G.R. No. L-21601 December 28, 1968 NIELSON & CO vs.
LEPANO NIELSON & CO!PAN", INC., plaintiff-appellant, vs. LEPANO CONSOLIDAED !INING CO!PAN", defendant- appellee. Lepanto seeks the reconsideration of the decision rendered on December 17, 1966. The motion for reconsideration is based on two sets of gronds ! the first set consisting of for principal gronds, and the second set consisting of five alternative gronds, as follows" Principal Grounds: 1. The cort erred in overlooking and failing to appl# the proper law applicable to the agenc# or management contract in $estion, namel#, %rticle 17&& of the 'ld (ivil (ode )%rticle 19*+ of the new,, b# virte of which said agenc# was effectivel# revoked and terminated in 19-. when, as stated in paragraph *+ of the complaint, /defendant volntaril# ... prevented plaintiff from resming management and operation of said mining properties./ *. The cort erred in holding that paragraph 00 of the management contract )12hibit (, sspended the period of said contract. &. The cort erred in reversing the rling of the trial 3dge, based on well-settled 3risprdence of this 4preme (ort, that the management agreement was onl# sspended bt not e2tended on accont of the war. -. The cort erred in reversing the finding of the trial 3dge that 5ielson6s action had prescribed, bt considering onl# the first claim and ignoring the prescriptibilit# of the other claims. Alternative Grounds: .. The cort erred in holding that the period of sspension of the contract on accont of the war lasted from 7ebrar# 19-* to 8ne *6, 19-9. 6. %ssming argendo that 5ielson is entitled to an# relief, the cort erred in awarding as damages )a, 1+: of the cash dividends declared and paid in December, 19-1; )b, the management fee of <*,.++.++ for the month of 8anar#, 19-*; and )c, the fll contract price for the e2tended period of si2t# months, since these damages were neither demanded nor proved and, in an# case, not allowable nder the general law of damages. 7. %ssming argendo that appellant is entitled to an# relief, the cort erred in ordering appellee to isse and deliver to appellant shares of stock together with frits thereof. 9. The cort erred in awarding to appellant an ndetermined amont of shares of stock and=or cash, which award cannot be ascertained and e2ected withot frther litigation. 9. The cort erred in rendering 3dgment for attorne#6s fees. >e are going to dwell on these gronds in the order the# are presented. 1. 0n its first principal grond Lepanto claims that its own consel and this (ort had overlooked the real natre of the management contract entered into b# and between Lepanto and 5ielson, and the law that is applicable on said contract. Lepanto now asserts for the first time and this is done in a motion for reconsideration - that the management contract in $estion is a contract of agenc# sch that it has the right to revoke and terminate the said contract, as it did terminate the same, nder the law of agenc#, and particlarl# prsant to %rticle 17&& of the 'ld (ivil (ode )%rticle 19*+ of the 5ew (ivil (ode,. >e have taken note that Lepanto is advancing a new theor#. >e have carefll# e2amined the pleadings filed b# Lepanto in the lower cort, its 2 memorandm and its brief on appeal, and never did it assert the theor# that it has the right to terminate the management contract becase that contract is one of agenc# which it cold terminate at will. >hile it is tre that in its ninth and tenth special affirmative defenses, in its answer in the cort below, Lepanto pleaded that it had the right to terminate the management contract in $estion, that plea of its right to terminate was not based pon the grond that the relation between Lepanto and 5ielson was that of principal and agent bt pon the grond that 5ielson had allegedl# not complied with certain terms of the management contract. 0f Lepanto had thoght of considering the management contract as one of agenc# it cold have amended its answer b# stating e2actl# its position. 0t cold have asserted its theor# of agenc# in its memorandm for the lower cort and in its brief on appeal. This, Lepanto did not do. 0t is the rle, and the settled doctrine of this (ort, that a part# cannot change his theor# on appeal ! that is, that a part# cannot raise in the appellate cort an# $estion of law or of fact that was not raised in the cort below or which was not within the isse made b# the parties in their pleadings )4ection 19, ?le -9 of the old ?les of (ort, and also 4ection 19 of the new ?les of (ort; @atea vs. Aagallon, L-*+&-., 5ovember *9, 196-; 5orthern Aotors, 0nc. vs. <rince Line, L-1&99-, 7ebrar# *9, 196+; %merican 12press (o. vs. 5atividad, -6 <hil. *+7; %goncillo vs. 8avier, &9 <hil. -*- and Aolina vs. 4omes, *- <hil -9,. %t an# rate, even if we allow Lepanto to assert its new theor# at this ver# late stage of the proceedings, this (ort cannot sstain the same. Lepanto contends that the management contract in $estion )12hibit (, is one of agenc# becase" )1, 5ielson was to manage and operate the mining properties and mill on behalf, and for the accont, of Lepanto; and )*, 5ielson was athoriBed to represent Lepanto in entering, on Lepanto6s behalf, into contracts for the hiring of laborers, prchase of spplies, and the sale and marketing of the ores mined. %ll these, Lepanto claims, show that 5ielson was, b# the terms of the contract, destined to e2ecte 3ridical acts not on its own behalf bt on behalf of Lepanto nder the control of the Coard of Directors of Lepanto /at all times/. @ence Lepanto claims that the contract is one of agenc#. Lepanto then maintains that an agenc# is revocable at the will of the principal )%rticle 17&& of the 'ld (ivil (ode,, regardless of an# term or period stiplated in the contract, and it was in prsance of that right that Lepanto terminated the contract in 19-. when it took over and assmed e2clsive management of the work previosl# entrsted to 5ielson nder the contract. Lepanto finall# maintains that 5ielson as an agent is not entitled to damages since the law gives to the principal the right to terminate the agenc# at will. Cecase of Lepanto6s new theor# >e consider it necessar# to determine the nature of the management contract ! whether it is a contract of agenc# or a contract of lease of services. 0ncidentall#, we have noted that the lower cort, in the decision appealed from, considered the management contract as a contract of lease of services. %rticle 17+9 of the 'ld (ivil (ode, defining contract of agenc#, provides" C# the contract of agenc#, one person binds himself to render some service or do something for the accont or at the re$est of another. %rticle 1.--, defining contract of lease of service, provides" 0n a lease of work or services, one of the parties binds himself to make or constrct something or to render a service to the other for a price certain. 0n both agenc# and lease of services one of the parties binds himself to render some service to the other part#. %genc#, however, is distingished from lease of work or services in that the basis of agenc# is representation, while in the lease of work or services the basis is emplo#ment. The lessor of services does not represent his emplo#er, while the agent represents his principal. Aanresa, in his /(ommentarios al (odigo (ivil 1spaDol/ )19&1, Tomo 0E, pp. &7*-&7&,, points ot that 3 the element of representation distingishes agenc# from lease of services, as follows" 5estro art. 1.7+9 como el art. 1.99- del (odigo de 5apoleon # cantos te2tos legales citamos en las concordancias, e2presan claramente esta idea de la representacion, /hacer algna cosa por centa o encargo de otra/ dice nestro (odigo; /poder de hacer algna cosa para el mandante o en s nombre/ dice el (odigo de 5apoleon, # en tales palabras aparece vivo # lminoso el concepto # la teoria de la representacion, tan fecnda en ensenanBas, $e a s sola lB es como se e2plican las diferencias $e separan el mandato del arrendamiento de servicios, de los contratos inominados, del conse3o # de la gestion de negocios. 1n efecto, en el arrendamiento de servicios al obligarse para s e3eccion, se traba3a, en verdad, para el deno $e remnera la labor, pero ni se le representa ni se obra en s nombre.... 'n the basis of the interpretation of %rticle 17+9 of the old (ivil (ode, %rticle 1969 of the new (ivil (ode has defined the contract of agenc# in more e2plicit terms, as follows" C# the contract of agenc# a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or athorit# of the latter. There is another obvios distinction between agenc# and lease of services. %genc# is a preparator# contract, as agenc# /does not stop with the agenc# becase the prpose is to enter into other contracts./ The most characteristic featre of an agenc# relationship is the agent6s power to bring abot bsiness relations between his principal and third persons. /The agent is destined to e2ecte 3ridical acts )creation, modification or e2tinction of relations with third parties,. Lease of services contemplate onl# material )non-3ridical, acts./ )?e#es and <no, /%n 'tline of <hilippine (ivil Law,/ Fol. F, p. *77,. 0n the light of the interpretations we have mentioned in the foregoing paragraphs let s now determine the natre of the management contract in $estion. Gnder the contract, 5ielson had agreed, for a period of five #ears, with the right to renew for a like period, to e2plore, develop and operate the mining claims of Lepanto, and to mine, or mine and mill, sch pa# ore as ma# be fond therein and to market the metallic prodcts recovered therefrom which ma# prove to be marketable, as well as to render for Lepanto other services specified in the contract. >e gather from the contract that the work ndertaken b# 5ielson was to take complete charge sb3ect at all times to the general control of the Coard of Directors of Lepanto, of the e2ploration and development of the mining claims, of the hiring of a sfficient and competent staff and of sfficient and capable laborers, of the prospecting and development of the mine, of the erection and operation of the mill, and of the benefication and marketing of the minerals fond on the mining properties; and in carr#ing ot said obligation 5ielson shold proceed diligentl# and in accordance with the best mining practice. 0n connection with its work 5ielson was to sbmit reports, maps, plans and recommendations with respect to the operation and development of the mining properties, make recommendations and plans on the erection or enlargement of an# e2isting mill, dispatch mining engineers and technicians to the mining properties as from time to time ma# reasonabl# be re$ired to investigate and make recommendations withot cost or e2pense to Lepanto. 5ielson was also to /act as prchasing agent of spplies, e$ipment and other necessar# prchases b# Lepanto, provided, however, that no prchase shall be made withot the prior approval of Lepanto; and provided frther, that no commission shall be claimed or retained b# 5ielson on sch prchase/; and /to sbmit all re$isition for spplies, all constricts and arrangement with engineers, and staff and all matters re$iring the e2penditres of mone#, present or ftre, for prior approval b# Lepanto; and also to make contracts sb3ect to the prior approve of Lepanto for the sale and marketing of the minerals mined from said properties, when said prodcts are in a sitable condition for marketing./ 1 0t ths appears that the principal and paramont ndertaking of 5ielson nder the management contract was the operation and development of the 4 mine and the operation of the mill. %ll the other ndertakings mentioned in the contract are necessar# or incidental to the principal ndertaking ! these other ndertakings being dependent pon the work on the development of the mine and the operation of the mill. 0n the performance of this principal ndertaking 5ielson was not in an# wa# e2ecting 3ridical acts for Lepanto, destined to create, modif# or e2tingish bsiness relations between Lepanto and third persons. 0n other words, in performing its principal ndertaking 5ielson was not acting as an agent of Lepanto, in the sense that the term agent is interpreted nder the law of agenc#, bt as one who was performing material acts for an emplo#er, for a compensation. 0t is tre that the management contract provides that 5ielson wold also act as prchasing agent of spplies and enter into contracts regarding the sale of mineral, bt the contract also provides that 5ielson cold not make an# prchase, or sell the minerals, withot the prior approval of Lepanto. 0t is clear, therefore, that even in these cases 5ielson cold not e2ecte 3ridical acts which wold bind Lepanto withot first secring the approval of Lepanto. 5ielson, then, was to act onl# as an intermediar#, not as an agent. Lepanto contends that the management contract in $estion being one of agenc# it had the right to terminate the contract at will prsant to the provision of %rticle 17&& of the old (ivil (ode. >e find, however, a proviso in the management contract which militates against this stand of Lepanto. <aragraph E0 of the contract provides" Coth parties to this agreement fll# recogniBe that the terms of this %greement are made possible onl# becase of the faith or confidence that the 'fficials of each compan# have in the other; therefore, in order to assre that sch confidence and faith shall abide and contine, 501L4'5 agrees that L1<%5T' ma# cancel this %greement at an# time pon ninet# )9+, da#s written notice, in the event that 501L4'5 for an# reason whatsoever, e2cept acts of Hod, strike and other cases be#ond its control, shall cease to prosecte the operation and development of the properties herein described, in good faith and in accordance with approved mining practice. 0t is ths seen, from the above-$oted provision of paragraph E0 of the management contract, that Lepanto cold not terminate the agreement at will. Lepanto cold terminate or cancel the agreement b# giving notice of termination ninet# da#s in advance onl# in the event that 5ielson shold prosecte in bad faith and not in accordance with approved mining practice the operation and development of the mining properties of Lepanto. Lepanto cold not terminate the agreement if 5ielson shold cease to prosecte the operation and development of the mining properties b# reason of acts of Hod, strike and other cases be#ond the control of 5ielson. The phrase /Coth parties to this agreement fll# recogniBe that the terms of this agreement are made possible onl# becase of the faith and confidence of the officials of each compan# have in the other/ in paragraph E0 of the management contract does not $alif# the relation between Lepanto and 5ielson as that of principal and agent based on trst and confidence, sch that the contractal relation ma# be terminated b# the principal at an# time that the principal loses trst and confidence in the agent. ?ather, that phrase simpl# implies the circmstance that broght abot the e2ection of the management contract. Ths, in the annal report for 19&6 * , sbmitted b# Ar. (. %. Dewit, <resident of Lepanto, to its stockholders, nder date of Aarch 1., 19&7, we read the following" To the stockholders 222 222 222 The incorporation of or (ompan# was effected as a reslt of negotiations with Aessrs. 5ielson I (o., 0nc., and an offer b# these gentlemen to Aessrs. (. 0. (ookes and F. L. Lednick#, dated %gst 11, 19&6, reading as follows" 5 Aessrs. (ookes and Lednick#, <resent ?e" Aanka#an (opper Aines H15TL1A15" %fter an e2amination of #or propert# b# or engineers, we have decided to offer as we hereb# offer to nderwrite the entire isse of stock of a corporation to be formed for the prpose of taking over said properties, said corporation to have an athoriBed capital of <1,7.+,+++.++, of which <7++,+++.++ will be issed in escrow to the claim-owners in e2change for their claims, and the balance of <1,+.+,+++.++ we will sell to the pblic at par or take orselves. The arrangement will be nder the following conditions" 1. The sbscriptions for cash shall be pa#able .+: at time of sbscription and the balance sb3ect to the call of the Coard of Directors of the proposed corporation. *. >e shall have an nderwriting and brokerage commission of 1+: of the <1,+.+,+++.++ to be sold for cash to the pblic, said commission to be pa#able from the first pa#ment of .+: on each sbscription. &. >e will bear the cost of preparing and mailing an# prospects that ma# be re$ired, bt no sch prospects will be sent ot ntil the te2t thereof has been first approved b# the Coard of Directors of the proposed corporation. -. That after the organiBation of the corporation, all operating contract be entered into between orselves and said corporation, nder the terms which the propert# will be developed and mined and a mill erected, nder or spervision, or compensation to be <*,+++.++ per month ntil the propert# is pt on a profitable basis and <*,.++.++ per month pls 1+: of the net profits for a period of five #ears thereafter. .. That we shall have the option to renew said operating contract for an additional period of five #ears, on the same basis as the original contract, pon the e2piration thereof. 0t is nderstood that the development and mining operations on said propert#, and the erection of the mill thereon, and the e2penditres therefor shall be sb3ect to the general control of the Coard of Directors of the proposed corporation, and, in case #o accept this proposition, that a detailed operating contract will be entered into, covering the relationships between the parties. Jors ver# trl#, )4gd., L. ?. 5ielson <rsant to the provisions of paragraph * of this offer, Aessrs. 5ielson I (o., took sbscriptions for 'ne Aillion 7ift# Thosand <esos )<1,+.+,+++.++, in shares of or (ompan# and their nderwriting and brokerage commission has been paid. Aore than fift# per cent of these sbscriptions have been paid to the (ompan# in cash. The claim owners have transferred their claims to the (orporation, bt the <7++,+++.++ in stock which the# are to receive therefor, is as #et held in escrow. 0mmediatel# pon the formation of the (orporation Aessrs. 5ielson I (o., assmed the Aanagement of the propert# nder the control of the Coard of Directors. % modification in the Aanagement (ontract was made with the consent of all the then 6 stockholders, in virte of which the compensation of Aessrs. 5ielson I (o., was increased to <*,.++.++ per month when mill constrction began. The formal Aanagement (ontract was not entered into ntil 8anar# &+, 19&7. 222 222 222 Aanila, Aarch 1., 19&7 )4gd., (. %. De>itt <resident >e can gather from the foregoing statements in the annal report for 19&6, and from the provision of paragraph E0 of the Aanagement contract, that the emplo#ment b# Lepanto of 5ielson to operate and manage its mines was principall# in consideration of the know-how and technical services that 5ielson offered Lepanto. The contract ths entered into prsant to the offer made b# 5ielson and accepted b# Lepanto was a /detailed operating contract/. 0t was not a contract of agenc#. 5owhere in the record is it shown that Lepanto considered 5ielson as its agent and that Lepanto terminated the management contract becase it had lost its trst and confidence in 5ielson. The contention of Lepanto that it had terminated the management contract in 19-., following the liberation of the mines from 8apanese control, becase the relation between it and 5ielson was one of agenc# and as sch it cold terminate the agenc# at will, is, therefore, ntenable. 'n the other hand, it can be said that, in asserting that it had terminated or cancelled the management contract in 19-., Lepanto had thereb# violated the e2press terms of the management contract. The management contract was renewed to last ntil 8anar# &1, 19-7, so that the contract had #et almost two #ears to go ! pon the liberation of the mines in 19-.. There is no showing that 5ielson had ceased to prosecte the operation and development of the mines in good faith and in accordance with approved mining practice which wold warrant the termination of the contract pon ninet# da#s written notice. 0n fact there was no sch written notice of termination. 0t is an admitted fact that 5ielson ceased to operate and develop the mines becase of the war ! a case be#ond the control of 5ielson. 0ndeed, if the management contract in $estion was intended to create a relationship of principal and agent between Lepanto and 5ielson, paragraph E0 of the contract shold not have been inserted becase, as provided in %rticle 17&& of the old (ivil (ode, agenc# is essentiall# revocable at the will of the principal ! that means, with or withot case. Ct precisel# said paragraph E0 was inserted in the management contract to provide for the case for its revocation. The provision of paragraph E0 mst be given effect. 0n the constrction of an instrment where there are several provisions or particlars, sch a constrction is, if possible, to be adopted as will give effect to all, & and if some stiplation of an# contract shold admit of several meanings, it shall be nderstood as bearing that import which is most ade$ate to render it effectal. - 0t is 'r considered view that b# e2press stiplation of the parties, the management contract in $estion is not revocable at the will of Lepanto. >e rle that this management contract is not a contract of agenc# as defined in %rticle 17+9 of the old (ivil (ode, bt a contract of lease of services as defined in %rticle 1.-- of the same (ode. This contract can not be nilaterall# revoked b# Lepanto. The first grond of the motion for reconsideration shold, therefore, be brshed aside. *. 0n the second, third and fifth gronds of its motion for reconsideration, Lepanto maintains that this (ort erred, in holding that paragraph 11 of the management contract sspended the period of said contract, in holding that the agreement was not onl# sspended bt was e2tended on accont of the war, and in holding that the period of sspension on accont of the war lasted from 7ebrar#, 19-* to 8ne *6, 19-9. >e are going to discss these three gronds together becase the# are interrelated. 7 0n or decision we have dwelt lengthil# on the points that the management contract was sspended becase of the war, and that the period of the contract was e2tended for a period e$ivalent to the time when 5ielson was nable to perform the work of mining and milling becase of the adverse effects of the war on the work of mining and milling. 0t is the contention of Lepanto that the happening of those events, and the effects of those events, simpl# sspended the performance of the obligations b# either part# in the contract, bt did not sspend the period of the contract, mch less e2tended the period of the contract. >e have conscientiosl# considered the argments of Lepanto in spport of these three gronds, bt >e are not persaded to reconsider the rlings that >e made in 'r decision. >e want to sa# a little more on these points, however. <aragraph 00 of the management contract provides as follows" 0n the event of inndation, flooding of the mine, t#phoon, earth$ake or an# other force ma3ere, war, insrrection, civil commotion, organiBed strike, riot, fire, in3r# to the machiner# or other event or case reasonabl# be#ond the control of 501L4'5 and which adversel# affects the work of mining and milling; 501L4'5 shall report sch fact to L1<%5T' and withot liabilit# or breach of the terms of this %greement, the same shall remain in sspense, wholl# or partiall# dring the terms of sch inabilit#. )1mphasis spplied, % reading of the above-$oted paragraph 00 cannot bt conve# the idea that pon the happening of an# of the events enmerated therein, which adversel# affects the work of mining and milling, the agreement is deemed sspended for as long as 5ielson is nable to perform its work of mining and milling becase of the adverse effects of the happening of the event on the work of mining and milling. Dring the period when the adverse effects on the work of mining and milling e2ist, neither part# in the contract wold be held liable for non-compliance of its obligation nder the contract. 0n other words, the operation of the contract is sspended for as long as the adverse effects of the happening of an# of those events had impeded or obstrcted the work of mining and milling. %n anal#sis of the phraseolog# of the above-$oted paragraph 00 of the management contract readil# spports the conclsion that it is the agreement, or the contract, that is sspended. The phrase /the same/ can refer to no other than the term /%greement/ which immediatel# precedes it. The /%greement/ ma# be wholl# or partiall# sspended, and this sitation will depend on whether the event wholl# or partiall# affected adversel# the work of mining and milling. 0n the instant case, the war had adversel# affected ! and wholl# at that ! the work of mining and milling. >e have clearl# stated in 'r decision the circmstances broght abot b# the war which cased the whole or total sspension of the agreement or of the management contract. L1<%5T' itself admits that the management contract was sspended. >e $ote from the brief of L1<%5T'" <robabl#, what 5ielson meant was, it was prevented b# Lepanto to assme again the management of the mine in 19-., at the precise time when defendant was at the feverish phase of rehabilitation and althogh the contract had alread# been sspended. )Lepanto6s Crief, p. 9,. ... it was impossible, as a reslt of the destrction of the mine, for the plaintiff to manage and operate the same and becase, as provided in the agreement, the contract was sspended b# reason of the war )Lepanto6s Crief, pp. 9-1+,. (lase 00, b# its terms, is clear that the contract is suspended in case fortitos event or force ma3ere, sch as war, adversel# affects the work of mining and milling. )Lepanto6s Crief, p. -9,. Lepanto is correct when it said that the obligations nder the contract were sspended pon the happening of an# of the events enmerated in 8 paragraph 00 of the management contract. 0ndeed, those obligations were sspended becase the contract itself was sspended. >hen we talk of a contract that has been sspended we certainl# mean that the contract temporaril# ceased to be operative, and the contract becomes operative again pon the happening of a condition ! or when a sitation obtains ! which warrants the termination of the sspension of the contract. 0n 'r decision >e pointed ot that the agreement in the management contract wold be sspended when two conditions concr, namel#" )1, the happening of the event constitting a force majeure that was reasonabl# be#ond the control of 5ielson, and )*, that the event constitting the force ma3ere adversel# affected the work of mining and milling. The sspension, therefore, wold last not onl# while the event constitting the force ma3ere contined to occr bt also for as long as the adverse effects of the force ma3ere on the work of mining and milling had not been eliminated. Gnder the management contract the happening alone of the event constitting the force ma3ere which did not affect adversel# the work of mining and milling wold not sspend the period of the contract. 0t is onl# when the two conditions concr that the period of the agreement is sspended. 0t is not denied that becase of the war, in 7ebrar# 19-*, the mine, the original mill, the original power plant, the spplies and e$ipment, and all installations at the Aanka#an mines of Lepanto, were destro#ed pon order of the Gnited 4tates %rm#, to prevent their tiliBation b# the enem#. 0t is not denied that for the dration of the war 5ielson cold not ndertake the work of mining and milling. >hen the mines were liberated from the enem# in %gst, 19-., the condition of the mines, the mill, the power plant and other installations, was not the same as in 7ebrar# 19-* when the# were ordered destro#ed b# the G4 arm#. (ertainl#, pon the liberation of the mines from the enem#, the work of mining and milling cold not be ndertaken b# 5ielson nder the same favorable circmstances that obtained before 7ebrar# 19-*. The work of mining and milling, as ndertaken b# 5ielson in 8anar#, 19-*, cold not be resmed b# 5ielson soon after liberation becase of the adverse effects of the war, and this sitation contined ntil 8ne of 19-9. @ence, the sspension of the management contract did not end pon the liberation of the mines in %gst, 19-.. The mines and the mill and the installations, laid waste b# the ravages of war, had to be reconstrcted and rehabilitated, and it can be said that it was onl# on 8ne *6, 19-9 that the adverse effects of the war on the work of mining and milling had ended, becase it was on that date that the operation of the mines and the mill was resmed. The period of sspension shold, therefore, be reckoned from 7ebrar# 19-* ntil 8ne *6, 19-9, becase it was dring this period that the war and the adverse effects of the war on the work of mining and milling had lasted. The mines and the installations had to be rehabilitated becase of the adverse effects of the war. The work of rehabilitation started soon after the liberation of the mines in %gst, 19-. and lasted ntil 8ne *6, 19-9 when, as stated in Lepanto6s annal report to its stockholders for the #ear 19-9, /8ne *9, 19-9 marked the official retrn to operation of this compan# at its properties at Aanka#an, Aontain <rovince, <hilippines/ )12h. 7-1,. Lepanto wold arge that if the management contract was sspended at all the sspension shold cease in %gst of 19-., contending that the effects of the war shold cease pon the liberation of the mines from the enem#. This contention cannot be sstained, becase the period of rehabilitation was still a period when the ph#sical effects of the war ! the destrction of the mines and of all the mining installations ! adversel# affected, and made impossible, the work of mining and milling. @ence, the period of the reconstrction and rehabilitation of the mines and the installations mst be conted as part of the period of sspension of the contract. Lepanto claims that it wold not be nfair to end the period of sspension pon the liberation of the mines becase soon after the liberation of the mines 5ielson insisted to resme the management work, and that 5ielson was nder obligation to reconstrct the mill in the same wa# that it was nder obligation to constrct the mill in 19&7. This contention is ntenable. 0t is tre that 5ielson insisted to resme its management work after liberation, bt this was onl# for the prpose of restoring the mines, the mill, and other installations to their operating and prodcing condition 9 as of 7ebrar# 19-* when the# were ordered destro#ed. 0t is not shown b# an# evidence in the record, that 5ielson had agreed, or wold have agreed, that the period of sspension of the contract wold end pon the liberation of the mines. This is so becase, as fond b# this (ort, the intention of the parties in the management contract, and as nderstood b# them, the management contract was sspended for as long as the adverse effects of the force ma3ere on the work of mining and milling had not been removed, and the contract wold be e2tended for as long as it was sspended. Gnder the management contract 5ielson had the obligation to erect and operate the mill, bt not to erect or reconstrct the mill in case of its destrction b# force majeure. 0t is the considered view of this cort that it wold not be fair to 5ielson to consider the sspension of the contract as terminated pon the liberation of the mines becase then 5ielson wold be placed in a sitation whereb# it wold have to sffer the adverse effects of the war on the work of mining and milling. The evidence shows that as of 8anar# 19-* the operation of the mines nder the management of 5ielson was alread# nder beneficial conditions, so mch so that dividends were alread# declared b# Lepanto for the #ears 19&9, 19-+ and 19-1. To make the management contract immediatel# operative after the liberation of the mines from the 8apanese, at the time when the mines and all its installations were laid waste as a reslt of the war, wold be to place 5ielson in a sitation whereb# it wold lose all the benefits of what it had accomplished in placing the Lepanto mines in profitable operation before the otbreak of the war in December, 19-1. The record shows that 5ielson started its management operation wa# back in 19&6, even before the management contract was entered into. %s earl# as %gst 19&6 5ielson negotiated with Aessrs. (. 0. (ookes and F. L. Lednick# for the operation of the Aanka#an mines and it was the reslt of those negotiations that Lepanto was incorporated; that it was 5ielson that helped to capitaliBe Lepanto, and that after the formation of the corporation )Lepanto, 5ielson immediatel# assmed the management of the mining properties of Lepanto. 0t was not ntil 8anar# &+, 19&7 when the management contract in $estion was entered into between Lepanto and 5ielson )12hibit %,. % contract for the management and operation of mines calls for a speclative and risk# ventre on the part of the manager-operator. The manager-operator invests its technical know-how, ndertakes back- breaking efforts and tremendos spade-work, so to sa#, in the first #ears of its management and operation of the mines, in the e2pectation that the investment and the efforts emplo#ed might be rewarded later with sccess. This e2pected sccess ma# never come. This had happened in the ver# case of the Aanka#an mines where, as reconted b# Ar. Lednick# of Lepanto, varios persons and entities of different nationalities, inclding Lednick# himself, invested all their mone# and failed. The manager-operator ma# not strike sfficient ore in the first, second, third, or forth #ear of the management contract, or he ma# not strike ore even ntil the end of the fifth #ear. Gnless the manager- operator strikes sfficient $antit# of ore he cannot e2pect profits or reward for his investment and efforts. 0n the case of 5ielson, its corps of competent engineers, geologists, and technicians begn working on the Aanka#an mines of Lepanto since the latter part of 19&6, and contined their work withot sccess and profit throgh 19&7, 19&9, and the earlier part of 19&9. 0t was onl# in December of 19&9 when the efforts of 5ielson started to be rewarded when Lepanto realiBed profits and the first dividends were declared. 7rom that time on 5ielson cold e2pect profit to come to it ! as in fact Lepanto declared dividends for 19-+ and 19-1 ! if the development and operation of the mines and the mill wold contine nhampered. The operation, and the e2pected profits, however, wold still be sb3ect to haBards de to the occrrence of fortitos events, fires, earth$akes, strikes, war, etc., constitting force ma3ere, which wold reslt in the destrction of the mines and the mill. 'ne of these diverse cases, or one after the other, ma# consme the whole period of the contract, and if it shold happen that wa# the manager- operator wold reap no profit to compensate for the first #ears of spade- work and investment of efforts and know-how. @ence, in fairness to the manager-operator, so that he ma# not be deprived of the benefits of the work he had accomplished, the force ma3ere clase is incorporated as a standard clase in contracts for the management and operation of mines. 10 The natre of the contract for the management and operation of mines 3stifies the interpretation of the force ma3ere clase, that a period e$al to the period of sspension de to force ma3ere shold be added to the original term of the contract b# wa# of an e2tension. >e, therefore, reiterate the rling in 'r decision that the management contract in the instant case was sspended from 7ebrar#, 19-* to 8ne *6, 19-9, and that from the latter date the contract had #et five #ears to go. &. 0n the forth grond of its motion for reconsideration, Lepanto maintains that this (ort erred in reversing the finding of the trial cort that 5ielson6s action has prescribed, b# considering onl# the first claim and ignoring the prescriptibilit# of the other claims. This grond of the motion for reconsideration has no merit. 0n 'r decision >e stated that the claims of 5ielson are based on a written docment, and, as sch, the case of action prescribes in ten #ears. . 0nasmch as there are different claims which accred on different dates the prescriptive periods for all the claims are not the same. The claims of 5ielson that have been awarded b# this (ort are itemiBed in the dispositive part of the decision. The first item of the awards in 'r decision refers to 5ielson6s compensation in the sm of <17,.++.++, which is e$ivalent to 1+: of the cash dividends declared b# Lepanto in December, 19-1. %s we have stated in 'r decision, this claim accred on December &1, 19-1, and the right to commence an action thereon started on 8anar# 1, 19-*. >e declared that the action on this claim did not prescribe althogh the complaint was filed on 7ebrar# 6, 19.9 ! or after a lapse of 16 #ears, 1 month and . da#s ! becase of the operation of the moratorim law. >e declared that nder the applicable decisions of this (ort 6 the moratorim period of 9 #ears, * months and 9 da#s shold be dedcted from the period that had elapsed since the accral of the case of action to the date of the filing of the complaint, so that there is a period of less than 9 #ears to be reckoned for the prpose of prescription. This claim of 5ielson is covered b# 12ective 'rder 5o. &*, issed on Aarch 1+, 19-., which provides as follows" 1nforcement of pa#ments of all debts and other monetary obligations pa#able in the <hilippines, e2cept debts and other monetar# obligations entered into in an# area after declaration b# <residential <roclamation that sch area has been freed from enem# occpation and control, is temporaril# sspended pending action b# the (ommonwealth Hovernment. )-1 '.H. .6-.7; 1mphasis spplied, 12ective 'rder 5o. &* covered all debts and monetar# obligation contracted before the war )or before December 9, 19-1, and those contracted sbse$ent to December 9, 19-1 and dring the 8apanese occpation. ?epblic %ct 5o. &-*, approved on 8l# *6, 19-9, lifted the moratorim provided for in 12ective 'rder 5o. &* on pre-war )or pre- December 9, 19-1, debts of debtors who had not filed war damage claims with the Gnited 4tates >ar Damage (ommission. 0n other words, after the effectivit# of ?epblic %ct 5o. &-*, the debt moratorim was limited" )1, to debts and other monetar# obligations which were contracted after December 9, 19-1 and dring the 8apanese occpation, and )*, to those pre-war )or pre-December 9, 19-1, debts and other monetar# obligations where the debtors filed war damage claims. That was the sitation p to Aa# 19, 19.& when this (ort declared ?epblic %ct 5o. &-* nconstittional. 7 0t has been held b# this (ort, however, that from Aarch 1+, 19-. when 12ective 'rder 5o. &* was issed, to Aa# 19, 19.& when ?epblic %ct 5o. &-* was declared nconstittional ! or a period of 9 #ears, * months and 9 da#s ! the debt moratorim was in force, and had the effect of sspending the period of prescription. 9 Lepanto is wrong when in its motion for reconsideration it claims that the moratorim provided for in 12ective 'rder 5o. &* was contined b# ?epblic %ct 5o. &-* /onl# with respect to debtors of pre-war obligations or those incrred prior to December 9, 19-1,/ and that /the moratorim was lifted and terminated with respect to obligations incrred after December 9, 19-1./ 9 11 This (ort has held that ?epblic %ct 5o. &-* does not appl# to debts contracted dring the war and did not lift the moratorim in relations thereto. 1+ 0n the case of %braham, et al. vs. 0ntestate 1state of 8an (. Jsmael, et al., L-167-1, 8an. &1, 196*, this (ort said" ?espondents, however, contend that ?epblic %ct 5o. &-*, which took effect on 8l# *6, 19-9, lifted the moratorim on debts contracted dring the 8apanese occpation. The cort has alread# held that ?epblic %ct 5o. &-* did not lift the moratorim on debts contracted dring the war )G# vs. Kalaw Katigbak, H.?. 5o. L-19&+, Dec. &1, 19-9, bt modified 12ective 'rder 5o. &* as to pre-war debts, making the protection available onl# to debtors who had war damage claims )4ison v. Airasol, H.?. 5o. L--711, 'ct. &, 19.*,. >e therefore reiterate the rling in 'r decision that the claim involved in the first item awarded to 5ielson had not prescribed. >hat we have stated herein regarding the non-prescription of the case of action of the claim involved in the first item in the award also holds tre with respect to the second item in the award, which refers to 5ielson6s claim for management fee of <*,.++.++ for 8anar#, 19-*. Lepanto admits that this second item, like the first, is a monetar# obligation. The right of action of 5ielson regarding this claim accred on 8anar# &1, 19-*. %s regards items &, -, ., 6 and 7 in the awards in the decision, the moratorim law is not applicable. That is the reason wh# in 'r decision >e did not discss the $estion of prescription regarding these items. The claims of 5ielson involved in these items are based on the management contract, and 5ielson6s case of action regarding these claims prescribes in ten #ears. (orollar# to 'r rling that the management contract was sspended from 7ebrar#, 19-* ntil 8ne *6, 19-9, and that the contract was e2tended for five #ears from 8ne *6, 19-9, the right of action of 5ielson to claim for what is de to it dring that period of e2tension accred dring the period from 8ne *6, 19-9 till the end of the five-#ear e2tension period or ntil 8ne *6, 19.&. %nd so, even if >e reckon 8ne *6, 19-9 as the starting date of the ten-#ear period in connection with the prescriptibilit# of the claims involved in items &, -, ., 6 and 7 of the awards in the decision, it is obvios that when the complaint was filed on 7ebrar# 6, 19.9 the ten-#ear prescriptive period had not #et lapsed. 0n 'r decision >e have also rled that the right of action of 5ielson against Lepanto had not prescribed becase of the arbitration clase in the Aanagement contract. >e are satisfied that there is evidence that 5ielson had asked for arbitration, and an arbitration committee had been constitted. The arbitration committee, however, failed to bring abot an# settlement of the differences between 5ielson and Lepanto. 'n 8ne *., 19.7 consel for Lepanto definitel# advised 5ielson that the# were not entertaining an# claim of 5ielson. The complaint in this case was filed on 7ebrar# 6, 19.9. -. 0n the si2th grond of its motion for reconsideration, Lepanto maintains that this (ort /erred in awarding as damages )a, 1+: of the cash dividends declared and paid in December, 19-1; )b, the management fee of <*,.++.++ for the month of 8anar# 19-*; and )c, the fll contract price for the e2tended period of 6+ months, since the damages were never demanded nor proved and, in an# case, not allowable nder the general law on damages./ >e have stated in 'r decision that the original agreement in the management contract regarding the compensation of 5ielson was modified, sch that instead of receiving a monthl# compensation of <*,.++.++ pls 1+: of the net profits from the operation of the properties for the preceding month, 11 5ielson wold receive a compensation of <*,.++.++ a month, pls )1, 1+: of the dividends declared and paid, when and as paid, dring the period of the contract, and at the end of each #ear, )*, 1+: of an# depletion reserve that ma# be set p, and )&, 1+: of an# amont e2pended dring the #ear ot of srpls earnings for capital accont. 12 0t is shown that in December, 19-1, cash dividends amonting to <17.,+++.++ was declared b# Lepanto. 1* 5ielson, therefore, shold receive the e$ivalent of 1+: of this amont, or the sm of <17,.++.++. >e have fond that this amont was not paid to 5ielson. 0n its motion for reconsideration, Lepanto inserted a photographic cop# of page 1*7 of its cash disbrsement book, allegedl# for 19-1, in an effort to show that this amont of <17,.++.++ had been paid to 5ielson. 0t appears, however, in this photographic cop# of page 1*7 of the cash disbrsement book that the sm of <17,.++.++ was entered on 'ctober *9 as /srpls a=c 5ielson I (o. 0nc./ The entr# does not make an# reference to dividends or participation of 5ielson in the profits. 'n the other hand, in the photographic cop# of page 99 of the 19-1 cash disbrsement book, also attached to the motion for reconsideration, there is an entr# for <17,.++.++ on %pril *&, 19-1 which states /%ccts. <a#. <articip. 5ielson I (o. 0nc./ This entr# for %pril *&, 19-1 ma# reall# be the participation of 5ielson in the profits based on dividends declared in %pril 19-1 as shown in 12hibit L. Ct in the same 12hibit L it is not stated that an# dividend was declared in 'ctober 19-1. 'n the contrar# it is stated in 12hibit L that dividends were declared in December 19-1. >e cannot entertain this piece of evidence for several reasons" )1, becase this evidence was not presented dring the trial in the cort below; )*, there is no showing that this piece of evidence is newl# discovered and that Lepanto was not in possession of said evidence when this case was being tried in the cort below; and )&, according to 12hibit L cash dividends of <17.,+++.++ were declared in December, 19-1, and so the sm of <17,.++.++ which appears to have been paid to 5ielson in 'ctober 19-1 cold not be pa#ment of the e$ivalent of 1+: of the cash dividends that were later declared in December, 19-1. %s regards the management fee of 5ielson corresponding to 8anar#, 19-*, in the sm of <*,.++.++, >e have also fond that 5ielson is entitled to be paid this amont, and that this amont was not paid b# Lepanto to 5ielson. >hereas, Lepanto was able to prove that it had paid the management fees of 5ielson for 5ovember and December, 19-1, 1& it was not able to present an# evidence to show that the management fee of <*,.++.++ for 8anar#, 19-* had been paid. 0t having been declared in 'r decision, as well as in this resoltion, that the management contract had been e2tended for . #ears, or si2t# months, from 8ne *7, 19-9 to 8ne *6, 19.&, and that the case of action of 5ielson to claim for its compensation dring that period of e2tension had not prescribed, it follows that 5ielson shold be awarded the management fees dring the whole period of e2tension, pls the 1+: of the vale of the dividends declared dring the said period of e2tension, the 1+: of the depletion reserve that was set p, and the 1+: of an# amont e2pended ot of srpls earnings for capital accont. .. 0n the seventh grond of its motion for reconsideration, Lepanto maintains that this (ort erred in ordering Lepanto to isse and deliver to 5ielson shares of stock together with frits thereof. 0n 'r decision, >e declared that prsant to the modified agreement regarding the compensation of 5ielson which provides, among others, that 5ielson wold receive 1+: of an# dividends declared and paid, when and as paid, 5ielson shold be paid 1+: of the stock dividends declared b# Lepanto dring the period of e2tension of the contract. 0t is not denied that on 5ovember *9, 19-9, Lepanto declared stock dividends worth <1,+++,+++.++; and on %gst **, 19.+, it declared stock dividends worth <*,+++,+++.++,. 0n other words, dring the period of e2tension Lepanto had declared stock dividends worth <&,+++,+++.++. >e held in 'r decision that 5ielson is entitled to receive l+: of the stock dividends declared, or shares of stock worth <&++,+++.++ at the par vale of <+.1+ per share. >e ordered Lepanto to isse and deliver to 5ielson those shares of stocks as well as all the frits or dividends that accred to said shares. 0n its motion for reconsideration, Lepanto contends that the pa#ment to 5ielson of stock dividends as compensation for its services nder the management contract is a violation of the (orporation Law, and that it 13 was not, and it cold not be, the intention of Lepanto and 5ielson ! as contracting parties ! that the services of 5ielson shold be paid in shares of stock taken ot of stock dividends declared b# Lepanto. >e have assidosl# considered the argments addced b# Lepanto in spport of its contention, as well as the answer of 5ielson in this connection, and >e have arrived at the conclsion that there is merit in the contention of Lepanto. 4ection 16 of the (orporation Law, in part, provides as follows" 5o corporation organiBed nder this %ct shall create or isse bills, notes or other evidence of debt, for circlation as mone#, and no corporation shall isse stock or bonds e2cept in e2change for actal cash paid to the corporation or for" )1, propert# actall# received b# it at a fair valation e$al to the par or issed vale of the stock or bonds so issed; and in case of disagreement as to their vale, the same shall be presmed to be the assessed vale or the vale appearing in invoices or other commercial docments, as the case ma# be; and the brden or proof that the real present vale of the propert# is greater than the assessed vale or vale appearing in invoices or other commercial docments, as the case ma# be, shall be pon the corporation, or for )*, profits earned by it but not distributed among its stockholders or members; Provided, however, That no stock or bond dividend shall be issed withot the approval of stockholders representing not less than two-thirds of all stock then otstanding and entitled to vote at a general meeting of the corporation or at a special meeting dl# called for the prpose. 222 222 222 No corporation shall make or declare any dividend except from the surplus profits arising from its business, or divide or distribte its capital stock or propert# other than actal profits among its members or stockholders ntil after the pa#ment of its debts and the termination of its e2istence b# limitation or lawfl dissoltion" Provided, That banking, savings and loan, and trst corporations ma# receive deposits and isse certificates of deposit, checks, drafts, and bills of e2change, and the like in the transaction of the ordinar# bsiness of banking, savings and loan, and trst corporations. )%s amended b# %ct 5o. *79*, and %ct 5o. &.19; 1mphasis spplied., 7rom the above-$oted provision of 4ection 16 of the (orporation Law, the consideration for which shares of stock ma# be issed are" )1, cash; )*, propert#; and )&, ndistribted profits. 4hares of stock are given the special name /stock dividends/ onl# if the# are issed in lie of ndistribted profits. 0f shares of stocks are issed in e2change of cash or propert# then those shares do not fall nder the categor# of /stock dividends/. % corporation ma# legall# isse shares of stock in consideration of services rendered to it b# a person not a stockholder, or in pa#ment of its indebtedness. % share of stock issed to pa# for services rendered is e$ivalent to a stock issed in e2change of propert#, becase services is e$ivalent to propert#. 1- Likewise a share of stock issed in pa#ment of indebtedness is e$ivalent to issing a stock in e2change for cash. Ct a share of stock ths issed shold be part of the original capital stock of the corporation pon its organiBation, or part of the stocks issed when the increase of the capitaliBation of a corporation is properl# athoriBed. 0n other words, it is the shares of stock that are originall# issed b# the corporation and forming part of the capital that can be e2changed for cash or services rendered, or propert#; that is, if the corporation has original shares of stock nsold or nsbscribed, either coming from the original capitaliBation or from the increased capitaliBation. Those shares of stock ma# be issed to a person who is not a stockholder, or to a person alread# a stockholder in e2change for services rendered or for cash or propert#. Ct a share of stock coming from stock dividends declared cannot be issed to one who is not a stockholder of a corporation. % /stock dividend/ is an# dividend pa#able in shares of stock of the corporation declaring or athoriBing sch dividend. 0t is, what the term itself implies, a distribtion of the shares of stock of the corporation 14 among the stockholders as dividends. % stock dividend of a corporation is a dividend paid in shares of stock instead of cash, and is properl# pa#able onl# ot of srpls profits. 1. 4o, a stock dividend is actall# two things" )1, a dividend, and )*, the enforced se of the dividend mone# to prchase additional shares of stock at par. 16 >hen a corporation isses stock dividends, it shows that the corporation6s accmlated profits have been capitaliBed instead of distribted to the stockholders or retained as srpls available for distribtion, in mone# or kind, shold opportnit# offer. 7ar from being a realiBation of profits for the stockholder, it tends rather to postpone said realiBation, in that the fnd represented b# the new stock has been transferred from srpls to assets and no longer available for actal distribtion. 17 Ths, it is apparent that stock dividends are issed onl# to stockholders. This is so becase onl# stockholders are entitled to dividends. The# are the onl# ones who have a right to a proportional share in that part of the srpls which is declared as dividends. % stock dividend reall# adds nothing to the interest of the stockholder; the proportional interest of each stockholder remains the same. 19 0f a stockholder is deprived of his stock dividends - and this happens if the shares of stock forming part of the stock dividends are issed to a non-stockholder ! then the proportion of the stockholder6s interest changes radicall#. 4tock dividends are civil frits of the original investment, and to the owners of the shares belong the civil frits. 19 The term /dividend/ both in the technical sense and its ordinar# acceptation, is that part or portion of the profits of the enterprise which the corporation, b# its governing agents, sets apart for ratable division among the holders of the capital stock. 0t means the fnd actall# set aside, and declared b# the directors of the corporation as dividends and dl# ordered b# the director, or b# the stockholders at a corporate meeting, to be divided or distribted among the stockholders according to their respective interests. *+ 0t is 'r considered view, therefore, that nder 4ection 16 of the (orporation Law stock dividends can not be issed to a person who is not a stockholder in pa#ment of services rendered. %nd so, in the case at bar 5ielson can not be paid in shares of stock which form part of the stock dividends of Lepanto for services it rendered nder the management contract. >e sstain the contention of Lepanto that the nderstanding between Lepanto and 5ielson was simpl# to make the cash vale of the stock dividends declared as the basis for determining the amont of compensation that shold be paid to 5ielson, in the proportion of 1+: of the cash vale of the stock dividends declared. %nd this conclsion of 'rs finds spport in the record. >e had adverted to in 'r decision that in 19-+ there was some dispte between Lepanto and 5ielson regarding the application and interpretation of certain provisions of the original contract particlarl# with regard to the 1+: participation of 5ielson in the net profits, so that some ad3stments had to be made. 0n the mintes of the meeting of the Coard of Directors of Lepanto on %gst *1, 19-+, >e read the following" The (hairman stated that he believed that it wold be better to tie the computation of the !" participation of Nielson # $ompany, %nc& to the dividend, because Nielson will then be able to definitely compute its net participation by the amount of the dividends declared. 0n addition to the dividend, we have been setting p a depletion reserve and it does not seem fair to brden the 1+: participation of 5ielson with the depletion reserve, as the depletion reserve shold not be considered as an operating e2pense. %fter a prolonged discssion, pon motion dl# made and seconded, it was ! ?14'LF1D, That the <resident, be, and he hereb# is, athoriBed to enter into an agreement with 5ielson I (ompan#, 0nc., modif#ing <aragraph F of management contract of 8anar# &+, 19&7, effective 8anar# 1, 19-+, in sch a wa# that 5ielson I (ompan#, 0nc. shall receive 1+: of an# dividends declared and paid, when and as paid dring the period of the contract and at the end of each #ear, 1+: of an# depletion reserve that ma# be set p and 1+: of an# amont e2pended dring the #ear ot of srpls earnings for capital accont. )1mphasis spplied., 15 7rom the sentence, /The (hairman stated that he believed that it wold be better to tie the comptation of the 1+: participation of 5ielson I (ompan#, 0nc., to the dividend, becase 5ielson will then be able to definitel# compte its net participation b# the amont of the dividends declared/ the idea is conve#ed that the intention of Lepanto, as e2pressed b# its (hairman (. %. De>itt, was to make the vale of the dividends declared ! whether the dividends were in cash or in stock ! as the basis for determining the amont of compensation that shold be paid to 5ielson, in the proportion of 1+: of the cash vale of the dividends so declared. 0t does not mean, however, that the compensation of 5ielson wold be taken from the amont actall# declared as cash dividend to be distribted to the stockholder, nor from the shares of stocks to be issed to the stockholders as stock dividends, bt from the other assets or fnds of the corporation which are not brdened b# the dividends ths declared. 0n other words, if, for e2ample, cash dividends of <&++,+++.++ are declared, 5ielson wold be entitled to a compensation of <&+,+++.++, bt this <&+,+++.++ shold not be taken from the <&++,+++.++ to be distribted as cash dividends to the stockholders bt from some other fnds or assets of the corporation which are not inclded in the amont to answer for the cash dividends ths declared. This is so becase if the <&+,+++.++ wold be taken ot from the <&++,+++.++ declared as cash dividends, then the stockholders wold not be getting <&++,+++.++ as dividends bt onl# <*7+,+++.++. There wold be a diltion of the dividend that corresponds to each share of stock held b# the stockholders. 4imilarl#, if there were stock dividends worth one million pesos that were declared, which means an issance of ten million shares at the par vale of ten centavos per share, it does not mean that 5ielson wold be given 1++,+++ shares. 0t onl# means that 5ielson shold be given the e$ivalent of 1+: of the aggregate cash vale of those shares issed as stock dividends. That this was the nderstanding of 5ielson itself is borne ot b# the fact that in its appeal brief 5ielson rged that it shold be paid /<&++,+++.++ being 1+: of the <&,+++,+++.++ stock dividends declared on 5ovember *9, 19-9 and %gst *+, 19.+..../ *1 >e, therefore, reconsider that part of 'r decision which declares that 5ielson is entitled to shares of stock worth <&++,+++.++ based on the stock dividends declared on 5ovember *9, 19-9 and on %gst *+, 19.+, together with all the frits accring thereto. 0nstead, >e declare that 5ielson is entitled to pa#ment b# Lepanto of <&++,+++.++ in cash, which is e$ivalent to 1+: of the mone# vale of the stock dividends worth <&,+++,+++.++ which were declared on 5ovember *9, 19-9 and on %gst *+, 19.+, with interest thereon at the rate of 6: from 7ebrar# 6, 19.9. 6. 0n the eighth grond of its motion for reconsideration Lepanto maintains that this (ort erred in awarding to 5ielson an ndetermined amont of shares of stock and=or cash, which award can not be ascertained and e2ected withot frther litigation. 0n view of 'r rling in this resoltion that 5ielson is not entitled to receive shares of stock as stock dividends in pa#ment of its compensation nder the management contract, >e do not consider it necessar# to discss this grond of the motion for reconsideration. The awards in the present case are all redced to specific sms of mone#. 7. 0n the ninth grond of its motion for reconsideration Lepanto maintains that this (ort erred in rendering 3dgment or attorne#6s fees. The matter of the award of attorne#6s fees is within the sond discretion of this (ort. 0n 'r decision >e have stated the reason wh# the award of <.+,+++.++ for attorne#6s fees is considered b# this (ort as reasonable. %ccordingl#, >e resolve to modif# the decision that >e rendered on December 17, 1966, in the sense that instead of awarding 5ielson shares of stock worth <&++,+++.++ at the par vale of ten centavos )<+.1+, per share based on the stock dividends declared b# Lepanto on 5ovember *9, 19-9 and %gst *+, 19.+, together with their frits, 5ielson shold be awarded the sm of <&++,+++.++ which is an amont e$ivalent to 1+: of the cash vale of the stock dividends ths declared, as part of the compensation de 5ielson nder the management contract. The 16 dispositive portion of the decision shold, therefore, be amended, to read as follows" 05 F01> '7 T@1 7'?1H'05H ('540D1?%T0'54, >e hereb# reverse the decision of the cort a 'uo and enter in lie thereof another, ordering the appellee Lepanto to pa# the appellant 5ielson the different amonts as specified hereinbelow" )1, 4eventeen thosand five hndred pesos )<17,.++.++,, e$ivalent to 1+: of the cash dividends of December, 19-1, with legal interest thereon from the date of the filing of the complaint; )*, Two thosand five hndred pesos )<*,.++.++, as management fee for 8anar# 19-*, with legal interest thereon from the date of the filing of the complaint; )&, 'ne hndred fift# thosand pesos )<1.+,+++.++,, representing management fees for the si2t#-month period of e2tension of the management contract, with legal interest thereon from the date of the filing of the complaint; )-, 'ne million for hndred thosand pesos )<1,-++,+++.++,, e$ivalent to 1+: of the cash dividends declared dring the period of e2tension of the management contract, with legal interest thereon from the date of the filing of the complaint; )., Three hndred thosand pesos )<&++,+++.++,, e$ivalent to 1+: of the cash vale of the stock dividends declared on 5ovember *9, 19-9 and %gst *+, 19.+, with legal interest thereon from the date of the filing of the complaint; )6, 7ift# three thosand nine hndred twent# eight pesos and eight# eight centavos )<.&,9*9.99,, e$ivalent to 1+: of the depletion reserve set p dring the period of e2tension, with legal interest thereon from the date of the filing of the complaint; )7, 4i2 hndred ninet# for thosand three hndred si2t# for pesos and sevent# si2 centavos )<69-,&6-.76,, e$ivalent to 1+: of the e2penses for capital accont dring the period of e2tension, with legal interest thereon from the date of the filing of the complaint; )9, 7ift# thosand pesos )<.+,+++.++, as attorne#6s fees; and )9, The costs. 0t is so ordered.