CREDIT TRANSACTIONS: Usury Law; Legal Interest G.R. No.

L-47180 May 19, 1980 THE PHILIPPINE AMERICAN ACCIDENT INSURANCE COMPANY, INC., petitionerappellant, vs. THE HON. JOSE P. FLORES, and CONCORDIA G. NAVALTA, respondents-appellees. FACTS: On January 22, 1973, in Civil Case 2414 of the CFI of La Union, the court ruled in favor of Condordia Navalta, the plaintiff in said case, ordering the Philippine American Accident Insurance Company, Inc., the defendant in that case and petitioner in this case, to pay Navalta P75,000 with legal interest from October 1968. The petitioner appealed to the Court of Appeals but the latter affirmed the lower courts decision. It then paid Navalta P 75,000 (principal) with interest at 6%, the legal interest as stated in Article 2209 of the Civil Code, per annum from October 1968 to April 30, 1977, amounting to P 38,250 plus Attorneys Fee of P1,000 or an aggregate sum of P 114,250. Navalta, however, stated that the amount was not enough as the petitioner should pay an additional sum of P 10,375.77 because the petitioner had to pay compound interest. The petitioner refused causing Navalta to secure a writ of execution. The petitioner moved to quash over the opposition of the latter. The court granted the writ of execution. ISSUE: Whether or not the petitioner is obligated to pay compound interest under the judgment. RULING: NO. The questioned Order cannot be sustained. The judgment which was sought to be executed ordered the payment of simple "legal interest" only. It said nothing about the payment of compound interest. Accordingly, when the respondent judge ordered the payment of compound interest he went beyond the confines of his own judgment which had been affirmed by the Court of Appeals and which had become final. Fundamental is the rule that execution must conform to that ordained or decreed in the dispositive part of the decision. Likewise, a court can not, except for clerical errors or omissions, amend a judgment that has become final. (Jabon, et al. vs. Alo, et al., 91 Phil. 750 [1952]; Robles vs. Timario, et al., 107 Phil. 809 [1960]; Collector of Internal Revenue vs. Gutierrez, et al., 108 Phil. 215 [1960]; Ablaza vs. Sycip, et al., 110 Phil., 4 [1960].) Private respondent invokes Sec. 5 of the Usury Law which reads in part as follows: "In computing the interest on any obligation, promissory note or other instrument or contract, compound interest shall not be reckoned, except by agreement, or, in default thereof, whenever the debt is judicially claimed in which last case it shall draw six per centum per annum interest ..." as well as Art. 2212 of the Civil Code which stipulates: "Interest due shall earn legal interest from the time it is judicially demanded, although

the obligation may be silent upon this point." Both legal provisions are in applicable for they contemplate the presence of stipulated or conventional interest which had accrued when demand was judicially made. (Sunico vs. Ramirez, 14 Phil. 500 [1909]; Salvador vs. Palencia, 25 Phil. 661 [1913]; Bachrach vs. Golingco, 39 Phil. 912 [1919]; Robinson vs. Sackermann 46 Phil. 539 [1924]; Philippine Engineering Co. vs. Green, 48 Phil. 466 [1925]; and Cu Unjieng vs. Mabalacat Sugar Co., 54 Phil. 916 [1930].) In this case no interest had been stipulated by the parties. In other words, there was no accrued conventional interest which could further earn interest upon judicial demand.