Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-30427             August 12, 1929

HARRY MARTIN, plaintiff-appellant,
vs.
AGUSAN COCONUT COMPANY, defendant-appellee.

J. W. Ferrier for appellant.
DeWitt, Perkins and Brady for appellee.

STATEMENT

Plaintiff is a resident of the City of Manila. The defendant is a corporation organized under the laws of the State of Delaware, of the United States, and duly licensed to do business in the Philippine Islands.

Plaintiff alleges that on October 11, 1918, he executed a mortgage to the defendant for P5,000 upon 103 head of his cattle then upon the Islands of Siassi, Province of Sulu; that in the early part of 1919, he executed another mortgage to the defendant on 70 head of other cattle, to secure the payment of P2,800, of which to this date he has received P800 only; that in August, 1920, and upon the advice of Dean C. Worcester, who was then the general manager of the defendant , 203 head of the cattle of the plaintiff were taken by the schooner Agusan of the defendant to what is known as the Diklom Ranch, and in November, 1920, the plaintiff and defendant entered into a written agreement of and concerning the cattle a copy of which is made a part of the complaint, in and by which 203 head of cattle were delivered to the defendant upon certain specified terms and conditions, including which was the "Cost of transportation to Diklom," "Care of animals," "Cost of care of animals," "Cost of certificate of registration and transfer," "Cost of property taxes," "Method of payment of costs of certificate of registration and of transfer and of property taxes," "Breeding Bulls," "Sale of male animals," "Disposition of female animals," "Accounting and payments," "Branding and inspection," and the following provisions:

Reports

On January first of each year the party of the second part shall render to the party of the first part a report setting forth the number and kind of bulls being used for breeding purposes; the number, sex and approximate age of all animals that have died during and the cases of death, if known; the number, sex and approximate age of all animals that have been sold during the year and the total gross receipts derived from such sales; the number, sex and approximate age of animals remaining in the herd.

Should there be any unusual mortality among the animals at any time, the party of the second part shall promptly report the fact to the party of the first part.

Term of agreement

The term of this agreement shall be five (5) years unless previously terminated by the mutual consent of the parties hereto.

Divisions of animals on the termination of this agreement

At the end of five (5) years from this date or sooner if this agreement should be terminated at an earlier date all the animals remaining in the herd, except breeding bulls furnished by the party of the second part and breeding cows originally furnished by the party of the first part shall be equally divided between the party of the first part and the party of the second part and shall become the property of the party of the first part and the party of the second part respectively. All breeding females belonging to the original herd shall revert to the party of the first part, and all breeding bulls furnished by the party of the second part shall be retained by it as its property.

That the defendant, through its then general manager, Dean C. Worcester, at different times after the shipment of the cattle to the Diklom Ranch, "reported to the plaintiff that his cattle were in good shape and doing well, going so far on one occasion as to say that the increase (by births) of the said cattle was greater than in any other herd on the said ranch"; that the defendant made a claim upon the plaintiff for P5,200 for the cost of transportation of the cattle to the Diklom Ranch, one-half of which was one-half of the proceeds of sale of some of the cattle, which was the property of the plaintiff; that the correct amount that plaintiff should have been charged is P1,050; that the defendant wrongfully and in violation of its contract sold a number of the male of the original head of 203 cattle, and failed to account to the plaintiff for the proceeds of the sale, the amount of which is P6,160; that the defendant has further failed to account for 50 more animals of the original herd, of the value of P4,330; that of the increase the defendant failed to account for 269 head of cattle of different ages, of the value of P11,500; that the defendant in violation of its contract never branded the animals belonging to the herd; that if failed to render the plaintiff the reports required by the terms and conditions of the contract; that it has failed and neglected to account to the plaintiff for the breeding value of the bulls, which were reasonably worth P3,600, of which the plaintiff is entitled to P1,800, and plaintiff prays judgment against the defendant for P19,490, with legal interest until it is paid, and costs.

For amended answer, the defendant makes a general and specific denial, and as a specific denial, and as a special defense alleges that there has been a complete settlement and accounting between the parties as to all of their respective rights and liabilities arising from or growing out of the contract, "and that on about the 18th day of March, 1926, said plaintiff attended with a representative of defendant at a division of the cattle, the subject matter of said contract, and accepted the cattle found to be due to him, and accepted the same as a liquidation and termination of the above mentioned contract," and as further separate and special defense, the defendant alleges that a financial liquidation was had between the plaintiff and the defendant in and by which it was found that there was due and owing the plaintiff the sum of P938.65, of which P500 was paid on account, and the balance then due and owing thereon was merged in a judgment which the plaintiff obtained against the defendant in the municipal court of the City of Manila, which it paid in full on May 5, 1926, by reason of which plaintiff's right of action, if any, is now res judicata.

At the trial the parties entered into the following stipulation:

Stipulated that at the time the cattle in question were transported from Siassi to Bugu (June to August 1920), the rates authorized by the Public Utility Commission for the M.S. Agusan on the basis of the mileage between those ports was P15.95 per head of cattle, and one-fifth thereof for calves. Also stipulated that the M.S. Agusan whose home port is Cebu, had no regular route at the time, but was sent to Siassi from Jolo to make the two trips required for the transfer of the cattle to Bugu returning against by way ports to Cebu thereafter.

This stipulation is made by the defendant without renouncing its contention that, under all the circumstances of the case, it was entitled to charge the full amount set out in the accounts.

As a result of the trial on such issues, the lower court found for the defendant and dismissed plaintiff's complaint, without costs from which he appealed and assigned twelve court erred in refusing to permit the plaintiff to testify as to verbal conversations which he had with Dean C. Worcester, who was then the general manager of the defendant and now deceased, and in finding that all matters at issue between the plaintiff and the defendant under the contract had been liquidated in the decision of the municipal court and are now res judicata, and that the division of the herd and its increase had been made on March 18, 1926, as shown by Exhibit 1, and finding that the plaintiff was not entitled to a refund of P1,066.99 on account of overcharged for transportation of the cattle, and in finding that at the time plaintiff signed Exhibit 1, he had knowledge of the accounts during the years 1920 and 1921, and that the plaintiff had accepted the division of the animals, as shown by Exhibit 1. That it erred in dismissing plaintiff's complaint, and in failing to sentenced the defendant to pay P9,873.45, with interest from December 31st, and in denying plaintiff's motion for a new trial.

JOHNS, J.:

As we analyze the record, the real question involved in the case is the legal force and effect of Exhibit 1, which is as follows:

AGUSAN COCONUT COMPANY

DIKLOM RANCH

RESULT OF THE DIVISION OF SIASI-AGUSAN-MARTIN HERD

1-class and age2-Agusan share3-Martin share
Male:
Broken steers . . . . . . . . . . . . . . . . . . . . . . . 11
Three years old steers . . . . . . . . . . . . . . . . 66
Two years old steers . . . . . . . . . . . . . . . . . 2526
One year old steers . . . . . . . . . . . . . . . . . . 1617
Male calves branded . . . . . . . . . . . . . . . . . 910
Male calves unbranded . . . . . . . . . . . . . . 2223
79
83
Female:
Three years old and over . . . . . . . . . . . . 2829
Two years old . . . . . . . . . . . . . . . . . . . . . . 1920
One year old . . . . . . . . . . . . . . . . . . . . . . . 2324
Female calves branded . . . . . . . . . . . . . 89
Female calves unbranded . . . . . . . . . . 2021
98
103
Original cows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .       Agusan share
177		Martin share
258

We hereby certify that we have made the partition of the cattle involved in the contract or pasturage agreement between Mr. Harry Martin and the Agusan Coconut Company and that the above is the result of the partition — 177 head of cattle for the Agusan Coconut Company as shown from under column Number 2 and 258 head of cattle for Mr. Harry Martin as shown under column Number 3. This partition terminates the above-mentioned contract or pasturage agreement.

Done at Diklom, Bukidnon, P.I., this 18 day of March, 1926.

Sgd. H. Martin
Agusan Coconut Company

By (Sgd.) F. Lewis
Superintendent, Diklom Ranch

Witness:

(Sgd.) J. Agudo

Witness:

(Sgd.) R.E. Gearheart

Diklom, Bukidnon, P.I.
March 23rd, 1926

I hereby acknowledge the receipt of two hundred fifty eight head of cattle from the Agusan Coconut Company as shown in detail under column Number 3 and headed '3 — Martin share.'

(Sgd.) H. Martin

The appellant in his brief says:

4. Our fourth assignment of error is to the effect that the lower court erred when it found that the division of the animals and their increment as provided in the contract had been made on March 18, 1926, as shown by Exhibit 1.

Exhibit 1 is prepared by the defendant, through its agents, and the method of securing the signature of the plaintiff thereto was testified to the plaintiff who also declared that when he went to Diklom in March 1926, to get the animals which belonged to him he took with him the certificates of ownership for all of his animals which had such certificates at the time they were sent to the Diklom ranch, which said that certificates had been returned to him by the defendant to whom he had formerly delivered them. He further declared that he could find but 72 of the animals corresponding to the 173 certificates which had been returned to him by the defendant and which he had taken with him to Diklom, and also that he received the animals which the defendant was willing to deliver him 'under protest' and that the animals so delivered to him were not all those to which he was entitled. Such Exhibit 1 is not final determination and division of animals as between this plaintiff and this defendant but is, under the circumstances, nothing more but a receipt of the actual number of animals which the defendant was willing to deliver to the plaintiff. The plaintiff likewise declared and this again without contradiction, that the defendant, through its agent, tried to require him to sign a 'quitclaim receipt' at the time he received such animals which receipt had already been prepared and which he refused to sign and that after such refusal he told the defendant's agent, Mr. Lewis, a witness at the hearing of the lower court, to prepare a receipt for the animals which had been delivered to him and which would sign the same; that such receipt (exhibit 1) was prepared that he signed it. None of these declarations on the part of the plaintiff were in any way contradicted, and must be taken to be true.

While it is true that the plaintiff made no written reservations upon Exhibit 1, his protest to the signing of the first receipt prepared for his signature and to the number of animals received by him is a sufficient protest and reservation of his rights, even if he had not signed the second receipt under protest as he declared he did. Plaintiff understood Exhibit 1 to be what he had asked Mr. Lewis, the representative of the defendant, to prepare, i.e., a receipt for the animals received by him. He signed it as and for such a receipt only. This exhibit was prepared by the defendant and if there are any doubts as to its meaning such doubts must be resolved against the defendant who made it.

Such Exhibit 1 in connection with the exhibits K, K-1, to K-9, inclusive (excluding Exhibits K-4a and K-4b) show conclusively that Exhibit 1 is not a division of animals and their increment is provided by their contract, Exhibit A, and we therefore, respectfully insist that our fourth assignment of error should be sustained.

Further in connection with this assignment we invite attention to the gross misinterpretation, if not actual fraud, on the part of the defendant in delivering to the plaintiff 173 certificates of ownership covering that the number of his cattle originally placed in the hands of the defendant, thus leading him to believe that such number of such animals were still in defendant's possession, and then delivering to him but 72 of the total covered by such certificates.

The exhibit was signed March 18, 1926, at which time, as a part of the exhibit, the plaintiff acknowledged in writing the receipt of 258 head of the cattle from the defendant, "as shown in detail under column number 3 and headed 3 — Martin share."

The plaintiff admits that he signed Exhibit 1, and that he received the 258 head of cattle as the "result of the Division of the Siassi-Agusan-Martin Herd," but contends that he signed it under "protest," and that he was misled and deceived by the defendant as to the actual facts and as to the number of cattle which he should receive under the original contract. Exhibit 1 was executed by the plaintiff in person and the defendant through Lewis, its superintendent.

At the oral argument plaintiff's attorney contended that Exhibit 1 was executed under duress or coercion, but that contention is not sustained by the record. In the final analysis, all that Lewis ever told the plaintiff was this, that I am authorized to make the division and to deliver the cattle on condition that you will sign Exhibit 1 after the division is made, but if you do not sign Exhibit 1, I have no authority to deliver you the cattle. That was not coercion; neither was it undue influence. The plaintiff had the option to stand upon his legal rights and to refuse to sign the exhibit in the manner and form in which it was drafted, and he elected to sign it, upon the strength of which the 258 head of cattle were then and there delivered to him, and it expressly recites that "This partition terminates the above mentioned contract or pasturage agreement." If that contract was then and there terminated, as Exhibit 1 says, how and upon what legal principle can the plaintiff now enforce it? It will be noted that thee are no reservations of any kind in Exhibit 1, and that there is nothing upon its face which would even suggest that it was signed by the plaintiff under protest, as he now claims.

Exhibit 1, which was executed on March 18, 1926, is in writing and was duly signed by the respective parties in the presence of two witnesses; and plaintiff acknowledges the receipt of the 258 head of cattle as his share of the cattle under the original contract of about November 20, 1920.

Plaintiff's cause of action is founded upon the original contract of November, 1920, and is based upon alleged breaches of the terms and conditions of that contract, and yet he admits that he signed Exhibit 1 and that he received the 258 head of cattle as a result of "the partition of the cattle involved in the contract or pasturage agreement" between him and the defendant, "and that the above is the result of such partition," and "this partition terminates the above mentioned contract or pasturage agreement." The complaint does not seek to revoke or set aside Exhibit 1. Neither does it allege fraud in its execution. In fact no reference whatever is made to Exhibit 1 in the complaint, and yet the plaintiff admits that he signed it and received the 258 head of cattle. In the face of that admission and without any allegation of fraud, how can plaintiff maintain an action on the original contract which was terminated five years later by another contract between the parties to the original contract?

In other words, when it appears that the parties to the original contract five years later have entered into another and a different contract which recites that a division was made of the property between the parties under the original contract, and specifically states that the original contract is terminated, and both parties take and accept the fruits of that settlement and division, in the absence of fraud or mistake in the execution of the last contract, which must both be alleged and proven, how and upon what legal principle can either party to the division maintain an action for a breach of the terms and conditions of the original contract? Nowhere in the pleadings is there any allegation of fraud or mistake in the execution of Exhibit 1. It is not even mentioned in the complaint. To defeat its legal force and effect, plaintiff now says that he signed Exhibit 1 under protest.

Upon that point, testifying as to his conversation with Lewis, superintendent of the defendant, plaintiff testified :

"A. I called his attention concerning this and he told me that they had been sold. I then told him, how could you have sold those animals since I have the certificates here? And he answered me, it is all we have and if you do not want to take them, we shall collect from you for the maintenance of the same here. Your contract has already expired and I have instructions to deliver them to you, and if you refuse to take them, we shall collect from you a certain amount each day for their stay and care; and he said that they did the same thing as regards the other herd of cattle that were there and which belonged to Mr. Aboitiz. I then took all the cattle which were delivered to me under protest that some of my cattle were missing. He asked me to sign a quit-claim receipt, which I refuse to do, and I told Mr. Lewis to make a receipt for the animals that he delivered to me and that I would sign it and that was done."

Yet the stubborn fact remains that after this conversation the plaintiff signed Exhibit 1 as it was written and accepted and receipted for the 258 head of cattle as a result of that division. There is nothing in Exhibit 1 to show that it was signed under protest or to show that it was signed on any terms or conditions, and it expressly recites that "this partition terminates the above mentioned contract or pasturage agreement," which flatly contradicts the oral testimony of plaintiff above quoted. There is no claim or pretense that he was misled or deceived in the signing of it or that he did not know its nature and contents or what he was signing, and there is no evidence that he was forced to sign Exhibit 1 or that he signed it under duress or coercion. The signing of it was a matter at his option and of his own discretion. Lewis was the superintendent of the defendant, and in the final analysis, he said to the plaintiff, I am authorized to make this settlement and division, but I do not have any authority to make any other settlement or to deliver the cattle, and the plaintiff signed Exhibit 1. That was not coercion or duress, and the signing of it by the plaintiff was purely an act of his own judgment and discretion as to what he should do, and he accepted and signed Exhibit 1 and is bound by its legal force and effect.

As we analyze the record that exhibit was a full and final settlement between the parties of all matters between them arising from or growing out of the original contract of November, 1920. It follows that the judgment of the lower court is affirmed, with costs. So ordered.

Avanceña, C. J., Johnson, Street, Villamor, Romualdez, and Villa-Real, JJ., concur.


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