Eastern Sugar Associates v. Sugar Board

77 P.R. 354
CourtSupreme Court of Puerto Rico
DecidedNovember 5, 1954
DocketNo. 3
StatusPublished

This text of 77 P.R. 354 (Eastern Sugar Associates v. Sugar Board) is published on Counsel Stack Legal Research, covering Supreme Court of Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastern Sugar Associates v. Sugar Board, 77 P.R. 354 (prsupreme 1954).

Opinion

Mr. Chief Justice Snyder

delivered the opinion of the Court.

Eastern Sugar Associates, who operate sugar mills, filed this petition under § 33 of the Sugar Act of Puerto Rico —Act No. 426, Laws of Puerto Rico, 1951 — to review Rule No. 2 of the Sugar Board which provides that the participation of colonos in the product of their cane shall be in money, except when the colonos elect to receive sugar.1 The Asso-[357]*357dates make four principal contentions: (1) Rule No. 2 is in conflict with Act No. 426, particularly § 7; (2) if it is not, Rule No. 2 and $ 7 deprive the Associates of their property and liberty to contract without due process of law; (3) the hearing held in connection with the adoption of Rule No. 2 was defective; (4) two Exhibits were erroneously admitted in evidence at the said hearing.

We examine first the argument of the Associates that Rule No. 2 is in conflict with Act No. 426, particularly § 7.2 In making this contention, the Associates rely on the terms of both § § 7 and 5.' The first sentence of § 5 speaks of “ . . . the share belonging to each colono of the sugar and molasses produced from his cane . . . ”; Part I-A of § 5 also refers to the “ . . . share of sugar pertaining to the [358]*358colono . . . ”. According to the Associates, this language means that it is the sugar itself which belongs to the colo-nos, not the cash proceeds of the sale of the sugar. And they assert that this contrasts with the provision in Part II of § 5 that the share of the colono as to molasses shall be in “the value” — that is, the cash proceeds — of the molasses. The explanation of the Associates for this alleged difference in § 5 in the treatment of molasses and sugar is. that historically for the former the colonos have always received cash, not molasses; on the other hand, some mills have liqui[359]*359dated the share of the sugar corresponding to the colono in money while other mills have liquidated in sugar.

The Associates concede that the first sentence of § 7 refers to liquidation in money. As they point out,. . . otherwise there would be no occasion to speak about the c.i.f. price in New York.” The Associates argue, however, that this first sentence “ . . . does not state, nor imply, that liquidations must be made in cash.” And they add: “The second sentence continues speaking of liquidations which are made in cash but makes an exception of the cases of colonos who may not choose to receive their share of sugar ‘as hereinafter provided’. It is obvious by the express use of the words ‘as hereinafter provided’ that the statute is speaking only of those cases where the colono, before December 1st, elects to receive sugar in hind.”

The Associates conclude from the foregoing that “ . . . what the statute provides is that where the customary method of liquidation is in cash, the colono, by making an election on December 1st, can require that liquidation be made in kind rather than in cash. Nowhere is it said directly or by implication that wher'e the custom is to liquidate in sugars the colono has the option at any time of requiring liquidation in cash. . . . Whether or not the colono may require liquidation in sugars where the custom is to liquidate in cash, is of course, of no interest to Eastern Sugar Associates because Eastern Sugar Associates insist and always have insisted on liquidating in sugars and not in cash. A central which customarily liquidates in cash might, of course, well object to being forced to liquidate in sugars at the colono’s election.”

The Associates conclude their argument on this point by asserting that the foregoing “. . . would seem to be the more reasonable interpretation even if the meaning were not entirely clear.” They state in their brief: “Article 7 of the statute provides that when liquidations are made in cash the [360]*360liquidations must be made at the fortnightly or monthly price at the time of production. The colono who is liquidated in cash had no opportunity to take advantage of higher prices in the latter part of the year. When liquidations are made in sugar, however, the colono can sell at any time of the year and take advantage of the higher market in the fall whereas under the cash liquidation system, the processor has the opportunity to make this speculative gain with the sugars acquired from colonos.” 3

We disagree with the Associates as to the meaning of § 7. We cannot follow their reasoning that § 7 permits a colono to elect liquidation in kind if he has previously liquidated in cash, but that it does not authorize the colono to elect liquidation in money if he has in the past liquidated in sugar. On the contrary, we think § 7 provides for liquidation in cash unless the colono elects to receive sugar, irrespective of the previous practice of the particular mill.

We do not agree with the Associates that § 5 treats the share of the colono as to sugar and molasses differently. In the first sentence of § 5 they are referred to in exactly the same manner: the statute speaks of “ . . . the share belonging to each colono of the sugar and molasses produced from his cane ... ”. No reference is made there to the participation of the colono in the value, or cash proceeds, of the molasses. Also, sugar and molasses are treated in the same way in the It being understood clause of the first paragraph of § 5. Obviously, both the phrases relied on by the Associates and those cited in this paragraph were, for present purposes, used somewhat loosely in § 5 and were not intended to have any effect on the problem before us. Moreover, § 5 is not primarily concerned with liquidation as such with reference to the colono; it deals principally with the [361]*361participation corresponding to the colono. As to liquidation, the chief role is played by § 7. Antonio Roig Sucrs. v. Sugar Board, decided today.4

The decisive provisions of Act No. 426, for purposes of the question before us, are found in § 7. The Associates concede, as already noted, that the first sentence in the first paragraph of § 7 contemplates liquidation in cash. The second sentence in the first paragraph of § 7 reads in part as follows: “Of the average prices of the sugar of Puerto Rico . . . the central may deduct the sums it may deem necessary to cover shipment and marketing expenses in all the cases of such colonos as may not choose to receive their share in sugar as hereinafter provided ... (Italics ours). The second paragraph of § 7 provides that whenever the colono, before December 1 prior to the beginning of the grinding season, so notifies the central, the latter must deliver to the colono the total amount of sugar to which he is entitled under the Act and the regulations. The third paragraph of § 7 gives the right of free storage in the warehouse of the central to the colonos “... who choose that their share of the proceeds of their cane be liquidated in sugar ... ”. (Italics ours). We find nothing in the above-quoted or the other provisions of § 7 which supports the contention of the Associates that the election between the two methods of liquidation is granted only to those colo-nos who have previously liquidated in money.

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77 P.R. 354, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-sugar-associates-v-sugar-board-prsupreme-1954.