Kalalo v Luz; G.R. No. L-27782; 31 Jul 1970; 34 SCRA 337

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Parties entered into an agreement where plaintiff-appellee would render engineering design services to defendant-appellant for fees. The fees agreed upon were percentages of appellant’s fee. One of the projects they worked on was for the International Rice Research Institute where appellee stood to receive $28,000, or 20% of the $140,000 that was paid to appellant.

Whether or not appellant may be compelled to pay in US dollars.

NO. Payment in dollars is prohibited by RA 529, a law enacted prior to the forging of the parties’ agreement. The law requires that obligations incurred prior to its enactment and that entail 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. RA 529 does not provide the rate of exchange for the payment of obligations incurred after the enactment of said Act. The logical conclusion, therefore, is that the rate of exchange should be that prevailing at the time of payment.

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