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[ GR No. L-16933, Dec 29, 1964 ]



120 Phil. 1526

[ G.R. No. L-16933, December 29, 1964 ]

[with resolution of July 30, 1965]




Petitioner-appellee, the Talisay-Silay Milling Co., Inc., went to the Court of First Instance of Manila on a petition for mandamus against Vicente Bunuan, as Sugar Quota Administrator, and Pedro C. Hernaez, as Secretary of Commerce and Industry. The Court granted the writ in its decision of February 15, 1958, and respondents elevated the case to the Court of Appeals, which thereafter certified the same to us in view of the nature of the questions involved.

The pertinent facts are not disputed. Appellee is the owner and operator of the sugar central in the mill district of Talisay-Silay, and is the holder of sugar quotas of all classes under the Sugar Limitation Law, Act No. 4166. These quotas are designated as A sugar for export, B sugar for domestic consumption and C sugar to be held in reserve. Shortages in the A and B categories in any given year may be filled from the reserve sugar by a system of reallocation to br made by the Sugar Quota Office.

For the crop year 1956-1957 the production of B sugar was originally fixed by the Sugar Quota Administrator, with the approval of the Secretary of Commerce and Industry, at 220,000 short tons. However, in view of the continually spiralling price of the commodity in the domestic market during that year several increases were authorized by the said officials in a series of Sugar Orders issued from April through July, 1957.

In the Talisay-Silay Mill District the report submitted by appellee to the Sugar Quota Administrator on October 11, 1957 showed that numerous planters were unable to fill their respective allotments of A and B sugar for the milling season which ended September 30, 1957. The total shortage in the first category (export) for the said mill district was 23, 734.33 piculs; in the second category (domestic) the shortage was 29,489.60 piculs. On the other hand, there was available a total of 78,488.26 piculs of reserve (C) sugar in the district, of which 77,797.46 piculs belonged to appellee and 690.80 piculs belonged to affiliated planters.

Upon receipt of such report the Sugar Quota Administrator proceeded to reallocate the unfilled quotas for the crop year 1956-1957 to those who had C sugar available in the district. The reallocation was made in a letter dated October 14, 1957 which he wrote to appellee, as follows:

"Talisay-Silay Milling Co.
Talisay, Occidental Negros


This has reference to the reallocation of the 1956-57 'B' and 'A' allotment shortages to planters and Mill Company with 'C' sugar. According to the report of allotment shortages and 'C' sugar holders which you submitted to this Office, the total quantity of 'B' allotment shortages is 29,489.60 piculs and the total quantity of 'A' allotment shortages is 23,734.33 piculs while the total quantity of 'C' sugar amount to 78,488.26 piculs 77,797.46 piculs of which belong to the Talisay-Silay Milling Company while 690.80 piculs belong to planters.

"Considering the fact that the allotment shortages are to be reallocated first to planters who are holders of 'C' sugar, and as priority is to be given to the filling of the 'B' shortages, the 'C' sugar of the planters, namely the Talisay-Silay Planters' Association and Antonio M. A. Lizares, are granted reallocation of the 'B' allotment shortages, and the balance of the 'B' allotment is granted to the Talisay-Silay Milling Company. The remaining balance of the 'C' sugar of the Mill Company in granted a reallocation in the amount of 23,734.33 piculs of 'A' allotment. With the foregoing explanation, the following is the reallocation of the allotment shortages in that district:

Talisay-Silay Planters' Ass'n
Antonio M. A. Lizares
Talisay-Silay Milling Co. ..................................................................................................
    __________ __________
  Total .................................................................................................
      piculs piculs
    Very Respectfully,  
      s/V.G. Bunuan
      t/V.G. BUNUAN

The reallocation with respect to export (A) sugar was duly carried out and the shortages filled by conversion of the available reserve (C) sugar, the bulk of which came from appellee. But with respect to the shortages in the domestic (B) sugar the conversion was disapproved by respondent Secretary of Commerce and Industry, who directed the Sugar Quota Administrator to instruct the Permit Agent in the Talisay-Silay Mill District not to sign the corresponding warehouse receipt permits. Petitioner-appellee thereupon addressed a letter to the respondents protesting such disapproval and calling their attention to their duty under the law to give effect to the reallocation already made and to authorize the Permit Agent to sign the domestic sugar quedan-permits involved. Respondents failed to do so or even to answer the said letter; and so the milling company filed the instant petition for mandamus to compel them to act as above indicated.

The trial court, in granting the writ prayed for, ruled that respondents "unlawfully neglected the performance of an act which the law specifically enjoins as a duty resulting from their office, thereby unlawfully excluding petitioner from the use and enjoyment of a right granted by law."

The statute in question is found in sections 8 and 8-A of the Sugar Limitation Law (Act No. 4166, as amended by Republic Act No. 1072), as follows:

"SEC. 8. The Sugar Quota Administrator shall allocate among all planters engaged in the growing of sugarcane, the total amount of 'B' and 'C' sugar, the manufacture whereof may be permitted in any given year, as provided in section five of this Act."

"SEC. 8-A. If after the termination of milling in each sugar central in any milling season, the holder of any allotment is not able to mill enough sugar to fill his allotment for that year, that amount of such allotment which he cannot fill during such milling season shall be reallocated by the Sugar Quota Administration to other holders of allotments first within the same district, and then to other districts or in such other manner as may insure the filling of the quota for that year; Provided, That no reallocation under the provision of this section shall diminish the allotment to which the holder may be entitled in any subsequent crop-year."

It appears to be quite beyond dispute that under Section 8 it is the duty of the Sugar Quota Administrator to allocate among sugar cane planters the total amount of B and C sugar authorized to be manufactured in any given year; and under Section 8-A, in the event the holder of any allotment for any given year is unable to fill the same, to reallocate the unfilled amounts to other allotment holders, giving priority to those who are within the same mill district, and then to other districts or such other manner as may insure the filling of the quota for that year. The system of reallocation, it may be noted, is only a means by which the quota fixed for any given year may be filled. This objective is laid down by law and necessarily negates any authority on the part of respondent officials to defeat it by refusing to make the reallocation required. Respondents themselves admit in their brief that the intention of the law is "not only to limit the production of sugar, but also to see to it that the limited amount permitted to be produced must actually be (sic) produced and utilized." On the witness stand, respondent Sugar Quota Administrator likewise admitted that he made the reallocation in his letter to the milling company of October 14, 1957, supra, in fulfillment of his duty imposed by Section 8-A of the Sugar Limitation Law and that in order to carry out such reallocation it was necessary to convert available C sugar to A and B sugar, respectively, to fill the shortages therein. As matters turned out, while the shortages in A sugar for the crop-year 1956-1957 were duly filled, those in B sugar were not, because the conversion for that purpose of the corresponding C sugar of appellee was disapproved by respondent Secretary.

Respondents invoke in defense the provisions of Sugar Order No. 5, issued by the Secretary of Commerce and Industry on October 17, 1957, section 1 of which states:

"1. No 'C' sugar of the 1956-1957 crop year and previous crop years is to be utilized to fill allotment shortages in 'B' sugar of 1956-1957 crop year without the previous approval of the Secretary of Commerce and Industry and only upon recommendation of the Sugar Stabilization Committee and representatives of millers and planters concerned" (Section 1, Sugar Order No. 5, series of 1957-1958, dated October 17, 1957.)

In the first place, the aforesaid Order was issued after the reallocation had been made by the Sugar Quota Administrator on October 14, 1957. Secondly, 'Sugar Order No. 5 was issued pursuant to section 12 of the Sugar limitation Law, which, respondents allege, authorizes the Secretary of Commerce and Industry (formerly the Governor General) "to issue rules and regulations governing the issuance of allotments and licenses and such other rules and regulations as he may consider necessary for carrying out the purpose of this Act." The authority thus given is not meant to frustrate such purpose, namely, the actual production of sugar in the amount fixed as quota for any given year. And yet that was the result, insofar as the Talisay-Silay Milling District was concerned, of the action of respondents, supposedly done under the authority of Sugar Order No. 5.

On October 1, 1957 respondents fixed the amount of 280,000 tons of B sugar to be manufactured for the crop year 1957-1958. Added to the alleged 53,000 tons still available from the previous year, there would be a total of 333,000 tons of sugar for domestic consumption. Respondents contend that if the 28,798.80 piculs of C sugar owned by the milling company were converted to B sugar, the domestic market would be glutted for the year 1957-1958 and the price of the commodity would consequently be disrupted. From a realistic viewpoint this could hardly be the case, because as pointed out by the trial court the amount of petitioner's sugar to be converted constituted only one-half (½) of one (1%) per cent of the total amount of the B sugar quota for that year.

In any case, a consideration of Section 8-A of the Sugar Limitation Law, in relation to Section 5-b (which provides for the fixing, from time to time, of the amount of B sugar for domestic consumption reveals that once the allotments for a given crop year have been fixed and allocated, and the milling season finished, all the unfilled allotments must be reallocated to other allotment holders so that entire quota for that year may be filled. This means that in fixing the quotas for the following year the Sugar Quota Administrator must necessarily take into account the reallocations required by section 8-A to fill the allotments for the proceeding year which were unfilled. In other words, respondents could not fix an excessive quota of B sugar for 1957-1958 and then refuse to fill the unfilled allotments for 1956-1957 on the pretext that to do so would create an excess of sugar for domestic consumption in 1957-1958.

There is no definite showing in the record that as of October 1957, when the reallocation for 1956-1957 was made, there would be actually an excess in the supply for the crop-year 1957-1958. Although the 1957-1958 quota of B sugar had been fixed in (Sugar Order No. 1, dated October 1, 1957) the previous milling season had just terminated and the ensuing one had not even started. What does appear, from the letter of the Sugar Quota Administrator to petitioner dated October 14, 1957, is that there were shortages in B sugar and that the filling thereof from the available C sugar should be and was being given priority.

But assuming that if the reallocations were carried out the domestic market might be glutted in the ensuing year, the remedy was to amend Sugar Order No. 1 by reducing the amount of B sugar therein permitted to be manufactured from the crop still to be milled. This, it is not denied, was within the authority of respondents to do. But, as correctly stated by the trial court, respondents could not refuse to carry out the reallocation and conversion of petitioner's C sugar into B sugar to fill the shortage therein, because such reallocation was made under and by virtue of the express mandate of the Sugar Limitation Law.

On the procedural question which respondents have raised, we agree with the trial court that the rule of exhaustion of administrative remedies does not require in the instant case an appeal to the President before recourse to the courts may be had. The right to appeal from the decision of an officer or court to which a particular matter is specifically referred is purely statutory (Lamb vs. Phipps, 22 Phil. 456, and cases cited) and there is no statute which provides for such appeal from the action taken here by the Secretary of Commerce and Industry. If an appeal may be taken to the President at all it is by virtue of his general supervisory authority as Chief Executive; and the same is not such "adequate remedy in the ordinary course of law" as would bar the special action of mandamus resorted to by petitioner.

The decision appealed from is affirmed, without pronouncement as to costs.

Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala, Bengzon, J. P., and Zaldivar, JJ., concur.


July 30, 1965


Before us is the motion filed by petitioner appellee for reconsideration and clarification of our decision affirming that of the Court of First Instance of Manila:

"Commanding the respondents, particularly the respondent Sugar Quota Administrator, to give full force and effect to the reallocation in question in favor of the petitioner of the 28,798.80 piculs of domestic 'B' allotment,' by forthwith signing and delivering to petitioner or causing their authorized representatives and Permit Agents to forthwith sign and deliver to petitioner the corresponding warehouse receipt-permits (Nos. B-44 688 and B-44 689) duly prepared by petitioner, in order lo fill the aforesaid allocation."

Petitioner points out that at the time the lower court rendered its judgment the signing and issuance of the warehouse receipt-permits aforementioned was the proper relief to which it was entitled but that since then and because of the period during which the appeal was pending those receipt-permits (for the year 1956-1957) have become obsolete. Consequently, petitioner explains, the only way the redress granted to it in this case may be made effective "would be the signing and issuance, in replacement thereof, of the corresponding domestic (B) warehouse receipt-permits for the current year against, and out of, the current reserve (C) sugars of herein petitioner."

Respondents, commenting on the motion, say the same has become moot and academic because petitioner's reserve (C) sugar in question in this case must have been used by it to fill reallocation (presumably of B sugar) granted to it in the years subsequent to the 1956-1957 crop year. The Solicitor-General quotes from a letter, dated March 1, 1965, of the incumbent acting Chief of the Sugar Quota Office, as follows:

"As the "B" allotment shortages in question were of the crop year 1956-1957, and formed portions of the domestic quota that was declared for the said crop year, it is believed that the giving of full force and effect to the re-allocation of said domestic shortages at this time almost 8 years later, is academic, specially if we consider the fact that the said re-allocation is intended to be filled 'out of the current reserve "C" sugar' and not of the "C" sugar of 1956-1957 then entitled to fill the re-allocation."

Answering the foregoing comment, petitioner submits that C sugar, according to Section 1 (a) of the Sugar Limitation Law (Act No. 4166, as amended), is sugar "to be held as an emergency reserve to make up any deficiency in A sugar and B sugar or for marketing elsewhere than in Continental United States or the Philippines;" that in the absence of any deficiency in the other classes of sugar, the unused reserve(C) sugar produced or held by a quota-holder during any crop-year must necessarily be carried over and added to his C sugar of the succeeding years; that such accumulated reserve sugar are never separated from each other or marked so as to indicate to what particular years they respectively correspond; and that when a deficiency in the other classes of sugar arises and has to be filled, any existing or available reserve (C) sugar left over and/or accumulated from previous crop years may be used to fill such deficiency, regardless of the year it was produced.

Petitioner's position appears to us to be reasonable. We have affirmed the judgment of the court granting the writ of mandamus in view of the injustice done to petitioner when the deficiency allotment of 28,798.80 piculs of B sugar reallocated to it for the year 1956-57 was not filled from its then existing C sugar as a result of the unjustified action of respondent Secretary of Commerce and Industry. It would not do to render our decision nugatory and in effect allow the injustice to remain unredressed simply because the C sugar in question was supposed to cover the shortage in B sugar in the year 1956-1957 and such shortage no longer exists at the present time. Otherwise no judicial recourse would be of practical value to a quota holder in a situation such as the one before us, for all respondents would have to do in order to avoid compliance with a peremptory writ that may be issued against them is to appeal therefrom: time would then do the rest-the time it usually takes before the appeal can be decided.

Respondents say that shortages in each class of sugar is determined by the Sugar Quota Office after the termination of the milling season in each mill district; that assuming that petitioner's C sugar in question may be availed of to fill allotment shortages in B sugar for the present crop year the existence of such shortages will be determined after the current milling season in the Talisay-Silay mill district; and that even then petitioner's C sugar may be availed of only in so far as the shortages cannot be filled from C sugar pertaining to planters within the district. The explanation does not impress us to be of any decisive importance in this case. The amount of B sugar to be produced in any given year is not unalterably fixed by law. It is decided by the Sugar Quota Office with the approval of the Secretary of Commerce and Industry, and may be increased from time to time within the same year. In fact the record of this case shows that several increases were authorized in the year 1956-1957, when the abortive deficiency reallocation to petitioner which gave rise to this litigation was made. To implement the judgment herein would only mean, in effect, an increase in the amount of sugar that will be available for domestic consumption. And no law has been cited to us which would be violated by such increase.

WHEREFORE, the decision of this Court is clarified in the sense that the Sugar Quota Administrator is ordered to give full force and effect to the reallocation in favor of petitioner of 28,798.80 piculs of domestic (B) sugar by signing and issuing, or causing his authorized representatives or permit agents to sign and issue, the corresponding domestic (B) warehouse receipt-permits for the current year, against, or out of, the current reserve (C) sugars of petitioner.

Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Paredes, Dizon, Regala, Bengzon, J. P., and Zaldivar, JJ., concur.