PEDRO J. VELASCO, plaintiff-appellant, vs. MANILA ELECTRIC Co., ET AL.

, defendants-
appellees.
VELASCO v. MERALCO
December 20, 1971 | J. JBL Reyes
Modes of Extinguishment - Payment or Performance
jlce

DOCTRINE: NCC 1250 is meant to be used for contractual obligations where a specific currency is
selected by the parties as medium of payment. It is inapplicable to obligations arising from tort.

CASE SUMMARY: MR from earlier SC decision. Velasco claimed damages from Meralco due to their
substation being too noisy. In his MR he asked for more damages. Meralco's MR argued that the doctrine of
inverse condemnation can be used. SC denied both MRs.

FACTS:
- The case is a motion for reconsideration from both appellant Velasco and appellee Meralco of an
earlier SC decision (Aug 6, 1971).

- In Mr. Velasco’s MR, he claimed damages from Meralco due to the noise caused by their substation
which is situated beside his house, resulting into loss of income and causing him to fail selling the
house to another person.
o Mr Velasco argued –
(1) that SC incorrectly assessed and unreasonably reduced the amount of damages awarded due
to not taking into account in computing his loss of income his undeclared income of P8,338.20.
(ELAM: gusto papa ni Vicky na mas matass)
(2) damages awarded to him are inadequate considering the high cost of living at that time.
He invoked NCC 1250 and the Pantoja Ruling (decreasing purchase of the peso was considered
a factor in estimating the indemnity due for loss of life)
- In Meralco’s MR, it said that in the case the noise emitted by substation is not brought down to 50-
decibel level imposed by SC decision, Velasco's remedy would be to compel Meralco to acquire and pay
for the value of the house under the doctrine of "inverse condemnation.”

ISSUE:
(1) WON Velasco is entitled to a larger amount of damages
(2) WON the inverse condemnation doctrine can be invoked

RULING:
Court ruled (with MERALCO):
- The SC denied Velasco's MR. For his first argument, the SC stated that several circumstances disprove
this claim. The fact that he set aside this undeclared income proves that it was not of comparable
character. Also, if the amount was part of his ordinary professional income, then Velasco would be guilty
of fraud for not declaring it and he should not be allowed to benefit from his own wrongdoing.

- For Velaso's second argument, the SC ruled that both NCC 1250 and the Pantoja Ruling are
inapplicable.
The use of the words "extraordinary inflation or deflation of the currency stipulated" shows that the
provision is meant to be used for contractual obligations where a specific currency is selected by the
parties as medium of payment.
1250 is inapplicable to obligations arising from tort (such as the case at bar) There was also no
showing that the factual assumption of the article has come into existence.

As for the Pantoja ruling, the SC stated that the damages awarded to Velasco were by no means full
compensatory damages, since he was declared entitled only to a reduced award for the nuisance sued
upon due to his failure to minimize his damages by means easily within his reach, and that the amount
granted him had already taken into account the economic circumstances.

- The SC also denied Meralco's MR, arguing that the doctrine of "inverse condemnation" was not
invoked in the Trial Court and that it would be improper to consider it on appeal, even less on an
MR. Also, there was no showing that it was impossible to lower the decibel level, as Meralco itself
provided evidence that the noise can be reduced by building a wall.

DISPOSITION: WHEREFORE, appellee’s motion to reconsider is likewise denied.

NOTES:
NCC 1250. In case an extraordinary inflation or deflation of the currency stipulated should
supervene, the value of the currency at the time of the establishment of the obligation shall be
the basis of payment, unless there is an agreement to the contrary.