G.R. No. L-2152 - De Castro vs. Longa

The case involves two sets of plaintiffs/appellants—Simeona N. de Castro (with related parties) and Paz Diago de Castro (with related parties)—against the defendant and appellee, Jose G. Longa, the lessee.
The subject matter centers on contracts of lease concerning the Hacienda Biason in Bais, Negros Oriental, owned pro indiviso by the lessors and subject to usufruct rights which later terminated by the death of the usufructuary.

Both contracts covered a period of six agricultural years, from 1939–1940 up to and including 1944–1945.
A supplementary contract provided that the lessee would pay an advance sum (initially P3,000, later increased to P3,500) annually, which would be liquidated upon the sale of sugar.
The rental was fixed as 731 piculs of sugar per crop year per lessor share, with the contracts containing specific provisions concerning the delivery of rental in sugar and other conditions (e.g., delivery of vacant fields free from cogon grass and the posting of a P10,000 bond).

Jose G. Longa took possession of the hacienda and, for the crop years 1939–1940 and 1940–1941, paid his obligations by delivering sugar rentals via “quedans” issued by the Central Azucarera de Bais.
For the agricultural year 1941–1942:

The lessee was only able to mill a portion (1,319.92 piculs) of the total quota due to multiple factors.
Only a fraction of this, approximately 96.69 piculs for each of the appellants, was credited by the Central; however, no quedans were issued because the Inspector of the Philippine Sugar Administration was absent.

The stoppage of the sugar mill on May 1, 1942 by order of President Quezon aimed at preventing aid to the enemy.
Temporary laborers (“sacada”) abandoned the hacienda, and fear of enemy invasion further disrupted normal operations.

The appellants eventually renounced claims for rentals for certain crop years during the Japanese occupation, acknowledging that the Central was unable to mill the sugar cane during that period.

The defendant advanced a force majeure defense, arguing that his non-performance was due to war and the resultant Japanese occupation, which made compliance with the lease terms impossible.
Disputes arose on two main fronts:

Whether the defendant could be compelled to pay sugar rentals under conditions of war or force majeure.
Whether the rental should be calculated on the basis of the total assigned sugar quota of the hacienda versus the sugar actually produced.

During trial, attempts by the appellants to introduce parol evidence (notably, a deposition of Simeona M. de Castro) to prove an alleged verbal agreement altering liability were precluded by the lower court as inadmissible to vary the written contract.
Extra evidence and depositions were objected to on several technical grounds under the rules of court, including improper filing, failure of oral presentation, and issues regarding the deponent’s absence.

The lower court of Negros Occidental had absolved the defendant from liability, finding his noncompliance attributable to the war and force majeure circumstances.
The appellants, filing as a joint record on appeal, raised separate errors regarding:

The rejection of parol evidence intended to prove that the contract did not intend to bind the defendant during war.
The interpretation of the rental computation clause in the lease contract.

The central issue for the appellate court was whether the defendant could be held to pay the stipulated sugar rentals despite the disruptions caused by war or force majeure.

Whether the lessee, Jose G. Longa, can be legally compelled to pay the sugar rentals stipulated in the contracts of lease despite the occurrence of war or other acts of force majeure.
Whether the failure to deliver the rentals in the manner prescribed—due to halting of milling operations and other war-induced impediments—exonerates the defendant from liability under the lease agreements.
Whether the lower court erred in excluding parol evidence which the appellants sought to introduce in order to prove a verbal stipulation modifying the written contract in relation to obligations during war or force majeure.
Whether the contractual clause for rental computation should be interpreted on the basis of the total assigned sugar quota of Hacienda Biason or on the sugar actually produced and delivered.
Whether the defendant’s failure to post the stipulated bond (P10,000) constitutes a breach justifying a claim for damages, given that no timely demand was made for such performance.