Complex sentence: Seeing the prevailing indiscipline, the mulatto Moyano, Olive accepts the suggestion to consult the royalist Colonel Jose Maria Casariego, who was taken captive and lodged there, this saw the advantage he could derive from the situation and advised to replace the patriot leaders by Spanish.
Split into simpler sentences: Seeing the prevailing indiscipline, the mulatto Moyano, Olive accepts the suggestion of consulting Royalist Colonel Jose María Casariego, who was taken captive and lodged there. Casariego saw the advantage he could derive from the situation and advised to replace the patriot leaders by Spanish.