363 Phil. 701
PANGANIBAN, J.:
"During the period from February 1979 to April 1979, the [herein petitioner], which was engaged in the export of girls' denim pants, contracted the services of the [respondent], the sole proprietress of the D'Wilmar Garments, for the sewing of 20,762 pieces of assorted girls[`] denims supplied by the [petitioner] under Purchase Orders Nos. 1404, dated February 15, 1979, 0430 dated February 1, 1979, 1453 dated April 30, 1979. The [petitioner] was obliged to pay the [respondent], for her services, in the total amount of P76,410.00. The [respondent] sew[ed] the materials and delivered the same to the [petitioner] which acknowledged the same per Delivery Receipt Nos. 0030, dated February 9, 1979; 0032, dated February 15, 1979; 0033 dated February 21, 1979; 0034, dated February 24, 1979; 0036, dated February 20, 1979; 0038, dated March 11, 1979[;] 0039, dated March 24, 1979; 0040 dated March 27, 1979; 0041, dated March 29, 1979; 0044, dated Marc[h] 25, 1979; 0101 dated May 18, 1979[;] 0037, dated March 10, 1979 and 0042 dated March 10, 1979, in good order condition. At first, the [respondent] was told that the sewing of some of the pants w[as] defective. She offered to take delivery of the defective pants. However, she was later told by [petitioner]'s representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the [petitioner] failed to pay her the aforesaid amount. This prompted her to hire the services of counsel who, on November 12, 1979, wrote a letter to the [petitioner] demanding payment of the aforesaid amount within ten (10) days from receipt thereof. On February 7, 1990, the [petitioner]'s [v]ice-[p]resident-[c]omptroller, wrote a letter to [respondent]'s counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the [petitioner] for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount.The Court of Appeals (CA) affirmed the trial court's ruling, except for the award of attorney's fees which was deleted.[9] Subsequently, the CA denied the Motion for Reconsideration.[10]
"On January 8, 1981, the [respondent] filed her complaint against the [petitioner] with the [trial court] for the collection of the principal amount of P76,410.00. x x x
x x x x x x x x x
"After due proceedings, the [trial court] rendered judgment, on February 28, 1989, in favor of the [respondent] against the [petitioner], the dispositive portion of which reads as follows:`WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant ordering the latter to pay the former:
(1) The sum of P76,140.00 with interest thereon at 12% per annum, to be counted from the filing of this complaint on January 8, 1981, until fully paid;
(2) The sum of P5,000 as attorney[']s fees; and
(3) The costs of this suit;
(4) Defendant's counterclaim is hereby dismissed.'"[8]
"Whether or not it is proper to impose interest at the rate of twelve percent (12%) per annum for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties."[12]
"If the obligation consists in the payment of money and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum." (Emphasis supplied.)On the other hand, private respondent maintains that the interest rate should be twelve percent (12%) per annum, in accordance with Central Bank (CB) Circular No. 416, which reads:
"By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the `Usury Law', the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum." (Emphasis supplied.)She argues that the circular applies, since "the money sought to be recovered by her is in the form of forbearance."[14]
"I. 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.In Keng Hua Paper Products Co., Inc. v. CA,[20] we also ruled that the monetary award shall earn interest at twelve percent (12%) per annum from the date of the finality of the judgment until its satisfaction, regardless of whether or not the case involves a loan or forbearance of money. The interim period is deemed to be equivalent to a forbearance of credit.[21]
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 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.
"2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be xxx the amount finally adjudged.
"3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit."[19]