Case Digest (G.R. No. L-37937)
Facts:
In Reynaldo Labayen et al. v. Talisay-Silay Milling Co., Inc. (G.R. No. 29298, December 15, 1928), appellant Reynaldo Labayen and a co‐owner of Hacienda Dos Hermanos in Talisay, Occidental Negros entered into a standard milling contract with appellee Talisay-Silay Milling Co., Inc. on August 27, 1919 for the grinding of sugar cane during the 1920–1921 harvest. Under Clause Third, the miller agreed, “whenever the contour of the land, the curves, and elevations permit,” to build and maintain a steam or motor railway reaching within one mile of the plantation’s boundary, complete with locomotives, wagons, spark arresters, switches, and a wharf branch. Clause Fifth bound the planter to plant at least half his land in cane annually, while Clause Tenth provided that failure to secure reasonable rights‐of‐way would suspend the contract without liability. In practice, the existing railroad terminated at Hacienda Esmeralda No. 2, four kilometers short of Dos Hermanos, due to steep gradesCase Digest (G.R. No. L-37937)
Facts:
- Parties and Contract Formation
- Reynaldo Labayen and co-owner of Hacienda Dos Hermanos (plaintiffs) vs. Talisay-Silay Milling Co., Inc. (defendant).
- Contract executed on August 27, 1919, for milling plaintiff’s sugar cane crop (1920–1921 season).
- Key Contractual Provisions
- Covenants of “La Central”: build and maintain a permanent railroad to reach plantations within one mile if terrain permits.
- Producer obligations and mutual clauses: producer to plant and deliver cane; clause 10 allows suspension if rights-of-way cannot be secured.
- Non-Performance and Physical Conditions
- Railroad extended only to Hacienda Esmeralda No. 2, stopping four kilometers short of Dos Hermanos.
- Engineering evidence: extension would require 4.84–7% grade, 26 curves, cost ~P80,000, and present dangerous conditions.
- Right-of-Way Issue
- Extension route required passage through Esteban de la Rama’s haciendas.
- De la Rama withheld permission until 1924, preventing construction during the contract period.
Issues:
- Breach and Excuse for Non-Construction
- Whether Talisay-Silay Milling breached its promise to extend the railroad.
- Whether contractual terrain and rights-of-way conditions excuse non-performance.
- Applicability of Impossibility Doctrine
- Whether physical danger and cost constitute legal or factual impossibility.
- Whether clause 10’s suspension provision applies due to inability to secure right-of-way.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)