You are on page 1of 3

ESTORES v SPOUSES SUPANGAN applied.

However, if the vendor fails to complete necessary documents


April 18, 2012 |Del Castillo, J. within thirty days without any sufficient reason, or without informing the
vendee of its status, vendee has the right to demand return of full amount of
down payment.
SUMMARY: Petitioner Estores and Respondents Spouses Supangan entered into a o (9) As to the boundaries and partition of the lots (15,018 sq. m. and 300 sq.
Contract of Conditional Sale , wherein Estores sold a parcel of land in Naic, Cavite to m.) Vendee shall be informed immediately of its approval by the LRC.
Spouses Supangan for the sum of 4.7M. There were conditions imposed in o (10) The vendor assures the vendee of a peaceful transfer of ownership
consideration of the sale. The Spouses were able to pay 3.5M however, Estores failed to  After almost seven years from the time of the execution of the contract and
undertake all the conditions in the contract, thus, as per the contract, the spouses notwithstanding payment of P3.5 million on the part of respondent-spouses, petitioner
demanded the return of their money. Estores acknowledged and promised to pay the still failed to comply with her obligation as expressly provided in paragraphs 4, 6, 7, 9 and
amount in 120 days. The spouses agreed but on the condition that 12% per annum 10 of the contract.
interest will be paid. Estores claimed that she should not pay interest since it was not  Hence, in a letter dated September 27, 2000, respondent-spouses demanded the return of
stipulated. The spouses then filed a complaint. The RTC ruled in favor of the spouses, the amount of P3.5 million within 15 days from receipt of the letter. Estores
which was affirmed by the CA. The CA held that it should be reckoned from the time acknowledged receipt of the P3.5 million and promised to return the same within 120
demand was made. The SC upheld the decision of the CA. days.
 Respondent-spouses were amenable to the proposal provided an interest of 12%
DOCTRINE: compounded annually shall be imposed on the P3.5 million.
Article 2210 of the Civil Code expressly states that “interest may, in the discretion
 When petitioner still failed to return the amount despite demand, respondent-spouses
of the court, be allowed upon damages awarded for breach of contract
were constrained to file a Complaint for sum of money before the Regional Trial Court of
General Rule: the applicable rate of interest shall be computed in accordance with with
Malabon against Estores as well as Roberto U. Arias (Arias) who allegedly acted as the
the stipulation of the parties
agent of Estores.
If there is no stipulation on the applicable rate of interest, it shall be 12% per annum
when the obligation arises out of a loan or a forbearance of money, goods or credit. In  In the Pre-Trial Order, the RTC noted that the parties agreed that the principal
other cases, it shall be 6% amount of 3.5M should be returned to the spouses Supangan. The only issue is
Forbearance was defined as a contractual obligation of lender or creditor to refrain whether the spouses are entitled to legal interest thereon, damages and attorney’s
during a given period of time, from requiring the borrower or debtor to repay a loan or fees
debt then due or payable. This describes a loan where a debtor is given a period within o Estores and Arias claimed that the imposition of interest is not
which to pay a loan or debt. In such case, forbearance of money, goods or credits will have proper as it was not provided for in the Conditional Deed of Sale
no distinct definition from a loan. o On the other hand, Spouses Supangan aver that it is only fair that
interest shall be paid considering that the money was not retuened
FACTS: upon demand and Estores has been using the money for her benfit
 On October 3, 1993, Hermojina Estores (petitioner) and respondent-spouses  The RTC ruled that Spouses Supangan were entitled to interest but only at the rate
Arturo and Laura Supangan entered into a Conditional Deed of Sale. Estores of 6% per annum and not 12%. It also ruled that they were entitled to attorneys
offered to sell a parcel of land located at Naic ,Cavite, for the sum of P4.7M. fees because they were compelled to litigate to protect their interest.
among the stipulations were as follows:  The CA affirmed the decision of the RTC. It found that:
o (1) Vendor will secure approved clearance from the DAR o The imposition of 6% interest proper.
o (4) the vendee shall be informed as to the status of the DAR o However, it ruled that it shall only run from September 27, 2000,
clearance within 10 days upon signing the document when they formally demanded the return of their money, and not
o (6) Regarding the house located within the perimeter of the subject [lot] from October 1993, when the contract was executed.
owned by spouses [Magbago], said house shall be moved outside the o It shall be computed from the time of demand until full payment
perimeter of this subject property to the 300 sq. m. area allocated for before finality of judgment and 12% per annum, in case the principal
[it]. Vendor hereby accepts the responsibility of seeing to it that such and interest remains unpaid after finality of judgment until satisfied
agreement is carried out before full payment of the sale is made by vendee. o Arias cannot be held solidarily liable with Estores because he merely
o (7) If and after the vendor has completed all necessary documents for acted as agent of the latter.
registration of the title and the vendee fails to complete payment as per  Estores filed an MR but was denied
agreement, a forfeiture fee of 25% or downpayment, shall be
RULING: Petition lacks merit. Thus, was denied by the Court. . The ruling of the are entitled not only to the return of the principal amount paid, but also to
Court of Appeals is AFFIRMED. compensation for the use of their money.
o And the compensation for the use of their money, absent any stipulation,
Whether or not the imposition of interest and attorneys fees is proper – YES. should be the same rate of legal interest applicable to a loan since the use or
Interest may be imposed even in the absence of stipulation in the contract deprivation of funds is similar to a loan
 Article 2210 of the Civil Code expressly states that “interest may, in the o The unwarranted withholding of the money which rightfully pertains to the
discretion of the court, be allowed upon damages awarded for breach of spouses amounts to forbearance of money which can be considered as an
contract. involuntary loan. Thus, the applicable rate of interest is 12% per annum.
o There is no question that Estores is legally obligated to return the  GUIDELINES (Crismina Garments, Inc. v. Court of Appeals citing Eastern Shipping Lines,
P3.5M because of her failure to fulfill the obligation under the Inc. v. Court of Appeals)
Conditional Deed of Sale, despite demand. I. When an obligation, regardless of its source, i.e., law, contracts,
o Estores enjoyed the use of the money from the time it was given to quasi-contracts, delicts or quasi-delicts is breached, the
her until the now, thus, she is already in default of her obligation contravenor can be held liable for damages. The provisions
from the date of demand on September 27, 2000. under Title XVIII on Damages of the Civil Code govern in
 The Court also ruled that the interest rate at the rate of 12% is applicable in determining the measure of recoverable damages.
this case”. II. II. With regard particularly to an award of interest in
o General Rule: the applicable rate of interest shall be computed in the concept of actual and compensatory damages, the rate
accordance with with the stipulation of the parties of interest, as well as the accrual thereof, is imposed, as
o If there is no stipulation on the applicable rate of interest, it shall be follows:
12% per annum when the obligation arises out of a loan or a 1. When the obligation is breached, and it consists in the
forbearance of money, goods or credit. In other cases, it shall be 6% payment of a sum of money, i.e., a loan or forbearance
o In the case at bar, the parties did not stipulate as to the applicable rate of money, the interest due should be that which may
of interest. have been stipulated in writing. Furthermore, the
interest due shall itself earn legal interest from the time
Whether or not a stipulation governing the return of the money be considered as it is judicially demanded. In the absence of stipulation,
a forbearance of money which required the payment of interest rate of 12%, the rate of interest shall be 12% per annum to be
even if the transaction involved a Conditional Deed of Sale – YES, computed from default, i.e., from judicial or
 Forbearance was defined as a contractual obligation of lender or creditor to refrain extrajudicial demand under and subject to the
during a given period of time, from requiring the borrower or debtor to repay a provisions of Article 1169 of the Civil Code.
loan or debt then due or payable. This describes a loan where a debtor is given a 2. When an obligation, not constituting a loan or forbearance
period within which to pay a loan or debt. In such case, forbearance of money, goods of money, is breached, an interest on the amount of
or credits will have no distinct definition from a loan. We believe however, that the phrase damages awarded may be imposed at the discretion of the
forbearance of money, goods or credits is meant to have a separate meaning from a loan, court at the rate of 6% per annum.No interest, however,
otherwise there would have been no need to add that phrase as a loan is already shall be adjudged on unliquidated claims or damages
sufficiently defined in the Civil Code except when or until the demand can be established with
 Forbearance of money, goods or credits should therefore refer to arrangements other than reasonable certainty. Accordingly, where the demand is
loan agreements, where a person acquiesces to the temporary use of his money, goods or established with reasonable certainty, the interest shall
credits pending happening of certain events or fulfillment of certain conditions. begin to run from the time the claim is made judicially or
o In this case, the respondent-spouses parted with their money even before extrajudicially (Art. 1169, Civil Code) but when such
the conditions were fulfilled. certainty cannot be so reasonably established at the time the
o They have therefore allowed or granted forbearance to the seller (Estores) to demand is made, the interest shall begin to run only from
use their money pending fulfillment of the conditions. the date the judgment of the court is made (at which time
o They were deprived of the use of their money for the period pending the quantification of damages may be deemed to have been
fulfillment of the conditions and when those conditions were breached, they 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
 Since the date of demand (September 27, 2000) was satisfactorily established
during trial, then the interest rate of 12% should be reckoned from the said
date of demand until the principal amount and the interest thereon is fully
satisfied.

NOTES:
 For those details which are not important but seems important.