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Civil Law; Interest Rates; The general rule is that the applicable
rate of interest „shall be computed in accordance with the stipulation
of the parties.‰ Absent any stipulation, the applicable rate of interest
shall be 12% per annum „when the obligation arises out of a loan or
a forbearance of money, goods or credits. In other cases, it shall be
six percent (6%).‰·Anent the interest rate, the general rule is that
the applicable rate of interest „shall be computed in accordance
with the stipulation of the parties.‰ Absent any stipulation, the
applicable rate of interest shall be 12% per annum „when the
obligation arises out of a loan or a forbearance of money, goods or
credits. In other cases, it shall be six percent (6%).‰ In this case, the
parties did not stipulate as to the applicable rate of interest. The
only question remaining therefore is whether the 6% as provided
under Article 2209 of the Civil Code, or 12% under Central Bank
Circular No. 416, is due.
Same; Same; The phrase „forbearance of money, goods or
credits‰ is meant to have a separate meaning from a loan, otherwise
there would have been no need to add that phrase as a loan is
already sufficiently defined in the Civil Code.·In Crismina
Garments, Inc. v. Court of Appeals, 304 SCRA 356 (1999),
„forbearance‰ was defined as a „contractual obligation of lender or
creditor to refrain during a given period of time, from requiring the
borrower or debtor to repay a loan or debt then due and payable.‰
This definition describes a loan where a debtor is given a period
within which to pay a loan or debt.
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* FIRST DIVISION.
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DEL CASTILLO, J.:
The only issue posed before us is the propriety of the
imposition of interest and attorneyÊs fees.
Assailed in this Petition for Review1 filed under Rule 45
of the Rules of Court is the May 12, 2006 Decision2 of the
Court
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3 Id., at p. 103.
4 Id., at p. 118.
98
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6 Id.
99
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7 Id., at p. 11.
8 See letter dated October 13, 2000; id., at p. 13.
9 See letter dated October 20, 2000; id., at p. 22.
10 Id., at pp. 2-7.
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11 Id., at p. 6.
100
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12 Id., at pp. 18-20.
13 Id., at pp. 40-42.
14 Id., at p. 40.
15 Id., at pp. 80-81.
16 Id., at p. 81.
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20 Id., at p. 256.
21 Id.
22 Id., at pp. 256-257.
23 Id., at p. 258.
24 CA Rollo, p. 82.
25 Id., at p. 98.
102
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26 Id., at pp. 100-101.
27 Id., at p. 102.
28 Id., at p. 103.
29 Id.
103
Our Ruling
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30 P1,500,000 on October 1, 1993; P1,500,000 on April 14, 1994;
P300,000 on October 7, 1998 and P200,000 on November 2, 1998; see
records, p. 10.
31 Crismina Garments, Inc. v. Court of Appeals, 363 Phil. 701, 703;
304 SCRA 356, 358 (1999).
32 Id.
105
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33 Id., at p. 709. Emphasis supplied.
34 Article 1933 of the Civil Code provides:
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recoverable damages.
II. 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
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37 Eastern Shipping Lines, Inc. v. Court of Appeals, supra note 35 at
pp. 95-97. Emphasis supplied.
108
„x x x x
(2) When the defendantÊs act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to protect
his interest;
xxxx
(11) In any other case where the court deems it just and
equitable that attorneyÊs fees and expenses of litigation should be
recovered.
In all cases, the attorneyÊs fees and expenses of litigation must be
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reasonable.‰
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38 Id.
39 223 Phil. 472; 139 SCRA 260 (1985).
109
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