G.R. No. L-2152 and L-2153. July 31, 1951.
SIMEONA N. DE CASTRO, ET AL., plaintiffs-appellants, vs. JOSE G. LONGA, defendant-appellee; PAZ DIAGO DE CASTRO, ET AL., plaintiffs-appellants, vs. JOSE G. LONGA, defendant-appellee.

FACTS

Two separate cases were tried jointly. Both involved contracts of lease executed on January 9, 1938, by co-owners of Hacienda Biason in Bais, Negros Oriental, in favor of the same lessee, Jose G. Longa, for six agricultural years (1939-1940 to 1944-1945). In G.R. No. L-2152 (Civil Case No. 478), the lessors (Simeona N. de Castro et al.) sought to recover unpaid rentals for the crop years 1940-1941 to 1944-1945, plus damages for alleged failure to return the hacienda in the agreed condition. In G.R. No. L-2153 (Civil Case No. 480), the lessor (Paz Diago de Castro) sought to recover 731 piculs of centrifugal sugar as rental for 1941-1942, plus damages, though she later renounced claims for 1942-1943 to 1944-1945 due to the Japanese occupation. The defendant pleaded force majeure due to war and Japanese occupation as a defense. The trial court absolved the defendant, prompting this appeal.

ISSUE

Whether the lessee, Jose G. Longa, can be compelled to pay the sugar rentals under the lease contracts despite the occurrence of war, enemy invasion, and occupation, or whether he can validly invoke force majeure as a defense to excuse non-performance.

RULING

The Supreme Court affirmed the trial court’s decision, holding that the defendant was excused from paying the rentals due to force majeure (war and enemy occupation). The Court ruled that:
1. The obligation to pay rentals was dependent on the actual production of sugar from the hacienda, which was allocated a specific quota. The lessee’s duty to pay was not an absolute obligation to deliver a fixed amount of sugar regardless of source, but was contingent upon milling the quota from the leased property.
2. For the 1941-1942 crop year, the lessee could only mill 1,319.92 piculs of sugar (out of a 9,081-picul quota) due to President Quezon’s order suspending milling to hinder the enemy war effort. The lessors’ share (96.69 piculs each) was credited by the Central Azucarera de Bais, though no quedans were issued due to the absence of the Philippine Sugar Administration inspector. This sugar was later sold by order of the Japanese Military Administration, and the proceeds were withdrawn by the lessors.
3. For the subsequent crop years (1942-1943 to 1944-1945), the Central could not operate due to enemy occupation, making sugar production impossible. Thus, the lessee’s failure to pay rentals was due to fortuitous events beyond his control.
4. The lessee’s failure to post a P10,000 bond as required by the contract did not warrant damages, as the lessors did not demand it for nearly nine years and the lessee had complied faithfully for the first two crop years.
The Court concluded that the defendant was not liable for the claimed rentals and damages. Costs were awarded against the appellants.