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&
COMPANY,
INC.,
plaintiffappellant,
vs.
LEPANTO
CONSOLIDATED
MINING COMPANY, defendant-appellee.1966
Dec 17
SYLLABUS
Agency distinguished from lease service. -- In
agency, the agent exercises discretionary powers,
while in lease of service, the lessor (like a servant)
ordinarily performs only ministerial functions
On February 6, 1958, plaintiff brought this action
against defendant before the Court of First
Instance of Manila to recover certain sums of
money representing damages allegedly suffered
by the former in view of the refusal of the latter to
comply with the terms of a management contract
entered into between them on January 30, 1937,
including attorney's fees and costs.
Defendant in its answer denied the material
allegations of the complaint and set up certain
special defenses, among them, prescription and
laches, as bars against the institution of the
present action.
After trial, during which the parties presented
testimonial and numerous documentary evidence,
the court a quo rendered a decision dismissing the
complaint with costs. The court stated that it did
not
find
sufficient
evidence
to
establish
defendant's counterclaim and so it likewise
dismissed the same.
The present appeal was taken to this Court directly
by the plaintiff in view of the amount involved in
the case.
The facts of this case, as stated in the decision
appealed from, are hereunder quoted for purposes
of this decision:
"It appears that the suit involves an operating
agreement executed before World War II between
the plaintiff and the defendant whereby the former
operated and managed the mining properties
owned by the latter for a management fee of
P2,500.00 a month and a 10% participation in the
net profits resulting from the operation of the
mining properties. For brevity and convenience,
hereafter the plaintiff shall be referred to as
NIELSON and the defendant, LEPANTO.
"The antecedents of the case are: The contract in
question (Exhibit 'C') was made by the parties on
January 30, 1937 for a period of five (5) years. In
the latter part of 1941, the parties agreed to
renew the contract for another period of five (5)
years, but in the meantime, the Pacific War broke
out in December, 1941.
"In January, 1942 operation of the mining
properties was disrupted on account of the war. In
February of 1942, the mill, power plant, supplies
on hand, equipment, concentrates on hand and
mines, were destroyed upon orders of the United
States Army, to prevent their utilization by the
invading Japanese Army. The Japanese forces
thereafter occupied the mining properties,
TOTAL
P14,000,000.00"
According to the terms of the management
contract as modified, appellant is entitled to 10%
of the P14,000,000.00 cash dividends that had
been distributed, as stated in the abovementioned report, or the sum of P1,400,000.00.
With regard to the second category, the stock
dividends declared by Lepanto during the period of
extension of the contract are: On November 28,
1949, the stock dividend declared was 50% of the
outstanding authorized capital of P2,000,000.00 of
the
company,
or
stock
dividends
worth
P1,000,000.00; and on August 22, 1950, the stock
dividend declared was 66-2/3% of the standing
authorized capital of P3,000,000.00 of the
company, or stock dividends worth P2,000,000.00.
41
Appellant's claim that it should be given 10% of
the cash value of said stock dividends with interest
thereon at 6% from February 6, 1958 cannot be
granted for that would not be in accordance with
the management contract which entitles Nielson
to 10% of any dividends declared paid, when and
as paid. Nielson, therefore, is entitled to 10% of
the stock dividends and to the fruits that may
have accrued to said stock dividends pursuant to