G.R. No. L-25071 July 29, 1972
GEORGE W. BATCHELDER, doing business under the name and style of Batchelder Equipment, plaintiff-appellant, vs. THE CENTRAL BANK OF THE PHILIPPINES, defendant-appellant.

FACTS

Plaintiff-appellant George W. Batchelder sought reconsideration of the Supreme Court’s March 29, 1972 decision. In his motion, he abandoned his original claim that a contract existed obligating the Central Bank to resell US dollars to him at a specific exchange rate of P2.00375 to US$1.00. Instead, he advanced a new legal theory, contending that even absent a contract, such an obligation on the part of the Central Bank arose directly from law. He argued that the various Central Bank circulars and memoranda, issued pursuant to its regulatory authority, possessed the force and effect of law and could themselves be sources of obligation under the Civil Code.
The Central Bank maintained its position that it acted solely in its capacity as the country’s monetary authority, a regulatory agency tasked with managing the currency and preserving the international value of the peso. It denied that its issuances created any self-imposed contractual or legal obligation to provide foreign exchange at a fixed, favorable rate to the plaintiff. The Bank further contested that the plaintiff had fully complied with all pertinent regulations, a prerequisite for any claim to a vested right.

ISSUE

The core issue for reconsideration was whether the Central Bank, through its administrative circulars and resolutions issued in the exercise of its quasi-legislative powers, assumed a legal obligation to sell foreign exchange to the plaintiff at a predetermined rate, thereby creating a vested right enforceable against it.

RULING

The Supreme Court denied the motion for reconsideration, affirming its prior decision. The Court clarified that while obligations can arise from law under Article 1157 of the Civil Code, and while administrative regulations issued pursuant to lawful authority may have the force of law, such legal obligations are not presumed. They must be expressly created by positive law, such as a statute or a clear regulatory provision that imposes a specific prestation on a party. The Court held that the plaintiff failed to demonstrate that the Central Bank’s circulars categorically imposed a duty on the Bank itself to act as a counterparty in a sale of foreign exchange at a guaranteed rate.
The Court reiterated the ratio decidendi of its original decision: the Central Bank was acting as a regulatory body entrusted with the delicate function of monetary stability, not as a juridical person entering into private contracts. To interpret its general circulars as self-imposing specific financial obligations would frustrate its statutory objectives. The issuance of regulations for the implementation of foreign exchange control is an exercise of police power and quasi-legislative authority for the public good, not an act creating private contractual rights. Consequently, with no valid source of obligation—neither contract nor law—established, the plaintiff’s ancillary claims of compliance and acquisition of a vested right necessarily failed. The decision of March 29, 1972, stood.