G.R. No.

L-44349, October 29, 1976

JESUS V. OCCENA and EFIGENIA C. OCCENA

vs.
HON. RAMON V. JABSON, COURT OF APPEALS and TROPICAL HOMES, INC.

FACTS:
Private respondent Tropical Homes, Inc had a subdivision contract with petitioners who are the owners
of the land subject of subdivision development by private respondent. The contract stipulated that the
petitioners’ fixed and sole share and participation is the land which is equivalent to forty percent of all cash
receipts from the sale of the subdivision lots. When the development costs increased to such level not
anticipated during the signing of the contract and which threatened the financial viability of the project as
assessed by the private respondent, respondent filed at the lower court a complaint for the modification of the
terms and conditions of the contract by fixing the proper shares that should pertain to the parties therein out
of the gross proceeds from the sales of the subdivision lots. Petitioners moved for the dismissal of the
complaint for lack of cause of action. The lower court denied the motion for dismissal which was upheld by the
CA based on the civil code provision that “when the service has become so difficult as to be manifestly beyond
the contemplation of the parties, the obligor may also be released therefrom, in whole or in part”. Insisting
that the worldwide increase in prices cited by private respondent does not constitute a sufficient cause of
action for the modification of the terms and conditions of the contract, petitioners filed the instant petition.

ISSUE:
Whether or not private respondent may demand modification of the terms of the contract on the
ground that the prestation has manifestly come beyond the contemplation of the parties.

RULING:
No, the prayer of the private respondent was for the modification of their valid contract. If the prayer
of the private respondent is to be released from its contractual obligations on account of the fact that the
prestation has become beyond the contemplation of the parties, then private respondent can rely on said
provision of the civil code. The Article 1267 of the Civil Code provides that when the service has become so
difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released
therefrom, in whole or in part, does not grant the court the power to remake, modify, or revise the contract or
to fix the division of the shares between the parties as contractually stipulated with the force of law between
the parties. Therefore, private respondent’s complaint for modification of its contract with petitioner must be
dismissed.