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    Ezekiel T. Mostiero
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    An engineer, Octavio Kalalo, was contracted by an architect, Alfredo Luz, to work on various projects in 1961, including one for the International Rice Research Institute worth $140,000 total. Luz agreed to pay Kalalo 20% of that amount, or $28,000, for his work. When Kalalo demanded payment in US currency, the court held that the payment should be made in Philippine currency instead, as the agreement was made before a law requiring foreign currency obligations to be paid in Philippine currency using the exchange rate at the time the obligation was incurred.

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    An engineer, Octavio Kalalo, was contracted by an architect, Alfredo Luz, to work on various projects in 1961, including one for the International Rice Research Institute worth $140,000 total. Luz agreed to pay Kalalo 20% of that amount, or $28,000, for his work. When Kalalo demanded payment in US currency, the court held that the payment should be made in Philippine currency instead, as the agreement was made before a law requiring foreign currency obligations to be paid in Philippine currency using the exchange rate at the time the obligation was incurred.

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    15 views1 page

    34 Scra 337

    Uploaded by

    Ezekiel T. Mostiero
    An engineer, Octavio Kalalo, was contracted by an architect, Alfredo Luz, to work on various projects in 1961, including one for the International Rice Research Institute worth $140,000 total. Luz agreed to pay Kalalo 20% of that amount, or $28,000, for his work. When Kalalo demanded payment in US currency, the court held that the payment should be made in Philippine currency instead, as the agreement was made before a law requiring foreign currency obligations to be paid in Philippine currency using the exchange rate at the time the obligation was incurred.

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    © All Rights Reserved
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    34 SCRA 337 Mercantile Law Negotiable Instruments Law Negotiable Instruments in

    General Sum Certain in Money Currency To Be Used


    Octavio Kalalo is an engineer whose services were contracted by Alfredo Luz, an architect
    in 1961. Luz contracted Kalalo to work on ten projects across the country, one of which was
    an in the International Rice Research Institute (IRRI) Research Center in Los Baos,
    Laguna. Luz was to be paid $140,000.00 for the entire project. For Kalalos work, Luz
    agreed to pay him 20% of what IRRI is going to pay or equivalent to $28,000.00.
    ISSUE: Whether or not Kalalo should be paid in US currency.
    HELD: No. The agreement was forged in 1961, years before the passage of Republic Act
    529 in 1950. The said law requires that payment in a particular kind of coin or currency
    other than the Philippine currency shall be discharged in Philippine currency measured at
    the prevailing rate of exchange at the time the obligation was incurred. Nothing in the law
    however provides which rate of exchange shall be used hence it is but logical to use the
    rate of exchange at the time of payment.

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