Samson Ching vs Clarita Nicdao & CA

- On October 21, 1997, petitioner Ching, a Chinese national, instituted

criminal complaints for eleven (11) counts of violation of BP 22
against respondent Nicdao.
- At about the same time, fourteen (14) other criminal complaints, also
for violation of BP 22, were filed against respondent Nicdao by
Emma Nuguid, said to be the common law spouse of petitioner
Ching.
- Allegedly fourteen (14) checks, amounting to P1,150,000.00, were
issued by respondent Nicdao to Nuguid but were dishonored for lack
of sufficient funds.
- At her arraignment, respondent Nicdao entered the plea of not guilty
to all the charges. A joint trial was then conducted.
- On direct-examination, petitioner Ching preliminarily identified each
of the eleven (11) Hermosa Savings & Loan Bank (HSLB) checks that
were allegedly issued to him by respondent Nicdao amounting
to P20,950,000.00. He identified the signatures appearing on the
checks as those of respondent Nicdao.He recognized her signatures
because respondent Nicdao allegedly signed the checks in his
presence. When petitioner Ching presented these checks for
payment, they were dishonored by the bank, HSLB, for being DAIF
or drawn against insufficient funds.
- Petitioner Ching averred that the checks were issued to him by
respondent Nicdao as security for the loans that she obtained from
him.
- Their transaction began sometime in October 1995 when respondent
Nicdao, proprietor/manager of Vignette Superstore, together with her
husband, approached him to borrow money in order for them to
settle their financial obligations.
- They agreed that respondent Nicdao would leave the checks undated
and that she would pay the loans within one year.
- When petitioner Ching went to see her after the lapse of one year to
ask for payment, respondent Nicdao allegedly said that she had no
cash.
- In September 1997, respondent Nicdao allegedly got mad at him for
being insistent and challenged him about seeing each other in court.
- Because of respondent Nicdao's alleged refusal to pay her
obligations, petitioner Ching deposited the checks that she issued to
him. As he earlier stated, the checks were dishonored by the bank for
being DAIF.
- On cross-examination petitioner Ching claimed that he had been a
salesman of the La Suerte Cigar and Cigarette Manufacturing for
almost ten (10) years already.
- He also mentioned an instance when respondent Nicdaos husband
and daughter approached him at a casino to borrow money from
him. He lent them P300,000.00.
- Petitioner Ching claimed that he was confident that he would be paid
by respondent Nicdao because he had in his possession her blank
checks. On the other hand, the latter allegedly had no cause to fear
that he would fill up the checks with just any amount because they
had trust and confidence in each other.
- It was also averred by petitioner Ching that respondent Nicdao
confided to him that she told her daughter Janette, who was married
to a foreigner, that her debt to him was only between P3,000,000.00
and P5,000,000.00.
- Another witness presented by the prosecution was Imelda Yandoc,
an employee of HSLB. She testified that she worked as a checking
account bookkeeper/teller of the bank.
- She received several checks issued by respondent Nicdao. She knew
respondent Nicdao because the latter maintained a savings and
checking account with them.
- Only a balance of P300.00 was left in respondent Nicdaos checking
account and P645.83 in her savings account. On even date, her
account with the bank was considered inactive.
 - Respondent Nicdao stated that she only dealt with Nuguid. She
vehemently denied the allegation that she had borrowed money from
both petitioner Ching and Nuguid in the total amount
of P22,950,000.00.
- In addition, respondent Nicdao also presented and identified several
cigarette wrappersat the back of which appeared computations. She
explained that Nuguid went to the grocery store everyday to collect
interest payments. The principal loan was P2,100,000.00 with 12%
interest per day. Nuguid allegedly wrote the payments for the daily
interests at the back of the cigarette wrappers that she gave to
respondent Nicdao.
- The principal loan amount of P2,100,000.00 was allegedly delivered
by Nuguid to respondent Nicdao in varying amounts of P100,000.00
and P150,000.00. Respondent Nicdao refuted the averment of
petitioner Ching that prior to 1995, they had another transaction.
- With respect to the P20,000,000.00 check, respondent Nicdao
admitted that the signature thereon was hers but denied that she
issued the same to petitioner Ching.
- Respondent Nicdao could not explain how the said check came into
petitioner Chings possession. She explained that she kept her checks
in an ordinary cash box together with a stapler and the cigarette
wrappers that contained Nuguids computations. Her saleslady had
access to this box.
- the MCTC rendered judgment convicting respondent Nicdao of
eleven (11) counts of violation of BP 22.
- RTC affirmed the decisions of the MCTC
- CA reversed the decision

Held:

The acquittal of respondent Nicdao

likewise effectively extinguished her
civil liability
First, the CAs acquittal of respondent Nicdao is not merely based on
reasonable doubt. Rather, it is based on the finding that she did not commit
the act penalized under BP 22. In particular, the CA found that
the P20,000,000.00 check was a stolen check which was never issued nor
delivered by respondent Nicdao to petitioner Ching. As such, according to
the CA, petitioner Ching did not acquire any right or interest over Check
No. 002524 and cannot assert any cause of action founded on said
check, and that respondent Nicdao has no obligation to make good the
stolen check and cannot, therefore, be held liable for violation of B.P. Blg.
22.

The Court agrees with the CA that the daily payments made by
respondent Nicdao amounting to P5,780,000.00 cannot be considered as
interest payments only. Even respondent Nicdao testified that the daily
payments that she made to Nuguid were for the interests due. However, as
correctly ruled by the CA, no interests could be properly collected in the
loan transactions between petitioner Ching and respondent Nicdao
because there was no stipulation therefor in writing. To reiterate, under
Article 1956 of the Civil Code, no interest shall be due unless it has been
expressly stipulated in writing.
Neither could respondent Nicdao be considered to be estopped from
denying the validity of these interests. Estoppel cannot give validity to an
act that is prohibited by law or one that is against public policy. Clearly, the
collection of interests without any stipulation therefor in writing is
prohibited by law. Consequently, the daily payments made by respondent
Nicdao amounting to P5,780,000.00 were properly considered by the CA as
applying to the principal amount of her loan obligations.
PHILIPPINE PHOSPHATE Vs KAMALIG RESOURCES, INC.,

- Kamalig purchased fertilizer products from Philphos for eventual

sale to its customers.
- The agreement governing the business transaction consisted of
advance payment to Philphos for Kamaligs purchases of fertilizer
products, followed by Philphoss issuance of a Sales Official Receipt
and an Authority to Withdraw
- Kamalig would subsequently resell the fertilizer products and issue
to its customers the corresponding Delivery Orders signed only by its
authorized officers. The customers would then present the Delivery
Orders to the proper Philphos warehouse for the release of the
fertilizer products.
- On 30 September 1985, Kamalig purchased from and made advance
payments for fertilizer products of various grades to Philphos in the
total sum of P4,548,152.53
- Prior to the release of fertilizer products at the said supply points,
however, Kamalig requested for a readjustment of the various
fertilizer grades and a modification of the locations from which the
fertilizer stocks would be picked up. The request was contained in a
letter dated 11 October 1985.
- In a subsequent letter dated 14 October 1985, Kamalig requested
another adjustment, this time a conversion of its stocks in Davao to
be delivered and picked up in Manila.
- All these requests were approved by Philphos.
- In the letter dated 21 July 1986, Philphos informed Kamalig of its
overwithdrawal of various fertilizer stocks in the supply depots
in Manila and Iloilo. This consisted of 291.45 metric tons (MT) of
fertilizer grade 21-0-0 from the Manila supply point and 50 MT each
of fertilizer from the Iloilo supply station.
- According to Philphos, the cost of these overwithdrawals by Kamalig
amounted to P1,016,994.21. But since Philphos also had an obligation
to Kamalig in the amount of P470,348.91 representing the Capital
 Recovery Component, partial compensation took place by operation
of law thereby reducing Kamaligs obligation to P546,645.30.
- Thus, Philphos demanded that this sum be settled on or before 31
July 1986, otherwise Kamalig would be charged 34% interest per
annum. Kamalig, however, denied that it had exceeded its
withdrawals of fertilizer and thus contended that it should not be
made liable for any amount.
- On 20 August 1987, Philphos filed the case for collection of a sum of
money against Kamalig before the RTC of Makati City.
- RTC ruled in favor of Philpos
- CA reversed the ruling of RTC

Held:
With respect to the 34% per annum interest claimed by Philphos, we
agree with the Court of Appeals that no evidence was presented that
would show that the parties stipulated on the payment of interest. Under
Article 1956 of the Civil Code, no interest shall be due unless it has been
expressly stipulated in writing. Philphos presented only its demand letters
insisting on payment of the value of the overwithdrawals and imposition
of 34% interest per annum if payment is not made in due time. Said
unilateral impositions of interest do not suffice as proof of agreement on
the alleged 34% per annum interest.
TING TING PUA vs. SPOUSES BENITO LO BUN TIONG and
CAROLINE SIOK CHING TENG

- The controversy arose from a Complaint for a Sum of Money filed by

petitioner Pua against respondent-spouses Benito Lo Bun Tiong
Benito) and Caroline Siok Ching Teng Caroline). In the complaint,
Pua prayed that, among other things, respondents, or then
defendants, pay Pua the amount PhP 8,500,000, covered by a check.
- During trial, petitioner Pua clarified that the PhP 8,500,000 check was
given by respondents to pay the loans they obtained from her under
a compounded interest agreement on various dates in 1988.
- As Pua narrated, her sister, Lilian Balboa (Lilian), vouched for
respondents ability to pay so that when respondents approached
her, she immediately acceded and lent money to respondents without
requiring any collateral except post-dated checks bearing the
borrowed amounts.
- In all, respondents issued 17 checks for a total amount of PhP
1,975,000. These checks were dishonored upon presentment to the
drawee bank.
- As a result of the dishonor, petitioner demanded payment.
Respondents, however, pleaded for more time because of their
financial difficulties. Petitioner Pua obliged and simply reminded the
respondents of their indebtedness from time to time.
- Sometime in September 1996, when their financial situation turned
better, respondents allegedly called and asked petitioner Pua for the
computation of their loan obligations.
- Hence, petitioner handed them a computation dated October 2, 1996
which showed that, at the agreed 2% compounded interest rate per
month, the amount of the loan payable to petitioner rose to PhP
13,218,544.20. On receiving the computation, the respondents asked
petitioner to reduce their indebtedness to PhP 8,500,000. Wanting to
get paid the soonest possible time, petitioner Pua agreed to the
lowered amount.
- Respondents then delivered to petitioner Asiatrust Check bearing the
reduced amount of PhP 8,500,000 dated March 30, 1997 with the
assurance that the check was good.
- In turn, respondents demanded the return of the 17 previously
dishonored checks. Petitioner, however, refused to return the bad
checks and advised respondents that she will do so only after the
encashment of Asiatrust Check.
- Check was also dishonored when it was presented by petitioner to
the drawee bank. Hence, as claimed by petitioner, she decided to file
a complaint to collect the money owed her by respondents.
- For the defense, both respondents Caroline and Benito testified along
with Rosa Dela Cruz Tuazon (Tuazon), who was the OIC-Manager of
Asiatrust-Binondo Branch in 1997.
- Respondents categorically denied obtaining a loan from petitioner.
Respondent Caroline, in particular, narrated that, in August 1995, she
and petitioners sister, Lilian, forged a partnership that operated a
mahjong business. Their agreement was for Lilian to serve as the
capitalist while respondent Caroline was to act as the cashier.
Caroline also agreed to use her personal checks to pay for the
operational expenses including the payment of the winners of the
games. As the partners anticipated that Caroline will not always be in
town to prepare these checks, she left with Lilian five (5) pre-signed
and consecutively numbered checks on the condition that these
checks will only be used to cover the costs of the business operations
and in no circumstance will the amount of the checks exceed PhP
5,000.
- In March 1996, however, respondent Caroline and Lilian had a
serious disagreement that resulted in the dissolution of their
partnership and the cessation of their business. In the haste of the
dissolution and as a result of their bitter separation, respondent
Caroline alleged that she forgot about the five (5) pre-signed checks
she left with Lilian. It was only when Lilians husband, Vicente
Balboa (Vicente), filed a complaint for sum of money in February
 1997 against respondents to recover PhP 5,175,250, covering three of
the five post-dated and pre-signed checks.
- Respondent Caroline categorically denied having completed Check
by using a check writer or typewriter as she had no check writer and
she had always completed checks in her own handwriting. She
insisted that petitioner and her sister completed the check after its
delivery. Furthermore, she could not have gone to see petitioner Pua
with her husband as they had been separated in fact for nearly 10
years. As for the 17 checks issued by her in 1988, Caroline alleged
that they were not intended for Pua but were issued for the benefit of
other persons.
- The witness for the respondents, Ms. Tuazon, testified that
respondent Caroline opened Asiatrust Account in September 1994.
She claimed that the average maintaining balance of respondent
Caroline was PhP 2,000 and the highest amount issued by Caroline
from her account was PhP 435,000. She maintained that respondent
Caroline had always completed her checks with her own
handwriting and not with a check writer. On October 15, 1996,
Carolines checking account was closed at the instance of the bank
due to 69 instances of check issuance against insufficient balance.
- RTC ruled in favor of petitioner.
- CA reversed RTCs ruling

Held: In a suit for a recovery of sum of money, as here, the plaintiff-

creditor has the burden of proof to show that defendant had not paid her
the amount of the contracted loan. However, it has also been long
established that where the plaintiff-creditor possesses and submits in
evidence an instrument showing the indebtedness, a presumption that the
credit has not been satisfied arises in her favor. Thus, the defendant is, in
appropriate instances, required to overcome the said presumption and
present evidence to prove the fact of payment so that no judgment will be
entered against him.
 In overruling the trial court, however, the CA opined that petitioner
"failed to establish [the] alleged indebtedness in writing." Consequently, so
the CA held, respondents were under no obligation to prove their defense.
Consequently, the 17 original checks, completed and delivered to
petitioner, are sufficient by themselves to prove the existence of the loan
obligation of the respondents to petitioner. Note that respondent Caroline
had not denied the genuineness of these checks.
However, respondents cannot be obliged to pay the interest of the
loan on the ground that the supposed agreement to pay such interest was
not reduced to writing. Article 1956 of the Civil Code, which refers to
monetary interest, specifically mandates that no interest shall be due unless
it has been expressly stipulated in writing. Thus, the collection of interest in
loans or forbearance of money is allowed only when these two conditions
concur: (1) there was an express stipulation for the payment of interest; (2)
the agreement for the payment of the interest was reduced in writing.
Absent any of these two conditions, the money debtor cannot be made
liable for interest. Thus, petitioner is entitled only to the principal amount
of the loan plus the allowable legal interest from the time of the demand, at
the rate of 6% per annum.
 EXCEPTIONS

ELIZABETH EUSEBIO-CALDERON vs. PEOPLE OF THE PHILIPPINES

- Petitioner Elizabeth Eusebio-Calderon was charged with Estafa in

three separate Informations.
- The private complainants, Teresita Eusebio, Amelia Casanova and
Manolito Eusebio, are petitioners aunt and cousins, respectively.
- On May 15, 1994, petitioner visited her Aunt Teresita in Bulacan to
borrow P50,000.00, in exchange for which she issued an Allied Bank
Chec in the amount of P52,500.00.
- On May 30, 1994, petitioner again borrowed from Teresita the
amount of P100,000.00, in exchange for which she issued Allied Bank
Check in the amount of P105,000.00.
- Also on May 30, 1994, Amelia Casanova went to the drugstore of
petitioner and lent her the amount of P100,000.00, allegedly to be
used for the expansion of her business. In exchange, petitioner issued
Allied Bank Check for P100,000.00 and six other checks in various
amounts purportedly to cover the interests.
- Manolito Eusebio alleges that in November 1994, petitioner borrowed
money from him because she needed it for her pharmaceutical
business. Manolito loaned her P50,000.00, for which she issued Allied
Bank Check covering the principal amount of the loan, and four other
postdated checks for the interests thereon.
- According to private complainants, petitioner assured them that the
checks will be honored upon maturity. They gave her the money
because she showed them her pieces of jewelry which convinced
them that she has the ability to pay the loans.
- In her defense, petitioner admits that she issued the checks but
alleges that it was not done to defraud her creditors. She claims that
 her dealings with private complainants started in 1987 with her uncle
Alberto, the husband of complainant Teresita and the father of
Amelia and Manolito.
- Although her uncle died in 1989, she continued to make good the
value of the postdated checks she issued until 1990. Finally, she
asserts that she is an educated woman and she never had any
intention to deceive the private complainants.
- The lower court rendered a joint decision finding petitioner
guilty

Issues:
(1) Did the Court of Appeals err in finding the appellant civilly liable to
complainants with respect to the interest in the principal loan despite the
dismissal of the interest checks by the Regional Trial Court?
(2) Is the interest agreed upon by the parties usurious?

Held: The civil liability of petitioner includes only the principal

amount of the loan. With respect to the interest checks she issued, the same
are void. There was no written proof of the payable interest except for the
verbal agreement that the loan shall earn 5% interest per month. Under
Article 1956 of the Civil Code, an agreement as to payment of interest must
be in writing, otherwise it cannot be valid. Consequently, no interest is due
and the interest checks she issued should be eliminated from the
computation of her civil liability.
However, while there can be no stipulated interest, there can be legal
interest pursuant to Article 2209 of the Civil Code. It is elementary that in
the absence of a stipulation as to interest, the loan due will now earn
interest at the legal rate of 12% per annum. We established the guidelines
particularly for the award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof as
follows:

When the obligation is breached, and it consists in the payment of a sum of

money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil Code. (Emphasis
supplied)

Hence, petitioner is liable for the payment of legal interest per annum
to be computed from December 20, 1994, the date when she received the
demand letter. After the judgment becomes final and executory until the
obligation is satisfied, the amount due shall earn interest at 12% per year,
the interim period being deemed equivalent to a forbearance of credit.
In view of our ruling that there can be no stipulated interest in this case,
there is no need to pass upon the second issue of whether or not the
interests were usurious.
Leonides C. Dio vs Lina Jardines

- On December 14, 1992, Leonides C. Dio (petitioner) filed a Petition

for Consolidation of Ownership with the RTC of Baguio City
- Alleging that Lina Jardines (respondent) executed in her favor a Deed
of Sale with Pacto de Retro over a parcel of land with improvements
thereon covered by Tax Declaration No. 44250, the consideration for
which amounted to P165,000.00;
- it was stipulated in the deed that the period for redemption would
expire in six months or on July 29, 1987; such period expired but
neither respondent nor any of her legal representatives were able to
redeem or repurchase the subject property; as a consequence,
absolute ownership over the property has been consolidated in favor
of petitioner.
- Respondent countered in her Answer that: the Deed of Sale with
Pacto de Retro did not embody the real intention of the parties; the
transaction actually entered into by the parties was one of simple
loan and the Deed of Sale with Pacto de Retro was executed just as a
security for the loan;
- the amount borrowed by respondent during the first week of January
1987 was only P50,000.00 with monthly interest of 9% to be paid
within a period of six months, but since said amount was insufficient
to buy construction materials for the house she was then building,
she again borrowed an additional amount of P30,000.00;
- it was never the intention of respondent to sell her property to
petitioner; the value of respondents residential house alone is over a
million pesos and if the value of the lot is added, it would be around
one and a half million pesos; it is unthinkable that respondent would
sell her property worth one and a half million pesos for only
P165,000.00; respondent has even paid a total of P55,000.00 out of the
amount borrowed and she is willing to settle the unpaid amount, but
petitioner insisted on appropriating the property of respondent
which she put up as collateral for the loan;
 - respondent has been the one paying for the realty taxes on the subject
property; and due to the malicious suit filed by petitioner,
respondent suffered moral damages.
- On September 14, 1993, petitioner filed an Amended Complaint
adding allegations that she suffered actual and moral damages. Thus,
she prayed that she be declared the absolute owner of the property
and/or that respondent be ordered to pay her P165,000.00 plus the
agreed monthly interest of 10%; moral and exemplary damages,
attorneys fees and expenses of litigation.
- Respondent then filed her Answer to the Amended Complaint
reiterating the allegations in her Answer but increasing the alleged
valuation of the subject property to more than two million pesos.
- RTC ruled in favor of the petitioner
- CA reversed the RTC judgment. The CA held that the true nature of
the contract between herein parties is one of equitable mortgage, as
shown by the fact that (a) respondent is still in actual physical
possession of the property; (b) respondent is the one paying the real
property taxes on the property; and (c) the amount of the supposed
sale price, P165,000.00, earns monthly interest. The dispositive
portion of the CA Decision promulgated on June 9, 2000 reads:

Issues:

1. THE LOWER COURT COMMITTED AN ERROR IN DECLARING

THAT THE TRUE NATURE OF THE CONTRACT ENTERED INTO BY
THE PARTIES AS ONE EQUITABLE MORTGAGE AND NOT A PACTO
DE RETRO SALE;

2. THE LOWER COURT COMMITTED AN ERROR IN ORDERING

THE RESPONDENT TO PAY PETITIONER LEGAL INTEREST DESPITE
THE CONFLICTING ADMISSIONS OF THE PARTIES THAT THE
AGREED INTERESTS WAS EITHER 9% OR 10%;

Held:
1. The Court sees no reversible error with the foregoing findings of fact
made by the CA. The CA correctly ruled that the true nature of the contract
entered into by herein parties was one of equitable mortgage.

Article 1602 of the Civil Code enumerates the instances when a

purported pacto de retro sale may be considered an equitable mortgage.

2. In any of the foregoing cases, any money, fruits, or other benefit to be

received by the vendee as rent or otherwise shall be considered as interest
which shall be subject to the usury laws.

The appellate court was also correct in ordering respondent to pay legal
interest on the amount of P165,000.00.

Both parties admit that they came to an agreement whereby respondent

shall pay petitioner interest, at 9% (according to respondent) or 10%
(according to petitioner) per month, if she is unable to pay the principal
amount of P165,000.00 on July 29, 1987.

Medel vs. Court of Appeals, the rate of interest of 6% per month or 72%
per annum as stipulated in the principal loan agreement is null and void
for being excessive, iniquitous, unconscionable and exorbitant. The Court
then held thus:

It is apparent that the stipulated interest in the subject loan is excessive,

iniquitous, unconscionable and exorbitant. Pursuant to the freedom of
contract principle embodied in Article 1306 of the Civil Code, contracting
parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals,
good customs, public order, or public policy. In the ordinary course, the
codal provision may be invoked to annul the excessive stipulated interest.
 In the case at bar, the stipulated interest rate is 6% per month, or 72%
per annum. By the standards set in the above-cited cases, this stipulation is
similarly invalid.

Applied to the present case, since the agreed interest rate is void, the
parties are considered to have no stipulation regarding the interest rate.
Thus, the rate of interest should be 12% per annum to be computed from
judicial or extrajudicial demand, subject to the provisions of Article 1169 of
the Civil Code.
VICTOR ONGSON vs. PEOPLE OF THE PHILIPPINES

- private complainant Samson Uy extended loans to petitioner and as

payment therefor, he issued to Uy eight (8) post dated checks.
- Upon presentment, the checks were dishonored and despite
demands, petitioner failed to make good the bounced checks.
- Thus the filing of a complaint for BP22
- Upon arraignment, petitioner entered a plea of not guilty.
- At the pre-trial, petitioner admitted the authenticity of his signatures
on the checks, the stamps of dishonored deposit, the dates thereof
and reasons for dishonor.
- After the prosecution rested its case, the defense presented Rowena
Carbon but she failed to appear.The defense also presented Evelyn
Villareal who testified that Liana's Supermarket, where Uy was sole
distributor of petitioner's beverage products, issued check vouchers
to Uy.
- Trial court rendered a decision finding petitioner guilty as charged.
- CA affirmed lower courts decision.

Held: The prosecution established beyond reasonable doubt

that petitioner received money in various amounts from private
complainant. Whether the amounts were loans or investment in the
business of petitioner, the checks were issued for valuable consideration.
Either way, petitioner is under obligation to pay private complainant.
Likewise, the prosecution proved that some of the checks were payment
for private complainant's commission from selling the products of
petitioner. Hence, the latter cannot successfully claim that the issuance of
the checks were not for a valuable consideration.

Interestingly, while petitioner denied existence of consideration, he at

the same time admitted that his obligation was P358,872.72 and not
P582,149.72.[36] It appears from Rowena Carbon's testimony that, as sole
distributor of petitioner's product to Liana's Supermarket, private
complainant received from the latter 3 checks in the amounts of P41,748.00,
P78,840.00 and P105,209.00, but were not remitted to petitioner. Hence,
Carbon claimed that the total unremitted amount of the checks should be
deducted from the indebtedness of the latter.

Finally, petitioner should be ordered to pay interest of 12% per annum

pursuant to Cabrera v. People, that when an obligation is breached, and it
consists in the payment of a sum of money, the interest due should be that
which may have been stipulated in writing. In the absence of such
stipulation, the rate shall be 12% per annum computed from judicial or
extrajudicial demand. In this case, there was no stipulated interest on
petitioner's obligation to pay the value of the dishonored checks. Demand
for payment was made extrajudicially as evidenced by petitioner's receipt
of private complainant's demand letter with notice of dishonor. The
applicable interest rate is therefore 12% per annum from the date of receipt
of the demand letter on December 7, 1992 until finality of this decision.
From the finality of this decision, the total amount of the dishonored
checks inclusive of interest shall further earn 12% interest per annum until
fully paid.