CRISMINA GARMENTS, INC v CA

Facts:

During the period from February 1979 to April 1979, the herein petitioner CRISMINA
GARMENTS, INC which was engaged in the export of girls denim pants, contracted the services of the
respondent the sole proprietress of the DWilmar Garments, for the sewing of 20,762 pieces of assorted
girlsdenims supplied by the petitioner. The petitioner was obliged to pay the respondent, for her
services, in the total amount of P76,410.00. The respondent sewed the materials and delivered the
same to the petitioner which acknowledged the same, in good order condition. At first, the respondent
was told that the sewing of some of the pants was defective. However, she was later told by petitioners
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. On February 7, 1990, the petitioner wrote a letter to respondents counsel, 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. 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. After
due proceedings, the trial court rendered judgment, on February 28, 1989, in favor of the respondent
against the petitioner. Making the petitioner to pay 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. CA
affirmed the decision of RTC, thus this petition.

Issue:

Whether or not 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.

Ruling:

No. 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
the amount finally adjudged. Because the amount due in this case arose from a contract for a piece of
work, not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should
be applied