Saura Inc. vs Dbp 44 Scra 445

G.R. No. L-24968 April 27, 1972 SAURA IMPORT and !PORT "O., IN" ., plaintiff-appellee, plaintiff-appellee, vs. #$LOPMNT %AN& O' T( P(ILIPPINS, defendant-appellant.

FACTS: In July 1953, plaintiff Saura Inc. applied t !"# fr an industrial lan f #5$$,$$$.$$, t %e used fr t&e cnstructin f a factry %uildin', t pay t&e %alance f t&e purc&ase price f t&e (ute )ill )ac&inery and e*uip)ent, and as additinal +rin' capital. +ever, t&e (ute )ill )ac&inery &ad already %een purc&ased %y Saura n t&e stren't& f a letter f credit etended %y t&e #rudential "an and Trust C., and t secure its release +it&ut first payin' t&e draft, Saura, Inc. eecuted a trust receipt in favr f t&e said %an. /n January 0, 195, !"# apprved t&e lan applicatin fr #5$$,$$$.$$, t %e secured %y a first )rt'a )rt'a'e 'e n t&e factr factry y %uildi %uildin' n' t %e cnstr cnstruct ucted, ed, t&e land land site site t&ere t&eref, f, and t&e )ac&in )ac&inery ery and e*uip)ent t %e installed. A)n' its cnditins is 2t&at r. 4 rs. a)n 6. Saura, Incencia Arellan,  Anicet Cal%y and 7re'ria 6sta%ill and C&ina 6n'ineers, 8td. s&all si'n t&e p r)issry ntes (intly +it& t&e %rr+er-crpratin. Saura, Inc. +as fficially ntified f t&e apprval n January 9, 195. T&e day %efre, &+ever, Saura, Inc. +rte a letter t FC, re*uestin' a )dificatin f t&e ter)s laid d+n %y it, t&at in lieu f &avin' C&ina 6n'ineers, 8td. si'n as c-)aer, Saura Inc. +uld put up a %nd fr  #13, 5$$.$$, and t&at aria S. ca +uld %e su%stituted fr Incencia. !"# apprved t&e re*uest n Fe%ruary , 195. +ever, Saura, Inc. nce a'ain +rte t !"# t&at C&ina 6n'ineers, 8td. &ad a'ain a'reed t act as c-si'ner fr t&e lan, and ased t&at t&e necessary dcu)ents %e prepared. /n April 13, 195 t&e lan dcu)ents +ere eecuted. ;net&eless, in a )eetin' f t&e !"# "ard f 7vernrs, it +as decided t reduce t&e lan fr) #5$$, $$$.$$ t #3$$, $$$.$$. "ut, s)eti)e in June 195, C&ina 6n'ineers 8td. declared t&at t&e c)pany is n ln'er part f t&e lan and t&erefre cnsidered t&e sa)e as cancelled as far as it +as cncerned. T&ey re*uested t&at t&e )rt'a'e %e +it&dra+n. "ecause f t&at, Saura, Inc. &ad +ritten !"# re*uestin' t&at t&e lan f #5$$,$$$.$$ %e 'ranted instead f t&e a'reed reduced a)unt. T&is, &+ever, +as denied %y !"#. "ut t&en a'ain, Saura Inc. infr)ed !"# t&at C&ina 6n'ineers 8td. c&an'ed its declaratin and is n+ +illin' t si'n t&e pr)issry ntes as c-)aer. !"# t&en restred t&e lan t t&e ri'inal a)unt. +ever, ne'tiatins ne'tiatins ca)e t a standstill. Saura, Inc. did n t pursue t&e )atter furt&er. Instead, it re*uested !"# t cancel t&e )rt'a'e, and s, n June 10, 1955 !"# eecuted t&e crrespndin' deed f cancellatin and delivered it t Saura, Inc.  Al)st 9 years after t&e )rt'a'e )rt'a'e in favr f !"# !"# +as cancelled cancelled at t&e re*uest f Saura, Inc., t&e latter c))enced t&e present suit fr da)a'es, alle'in' failure f !"# t c)ply +it& its %li'atin t releas release e t&e prcee prceeds ds f t&e lan lan appli applied ed fr and apprv apprved, ed, t&ere% t&ere%y y preven preventin tin' ' t&e plain plaintif tifff fr) fr) c)pletin' r payin' cntractual c))it)ents it &ad entered int.

T&e trial curt rendered (ud')ent fr t&e plaintiff, rulin' t&at t&ere +as a perfected cntract %et+een t&e parties and t&at t&e defendant +as 'uilty f %reac& t&eref. T&e present appeal is fr) t&at  (ud')ent. ISSes. Article 193 f t&e Civil Cde prvides, 2An accepted pr)ise t deliver s)et&in', %y +ay f c))datu) r si)ple lan is %indin' upn t&e parties, %ut t&e c))datu) r si)ple lan itself s&all nt %e perferted until t&e delivery f t&e %(ect f t&e cntract. T&ere +as undu%tedly ffer and acceptance in t&is case evidenced %y t&e applicatin f Saura, Inc. fr a lan and t&e su%se*uent apprval f !"#, and t&e crrespndin' eecutin and re'istratin f )rt'a'e. =&en !"# turned d+n t&e re*uest f petitiner, Saura, Inc. %viusly +as in n psitin t c)ply +it& FC?s cnditins. S instead f din' s and insistin' t&at t&e lan %e released as a'reed upn, Saura, Inc. ased t&at t&e )rt'a'e %e cancelled. T&e actin t&us taen %y %t& parties +as in t&e nature f )utual desistance. It is a cncept t&at derives fr) t&e principle t&at since )utual a'ree)ent can create a cntract, )utual disa'ree)ent %y t&e parties can cause its etin'uis&)ent. =66F/6, t&e (ud')ent appealed fr) is reversed and t&e c)plaint dis)issed.