Crismina Garments v.
CA
G.R. No. 128721, March 9, 1999, 304 SCRA 356
FACTS: During the period from February 1979 to April 1979, Crismina Garments, Inc.
contracted the services of D’Wilmar Garments, for the sewing of 20,762 pieces of assorted
girls denims for P76,410. At first, the respondent was told that the sewing of some of the
pants were defective. She offered to take them back, but then she was later told by the
petitioner’s representative that it was good already and asked her to return for her check of
P76,410. However, the petitioner failed to pay her the aforesaid amount. This prompted her
to hire the services of counsel who, on November 12, 1979, wrote a letter to the petitioner
demanding payment of the aforesaid amount within ten days from receipt thereof.
On February 7, 1990, the petitioner’s vice-president-comptroller, wrote a letter to
respondent’s counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering
6,164 pairs, were defective and that she was liable to the petitioner for the amount of
P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund
of the aforesaid amount.
On January 8, 1981, the respondent filed a complaint against the petitioner with the trial
court. The RTC rendered judgment in favor of the respondent, ordering the petitioner to pay
the sum of P76,140 with 12% interest per annum. CA affirmed.
ISSUE:
Whether or not it is proper to impose 12% interest rate per annum for an obligation that does
not involve a loan or forbearance of money in the absence of stipulation of the parties.
RULING:
No. The amount due in this case arose from a contract for a piece of work, not from a loan or
forbearance of money. Hence, the legal rate of interest shall be 6% per annum, computed
from the time of the filing of the Complaint in the trial court until the finality of the judgment.
If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the
interest rate shall be 12% per annum computed from the time the judgment becomes final
and executory until it is fully satisfied.
Keng Hua Products v. CA G.R No. 116863, 12 February 1998
FACTS: Plaintiff (herein private respondent), a shipping company, is a foreign corporation
licensed to do business in the Philippines. On June 29, 1982, plaintiff received at its Hong
Kong terminal a sealed container, containing seventy-six bales of unsorted waste paper for
shipment to defendant (herein petitioner), Keng Hua Paper Products, Co. in Manila. A bill of
lading to cover the shipment was issued by the plaintiff.
On July 9, 1982, the shipment was discharged at the Manila International Container Port.
Notices of arrival were transmitted to the defendant but the latter failed to discharge the
shipment from the container during the free time period or grace period. The said shipment
remained inside the plaintiffs container from the moment the free time period expired on July
29, 1982 until the time when the shipment was unloaded from the container on November
22, 1983, or a total of four hundred eighty-one (481) days. During the 481-day period,
demurrage charges accrued. Within the same period, letters demanding payment were sent
by the plaintiff to the defendant who, however, refused to settle its obligation which
eventually amounted to P67,340.00. Numerous demands were made on the defendant but
the obligation remained unpaid. Plaintiff thereafter commenced this civil action for collection
and damages.
In its answer, defendant, by way of special and affirmative defense, alleged that it purchased
fifty (50) tons of waste paper from the shipper in Hong Kong, Ho Kee Waste Paper, as
manifested in Letter of Credit issued by Equitable Banking Corporation, with partial shipment
permitted; that under the letter of credit, the remaining balance of the shipment was only ten
(10) metric tons as shown in Invoice that the shipment plaintiff was asking defendant to
accept was twenty (20) metric tons which is ten (10) metric tons more than the remaining
balance; that if defendant were to accept the shipment, it would be violating Central Bank
rules and regulations and custom and tariff laws; that plaintiff had no cause of action against
the defendant because the latter did not hire the former to carry the merchandise; that the
cause of action should be against the shipper which contracted the plaintiffs services and not
against defendant; and that the defendant duly notified the plaintiff about the wrong
shipment through a letter dated January 24, 1983.
ISSUE:1. Whether or not the petitioner was bound by the bill of lading.
2. Whether or not interest may not be allowed to run from the date of private respondents
extrajudicial demands on March 8, 1983 for P50,260 or on April 24, 1983 for P37,800,
considering that, in both cases, there was no demand for interest.
RULING:
A bill of lading serves two functions. First, it is a receipt for the goods shipped. Second, it is a
contract by which three parties, namely, the shipper, the carrier, and the consignee
undertake specific responsibilities and assume stipulated obligations.
Petitioner admits that it received the bill of lading immediately after the arrival of the
shipment on July 8, 1982. Having been afforded an opportunity to examine the said
document, petitioner did not immediately object to or dissent from any term or stipulation
therein. It was only six months later, on January 24, 1983, that petitioner sent a letter to
private respondent saying that it could not accept the shipment. Petitioners inaction for such
a long period conveys the clear inference that it accepted the terms and conditions of the bill
of lading. Moreover, said letter spoke only of petitioner’s inability to use the delivery permit,
i.e. to pick up the cargo, due to the shippers failure to comply with the terms and conditions
of the letter of credit, for which reason the bill of lading and other shipping documents were
returned by the banks to the shipper. The letter merely proved petitioners refusal to pick up
the cargo, not its rejection of the bill of lading.
In the case at bar, the prolonged failure of petitioner to receive and discharge the cargo from
the private respondent’s vessel constitutes a violation of the terms of the bill of lading. It
should thus be liable for demurrage to the former.
On behalf of the interest jurisprudence teaches us:
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or
damages except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
but when such certainty cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged
3. When the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
shall be 12% per annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.
The case before us involves an obligation not arising from a loan or forbearance of money;
thus, pursuant to Article 2209 of the Civil Code, the applicable interest rate is six percent per
annum. Since the bill of lading did not specify the amount of demurrage, and the sum claimed
by private respondent increased as the days went by, the total amount demanded cannot be
deemed to have been established with reasonable certainty until the trial court rendered its
judgment. Indeed, (u)nliquidated damages or claims, it is said, are those which are not or
cannot be known until definitely ascertained, assessed and determined by the courts after
presentation of proof. Consequently, the legal interest rate is six percent, to be computed
from September 28, 1990, the date of the trial court’s decision. And in accordance with
Philippine Natonal Bank and Eastern Shipping, the rate of twelve percent per annum shall be
charged on the total then outstanding, from the time the judgment becomes final and
executory until its satisfaction.
Case of Security Bank and Trust Company vs. R.T.C MAKATI BR. 61 MAGTANGGOL EUSEBIO
AND LEILA VENTURA G.R.No. 113926 23October1996
FACTS OF THE CASE:
On April 27, 1983, private respondent Magtanggol Eusebio executed 3 Promissory Notes from
different dates in favor of petitioner Security Bank and Trust Co. (SBTC) in the amounts of
100,000, 100,000, and 65,000. Respondent bound himself to pay the said amounts in six (6)
monthly installments plus 23% interest per annum.On all the abovementioned promissory
notes, private respondent Leila Ventura had signed as co-maker. Upon maturity there were
still principal balance remaining on the notes. Eusebio refused to pay the balance payable, so
SBTC filed a collection case against him. The RTC rendered a judgment in favor of SBTC,
although the rate of interest imposed by the RTC was 12% p.a. instead of the agreed upon
23% p.a. The court denied the motion filed by SBTC to apply the 23% p.a. instead of the 12%
p.a.
ISSUES OF THE CASE:
Did the RTC err in using 12% instead of the 23% as agreed upon by the parties?- Yes, the rate
of interest was agreed upon by the parties freely. Significantly, respondent did not question
that rate.
- P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting parties to stipulate
freely regarding any subsequent adjustment in the interest rate that shall accrue on a loan or
forbearance of money, goods or credits.
- It is not for respondent court a quo to change the stipulations in the contract where it is not
illegal. Furthermore, Article 1306 of the New Civil Code provides that contracting parties may
establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or public policy.
- The 12% shall be applied for obligations arising from loans, or forbearance of money in the
absence of express stipulations
HELD:
IN VIEW OF THE FOREGOING, the decision of the respondent court a quo, is hereby AFFIRMED
with the MODIFICATION that the rate of interest that should be imposed be 23% per annum.
Obligations and Contracts Terms:
PROMISSORY NOTE - A written document in which a borrower agrees (promises) to pay back
money to a lender according to specified terms. A written promise to pay a certain sum of
money, at a future time, unconditionally.
A promissory note differs from a mere acknowledgment of debt, without any promise to pay,
as when the debtor gives his creditor an I 0 U. In its form it usually contains a promise to pay,
at a time therein expressed, a sum of money to a certain person therein named, or to his
order, for value received. It is dated and signed by the maker. It is never under seal.
He who makes the promise is called the maker, and he to whom it is made is the payee.
JOSE ALMEDA VS. COURT OF APPEALS, digested
GR # 121013 July 16 1996
FACTS: Petitioner Jose Almeda filed a notice of appeal which was disapproved by the trial
court due to it being filed five (5) days late beyond the reglementary period and subsequently
denied of motion for reconsideration. Respondent court dismissed the petition contending
that the requirement regarding perfection of an appeal was not only mandatory but
jurisdictional such that the petitioner’s failure to comply therewith had the effect of
rendering the judgment final. Subsequently, petitioner motions for reconsideration and is
denied. Also, it was found that there was lack of merit in the petitioner’s reason for the late
filing of the notice of appeal.
ISSUE: Whether or not failure to comply with the requirement regarding perfection of an
appeal within reglementary period would render a judgment final and executory.
HELD: Yes, the period to appeal is prescribed not only by the Rules of Court but also by
statute, particularly Sec 39 of BP 129, which provides:
Sec.39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, or
decisions of any court in all cases shall be fifteen (15) days counted from the notice of the
final order, resolution, award, judgment, or decision appealed from…
The right to appeal is a statutory right and one who seeks to avail of it must strictly comply
with the statutes or rules as they are considered indispensable interdictions against needless
delays and for an orderly discharge of judicial business. Due to petitioner’s negligence of
failing to perfect his appeal, there is no recourse but to deny the petition thus making the
judgment of the trial court final and executory.
First Metro Investment vs. Este. Del Sol - G.R. No. 141811, November 15, 2001, 369 SCRA 99
FACTS: Petitioner FMIC granted respondent Este del Sol a loan of Seven Million Three
Hundred Eighty-Five Thousand Five HundredPesos (P7,385,500.00) to finance the
construction and development of the Este del Sol Mountain Reserve, a sports/resort complex
project located at Barrio Puray, Montalban, Rizal. Under the terms of the Loan Agreement,
the proceeds of the loan were to be released on staggered basis. Interest on the loan was
pegged at sixteen (16%) percent per annum based on the diminishing balance. The loan was
payable in thirty-six (36) equal and consecutive monthly amortizations. In case of default, an
acceleration clause was, among others, provided and the amount due was made subject to a
twenty (20%) percent one-time penalty on the amount due and such amount shall bear
interest at the highest rate permitted by law from the date of default until full payment
thereof plus liquidated plus attorney’s fees equivalent to twenty-five (25%) percent of the
sum sought to be recovered. Respondent Este del Sol also executed, as provided for by the
Loan Agreement, an Underwriting Agreement with underwriting fee, annual supervision fee
and consultancy fee with Consultancy Agreement for four (4) years, coinciding with the term
of the loan The said fees were deducted from the first release of loan.Respondent Este del Sol
failed to meet the schedule of repayment in accordance with a revised Schedule of
Amortization. Accordingly, petitioner FMIC caused the extrajudicial foreclosure of the real
estate mortgage on June 23, 1980. At the public auction, petitioner FMIC was the highest
bidder of the mortgaged properties. Failing to secure from the individual respondents the
payment of the alleged deficiency balance, despite individual demands sent to each of them,
petitioner instituted the instant collection suit against the respondents to collect the alleged
deficiency balance.
ISSUE: Whether or not the fees provided for in the Underwriting and Consultancy Agreements
were mere subterfuges to camouflage the excessively usurious interest charged.
RULING: Yes. The Loan, Underwriting and Consultancy Agreements are separate and
independent transactions. The Underwriting and Consultancy Agreements which were
executed and delivered contemporaneously with the Loan Agreement were exacted by
petitioner FMIC as essential conditions for the grant of the loan. An apparently lawful loan is
usurious when it is intended that additional compensation for the loan be disguised by an
ostensibly unrelated contract providing for payment by the borrower for the lender’s services
which are of little value or which are not in fact to be rendered, such as in the instant case. In
this connection, Article 1957 of the New Civil Code clearly provides that: Art. 1957. Contracts
and stipulations, under any cloak or device whatever, intended to circumvent the laws against
usury shall be void. The borrower may recover in accordance with the laws on usury.
In usurious loans, the entire obligation does not become void because of an agreement for
usurious interest; the unpaid principal debt still stands and remains valid but the stipulation
as to the usurious interest is void, consequently, the debt is to be considered without
stipulation as to the interest. In simple loan with stipulation of usurious interest, the
prestation of the debtor to pay the principal debt, which is the cause of the contract (Article
1350, Civil Code), is not illegal. The illegality lies only as to the prestation to pay the stipulated
interest; hence, being separable, the latter only should be deemed void, since it is the only
one that is illegal. Thus, the nullity of the stipulation on the usurious interest does not affect
the lender’s right to receive back the principal amount of the loan. With respect to the
debtor, the amount paid as interest under a usurious agreement is recoverable by him, since
the payment is deemed to have been made under restraint, rather than voluntarily.