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78

SUPREME COURT REPORTS ANNOTATED
Eastern Shipping Lines, Inc. vs. Court of Appeals

G.R. No. 97412. July 12, 1994.
EASTERN SHIPPING LINES, INC., petitioner, vs. HON. COURT OF APPEALS AND MERCANTILE INSURANCE COMPANY, INC.,
respondents.
*

Common Carriers; Obligations; Presumption of Fault; When the goods shipped either are lost or arrive in damaged condition, a presumption arises
against the carrier of its failure to observe that requisite diligence, and there need not be an express finding of negligence to hold it liable.—The common
carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person
entitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; Kui Bai vs. Dollar Steamship Lines, 52 Phil. 863). When
the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there
need not be an express finding of negligence to hold it liable (Art. 1735, Civil Code; Philippine National Railways vs. Court
______________
*EN BANC.
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Eastern Shipping Lines, Inc. vs. Court of Appeals
of Appeals, 139 SCRA 87; Metro Port Service vs. Court of Appeals, 131 SCRA 365). There are, of course, exceptional cases when such presumption of
fault is not observed but these cases, enumerated in Article 1734 of the Civil Code, are exclusive, not one of which can be applied to this case.
Same; Same; Arrastre Operator; Carrier and arrastre operator liable in solidum for the proper delivery of the goods to the consignee.—The question of
charging both the carrier and the arrastre operator with the obligation of properly delivering the goods to the consignee has, too, been passed upon by the
Court. In Fireman’s Fund Insurance Co. vs. Metro Port Service, Inc. (182 SCRA 455), we have explained, in holding the carrier and the arrastre operator
liable in solidum, thus: “The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman (Lua Kian
v. Manila Railroad Co., et al., 19 SCRA 5 [1967]. The relationship between the consignee and the common carrier is similar to that of the consignee and the
arrastre operator (Northern Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the ARRASTRE to take good care of the goods
that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the CARRIER. Both the ARRASTRE
and the CARRIER are therefore charged with the obligation to deliver the goods in good condition to the consignee.”
Same; Same; Same; The Supreme Court is not implying, however, that the arrastre operator and the customs broker are themselves always and
necessarily liable solidarily with the carrier, or vice-versa, nor that attendant facts in a given case may not vary the rule.—We do not, of course, imply by the
above pronouncement that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier, or viceversa, nor that attendant facts in a given case may not vary the rule. The instant petition has been brought solely by Eastern Shipping Lines which, being
the carrier and not having been able to rebut the presumption of fault, is, in any event, to be held liable in this particular case. A factual finding of both the
court a quo and the appellate court, we take note, is that “there is sufficient evidence that the shipment sustained damage while in the successive

possession of appellants” (the herein petitioner among them). Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the sole petitioner in this
case, is inevitable regardless of whether there are others solidarily liable with it.
Damages; Interest Rates; Rules of thumb for future guidance in the award of damages and interest rates.—The ostensible discord is not difficult to
explain. The factual circumstances may have called for
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8

SUPREME COURT REPORTS ANNOTATED

0
Eastern Shipping Lines, Inc. vs. Court of Appeals
different applications, guided by the rule that the courts are vested with discretion, depending on the equities of each case, on the award of interest.
Nonetheless, it may not be unwise, by way of clarification and reconciliation, to suggest the following rules of thumb for future guidance.
Same; Same; Same; When an obligation is breached, the contravenor can be held liable for damages.—When an obligation, regardless of its source, i.e.,
law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on
“Damages” of the Civil Code govern in determining the measure of recoverable damages.
Same; Same; Same; Interests in the Concept of Actual and Compensatory Damages; In a loan or forbearance of money, the interest due should be that
stipulated in writing, and in the absence thereof, the rate shall be 12% per annum.—With regard particularly to an award of interest in the concept of actual
and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall
be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
Same; Same; Same; Same; In case of other obligations, the interest on the amount of damages may be imposed at the discretion of the court at the rate of
6% per annum.—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.
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Eastern Shipping Lines, Inc. vs. Court of Appeals
Same; Same; Same; Same; When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest 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. —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.

PETITION for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Alojado & Garcia and Jimenea, Dala & Zaragoza for petitioner.
Zapa Law Office for private respondent.
VITUG,J.:
The issues, albeit not completely novel, are: (a) whether or not a claim for damage sustained on a shipment of goods can be a solidary, or joint
and several, liability of the common carrier, the arrastre operator and the customs broker; (b) whether the payment of legal interest on an
award for loss or damage is to be computed from the time the complaint is filed or from the date the decision appealed from is rendered; and
(c) whether the applicable rate of interest, referred to above, is twelve percent (12%) or six percent (6%).
The findings of the court a quo, adopted by the Court of Appeals, on the antecedent and undisputed facts that have led to the controversy
are hereunder reproduced:
“This is an action against defendants shipping company, arrastre operator and broker-forwarder for damages sustained by a shipment while in defendants’
custody, filed by the insurer-subrogee who paid the consignee the value of such losses/damages.
“On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan for delivery vessel ‘SS EASTERN COMET’ owned by
defendant Eastern Shipping Lines, Inc. under Bill of Lading No. YMA-8 (Exh. B). The shipment was insured under plaintiff’s Marine Insurance Policy No.
81/01177 for P36,382,466.38.
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SUPREME COURT REPORTS ANNOTATED
Eastern Shipping Lines, Inc. vs. Court of Appeals

“Upon arrival of the shipment in Manila on December 12, 1981, it was discharged unto the custody of defendant Metro Port Service, Inc. The latter
excepted to one drum, said to be in bad order, which damage was unknown to plaintiff.
“On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port Service, Inc., one drum opened and
without seal (per ‘Request for Bad Order Survey.’ (Exh. D).
“On January 8 and 14, 1982, defendant Allied Brokerage Corporation made deliveries of 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 (per ‘Bad Order Waybill’ No. 10649, Exh. E).
“Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses totaling P19,032.95, due to the fault and
negligence of defendants. Claims were presented against defendants who failed and refused to pay the same (Exhs. H, I, J, K, L).
“As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19,032.95 under the aforestated marine insurance policy, so
that it became subrogated to all the rights of action of said consignee against defendants (per ‘Form of Subrogation,’ ‘Release’ and Philbanking check, Exhs.
M, N, and O).” (pp. 85-86, Rollo.)

There were, to be sure, other factual issues that confronted both courts. Here, the appellate court said:

Manila on December 12.’ The report further states that when defendant Allied Brokerage withdrew the shipment from defendant arrastre operator’s custody on January 7. Records. Net unrecovered spillage was 15 kgs. portion of the same was already in bad order (p. ‘3. p. therefore. one drum was found with adul-terated/faked contents. vs. ‘Correspondingly. Record). as clearly shown by the Bill of Lading and Commercial Invoice which do not indicate any damages drum that was shipped (Exhs. Metroport averred that although subject shipment was discharged unto its custody. 234. 17. but nonetheless. one drum was found opened without seal. The report went on to state that when the drums reached the consignee. 1994 83 Eastern Shipping Lines. “From the evidence the court found the following: 1. South Harbor.Whether or not these losses/damages were sustained 83 VOL. Under Art. it still exercised extra ordinary care and diligence in the handling/delivery of the cargo to consignee in the same condition shipment was received by it. if determinable).. p. Allied Brokerage alleged that plaintiff has no cause of action against it. 1737 of the New Civil Code.’ it was observed that ‘one (1) fiber drum (was) in damaged condition. Inc. 38). 34. 1981. arrastre operator (Metro Port) and broker (Allied Brokerage). ‘1. that these losses/ damages occurred before the shipment reached the consignee while under the successive custodies of defendants.’ are considered. 86427. it follows that the losses/damages were sustained while in the respective and/or successive custody and possession of defendants carrier (Eastern). not having negligent or at fault for the shipment was already in damage and bad order condition when received by it. 3. traversing the material allegations of the complaint contending that: As for defendant Eastern Shipping it alleged that the shipment was discharged in good order from the vessel unto the custody of Metro Port Service so that any damage/losses incurred after the shipment was incurred after the shipment was turned over to the latter. until the consignee has been advised and has had . while in the custody of defendants (in whose respective custody. with its ‘Additional Survey Notes. Court of Appeals 1. 2. is no longer its liability (p. Allied’s pre-Trial Brief. it excepted to one drum in bad order. the common carrier’s duty to observe extraordinary diligence in the vigilance of goods remains in full force and effect even if the goods are temporarily unloaded and stored in transit in the warehouse of the carrier at the place of destination. G).Whether or not defendant(s) should be held liable for the losses/damages (see plaintiff’s pre-Trial Brief. ‘2. The two. cello bag partly torn but contents intact. drums were shipped in good order and condition. 1981 the shipment was delivered to defendant Metro Port Service. 11.’ ‘As to the first issue.Whether or not the shipment sustained losses/damages. it is stated that when the shipment was ‘landed on vessel’ to dock of Pier # 15. as to the second issue. there can be no doubt that the shipment sustained losses/damages. B and C). Inc. It is obvious. In the latter notes. adopting plaintiff’s Records. 1982. JULY 12. Record).“Defendants filed their respective answers. But when on December 12. covered by the vessel’s Agent’s Bad Order Tally Sheet No. This becomes evident when the Marine Cargo Survey Report (Exh. “‘The issues are: 2.

jointly and severally: 1. the date of filing of this complaints. crate box or container in no case to exceed P5.IT HELD THAT THE GRANT OF INTEREST ON THE CLAIM OF PRIVATE RESPONDENT SHOULD COMMENCE FROM THE DATE OF THE FILING OF THE COMPLAINT AT THE RATE OF TWELVE PERCENT PER ANNUM INSTEAD OF FROM THE . with the present legal interest of 12% per annum from October 1. Inc. and 3. 2. the common carrier. PREMISES CONSIDERED. shall be to the extent of the actual invoice value of each package. attributes error and grave abuse of discretion on the part of the appellate court when— 1. the ‘Turn-Over Survey of Bad Order Cargoes’ (Exhs. 1. II. 2.95. B. 87-89. pursuant to Section 6. 3-Eastern) states that on December 12.’ “and thus held: 84 84 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. vs. 1738.00 each. Eastern Shipping Lines. Court of Appeals ‘WHEREFORE. Rollo. judgment is hereby rendered: A. I.01 of the Management Contract).P3. defendant’s recourse to US. As there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants.032.Ordering defendants to pay plaintiff. Inc. as subrogee for the amount it paid to the consignee. shall not exceed US$500 per case or the CIF value of the loss. “Dissatisfied.The amount of P19. while the liability of defendant Metro Port Service. 207. We find that the conclusion drawn therefrom is correct. until fully paid (the liability of defendant Eastern Shipping.reasonable opportunity to remove or dispose of the goods (Art. and therefore they are liable to the appellee.Dismissing the counterclaims and crossclaim of defendant/cross-claimant Allied Brokerage Corporation..000. Inc.000. 1981 one drum was found ‘open.Costs. In this petition. NCC). 1982.IT HELD PETITIONER CARRIER JOINTLY AND SEVERALLY LIABLE WITH THE ARRASTRE OPERATOR AND CUSTOMS BROKER FOR THE CLAIM OF PRIVATE RESPONDENT AS GRANTED IN THE QUESTIONED DECISION. “The appeal is devoid of merit. Record). Defendant Eastern Shipping’s own exhibit.” (pp. 3. 2.00 as attorney’s fees.’ (p.) The Court of Appeals thus affirmed in toto the judgment of the court a quo. whichever is lesser. “After a careful scrutiny of the evidence on record. Inc. SO ORDERED.

lightning. storm. we do have a fairly good number of previous decisions this Court can merely tack to. There are. Ganzon vs. 234. earthquake. (4)The character of the goods or defects in the packing or in the containers. 139 SCRA 87. the person entitled to receive them (Arts. or until the lapse of a reasonable time for their acceptance by. 1736-1738. (3)Act or omission of the shipper or owner of the goods. PRIVATE RESPONDENT’S CLAIM BEING INDISPUTABLY UNLIQUIDATED. DATE OF THE DECISION OF THE TRIAL COURT AND ONLY AT THE RATE OF SIX PERCENT PER ANNUM. whether international or civil. unless the same is due to any of the following causes only: 1. 161 SCRA 646. When the goods shipped either are lost or arrive in damaged condition. destruction. In this decision. a presumption arises against the carrier of its failure to observe that diligence.Common carriers are responsible for the loss. not one of which can be applied to this case. Metro Port Service. granted. Indeed. The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of. Civil Code. 863). and there need not be an express finding of negligence to hold it liable (Art. in part. 4. exceptional cases when such presumption of fault is not observed but these cases.85 VOL. Inc. (2)Act of the public enemy in war. Court of Appeals. or other natural disaster or calamity. 1994 85 Eastern Shipping Lines. are exclusive. enumerated in Article 1734 of the Civil Code. 86 86 SUPREME COURT REPORTS ANNOTATED . the carrier for transportation until delivered to. Court of Appeals 1. 3. 131 SCRA 365). vs. 2. or deterioration of the goods. we have begun by saying that the questions raised by petitioner carrier are not all that novel. 5. Inc. Civil Code. and received by.Philippine National Railways vs. (5)Order or act of competent public authority. Dollar Steamship Lines. 1735. 52 Phil. Kui Bai vs. Court of Appeals. JULY 12. The petition is. vs. (1)Flood. of course. The question of charging both the carrier and the arrastre operator with the obligation of properly delivering the goods to 1 _________________ 1 Art. Court of Appeals.1734.

Eastern Shipping Lines. 3 Penned by Justice Conrado Sanchez. in lieu of proof. 1994 87 Eastern Shipping Lines. the liability imposed on Eastern Shipping Lines. 107 Phil. Inc. A factual finding of both the court a quo and the appellate court. Inc. In this case. this Court ruled: “Interest upon an obligation which calls for the payment of money. et al. judicial or extrajudicial. vs. we take note. . the amount of P1. Accordingly.. decided on 15 May 1969..447. This demand. in holding the carrier and the arrastre operator liable in solidum. Let us first see a chronological recitation of the major rulings of this Court: The early case of Malayan Insurance Co. thus: “The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman (Lua Kian v.. JULY12.” We do not. we have explained. In the stipulation of facts later entered into by the parties. such responsibility also devolves upon the CARRIER. Such interest normally is allowable from the date of demand. appellee Malayan Insurance (the plaintiff in the lower court) averred in its complaint that the total amount of its claim for the value of the undelivered goods amounted to P3. Court of Appeals recovery of money arising out of short deliveries and pilferage of goods. InFireman’s Fund Insurance.51 was agreed upon. or vice-versa. Co.51 with legal interest thereon from the date the complaint was filed on 28 December 1962 until full payment thereof. Calixto Zaldivar. Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them in good condition to the consignee. being the carrier and not having been able to rebut the presumption of fault. is. the award of legal interest.447. The trial court rendered judgment ordering the appellants (defendants) Manila Port Service and Manila Railroad Company to pay appellee Malayan Insurance the sum of P1. vs. was neither established in its totality nor definitely ascertained. Manila Port Service. absent a stipulation. is that “there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants” (the herein petitioner among them). Prince Line. Manila Railroad Co. inter alia. The instant petition has been brought solely by Eastern Shipping Lines which. v. Inc. imply by the above pronouncement that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier. too. nor that attendant facts in a given case may not vary the rule.. Inc. however. the sole petitioner in this case. 253 [1960]). Both the ARRASTRE and the CARRIER are therefore charged with the obligation to deliver the goods in good condition to the consignee. In sustaining the appellants. 87 VOL. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator (Northern Motors. Court of Appeals the consignee has. is inevitable regardless of whether there are others solidarily liable with it. vs. The appellants then assailed.(182 SCRA 455). Inc.947. to be held liable in this particular case. is the legal rate. Reyes. Querube Makalintal. been passed upon by the Court.. vs. 234.20. Metro Port Service. It is over the issue of legal interest adjudged by the appellate court that deserves more than just a passing remark. in any event. of course. The trial court opted for judicial demand as the starting point. concurred in by Justices Jose B. 19 SCRA 5 [1967].L. Inc. Arsenio Dizon. involved a suit for 2 3 _______________ 2 28 SCRA 65.

’ And as was held by this Court in Rivera vs. Agustinos.000. vs. judgment is hereby rendered in favor of the plaintiffs and third party defendants and against the defendants and third party plaintiffs as follows: “Ordering defendants and third party plaintiffs Shell and Michael.. instead. 265. or credits and the rate allowed in judgments. the lower court decreed: Enrique Fernando. in the absence of express contract as to such rate of interest.00 with costs against defendants and third party plaintiffs. providing thus— “By virtue of the authority granted to it under Section 1 of Act 2655.’ then. 1972 with legal interest from the filing of the complaint until paid and to pay attorney’s fees of P5. 416. 38 Phil. 1969 up to the time they are actually paid or already the total sum of P370. 1622 dated July 29.. Amadeo Matute. assessed and determined by the courts after proof (Montilla c.if the suit were for 4 damages. interest ‘cannot be recovered upon unliquidated claims or damages.000.” 98 Phil. 302). Tomol. goods.) On appeal to the Court of Appeals. Corporacion de P. has prescribed that the rate of interest for the loan. the latter modified the amount of damages awarded but sustained the trial court in adjudging legal interest from the filing of the complaint until fully paid. February 29. 25 Phil.” (Italics found in the text)— should have. the case was remanded to the lower court for execution. Inc. fishing gear and equipment minus P80. Reformina and Francisco Reformina the sum of P131. 1974.00 which is the value of the boat F B Pacita III together with its accessories. Chief Justice Roberto Concepcion and Justice Fred Ruiz Castro were on official leave..084. ‘unliquidated and not known until definitely ascertained. This Court ruled: 6 _________________ . “x x x xxx “(g)Plaintiffs Pacita F. Monetary Board in its Resolution No. the petitioners contended that Central Bank Circular No. Perez.00 which is the value of the insurance recovered and the amount of P10.’”(Italics supplied) The case of Reformina vs. L-6998. Claudio Teehankee and Antonio Barredo. Francisco Capistrano. was for “Recovery of Damages for Injury to Person and Loss of Property.. 29 February 1956. Lichauco v. 447. shall be twelve (12%) percent per annum. been applied.” After trial. 1956. 5 139 SCRA 260. Guzman. When the appellate court’s decision became final.000. rendered on 11 October 1985. or forbearance of any money. Incorporated to pay jointly and severally the following persons: “(a). as amended. 5 ________________ 4 The correct caption of the case is “Claro Rivera vs. 516. except when the demand can be established with reasonable certainty.” (Italics supplied. interest ‘should be from the date of the decision.000.00 as of June 4.“But then upon the provisions of Article 2213 of the Civil Code. Court of Appeals “WHEREFORE. and this was when the trial court issued its assailed resolution which applied the 6% interest per annum prescribed in Article 2209 of the Civil Code. In their petition for review on certiorari. This Circular shall take effect immediately.00 a month as the estimated monthly loss suffered by them as a result of the fire of May 6. 88 88 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. L-6998. P.

Ameurfina Melencio-Herrera. Inc. the law applicable to the said case is Article 2209 of the New Civil Code which reads— ‘Art. inter alia. was decided. concurred in by Justices Pedro Yap. and the debtor incurs in delay..68 withinterest at the legal rate from November 29.335. Jr. Andres Narvasa. Buena 89 VOL.e. thus: 9 “WHEREFORE. goods or credits..” Save from the modification of the amount granted by the lower court. Inc. in an action for the recovery of damages arising from the collapse of a building. Hugo Gutierrez. Court of Appeals In Nakpil and Sons vs. nor involving loans or forbearance of any money. 1968. the trial court. As correctly argued by the private respondents. Cruz and Edgardo Paras. x x x.2209.. concurred in by Justice Claudio Teehankee while Chief Justice Felix Makasiar concurred with the separate opinion of Justice Plana. i. this Court modified the interest award from 12% to 6% interest per annum but sustained the time computation thereof. the decision appealed from is hereby MODIFIED and considering the special and environmental circumstances of this case. Relying on the Reformina v. the legal interest which is six percent per annum. the indemnity for damages. 234. now Chief Justice.500. 90 90 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. there being no stipulation to the contrary. the “defendant United Construction Co. Inc. 7 143 SCRA 158. Vicente Abad Santos. ordered. Inc. Court of Appeals. Isagani A.00 withlegal interest thereon from the filing of the complaint until fully paid. “x x x xxx xxx “Coming to the case at bar. 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 not involve any loan. Jr. vs. Lorenzo Relova. and in the absence of stipulation. Tomol case. goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank. promulgated on 28 July 1986. as We do hereby impose. goods or credits. Justice Ramon Aquino concurred in the result. Ameurfina Melencio-Herrera. the Court of Appeals sustained the trial court’s decision. much less forbear-ances of any money. Venicio Escolin.6 Penned by Justice Serafin Cuevas. Court of Appeals “The judgments spoken of and referred to are judgments in litigations involving loans or forbearance of any money. v. 1994 89 Eastern Shipping Lines. 8 Penned by then Justice. 7 8 ________________ ventura de la Fuente. the date of the filing of the complaint until full payment x x x. concurred in by Justices Hermogenes Concepcion. JULY 12. on 03 October 1986. we deem it reasonable to render a decision imposing. Justice Efren Plana filed a concurring and dissenting opinion. upon the defendant and the third-party defendants (with the exception of Roman . from the filing of the complaint until fully paid. When taken to this Court for review..—If the obligation consists in the payment of a sum of money. Nestor Alampay and Lino Patajo. The trial court awarded private respondent Pedro Manabat actual and compensatory damages in the amount of P72. Any other kind of monetary judgment which has nothing to do with. Cruz.. shall be the payment of interest agreed upon. vs. The case was for damages occasioned by an injury to person and loss of property. (one of the petitioners) x x x to pay the plaintiff. the sum of P989.’” The above rule was reiterated in Philippine Rabbit Bus Lines. the case.

goods or credits. 1723. (2) forbearance of any money. vs. in other words. 91 VOL.000. for moral damages by the trial court. in its resolution of 15 April 1988.00 as exemplary damages with interest thereon at 12% per annum from notice of judgment.000. respectively. Inc. The Court thus set aside the decision of the appellate court and rendered a new one. “It will be noted that in the cases already adverted to. Intermediate Appellate Court was a petition for review on certiorari from the decision.e. there is neither a loan or a forbearance.000. this Court. It is true that in the instant case.00) Pesos as and for attorney’s fees. 143 SCRA 160-161 [1986]. held the award. 139 SCRA 260[1985]). Solidary costs against the defendant and third-party defen-dants (except Roman Ozaeta).00) Pesos as moral damages. 416 x x x is applicable only in ________________ 9 10 160 SCRA 334. Civil Code. dated 27 February 1985. contending that “the interest of twelve (12%) percent per annum imposed on the total amount of the monetary award was in contravention of law. they are not applicable to the instant case. Justice Hugo Gutierrez. Tomol.” (Italics supplied) 11 12 ___________________ 11 167 SCRA 209. “ordering the petitioner to pay private respondent the sum of One Hundred Thousand (P100. Inc. Teodoro Padilla. that will cause the imposition of the interest. p.. as part of the judgment for damages.00 as moral damages and P400. it explained: 10 “There should be no dispute that the imposition of 12% interest pursuant to Central Bank Circular No. of the then Intermediate Appellate Court reducing the amount of moral and exemplary damages awarded by the trial court. and its resolution. the rate of interest is imposed on the total sum. took no part because he was the ponente in the Court of Appeals. 234. restoring the amount of damages awarded by the trial court.. JULY 12.Ozaeta) a solidary (Art. vs. 1994 91 Eastern Shipping Lines.000. Supra.00) Pesos to cover all damages (with the exception of attorney’s fees) occasioned by the loss of the building (including interest charges and lost rentals) and an additional ONE HUNDRED THOUSAND (P100.00 and P100. Reformina v.. from the filing of the complaint until paid.” The Court ruled out the applicability of the Reformina and Philippine Rabbit Bus Lines cases and. goods or credit. dated 29 April 1985. Penned by Justice Edgardo Paras. Jr. but then no interest is actually imposed provided the sums referred to in the judgment are paid upon the finality of the judgment. v.” (Italics supplied) A motion for reconsideration was filed by United Construction.000. Cruz. (Philippine Rabbit Bus Lines Inc. with six (6%) percent interest thereon computed from the finality of this decision until paid. It is delay in the payment of such final judgment. while recognizing the right of the private respondent to recover damages.000.000. twelve (12%) per cent interest per annum shall be imposed upon aforementioned amounts from finality until paid . In a decision of 09 November 1988.. later sustained by the IAC. with the concurrence of Justices Marcelo Fernan.” (Italics supplied) The subsequent case of American Express International. Jr. Clearly. 10) indemnity in favor of the Philippine Bar Association of FIVE MILLION (P5.000. however. plus costs of suit. and (3) rate allowed in judgments (judgments spoken of refer to judgments involving loans or forbearance of any money.000. i. P2. to be inconceivably large. . the total sum being payable upon the finality of this decision. Court of Appeals the following: (1) loans. to P240. Upon failure to pay on such finality. and Irene Cortes. Abdulwahid Bidin.00.

Carolina Griño-Aquino. with interest at the legal rate from the date of the filing of the complaint until fully paid. Inc. Jr. 1972 is affirmed in all respects. (T)he transaction involved is clearly not a loan or forbearance of money. jointly and severally. Court of Appeals Reformina came into fore again in the 21 February 1989case of Florendo v. with the modification that defendants-appellants. providing any legal interest thereon. decided on 08 May 1992.400. After conducting a hearing on the complaints for eminent domain.12 Rendered per curiam with the concurrence of then Chief Justice Marcelo Fernan. except defendant-appellant Merton Munn. a petition for certiorari assailed the said order. Cruz. Justices Andres Narvasa. 1994 93 Eastern Shipping Lines. This Court said: “x x x. and an entry of judgment was made. the Court had another occasion to rule on the matter. The records were thereupon transmitted to the trial court. are ordered to pay. the Court declared: 15 “x x x. Isagani A. 416] does not apply to actions based on a breach of employment contract like the case at bar. vs. the latter held: 13 “WHEREFORE. 14 208 SCRA 542. vs. including the sum of P1. the petitioner was awarded by the trial court moral and exemplary damages without. 92 92 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. Ascribing grave abuse of discretion on the part of the trial judge. Angas.” Again..00 in concept of compensatory damages. For having been illegally dismissed.” (Italics supplied) The petition for review to this Court was denied. 234. Court of Appeals the trial court ordered the petitioner to pay the private respondents certain sums of money as just compensation for their lands so expropriated “with legal interest thereon x x x until fully paid. in applying the 6% legal interest per annum under the Civil Code. JULY 12. 14 ________________ 13 170 SCRA 461.Ruiz which arose from a breach of employment contract. 93 VOL. When the decision was appealed to the Court of Appeals. Abdulwahid Bidin.National Power Corporation vs. and the interest adjudged by the trial court is in the nature of indemnity for . the payment of which is without stipulation regarding interest. involved the expropriation of certain parcels of land. it is to be noted that the Court of Appeals ordered the payment of interest ‘at the legal rate’ from the time of the filing of the complaint. Justices Ameurfina Melencio-Herrera and Hugo Gutierrez. Justices Edgardo Paras and Florentino Feliciano also took no part.” (Italics supplied) The Court reiterated that the 6% interest per annum on the damages should be computed from the time the complaint was filed until the amount is fully paid. Teodoro Padilla. Leo Medialdea and Florenz Regalado. the amounts stated in the dispositive portion of the decision. Said circular [Central Bank Circular No. except as modified hereinabove the decision of the CFI of Negros Oriental dated October 31. Abraham Sarmiento. Emilio Gancayco. Quite recently. goods or credits but expropriation of certain parcels of land for a public purpose. however. took no part because they did not participate in the deliberations. x x x. Irene Cortes. Inc. The writ of execution issued by the trial court directed that only compensatory damages should earn interest at 6% per annum from the date of the filing of the complaint.

” The Nakpil and Sons case ruled that 12% interest per annum should be imposed from the finality of the decision until the judgment amount is paid. Therefore.e. The cases can perhaps be classified into two groups according to the similarity of the issues involved and the corresponding rulings rendered by the court. It is easily discernible in these cases that there has been a consistent holding that the Central Bank Circular imposing the 12% interest per annum applies only to loans or forbearance of money. The legal interest required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof. Manila Port Service (1969).. Cruz (1986).’” American Express International v. the “first group” which remained consistent in holding that the running of the legal interest should be from the time of the filing of the complaint until fully paid. on the other hand. depending on whether or not the amount involved is a loan or forbearance. Florendo v. i. Angas (1992). 16 Black’s Law Dictionary (1990 ed. 2209 of the Civil Code shall apply. Florenz Regalado and Rodolfo Nocon. Nakpil and Sons v. a common time frame in the computation of the 6% interest per annum has been applied. 16 __________________ 15 Penned by Justice Edgardo Paras with the concurrence of Justices Ameurfina Melencio-Herrera. ‘unliquidated and not known until definitely ascertained. Teodoro Padilla. Tomol (1985). goods or credits. 22 Wash.2d 408. Unlike. Intermediate Appellate Court (1988).’ then. Court of Appeals (1988). and American Express International v.” Concededly. Ruiz (1989) and National Power Corporation v. goods or credits. introduced a different time frame for reckoning the 6% interest by ordering it to be “computed from the finality of (the) decision until paid. too. and that the 6% interest under the Civil Code governs when the transaction involves the payment of indemnities in the concept of damage arising from the breach or a delay in the performance of obligations in general. The factual circumstances may have called for different applications.” the basic issue focuses on the application of either the 6% (under the Civil Code) or 12% (under the Central Bank Circular) interest per annum. guided by the rule that the courts are vested with discretion. depending 17 _________________ . 644) citing the case of Hafer v. In the “first group.damages. there have been seeming variances in the above holdings. vs. etc. Art. Observe. 156 P. that in these cases. IAC.. The “first group” would consist of the cases of Reformina v.” did not alter the pronounced rule on the application of the 6% or 12% interest per annum. Inc. and not by way of earnings from loans. In the “second group” would be Malayan Insurance Company v. interest ‘should be from the date of the decision. the “second group” varied on the commencement of the running of the legal interest. Philippine Rabbit Bus Lines v. Court of Appeals as well as to judgments involving such loan or forbearance of money. 411 defines the word 94 94 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. on the one hand. however. The ostensible discord is not difficult to explain. 2d 378. from the time the complaint is filed until the adjudged amount is fully paid. Malayan held that the amount awarded should bear legal interest from the date of the decision of the court a quo. explaining that “if the suit were for damages. The“second group. or one of indemnity for damage. Spaeth. since the kind of interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by way of damages. assessed and determined by the courts after proof.

 Inc.forbearance. 3.. on the award of interest. and 5. (3)Quasi-contracts. JULY 12. Nonetheless. 18 19 20 2.When the obligation is breached.With regard particularly to an award of interest in the concept of actual and compensatory damages. (4)Acts or omissions punished by law. Court of Appeals on the equities of each case. 1994 95 Eastern Shipping Lines. (2)Contracts. quasi-contracts. i. (5)Quasi-delicts. the interest due shall itself earn legal interest from the time it is judicially demanded. to suggest the following rules of thumb for future guidance. 2.. regardless of its source. contracts. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of recoverable damages.Obligations arise from. is imposed. 4. In the absence of stipulation. by way of clarification and reconciliation.When an obligation. 21 22 23 ___________________ 18 “ART.e. I. and it consists in the payment of a sum of money. as well as the accrual thereof. II. the interest due should be that which may have been stipulated in writing. a loan or forbearance of money. the rate of interest shall be 12% per annum to be computed from default. 95 VOL. 1.1157.e. Furthermore.” . as follows: 1. the application of the 6% and 12% interest per annum has no bearing considering that this case was decided upon before the issuance of Circular No. 234. 17 In the case of Malayan Insurance. 416 by the Central Bank. 1. the rate of interest.. during given period of time. i. delicts or quasi-delicts is breached. within the context of usury law. law. as a contractual obligation of lender or creditor to refrain. it may not be unwise. vs. from requiring borrower or debtor to repay loan or debt then due and payable. (1)Law. the contravenor can be held liable for damages.e. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. i.

and the debtor incurs in delay. 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 24 25 26 ___________________ “However. or 3.2211. delay by the other begins.In crimes and quasi-delicts.” 20 “ART.Those who in the performance of their obligations are guilty of fraud. there being no stipulation to the 25 contrary.If the obligation consists in the payment of a sum of money. “ART. interest as a part 24 of the damages may.2213. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. or 2. neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. is breached. as when the obligor has rendered it beyond his power to perform. the indemnity for damages. (3)When demand would be useless. an interest on the amount of damages awarded may be imposed at thediscretion of the court at the rate of 6% per annum.When an obligation.2212. in the discretion of the court.2195.” 21 “ART.No interest shall be due unless it has been expressly stipulated in writing. (2)When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract. however. where the demand is established with reasonable certainty. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. From the moment one of the parties fulfills his obligation. Accordingly.” “Art.1170. the legal interest. in a proper case. although the obligation may be silent upon this point. No interest.1956.” 23 “ART. 96 96 SUPREME COURT REPORTS ANNOTATED Eastern Shipping Lines. and in the absence of stipulation.” “ART. negligence. and those who in any manner contravene the tenor thereof. or delay.2210. Inc. be allowed upon damages awarded for breach of contract.The provisions of this Title (on Damages) shall be respectively applicable to all obligations mentioned in article 1157.” “ART.2209. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty.” 26 97 . shall be the payment of the interest agreed upon. 1169.1169. which is six per cent per annum. Court of Appeals 2.Interest due shall earn legal interest from the time it is judicially demanded. are liable for damages.Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. the demand by the creditor shall not be necessary in order that delay may exist: 1. except when the demand can be established with reasonable certainty. (1)When the obligation or the law expressly so declare. vs. be adjudicated in the discretion of the court.Interest may. “In reciprocal obligations. not constituting a loan or forbearance of money.19 “ART.Interest cannot be recovered upon unliquidated claims or damages.” 22 “ART.

SO ORDERED. vs. GALLERY FRAMES and/or FELIPE BORDEY. JJ. 226 SCRA 476 [1993]). Inc.J. Took no part in deliberations. this interim period being deemed to be by then an equivalent to a forbearance of credit. J. All rights reserved. the reliefs continue to add up until full satisfaction.—Where the obligation arose from a contract or purchase and sale and not from a contract of loan or mutuum.* DARIO NACAR. if no previous computation has been made) is a part of the law — specifically.R. 189871.Regalado. shall be imposed on such amount upon finality of this decision until the payment thereof. JR. 3. A TWELVE PERCENT (12%) interest. above. vs. as expressed under Article 279 of the Labor Code.. While common carriers are required to observe extraordinary diligence and are presumed at fault. Court of Appeals ascertained).. Notes. the rate of legal interest. Bellosillo. A recomputation (or an original computation. ——o0o—— 98 © Copyright 2016 Central Book Supply. 225 SCRA 268 [1993]). 1994 97 Eastern Shipping Lines. JULY 12. whether the case falls under paragraph 1 or paragraph 2. Termination of Employment. Feliciano. Court of Appeals. The actual base for the computation of legal interest shall. Mendoza.). Melo. August 13. the applicable rate is 6% per annum as provided in Article 2209 of the Civil Code and not the rate of 12% per annum as provided in Circular No. By the nature of an illegal dismissal case. concur. Padilla. petitioner. no such presumption applies to private carriers (Planters Products. Quiason. Article 279 of the Labor Code and the established jurisprudence on this provision . the petition is partly GRANTED.. No. Romero. vs. Narvasa (C. The appealed decision is AFFIRMED with the MODIFICATION that the legal interest to be paid is SIX PERCENT (6%) on the amount due computed from the decision. Bidin. Illegal Dismissals.—No essential change is made by a recomputation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared by the Labor Arbiter in that decision. Davide.VOL. Court of Appeals. 234. Cruz. 416 (Pilipinas Bank vs. Inc.When the judgment of the court awarding a sum of money becomes final and executory. in lieu of SIX PERCENT (6%). Inc. dated 03 February 1988. Jr. be on the amount finally adjudged.. Labor Law. Petition partly granted. WHEREFORE. G. in any case. 2013. shall be 12% per annum from such finality until its satisfaction.Puno and Kapunan. respondents. of the court a quo.

Court of Appeals.1 of the Manual of Regulations for Non-Bank Financial Institutions.—In the absence of an express stipulation as to the rate of interest that would govern the parties. before its amendment by BSP-MB Circular No. qualified only by jurisprudence in its interpretation of when separation pay in lieu of reinstatement is allowed. Interest Rates.3 and 4303P. By the nature of an illegal dismissal case. as expressed under Article 279 of the Labor Code. The illegal dismissal ruling stands. When that happens. the rate of legal interest for loans or forbearance of any money. qualified only by jurisprudence in its interpretation of when separation pay in lieu of reinstatement is allowed. goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per . In allowing separation pay. and Subsection X305. Same. 2013.—That the amount respondents shall now pay has greatly increased is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek recourses against the Labor Arbiter’s decision. goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the case of Eastern Shipping Lines vs. the reliefs continue to add up until full satisfaction.1.— that is read into the decision. 4305S. 440 4 SUPREME COURT REPORTS ANNOTATED 40 Nacar vs. the final decision effectively declares that the employment relationship ended so that separation pay and backwages are to be computed up to that point. the rate of legal interest for loans or forbearance of any money. Gallery Frames the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. the finality of the illegal dismissal decision becomes the reckoning point instead of the reinstatement that the law decrees. In the absence of an express stipulation as to the rate of interest that would govern the parties.1 of the Manual of Regulations for Banks and Sections 4305Q. The recomputation of _______________ * EN BANC. Same. Article 279 provides for the consequences of illegal dismissal in no uncertain terms. and this is not a violation of the principle of immutability of final judgments. 799 — but will now be six percent (6%) per annum effective July 1. only the computation of monetary consequences of this dismissal is affected. Same. 234 SCRA 78 (1994). Article 279 of the Labor Code provides for the consequences of illegal dismissal in no uncertain terms.

as well as such loans made by pawnshops. the rate of interest shall be 6% per annum to be computed from default. It should be noted. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code .. i. or loans of financial intermediaries. Same. the interest due shall itself earn legal interest from the time it is judicially demanded. Inc. i. a loan or forbearance of money. and it consists in the payment of a sum of money. that the new rate could only be applied prospectively and not retroactively. Gallery Frames amendment by BSP-MB Circular No. goods or credits.442 . It even authorizes the BSP-MB to prescribe different maximum rate or rates for different types of borrowings.annum — as reflected in the case of Eastern Shipping Lines. 703.” Same. 2013.e. the interest due should be that which may have been stipulated in writing.1 of the Manual of Regulations for Banks and Sections 4305Q. goods or credits. finance companies and similar credit institutions. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 4305S. and it consists in the payment of a sum of money. The Bangko Sentral ng Pilipinas-Monetary Board may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the forbearance of any money.1. finance companies and similar credit institutions.. Court of Appeals. 2013 441 Nacar vs. Furthermore. Monetary Board. before its 441 VOL.—In the recent case of Advocates for Truth in Lending. 799 — but will now be six percent (6%) per annum effective July 1. a loan or forbearance of money. In the absence of stipulation. 2013. including deposits and deposit substitutes.e. including those for loans of low priority such as consumer loans. AUGUST 13. 688 SCRA 530 (2013). Consequently. the rate of interest shall be 6% per annum to be computed from default. 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable. this Court affirmed the authority of the BSP-MB to set interest rates and to issue and enforce Circulars when it ruled that “the BSP-MB may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the forbearance of any money. as well as such loans made by pawnshops.—When the obligation is breached. v. Come July 1. the interest due should be that which may have been stipulated in writing.1 of the Manual of Regulations for Non-Bank Financial Institutions.. the twelve percent (12%) per annum legal interest shall apply only until June 30. nonetheless..e.e. including those for loans of low priority such as consumer loans. When the obligation is breached. 234 SCRA 78 (1994) and Subsection X305. In the absence of stipulation. andEduardo B. i. Inc. Olaguer v.3 and 4303P. i. Bangko Sentral Monetary Board.

1169.—When the judgment of the court awarding a sum of money becomes final and executory. Cabio Law Office and Associates for respondent. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. PETITION for review on certiorari of the decision and resolution of the Court of Appeals.4 SUPREME COURT REPORTS ANNOTATED 42 Nacar vs. When the judgment of the court awarding a sum of money becomes final and executory. shall be 6% per annumfrom such finality until its satisfaction. 2013 443 . Carlo A. Same. No interest. Accordingly. shall be 6% per annum from such finality until its satisfaction. the rate of legal interest. 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). in any case. 703. 443 VOL. above. the rate of legal interest. however. this interim period being deemed to be by then an equivalent to a forbearance of credit. Civil Code). but when such certainty cannot be so reasonably established at the time the demand is made.—When an obligation. except when or until the demand can be established with reasonable certainty. The actual base for the computation of legal interest shall. AUGUST 13. When an obligation. The facts are stated in the opinion of the Court. not constituting a loan or forbearance of money. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. Gallery Frames Same. is breached. be on the amount finally adjudged. 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. whether the case falls under paragraph 1 or paragraph 2. where the demand is established with reasonable certainty. shall be adjudged on unliquidated claims or damages. Domingo for petitioner.

Jr. computed only up to promulgation of this decision as follows: _______________ 1 Penned by Associate Justice Vicente S. 3 Id. 1998. it is clear from the records that complainant was never afforded due process before he was terminated. and his apparent reluctance to be reinstated. Veloso. at pp. with Associate Justices Rebecca De Guia-Salvador and Ricardo R. All the more. The factual antecedents are undisputed.R. reads: With the foregoing. On October 15. petitioner was awarded backwages and separation pay in lieu of reinstatement in the amount of P158. 32.919.Rollo.. pp. J.. 01-00519-97. we find and so rule that respondents failed to discharge the burden of showing that complainant was dismissed from employment for a just or valid cause. docketed as NLRC NCR Case No. Rosario. Petitioner Dario Nacar filed a complaint for constructive dismissal before the Arbitration Branch of the National Labor Relations Commission (NLRC) against respondents Gallery Frames (GF) and/or Felipe Bordey.Nacar vs. 2008 of the Court of Appeals (CA) in CA-G. at p. Gallery Frames PERALTA. concurring.: This is a petition for review on certiorari assailing the Decision1 dated September 23.92. Thus. considering the strained relationship between the parties. The dispositive portion of the decision.. 98591. the Labor Arbiter rendered a Decision 3 in favor of petitioner and found that he was dismissed from employment without a valid or just cause. SP No. 2 Id. E. As such. 444 . and the Resolution2 dated October 9. 79-84. 2009 denying petitioner’s motion for reconsideration. 33-48. we are perforce constrained to grant complainant’s prayer for the payments of separation pay in lieu of reinstatement to his former position.

00 x 26 days x 8 months = P41.00/day x 12.933.4 mos.986. judgment is hereby rendered finding respondents guilty of constructive dismissal and are therefore. premises considered.00 months P62. & 1 1990 P198/day 1998 month BACKWAGES Date Dismissed Rate per Date of Decisions = day Aug.444 SUPREME COURT REPORTS ANNOTATED Nacar vs. Aug.56 b) Prevailing P198.36 mos. 18. mos. 24.00 P32. August = 18. Gallery Frames SEPARATION PAY Date Hired Rate Date of Decision Length of Service P198.986. ordered: . = P62.00 = = = 8 yrs.947.184.00 2/6/98 Rate x TOTAL to 26 = P95.76 = to 8/18/98 per days = 2/5/98 January = 12.4 = = 1997 P196. 6.20 xxxx WHEREFORE. 1998 a) 1/24/97 P196.36 = x day 6.

but it was dismissed for lack of merit in the Resolution 5 dated February 29. 82-84. AUGUST 13. and 3. 2002.56) Pesos representing his separation pay. 2. 9 The case was. 6 Dissatisfied. 2013 445 Nacar vs. To pay jointly and severally the complainant the amount of nine (sic) five thousand nine hundred thirty-three and 36/100 (P95. 2000. Gallery Frames Respondents appealed to the NLRC. 703.) 445 VOL.986. 2002.1. this Court denied the petition in the Resolution dated April 17. thereafter. at pp. 7 Respondents then sought relief before the Supreme Court. 2000. docketed as G. 151332. 8 An Entry of Judgment was later issued certifying that the resolution became final and executory on May 27. No. All other claims are hereby dismissed for lack of merit. On August 24.R. the CA issued a Resolution dismissing the petition. the NLRC sustained the decision of the Labor Arbiter. Respondents filed a motion for reconsideration.4 _______________ 4 Id. Respondents filed a Motion for Reconsideration. but respondents failed to appear. Accordingly.933.36) representing his backwages. but it was denied. 10 . but it was likewise denied in a Resolution dated May 8. 2001. respondents filed a Petition for Review onCertiorari before the CA. SO ORDERED. referred back to the Labor Arbiter. (Emphasis supplied. Finding no reversible error on the part of the CA.. A pre-execution conference was consequently scheduled. To pay jointly and severally the complainant the amount of sixty-two thousand nine hundred eighty-six pesos and 56/100 (P62.

7 Rollo.320. the Computation and Examination Unit of the NLRC arrived at an updated amount in the sum of P471. the Labor Arbiter issued an Order15 denying the motion.320. no more recomputation is required to be made of the said awards.56 and limited backwages of P95. They claimed that after the decision becomes final and executory. an Alias Writ of Execution16 was issued on January 14. at pp. 2002. the same cannot be altered or amended anymore. at p. at pp.986. praying that his backwages be computed from the date of his dismissal on January 24.36. 14 On January 13.. at pp. petitioner filed a Motion for Correct Computation. id.. Thus. 85-93. Gallery Frames On December 2. 35. 2003..31.On November 5.31. a Writ of Execution 13 was issued by the Labor Arbiter ordering the Sheriff to collect from respondents the total amount of P471.. 9 Id. 12 _______________ 5 Id.. 100. 8 Id. 1997 up to the finality of the Resolution of the Supreme Court on May 27. 2002. p. that since the Labor Arbiter awarded separation pay of P62. 12 Id. 2000. at p. 11 Upon recomputation. at p.. 10 Id. 11 Id. 35-36. 446 446 SUPREME COURT REPORTS ANNOTATED Nacar vs. 36. 101. 94-96. 6 Resolution dated July 24. Respondents filed a Motion to Quash Writ of Execution. among other things. 2002. 2003. .933. arguing.

2003 issued a Resolution 17 granting the appeal in favor of the respondents and ordered the recomputation of the judgment award. 2013 447 Nacar vs. at pp. 114-117. at pp.. 1998. petitioner moved that an Alias Writ of Execution be issued to enforce the earlier recomputed judgment award in the sum of P471. but respondents failed to appear on time. pending the final computation of his backwages and separation pay. Meanwhile. 37. . 18 Id. at pp. which on June 30. Consequently.. On August 20. 16 Id.. 14 Id. Gallery Frames termined by the Labor Arbiter in his Decision dated October 15. 109-113. another pre-execution conference was held.320.31.Respondents again appealed before the NLRC. 101. at pp. 15 Id. 17 Id. where the judgment award of petitioner was reassessed to be in the total amount of only P147. at p.560. 97-102.. 447 VOL. 2003.. Petitioner then moved that a writ of execution be issued ordering respondents to pay him the original amount as de_______________ 13 Id.19. at p.. 103-108. AUGUST 13. an Entry of Judgment was issued declaring the Resolution of the NLRC to be final and executory. 703. 18 The records of the case were again forwarded to the Computation and Examination Unit for recomputation.

the Labor Arbiter issued an Alias Writ of Execution to satisfy the judgment award that was due to petitioner in the amount of P147. _______________ 19 Id.On January 14. 65-69.. at pp. it is the amount of P158..459.919. he is only entitled to the balance of P11. Petitioner filed a Motion for Reconsideration. the Labor Arbiter issued an Order 20granting the motion.73. 40.. 2005. 21 which appeal was denied by the NLRC in its Resolution 22 dated September 27. Petitioner then appealed before the NLRC. the Labor Arbiter reasoned that since the decision states that the separation pay and backwages are computed only up to the promulgation of the said decision. at pp. 98591. 2006. SP No. at pp. Thus.19. 2007. but only up to the amount of P11.19. However. Gallery Frames .73.. docketed as CA-G. 70-74. 20 Id. Aggrieved. The Labor Arbiter reasoned that it is the October 15. 23 Id. 448 448 SUPREME COURT REPORTS ANNOTATED Nacar vs. but it was likewise denied in the Resolution23 dated January 31. 21 Id. 58-59.19 On May 10. petitioner then sought recourse before the CA. at p.560.459.R. since petitioner already received P147. which petitioner eventually received. 60-64. at pp. 22 Id. 1998 Decision that should be enforced considering that it was the one that became final and executory.92 that should be executed.560. 2003.. Petitioner then filed a Manifestation and Motion praying for the recomputation of the monetary award to include the appropriate interests.

On September 23. the petition assigning the lone error: I WITH DUE RESPECT... AUGUST 13. the same is not final until reinstatement is made or until finality of the decision. a belated correction thereof is no longer allowed. 2008. 32. 1998 DECISION OF LABOR ARBITER LUSTRIA SUBSERVIENT TO AN OPINION EXPRESSED IN THE BODY OF THE SAME DECISION. 2005 ORDER OF LABOR ARBITER MAGAT MAKING THE DISPOSITIVE PORTION OF THE OCTOBER 15. 703. 33-48. 449 VOL. 2013 449 . in case of an award of separation pay. SUSTAINED THE MAY 10. at p. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED. it can no longer be modified in any respect. Consequently.. which already became final and executory. but it was denied in the Resolution 25 dated October 9. the CA rendered a Decision 24denying the petition. 25 Id. at p. 2002 Resolution of the Supreme Court in G.R. The CA opined that since petitioner no longer appealed the October 15. the reckoning point for the compu_______________ 24 Id. except to correct clerical errors or mistakes. 27. 2009. 2002. Petitioner filed a Motion for Reconsideration. The CA stated that there is nothing left to be done except to enforce the said judgment. No. COMMITTED GRAVE ABUSE OF DISCRETION AND DECIDED CONTRARY TO LAW IN UPHOLDING THE QUESTIONED RESOLUTIONS OF THE NLRC WHICH. 1998 decision of the Labor Arbiter did not become final and executory until the April 17. 26 Id. Hence. 26 Petitioner argues that notwithstanding the fact that there was a computation of backwages in the Labor Arbiter’s decision. IN TURN. 151332 was entered in the Book of Entries on May 27. at pp. Petitioner maintains that considering that the October 15. 1998 Decision of the Labor Arbiter.

February 8. The instant case is similar to the case of Session Delights Ice Cream and Fast Foods v.919. 1998 decision of the Labor Arbiter. long after the decision had become final and executory. no more recomputation is required to be made of said awards. 612 SCRA 10. 2010. Respondents added that it was only during the execution proceedings that the petitioner questioned the award. Respondents insist that since the decision clearly stated that the separation pay and backwages are “computed only up to [the] promulgation of this decision. Court of Appeals (Sixth Division).R. and whether this violated the principle of immutability of judgment. 172149.92. Also in Session Delights. 1998. Respondents contend that to allow the further recomputation of the backwages to be awarded to petitioner at this point of the proceedings would substantially vary the decision of the Labor Arbiter as it violates the rule on immutability of judgments. No. The petition is meritorious. Further.27 wherein the issue submitted to the Court for resolution was the propriety of the computation of the awards made. Gallery Frames tation of the backwages and separation pay should be on May 27. respondents assert that since only separation pay and limited backwages were awarded to petitioner by the October 15. the _______________ 27 G. petitioner posits that he is also entitled to the payment of interest from the finality of the decision until full payment by the respondents. it was a distinct feature of the judgment of the Labor Arbiter in the above-cited case that the decision already provided for the computation of the payable separation pay and backwages due and did not further order the computation of the monetary awards up to the time of the finality of the judgment. On their part. Like in the present case. 450 .Nacar vs.” and considering that petitioner no longer appealed the decision. 2002 and not when the decision of the Labor Arbiter was rendered on October 15. petitioner is only entitled to the award as computed by the Labor Arbiter in the total amount of P158.

The decision consists essentially of two parts. given that the petitioner did not immediately pay the awards stated in the original labor arbiter’s decision. Gallery Frames dismissed employee failed to appeal the decision of the labor arbiter. can. The Court clarified. if separation pay is to be given in lieu reinstatement. The question is posed. AUGUST 13. and legal interests. thus: In concrete terms. This part. being merely a computation of what the first part of the decision established and declared. the computation the labor arbiter made shows that it was time-bound as can be seen from the figures used in the computation. also made a computation of the award. or up to the finality of the decision. attorney’s fees. The first is that part of the decision that cannot now be disputed because it has been confirmed with finality. 703. pegged as of the time the decision was rendered and confirmed with modification by a final CA decision. that the petitioner now posits should no longer be re-computed because the computation is already in the labor arbiter’s decision that the CA had affirmed. at the same time that it found that an illegal dismissal had taken place. backwages. the question is whether a re-computation in the course of execution of the labor arbiter’s original computation of the awards made. On its face. The public and private respondents. The second part is the computation of the awards made. is legally proper. 2013 451 . This is the part. This is the finding of the illegality of the dismissal and the awards of separation pay in lieu of reinstatement. it delayed payment because it continued with the litigation until final judgment at the CA level. is understandable 451 VOL. on the other hand. A source of misunderstanding in implementing the final decision in this case proceeds from the way the original labor arbiter framed his decision. be re-computed. posit that a re-computation is necessary because the relief in an illegal dismissal decision goes all the way up to reinstatement if reinstatement is to be made. That the labor arbiter’s decision. by its nature.450 SUPREME COURT REPORTS ANNOTATED Nacar vs. too.

he apparently read the figures originally ordered to be paid to be the computation due had the case been terminated and implemented at the labor arbiter’s level. The CA decision. shall embody in any such decision or order the detailed and full amount awarded. Gallery Frames . However. in cases involving monetary awards and at all events. lapsed to finality and was subsequently returned to the labor arbiter of origin for execution. It was at this point that the present case arose. in turn. Clearly implied from this original computation is its currency up to the finality of the labor arbiter’s decision. By law. as far as practicable. and no question would have arisen had the parties terminated the case and implemented the decision at that point. Hence..e. This Section in part states: [T]he Labor Arbiter of origin. Thus. Rule VIII of the then NLRC Rules of Procedure which requires that a computation be made. The petitioner appropriately sought to nullify the NLRC decision on jurisdictional grounds through a timely filed Rule 65 petition for certiorari. 2003) and 452 452 SUPREME COURT REPORTS ANNOTATED Nacar vs. Focusing on the core illegal dismissal portion of the original labor arbiter’s decision. reviewable only by the CA on jurisdictional grounds. on the finding of illegality as well as on all the consequent awards made. finding that NLRC exceeded its authority in affirming the payment of 13th month pay and indemnity. As we noted above. the labor arbiter re-computed the award to include the separation pay and the backwages due up to the finality of the CA decision that fully terminated the case on the merits.Nacar vs. the petitioner appealed the case to the NLRC which. the NLRC decision is final. the labor arbiter’s approved computation went beyond the finality of the CA decision (July 29. Unfortunately. this implication is apparent from the terms of the computation itself. the petitioner disagreed with the labor arbiter’s findings on all counts — i. affirmed the labor arbiter’s decision. the implementing labor arbiter ordered the award re-computed. Gallery Frames in light of Section 3.

30 _______________ 28 Session Delights Ice Cream and Fast Foods v. no essential change is made by a recomputation as this step is a necessary consequence that flows from the nature of the illegality of dismissal declared by the Labor Arbiter in that decision. and this is not a violation of the principle of immutability of final judgments. supra. 25. computed as of the time of the labor arbiter’s original decision. The illegal dismissal ruling stands. the second part is the computation of the awards or monetary consequences of the illegal dismissal. the CA issued the decision now questioned in the present petition. The recomputation of the consequences of illegal dismissal upon execution of the decision does not constitute an alteration or amendment of the final decision being implemented. at p. 30 Id. if no previous computation has been made) is a part of the law — specifically. Court of Appeals (Sixth Division). Article 279 of the Labor Code and the established jurisprudence on this provision — that is read into the decision. Hence.. 25-26. the first part contains the finding of illegality and its monetary consequences. at pp.. as expressed under Article 279 of the Labor Code. only the computation of monetary consequences of this dismissal is affected.included as well the payment for awards the final CA decision had deleted — specifically. 2013 453 Nacar vs. at pp. 703. 453 VOL. Gallery Frames That the amount respondents shall now pay has greatly increased is a consequence that it cannot avoid as it is the risk that it ran when it continued to seek recourses against the Labor Arbiter’s decision. By the nature of an illegal dismissal case. 28 Consequently.29 A recomputation (or an original computation. 29 Id. Article 279 provides for the consequences of illegal dismissal in no uncertain . from the above disquisitions. We see no error in the CA decision confirming that a recomputation is necessary as it essentially considered the labor arbiter’s original decision in accordance with its basic component parts as we discussed above. To reiterate. 21-23. the proportionate 13th month pay and the indemnity awards. AUGUST 13. the reliefs continue to add up until full satisfaction. under the terms of the decision which is sought to be executed by the petitioner.

i. to wit: II. With regard particularly to an award of interest in the concept of actual and compensatory damages. as follows: 1. however.R. No interest. When that happens. _______________ 31 Id. not constituting a loan or forbearance of money. Gallery Frames 2. the final decision effectively declares that the employment relationship ended so that separation pay and backwages are to be computed up to that point. No. and it consists in the payment of a sum of money. at p. 454 454 SUPREME COURT REPORTS ANNOTATED Nacar vs. the interest shall begin to run only from the date . 32 G. where the demand is established with reasonable certainty. 1994. 26.. the interest due shall itself earn legal interest from the time it is judicially demanded. Inc.31 Finally. In allowing separation pay. When an obligation. 97412. an interest on the amount of damages awarded may be imposed at thediscretion of the court at the rate of 6% per annum. In the landmark case of Eastern Shipping Lines. the rate of interest shall be 12% per annum to be computed from default. July 12. as well as the accrual thereof.. In the absence of stipulation. Accordingly. 1169. 234 SCRA 78.terms.32 the Court laid down the guidelines regarding the manner of computing legal interest. Furthermore. Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made. Court of Appeals. the finality of the illegal dismissal decision becomes the reckoning point instead of the reinstatement that the law decrees. i. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. v. the interest due should be that which may have been stipulated in writing. anent the payment of legal interest.e.e. is breached. a loan or forbearance of money. the rate of interest. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. When the obligation is breached. qualified only by jurisprudence in its interpretation of when separation pay in lieu of reinstatement is allowed. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. is imposed..

2013. shall be 12% per annum from such finality until its satisfaction. goods or credits and the rate allowed in judgments.35 Series of 2013.1. In view of the above. 2013 455 Nacar vs. 796 dated 16 May 2013. Series of 1982 and. approved the following revisions governing the rate of interest in the absence of stipulation in loan contracts. The rate of interest for the loan or forbearance of any money. in any case. whether the case falls under paragraph 1 or paragraph 2. approved the amendment of Section 234 of Circular No. however. 4305S. 905. When the judgment of the court awarding a sum of money becomes final and executory. italics in the original). the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB). The rate of interest for the loan or forbearance of any money. in its Resolution No. 2013. thereby amending Section 2 of Circular No. (Citations omitted. 34 SECTION  2. Section 2. 796 dated May 16. above. 95-97. this interim period being deemed to be by then an equivalent to a forbearance of credit.1 of the Manual of Regulations for Banks and Sections 4305Q. effective July 1. supra. Court of Appeals.3 36 _______________ 37 38 . shall be six percent (6%) per annum. the pertinent portion of which reads: The Monetary Board. be on the amount finally adjudged.the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). 799. v. Inc. at pp. Subsection X305. Gallery Frames 905. the rate of legal interest. 3. in its Resolution No. goods or credits and the rate allowed in judg455 VOL. 33 Recently. Series of 1982: Section 1. The actual base for the computation of legal interest shall. 703. in the absence of an express contract as to such rate of interest. AUGUST 13. issued Circular No. accordingly. _______________ 33 Eastern Shipping Lines.

2013. in the absence of express contract as to such rate of interest.1 of the Manual of Regulations for Banks and Sections 4305Q. It should be noted.1 (2008 . in the absence of express contract as to such rate of interest.ments. 35 Rate of interest in the absence of stipulation. from the foregoing.6) Rate of interest in the absence of stipulation. 2013. Consequently.1 Rate of interest in the absence of stipulation. 2013. before its amendment by BSP-MB Circular No.1. In the absence of express contract.1 of the Manual of Regulations for Non-Bank Financial Institutions. 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable. in the absence of an express stipulation as to the rate of interest that would govern the parties. It reads: § 4305Q. nonetheless.3 Interest in the absence of contract. 36 § X305. goods or credits and the rate allowed in judgments. in the absence of expressed contract as to such rate of interest. 38 The Section is under S Regulations or Regulations Governing Non-Stock Savings and Loan Associations. The rate of interest for the loan or forbearance of any money. the rate of interest for the loan or forbear 456 456 SUPREME COURT REPORTS ANNOTATED Nacar vs. the twelve percent (12%) per annum legal interest shall apply only until June 30. goods or credit and the rate allowed in judgments. Come July 1. 37 The Section is under Q Regulations or Regulations Governing Non-Bank Financial Institutions Performing Quasi-Banking Functions. Thus. the rate of legal interest for loans or forbearance of any money. . shall continue to be twelve percent (12%) per annum.4307Q. goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the case of Eastern Shipping Lines40 and Subsection X305.3 and 4303P. It reads: § 4305S. that the new rate could only be applied prospectively and not retroactively. shall be twelve percent (12%) per annum. Gallery Frames and 4303P. 39 This Circular shall take effect on 1 July 2013. The rate of interest for the loan or forbearance of any money. 4305S. shall be twelve percent (12%) per annum.1 of the Manual of Regulations for Non-Bank Financial Institutions are hereby amended accordingly. 799 — but will now be six percent (6%) per annum effective July 1. Dated June 21.

in the recent case of Advocates for Truth in Lending. finance companies and similar credit institutions. (Circular No. as well as such loans made by pawnshops. including deposits and deposit substitutes. as follows: .41 this Court affirmed the authority of the BSP-MB to set interest rates and to issue and enforce Circu_______________ ance of any money.” Nonetheless. goods or credit and the rate allowed in judgment shall be twelve percent (12%) per annum.1 Rate of interest in the absence of stipulation. 39 The Section is under P Regulations or Regulations Governing Pawnshops. with regard to those judgments that have become final and executory prior to July 1. or loans of financial intermediaries. the guidelines laid down in the case of Eastern Shipping Lines42 are accordingly modified to embody BSP-MB Circular No. It reads: § 4303P. Inc. AUGUST 13. 688 SCRA 530. It even authorizes the BSP-MB to prescribe different maximum rate or rates for different types of borrowings. said judgments shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein. 703. 41 G. January 15. Gallery Frames lars when it ruled that “the BSP-MB may prescribe the maximum rate or rates of interest for all loans or renewals thereof or the forbearance of any money. 2013 457 Nacar vs. 2013. 95-97. 656 dated 02 June 2009) 40 Supra note 32. To recapitulate and for future guidance. including those for loans of low priority such as consumer loans. 192986. Bangko Sentral Monetary Board.R. 799. goods or credits. No.Corollarily. 547. shall be twelve percent (12%) per annum. 2013. Olaguer v. 457 VOL. The rate of interest for a loan or forbearance of money in the absence of an expressed contract as to such rate of interest. and Eduardo B. at pp.

i. Furthermore. With regard particularly to an award of interest in the concept of actual and compensatory damages. 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). be on the amount finally adjudged. No interest. contracts.e. the interest due shall itself earn legal interest from the time it is judicially demanded. a loan or forbearance of money. law. Civil Code). regardless of its source. II. and it consists in the payment of a sum of money. shall be adjudged on unliquidated claims or damages.. the rate of interest shall _______________ 42 Supra note 32. the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art.. The actual base for the computation of legal interest shall. as follows: 1. however. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of recoverable damages. the rate of interest.e. as well as the accrual thereof. Gallery Frames be 6% per annum to be computed from default. where the demand is established with reasonable certainty. quasi-contracts. is imposed. from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. i. the interest due should be that which may have been stipulated in writing. is breached. In the absence of stipulation. in any case.e. not constituting a loan or forbearance of money. 2. the contravenor can be held liable for damages. an interest on the amount of damages awarded may be imposed at thediscretion of the court at the rate of 6% per annum.I. 458 458 SUPREME COURT REPORTS ANNOTATED Nacar vs. but when such certainty cannot be so reasonably established at the time the demand is made. 1169. Accordingly. When the obligation is breached. i. When an obligation. When an obligation. delicts or quasi-delicts is breached. except when or until the demand can be established with reasonable certainty. ..

Brion. and (3) interest of twelve percent (12%) per annum of the total monetary awards. 98591. 2009 areREVERSED and SET ASIDE. No. 2013 until their full satisfaction. (2) separation pay computed from August 1990 up to May 27. Gallery Frames No. computed from May 27. Abad. 1997 up to May 27. 2013 and six percent (6%) per annum from July 1. Jr. Perez. SP 459 VOL.. JJ. the Decision dated September 23. And. 2002 to June 30. Velasco. Villarama. shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein. shall be 6% per annum from such finality until its satisfaction. 2002. . concur.3. Carpio.. The Labor Arbiter is hereby ORDERED to make another recomputation of the total monetary benefits awarded and due to petitioner in accordance with this Decision. 151332 became final and executory. Leonardo-De Castro. SO ORDERED. Sereno (CJ.R.). 703. Mendoza. Perlas-Bernabe and Leonen. 2008 of the Court of Appeals in CA-G. 2013. when the Resolution of this Court in G.. AUGUST 13. judgments that have become final and executory prior to July 1. the rate of legal interest. premises considered. this interim period being deemed to be by then an equivalent to a forbearance of credit. Jr. whether the case falls under paragraph 1 or paragraph 2. 2002 at the rate of one month pay per year of service. 2013 459 Nacar vs. WHEREFORE.R. Del Castillo. above. and the Resolution dated October 9. Respondents areORDERED to PAY petitioner: (1) backwages computed from the time petitioner was illegally dismissed on January 24. When the judgment of the court awarding a sum of money becomes final and executory. Bersamin. Reyes. in addition to the above.

. 8791 which explicitly allows an appeal of the decisions of the Bangko Sentral ng Pilipinas (BSP) Monetary Board to the Court of Appeals. Inc. Notes.. 7653 or in Republic Act No. 640 SCRA 322 [2011]) ——o0o—— © Copyright 2016 Central Book Supply. Ganzon. Philippine Countryside Rural Bank. (Philippine Deposit Insurance Corporation [PDIC] vs.—There is nothing in Republic Act No. All rights reserved. 591 SCRA 321 [2009]) Court is of the view that the Monetary Board approval is not required for Philippine Deposit Insurance Corporation (PDIC) to conduct an investigation on the Banks. Inc. (United Coconut Planters Bank vs.Judgment and resolution reversed and set aside. E. Inc. .