EN
BANC
A.C.
ENTERPRISES, INC.,
Petitioner,
G. R. No. 101444
May 9, 1995
-versus-
CONSTRUCTION
INDUSTRY ARBITRATION COMMISSION
and DEE CONSTRUCTION CORPORATION,
Respondents.
R
E S O L U T I O N
QUIASON, J.:
chanroblesvirtualawlibrary
In their Second
Motion For Partial Reconsideration,
private respondent insists that it is entitled to interest at the rate
of 12% per annum on the monetary award given them by the Construction
Industry
Arbitration Commission [CIAC]. It contends that under Executive Order
No.
1008 dated February 4, 1985 and the Rules of Procedure Governing
Construction
Arbitration, arbitral awards are final and "inappealable (sic)"
and pursuant to our ruling in Eastern Shipping Lines, Inc. v. Court of
Appeals, 234 SCRA 78 [1994], monetary awards in all judgments that
became
final and executory, regardless of the nature of the obligation, shall
bear legal interest of 12% per annum.
The obligation
that was breached in the arbitration
case at bench was not based on a loan or forbearance of money, and
therefore
was not covered by Central Bank Circular No. 416.
In Reformina v. Tomol, Jr., 139 SCRA 260
[1985],
we made clear that the award of legal interest at 12% per annum under
said
Central Bank Circular shall be adjudged only in cases involving the
loan
or forbearance of money (See also Pilipinas Bank v. Court of Appeals,
225
SCRA 268 [1993]). However, in Eastern Shipping Lines, Inc., We held
that
when the judgment awarding a sum of money becomes final and executory,
the monetary award shall earn interest at 12% per annum from the date
of
such finality until its satisfaction, regardless of whether the case
involves
a loan or forbearance of money. The reason is that this interim
period is deemed to be, by then, equivalent to a forbearance of credit.
We quote from Eastern Shipping Lines, Inc., supra., at pp. 95-97:
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 on 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 a forbearance of credit. [Emphasis
supplied].
It appears that
private respondent equated, and wrongly
at that, the term "final and inappealable (sic)" as used in E.
O.
No. 1008 and the Rules of Procedure Governing Construction Arbitration
with the term "final and executory" as used in Eastern Shipping Lines,
Inc. Section 19 of E. O. No. 1008 dated February 4, 1985 provides
as follows:
Finality of Awards. - The
arbitral
award shall be binding upon the parties. It shall be final and
inappealable
(sic) except on questions of law which shall be appealable to the
Supreme
Court [Emphasis supplied].
Section 2 of
Article XVI of the Rules of Procedure
Governing Construction Arbitration provides as follows:
Appeals.- Pursuant to
Section 19
of Executive Order No. 1008 dated 4 February 1985, arbitral awards are
final and inappealable (sic) except on questions of law which shall be
appealable to the Supreme Court before the award becomes final. An
appeal
shall not stay the award unless the Supreme Court shall direct
otherwise
upon such terms as it may deem just. An appeal from an arbitral award
or
an order/decision of the CIAC shall be perfected by filing with the
CIAC
a notice of appeal and with the Supreme Court twelve (12) copies of a
petition
for review of the award, order, or decision complained of within 30
days
from notice of such award, order, or decision [Emphasis supplied].
A "final and
inappealable (sic)" judgment
is not the same as a "final and executory" one. The former becomes
executory
only as in the case of an award by the CIAC after the lapse of 30 days
from receipt of notice thereof and no petition for review to the
Supreme
Court is made [Rules of Procedure Governing Construction Arbitration,
Art.
XVI, Sec. 1].
While the
Petition for Review does not automatically
suspend the execution of the award of the CIAC, the Supreme Court may
direct
a stay of the execution. In the case at bench, the Court issued a
temporary
restraining order to stay the execution of the award [Resolution,
October
14, 1991].cralaw:red
The CIAC award
did not become "final and executory"
until after service of a copy of the Resolution dated April 8, 1992 of
this Court, denying the motion for reconsideration. The award was fully
paid to private respondent on May 6, 1992 [Rollo, p. 456]. We consider
the interest that accrued from April 8 to May 6, 1992, a period of less
than a month, as de minimis as to warrant its charging against the
award.cralaw:red
IN VIEW OF THE
FOREGOING, the Court RESOLVED:
Narvasa, C.J.,
Padilla, Regalado, Davide,
Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza and
Francisco,
JJ., concur.
Feliciano, J., took no part. |