Lucia R. Singson v. Caltex (Philippines)

Summary

This case involves a dispute over rental adjustment in a 20-year lease contract between lessor Lucia Singson and lessee Caltex Philippines. The lease, executed in 1968, fixed rental rates at P2.50/sq.m. for the first decade and P3.00/sq.m. for the second decade, with a maximum rental clause. In 1983, citing extraordinary inflation, Singson sought rental adjustment under Article 1250 of the Civil Code, which allows currency value adjustments for extraordinary inflation/deflation. Caltex refused, invoking the maximum rental provision. All three court levels rejected Singson's claim, ruling that while inflation occurred during 1968-1983, it did not constitute 'extraordinary inflation' under Article 1250. The Supreme Court emphasized that peso decline was normal currency erosion, not the violent, sudden changes contemplated by the law, and that clear contractual terms must be respected absent extraordinary circumstances.