Case Digest (G.R. No. L-43446)
Facts:
Filipino Pipe and Foundry Corporation v. National Waterworks and Sewerage Authority, G.R. No. L-43446, May 3, 1988, Supreme Court First Division, Grino‑Aquino, J., writing for the Court. The dispute arose from a 1961 contract under which NAWASA engaged Filipino Pipe and Foundry Corporation (FPFC) to supply centrifugally cast iron pressure pipes worth P270,187.50 for waterworks projects. NAWASA made partial payments totaling P134,680.00 and left a balance of P135,507.50 (exclusive of interest). After delivery, FPFC sued for collection (Civil Case No. 66784) and on November 23, 1967 the Court of First Instance of Manila awarded judgment in FPFC’s favor, ordering NAWASA to pay the unpaid balance in negotiable bonds redeemable after ten years, with 6% interest and accrued interest to March 15, 1966.When NAWASA did not satisfy that judgment, FPFC filed a new action on February 18, 1971 (Civil Case No. 82296) seeking an adjustment of the unpaid balance to reflect changes in the value of the peso since the 1967 judgment, invoking Article 1250 of the Civil Code on extraordinary inflation. NAWASA moved to dismiss on May 3, 1971, asserting the second suit was barred by the prior judgment. The trial court denied the motion to dismiss (May 26, 1971), distinguishing the two causes of action: the first was for collection; the second sought re‑adjustment of the judgment’s real value due to alleged supervening extraordinary inflation.
At trial the court solicited expert evidence; FPFC submitted extensive price‑index data showing a continuous decline in the peso’s purchasing power from 1962 onward. The trial court, however, held on September 5, 1973 that although the peso’s purchasing power had declined, the decline did not amount to the kind of “extraordinary inflation” contemplated by Article 1250 and the Code Commission’s report (which the court said was aimed at wartime anomalies). FPFC appealed. The Court of A...(Pro-only)
Issues:
- Does the continuous decline in the purchasing power of the peso, as shown by FPFC’s price‑index evidence, constitute an “extraordinary inflation” under Article 1250 of the Civil Code entitling FPFC to an adjustment of NAWASA’s unpaid jud...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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