Facts:

The case revolves around the Pampanga Sugar Mills (hereinafter referred to as "the plaintiff"), which filed a complaint on May 23, 1924, in the Court of First Instance of Manila against M. Chong Tiaopoc, Luis Vismanos, and Jao Pi (the "defendant vendees") and the Union Guarantee Co., Ltd. (the "defendant guarantor"). The plaintiff sought judgment ordering the defendant vendees to pay a total of P14,027.52, with legal interest, which represented the price of molasses they purchased under a contractual agreement. Additionally, the plaintiff wanted a similar judgment against the Union Guarantee Co. for any unpaid amount following the actions taken against the defendant vendees. In response to the complaint, the Union Guarantee Co., Ltd. filed an answer denying all allegations and sought dismissal of the complaint. The defendant vendees also answered, denying the allegations and presenting a counter-complaint for damages against the plaintiff.

The centr

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Facts:

Background of the Case

• Pampanga Sugar Mills, the plaintiff, entered into legal proceedings against multiple defendants: M. Chong Tiaopoc, Luis Vismanos, and Jao Pi, along with the Union Guarantee Co., Ltd.
• The complaint was filed on May 23, 1924, in the Court of First Instance of Manila, seeking monetary relief and costs, as well as other judicial remedies.

Pleadings and Procedural History

• The complaint sought:
• Payment of P14,027.52 by the individual defendants jointly and severally, with legal interest accruing from the date of filing.
• Against the Union Guarantee Co., Ltd., relief for any unpaid portion after proceeding against the defendants’ property.
• Costs and such other relief as may be proper under law.
• The Union Guarantee Co., Ltd. answered on June 27, 1924, denying each allegation while reserving the right to file a more complete answer.
• On July 29, 1924, M. Chong Tiaopoc and Luis Vismanos filed their answer, also denying every allegation, and introduced a special defense, counter-complaint, and cross-complaint.
• The plaintiff, in a reply filed on August 9, 1924, denied these defenses and requested their dismissal.
• On January 12, 1925, the Union Guarantee Co., Ltd. amended its previous answer to include its codefendants and prayed for dismissal of the complaint with costs against the plaintiff.

Contractual Agreement and Transaction Details

• On December 19, 1921, Pampanga Sugar Mills contracted with M. Chong Tiaopoc, Luis Vismanos, and Jao Pi to sell 1,500,000 gallons of molasses (Exhibit A), produced at the sugar central in Del Carmen, Pampanga, during the calendar year 1922.
• Key terms included:
• The defendants were to purchase and take delivery of at least 75,000 gallons per month.
• If the vendees failed to take delivery of the entire amount, the vendor could dispose of the remaining molasses by:
• Discarding it,

ii. Utilizing it in any manner deemed proper, or iii. Selling it at the prevailing market price—all for the account of the vendees.

Performance and Delivery of Molasses

• Under the contract (Exhibit A):
• Jao Pi took delivery of 222,190 gallons,
• Lo Seng received 180,612 gallons,
• M. Chong Tiaopoc obtained 216,863 gallons, and
• Luis Vismanos took 195,026 gallons.
• The vendor disposed of molasses by throwing out quantities without proper notice:
• 38,158 gallons were discarded in March 1922,
• 36,671 gallons were thrown away in June 1922 (Exhibit C).
• The vendees notified the vendor that they required no more than 1,187,619 gallons of molasses, and accordingly, the vendor adjusted the charge to that amount instead of the full contracted volume of 1,500,000 gallons.

Discrepancies in Production and Accounting of Molasses

• Evidence presented included Exhibit C, which stated the production for 1922 as 1,187,619 gallons.
• Contrastingly, Exhibit K, compiled during the case’s pendency, indicated a production amount of 1,984,098 gallons.
• The trial court noted a significant difference between these documents and concluded that Exhibit C, having been prepared before the filing of the complaint, was more reliable.

Additional Contract with Carlos Palanca

• On January 6, 1923, the Pampanga Sugar Mills entered into a contract with Carlos Palanca for the delivery of all molasses left in the sugar central as of December 31, 1922, produced from the 1921-1922 harvest.
• Terms of the contract with Palanca included:
• A delivery rate of 90,000 gallons per month from December 1, 1922, to June 30, 1923.
• In exchange, Palanca was to render 60 gallons of motor alcohol for every 1,000 gallons of molasses received (Exhibit I).
• Under this arrangement, Carlos Palanca received 500,000 gallons of molasses.

Issues Regarding the Payment for Unsold or Undisposed Molasses

• The dispute arose over whether the defendants were obliged to pay for the balance (212,008 gallons) not taken from the molasses production or effectively disposed of by the vendor.
• The contract permitted the vendor to dispose of the undelivered portion only after giving proper notice, and any proceeds from a sale should be credited to the defendants, leaving no basis for additional charges.
• The issue also encompassed whether the plaintiff chose an allowable method of disposal consistent with the contractual notice requirement.

Trial Court’s Findings and Judgment

• The trial court found by a preponderance of evidence that the factual production numbers disclosed in Exhibit C were correct despite discrepancies with Exhibit K.
• The court ruled that the plaintiff could not claim payment for the difference between the contracted amount and the actual amounts taken, especially since proper notice for the disposition of the uncalled-for molasses was not given.
• Consequently, the trial court dismissed the complaint, counterclaim, and cross-complaint without special pronouncement on costs.

Issue:

• Whether the trial court correctly determined the actual production of molasses in 1922 given the discrepancies between Exhibit C (1,187,619 gallons) and Exhibit K (1,984,098 gallons).
• Whether the plaintiff is entitled to demand payment for the difference between the contracted amount of molasses and the amount actually delivered and taken by the defendants.
• Whether the vendor (plaintiff) complied with the contractual requirement to give a forty-eight hours' notice before disposing of undelivered molasses.
• Whether the trial court properly rejected the amendment of the complaint to include the unproven fact as alleged by the plaintiff, in view of Articles 109 and 110 of the Code of Civil Procedure.
• Whether the assignments of error raised by the plaintiff regarding the evidence and the application of contractual terms have any merit.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)