Philippine Supreme Court Resolutions > Year 2011 > February 2011 Resolutions > [G.R. No. 193793 : February 28, 2011] PABLO DESIERTO, PETITIONER VERSUS SPOUSES LEONARDO AND MARIA CRISTINA AGODON, RESPONDENTS. :

Please take notice that the Court, Third Division, issued a Resolution dated 28 February 2011, which reads as follows: 

G.R. No. 193793 - PABLO DESIERTO, petitioner versus SPOUSES LEONARDO AND MARIA CRISTINA AGODON, respondents.

  RESOLUTION 

This resolves the Motion for Reconsideration, dated February 2, 2011, filed by petitioner Pablo Desierto to set aside our Resolution of November 22, 2010, denying his petition for review for failure to show any reversible error on the part of the Court of Appeals' Resolution of September 17, 2010.

In his motion for reconsideration, petitioner questions for the first time the trial court's award of 12% annual interest in favor of the respondents, as the transaction between the parties did not consist of a loan or forbearance. Petitioner cites Eastern Shipping Lines, Inc. v Court of Appeals, et al.^[1] to support his arguments. In addition, he reiterates that the procedural rules should have been construed liberally in his favor so that the respondents' evidence should not have been heard ex-parte, as provided by Section 5, Rule 18 of the Rules of Court.

We deny the motion for reconsideration.

It is an accepted doctrine that a 12% interest may be imposed on judgments involving loans or forbearance of any money, goods or services. The interest that should be imposed on any other kind of monetary judgment, which has nothing to do with loans or forbearance of any money, goods or services, should be six percent (6%).^[2]

The facts, as narrated by the Court of Appeals, are undisputed. In 1999, petitioner began to transact with Leonardo Agodon by rediscounting his personal as well as customers' checks with Leonardo Agodon. Petitioner's customers would pay him for electrical supplies by way of postdated checks payable from 30 to 60 days after issuance; and petitioner, in turn, would deliver the checks to Leonardo Agodon for rediscounting. Accordingly, petitioner pays a monthly interest of five percent as a consideration for the rediscounting of his checks. When the postdated checks fall due, respondents would deposit the checks in their account.^[3]

The transaction herein described had already been characterized by a short-term loan in Betts v. McKenzie Check Advance of Florida,^[4] wherein the United States Supreme Court ruled that:

For purposes of the analysis, the characterization of the transactions is important. There is no question that what takes place is something more than simple check cashing. In a deferred presentment transaction, the customer is advanced (sic) money in exchange for a check which the lender agrees not to immediately cash. In exchange for agreeing to defer presentment of the check, the lender exacts a fee. As Betts argues in this case, one might wonder why anyone would utilize the services of a "check casher" and pay for what he or she could otherwise obtain for free at a bank. Clearly, it is because the customer does not have the funds readily available to honor the check. Thus, there can be no question that what takes place is essentially an advance of money or a short-term loan.

Since the transactions between the petitioner and respondents are short-term loans, then the trial court adhered to jurisprudence and properly imposed the 12% interest from the date of formal demand.

The second ground which the petitioner raised in this motion, regarding the relaxation of procedural rules, had already been previously passed upon and was dismissed for lack of basis.

WHEREFORE, premises considered, we DENY the Motion for Reconsideration  with FINALITY. No further pleadings shall be entertained in this case.

Let entry of judgment be made in due course.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
  Clerk of Court

Endnotes:

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^[1] G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95-97.

^[2] Reformina v. Tomol, Jr., G.R. No. L-59096, October 11, 1985, 139 SCRA 260, 265-266; and Eastern Shipping Lines, Inc. v. Court of Appeals, ibid. 

^[3] Rollo, pp. 67-68. 

^[4] 879 So.2d 667 (2004).