cultivation as new planting, nor performed any work, nor invested any capital, it is obvious that they are not entitled to any indemnity for claim any share in a supposed crop of 1922-23, nor recover by the defendants' own acts in violating their contracts with the plaintiffs. In support of the defendants' counterclaim in regard to the plaintiffs Ferrer, there were presented, Exhibit 19, which is a mortgage to secure a loan for the sum of P25,000, with interest at 12 per cent per annum, payable annually, during ten agricultural years, executed by the plaintiff Juliana Puentebella Vda. de Ferrer, in favor or that the debtor shall pay 15 per cent of such amounts as may be claimed, in case of litigation, for attorney's fees and expenses; Exhibit 20, which is a mortgage to secure per annum, payable within ten years, executed by the deceased Pedro Ferrer in favor of the Hijos de I. de la Rama; and Exhibit 21, which is also a mortgage for the sum of P12,500, with interest at 12 percent per annum, likewise payable annually during ten agricultural years, and which mortgage was executed by Francisco Ferrer in favor of the Hijos de I. de la Rama it having been furthermore stipulated therein that, in case of litigation, the debtor should pay 15 per cent of such amounts as may be claimed, for attorney's fees and the expenses of litigation; and in regard to the plaintiffs Puentebella, Exhibit B was introduced which is a mortgage for the sum of P30,000 with interest at 12 per cent per annum, payable annually during twenty agricultural years, it having been further stipulated that in case of litigation, the debtor shall pay 15 per cent of such amounts as may claimed, for attorney's fees and expenses; and Exhibit 18, which is a statement of the partial receipts and payments made by the plaintiffs, to wit:
1920 Nature of transaction Debit Credit Balance June 18, Received on account ......................... 5,000.00 ............ 5,000 July 2, Received on account ......................... 5,000.00 ............ 10,000 July 31, Double plough .................................... 323.00 ............ 10,323 Aug. 8, 1 tractor ................................................. 3,978.00 ............ 14,301 Aug. 23, Received on account ......................... 5,000.00 ............ 19,301 Sept. 13, Received on account ......................... 2,500.00 ............ 21,801 Sept. 22, Received on account ......................... 1,400.00 ............ 23,201 Oct. 4, Received on account ......................... 900.00 ............ 24,101 Oct. 18, Received on account ......................... 2,000.00 ............ 26,101 Nov. 17, Received on account ......................... 2,000.00 ............ 28,101 Nov. 17, Received on account ......................... ............ 500.00 28,601 Received on account ......................... ............ 500.00 28,101 Received on account ......................... 323.00 ............ 27,778 Dec. 8, Received on account ......................... 2,222.00 ............ 30,000 1921
Received on account ......................... 1,590.00 ............ 31,590
It will be observed that the installments in these contracts are not due, but as the plaintiffs themselves, in their respective complaints, ask for the cancellation of the contracts, it is clear that they have tacitly renounce the terms agreed upon. It is not believed, however, that the counterclaimants are entitled to any amount for attorney's fees and expenses of litigation as stipulated in the contracts Exhibits B, 19 and 21, because these two cases having been brought by the plaintiffs for violation of said contracts by the defendants, it would not be equitable and just their non-fulfillment of the contracts being the determining cause of the actionto award them any amount for attorney's fees and expenses to defend these actions, which would not have arisen had the defendants been loyal to their contracted obligations. The mortgage loans earn interest at the rate of 12 per cent per annum, while the most that the defendants can be ordered to pay the plaintiffs on the amounts claimed by them is legal interest from the filing of the complaints herein, a circumstance which would place Mr. De la Rama in an advantageous position if the amounts claimed by the parties time the damages were caused. Such set-off is believed to be equitable because, as a matter of fact, were it not for the defendants' nonfulfillment of their obligations, said plaintiffs have lost their respective crops, or contracted the lost through the fault, delinquency, or violation of the contracts by their creditors themselves, which are legal causes, against the guilty party. In view of the foregoing, the following judgment is rendered.
In regard to the complaint in case No. 2911, (1) The defendant Esteban de la Rama is ordered to pay the plaintiffs the sum of P25,650, and the costs of this action; (2) In regard to the cross-complaint the plaintiffs are ordered to pay Esteban de la Rama, to wit: Juliana Vda. de Ferrer, the sum of P25,000, with interest at 12 per cent per annum from August 3, 1920, the date of the receipt of this amount (Exhibit 22); Pedro Ferrer, the sum of P12,500 with interest at 12 per cent per annum from August 3, 1920 (Exhibit 23), and Francisco Ferrer, the sum of P12,500, with interest at 12 per cent per annum from August 3, 1920 (Exhibit 24); (3) The counterclaim for damages is dismissed and it is ordered that the amounts awarded to the plaintiffs and the principal of the mortgage loan, which they are hereby ordered to pay, compensate each other proportionately up to the concurrent amount, said compensation to be effective as of April 1, 1922; and (4) It is ordered that the balance from the compensation be deposited with the court by the plaintiffs within three months from the date hereof, with the admonition that failing to do so the sale of the mortgaged property will be ordered and the proceeds thereof applied to the amount of this judgment with respect to the counterclaim. In regard to the complaint in case No. 2912, (1) The defendant Esteban de la Rama is ordered to pay the plaintiffs the sum of P24,581.25 and the costs of this action; (2) In regard to the cross-complaint, the plaintiffs are ordered to pay Esteban de la Rama the sum of P31,590, with interest at 12 percent per annum from the various dates of the partial receipts, as shown by Exhibit 18, quoted herein; (3) The counterclaim for damages is dismissed and it is ordered that the amounts awarded to the plaintiffs and the ordered to pay, compensate each other proportionately up to the concurrent amount, said compensation to be effective as of April 1, 1922. The plaintiffs under their first three assignments of error maintain that they are entitled to damages for the loss of the ratoon crop for the year 1923, but we agree with the court below that such damages are too remote. It is further to be noted that plaintiffs made no effort to reduce the loss for 1923 by cultivating the ratoons or by again planting the land to cane or other crops after the failure of the 1922 cane crop and it is elementary that a party injured by a breach of contract cannot recover damages for any loss which he might have avoided with ordinary care and reasonable expense. (Warren vs. Stoddard, 105 U. S., 224.) Assuming for the sake of the argument that the damages claimed were not too remote, there is no evidence sufficiently showing what the amount of the recoverable damages would have been if the plaintiffs had done their duty and sought to minimize the losses. The plaintiff-appellants' fourth assignment of error is evidently the result of carelessness in reading the appealed judgment and need not be discussed. The defendant-appellants present the following assignments of error: I. The court below committed an error in rendering judgment in case G.R. No. 26217 against Esteban de la Rama, ignoring the Negros Coal Co. II. The court below committed an error in holding that the defendants were obliged, by the terms of the contracts Exhibits A and B, to grind the plaintiffs' sugar cane in 1921. III. Even supposing that the defendants were obliged to grind the plaintiffs' cane in the central of the Negros Coal Company, the court below committed an error in holding the defendants liable for damages for not having completed the central in 1921. IV. The court below committed an error in not dismissing the complaint of Messrs. Ferrer (G.R. No. 26217), the plaintiffs not having complied with the condition precedent to submit their difference to arbitrators before filing their complaint. V. Even supposing that the defendants were liable for damages, the court below committed an error in ordering Esteban de la Rama to pay Messrs. Ferrer the sum of P25,650, and to Messrs. Puentebella the sum of P24,581.25, by way of damages. The questions raised by the assignments quoted are fully discussed in the decision of the court below and hardly require further elucidation. As to the first assignment, we may say, however, that aside from the fact that the Negros Coal Co., Ltd. has been dissolved and that De la Rama figures as its successor in interest and liabilities, it is further to be noted that the losses suffered by the plaintiffs were due to De la Rama's misleading representations and to his failure to fulfill his promises. In these circumstance, it was not error to give judgment for damages against him and not against the Negros Coal Co., Ltd. The fourth assignment of error is likewise without merit. The arbitration clause in paragraph 17 of the Ferrer contract, Exhibit A, expressly provides that the parties shall "abide by the decision of said arbitrators or any three of them, as he case may be." The clause does not merely to the courts; it provides for a final determination of legal rights by arbitration. In other words, an attempt was make to take the disputes between the parties out of the jurisdiction of the courts. An agreement to that effect is contrary to public policy and is not binding upon the parties. The defendant-appellants' other assignments of error relate only to questions of fact in regard to which the findings of the court below are fully sustained by the evidence. The judgment appealed from is affirmed without costs to any of the parties. So ordered. Johnson, Street, Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.