Estores v. Supangan, G.R. No. 175139, 18 April 2012.

First Division

DEL CASTILLO, J.

FACTS: The parties entered into a conditional deed of sale

whereby the petitioner offered to sell, and the respondent-
spouses offered to buy a parcel of land. Petitioner failed to
comply with her obligation. After a demand by the
respondent-spouses, petitioner promised to return their
payment. Respondent-spouses were amenable, provided an
interest of 12% compounded annually shall be imposed on
the P3.5M. Respondent-spouses filed a complaint for sum of
money when petitioner failed to return the amount despite
demand. In their Answer with Counterclaim, petitioner and
a certain Arias, allegedly acted as agent, expressed their
willingness to return the principal amount but without any
interest as the same was allegedly not agreed upon. The
RTC ordered payment of P3.5M plus 6% compounded
interest for execution of the contract plus P50,000.00
attorney’s fees and 20% of the recoverable amount. The CA
affirmed the 6%, but from the date of demand and shall be
adjusted to 12% if remains unpaid until finality of judgment.
The attorney’s fees is reduced to P100,000.00.

ISSUE: Whether the imposition of interest and

attorney’s fees is proper.

RULING: Yes. Article 2210 of the Civil Code expressly

provides that interest may, in the discretion of the court, be
allowed upon damages awarded for breach of contract. In
this case, the Court considers the 12% applicable because
absent any stipulation, the applicable rate of interest shall
be 12% per annum when the obligation arises out of a loan
or a forbearance of money, goods or credits. The Court
considers the return of the money in this case as a
forbearance which required 12% interest rate.
ISSUE: What is forbearance versus loan?

RULING: Forbearance of money, goods or credits refer to

arrangements other than loan arrangements, where a
person acquiesces to the temporary use of his money, goods
or credits pending happening of certain events or fulfillment
of certain conditions.

ISSUE: Whether the award of attorney’s fees is proper.

RULING: Yes. Under Article 2208 of the Civil Code,

attorney’s fees may be recovered: (2) When the defendant’s
act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
(11) In any other case, where the court deems it just and
equitable that attorney’s fees and expenses of litigation
should be recovered. In this case, there is doubt that the
respondent-spouses were forced to litigate to protect their
interest, i.e., to recover their money. The Court fixed the
attorney’s fees at the reasonable amount of P50,000.00.