DEMETRIO ERNESTO, GREGORIO DELEGADO, ALEJANDRO DOGOLDOGOL, TIMOTEO

CAWAS, TORIBIO MONTEMAYOR, JUAN DELEGADO, FELIPE GOLVIN, LUCAS VALLES,

VICTOR REDERA, RAFOL AGATON, and 1,000 others similarly situated as laborers of
respondents planters, petitioners,
vs.
THE COURT OF APPEALS, SAN CARLOS MILLING CO., INC., SPOUSES CARLOS LEDESMA
and CONNIE LEDESMA, SPOUSES VICENTE GUSTILO, JR. and AMPARO L. GUSTILO, and
JULIETA LEDESMA, respondents.

BARREDO, J.:

Petitioner for review of the decision of the Court of Appeals in CA-G.R. No. SP-08166-R, Demetrio
Ernesto, et. al. vs. San Carlos Milling Co., et al., which affirmed the judgment of the Court of
Agrarian Relations, Branch III, City of San Carlos dismissing the complaint of petitioners seeking the
payment of their 60% share of the alleged contractual increase in the share of the planters in the
proceeds of sugarcane milled in respondent's sugar mill during the crop years 1958-59 to 1967-68
and all subsequent crop years to which they (petitioners) maintain they are entitled under the Sugar
Act of 1952 (R.A. 809).

At the threshold, We are met of an alleged obstacle to the redress sought by the petitioners, namely,
the contention of respondents that the judgment of the Court of Appeals which they want Us to
review has long become final and executory and beyond our authority to alter or modify, much less
reverse.

It is indeed regrettable that this situation has arisen from an apparent oversight on the part of the
Court of Appeals in entertaining and granting two motion of petitioners for extension of time to file a
motion for reconsideration of its decision, considering that Section 18 of Presidential Decree No.
946, provides very explicitly in its last paragraph thus:

The decision or orders of the Court of Appeals may be appealed to the Supreme
Court by petition for review on certiorari only on questions of law, within a non-
extendible period of thirty (30) days from receipt by the appellant of a copy of the
decision or order. (Emphasis supplied)

More, said provision enjoins unequivocally that "no motion for rehearing or reconsideration shall be
allowed in the Court of Appeals." And so, respondents maintain, the present case being an agrarian
one, obviously P.D. 946 is applicable hereto, and, therefore, all that We can do is to dismiss the
petition herein.

While respondents' posture is seemingly plausible from the strictly literal and technical points of
view, the Court cannot see its way clear to denying the laborers herein involved a hearing by Us on
what appears manifestly to be a meritorious claim they have. They were not the ones who made the
mistake of filing the motions for extension of time for reconsideration of the decision of the Court of
Appeals; it was their lawyer. And how were they to know 'there was any technical defect in their
lawyer's move when the Court of Appeals acted favorably on them? Moreover, in its latest resolution,
the Court of Appeals expressly held that its action relative to the two motions for extension was
without prejudice to their appealing to this Court. And in Line with such reservation June 25, 1980,
after considering the respective arguments of the parties in their pleadings relative to the alleged
legal impediments to Our taking cognizance of this petition, this Court gave due course to the same.
That resolution alone settled the issue of jurisdiction raised by respondents. In fact, the parties, in
obedience to Our above-mentioned resolution filed, after many extensions at that, their respective
memoranda dealing also on the merits of the case, albeit respondents persisted in discussing their
intention about the finality of the decision of the Court of Appeals.

After the proceedings had already gone that far in another evident attempt to have the Court cut
short this case in their favor, on August 5, 1981, respondent Central filed a motion to dismiss. On
September 11, 1981, the other private respondent joined the Central's motion. We required
petitioners to answer said motion, which they did. Upon consideration of said motion and the answer
thereto of petitioners, in its resolution of October 7, 1981, the Court resolved to deny the same. But
since the Court acted on their motion to dismiss before they could file their reply to petitioners'
answer on November 4, 1981, respondents asked that their reply be considered as their motion for
reconsideration of Our resolution of October 7, 1981. On November 18, 1981, the Court resolved to
deny said motion for reconsideration.

In the light of such development related to Our jurisdiction to entertain this petition, no one can say
that the matter has not been duly and sufficiently considered. We are not, therefore, disposed to
entertain any further representation on said point, and We accordingly deem that issue foreclosed.
Surely, laborers should not be made to suffer the consequences of a miscomprehension of their
counsel and the Court of appeals of the applicable law. That would be far from affording labor the
protection the Constitution mandates it should be accorded. This Court will never deny without due
hearing, what could be a manifestly meritorious claim of labor, whenever the failure to secure a full
hearing on the merits of its claim is caused by a lawyer's obvious lack of acquaintance with a
technical point of procedure contained in a relatively new statute, specially, as in this case, where
the erroneous action of the lawyer was compounded by the Court's own resolution betraying its own
oversight of the technical requirement involved, and because of such action of the Court, the
prescribed period within which labor may complete its quest for redress appears to have run out.
The situation herein might have been different had not the action of the Court of Appeals resulted in
the petitioners losing time and being lulled into believing their case was still alive. It is Our
considered opinion that the interests of justice and the protection to labor tenent of the constitution
would be better served it. We ruled, as We hereby rule, that under the peculiar circumstances of this
case, We have the requisite authority to entertain the petition herein. It results, therefore, that We
may now pass on the merits of the basic claim of the petitioners.

In that regard, it appears to Us that the main issue. We have to decide differs from those in the
Talisay-Silay and Victorias cases involving Republic Act 809 We have heretofore decided.

In those cases, We applied Republic Act 809 in spite of the existence of a majority of planters within
the district who, as We applied Republic ACT 809 in spite of the existence of a majority of planters
within the district who, as We found, had written milling contracts with the mills. In the instant case,
the petitioners insist that tin the San Carlos Milling district, there was no such majority during all the
times materials hereto, which contention is denied by respondents. And the issue revolves solely
around the point of whether or not so-called emergency, non-quota and non-district or
accommodation planters should be counted in determining the majority contemplated in the law.

In Talisay-Silay, the same issue was also raised, but We found no necessity to resolve it because
even if We had done so affirmatively, the result of the case could not have been affected due to the
small number of emergency planters involved. In the case oat bar, however, the determination of the
issue is decisive because the record indicates that if the emergency, or non-quota, non-district and
"accommodation" planters are to be considered in ascertaining how many "planters" (are those) with
?ritten milling contracts with the sugar mill", (are those) with written milling contracts with the sugar
mill", the result would be that the planters in the San Carlos Milling district with such written contracts
would be in the minority, in which case Section 9 of Republic Act 809 would be applicable, not in
relation to any contractual in crease in the share of the planters, as in the Talisay-Silay and Victorias
cases, but in relation to Section 1 of the Act which provides as follows:

In the absence of written milling agreements between the majority of planters and the
millers of sugar-cane in any milling district in the Philippines, the unrefined sugar
produced in that district from the milling by any sugar central of the sugar-cane of
any sugar-cane planter or plantation owner, as we as all by-products and derivatives
thereof, shall be divided between them as follows:

Sixty per centum for the planter, and forty per centum for the central in any milling
district the maximum actual production of which is not more than four hundred
thousand piculs: Provided, That the provisions of this section shall not apply to sugar
centrals with an actual production of less than one hundred fifty thousand piculs.

Sixty-two and one-half per centum for the planter, and thirty-seven and one-half per
centum for the cetral in any milling district the maximum actual production of which
exceeds four hundreds thousand piculs but does not exceed six hundred thousand
piculs;

Sixty-five per centum for the planter, and thirty-five per centum for the central in any
milling district the maximum actual production of which exceeds six hundred
thousand piculs but does not exceed nine hundred thousand piculs;

Sixty-seven and one-half per centum for the planter, and thirty-two and one-half per
centum for the central in any milling district the maximum actual production of which
exceed one million two hundred thousand piculs;

Seventy per centum for the planter, and thirty per centum for the central in any
milling district the maximum actual production of which exceeds one million two
hundred thousand piculs.

By actual production is meant the total production of the mill for the crop year
immediately preceding.

In its decision now under review, the Court of Appeals ruled against petitioners by adopting in
toto the view of the trial court thereon, which is that emergency, non-quota, non-district or
accommodation planters should not be counted in determining the "majority" required in the abvove-
quoted legal provision. Indeed, although the Appellate Court made the factual that:

In the case of the 'emergency', 'non-quota', 'non-district, and 'accommodation'

planter, it may be mentioned in passing that, in tis milling agreements, the
defendants Central recognizes the San Carlos Planters' Association as the sole
agents of the planters in its mill district in all its dealings with the latter. In practice,
the Central requires membership in said Associaiton of any and all planters, including
thos new 'classfications' of planters, before accepting their sugarcane for milling. As
members of said Association, they are likewise bound by Resolution No. 3 (Exh. 5-B-
SCMC) unanimously adopted by the members in the annual meeting of November
24, 1962, whereby the members of the Association confirmed and ratified the
Memorandum Agreement entered into by their negotiating panel with the Central and
its Managing agents. Moreover, all these planters, whether signatories or not, had in
manner of speaking ratified the aforementioned act of the Association as their agent,
 by accepting all the benefits and complying with all the planter's obligations under the
said Memorandum when they individually signed another ten-year extension of the
milling contract, embodied in the Memorandum Agreement for an additional period of
seven years, from and after the 1973-74 and up to and including the 1980-81 crop
years. (Pp 53-54, Record.)

thus implying that factually such "emergency", "non-quota", "non-district" or "accommodation"

planters had no written contracts with the Central, it held, however, that said classes of planters may
not be considered in finding out the existence of the majority of planters with written milling contracts
within the contemplation of Section 1 of the Act.

We are not inclined to agree with the technical ratiocination expounded by the Court of Appeals as
follows:

Thus, in the light of the above-cited legal definitions, we are of the opinion and so
hold that, in the determination of the 'majority' of planters in any milling district in the
Philippines for purpose of said Act 809, only the planters-owners of plantation within
the particular mill district who have been allocated export and/or domestic reserve
sugar quotas, as determined in Executive Orders Nos. 900 and 901 and their
Supplements are to be considered and counted as composing the totality of planters
in that mill district. Accordingly, the so-called 'emergency', 'non-quota', 'non-district' or
'accommodation' planters of new areas of plantations without such sugar allotments
are to be excluded in the determination of such 'majority'. To be part of a 'mill district'
, the 'plantation' of the planter had to appear in the 'sugar Audit' of 1934 as having
been planter sugarcane, and to have a sugar allotment or quota which in tutn is a
part of the allocation for the entire 'mill district.

...; and there cannot be a sugar plantation owner without land to which the quota is
attached; ... (Presbitero vs. Fernandez, et al., 7 mSCRA 625, 532I." (Pp. 52-53,
Record.)

We believe that there is no valid reason why the statutory definition of planters under Act 4166 and
Executive Orders 900 and 901 should still be adhered to after the factual situation to which they
were addressed had already changed, as found by the Appellate Court itself. Discoursing on this
point, the Court of Appeals held:

But what is the majority as contemplated by the law? Should the total number of
planters from which such majority is to be determined be limited only to the owners of
the plantation which had been allocated sugar quotas under the previous laws on
sugar production, or should it include the planters who joined the sugar industry only
in the middle 1950's and who are commonly known as 'emergency',
'accommodation', 'non-quota', or 'non-district' planters? The existence of this 'class'
of planters can be gathered from the cross-examination of witness Manuel Hortillas,
thus —

ATTY. DIOLA (Proceeding)

Q. Now, you stated the non-district planters were allowed to mill, can
you tell us who allowed these non-district planters to mill, is it the
government or the Central?

A. The government of the Sugar Quota Office.

 Q. When was that done?

A. Somewhere in 1954 and 1955.

Q. And in this answer you have just made with particular reference to
non-disctrict planters, this goes through (true) with the so-called
'emergency and accommodation' planters?

A. Beginning those crop years, they were allowed by the government.

COURT

Q. When were those crop years?

A. Somewhere in 1954 or 1955.

Q. About before 1982?

A. There was none, sir. (tsn, pp. 38-39, hearing of September 4,

1973)

It behooves us, then to look into the history of sugar production in the Philippines,
from the inception of its regulation and up to the passage of the Sugar Act of 1952, in
order that we may ascertain the meaning which the Legislative had intended to give
to certain words and phrases used therein.

As pointed out by the defendant Central, on July 2, 1932, by Executive Order No.
489, then Governor-General of the Philippine Islands Frank Murphy directed the
Insular Auditor to make an examination into the business and administration of all
parties engaged in the production, milling and/or shipping of centrifugal sugar, for the
purpose of obtaining such information as may be deemed necessary, useful or
desirable in making or readjusting the allotments of quotas for sugar which may be
allowed to be grown and manufactured in this country for export to the United States,
as well as for local consumption. Pursuant thereto, the Insular Auditor conducted,
completed and delivered to the Governor-General the 'Sugar Mill Audit-1934' and
'Sugar Plantation Audit 1934'. In the meantime, the Philippine Legislature passed Act
No. 4166 entitled 'An Act to provide for the limitation, regulation, and allocation of
sugar produced in the Philippine Islands, and for the processing and marketing
thereof, and for other purposes', on December 4, 1934. On October 30, 1935, the
Governor-General promulgated Executive Orders No. 900 (Exh. 527-SCMC) and its
supplement, allocating the Export and 'A' quota, and the Domestic and Reserve or 'B'
and 'C' quotas, respectively, among the plantations and/or planters and the mill in
each mill district on the basis of their average annual production during the particular
case of the San Carlos District, Mill District No. 38, the allotments were made in the
corresponding portion of the said Supplements denominated 'Part 38' (Exhs. 528-
SCMC and 530-SCMC), between the defendant Central and its adherent planters
named therein. The limitation of sugarcane planting and sugar production under Act
No. 4166, and the allocation of the sugar quotas, both export, domestic and reserve,
among the mills and plantation owners continued until the year 1955. At this time, the
government, thru the Sugar Quota Office, increased the domestic and reserve
production in view of the shortage in our sugar prduction in relation to our export and
domestic requirements. In view of such relaxation on the limitation of sugar
 production, new areas were opened to sugarcane. That was when the appellations
'emergency', 'non-quota', 'non-district', or 'accommodation' were given to the planters
of new areas whose sugarcane was ordered to be milled by all sugar centrals per
directive of the Sugar Quota Office although they had no sugar allocation.

In the interpretation, therefore, of certain words and phrases used in the Sugar Act of
1952, recourse must be made to the definitions given in Executive Orders 900 and
901 and in Act No. 4166. For it can be safely presumed that, in drafting, debating on
and finally passing the Sugar Act, Congress must have intended to and did give the
same meanings to the words and phrases now found therein as they were meant in
the aforesaid Executive Order and Act No. 4166. Since there were yet no
'emergency', 'non-district' or 'non-quota' or 'accommodation' planters at the time of its
passage, Congress could not have intended to include them in the determination of a
majority of the planters in a Mill district. (Pp. 47-50, Record).

As will noted in the above-quoted dissertation, the limitation to sugar quotas, whether export,
domestic or reserve among all the mills continued only until 1955. From that year, emergency, non-
quota, non-district or accommodation planterscame into being with the blessings of the Sugar Quota
Administration. With such a change in situation, it would not be logical to continue adhering to the
previous definitions that had already lost their legal effect. Consequently, We are of the considered
opinion that after the quota system ceased, the definition of planters within the district for the
purposes of Section 1 of the Sugar Act should be all planters who delivered their sugarcane to the
respondent Central who milled the same. Hence, as such, they should all be counted in determining
the total number of planters in the sugar district in ascertaining whether or not a majority of them
have written milling contracts with the respondent Central. And it being ineludably implicit from the
record that on that basis those having written contracts were in the minority. We have no alternative
but to hold that Section 1 of Republic Act 809 applies to the case at bar.

Having arrived at this conclusion, We hold that respondent Central is liable to its co-respondent
planters for the difference between, on the one hand, what they had paid them during crop years
1958-59 and thru all succeeding crop years thereafter and, on the other, what Section 1 prescribes.
And in accordance with Section 9 of the Act, 60% of whatever the Central is bound to pay the
planters should be paid by said planters to their respective laborers, under the supervision of the
Minister of Labor.

WHEREFORE, judgment is hereby rendered in favor of petitioners and against the respondents
Central and planters in the manner set forth in the foregoing opinion, which, summarized, is that
from crop year 1958-59 and all the crop years thereafter the Central is sentenced to pay all the
planters in the San Carlos Milling district, regardless of their classification as emergency or non-
quota planters, the corresponding rates of share prescribed in Section 1 of Republic Act 809 minus
what said planters have already been actually paid pursuant to their milling contracts, which should
be deemed to include that paid to the Association for "research, investment, development and social
welfare funds to be used by the planters for these purposes, in accordance with their sole judgment
and discretion", and the respondent planters in turn are hereby sentenced to pay their respective
laborers, herein petitioners, 60% of such difference they will be paid by the Central, pursuant to
Section 9 of the Act, and the Minister of Labor is hereby directed to supervise the payments to the
laborers herein adjudged. Respondent planters are further sentenced to pay their respective
laborers 60% of what they have already been paid by the Central during all the crop years involved
in this case.

All amounts herein ordered to be paid shall bear interest at the legal rate from the time of the finality
of this judgment, and this case being one involving a claim of laborers in the nature of unpaid portion
of wages due them by mandate of the law, the respondents shall pay as attorney's fees, per Article
2208, paragraphs (7) and (11) of the Civil Code, 10% of their respective proportion of payments to
be made as above adjudged. No costs.

Concepcion, Jr., Guerrero, De Castro, Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, Jr.,
JJ., concur.