1/4/2019 Salus Populi Est Suprema Lex: Eastern Shipping vs CA Credit Digest

Eastern Shipping vs CA Credit Digest

Eastern Shipping vs CA
GR No. 97412, 12 July 1994
234 SCRA 78

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as
insured with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which
excepted to one drum, said to be in bad order and which damage was unknown the Mercantile
Insurance Company. Allied Brokerage Corporation received the shipment from Metro, one drum
opened and without seal. Allied delivered the shipment to the consignee’s warehouse. The latter
excepted to one drum which contained spillages while the rest of the contents was adulterated/fake.
As consequence of the loss, the insurance company paid the consignee, so that it became
subrogated to all the rights of action of consignee against the defendants Eastern Shipping, Metro
Port and Allied Brokerage. The insurance company filed before the trial court. The trial court ruled in
favor of plaintiff an ordered defendants to pay the former with present legal interest of 12% per annum
from the date of the filing of the complaint. On appeal by defendants, the appellate court denied the
same and affirmed in toto the decision of the trial court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed
from the time the complaint is filed from the date the decision appealed from is rendered.

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a
quo. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on
the amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor,
the rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim
period being deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or EJ but
when such certainty cannot be so reasonably established at the time the demand is made, the
interest shll begin to run only from the date of judgment of the court is made.

(3) The Court held that it should be computed from the decision rendered by the court a quo.

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