G.R. No. 137798 October 4, 2000
Art. 1250 – Extraordinary inflation or deflation
Facts:
·
Singson and
Caltex entered into a contract of lease over a parcel of land in Quezon City to
be used by respondent as a gasoline service station.
·
The contract
of lease provides that the lease shall run for a period of 20 years, and that
the monthly rental was fixed at P3,500.00 for the first 10 years, and at
P4,200.00 for the succeeding 10 years of the lease.
·
Five years
before the expiration of the lease contract, Singson asked Caltex to adjust or
increase the amount of rentals citing that the country was experiencing
extraordinary inflation.
·
Respondent
refused on the basis of the clear provisions of rental fees.
·
Petitioner
instituted a complaint to adjust rentals, invoked Article 1250 of the Civil
Code, since the contract of lease was executed during extraordinary inflation.
·
The RTC, as
affirmed by the CA, dismissed the complaint for lack of merit.
Issue:
WoN
there existed an extraordinary inflation when
the executed the contract that would call for the application of Article 1250
of the Civil Code and justify an adjustment or increase of the rentals between
the parties.
Held:
No, the Court holds that Article 1250 of the Civil Code is inapplicable in the instant case
because such economic inflation during that period did not contemplate of a
normal or ordinary decline in the purchasing power of the peso, and there was
no even an official declaration thereof by competent authorities.
It decrees that extraordinary
inflation to exist when there is a decrease or increase in the purchasing power
of the Philippine currency which is unusual or beyond the common fluctuation in
the value of said currency, and such increase or decrease could not have been
reasonably foreseen or was manifestly beyond the contemplation of the parties
at the time of the establishment of the obligation.
Thus,
the petition is DENIED.
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