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Showing posts with label March 9. Show all posts
Showing posts with label March 9. Show all posts

Tax Case Digest: Chevron Holdings, Inc. v. CIR, CTA EB No. 1895/1896, March 9, 2020

Chevron Holdings, Inc. v. CIR
CTA EB No. 1895/1896, March 9, 2020.

CTA En Banc
Castaneda, Jr., J.:

Lessons Applicable: filing of the complete supporting documents by the taxpayer in connection with an administrative claim for VAT refund
Laws Applicable: Section 112 (C) of the NIRC of 1997

FACTS:
  • October 31, 2013: Chevron Holdings, Inc. (CHI) filed with the Department of Finance One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (DOF-OSS) an administrative claim for refund or issuance of TCC for unutilized input VAT for the 1st quarter of CY 2012 in the total amount of P16,165,791.62.
  • January 16, 2014: CHI filed with DOF-OSS an administrative claim for refund or issuance of TCC for unutilized input VAT for the 2nd quarter of CY 2012 in the total amount of P19,732,044.98.
  • February 17 and 27, 2014: CHI submitted additional documents required under the First Notice attached to the Letter of Authority (LOA) No.  LOA-311-2013-0000050327 dated November 28, 2013.
  • March 14, 2014: CHI received LOA No. LOA-411-2014-00000015 dated March 10, 2014.
  • Due to CIR’s inaction on its administrative claims for refund, it filed a Petition for Review on March 28, 2014 for CTA Case No. 8790 and June 13, 2014 for CTA Case No. 8835.
  • January 18 and July 10, 2018: CTA 1st Division issued the assailed decision
  • August 14, 2018: CHI filed its Petition for Review in CTA EB No. 1895 and CIR filed his Petition for Review in CTA EB No. 1896. 
ISSUES:
1.    W/N CTA has jurisdiction
2.    W/N CHI is entitled to its entire refund claim.

HELD: Dismissed.
1.    NO.  CHI complied with the thirty (30) day period from the request of the BIR dated February 7, 2014 when it submitted its last batch of supporting documents on February 27, 2014.  But, failed to observe the unqualified provision of law regarding the 120-day period which commences from the taxpayer’s submission of complete documents.  In other words, while Chevron’s due process were observed following the pronouncement of the Supreme Court in the Total case, Chevron completely disregarded the BIR’s right to be afforded opportunity to review its claims.  Thus, Chevron’s haste in elevating the instant case to the CTA is a blatant violation of the doctrine of exhaustion of administrative remedies as pronounced in the San Roque case.

  • Subject provision works to protect both the taxpayer and the BIR from belated resolution of the claim and from prematurity of elevating the same to the proper courts, respectively.
  • To be sure, it is the taxpayer who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period.  Nevertheless, the Supreme Court also emphasized that the forgoing benefit given to taxpayer is not unbridled and, as such, is subject to limitations.  Hence, based on the above-quoted portion of Pilipinas Total Gas, the filing of the complete supporting documents by the taxpayer in connection with an administrative claim for VAT refund is subject to the following rules:
a.    Upon filing of his application for tax credit or refund for excess creditable input taxes, the taxpayer-claimant is given thirty (30) days within which to complete the required documents within thirty (30) days from request of the investigation/processing unit. 
b.    If in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimate amount of the claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigation/processing unit.  Notice of the request for the submission of additional supporting document is required.
c.    It is only upon the submission of the taxpayer that the 120-day period would begin to run.
d.    In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112 (A) of the NIRC.

2.    NO.
  • Chevon’s presentation of its clients’ (1) SEC Certificates of Non-Registration (2) screenshots of Chevron Subsidiary governance website and (3) Service Agreements, may have sufficed to prove that they were foreign corporations.  However, these pieces of evidence are insufficient to prove that they are doing business outside the Philippines.
  • Even if RMC No. 42-03 allows out-of-period claims of input VAT, the same cannot be adhered to, as it contravenes Section 110 (A)(2) of the NIRC OF 1997, as amended.  It is clear from the foregoing provision that for purchases of goods, the corresponding input value added taxes of which is creditable to the purchaser upon the issuance of the corresponding invoice.  On the other hand, for purchases of services, the corresponding input value added taxes of which is creditable to the purchaser upon payment of compensation, rental, royalty or fee, that is, upon the date of official receipt.  Section 110 (A) is explicit – upon consummation, in the case of domestic purchases of goods, and upon payment, in the case of purchases of services.  It does not provide any qualification.

Torts and Damages Case Digest: People v. Pirame (2000)


G.R. No. 121998             March 9, 2000

Lessons Applicable: Moral Damages on Taking of Life (Torts and Damages)
Laws Applicable: 

FACTS:

  • March 18, 1993 am: Cipriano Supero saw Pedro Torrenueva being held by Florencio Perame was struck with an iron pipe by Epifanio Cleopas and Teodorico Cleopas with a piece of wood hitting him in the forehead so he fell on the ground dead.  He was then buried in the well near the house of Demetrio Cleopas, father of the accused.  
  • Upon arraignment, Florencio Pirame and Teodorico Cleopas entered a plea of not guilty. Epifanio Cleopas was not arraigned, being at large. Thereafter, trial on the merits ensued. 
  • RTC: Teodorico Cleopas and Florencio Pirame guilty of the crime of murder punished under Article 248 of the Revised Penal Code and sentenced each one of them to suffer an imprisonment of RECLUSION PERPETUA, with the accessories of the law and to pay the cost.  Ordering them to indemnify surviving spouse P50,000 each and 23,214 for burial and incidental expenses and P50,000 each for moral and exemplary damages and in all instances without subsidiary imprisonment in case of insolvency. Deducting time for preventive imprisonment.
ISSUE: W/N the surviving spouse should be awarded moral and exemplary damages

HELD: NO. AFFIRMED, but the award of P50,000.00 as moral and exemplary damages is hereby DELETED

  • The widow of the victim did not testify on any mental anguish or emotional distress, which she suffered as a result of her husband's death. The absence of any generic aggravating circumstance attending the crime likewise precludes the award of exemplary damages 

Jurisprudence: G.R. No. 121998


SECOND DIVISION

G.R. No. 121998             March 9, 2000

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
TEODORICO CLEOPAS and FLORENCIO PIRAME, accused, FLORENCIO PIRAME, accused-appellant.



QUISUMBING, J.:

On appeal is the decision dated January 5, 1995, of the Regional Trial Court of Tagbilaran City, Branch 1, in Criminal Case No. 8343 finding the accused Teodorico Cleopas and Florencio Pirame guilty of murder beyond reasonable doubt.1

The facts of the case, as found by the trial court, are as follows:

The factual findings of the Court based on the testimony of the witnesses for the prosecution and the defense are, as follows, to wit:

a)     That in morning of March 18, 1993 near the house of Demetrio Cleopas, father of the accused Teodorico Cleopas and Epifanio Cleopas at Barangay Tubog, Ubay, Bohol, the eye-witness Cipriano Supero saw the victim in the instant case Pedro Torrenueva while being held by the accused Florencio Perame (sic) the accused Epifanio Cleopas struck him with an iron pipe and by the accused Teodorico Cleopas with a piece of wood, hitting the aforementioned victim Pedro Torrenueva on the forehead, which, as a consequence, fell on the ground dead;

b)     That to cover the discovery of the commission of the crime the dead body of the victim Pedro Torrenueva was buried in the well near the house of Demetrio Cleopas father of the accused Epifanio Cleopas who is still at large and the accused Teodorico Cleopas;

c)     That the testimony of the other witnesses for the prosecution SPO2 Sabeniano Atopan, Candida Cosip, Evelyn Torrenueva and Pedro Acquiat viewed in their totality with the testimony of the eye-witness Cipriano Supero points to the accused Teodorico Cleopas, Epifanio Cleopas and Florencio Pirame as the perepetrators (sic) of the crime as charged. On May 13, 1993, the three accused, Teodorico Cleopas, Epifanio Cleopas and Florencio Pirame, were charged with the crime of murder under the following information:

That on or about the 18th day of March, 1993, in the municipality of Ubay, province of Bohol, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused conspiring, confederating and mutually helping one another, with intent to kill, armed with stainless pipe and a piece of wood, with treachery, evident premeditation and abuse of superior strength, did then and there willfully, unlawfully and feloniously, attack, assault and strike one Pedro Torrenueva who was unarmed and unaware thereof with the said stainless pipe and piece of wood thereby inflicting fatal injuries on the different parts of the victim's body which resulted to his immediate death; to the damage and prejudice of the heirs of the deceased to be proved during the trial of the case.1âwphi1.nêt

Acts committed contrary to the provisions of Art. 248 of the Revised Penal Code.3

Upon arraignment, Florencio Pirame and Teodorico Cleopas entered a plea of not guilty. Epifanio Cleopas was not arraigned, being at large.4 Thereafter, trial on the merits ensued.

The prosecution presented the following witnesses: (1) SPO2 Sabiniano Atupan, who led the police team that conducted the investigation of the killing: (2) Dr. Arnold Cagulada, the Municipal Health Officer of Ubay, Bohol, who examined the cavader of the victim; (3) Candida Cusip,5 an aunt of the victim ventured towards the house of accused Teodorico Cleopas on the day of the incident; (4) Evelyn Torrenueva, the wife of the victim, who corroborated the testimony of Cusip and testified as to the damages incurred by her due to her husband's death; (5) Pedro Acquiat, who joined the police in the search for the victim's body; and (6) Cipriano Supero, the alleged eyewitness to the killing who identified all the three accused as the victim's assailants.

In turn, the defense presented accused Teodorico Cleopas and appellant Florencio Pirame, who both testified on their behalf.

On January 5, 1995, the Regional Trial Court of Tagbilaran City, Branch I, rendered its decision finding Teodorico Cleopas and Florencio Pirame guilty of the crime of murder. It disposed:

PREMISES, CONSIDERED, the Court finds the accused Teodorico Cleopas and Florencio Pirame guilty of the crime of Murder punished under Article 248 of the Revised Penal Code and hereby sentences each one of them to suffer an imprisonment of RECLUSION PERPETUA, with the accessories of the law and to pay the cost.

The accused Teodorico Cleopas and Florencio Pirame are further ordered to indemnify the surviving spouse of the deceased victim Pedro Torrenueva in the amount of Fifty Thousand Pesos (P50,000.00) each and the amount of Twenty Three Thousand Fourteen (sic) Pesos (23,214.00) representing burial and incidental expenses and Fifty Thousand Pesos each (P50,000) representing moral and exemplary damages and in all instances without subsidiary imprisonment in case of insolvency.

It appearing that the accused in the instant case Teodorico Cleopas and Florencio Pirame have undergone preventive imprisonment they are entitled to the full time of their preventive imprisonment to be deducted from their term of sentence if they have not executed a waiver otherwise they will only be entitled to 4/5 of the time have undergone preventive imprisonment to be deducted from their term of sentence if they have not executed a waiver.

The foregoing separate Decision does not affect the accused Epifanio Cleopas who is still at large who will be tried separately as soon as he shall have been arrested.

SO ORDERED.6

Only Florencio Pirame appealed from the decision of the trial court. He assigns the following errors in his brief:

I

THE TRIAL COURT COMMITTED GRAVE ERROR IN RELYING ON THE WEAKNESS OF THE DEFENSE EVIDENCE RATHER THAN ON THE STRENGTH OF THE EVIDENCE FOR THE PROSECUTION IN FINDING THE ACCUSED-APPELLANT PIRAME GUILTY OF MURDER BEYOND REASONABLE DOUBT.

II

THE TRIAL COURT COMMITTED GRAVE ERROR IN GIVING CREDENCE TO THE TESTIMONY OF PROSECUTION WITNESSES CIPRIANO SUPERO AND CANDIDA CUCIP IMPLICATING ACCUSED-APPELLANT FLORENCIO PIRAME IN THE CRIME OF MURDER DESPITE THEIR MANIFEST UNBELIEVABLE, IMPROBABLE AND UNRELIABLE TESTIMONY.7

In his brief, appellant alleges that the declaration of Demetrio Cleopas, both in the course of police investigation and in a sworn statement, to the effect that his two sons were responsible for the killing did not make any mention of him, hence, he should not have been implicated. Such declaration, appellant contends, as made in the sworn statement, should have been considered by the trial court as part of the res gestae. In addition, he urges that the trial court should have considered the testimony of accused Teodorico Cleopas, who testified that he did not see appellant on the date of the incident. He also contends that contrary to the trial court's view, there was no "uniting point" or corroboration between the testimonies of Cipriano Supero, the alleged eyewitness to the incident, and that of the other prosecution witnesses. Supero's testimony, he further claims, should not have been considered by the trial court as this witness was a coached and rehearsed witness, who testified only two months after the incident, and whose testimony is allegedly not worthy of belief. Appellant also asserts that while he invokes the weak defense of alibi, the evidence against him is likewise weak, and did not prove his guilt beyond reasonable doubt. Lastly, appellant contends that the trial court erred in finding him to be a co-conspirator of the other two accused.

In its brief, the Office of the Solicitor General contends that the positive identification by prosecution witness Cipriano Supero of appellant at the scene of the crime should prevail over appellant's denial and alibi. It further argues that a conspiracy to kill the victim was present.

Taken together, these contentions of appellant and the appellee point to one, issue, which is the credibility of witnesses in this case. We find that credibility preponderates in favor of the prosecution, and against the appellant.

Appellant makes much of the testimony of prosecution witness SPO2 Atupan. This witness testified that in the course of police investigation, Demetrio Cleopas, father of accused Teodorico and Epifanio Cleopas, said that his two sons were responsible for the killing, Demetrio reiterated the same allegation in a sworn statement made before the Ubay Police on March 24, 1993, 8 which appellant also relies upon to support his claim of innocence. This particular allegation in the sworn statement, appellant urges, should be considered as part of the res gestae, as it "grew out of the main fact, shed light upon it, and which are (sic) unpremeditated, spontaneous, and made at a time so near, subsequent to the main act, as to exclude the idea of deliberation and fabrication.9

This assertion made by Demetrio Cleopas in his sworn statement is not part of the res gestae. Res gestae refers to those exclamations and statements made by either the participants, victims, or spectators immediately before, during, or immediately after the commission of the crime, when the circumstances are such that the statements were made as a spontaneous reaction or utterance inspired by the excitement of the occasion and there was no opportunity for the declarant to deliberate and to fabricate a false statement. 10 The allegations made by Demetrio Cleopas in his sworn statement were not made immediately after the killing of the victim. They were made on March 24, 1993, or six days after the killing of the victim on March 18. As we have held that a statement given a day after the incident in answer to questions propounded in an investigation cannot be considered part of the res gestae, 11 so too with the declarations of Demetrio Cleopas in his sworn statement.

Moreover, resort to the very sworn statement invoked by appellant would reveal that Demetrio Cleopas himself was in no position to identify all the perpetrators of the crime. The pertinent portion of the statement reads as follows:

Q:     Do you remember where were you on March 18, 1993?

A:     Yes, I was in our nipa hut near our house.

Q:     What were (sic) the unusual incident that you have witness (sic) on that day; (sic)

A:     On March 18, 1993 at 10:00 o'clock in the morning more or less. I heard a shout from my wife that's why I went near to her and what I have seen was a man lying on the ground which in my belief was already dead.

Q:     What was the cause of death of that person?

A:     When I asked my son Epifanio Cleopas alias "Paning" what was that incident and he answered that they mutually struck him because he boxed one on (sic) my son named Teodorico Cleopas @
"Tidoy". 12

It is clear that Demetrio Cleopas did not see the actual killing of the victim. He only learned of the details of the killing from his son Epifanio. Thus, SPO2 Atupan's testimony that Demetrio Cleopas named his sons as the perpetrators of the crime, without mention of appellant Florencio Pirame, and which declaration was based on Epifanio Cleopas' admission of guilt for the killing, is in effect hearsay twice removed. It cannot be used to absolve appellant of his participation in the crime. Further still, the testimony of used Teodorico Cleopas that he never saw appellant on the date of the incident, 13 does not support the declarations of Demetrio Cleopas, as Teodorico's testimony cannot be expected to implicate a co-accused, being self-serving as it is.

Appellant next assails the trial court's dictum to the effect that the testimonies of the prosecution witnesses, viewed in their totality, point to the guilt of all three accused, including appellant. 14 He claims that it was only Cipriano Supero who testified that he saw appellant hold the arms of the victim while the other two accused hit him on the head with a stick and a not steel pipe. This, he asserts, was not corroborated by any other prosecution witness, hence there was no "unifying point" in their testimonies.

That the testimony of Supero was not corroborated by any other witness is no moment. It is axiomatic that the testimonies of witnesses are weighed, not numbered, and the testimony of a single witness may suffice for conviction if found trustworthy and reliable. That the prosecution had only one eyewitness to implicate appellant hardly negates its cause. There is no law, which requires that the testimony of a single witness needs corroboration except where the law expressly mandates such corroboration. 15 Indeed, the testimony of a single witness, when positive and credible, is sufficient to support a conviction even of murder. Hence, a finding of guilt may be based on the uncorroborated testimony of a single witness when the trial court finds such testimony positive and credible. On this score, appellant that the testimony of Cipriano Supero should not have been considered by the trial court, as Supero is allegedly a coached and rehearsed witness. In effect, appellant assails Supero's credibility. He points out that on direct examination, Supero initially stated that the killing took place "inside the house of Demetrio Cleopas", but later on modified his answer to clarify that the victim was killed "outside the house." 17 In addition, appellant emphasizes that it took Supero two months after the death of the victim to come out and volunteer to two testify as to what he had seen transpire on the morning of March 18, 1993. Appellant asserts that this delay further proves that Supero was a rehearsed witness.

These contentions are without merit. The initial lapse in Supero's testimony as to whether the crime was committed inside or outside of the house of Demetrio Cleopas was eventually settled by the trial court when it asked clarificatory questions. Supero was nonetheless able to testify on the actual killing of the victim, as well as identify all the perpetrators of the crime. The earlier inconsistency in his testimony, slight as it is, cannot suffice to impeach this witness. Settled is the rule that inconsistencies in the testimonies of witnesses when referring only to minor details and collateral matters do not affect either the substance of their declaration, their veracity, or the weight of their testimony. Although there may be inconsistencies on minor details, the same do not impair the credibility of the witnesses where there is consistency in relating the principal occurrence and positive identification of the assailants. Slight contradictions in fact even serve to strengthen the sincerity of the witness and prove that his testimony is not rehearsed. They are safeguards against memorized perjury. Further still, the delay of Supero in volunteering to testify on the incident is of little consequence. At the time Supero witnessed the killing, all he saw was the striking of the victim by the assailants while appellant held the victim's arms. The victim then fell to the ground, motionless. Thereafter, Supero left, fearful of what he had seen. 19 He did not divulge this to anyone else except his mother, for they were afraid of being involved in that matter. 20

At the time he witnessed the incident, Supero was not aware that the victim had died as a result of the assault. He came to know that the victim died only two months after, when word spread that the body of the victim was discovered in the well of Demetrio Cleopas. 21 Upon learning of the victim's fate, he came forward to reveal what he had seen when he testified in open court. Hence, appellant cannot claim that Supero's report and testimony on the incident was belatedly made. Thus, the two-month delay in reporting the account of the eyewitness in this case does not give rise to any doubt on the veracity thereof. As we have held, the belated report and the reluctance of witnesses to testify in criminal actions is a matter of judicial notice. 22

Against Supero's positive identification of appellant as the person who held the hands of the victim while accused Teodorico and Epifanio Cleopas struck him, appellant advanced the defense of alibi. He testified that he was harvesting palay the whole day at Barangay Corazon, San Miguel, Bohol on March 18, 1993. 23 The distance of the house of Demetrio Cleopas from his house, which is located at the center of Barangay Corazon, 24 was estimated by him to be seven kilometers. 25 We find this distance of seven kilometers to be less than sufficient for purposes of an air-tight alibi. Alibi is an affirmative defense and, considering that it is easy to conduct, when an accused relies thereon, he has the burden of proving it, i.e., that he could not have been at the scene of the crime at the time of its commission. For alibi to prosper, an accused must prove that not only was he absent at the scene of the crime at the time of its commission, but also that it was physically impossible for him to be so situated at said instance. 26 This, appellant failed to do, more so when his claim that he was harvesting palay on the day the killing took place was not corroborated by anyone else.

Appellant asserts that the trial erred in finding appellant a conspirator, hence guilty of murder beyond reasonable doubt. We find the trial court's finding of the existence of a conspiracy to kill the victim well-taken. Cipriano Supero's testimony discloses that appellant held the victim's arms in a cross-wise manner while Epifanio and Teodorico Cleopas struck the victim on the forehead with a steel pipe and a long piece of wood, respectively. Thereafter, the victim fell to the ground. 27 These concurrent actions of appellant and his co-accused reveal a mutual intention and determination to kill the victim, an indicator of conspiracy. Conspiracy, in order to exist, does not require an agreement for an appreciable period prior to the commission of the crime; it exists if, at the time of the commission of the offense, the accused had the same purpose and was united in its execution. 28 The fact that appellant conspired in the commission of the crime charged was sufficiently and convincingly shown by his active participation in holding the victim to render him immobile, thus enabling the other two accused to consummate their dastardly act of killing the victim. 29

We note, however, that the trial court in its decision did not make any definitive finding on the circumstances which qualified the crime to murder. While the information charging appellant and the other accused alleged that the commission of the crime was attended by treachery, evident premeditation and abuse of superior strength, the court did not expound upon or point to the existence of these aggravating circumstances in the case at bar. In other words, it did not state its basis for qualifying the crime to murder. We are thus required to determine if the crime at bar could be qualified to murder, to resolve this appeal. It is axiomatic that an appeal, once accepted by this Court, throws the entire case open to review, and that this Court has the authority to review matters, not specifically raised or assigned as errors by the parties, if their consideration is necessary in arriving at a just resolution of the case. 30

In the present case, the prosecution alleged the attendance of treachery in the commission of the crime. The requisites for treachery to be a qualifying circumstance are: (1) the employment means, method, or manner of execution which will ensure the safety of the malefactor from defensive or retaliating acts on the part of the victim, no opportunity being given to the latter to defend himself or to retaliate; and (2) deliberate or conscious adoption of such means, method, or manner of execution. 31

Cipriano Supero testified that appellant Florencio Pirame held the arms of the victim while Epifanio and Teodorico Cleopas struck the victim on the head, causing his death. The victim was defenseless during the attack as his hands were restrained by appellant, facilitating the beating of the victim by the other perpetrators. Clearly, the manner by which the victim was restrained and assaulted was deliberately and consciously adopted by his assailants to ensure. Thus, there was treachery in the killing of the victim, as the offenders employed means, methods or forms in the execution thereof which tended directly and specially to insure its execution, without risk to themselves arising from the defense which the victim might take. 32

The attendance of evident premeditation in the commission of the crime, though alleged in the information, is not supported by the evidence, as there is no showing as to when appellant and his co-accused determined to kill the victim. Likewise, abuse of superior strength, being absorbed by treachery, 33 cannot be considered as an aggravating circumstance in this case.

As treachery was resent when the victim as killed, we find that the crime of murder was committed by appellant and his co-accused. At the time of the commission of the crime, the imposable penalty for murder was reclusion temporal in its maximum period to death. There being no aggravating or mitigating circumstances attending the killing, the applicable penalty would thus be the medium period of the imposable penalty, which is reclusion perpetua. 34

We concur with the trial court's award of P50,000.00 each from appellant Florencio Pirame and co-accused Teodorico Cleopas as death indemnity to the victim's heirs, which is in line with current jurisprudence. We also find the amount of P23,214.00 awarded by the trial court as "burial and incidental expenses" supported by the records. 35 The award of P50,000.00 from each accused as moral and exemplary damages, however, is unsupported. The widow of the victim did not testify on any mental anguish or emotional distress, which she suffered as a result of her husband's death. The absence of any generic aggravating circumstance attending the crime likewise precludes the award of exemplary damages.

WHEREFORE, the instant appeal is DENIED. The decision of the Regional Trial Court convicting appellant Florencio Pirame of the crime of murder and sentencing him to reclusion perpetua, and to pay the widow of the victim P50,000.00 as civil indemnity and P23,214.00 as actual damages, as well as the costs is AFFIRMED, but the award of P50,000.00 as moral and exemplary damages is hereby DELETED, there being no legal and factual basis therefor.

SO ORDERED.

Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

Footnotes

1 Rollo, pp. 19-25.

2 Id., at 80-81.

3 Records, p. 27.

4 Id., at 45.

5 Also spelled as "Cucip" or Cosip" in other parts of the Records.

6 Supra, note 1 at 81-82.

7 Id. at 54.

8 Supra, note 3 at 13-14.

9 Rollo, pp. 67-68.

10 People vs. Manhuyod, Jr., 290 SCRA 257, 271 (1998).

11 People vs. Navarro, 297 SCRA 331, 350 (1998).

12 Records, p. 13.

13 TSN, December 29, 1994, p. 3.

14 Supra, note 9 at 81.

15 People vs. Daraman, 294 SCRA 27, 45 (1998).

16 People vs. De la Cruz, 298 SCRA 36, 44 (1998).

17 TSN, February 9, 1994, p. 4.

18 People vs. Sanchez, 302 SCRA 21, 51-52 (1999).

19 Supra, note 17 at 4-7.

20 Id., at 6-7.

21 TSN, February 9, 1994, p. 7; TSN, February 15, 1994, p. 2.

22 People vs. Realin, 301 SCRA 495, 511 (1999).

23 TSN, September 27, 1994, p. 7.

24 Id. at 8-9.

25 TSN, September 28, 1994, p. 7.

26 People vs. Villanueva, 302 SCRA 380, 394-395, 396 (1999).

27 TSN, February 9, 1994, pp. 5-6.

28 People v. Galapin, 293 SCRA 474, 490 (1998).

29 People vs. Dinglasan, 267 SCRA 26, 45 (1997).

30 Sociedad Europea de Financiacion, S.A. vs. Court of Appeals, 193 SCRA 105, 114 (1991).

31 People vs. Gatchialian, 300 SCRA 1, 18 (1998).

32 People vs. Villamor, 292 SCRA 384, 397 (1998); People vs. Molina, 292 SCRA 742, 775 (1998).

33 People vs. Lapay, 298 SCRA 62, 81 (1998).

34 Luis B. Reyes, THE REVISED PENAL CODE; Book Two, p. 927 (1993 Ed.).

35 TSN, June 14, 1994, p. 6; Folder of Exhibits, p. 4.

Torts and Damages Case Digest: Crismina Garments v. CA (1999)

G.R. No. 128721 March 9, 1999
Lessons Applicable: Interest (Torts and Damages)
Laws Applicable: Article 1589 on the Civil Code, Article 2209 of the Civil Code

FACTS:
  • February 1979 - April 1979: Crismina Garments, Inc. contracted the services of D'Wilmar Garments, for the sewing of 20,762 pieces of assorted girls denims for P76,410
  • At first, the Crismina was told that the sewing of some of the pants were defective so it offered to take them back but then she was told it was good already and asked her to return for her check.
  • Crismina failed to pay and told her that 6,164 pairs were defective and asked for actual damages of P49,925.51 
  •  RTC: favored D'Wilmar P76,140 at 12% per annum, P5,000 attorney's fees and cost of suit
  • CA: affirmed but delete the attorney's fees
ISSUE: W/N they should impose 12% interest for an obligation which is not a loan in the absence of stipulation

HELD: NO. Appealed Decision is MODIFIED. The rate of interest shall be 6%/annum, computed from the time of the filing of the Complaint in the trial court until the finality of the judgment. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be 12% per annum computed from the time the judgment becomes final and executory until it is fully satisfied.

  • Article 1589 on the Civil Code
    • [t]he vendee [herein petitioner] shall owe interest for the period between the delivery of the thing and the payment of the price . . . should he be in default from the time of judicial or extrajudicial demand for the payment of the price.
  • Article 2209 of the Civil Code
    • If the obligation consists in the payment of money and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is 6%/annum
  • Usury Law
    • rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum
  • award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof
    • 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
      • 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
    • When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.
      • No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty
      • where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). 
      • The actual base for the computation of legal interest shall, in any case, be . . . the amount finally adjudged.
    • When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to forbearance of credit
  • amount due in this case arose from a contract for a piece of work, not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should be applied. 
    • Furthermore, since the amount of the demand could be established with certainty when the Complaint was filed, the six percent (6%) interest should be computed from the filing of the said Complaint. 
    • But after the judgment becomes final and exuecutory until the obligation is satisfied, the interest should be reckoned at twelve percent (%12) per year 

Jurisprudence: G.R. No. 128721


THIRD DIVISION


G.R. No. 128721 March 9, 1999


CRISMINA GARMENTS, INC., petitioner, 
vs.
COURT OF APPEALS and NORMA SIAPNO, respondent.


PANGANIBAN, J.:


Interest shall be computed in accordance with the stipulation of the parties. In the absence of such agreement, the rate shall be twelve percent (12%) per annum when the obligation arises out of a loan or a forbearance of money, goods or credits. In other cases, it shall be six percent (6%).


The Case


On May 5, 1997, Crismina Garments, Inc. filed a Petition for Review on Certiorari 1 assailing the December 28, 1995 Decision 2 and March 17, 1997 Resolution 3 of the Court of Appeals in CA-GR CV No. 28973. On September 24, 1997, this Court issued a minute Resolution 4 denying the petition "for its failure to show any reversible error on the part of the Court of Appeals."


Petitioner then filed a Motion for Reconsideration, 5 arguing that the interest rate should be computed at 6 percent per annum as provided under Article 2209 of the Civil Code, not 12 percent per annum as prescribed under Circular No. 416 of the Central Bank of the Philippines. Acting on the Motion, the Court reinstated 6 the Petition, but only with respect to the issue of which interest rate should be applied. 7


The Facts


As the facts of the case are no longer disputed, we are reproducing hereunder the findings of the appellate court:


During the period from February 1979 to April 1979, the [herein petitioner], which was engaged in the export of girls' denim pants, contracted the services of the [respondent], the sole proprietress of the D'Wilmar Garments, for the sewing of 20,762 pieces of assorted girls['] denims supplied by the [petitioner] under Purchase Orders Nos. 1404, dated February 15, 1979, 0430 dated February 1, 1979, 1453 dated April 30, 1979. The [petitioner] was obliged to pay the [respondent], for her services, in the total amount of P76,410.00. The [respondent] sew[ed] the materials and delivered the same to the [petitioner] which acknowledged the same per Delivery Receipt Nos. 0030 dated February 9, 1979; 0032, dated February 15, 1979; 0033 dated February 21, 1979; 0034, dated February 24, 1979; 0036, dated February 20, 1979; 0038, dated March 11, 1979[;] 0039, dated March 24, 1979; 0040 dated March 27, 1979; 0041, dated March 29, 1979; 0044, dated Marc[h] 25, 1979; 0101 dated May 18, 1979[;] 0037, dated March 10, 1979 and 0042 dated March 10, 1979, in good order condition. At first, the [respondent] was told that the sewing of some of the pants w[as] 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 (10) days from receipt thereof. On February 7, 1990, the [petitioner]'s [v]ice-[p]resident-[c]omptroller, 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.


On January 8, 1981, the [respondent] filed her complaint against the [petitioner] with the [trial court] for the collection of the principal amount of P76,410.00. . . .


xxx  xxx  xxx


After due proceedings, the [trial court] rendered judgment, on February 28, 1989, in favor of the [respondent] against the [petitioner], the dispositive portion of which reads as follows:


WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant ordering the latter to pay the former:


(1) The sum of P76,140.00 with interest thereon at 12% per annum, to be counted from the filing of this complaint on January 8, 1981, until fully paid;


(2) The sum of P5,000 as attorney[']s fees; and


(3) The costs of this suit;


(4) Defendant's counterclaim is hereby dismissed. 8


The Court of Appeals (CA) affirmed the trial court's ruling, except for the award of attorney's fees which was deleted. 9 Subsequently, the CA denied the Motion for Reconsideration. 10


Hence, this recourse to this Court 11


Sole Issue


In light of the Court's Resolution dated April 27, 1998, petitioner submits for our consideration this sole 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. 12


This Court's Ruling


We sustain petitioner's contention that the interest rate should be computed at six percent (6%) per annum.


Sole Issue: Interest Rate


The controversy revolves around petitioner's payment of the price beyond the period prescribed in a contract for a piece of work. Article 1589 on the Civil Code provides that "[t]he vendee [herein petitioner] shall owe interest for the period between the delivery of the thing and the payment of the price . . . should he be in default from the time of judicial or extrajudicial demand for the payment of the price." The only issue now is the applicable rate of interest for the late payment.


Because the case before us is "an action for the enforcement of an obligation for payment of money arising from a contract for a piece of work," 13 petitioner submits that the interest rate should be six percent (6%), pursuant to Article 2209 of the Civil Code, which states:


If the obligation consists in the payment of money and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum." (Emphasis supplied.)


On the other hand, private respondent maintains that the interest rate should be twelve percent (12 %) per annum, in accordance with Central Bank (CB) Circular No. 416, which reads:


By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law", the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve per cent (12%) per annum." (Emphasis supplied.)


She argues that the circular applies, since "the money sought to be recovered by her is in the form of forbearance." 14


We agree with the petitioner. In Reformina v. Tomol Jr., 15 this Court stressed 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 the said circular are governed by Article 2209 of the Civil Code, 16 which considers interest a form of indemnity for the delay in the performance of an obligation. 17


In Eastern Shipping Lines, Inc. v. Court of Appeals, 18 the Court gave the following guidelines for the application of the proper interest rates:


I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.


II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:


1. 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.


2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be . . . the amount finally adjudged.


3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to forbearance of credit. 19


In Keng Hua Paper Products Co., Inc. v. CA, 20 we also ruled that the monetary award shall earn interest at twelve percent (12%) per annum from the date of finality of the judgment until its satisfaction, regardless of whether or not the case involves a loan of forbearance of money. The interim period is deemed to be equivalent to a forbearance of a credit. 21


Because the amount due in this case arose from a contract for a piece of work, not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should be applied. Furthermore, since the amount of the demand could be established with certainty when the Complaint was filed, the six percent (6%) interest should be computed from the filing of the said Complaint. But after the judgment becomes final and exuecutory until the obligation is satisfied, the interest should be reckoned at twelve percent (%12) per year.


Private respondent maintains that the twelve percent (12%) interest should be imposed, because the obligation arose from a forbearance of 
money. 22 This is erroneous. In Eastern Shipping, 23 the Court observed that 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 this standard, the obligation in this case was obviously not a forbearance of money, goods or credit.


WHEREFORE, the appealed Decision is MODIFIED. The rate of interest shall be six percent (6%) per annum, computed from the time of the filing of the Complaint in the trial court until the finality of the judgment. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied. No pronouncement as to costs.


SO ORDERED.


Romero, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.


Footnotes


1 Rollo. pp. 7-21.


2 Penned by Justice Romeo J. Callejo Sr., with the concurrence of J. Antonio M. Martinez, Division chairman (now retired member of this Court), and Pacita Cañizares-Nye, member.


3 Also penned by Justice Callejo, Sr. with JJ. Antonio M. Martinez, Division chairman, and Ruben T. Reyes, member, of both concurring.


4 Rollo, pp. 104-105.


5 Ibid., pp. 106-112.


6 Resolution dated April 27, 1998; rollo, p. 118.


7 Rollo, pp. 140-141.


8 CA Decisions, pp. 1-4; rollo, pp. 25-28 (citations omitted)


9 Ibid., p. 8. rollo, p. 31.


10 Rollo, p. 33.


11 The case was deemed submitted for resolution on December 17, 1998, when this Court received private respondent's Memorandum.


12 Petitioner's Memorandum, p. 2; rollo, p. 160.


13 Ibid., 3; rollo, p. 161.


14 Memorandum for Private Respondent, p. 8; rollo, p. 175


15 139 SCRA 260, October 11, 1985, per Cuevas, J. See also Philippine Rabbit Bus Lines, Inc. v. Cruz, 143 SCRA 158, 160-161, July 28, 1986; and Pilipinas Bank v. Court of Appeals, 225 SCRA 268, 275, August 12, 1993.


16 National Power Corporation v. Angas, 208 SCRA 542, 546-549, May 8, 1992; Tio Khe Cho v. Court of Appeals, 202 SCRA 119, 123-124, September 30, 1991; Philippines Virginia Tobacco Administration v. Tensuan, 188 SCRA 628 632-633, August 20, 1990; Central Azucarera de Basis v. Court of Appeals, 188 SCRA 328, 338-339, August 3, 1990; and GSIS v. Court of Appeals,: 145 SCRA 311, 321, October 30, 1986.


17 Castelo v. Court of Appeals, 244 SCRA 180, 190, May 22, 1995 and Pacific Mills, Inc. v. Court of Appeals, 206 SCRA 317, 326, February 17, 1992.


18 234 SCRA 78, 95-97, July 12, 1994, per Vitug, J.


19 AC Enterprises, Inc. v. Construction Industry Arbitration Commission, 244 SCRA 55, 57-58, May 9, 1995, per Quiason, J.


20 GR No. 116863, February 12, 1998, per Panganiban, J.


21 Philippine National Bank v. Court of Appeals, 263 SCRA 766, 770-772, October 23, 1996; and Food Terminal, Inc. v. Court of Appeals, 262 SCRA 339, 343-344, September 23, 1996.


22 Private respondent's Memorandum, p. 8; rollo, p. 175.


23 Supra, at p. 94.