26.] Arrieta vs NARIC 10 SCRA 79 (1964) FACTS
1. On May 19, 19, 1952, !ainti" !ainti""#ae!! "#ae!!ee ee arti$iate% arti$iate% an% an% &'n in te *!i$ *i%%in+ *i%%in+ $a!!e% $a!!e% *y te NARIC "'r te s!y '" 20,000 etri$ t'ns '" -rese ri$e. 2. A$$'r%in+!y A$$'r%in+!y,, 'n !y 1, 1952, !ainti"" !ainti""## ae!!ee /a /. /. Arrieta Arrieta an% te ae!!ant ae!!ant $'r'rati'n $'r'rati'n entere% entere% int' a C'ntra$t '" Sa!e '" Ri$e, n%er te ters '" &i$ te "'rer '*!i+ate% erse!" t' %e!iver t' te !atter 20,000 etri$ t'ns '" -rese Ri$e at 20.00 er etri$ t'n, CI3 Mani!a. . In trn, trn, te %e"en%ant %e"en%ant C'r' C'r'rati rati'n 'n $'itt $'itte% e% itse!" itse!" t' ay "'r te i'rt i'rte% e% ri$e *y eans eans '" an irrev'$a*!e, $'n"ire% an% assi+na*!e !etter '" $re%it in .S. $rren$y in "av'r '" te !ainti""# ae!!ee an%'r s!ier s !ier in -ra, ie%iate!y. 4. es esititee te te $' $'itite ent nt t' ay ay ie ie%i %iat ate! e!yy *y *y ean eanss '" an irre irrev' v'$a $a*! *!e, e, $'n" $'n"ir ire e%% an% an% assi+na*!e 8etter '" Cre%it, '&ever, it &as 'n!y 'n !y 0, 1952, 'r a "!! 'nt "r' te ee$ti'n '" te $'ntra$t, tat te %e"en%ant $'r'rati'n, tr its +enera! ana+er, t'': te "irst ste t' 'en a !etter '" $re%it *y "'r&ar%in+ t' te /i!iine Nati'na! -an: its A!i$ati'n "'r C'er$ia! 8etter '" Cre%it. 5. On te sae sae %ay, %ay, !y !y 0, 1952, 1952, Mrs. Mrs. /a /. /. Arriet Arrieta, a, tr $'nse! $'nse!,, a%vis a%vise% e% te ae! ae!!a !ant nt $'r'rati'n '" te etree ne$essity "'r te ie%iate 'enin+ '" te !etter '" $re%it sin$e se a% *y ten a%e a ten%er t' er s!ier in Ran+''n, -ra e;iva!ent t' 5< '" te 3.O.-. ri$e '" 20,000 t'ns at 1=0.70 an% in $'!ian$e &it te re+!ati'ns in Ran+''n tis 5< &i!! *e $'n"is$ate% i" te re;ire% !etter '" $re%it is n't re$eive% *y te *e"'re A+st 4, 1952. 6. It trne trne%% 't 't '&ev '&ever er,, te ae!! ae!!an antt $'r' $'r'rat rati' i'nn &as &as n't in any any "inan "inan$i $ia! a! 'si 'sititi'n 'n t' eet eet te te $'n%iti'n, &i$ it $an%i%!y a%itte% in a $'ni$ati'n &it /N-. C'nse;ent!y, te $re%it instrent instrent a!ie% "'r &as 'ene% 'n!y 'n Sete*er Sete*er =, 1952 in "av'r '" >iri Set:ya, Ran+''n, -ra, an%'r assi+nee "'r ,614,000.00,(& ,614,000.00,(&i$ i$ is 're tan t&' 'nts "r' te ee$ti'n '" te $'ntra$t) te arty nae% *y te ae!!ee as *ene"i$iary '" te !etter '" $re%it. 7. As a res!t '" '" te %e!ay %e!ay, te a!!'$ati'n a!!'$ati'n '" ae!!ee?s ae!!ee?s s!ier s!ier in Ran+''n Ran+''n &as $an$e!!e% $an$e!!e% an% te te 5< %e'sit, a'ntin+ t' 524,000 :yats 'r ar'iate!y /200,000.00 &as "'r"eite%. =. In tis $'nne$ti'n, $'nne$ti'n, it st st *e a%e '" re$'r% re$'r% tat a!t'+ a!t'+ te te -rese -rese at'rities at'rities a% set A+st 4, 1952 as te %ea%!ine "'r te reittan$e '" te re;ire% !etter '" $re%it, te $an$e!!ati'n '" te a!!'$ati'n an% te $'n"is$ati'n '" te 5< %e'sit &ere n't e""e$te% nti! A+st 20. 1952, 'r, a "!! a!" 'nt a"ter te eirati'n '" te %ea%!ine. An% yet, even &it tat 15#%ay +ra$e, ae!!ant $'r'rati'n &as na*!e t' a:e +''% its $'itent t' 'en te %iste% !etter '" $re%it. 9. >e ae!!e ae!!eee en%eav're% en%eav're%,, *t "ai!e%, "ai!e%, t' rest're rest're te $an$e!! $an$e!!e% e% -rese -rese ri$e a!!'$ati a!!'$ati'n. 'n. @en te "ti!ity "ti!ity '" reinstatin+ reinstatin+ te sae *e$ae aarent, aarent, se '""ere% '""ere% t' s*stitte s*stitte >ai!an% ri$e instea% t' te %e"en%ant NARIC, $'ni$atin+ at te sae tie tat te '""er &as a s'!ti'n &i$ s'!% *e *ene"i$ia! t' te NARIC an% t' s at te sae tie. 10. >is '""er "'r s*stitti'n s*stitti'n,, '&ever, '&ever, &as ree$te% *y te ae!!ant in a res'!ti'n res'!ti'n %ate% N've*er 15, 1952. Ae!!ee sent a !etter t' te ae!!ant, %ean%in+ $'ensati'n "'r te %aa+es $ase% er in te s '" 2=6,000.00, .S. $rren$y, reresentin+ nrea!ie% r'"it. >e %ean% avin+ *een ree$te%, se institte% tis $ase n'& 'n aea!. ISSUE
@ON te !'&er $'rt erre% in '!%in+ NARIC !ia*!e "'r %aa+es "'r *rea$ '" $'ntra$t HELD
# BS. @e %' n't tin: te ae!!ant $'r'rati'n $an re"te te "a$t tat a% it *een a*!e t' t te 50 $' ar+ina! $as %e'sit %ean%e% *y te *an:, ten te !etter '" $re%it &'!% ave *een ar've%, 'ene% an% re!ease% as ear!y as A+st 4, 1952. >e !etter '" te /i!iine Nati'na! -an: t' te NARIC &as !ain an% e!i$it tat as '" te sai% %ate, ae!!ant?s it a!i$ati'n "'r a !etter '" $re%it . . . as *een ar've% *y te -'ar% '" ire$t'rs &it te $'n%iti'n tat 50< ar+ina! $as %e'sit *e ai% an% tat %ra"ts are t' *e ai% 'n resentent. >e !ia*i!ity '" te ae!!ant, '&ever, stes n't a!'ne "r' tis "ai!re 'r ina*i!ity t' satis"y te re;ireents '" te *an:. Its $!a*i!ity arises "r' its &i!!"! an% %e!i*erate assti'n '" $'ntra$ta! '*!i+ati'ns even as it &as &e!! a&are '" its "inan$ia! in$aa$ity t' n%erta:e te resentati'n. # A n*er '" !'+i$a! in"eren$es ay *e %ra&n "r' NARICDs a%issi'n. 3irst, tat te ae!!ant :ne& te *an: re;ireents "'r 'enin+ !etters '" $re%itE se$'n%, tat ae!!ant a!s' :ne& it $'!% n't eet t'se re;ireents. @en, tere"'re, %esite tis a&areness tat it &as "inan$ia!!y in$'etent t' 'en a !etter '" $re%it ie%iate!y, ae!!ant a+ree% in ara+ra = '" te $'ntra$t t' ay ie%iate!y *y eans '" an irrev'$a*!e, $'n"ire% an% assi+na*!e !etter '" $re%it, it st *e sii!ar!y *e e!% t' ave *'n% itse!" t'' ans&er "'r a!! an% every $'nse;en$es tat &'!% res!t "r' te reresentati'n. # In re!ati'n t' te a"'re;'te% '*servati'n '" te tria! $'rt, @e &'!% !i:e t' a:e re"eren$e a!s' t' Arti$!e 1170 '" te Civi! C'%e &i$ r'vi%esF "Those who in the performance of their obligation are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable in damages. # n%er tis r'visi'n, n't 'n!y %e*t'rs +i!ty '" "ra%, ne+!i+en$e 'r %e"a!t in te er"'ran$e '" '*!i+ati'ns are %e$ree% !ia*!eF in +enera!, every %e*t'r &' "ai!s in te er"'ran$e '" is '*!i+ati'ns is *'n% t' in%eni"y "'r te !'sses an% %aa+es $ase% tere*y. >e rase in any anner $'ntravene te ten'r '" te '*!i+ati'n in$!%es any i!!i$it a$t &i$ iairs te stri$t an% "ait"! "!"i!!ent '" te '*!i+ati'n, 'r every :in% '" %e"e$tive er"'ran$e. (IG >'!entin', Civi! C'%e '" te /i!iines, $itin+ at'rities, . 10.) - >e NARIC &'!% a!s' ave tis C'rt '!% tat te s*se;ent '""er t' s*stitte >ai!an% ri$e "'r te 'ri+ina!!y $'ntra$te% -rese ri$e a'nte% t' a &aiver *y te ae!!ee '" &atever ri+ts se i+t ave %erive% "r' te *rea$ '" te $'ntra$t. @e %isa+ree. @aivers are n't rese%, *t st *e $!ear!y an% $'nvin$in+!y s'&n, eiter *y eress sti!ati'n 'r a$ts a%ittin+ n' 'ter reas'na*!e e!anati'n. (Raire vs. C'rt '" Aea!s, 9= /i!., 225E 52 O"". Ha. 779). In te $ase at *ar, n' s$ intent t' &aive as *een esta*!ise%. - In te reises, '&ever, a in'r '%i"i$ati'n st *e e""e$te% in te %is'siti'n 'rti'n '" te %e$isi'n aea!e% "r' ins'"ar as it eresses te a'nt '" %aa+es in .S. $rren$y an% n't in /i!iine /es'. Re*!i$ A$t 529 se$i"i$a!!y re;ires te %is$ar+e '" '*!i+ati'ns 'n!y in any $'in 'r $rren$y &i$ at te tie '" ayent is !e+a! ten%er "'r *!i$ an% rivate %e*ts. In vie& '" tat !a&, tere"'re, te a&ar% s'!% *e $'nverte% int' an% eresse% in /i!iine /es'. /ON A88 > 3ORHOINH, te %e$isi'n aea!e% "r' is ere*y a""ire%, &it te s'!e '%i"i$ati'n tat te a&ar% s'!% *e $'nverte% int' te /i!iine es' at te rate '" e$an+e revai!in+ at te tie te '*!i+ati'n &as in$rre% 'r 'n !y 1, 1952 &en te $'ntra$t &as ee$te%. >e ae!!ee insran$e $'any, in te !i+t '" tis %+ent, is re!ieve% '" any !ia*i!ity n%er tis sit. N' r'n'n$eent as t' $'sts.