Crismina Garments, Inc. Vs.
Court Of Appeals Applying the said doctrine in the case at bar,
Petitioner contracted the services of the
respondent, to sew for the petitioner of 20,762 pieces
of assorted girls denims to the amount of P76,410.00.
At first, the respondent was told that the sewing of
some of the pants was defective. She offered to take
delivery of the defective pants. However, she was
later told by [petitioner]'s representative that the
goods were already good. She was told to just return
for her check of P76,410.00.
However, the petitioner failed to pay her the aforesaid
amount. This prompted her to hire the services of
counsel who, on November 12, 1979, wrote a letter to
the petitioner demanding payment of the aforesaid
amount within ten days from receipt thereof. On
February 7, 1990, the petitioner's vice-president-
comptroller, wrote a letter to respondent's counsel,
averring, inter alia, that the pairs of jeans sewn by
her, numbering 6,164 pairs, were defective and that
she was liable to the petitioner for the amount of
P49,925.51 which was the value of the damaged
pairs of denim pants and demanded refund of the
aforesaid amount.
ISSUE:
Whether or not it is proper to impose interest
at the rate of twelve percent (12%) per annum for an
obligation that does not involve a loan or forbearance
of money in the absence of stipulation of the parties.
HELD:
The Supreme Court found petitioners
contention tenable. The Court had previously ruled
that the interest rate under CB Circular No. 416
applies to (1) loans; (2) forbearance of money, goods
or credits; or (3) a judgment involving a loan or
forbearance of money, goods or credits. Cases
beyond the scope of said circular are governed by
Article 2209 of the Civil Code, which considers
interest a form of indemnity for the delay in the
performance of an obligation.
the Court ruled that since the amount due in the
present case arose from a contract for a piece of
work, not from a loan or forbearance of money, the
legal rate of six percent (6%) interest per annum
should be applied. Private respondents contention
that the twelve percent (12%) interest per annum
should be imposed because the obligation arose from
a forbearance of money was found by the Court
erroneous because a forbearance in the context of
the Usury Law is a contractual obligation of lender or
creditor to refrain, during a given period of time from
requiring the borrower or debtor to repay a loan or
debt then due and payable. Using the said standard
in case at bar, the Court concluded that the obligation
was obviously not a forbearance of money, goods or
credits.
PNB vs. Ibarrola
As payments for the purchase of medicines, the
Province of Isabela issued several checks drawn
against its accounts with petitioner Philippine National
Bank (PNB) in favor of the seller, private respondent
Ibarrola. Ibarrola failed to receive the full payment,
thus she filed an action for a sum of money and
damages against
the Province of Isabela and PNB among others.
RTC ruled in her favor ordering that she be paid “with
interest thereon at the legal rate from the date of the
filing
of the complaint until the entire amount is fully paid”.
CA and SC affirmed. However, the three courts did
not specify whether the legal rate of interest referred
to in the judgment is 6% or 12%.
ISSUE: Whether in an action for damages, the legal
rate of interest is 6% as provided by Article 2209of the
New Civil Code or 12% as provided by CB Circular
416 series of 1974
HELD:
The case at bench does not involve a loan. When an
obligation arises from a contract of purchase and sale
and not from a contract of loan or mutuum, the
applicable rate is 6% per annum as provided in Article
2209 of the NCC and not the rate of 12% per annum
as provided in (CB) Cir. No. 416.
The rate of 12% interest referred to in Cir. 416 applies
only to: Loan or forbearance of money, or to cases
where money is transferred from one person to
another and the obligation to return the same or a
portion thereof is adjudged. Any other monetary
judgment which does not involve or which has
nothing to do with loans or forbearance of any money,
goods or credit does not fall within its coverage for
such imposition is not within the ambit of the authority
granted to the Central Bank.

Therefore, the proper rate of interest referred to in the

judgment under execution is only 6%. However, once
the judgment becomes final and executory, the
"interim period from the finality of judgment awarding
a monetary claim and until payment thereof, is
deemed to be equivalent to a forbearance of credit.
Thus, the rate of 12% p.a. should be imposed, and to
be computed from the time the judgment became final
and executory until fully satisfied.