G.R. No. 76101-02, 30 September 1991, 202 SCRA 119


Petitioner shipped bags of imported fishmeals and insured the same with respondent insurance company Eastern Assurance & Surety Corp ( EASCO). During transit, the bags were found out to be damaged thus rendering the fishmeals useless. Petitioner filed a claim before the EASCO which denied the same, prompting the former to sue the latter at CFI Cebu who ordered EASCO to pay the petitioner’s claim for insurance with damages. Upon execution, respondent filed a petition for certiorari with the CA who set aside the lower court’s decision arguing that the latter has erred in fixing the legal interest on 12 % per annum rather than the mandated 6 %.


What should be the legal interest be for damages arising from loss of property?


The applicable law is Article 2209 of the Civil Code which reads that if the obligation consists in the payment of a sum of money and the debtor incurs delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest agreed upon, and in the absence of stipulation, the legal interest which is 6% per annum.

The adjusted rate mentioned in the Circular no. 416, from which the CFI based its decision, refers only to loans or forbearance of money, goods or credits and court judgments thereon but not to court judgments for damages arising from injury to persons and loss of property which does not involve a loan.

*Case digest by AG Himang, LLB-IV, Andres Bonifacio College Law School, SY 2018-2019