Friday, July 7, 2023

Case Digest: Feliciano A. Cruz vs Auditor General, G.R. No. L-12233

Feliciano A. Cruz vs Auditor General, GR No. L-12233, May 30, 1959

Subject: Obligations and Contracts

FACTS

During the Japanese occupation, Cruz wanted to purchase a lot made available to the public by the Government through the Rural Progress Administration. The lot refers to the Sta. Clara Estate in Sampaloc, Manila. Pursuant to government requisites, Cruz has to pay 1,160 in Japanese money as deposit.

After liberation, Cruz delivered to RPA another 442.85 in Philippine currency. To expedite the conveyance, Cruz delivered the balance of the stipulated price and thereafter demanded the refund of the 1,160 but the Auditor General refused on the ground that deposits under EO No. 49 were considered void and the loss of the deposit by fortuitous event must be borne by Cruz.

ISSUE

Whether or not Cruz can recover the deposit he paid.

RULING

Yes.

Under the law and existing jurisprudence, deposits made in banks during the occupation are null and void, because said institutions were bound to accept and could not have refused to accept any and all deposits made in Mickey Mouse money. In other words, said deposits were accepted without the degree of freedom characterizing the consent that normally binds the parties to a contract. This situation did not obtain in other deposits made during said period.

In this case, it was the RPA that required the petitioner to make the deposit by way of advance partial payment. Such policy was adopted by the RPA of its own free will. It could have changed the policy yet it did not do so. Thus, neither the petitioner nor the RPA was in the same condition as that of the depositors and depositaries contemplated in Executive Order No. 49 and the jurisprudence mentioned.

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