Case Summary (G.R. No. 73913)
Issue and Judgment Execution
The core issue revolves around the calculation of interest on a monetary judgment resulting from a final and executory decision. The petitioner sought the recovery of compounded interest under Article 2212 of the Civil Code. The trial court determined that the judgment did not include compounded interest and rejected the petitioner's claim for such recovery during execution proceedings, prompting Calilung to appeal to higher courts.
Antecedents of the Case
In 1987, Calilung aimed to purchase shares from RPTSI but was only able to acquire a partial amount, leading to a loan arrangement through a promissory note for P718,750.00, with an interest rate of 14% per annum, guaranteed by Paramount Insurance. Following RPTSI's default on the promissory note, Calilung pursued legal action in the Regional Trial Court (RTC) to enforce payment.
Proceedings in Trial Court and Court of Appeals
The RTC ruled in Calilung's favor, ordering RPTSI and Paramount to pay the principal amount plus interest as specified. This decision was affirmed by the Court of Appeals, which rejected any claims regarding the alleged simulation of the promissory note by the respondents. Paramount's appeals were dismissed due to lack of factual basis contesting the validity of the promissory note.
RTC Orders on Interest Calculation
In the subsequent execution proceedings, the RTC issued a series of orders addressing the rate of interest. Initially, it ruled that only simple interest at 14% per annum from October 7, 1987, was applicable, as no mention of compounded interest existed in the original judgment. However, after reconsideration, the RTC appeared to allow for compounded interest based on the premise that the surety obligation evolved into a loan obligation upon default.
RTC Reversion to Original Stance
The RTC, through a later order, reverted to its initial position against compounded interest, emphasizing that the original judgment's finality precluded any alteration regarding the terms of interest. It ruled that any form of compounding would violate the principle of immutability of judgments, reiterating that the judgment did not stipulate compound interest on the awarded amount.
Legal Analysis on Interest
The Court ruled against the petitioner’s request for compounded interest, clarifying that only the 14% per annum interest as specified could be imposed. The judgment's terms must be adhered to without modification or deviation, reflecting the legal doctrine of imm
...continue readingCase Syllabus (G.R. No. 73913)
Case Citation
- 789 Phil. 440 FIRST DIVISION [ G.R. No. 195641, July 11, 2016 ]
Parties Involved
- Petitioner: Tarcisio S. Calilung
- Respondents: Paramount Insurance Corporation, RP Technical Services, Inc., Renato L. Punzalan, Jose Manalo, Jr.
Issue Presented
- The primary issue revolves around the rate of interest applicable to the debt as decreed in a final and executory decision, specifically whether compounded interest can be claimed under Article 2212 of the Civil Code during the execution of the judgment.
Antecedents of the Case
On March 16, 2005, the Supreme Court issued a resolution in G.R. No. 136326, affirming the judgment from the Regional Trial Court (RTC) which ordered the respondents to pay the petitioner:
- Principal Amount: P718,750.00
- Interest Rate: 14% per annum from October 7, 1987 until full payment
- Attorney's Fees: 5% of the amount due
- Costs of Suit
The factual background includes:
- In 1987, Tarcisio S. Calilung sought to purchase shares from RP Technical Services, Inc. (RPTSI).
- Due to concerns over control of the corporation, Calilung was allowed to purchase shares worth P2,820.00, with the remaining P718,750.00 intended for a Shell Station Project.
- On October 9, 1987, a promissory note for P718,750.00 was executed by Renato Punzalan (RPTSI) with a 14% interest rate.
- Paramount Insurance Corporation guaranteed this obligation under a Surety Bond.
Proceedings in the Regional Trial Court
- Calilung filed a complaint for a sum of money when RPTSI defaulted on the promissory note.
- The RTC ruled in favor of Calilung, leading to appeals by the respondents which