CREDIT TRANSACTIONS: INTEREST
G.R. No. L-59096 October 11, 1985 PACITA PACITA F. REF REFORM ORMINA INA and HEIRS HEIRS OF FRANCISCO REFORMINA, petitioners, vs. vs. THE HONORABLE VALERIANO P. TOMOL, JR., as Judge of the Court of First Instance, Branch XI, CEBU CITY, SHELL SHELL REF REFINI INING NG COMPAN COMPANY Y (PHILS. (PHILS.), ), INC., and MICHAEL, INCORPORATED, respondents. FACTS This is a a Petition for Review on certiorari of the Resolution Resolution of CFI-Cebu CFI-Cebu Judge Tomol for an action for Recovery of Damages for injury to Person and Loss of Property. On June 7, 1972, judgment was rendered by the Court of First instance of Cebu in Civil Civil Case Case No. No. R-1127 R-11279, 9, 2 the disposit dispositive ive portion of which reads— WHEREFORE, judgment is hereby rendered in favor favor of the plaint plaintiff iffs s and third party party defend defendant ants s and and agains againstt the defend defendant ants s and third party plaintiffs as follows: Orde Orderi ring ng defe defend ndan ants ts and and thir third d part party y plaintiffs Shell and Michael, Incorporated to pay pay join jointl tly y and and seve severa rall lly y the the foll follow owin ing g persons: ( g) Plaintiffs Pacita and Francisco Reformina the sum of P131,084.00 which is the value of the boat F B Pacita Ill together with its accessories, fishing gear and equipment minus P80, P80,00 000. 0.00 00 whic which h is the the valu value e of the the insura ins urance nce recove recovere red d and and the amount amount of P10, P10,00 000. 0.00 00 a mont month h as the the esti estima mate ted d monthly loss suffered by them as a result of the fire of May 6, 1969 up to the time they are actually paid or already the total sum of P370,000.00 as of June 4, 1972 with legal interest from interest from the filing of the the com complain laintt unti untill pai paid and to pay pay attorn attorney' ey's s fees fees of P5, P5,000 000.00 .00 with with costs costs against inst defen efenda dant nts s and thir third d party plaintiffs. On appeal to the then Court of Appeals, the tria triall cour court' t's s judg judgme ment nt was was modi modifi fied ed to reads as follows— WHEREFORE. the judgment appealed from is modified such that defendantsappellan appellants ts Shell Shell Refining Refining Co. (Phils.), (Phils.), Inc. and and Mich Michae ael, l, Inco Incorp rpor orat ated ed are are here hereby by ordered to pay ... The two (2) defendantsappell pella ants are also lso direc irecte ted d to pay P100,000.00 with legal interests from the
fil filing ing of the the com complain laintt unti untill paid as compen compensa sator tory y and and moral moral damag damages es and and P41,000.00 compensation for the value of the lost boat with legal interest from interest from the filing filing of the complain complaintt until until fully fully paid paid to Paci Pacita ta F.Reformina F.Reformina and the heirs of Francisco Reformina. Reformina. The liabili liability ty of the two two defen efend dants nts for for an the the awar wards is solidary. Petitioners' motion for the reconsideration of the questioned Resolution having been denied, they now come before Us through the instant petition praying for the setting asid aside e of the the said said Reso Resolu luti tion on and and for for a declaration that the judgment in their favor should should bear legal legal inter interest est at the rate of twelve (12%) percent per annum pursuant to Central Bank Circular No. 416 dated July 29, 1974. ISSUE How much, by way of legal interest, should a judg judgme ment nt debt debtor or pay pay the the judg judgme ment nt creditor? WON legal interest meant 6% as provided for under Article 2209 of the Civil Code . What What kind kind of judgme judgment nt is cover covered ed under under USURY Law? RULING Article 2209 of the Civil Code is applicable in case at bar. It must be noted that the decision herein sought to be executed is one rendered in an Action for Damages for injury to persons and loss of property and does does not not invo involv lve e any any loan loan,, much much less less forb forbea eara ranc nces es of any any mone money, y, good goods s or credits. As correctly argued by the private respondents, the law applicable to the said case is Article 2209 of the New Civil Code which reads— Art. 2209. If the obligation consists in the paym paymen entt of a sum sum of mone money, y, and and the the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest agree greed d upon upon,, and in the the absen bsence ce of stipulat stipulation, ion, the legal legal interest interest which is six percent per annum. The The above above provis provision ion remain remains s untouc untouched hed desp despit ite e the the gran grantt of auth author orit ity y to the the Central Bank by Act No. 2655, as amended. To To make make Cent Centra rall Bank Bank Circ Circul ular ar No. No. 416 416 applic applicab able le to any any case case other other than than those those specifically provided for by the Usury Law will make the same of doubtful constitutionality since the Monetary Board will will be exer exerci cisi sing ng legi legisl slat ativ ive e func functi tion ons s
which was beyond the intendment of P.D. No. 116. Cent Centra rall Bank Bank provides —
Circ Circul ular ar
No. No.
416 41 6
whic which h
By virt virtue ue of the the auth author orit ity y gran grante ted d to it under Section 1 of Act 2655, as amended, otherwise known as the "Usury Law" the Monetary Board in its Resolution No. 1622 dated July 29, 1974, has prescribed that the the rate rate of inte intere rest st for for the the loan loan or forbearance of any a ny money, goods, or credits and the rate allowed in judgments, in the absence of express contra contract ct as to such such rate rate of interes interest, t, shal shalll be twel twelve ve (12%) (12%) per cent cent per per annum. This This Circ Circul ular ar shal shalll take take effe effect ct immediately. (Italics supplied)
The judgments spoken of and referred to are Judgments in litigations involving loans or forbea forbearan rance ce of any 'money, 'money, goods goods or credi redits ts.. Any oth other kind kind of mon moneta etary judgment which has nothing to do with, nor invo involv lvin ing g loan loans s or forb forbea eara ranc nce e of any any mone money, y, good goods s or cred credit its s does does not not fall fall within the coverage of the said law for it is not not with within in the the ambi ambitt of the the auth author orit ity y granted to the Central Bank.
ruizsharmine
