Case Digest (G.R. No. L-25071)
Facts:
The case involves George W. Batchelder, doing business as Batchelder Equipment, as the plaintiff-appellant, and the Central Bank of the Philippines as the defendant-appellant. The events leading to the case began when Batchelder, an American citizen residing in the Philippines, entered into a contract with the U.S. Navy on March 30, 1960, for the construction of a weather station in Bukidnon, Mindanao, valued at $188,000. Following the issuance of Central Bank Circular No. 20 on December 9, 1949, which imposed exchange controls, the Central Bank issued several subsequent circulars and resolutions, including Monetary Board Resolution No. 857 on June 17, 1960, which allowed Filipino and resident American contractors to utilize 90% of their dollar earnings for purchasing construction materials and equipment. Batchelder surrendered his dollar earnings amounting to $199,966.00 to the Central Bank but was only permitted to utilize $25,874.84, or 21.41% of the amount he applied for....
Case Digest (G.R. No. L-25071)
Facts:
Parties Involved:
- Plaintiff-Appellant: George W. Batchelder, an American citizen residing in the Philippines, doing business under the name Batchelder Equipment.
- Defendant-Appellant: The Central Bank of the Philippines, a government corporation established under Republic Act No. 265.
Background of the Case:
- The Central Bank issued Central Bank Circular No. 20 on December 9, 1949, imposing exchange controls. Subsequent circulars, including Circular No. 44 (June 12, 1953), Circular No. 105 (April 25, 1960), and Circular No. 106 (April 25, 1960), were issued to implement exchange control policies.
- On July 16, 1959, Republic Act No. 2609 was enacted, mandating a four-year program of gradual decontrol of foreign exchange.
Plaintiff’s Contract with the U.S. Navy:
- On March 30, 1960, Batchelder entered into a contract with the U.S. Navy for the construction of a weather station in Bukidnon, Mindanao, for $188,000.
Monetary Board Resolutions:
- On June 17, 1960, the Central Bank issued Monetary Board Resolution No. 857, allowing contractors with U.S. military base contracts predating April 25, 1960, to utilize 90% of their surrendered dollar earnings at a preferred exchange rate of P2.00375 per $1.
- On April 28, 1961, Monetary Board Resolution No. 695 amended Resolution No. 857, requiring contractors to comply with specific terms to utilize their dollar earnings.
Plaintiff’s Surrender of Dollar Earnings:
- Batchelder surrendered $199,966 to the Central Bank but was only allowed to utilize $25,874.84 (21.41%) of his earnings. He demanded the balance of 90% of his surrendered earnings at the preferred exchange rate.
Lower Court Decision:
- The lower court ruled in favor of Batchelder, holding that the Central Bank’s resolutions created a contractual obligation to resell $154,094.56 at the preferred exchange rate or pay the difference in peso cost.
Issue:
- (Unlock)
Ruling:
- (Unlock)
Ratio:
No Contractual Obligation Created:
- A contract requires a meeting of minds between parties, with mutual consent to the terms. The Central Bank’s issuance of resolutions and circulars was an exercise of its regulatory powers, not an offer to enter into a contract.
- The resolutions were part of the Central Bank’s implementation of statutory objectives under Republic Act No. 265, aimed at maintaining monetary stability and promoting economic growth.
Regulatory vs. Contractual Actions:
- The Central Bank’s actions were quasi-legislative, aimed at implementing exchange control policies. These actions did not create enforceable contractual rights for individuals.
- The lower court erred in interpreting the resolutions as creating a binding contract.
No Grounds for Damages:
- Since no contractual obligation existed, Batchelder’s claims for compensatory damages, attorney’s fees, and exemplary damages were without legal basis.
Proper Remedy:
- Batchelder may pursue other legal remedies under the Central Bank’s valid rules and regulations, but he cannot enforce a contractual claim based on the resolutions.