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    Saura v. DBP, GR L-24968, April 27, 1972 (Per J. Makalintal, en Banc)

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    Saura v. DBP, GR L-24968, April 27, 1972 (Per J. Makalintal, en Banc)

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    robiavakin8
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    Original Title

    (67) Saura v. DBP, GR L-24968, April 27, 1972 [Per j. Makalintal, En Banc]

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    5 views1 page

    Saura v. DBP, GR L-24968, April 27, 1972 (Per J. Makalintal, en Banc)

    Uploaded by

    robiavakin8

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    © All Rights Reserved
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    of 1

    G.R. No.

    L-24968 April 27, 1972


    SAURA IMPORT and EXPORT CO., INC., plaintiff-appellee,
    vs.
    DEVELOPMENT BANK OF THE PHILIPPINES, defendant-appellant.

    FACTS:

    • In July 1952, Saura, Inc., applied to Rehabilitation Finance Corp., now DBP, for an industrial
    loan of P500,000 to be used for the construction of a factory building, to pay the balance
    of the jute mill machinery and equipment and as additional working capital. In Resolution
    No.145, the loan application was approved to be secured first by mortgage on the factory
    buildings, the land site, and machinery and equipment to be installed.
    • The mortgage was registered and documents for the promissory note were executed. But
    then, later on, was cancelled to make way for the registration of a mortgage contract over
    the same property in favor of Prudential Bank and Trust Co., the latter having issued Saura
    letter of credit for the release of the jute machinery. As security, Saura execute a trust
    receipt in favor of the Prudential. For failure of Saura to pay said obligation, Prudential
    sued Saura.
    • After almost 9 years, Saura Inc, commenced an action against RFC, alleging failure on the
    latter to comply with its obligations to release the loan applied for and approved, thereby
    preventing the plaintiff from completing or paying contractual commitments it had
    entered into, in connection with its jute mill project.

    ISSUE:
    Whether or not DBP failed to fullfill its obligation to Saura.
    HELD:
    No. When RFC turned down the request in its letter of January 25, 1955 the negotiations
    which had been going on for the implementation of the agreement reached an impasse.
    Saura, Inc. obviously was in no position to comply with RFC's conditions. So instead of
    doing so and insisting that the loan be released as agreed upon, Saura, Inc. asked that the
    mortgage be cancelled, which was done on June 15, 1955. The action thus taken by both
    parties was in the nature of mutual desistance — what Manresa terms "mutuo disenso" —
    which is a mode of extinguishing obligations. It is a concept that derives from the principle
    that since mutual agreement can create a contract, mutual disagreement by the parties
    can cause its extinguishment.

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