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    Del Rosario v. Shell

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    Joshua Reyes
    Del Rosario leased land to Shell with a rental agreement that would adjust the rent according to any devaluation or appreciation of the Philippine currency. Later, President Macapagal issued an executive order lowering the par value of the peso. Del Rosario demanded a rental increase, which Shell refused. The court dismissed, saying the order did not devalue the peso. However, the Supreme Court differentiated devaluation and depreciation, finding both refer to a decrease in value. As the parties intended in their agreement, the lowered peso value justified adjusting the rent upwards. The Court applied Article 1250, making the rental increase valid.

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    Del Rosario v. Shell

    Uploaded by

    Joshua Reyes
    265 views2 pages
    Del Rosario leased land to Shell with a rental agreement that would adjust the rent according to any devaluation or appreciation of the Philippine currency. Later, President Macapagal issued an executive order lowering the par value of the peso. Del Rosario demanded a rental increase, which Shell refused. The court dismissed, saying the order did not devalue the peso. However, the Supreme Court differentiated devaluation and depreciation, finding both refer to a decrease in value. As the parties intended in their agreement, the lowered peso value justified adjusting the rent upwards. The Court applied Article 1250, making the rental increase valid.

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    Del Rosario leased land to Shell with a rental agreement that would adjust the rent according to any devaluation or appreciation of the Philippine currency. Later, President Macapagal issued an executive order lowering the par value of the peso. Del Rosario demanded a rental increase, which Shell refused. The court dismissed, saying the order did not devalue the peso. However, the Supreme Court differentiated devaluation and depreciation, finding both refer to a decrease in value. As the parties intended in their agreement, the lowered peso value justified adjusting the rent upwards. The Court applied Article 1250, making the rental increase valid.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    265 views2 pages

    Del Rosario v. Shell

    Uploaded by

    Joshua Reyes
    Del Rosario leased land to Shell with a rental agreement that would adjust the rent according to any devaluation or appreciation of the Philippine currency. Later, President Macapagal issued an executive order lowering the par value of the peso. Del Rosario demanded a rental increase, which Shell refused. The court dismissed, saying the order did not devalue the peso. However, the Supreme Court differentiated devaluation and depreciation, finding both refer to a decrease in value. As the parties intended in their agreement, the lowered peso value justified adjusting the rent upwards. The Court applied Article 1250, making the rental increase valid.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    SIMEON DEL ROSARIO VS. SHELL Fineness in Effect on July 1, 1944).

    This took effect at noon of


    1988 | Paras | Art. 1250 Extraordinary Inflation or Deflation November 8, 1965.
    4. By the reason of the EO, plaintiff-appellant demanded from the
    PETITIONERS: Simeon Del Rosario (Plaintiff-Appellant) defendant-appellee an increase in the monthly rentals to 487.5 pesos
    RESPONDENTS: The Shell Company of the Philippines Limited a month in which the defendant-appellee refused to do so.
    (Defendant-Appellee) 5. Plaintiff prayed to the CFI that defendant be ordered to pay the
    increase in the monthly rental and likewise asked for damages. The
    SUMMARY: CFI dismissed the petition because according to the CFI, the said EO
    Del Rosario leased a parcel of land to Shell. It was stipulated in the Lease did not officially devalue the peso but merely modified the par value
    Agreement that the rental specified shall be adjusted in accordance with of the peso.
    the devaluation or appreciation of the Philippine Currency. 6. Petitioner still believes that the EO decreased the value of peso that
    President Macapagal promulgated EO 1951 titled "Changing the Par would justify the increase in rent, thus the case before the SC.
    Value of the Peso from US$0.50 to US$0.2564103”.
    Del Rosario demanded an increase in the monthly rentals, Shell refused.
    Del Rosario prayed to the CFI That Shell be ordered to pay the increased ISSUE: WoN the decrease in the par value of the peso by virtue of EO 195
    rental. CFI dismissed and said that the EO did not devalue the peso but is precisely the event contemplated by the parties in paragraph 14 of their
    merely modified the per value of peso. lease contract. – YES
    SC differentiated “devaluation” and “depreciation” and concluded that
    both mean a decrease in the value as applied in this case. Art.1250 is HELD:
    applied making the increase in rentals valid.  The Court defined the word devaluation since it was used in the lease
    contract. It will be noted that devaluation is an official act of the
    DOCTRINE: government and refers to a reduction in metallic content while
    Art. 1250. In case an extraordinary inflation or deflation of the currency depreciation can take place with or without an official act and does
    stipulated should supervene, the value of the currency at the time of the not depend on metallic content.
    establishment of the obligation shall be the basis of payment, unless there  In the case at bar, while no express reference has been made to
    is an agreement to the contrary metallic content, there nonetheless is a reduction in par value or in
    the purchasing power of Philippine currency.
     Even assuming there has been no official devaluation as the term is
    FACTS: technically understood, the fact is that there has been a diminution or
    lessening in the purchasing power of the peso, thus, there has been a
    1. On September 20, 1960 the parties entered into a Lease Agreement "depreciation" (opposite of "appreciation").
    whereby the plaintiff- appellant leased a parcel of land in Ligao,  Moreover, when laymen unskilled in the semantics of economics use
    Albay to the defendant-appellee at a monthly rental of Two Hundred the terms "devaluation" or "depreciation" they certainly mean them
    Fifty Pesos (P250.00). in their ordinary signification — decrease in value.
    2. Paragraph 14 of said contract of lease provides: "In the event of an  Hence as contemplated currency the parties herein in their lease
    official devaluation or appreciation of the Philippine currency the agreement, the term "devaluation" may be regarded as synonymous
    rental specified herein shall be adjusted in accordance with the with "depreciation," for certainly both refer to a decrease in the value
    provisions of any law or decree declaring such devaluation or of the currency. The rentals should therefore by their agreement be
    appreciation as may specifically apply to rentals." proportionately increased
    3. On November 6, 1965, President Diosdado Macapagal promulgated
    Executive Order No. 195 1 titled "Changing the Par Value of the WHEREFORE, the lower court decision is reversed.
    Peso from US$0.50 to US$0.2564103 (U.S. Dollar of the Weight and

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