CATHOLIC VICAR APOSTOLIC V CA 165 SCRA 515 (1988) The whole controversy started when Catholic Vicar of the

Mountain Province (Vicar for brevity)filed with the CFI of Baguio, Benguet an application for registration of title for Lots 1,2,3 and 4of Psu-194357 situated at Poblacion Central, La Trinidad, Benguet. Said lots being the sites of theCatholic Church building, convents, school, etc., Upon learning of the application, the Heirs of Juan Valdez and the Heirs of EmigdioOctaviano filed an Answer/Opposition thereto on Lots 2 and3,respectively, asserting ownership and title thereto. The land registration court promulgatedits decision confirming the registrable title to Vicar.Both heirs of Valdez and Octavianoappealedto the Court of Appeals. The CA modified the decision of the land registration court and found that Lots 2 and 3 were possessed by the predecessors-in-interest of private respondents underclaim of ownership in good faith from 1906 to 1951; that Vicar has been in possession of the same lots as bailee in commodatum up to 1951, when Vicar repudiated the trust and when it applied for registration in1962; that Vicar had just been in possession as owner for 11years,hence there is no possibility of acquisitive prescription which requires 10 years possession with just title and 30 years possession without. ISSUE: WON the failure of Vicar to return the subject property to private respondents wouldconstitute an adverse possession that would entitle Vicar to have a just title in order for ordinaryacquisitive prescription to set in.RULING:

Private respondents were able to prove that their predecessors' house was borrowedby petitioner Vicar after the church and the convent were destroyed. They neverasked for the return of the house, but when they allowed its free use, they becamebailors in Commodatum and the petitioner the bailee. The bailees' failure to return the subject matter of commodatum to the bailor did not mean adverse possession on the part of the borrower. The bailee held in trust the property subject matter of commodatum. The adverse claim of petitioner came only in 1951 when it declared thelots for taxation purposes. The action of petitioner Vicar by such adverse claim couldnot ripen into title by way of ordinary acquisitive prescription because of the absence of just title. The Court of Appeals found that the predecessors-in-interest and private respondents were possessors under claim of ownership in good faith from 1906; that petitioner Vicar was only a bailee in commodatum; and that the adverse claim and repudiation of trust came only in 1951. State Investment House, Inc. v. CA GR No. 90676 June 19, 1991 Facts: Private respondents Spouses Rafael &Refugia Aquino pledged certain shares of stock to petitioner to secure a loan. Prior to the execution of such pledge, respondents, agreed with the petitioner for the latter's purchase of receivables from Spouses Jose and Marcelina Aquino. Respondent spouses paid their loan partly from their own money and from the proceeds of a new loan secured by the same pledge. Upon maturity of the new loan, petitioner demanded payment. Respondents expressed willingness to

pay requesting that upon payment the shares of stocks pledged be released. Petitioner denied the request on the ground that the loan extended to Jose &Marcelina had remained. Respondent sued the petitioner. The trial judge ruled in their favor. During execution, the petitioner refused to accept payment demanding that interests be paid. Issue: Are the respondents liable for payment of interest even without mora? If they are liable, on what rate should the interests be? Held: On the first issue, yes. The respondents may not be in default in view of their expressed willingness to pay the same upon demand and the refusal of the petitioner to accept. However, their tender of payment should have been properly consigned with the court. On the second issue, since respondent spouses were held not to have been in delay, they were properly liable only for the principal of the loan and the stipulated regular or monetary interest of 17% per annum. They were not liable for penalty or compensatory interest, fixed by the promissory note in Account No. IF-82-0904-AA at two percent (2%) per month or twenty-four (24%) per annum. It must be stressed that the appropriate measure for damages in case of delay in discharging an obligation consisting of the payment of a sum or money, is the payment of penalty interest at the rate agreed upon; and in the absence of a stipulation of a particular rate of penalty interest, then the payment of additional interest at a rate equal to the regular monetary interest; and if no regular interest had been agreed upon, then payment of legal interest or six percent (6%)per annum, or in the case of loans or forbearances of money, 12 % per annum as provided for in Central Bank Circular No. 416. Francisco v. Gregorio GR No. L-59519 July 20, 1982 Facts: Petitioner Francisco, through her daughter, agreed to lease a piece of land where a building should be constructed by the former. The contract provided, among others: the deposit to the account of the lessor-petitioner the amount of 150k representing 30K goodwill money and 120K advanced rental and a stipulation that in case the parties will not agree as to the terms and conditions of the final contract of lease, the pre-lease contract shall be declared null and void and the petitioner shall return the deposit plus legal interest. Before final occupancy, the petitioner declared the pre-lease contract null and void, leased the premises to another lessee and offered to return the 150K deposit. Private respondents refused to accept so that petitioner was prompted to make a consignation of the money with the Court. Private respondents then filed a complaint, hence respondent judge ruled in their favor with an order to pay the amount of deposit plus compensatory interests. Issue: Is the petitioner liable for payment of interest despite tender of payment before demand? Held: No. The award for interests in an action for the recovery of a sum of money partakes of a nature of an award for damages. Thus, Article 2209 of the Civil Code provides: Art. 2209. If the obligation consists in the payment of a sum 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 percent per annum. Clearly, the indemnity for interest on a monetary obligation attaches only when the obligor incurs delay, that is, when he is in default, it being a fundamental principle of law that: 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. (Art. 1169, Civil Code.) In the case at bar, it is not disputed that no demands, judicial or extrajudicial, were made by private respondents on defendant Boiser (Francisco) for the return of the amount of P150,000.00. There could not have been any because of the nature of the action filed by private respondents, which is for specific performance. Hence, there is no delay of the latter's obligation, assuming that she be eventually required in the decision of the Court to return the same. Thus, no interest is due where there was tender of payment prior to any demand to pay or perform the agreed act. Eastern Shipping Lines v. CA GR No. 97412 July 12, 1994 Facts: Petitioner-defendant was consigned to deliver a cargo. Upon embarkment, the cargo was found to be damaged while on transit. Private respondent-plaintiff, Mercantile Insurance, paid the consignee the amount of damage based on a marine insurance policy. Mercantile consquently sued the petitioner for recovery of damages it paid to the consignee. The court a quo decided in favor of the plaintiff and further stressing the amount paid by the insurance company to the consignee be paid and with the present legal interest of 12% per annum commencing on the date of filing of the complaint, until fully paid. The petitioner now constests the ruling particularly on the issue of interest. Issue: When should the reckoning period be for the computation of the payment of legal interest on an award for loss or damage? What is the applicable rate of interest? Held: The Court laid down the following rules of thumb for guidance in cases like that of the above: I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasidelicts 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. 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 on 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.