G.R. No. 58122. December 29, 1989.

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MOBIL OIL PHILIPPINES, INC., petitioner, vs. THE HONORABLE COURT OF
APPEALS and FERNANDO A. PEDROSA, respondents.

FACTS:
Plaintiff is a dealer of defendant’s petroleum products and accessories. An international oil crisis
came about by reason of the concerted action of principal oil producing countries to increase the
oil prices. On February 15, 1974—a Friday—while there was still this oil crisis, plaintiff placed
with defendant a pre-paid order for 8,000 liters of premium gasoline and 2,000 liters of regular
gasoline paying therefore a PBTC Cashier’s Check in the amount of P4,610.00 was received. A
product order form was prepared and filled up by defendant’s order clerk, stating that the order
was taken at ‘2:20’ and ‘12/15’ and the delivery due date is ‘Today’. However, the order was held
until February 19, 1974, the reason for the delay being that on February 18 there was a price
increase and they had to give priority to the recall of invoices already with their warehouse and
dispatcher for re-pricing. Plaintiff was informed of the price increase and refused to pay the price
differential of P2,880.00, but this notwithstanding defendant delivered to plaintiff this February
15 order on March 5, 1974, on the basis of the new increased prices thus reflecting an outstanding
obligation of P2,880.00 against plaintiff.
It was defendant’s contention that since the gasoline was actually delivered on March 5, 1974, the
then prevailing increased rates should be made to apply and not the price prevailing on February
14, 1974 the date when the order was made and paid by plaintiff with a cashier’s check. To such
contention, plaintiff disagreed by arguing that defendant committed a contractual breach and
incurred in delay that should make it liable for damages. Both the trial court and the appellate court
found in favor of plaintiff.

ISSUE:
Whether or not the increase in price is valid.

RULING:
NO. The Court finds and so holds that defendant deliberately delayed the delivery of the gasoline
in question to a date subsequent to February 15, 1974, in the erroneous belief that thereby it could
impose upon the defendant the increased new price that took effect on February 18, 1974. The case
of Commissioner of Public Highways vs. Burgos can be applied here, to wit:

“x x x an agreement is needed for the effects of an extraordinary inflation to be

taken into account to alter the value of the currency at the time of the establishment
of the obligation which, as a rule, is always the determinative element, to be varied
by agreement that would find reason only in the supervention of extraordinary
inflation or deflation.”

Defendant took unfair advantage of the anticipated oil increase on February 18, 1974, motivated
by a desire to rake for itself substantial profits that legitimately belonged to its Mobil dealers,
similarly situated as plaintiff. It threatened plaintiff and made good its threat to suspend gasoline
deliveries, if plaintiff should not accede to its undue demand for the payment of the price
differential. These actuations of defendant are indeed oppressive and malevolent.