What Happened to the Central Azucarera de Mabalacat?

Once upon a time, there was a sugar central in the Municipality of Mabalacat, Pampanga operated by Mabalacat Sugar Company (The Sugar Central). It was known as the Central Azucarera de Mabalacat. Writing from memory, historian Mariano Henson (1955:115), shared that the sugar central started milling in 1923 and conked out of business in 1934. However, court records indicate that the sugar central may have started operations as early as 1920. At its prime, the sugar central milled 256 tons of sugar cane daily. Pampanga's sugar cane farming expanded to Mabalacat since mid-1800s.

So, what happened to Mabalacat's little sugar central?

The Mabalacat Sugar Company operated its sugar central on two (2) parcels of land in Mabalacat, Pampanga. The said lands hosted the the Sugar Central's buildings, sugar-cane mill, telephone installations, apparatus, utensils and machinery necessary for the operation of a sugar central. The Sugar Central also owned a railway on lands rented from the Dizon and Tiglao families. The railways covered a strip of land, some 2,664 meters long and 5 meters wide, stretching from Hacienda Concepcion, traversing through Barrio Dolores, to Mabalacat. The property included permanent improvements - embankments, bridges, sewers and telephone lines - all for the proper transport of sugar cane.

The sugar central was managed by its president Benjamin A. Green. He was known by his appellation, B.A. Green. He owned 55% of the company's capital stock. On April 26, 1926, B.A. Green, the president and manager of Mabalacat Sugar Company, Inc. obtained a loan from a Binondo-based real estate holding company, Cu Unjieng y Hijos. The loan was secured by a first mortgage constituted on the Sugar Central's two (2) parcels of land including all improvements, fixtures, machinery and equipment existing therein or may exist in the future on said lots.

Guillermo A. Cu Unjieng owner of Cu Unjieng y Hijos which funded Mabalacat Sugar Central's 1926 expansion.
(Photo:  Josephine M. T. Khu) 

Shortly after, Green decided to buy additional machinery and equipment with the goal of increasing the Sugar Central's milling capacity from 150 to 250 tons per day. He needed additional capital amounting to PhP 100,000.00. He, thus, proposed to entrepreneur B.H. Berkenkotter to advance the needed funds. Green promised to return Berkenkotter's money as soon as he could obtain additional loans from Cu Unjieng y Hijos. On October 5, 1926, Berkenkotter agreed with the proposal and four days later, delivered the amount of PhP 1,710.00. Berkenkotter also advanced to the Sugar Central the amount of PhP 25,750.00 plus PhP 22,000.00 representing his unpaid salaries.

The additional machinery and equipment purchased were installed on April 27, 1927. As planned, on June 10, 1927, B.A. Green applied for additional loans of PhP 75,000.00 from Cu Unjieng y Hijos. He offered as security the newly-installed machinery and equipment. The loan, however, was not granted.

The Sugar Central became laden with indebtedness. On October 20, 1928, Cu Unjieng y Hijos, gave extension of time for the Sugar Central to pay in full its mortgage indebtedness until June 30, 1929, with certain installment payments to be made on specified dates. But the Sugar Central failed to make payments due on February 25, 1929, March 25, 1929, and April 25, 1929, and failed altogether to fully pay the balance due on June 30, 1929. 

To recover their investments, Cu Unjieng y Hijos filed Civil Case No. 4178 before the Court of First Instance of Pampanga against the Sugar Central. After trial, the court ordered, among others, the Sugar Central to pay Cu Unjieng y Hijos the amount PhP 163, 534.73 with interests of 12 percent per year, compounded monthly beginning May 1, 1929. If payments were not made within three (3) months, foreclosure proceedings follow. On appeal, the Supreme Court of the Philippines modified the lower court's decision ordering the Sugar Central to pay PhP 162,398.61, with interest at 12 per cent per year, beginning May 1, 1929. (Cu Unjieng y Hijos vs. The Mabalacat Sugar Co., et al., G.R. No. L-32644, decided October 4, 1930).

B.H. Berkenkotter, on the other hand, filed a petition before the Court of First Instance of Manila claiming ownership over the machinery and equipment installed at the Sugar Central. He believed that he is the rightful owner of the said machinery and equipment having advanced some money for its purchase and that he was unpaid. The lower court and the Supreme Court denied his claim. The machinery and equipment were considered permanent improvements and were therefore incorporated in the mortgaged lands. They were deemed mortgaged properties to Cu Unjieng y Hijos. However, Berkenkotter was allowed the right of redemption (B. H. Berkenkotter vs. Cu Unjieng y Hijos, G.R. No. L-41643, July 31, 1935).

The Sugar Central continuously failed to pay its indebtedness to its creditors prompting the Provincial Sheriff of Pampanga to foreclose its properties, including its machinery and accessories, and sold them in public auction for PhP 177,000.00. Green found the price inadequate. But the Court of First Instance found it more than enough and so confirmed the validity of the sale. On appeal, the validity of the auction sale was upheld by the Supreme Court of the Philippines. (Cu Unjieng y Hijos vs. Mabalacat Sugar Company, et.al. G.R. No. 37206, decided September 22, 1933).

The Sugar Central's Financial Setbacks

Between the crop years 1926-1930, the Sugar Central experienced financial setbacks. It failed to meet its obligations to its creditors. For instance, it failed to deliver 14,243.42 piculs of centrifugal sugar promised to Compañia General de Tabacos de Filipinas (G.R. No. 34960, decided September 25, 1931). It also failed to pay Earnshaws Docks and Honolulu Iron Works for services rendered, materials supplied and promissory note issued (G.R. L-32547, decided October 4, 1930). And it failed to negotiate for the renewal of the lease contract of the lands it used (G.R. No. 30112, decided September 9, 1929).

On September 4 and 5, 1927, Manuel Lazatin and Tomasa C. Vda de Pamintuan (in behalf of the minor owners) hired a large body of men to remove hastily the railway tracks of the Sugar Central. It was done with such haste, force and violence that the whole track was torn up and removed in two days. The men bent or twisted the rails, destroyed the railway ties, fish-plates, bolts and nuts and spikes. So devastating was the effect of this hullabaloo that the company was forced to litigate the matter to redress its damages despite its ailing financial condition. The Supreme Court of the Philippines found Lazatin and Pamintuan liable to the Sugar Central for damages amounting to PhP 2,083.00 (The Mabalacat Sugar Company vs. Jose V. Ramirez, et. al., G.R. No. 30112, decided September 9, 1929).

The Sugar Central Under Receivership

On May 3, 1929, after winning the case against the Sugar Central, Cu Unjieng y Hijos secured the appointment of Rafael Fernandez as receiver of the properties. Fernandez, a learned man, who graduated at the University of the Philippines and Harvard University, was a trusted friend of the Cu Unjiengs. Fernandez, after filing a bond of PhP 10, 000.00, assumed office as a receiver. 

It turned out, however, that Fernandez brought more harm than good to the Sugar Central. On December 18, 1930, Fernandez, in his capacity as the receiver of the Sugar Central, issued forged sugar quedan no. 306 for 380,000 piculs of centrifugal sugar in favor of Amando L. Santos. And on December 25, 1930 and February 17, 1931, Fernandez, issued another two forged sugar quedans nos. 307 and 324, for 530,434 and 544,345 piculs, respectively, of centrifugal sugar in favor of Teodoro Santos. Subsequently, it appeared that Amando L. Santos and Teodoro Santos transferred the said three sugar quedans to Rafael Fernandez, this time in the his personal capacity. With the said forged sugar quedans, Fernandez obtained from National City Bank of New York over-draft credit facilities, up to the amount of P900,000.00. The centrifugal sugar represented by said quedans did not exist (The National City Bank of New York vs. Yek Tong Lin Fire & Marine Insurance Co., G.R. No. L-8369, decided April 20, 1956).

On July 24, 1931, Rafael Fernandez was discharged as receiver of the Mabalacat Sugar Company. Francisco Baltazar took over the receivership after having filed a bond for P50,000 and taken oath of office as a receiver. He helped the Sugar Central fold up its business. By the eve of the World War II, Mabalacat Sugar Company was a distant memory.

What of B.A. Green? He moved on to become the president of another venture - the Abucay Plantation Company.

Hacienda Concepcion (1927) as it appeared in a Camp Stotsenburg map. It shows the sugar plantation and the railway track. (https://searchworks.stanford.edu/view/9956692).

List of Works Cited

B. H. Berkenkotter vs. Cu Unjieng y Hijos, G.R. No. L-41643, July 31, 1935.

Cu Unjieng y Hijos vs. The Mabalacat Sugar Co., et al., G.R. No. L-32644, decided October 4, 1930.

Cu Unjieng y Hijos vs. Mabalacat Sugar Company, et.al. G.R. No. 37206, decided September 22, 

     1933.

Earnshaws Docks and Honolulu Iron Works vs. Mabalacat Sugar Company, G.R. No. L-32547,
     decided October 4, 1930.

Henson, Mariano. 1955. The Province of Pampanga and its Towns (A.D. 1300-1955) with the 

     Genealogy of the Rulers of Central Luzon. Angeles, Pampanga.

La Compañia General De Tabacos De Filipinas vs. Mabalacat Sugar Co., and Geo C. Sellner, G.R. 

     No. 34960. September 25, 1931.

The Mabalacat Sugar Company vs. Jose V. Ramirez, et. al. G.R. No. 30112, decided September 9, 

     1929.

The National City Bank of New York vs. Yek Tong Lin Fire & Marine Insurance Co., G.R. No. L-

     8369, decided April 20, 1956.