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Saura

Import & Export Co., Inc. v Development Bank of the Philippines *mej magulo yung facts. Sosorry if I cant make it clearer. But I tried!!! Facts: - Saura Inc applied to the RFC - Rehabilitation Finance Corporation (now DBP Development Bank of the Philippines) for an industrial loan of 500k o However, before the loan application, Saura had already purchased the jute mill machinery on the strength of a letter of credit extended by Prudential o ** The proceeds of the loan from DBP was to be applied to Prudential but since the loan did not proceed, Saura was not able to fulfill its obligation to Prudential. DBP passed Resolution No. 145 approving the loan application with specifications on how to spend the money (construction, machinery, working capital) Resolution No. 736: Reassessment resulting in Resolution No. 3989 reducing the loan to 300k Saura: 500k, DBP denied DBP cancelled 300k, in view of the withdrawal of China Engineers Ltd. (China Engineers was a signatory to the original Res 145) Saura asked for reinstatement of 500k, with China Engineers as signatory Resolution No. 9083 restored loan to 500k with 2 new conditions o Certification from Dept of Agriculture and Natural Resources Use local raw materials However, Saura could not comply with the conditions (local raw materials were not available) Saura did not pursue and requested DBP to cancel the mortgage. DBP executed the corresponding deed of cancellation and delivered it to Ramon Saura (President of Saura Import) 7years later, Saura applied for another loan with DBP for another project. DBP denied. 2years later, this action for damages was instituted by Saura against DBP for allegedly failing to release the loan proceeds.

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Issue: - Whether or not Saura was entitled to damages by the alleged breach of contract by DBP

Held: No - There was mutual desistance o Sauras request for the cancellation of mortgage carried no reservation of whatever rights it believed it might have against DBP for the latters non- compliance o It was only 9years after the loan agreement had been cancelled at its own request that Saura brought this action for damages

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