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G.R. No.

173227 January 20, 2009


SEBASTIAN SIGA-AN, Petitioner,
vs.
ALICIA VILLANUEVA, Respondent.
D E C I S I O N
CHIC-NA!ARI, J.:
Before Us is a Petition
1
for Review on Certiorari under Rule 4 of t!e Rules of Court see"in# to set aside t!e
De$ision,
%
dated 1& De$e'(er %)), and Resolution,
*
dated 1+ ,une %))& of t!e Court of -ppeals in C-.
/.R. C0 No. 11214, w!i$! a3r'ed in toto t!e De$ision,
4
dated %& ,anuar4 %))1, of t!e 5as Pinas Cit4
Re#ional 6rial Court, Bran$! %, in Civil Case No. 5P.+2.))&2.
6!e fa$ts #at!ered fro' t!e re$ords are as follows7
On *) 8ar$! 1++2, respondent -li$ia 0illanueva 9led a $o'plaint

for su' of 'one4 a#ainst petitioner


Se(astian Si#a.an (efore t!e 5as Pinas Cit4 Re#ional 6rial Court :R6C;, Bran$! %, do$"eted as Civil Case
No. 5P.+2.))&2. Respondent alle#ed t!at s!e was a (usinesswo'an en#a#ed in suppl4in# o3$e 'aterials
and e<uip'ents to t!e P!ilippine Nav4 O3$e :PNO; lo$ated at =ort Bonifa$io, 6a#ui# Cit4, w!ile petitioner
was a 'ilitar4 o3$er and $o'ptroller of t!e PNO fro' 1++1 to 1++&.
Respondent $lai'ed t!at so'eti'e in 1++%, petitioner approa$!ed !er inside t!e PNO and o>ered to loan
!er t!e a'ount of P4),))).)). Sin$e s!e needed $apital for !er (usiness transa$tions wit! t!e PNO, s!e
a$$epted petitioner?s proposal. 6!e loan a#ree'ent was not redu$ed in writin#. -lso, t!ere was no
stipulation as to t!e pa4'ent of interest for t!e loan.
&
On *1 -u#ust 1++*, respondent issued a $!e$" wort! P)),))).)) to petitioner as partial pa4'ent of t!e
loan. On *1 O$to(er 1++*, s!e issued anot!er $!e$" in t!e a'ount of P%)),))).)) to petitioner as
pa4'ent of t!e re'ainin# (alan$e of t!e loan. Petitioner told !er t!at sin$e s!e paid a total a'ount
of P1)),))).)) for t!eP4),))).)) wort! of loan, t!e e@$ess a'ount of P1&),))).)) would (e applied as
interest for t!e loan. Not satis9ed wit! t!e a'ount applied as interest, petitioner pestered !er to pa4
additional interest. Petitioner t!reatened to (lo$" or disapprove !er transa$tions wit! t!e PNO if s!e would
not $o'pl4 wit! !is de'and. -s all !er transa$tions wit! t!e PNO were su(Ae$t to t!e approval of petitioner
as $o'ptroller of t!e PNO, and fearin# t!at petitioner 'i#!t (lo$" or undul4 inBuen$e t!e pa4'ent of !er
vou$!ers in t!e PNO, s!e $on$eded. 6!us, s!e paid additional a'ounts in $as! and $!e$"s as interests for
t!e loan. S!e as"ed petitioner for re$eipt for t!e pa4'ents (ut petitioner told !er t!at it was not ne$essar4
as t!ere was 'utual trust and $on9den$e (etween t!e'. -$$ordin# to !er $o'putation, t!e total a'ount
s!e paid to petitioner for t!e loan and interest a$$u'ulated toP1,%)),))).)).
1
6!ereafter, respondent $onsulted a law4er re#ardin# t!e propriet4 of pa4in# interest on t!e loan despite
a(sen$e of a#ree'ent to t!at e>e$t. Cer law4er told !er t!at petitioner $ould not validl4 $olle$t interest on
t!e loan (e$ause t!ere was no a#ree'ent (etween !er and petitioner re#ardin# pa4'ent of interest. Sin$e
s!e paid petitioner a total a'ount of P1,%)),))).)) for t!e P4),))).)) wort! of loan, and upon (ein#
advised (4 !er law4er t!at s!e 'ade overpa4'ent to petitioner, s!e sent a de'and letter to petitioner
as"in# for t!e return of t!e e@$ess a'ount of P&&),))).)). Petitioner, despite re$eipt of t!e de'and letter,
i#nored !er $lai' for rei'(urse'ent.
2
Respondent pra4ed t!at t!e R6C render Aud#'ent orderin# petitioner to pa4 respondent :1; P&&),))).))
plus le#al interest fro' t!e ti'e of de'andD :%; P*)),))).)) as 'oral da'a#esD :*; P),))).)) as
e@e'plar4 da'a#esD and :4; an a'ount e<uivalent to %E of P&&),))).)) as attorne4?s fees.
+
In !is answer
1)
to t!e $o'plaint, petitioner denied t!at !e o>ered a loan to respondent. Ce averred t!at in
1++%, respondent approa$!ed and as"ed !i' if !e $ould #rant !er a loan, as s!e needed 'one4 to 9nan$e
!er (usiness venture wit! t!e PNO. -t 9rst, !e was relu$tant to deal wit! respondent, (e$ause t!e latter
!ad a spott4 re$ord as a supplier of t!e PNO. Cowever, sin$e respondent was an a$<uaintan$e of !is
o3$e'ate, !e a#reed to #rant !er a loan. Respondent paid t!e loan in full.
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Su(se<uentl4, respondent a#ain as"ed !i' to #ive !er a loan. -s respondent !ad (een a(le to pa4 t!e
previous loan in full, !e a#reed to #rant !er anot!er loan. 5ater, respondent re<uested !i' to restru$ture
t!e pa4'ent of t!e loan (e$ause s!e $ould not #ive full pa4'ent on t!e due date. Ce a$$eded to !er
re<uest. 6!ereafter, respondent pleaded for anot!er restru$turin# of t!e pa4'ent of t!e loan. 6!is ti'e !e
reAe$ted !er plea. 6!us, respondent proposed to e@e$ute a pro'issor4 note w!erein s!e would
a$"nowled#e !er o(li#ation to !i', in$lusive of interest, and t!at s!e would issue several postdated
$!e$"s to #uarantee t!e pa4'ent of !er o(li#ation. Upon !is approval of respondent?s re<uest for
restru$turin# of t!e loan, respondent e@e$uted a pro'issor4 note dated 1% Septe'(er 1++4 w!erein s!e
ad'itted !avin# (orrowed an a'ount of P1,%4),))).)), in$lusive of interest, fro' petitioner and t!at s!e
would pa4 said a'ount in 8ar$! 1++. Respondent also issued to !i' si@ postdated $!e$"s a'ountin#
to P1,%4),))).)) as #uarantee of $o'plian$e wit! !er o(li#ation. Su(se<uentl4, !e presented t!e si@
$!e$"s for en$as!'ent (ut onl4 one $!e$" was !onored. Ce de'anded t!at respondent settle !er
o(li#ation, (ut t!e latter failed to do so. Cen$e, !e 9led $ri'inal $ases for 0iolation of t!e Boun$in# C!e$"s
5aw :Batas Pa'(ansa Bl#. %%; a#ainst respondent. 6!e $ases were assi#ned to t!e 8etropolitan 6rial Court
of 8a"ati Cit4, Bran$! & :8e6C;.
1%
Petitioner insisted t!at t!ere was no overpa4'ent (e$ause respondent ad'itted in t!e latter?s pro'issor4
note t!at !er 'onetar4 o(li#ation as of 1% Septe'(er 1++4 a'ounted to P1,%4),))).)) in$lusive of
interests. Ce ar#ued t!at respondent was alread4 estopped fro' $o'plainin# t!at s!e s!ould not !ave
paid an4 interest, (e$ause s!e was #iven several ti'es to settle !er o(li#ation (ut failed to do so. Ce
'aintained t!at to rule in favor of respondent is tanta'ount to $on$ludin# t!at t!e loan was #iven
interest.free. Based on t!e fore#oin# aver'ents, !e as"ed t!e R6C to dis'iss respondent?s $o'plaint.
-fter trial, t!e R6C rendered a De$ision on %& ,anuar4 %))1 !oldin# t!at respondent 'ade an overpa4'ent
of !er loan o(li#ation to petitioner and t!at t!e latter s!ould refund t!e e@$ess a'ount to t!e for'er. It
ratio$inated t!at respondent?s o(li#ation was onl4 to pa4 t!e loaned a'ount of P4),))).)), and t!at t!e
alle#ed interests due s!ould not (e in$luded in t!e $o'putation of respondent?s total 'onetar4 de(t
(e$ause t!ere was no a#ree'ent (etween t!e' re#ardin# pa4'ent of interest. It $on$luded t!at sin$e
respondent 'ade an e@$ess pa4'ent to petitioner in t!e a'ount of P&&),))).)) t!rou#! 'ista"e,
petitioner s!ould return t!e said a'ount to respondent pursuant to t!e prin$iple of solutio indebiti.
1*
6!e R6C also ruled t!at petitioner s!ould pa4 'oral da'a#es for t!e sleepless ni#!ts and wounded
feelin#s e@perien$ed (4 respondent. =urt!er, petitioner s!ould pa4 e@e'plar4 da'a#es (4 wa4 of e@a'ple
or $orre$tion for t!e pu(li$ #ood, plus attorne4?s fees and $osts of suit.
6!e dispositive portion of t!e R6C De$ision reads7
FCERE=ORE, in view of t!e fore#oin# eviden$e and in t!e li#!t of t!e provisions of law and Aurispruden$e
on t!e 'atter, Aud#'ent is !ere(4 rendered in favor of t!e plainti> and a#ainst t!e defendant as follows7
:1; Orderin# defendant to pa4 plainti> t!e a'ount of P&&),))).)) plus le#al interest of 1%E per
annu' $o'puted fro' * 8ar$! 1++2 until t!e a'ount is paid in fullD
:%; Orderin# defendant to pa4 plainti> t!e a'ount of P*)),))).)) as 'oral da'a#esD
:*; Orderin# defendant to pa4 plainti> t!e a'ount of P),))).)) as e@e'plar4 da'a#esD
:4; Orderin# defendant to pa4 plainti> t!e a'ount e<uivalent to %E of P&&),))).)) as attorne4?s
feesD and
:; Orderin# defendant to pa4 t!e $osts of suit.
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Petitioner appealed to t!e Court of -ppeals. On 1& De$e'(er %)), t!e appellate $ourt pro'ul#ated its
De$ision a3r'in# in toto t!e R6C De$ision, t!us7
FCERE=ORE, t!e fore#oin# $onsidered, t!e instant appeal is !ere(4 DENIED and t!e assailed de$ision GisH
-==IR8ED in toto.
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Petitioner 9led a 'otion for re$onsideration of t!e appellate $ourt?s de$ision (ut t!is was denied.
1&
Cen$e,
petitioner lod#ed t!e instant petition (efore us assi#nin# t!e followin# errors7
I.
6CE R6C -ND 6CE COUR6 O= -PPE-5S ERRED IN RU5IN/ 6C-6 NO IN6ERES6 F-S DUE 6O PE6I6IONERD
II.
6CE R6C -ND 6CE COUR6 O= -PPE-5S ERRED IN -PP5IIN/ 6CE PRINCIP5E O= SOLUTIO INDEBITI.
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Interest is a $o'pensation 9@ed (4 t!e parties for t!e use or for(earan$e of 'one4. 6!is is referred to as
'onetar4 interest. Interest 'a4 also (e i'posed (4 law or (4 $ourts as penalt4 or inde'nit4 for da'a#es.
6!is is $alled $o'pensator4 interest.
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6!e ri#!t to interest arises onl4 (4 virtue of a $ontra$t or (4 virtue
of da'a#es for dela4 or failure to pa4 t!e prin$ipal loan on w!i$! interest is de'anded.
1+
-rti$le 1+& of t!e Civil Code, w!i$! refers to 'onetar4 interest,
%)
spe$i9$all4 'andates t!at no interest
s!all (e due unless it !as (een e@pressl4 stipulated in writin#. -s $an (e #leaned fro' t!e fore#oin#
provision, pa4'ent of 'onetar4 interest is allowed onl4 if7 :1; t!ere was an e@press stipulation for t!e
pa4'ent of interestD and :%; t!e a#ree'ent for t!e pa4'ent of interest was redu$ed in writin#. 6!e
$on$urren$e of t!e two $onditions is re<uired for t!e pa4'ent of 'onetar4 interest. 6!us, we !ave !eld
t!at $olle$tion of interest wit!out an4 stipulation t!erefor in writin# is pro!i(ited (4 law.
%1
It appears t!at petitioner and respondent did not a#ree on t!e pa4'ent of interest for t!e loan. Neit!er
was t!ere $onvin$in# proof of written a#ree'ent (etween t!e two re#ardin# t!e pa4'ent of interest.
Respondent testi9ed t!at alt!ou#! s!e a$$epted petitioner?s o>er of loan a'ountin# to P4),))).)), t!ere
was, nonet!eless, no ver(al or written a#ree'ent for !er to pa4 interest on t!e loan.
%%
Petitioner presented a !andwritten pro'issor4 note dated 1% Septe'(er 1++4
%*
w!erein respondent
purportedl4 ad'itted owin# petitioner J$apital and interest.J Respondent, !owever, e@plained t!at it was
petitioner w!o 'ade a pro'issor4 note and s!e was told to $op4 it in !er own !andwritin#D t!at all !er
transa$tions wit! t!e PNO were su(Ae$t to t!e approval of petitioner as $o'ptroller of t!e PNOD t!at
petitioner t!reatened to disapprove !er transa$tions wit! t!e PNO if s!e would not pa4 interestD t!at (ein#
unaware of t!e law on interest and fearin# t!at petitioner would 'a"e #ood of !is t!reats if s!e would not
o(e4 !is instru$tion to $op4 t!e pro'issor4 note, s!e $opied t!e pro'issor4 note in !er own !andwritin#D
and t!at su$! was t!e sa'e pro'issor4 note presented (4 petitioner as alle#ed proof of t!eir written
a#ree'ent on interest.
%4
Petitioner did not re(ut t!e fore#oin# testi'on4. It is evident t!at respondent did
not reall4 $onsent to t!e pa4'ent of interest for t!e loan and t!at s!e was 'erel4 tri$"ed and $oer$ed (4
petitioner to pa4 interest. Cen$e, it $annot (e #ainfull4 said t!at su$! pro'issor4 note pertains to an
e@press stipulation of interest or written a#ree'ent of interest on t!e loan (etween petitioner and
respondent.
Petitioner, nevert!eless, $lai's t!at (ot! t!e R6C and t!e Court of -ppeals found t!at !e and respondent
a#reed on t!e pa4'ent of 1E rate of interest on t!e loanD t!at t!e a#reed 1E rate of interest was dul4
ad'itted (4 respondent in !er testi'on4 in t!e Batas Pa'(ansa Bl#. %% $ases !e 9led a#ainst respondentD
t!at despite su$! Audi$ial ad'ission (4 respondent, t!e R6C and t!e Court of -ppeals, $itin# -rti$le 1+& of
t!e Civil Code, still !eld t!at no interest was due !i' sin$e t!e a#ree'ent on interest was not redu$ed in
writin#D t!at t!e appli$ation of -rti$le 1+& of t!e Civil Code s!ould not (e a(solute, and an e@$eption to
t!e appli$ation of su$! provision s!ould (e 'ade w!en t!e (orrower ad'its t!at a spe$i9$ rate of interest
was a#reed upon as in t!e present $aseD and t!at it would (e unfair to allow respondent to pa4 onl4 t!e
loan w!en t!e latter ver4 well "new and even ad'itted in t!e Batas Pa'(ansa Bl#. %% $ases t!at t!ere
was an a#reed 1E rate of interest on t!e loan.
%
Fe !ave $arefull4 e@a'ined t!e R6C De$ision and found t!at t!e R6C did not 'a"e a rulin# t!erein t!at
petitioner and respondent a#reed on t!e pa4'ent of interest at t!e rate of 1E for t!e loan. 6!e R6C $learl4
stated t!at alt!ou#! petitioner and respondent entered into a valid oral $ontra$t of loan a'ountin#
to P4),))).)), t!e4, nonet!eless, never intended t!e pa4'ent of interest t!ereon.
%&
F!ile t!e Court of
-ppeals 'entioned in its De$ision t!at it $on$urred in t!e R6C?s rulin# t!at petitioner and respondent
a#reed on a $ertain rate of interest as re#ards t!e loan, we $onsider t!is as 'erel4 an inadverten$e
(e$ause, as earlier elu$idated, (ot! t!e R6C and t!e Court of -ppeals ruled t!at petitioner is not entitled to
t!e pa4'ent of interest on t!e loan. 6!e rule is t!at fa$tual 9ndin#s of t!e trial $ourt deserve #reat wei#!t
and respe$t espe$iall4 w!en a3r'ed (4 t!e appellate $ourt.
%1
Fe found no $o'pellin# reason to distur(
t!e rulin# of (ot! $ourts.
Petitioner?s relian$e on respondent?s alle#ed ad'ission in t!e Batas Pa'(ansa Bl#. %% $ases t!at t!e4 !ad
a#reed on t!e pa4'ent of interest at t!e rate of 1E deserves s$ant $onsideration. In t!e said $ase,
respondent 'erel4 testi9ed t!at after pa4in# t!e total a'ount of loan, petitioner ordered !er to pa4
interest.
%2
Respondent did not $ate#ori$all4 de$lare in t!e sa'e $ase t!at s!e and respondent 'ade
an express stipulation in writin# as re#ards pa4'ent of interest at t!e rate of 1E. -s earlier dis$ussed,
'onetar4 interest is due onl4 if t!ere was anexpress stipulation in writin# for t!e pa4'ent of interest.
6!ere are instan$es in w!i$! an interest 'a4 (e i'posed even in t!e a(sen$e of e@press stipulation, ver(al
or written, re#ardin# pa4'ent of interest. -rti$le %%)+ of t!e Civil Code states t!at if t!e o(li#ation
$onsists in t!e pa4'ent of a su' of 'one4, and t!e de(tor in$urs dela4, a le#al interest of 1%E per annu'
'a4 (e i'posed as inde'nit4 for da'a#es if no stipulation on t!e pa4'ent of interest was a#reed upon.
5i"ewise, -rti$le %%1% of t!e Civil Code provides t!at interest due s!all earn le#al interest fro' t!e ti'e it
is Audi$iall4 de'anded, alt!ou#! t!e o(li#ation 'a4 (e silent on t!is point.
-ll t!e sa'e, t!e interest under t!ese two instan$es 'a4 (e i'posed onl4 as a penalt4 or da'a#es for
(rea$! of $ontra$tual o(li#ations. It $annot (e $!ar#ed as a $o'pensation for t!e use or for(earan$e of
'one4. In ot!er words, t!e two instan$es appl4 onl4 to $o'pensator4 interest and not to 'onetar4
interest.
%+
6!e $ase at (ar involves petitioner?s $lai' for 'onetar4 interest.
=urt!er, said $o'pensator4 interest is not $!ar#ea(le in t!e instant $ase (e$ause it was not dul4 proven
t!at respondent defaulted in pa4in# t!e loan. -lso, as earlier found, no interest was due on t!e loan
(e$ause t!ere was no written a#ree'ent as re#ards pa4'ent of interest.
Apropos t!e se$ond assi#ned error, petitioner ar#ues t!at t!e prin$iple of solutio indebiti does not appl4 to
t!e instant $ase. 6!us, !e $annot (e $o'pelled to return t!e alle#ed e@$ess a'ount paid (4 respondent as
interest.
*)
Under -rti$le 1+&) of t!e Civil Code, if t!e (orrower of loan pa4s interest w!en t!ere !as (een no
stipulation t!erefor, t!e provisions of t!e Civil Code $on$ernin# solutio indebiti s!all (e applied. -rti$le
%14 of t!e Civil Code e@plains t!e prin$iple of solutio indebiti. Said provision provides t!at if so'et!in# is
re$eived w!en t!ere is no ri#!t to de'and it, and it was undul4 delivered t!rou#! 'ista"e, t!e o(li#ation
to return it arises. In su$! a $ase, a $reditor.de(tor relations!ip is $reated under a <uasi.$ontra$t w!ere(4
t!e pa4or (e$o'es t!e $reditor w!o t!en !as t!e ri#!t to de'and t!e return of pa4'ent 'ade (4 'ista"e,
and t!e person w!o !as no ri#!t to re$eive su$! pa4'ent (e$o'es o(li#ated to return t!e sa'e. 6!e
<uasi.$ontra$t of solutio indebiti !ar"s (a$" to t!e an$ient prin$iple t!at no one s!all enri$! !i'self
unAustl4 at t!e e@pense of anot!er.
*1
6!e prin$iple of solutio indebitiapplies w!ere :1; a pa4'ent is 'ade
w!en t!ere e@ists no (indin# relation (etween t!e pa4or, w!o !as no dut4 to pa4, and t!e person w!o
re$eived t!e pa4'entD and :%; t!e pa4'ent is 'ade t!rou#! 'ista"e, and not t!rou#! li(eralit4 or so'e
ot!er $ause.
*%
Fe !ave !eld t!at t!e prin$iple of solutio indebiti applies in $ase of erroneous pa4'ent of
undue interest.
**
It was dul4 esta(lis!ed t!at respondent paid interest to petitioner. Respondent was under no dut4 to 'a"e
su$! pa4'ent (e$ause t!ere was no e@press stipulation in writin# to t!at e>e$t. 6!ere was no (indin#
relation (etween petitioner and respondent as re#ards t!e pa4'ent of interest. 6!e pa4'ent was $learl4 a
'ista"e. Sin$e petitioner re$eived so'et!in# w!en t!ere was no ri#!t to de'and it, !e !as an o(li#ation
to return it.
Fe s!all now deter'ine t!e propriet4 of t!e 'onetar4 award and da'a#es i'posed (4 t!e R6C and t!e
Court of -ppeals.
Re$ords s!ow t!at respondent re$eived a loan a'ountin# to P4),))).)) fro' petitioner.
*4
Respondent
issued two $!e$"s wit! a total wort! of P1)),))).)) in favor of petitioner as pa4'ent of t!e loan.
*
6!ese
$!e$"s were su(se<uentl4 en$as!ed (4 petitioner.
*&
O(viousl4, t!ere was an e@$ess of P1&),))).)) in t!e
pa4'ent for t!e loan. Petitioner $lai's t!at t!e e@$ess of P1&),))).)) serves as interest on t!e loan to
w!i$! !e was entitled. -side fro' issuin# t!e said two $!e$"s, respondent also paid $as! in t!e total
a'ount of P11,))).)) to petitioner as interest.
*1
-lt!ou#! no re$eipts reBe$tin# t!e sa'e were presented
(e$ause petitioner refused to issue su$! to respondent, petitioner, nonet!eless, ad'itted in !is Repl4.
-3davit
*2
in t!e Batas Pa'(ansa Bl#. %% $ases t!at respondent paid !i' a total a'ount of P11,))).))
$as! in addition to t!e two $!e$"s. Se$tion %& Rule 1*) of t!e Rules of Eviden$e provides t!at t!e
de$laration of a part4 as to a relevant fa$t 'a4 (e #iven in eviden$e a#ainst !i'. -side fro' t!e a'ounts
of P1&),))).)) and P11,))).)) paid as interest, no ot!er proof of additional pa4'ent as interest was
presented (4 respondent. Sin$e we !ave previousl4 found t!at petitioner is not entitled to pa4'ent of
interest and t!at t!e prin$iple of solutio indebiti applies to t!e instant $ase, petitioner s!ould return to
respondent t!e e@$ess a'ount of P1&),))).)) and P11,))).)) or t!e total a'ount of P**,))).)).
-$$ordin#l4, t!e rei'(ursa(le a'ount to respondent 9@ed (4 t!e R6C and t!e Court of -ppeals s!ould (e
redu$ed fro'P&&),))).)) to P**,))).)).
-s earlier stated, petitioner 9led 9ve :; $ri'inal $ases for violation of Batas Pa'(ansa Bl#. %% a#ainst
respondent. In t!e said $ases, t!e 8e6C found respondent #uilt4 of violatin# Batas Pa'(ansa Bl#. %% for
issuin# 9ve dis!onored $!e$"s to petitioner. Nonet!eless, respondent?s $onvi$tion t!erein does not a>e$t
our rulin# in t!e instant $ase. 6!e two $!e$"s, su(Ae$t 'atter of t!is $ase, totalin# P1)),))).)) w!i$!
respondent $lai'ed as pa4'ent of t!e P4),))).)) wort! of loan, were not a'on# t!e 9ve $!e$"s found
to (e dis!onored or (oun$ed in t!e 9ve $ri'inal $ases. =urt!er, t!e 8e6C found t!at respondent 'ade an
overpa4'ent of t!e loan (4 reason of t!e interest w!i$! t!e latter paid to petitioner.
*+
-rti$le %%11 of t!e Civil Code provides t!at 'oral da'a#es 'a4 (e re$overed if t!e part4 underwent
p!4si$al su>erin#, 'ental an#uis!, fri#!t, serious an@iet4, (es'ir$!ed reputation, wounded feelin#s, 'oral
s!o$", so$ial !u'iliation and si'ilar inAur4. Respondent testi9ed t!at s!e e@perien$ed sleepless ni#!ts and
wounded feelin#s w!en petitioner refused to return t!e a'ount paid as interest despite !er repeated
de'ands. Cen$e, t!e award of 'oral da'a#es is Austi9ed. Cowever, its $orrespondin# a'ount
of P*)),))).)), as 9@ed (4 t!e R6C and t!e Court of -ppeals, is e@or(itant and s!ould (e e<uita(l4
redu$ed. -rti$le %%1& of t!e Civil Code instru$ts t!at assess'ent of da'a#es is left to t!e dis$retion of t!e
$ourt a$$ordin# to t!e $ir$u'stan$es of ea$! $ase. 6!is dis$retion is li'ited (4 t!e prin$iple t!at t!e
a'ount awarded s!ould not (e palpa(l4 e@$essive as to indi$ate t!at it was t!e result of preAudi$e or
$orruption on t!e part of t!e trial $ourt.
4)
6o our 'ind, t!e a'ount of P1),))).)) as 'oral da'a#es is
fair, reasona(le, and proportionate to t!e inAur4 su>ered (4 respondent.
-rti$le %%*% of t!e Civil Code states t!at in a <uasi.$ontra$t, su$! as solutio indebiti, e@e'plar4 da'a#es
'a4 (e i'posed if t!e defendant a$ted in an oppressive 'anner. Petitioner a$ted oppressivel4 w!en !e
pestered respondent to pa4 interest and t!reatened to (lo$" !er transa$tions wit! t!e PNO if s!e would not
pa4 interest. 6!is for$ed respondent to pa4 interest despite la$" of a#ree'ent t!ereto. 6!us, t!e award of
e@e'plar4 da'a#es is appropriate. 6!e a'ount of P),))).)) i'posed as e@e'plar4 da'a#es (4 t!e R6C
and t!e Court is 9ttin# so as to deter petitioner and ot!er lenders fro' $o''ittin# si'ilar and ot!er
serious wron#doin#s.
41
,urispruden$e instru$ts t!at in awardin# attorne4?s fees, t!e trial $ourt 'ust state t!e fa$tual, le#al or
e<uita(le Austi9$ation for awardin# t!e sa'e.
4%
In t!e $ase under $onsideration, t!e R6C stated in its
De$ision t!at t!e award of attorne4?s fees e<uivalent to %E of t!e a'ount paid as interest (4 respondent
to petitioner is reasona(le and 'oderate $onsiderin# t!e e@tent of wor" rendered (4 respondent?s law4er
in t!e instant $ase and t!e fa$t t!at it dra##ed on for several 4ears.
4*
=urt!er, respondent testi9ed t!at s!e
a#reed to $o'pensate !er law4er !andlin# t!e instant $ase su$! a'ount.
44
6!e award, t!erefore, of
attorne4?s fees and its a'ount e<uivalent to %E of t!e a'ount paid as interest (4 respondent to
petitioner is proper.
=inall4, t!e R6C and t!e Court of -ppeals i'posed a 1%E rate of le#al interest on t!e a'ount refunda(le to
respondent $o'puted fro' * 8ar$! 1++2 until its full pa4'ent. 6!is is erroneous.
Fe !eld in Eastern Shipping Lines, Inc ! Court o" Appeals,
4
t!at w!en an o(li#ation, not $onstitutin# a
loan or for(earan$e of 'one4 is (rea$!ed, an interest on t!e a'ount of da'a#es awarded 'a4 (e
i'posed at t!e rate of &E per annu'. Fe furt!er de$lared t!at w!en t!e Aud#'ent of t!e $ourt awardin# a
su' of 'one4 (e$o'es 9nal and e@e$utor4, t!e rate of le#al interest, w!et!er it is a loanKfor(earan$e of
'one4 or not, s!all (e 1%E per annu' fro' su$! 9nalit4 until its satisfa$tion, t!is interi# period (ein#
dee'ed e<uivalent to a for(earan$e of $redit.
In t!e present $ase, petitioner?s o(li#ation arose fro' a <uasi.$ontra$t of solutio indebiti and not fro' a
loan or for(earan$e of 'one4. 6!us, an interest of &E per annu' s!ould (e i'posed on t!e a'ount to (e
refunded as well as on t!e da'a#es awarded and on t!e attorne4?s fees, to (e $o'puted fro' t!e ti'e of
t!e e@tra.Audi$ial de'and on * 8ar$! 1++2,
4&
up to t!e 9nalit4 of t!is De$ision. In addition, t!e interest
s!all (e$o'e 1%E per annu' fro' t!e 9nalit4 of t!is De$ision up to its satisfa$tion.
"HERE#RE, t!e De$ision of t!e Court of -ppeals in C-./.R. C0 No. 11214, dated 1& De$e'(er %)), is
!ere(4 A##IR$E% wit! t!e followin# $%I#ICATINS7 :1; t!e a'ount of P&&),))).)) as refunda(le
a'ount of interest is redu$ed to 6CREE CUNDRED 6CIR6I =I0E 6COUS-ND PESOS :P**,))).));D :%; t!e
a'ount ofP*)),))).)) i'posed as 'oral da'a#es is redu$ed to ONE CUNDRED =I=6I 6COUS-ND PESOS
:P1),))).));D :*; an interest of &E per annu' is i'posed on t!e P**,))).)), on t!e da'a#es awarded
and on t!e attorne4?s fees to (e $o'puted fro' t!e ti'e of t!e e@tra.Audi$ial de'and on * 8ar$! 1++2 up
to t!e 9nalit4 of t!is De$isionD and :4; an interest of 1%E per annu' is also i'posed fro' t!e 9nalit4 of
t!is De$ision up to its satisfa$tion. Costs a#ainst petitioner.
S R%ERE%.