Miguel Velasco y Cuarteroni v. Lao Tam

Summary

Supreme Court affirmed that a lessee must pay full contractual rent even when the leased building is partially destroyed by fire and undergoing repairs. The Court applied the literal interpretation rule under Civil Code Article 1281, finding the lease contract's rent payment obligation was absolute and unconditional. Despite the lessee's argument that reduced building income should justify reduced lot rent, the Court ruled that the contract's fire clause only provided for lease term extension, not rent reduction. The decision established that clear contractual terms must be enforced as written, and courts cannot modify agreements to address business losses not expressly covered by contract provisions.