Saura Import vs. DBP, G.R. No. L-24968, April 27, 1972

SAURA IMPORT and EXPERT CO., INC., vs DBP 

[G.R. No. L-24968, April 27, 1972] MAKALINTAL, J.

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.
• The trial court ruled in favor of Saura, ruling that there was a perfected contract between the parties and that the RFC was guilty of breach thereof.

ISSUE: Whether or not there was a perfected contract between the parties. YES. There was indeed a perfected consensual contract.

HELD:

·Article 1934 provides: An accepted promise to deliver something by way of commodatum or simple loan is binding upon the parties, but the commodatum or simple loan itself shall not be perfected until delivery of the object of the contract.

· There was undoubtedly offer and acceptance in the case. The application of Saura, Inc. for a loan of P500,000.00 was approved by resolution of the defendant, and the corresponding mortgage was executed and registered. The defendant failed to fulfill its obligation and the plaintiff is therefore entitled to recover damages.

· When an application for a loan of money was approved by resolution of the respondent corporation and the responding mortgage was executed and registered, there arises a perfected consensual contract.

· However, it should be noted that RFC imposed two conditions (availability of raw materials and increased production) when it restored the loan to the original amount of P500,000.00.

· 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.The action thus taken by both parties was in the nature of mutual desistance 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.

·WHEREFORE, the judgment appealed from is reversed and the complaint dismissed.

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Teves vs. COMELEC, G.R. No. 180363, April 28, 2009

G.R. No. 180363, April 28, 2009

EDGAR Y. TEVES, Petitioner, vs. THE COMMISSION ON ELECTIONS and HERMINIO G. TEVES

Facts:

·         Petitioner was a candidate for the position of Representative of the 3rd legislative district of Negros Oriental during the May 14, 2007 elections.

·         Respondent Herminio G. Teves filed a petition to disqualify petitioner on the ground that in Teves v. Sandiganbayan,3 he was convicted of violating Section 3(h), Republic Act (R.A.) No. 3019, or the Anti-Graft and Corrupt Practices Act, for possessing pecuniary or financial interest in a cockpit, which is prohibited under Section 89(2) of the Local Government Code (LGC) of 1991.

·         Respondent alleged that petitioner is disqualified from running for public office because he was convicted of a crime involving moral turpitude which carries the accessory penalty of perpetual disqualification from public office.

·         The COMELEC First Division disqualified petitioner from running for the position of member of House of Representatives and ordered the cancellation of his Certificate of Candidacy.

·         Upon MR, COMELEC en banc denied the motion saying that since petitioner lost in the last 14 May 2007 congressional elections, it thereby rendered the instant MR moot and academic.

Issue: Whether petitioner’s violation of Section 3(h), R.A. No. 3019 involves moral turpitude.

Held:

·         Moral turpitude has been defined as everything which is done contrary to justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general.

·         The essential elements of the violation of said provision are as follows: 1) The accused is a public officer; 2) he has a direct or indirect financial or pecuniary interest in any business, contract or transaction; 3) he either: a) intervenes or takes part in his official capacity in connection with such interest, or b) is prohibited from having such interest by the Constitution or by law.

·         Thus, there are two modes by which a public officer who has a direct or indirect financial or pecuniary interest in any business, contract, or transaction may violate Section 3(h) of R.A. 3019. The first mode is when the public officer intervenes or takes part in his official capacity in connection with his financial or pecuniary interest in any business, contract, or transaction. The second mode is when he is prohibited from having such an interest by the Constitution or by law.

·         In Teves v. Sandiganbayan, petitioner was convicted under the second mode for having pecuniary or financial interest in a cockpit which is prohibited under Sec. 89(2) of the Local Government Code of 1991.

o   The evidence for the prosecution has established that petitioner Edgar Teves, then mayor of Valencia, Negros Oriental, owned the cockpit in question.

o   Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his wife, still he would have a direct interest thereon because, as correctly held by respondent Sandiganbayan, they remained married to each other from 1983 up to 1992, and as such their property relation can be presumed to be that of conjugal partnership of gains in the absence of evidence to the contrary.

o   Hence, his interest in the Valencia Cockpit is direct and is, therefore, prohibited under Section 89(2) of the LGC of 1991.

·         However, conviction under the second mode does not automatically mean that the same involved moral turpitude. A determination of all surrounding circumstances of the violation of the statute must be considered. Besides, moral turpitude does not include such acts as are not of themselves immoral but whose illegality lies in their being positively prohibited, as in the instant case.

·         The Court clarified that not every criminal act, however, involves moral turpitude. It is for this reason that "as to what crime involves moral turpitude, is for the Supreme Court to determine." In resolving the foregoing question, the Court is guided by one of the general rules that crimes mala in se involve moral turpitude, while crimes mala prohibita do not.

·         Moral turpitude implies something immoral in itself, regardless of the fact that it is punishable by law or not. It must not be merely mala prohibita, but the act itself must be inherently immoral. The doing of the act itself, and not its prohibition by statute fixes the moral turpitude.

·         Consequently, considering all circumstances, the Court held that petitioner’s conviction does not involve moral turpitude.

·         The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit.

·         In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no authority to review, much less reverse.

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