State Investment House, Inc. v. CA GR No.

90676 June 19, 1991 Facts: Private respondents Spouses Rafael & Refugia Aquino pledged certain shares of stock to petitioner to secure a loan. Prior to the execution of such pledge, respondents, agreed with the petitioner for the latter's purchase of receivables from Spouses Jose and Marcelina Aquino. Respondent spouses paid their loan partly from their own money and from the proceeds of a new loan secured by the same pledge. Upon maturity of the new loan, petitioner demanded payment. Respondents expressed willingness to pay requesting that upon payment the shares of stocks pledged be released. Petitioner denied the request on the ground that the loan extended to Jose & Marcelina had remained. Respondent sued the petitioner. The trial judge ruled in their favor. During execution, the petitioner refused to accept payment demanding that interests be paid. Issue: Are the respondents liable for payment of interest even without mora? If they are liable, on what rate should the interests be? Held: On the first issue, yes. The respondents may not be in default in view of their expressed willingness to pay the same upon demand and the refusal of the petitioner to accept. However, their tender of payment should have been properly consigned with the court. On the second issue, since respondent spouses were held not to have been in delay, they were properly liable only for the principal of the loan and the stipulated regular or monetary interest of 17% per annum. They were not liable for penalty or compensatory interest, fixed by the promissory note in Account No. IF-82-0904-AA at two percent (2%) per month or twenty-four (24%) per annum. It must be stressed that the appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum or money, is the payment of penalty interest at the rate agreed upon; and in the absence of a stipulation of a particular rate of penalty interest, then the payment of additional interest at a rate equal to the regular monetary interest; and if no regular interest had been agreed upon, then payment of legal interest or six percent (6%)per annum, or in the case of loans or forbearances of money, 12 % per annum as provided for in Central Bank Circular No. 416. State Investment House vs. CA (198 SCRA 390) The appropriate measure for damages in case of delay indischarging an obligation consisting of the payment of a sum of money, is the payment of the penalty interest at the rateagreed upon; and in the absence of a stipulation of a particularrate of penalty interest, then the payment of additional interestat a rate equal to the

regular monetary interest, and if noregular interest had been agreed upon, then payment of legal interest.