ALFREDO MONTELIBANO and ALEJANDRO MONTELIBANO

vs.
THE HON. COURT OF APPEALS and BACOLOD-MURCIA MILLING COMPANY, INC.
G.R. No. 85757, July 8, 1991

FACTS:

Alfredo and Alejandro Montelibano, together with other planters, entered into contracts with Bacolod-Murcia
Milling Co., Inc., for the milling of sugar cane at a sharing ratio of 55% for the planters and 45% for the miller. The
contracts were to be in force for thirty (30) years starting with the 1920-21 crops. A proposal was made to amend the
milling contracts by increasing the planters' share to 60% of the manufactured sugar and molasses and giving them
other concessions besides, but the term of the contracts was extended to 45 years instead of 30. On August 30, 1936,
the milling company's Board of Directors adopted a resolution granting further concessions to the planters over and
above those contained in the amended milling contract. Subsequently, the Montelibanos sued the milling company
alleging that the three other centrals in the province were granting increased participation to their planters; therefore,
pursuant to paragraph 9 of the August 20, 1936 Resolution, Bacolod-Murcia Milling Co., Inc. was obligated to grant
similar concessions to the Montelibanos.
The milling company opposed the claim on the ground that, among others, it was a donation which was not
within the power of the Board of Directors to grant. The trial court dismissed the action, but on appeal to the Supreme
Court reversed the lower court.

ISSUE:

Whether or not the reversal was proper.

RULING:

YES.

The Court ruled that the August 20, 1936 resolution, passed in good faith by the board of directors, was valid
and binding and formed an integral part of the amended milling contracts, the milling company having agreed to give
concessions to the planters, precisely to induce them to agree to an extension of their contracts.
Petitioner filed two motions for reconsideration; however, the doctrine of res judicata had set in. Wherefore, the appeal
was denied.