G.R. No. 226771 - Norsk Hydro , Inc. vs. Premiere Development Bank

Petitioners Norsk Hydro (Philippines), Inc. and Norteam Seatransport Services filed a Complaint for Sum of Money and Damages with an Application for the Issuance of a Writ of Preliminary Attachment against respondents Premiere Development Bank (later Security Bank Corporation), Bank of the Philippine Islands (BPI), Citibank, N.A., Skyrider Brokerage International, Inc., and Marivic-Jong Briones.
Petitioners alleged non-remittance by Skyrider Brokerage of 19 crossed manager’s checks given by petitioner Yara Fertilizers (formerly Norsk Hydro (Philippines), Inc.) for payment of customs duties for imported fertilizers.

RTC found respondents Security Bank, Skyrider Brokerage, Jong-Briones, and BPI jointly and severally liable for P26,176,006.06 covering 18 crossed manager’s checks purchased from BPI, with interest.
Respondents Security Bank, Skyrider Brokerage, Jong-Briones, and Citibank found jointly and severally liable for P1,907,784 covering a Citibank manager’s check, plus interest.
BPI and Citibank were allowed to claim reimbursement from Security Bank for any amounts paid.
Exemplary damages of P400,000 and moral damages of P400,000 each were awarded against respondents Security Bank, Skyrider Brokerage, and Jong-Briones.
Attorney’s fees amounting to P700,000 were also awarded, plus costs of suit.

On appeal, the Court of Appeals affirmed the RTC Decision on November 20, 2014, holding respondents liable for gross negligence in unauthorized encashment and conversion of checks.
Respondents’ Petition for Review was denied by the Supreme Court on March 16, 2015; the decision became final and executory on May 26, 2015.

Petitioners filed a Motion for Execution seeking payment of P109,460,770.61, claiming 12% legal interest per annum from extrajudicial demand until June 30, 2013, and 6% thereafter pursuant to BSP Circular No. 799-13, compounded annually.
Respondents opposed, arguing interest should be 6% per annum from date of finality without compounding interest, as the obligation arose from fraud and negligence, not loan or forbearance, and that no interest should be imposed on moral damages and attorney’s fees.

RTC issued an Order dated February 19, 2016, granting execution for the remaining unpaid amount of P1,328,263.07 with 6% interest per annum from November 30, 2015 until fully paid, plus costs.
Based on lack of specific demand date, RTC initially computed interest from filing date October 9, 2003.
On reconsideration (Order dated August 5, 2016), RTC found last demand letter sent on June 25, 2003, and recomputed interest accordingly, increasing unpaid obligation to P1,831,535.79 plus interest and costs.
Parties filed Joint Manifestation confirming additional payment of P1,328,263.07, reducing remaining obligation to P539,903.44 as of March 30, 2016.

Whether the obligation of respondents arises from a loan or forbearance of money or from fraud and negligence.
Whether the legal interest to be applied on the actual damages should be 12% per annum from the date of extrajudicial demand to June 30, 2013, and 6% thereafter, or 6% per annum without compounding from finality of judgment.
Whether the legal interest, if any, should be compounded annually.
Whether legal interest should be imposed on moral and exemplary damages and attorney’s fees.
Whether legal interest should be imposed on costs of suit.