10.

Lim vs Security Bank

CASE DIGEST: MARIANO LIM, Petitioner, v. SECURITY CORPORATION, Respondent.

FACTS:

Petitioner executed a Continuing Suretyship in favor of respondent to secure ny and all types of credit
accommodation that may be granted by the bank hereinto and hereinafterin favor of Raul Arroyo for
the amount of P2,000,000.00 which is covered by a Credit Agreement/Promissory Note. The promissory
note contained a stipulation that the interest on the loan shall be 19% per annum, compounded
monthly, for the first 30 days from the date thereof, and if the note is not fully paid when due, an
additional penalty of 2% per month of the total outstanding principal and interest due and unpaid, shall
be imposed.

Debtor Raul Arroyo defaulted on his loan obligation. Petitioner, thereafter, received a Notice of Final
Demand dated August 2, 2001, informing him that he was liable to pay the loan obtained by Raul and
Edwina Arroyo, including the interests and penalty fees amounting to P7,703,185.54, and demanding
payment thereof. Petitioner failed to comply with said demand, hence, respondent filed a complaint for
collection of sum of money against him and the Arroyo spouses. The Arroyo spouses can no longer be
located and summons was not served on them, hence, only the petitioner actively participated in the
case.

The Regional Trial Court of Davao (RTC) rendered judgment against petitioner. Upon appeal to the CA,
the Court affirmed the decision of the RTC. Hence, the present petition for review on certiorari.

ISSUE:

May petitioner validly be held liable for the principal debtor's loan obtained six months after the
execution of the Continuing Suretyship?

HELD:

A contract of suretyship is an agreement whereby a party, called the surety, guarantees the
performance by another party, called the principal or obligor, of an obligation or undertaking in favor of
another party, called the obligee. The case of Stronghold Insurance Company, Inc. v. Republic-Asahi
Glass Corporation, G.R. No. 147561 citing Garcia v. Court of Appeals, enunciated that although the
contract of a surety is in essence secondary only to a valid principal obligation, his liability to the creditor
or promisee of the principal is said to be direct, primary and absolute; in other words, he is directly and
equally bound with the principal.

Clear and unequivocal are the terms of the Continuing Suretyship executed by petitioner. It states that
petitioner, as surety, shall, without need for any notice, demand or any other act or deed, immediately
become liable and shall pay all credit accommodations extended by the Bank to the Debtor, including
increases, renewals, roll-overs, extensions, restructurings, amendments or novations thereof, as well as
(i) all obligations of the Debtor presently or hereafter owing to the Bank, as appears in the accounts,
books and records of the Bank, whether direct or indirect, and (ii) any and all expenses which the Bank
may incur in enforcing any of its rights, powers and remedies under the Credit Instruments as defined
herein below.
The foregoing stipulations are valid and legal and, therefore, constitute as law between the parties.
Under Article 2053 of the Civil Code, guaranty may also be given as security for future debts, the amount
of which is not yet known; x x x.Thus, petitioner is unequivocally bound by the terms of the Continuing
Suretyship. There can be no cavil then that petitioner is liable for the principal of the loan, together with
the interest and penalties due thereon, even if said loan was obtained by the principal debtor even after
the date of execution of the Continuing Suretyship.

PARTIALLY GRANTED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 188539 March 12, 2014

MARIANO LIM, Petitioner,

vs.
SECURITY BANK CORPORATION,* Respondent.

DECISION

PERALTA, J.:

This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that
the Decision1of the Court of Appeals (CA), promulgated on July 30, 2008, and the Resolution 2 dated
June 1, 2009, denying petitioner's motion for reconsideration thereof, be reversed and set aside.

Petitioner executed a Continuing Suretyship in favor of respondent to secure "any and all types of
credit accommodation that may be granted by the bank hereinto and hereinafter" in favor of Raul
Arroyo for the amount of ₱2,000,000.00 which is covered by a Credit Agreement/Promissory
Note.3 Said promissory note stated that the interest on the loan shall be 19% per annum,
compounded monthly, for the first 30 days from the date thereof, and if the note is not fully paid
when due, an additional penalty of 2% per month of the total outstanding principal and interest due
and unpaid, shall be imposed.

In turn, the Continuing Suretyship4 executed by petitioner stipulated that:

3. Liability of the Surety. - The liability of the Surety is solidary and not contingent upon the pursuit of
the Bank of whatever remedies it may have against the Debtor or the collaterals/liens it may
possess. If any of the Guaranteed Obligations is not paid or performed on due date (at stated
maturity or by acceleration), the Surety shall, without need for any notice, demand or any other act
or deed, immediately become liable therefor and the Surety shall pay and perform the same.5

Guaranteed Obligations are defined in the same document as follows:

a) "Guaranteed Obligations" - the obligations of the Debtor arising from all credit accommodations
extended by the Bank to the Debtor, including increases, renewals, roll-overs, extensions,
restructurings, amendments or novations thereof, as well as (i) all obligations of the Debtor presently
or hereafter owing to the Bank, as appears in the accounts, books and records of the Bank, whether
direct or indirect, and (ii) any and all expenses which the Bank may incur in enforcing any of its
rights, powers and remedies under the Credit Instruments as defined hereinbelow.6

The debtor, Raul Arroyo, defaulted on his loan obligation. Thereafter, petitioner received a Notice of
Final Demand dated August 2, 2001, informing him that he was liable to pay the loan obtained by
Raul and Edwina Arroyo, including the interests and penalty fees amounting to ₱7,703,185.54, and
demanding payment thereof. For failure of petitioner to comply with said demand, respondent filed a
complaint for collection of sum of money against him and the Arroyo spouses. Since the Arroyo
spouses can no longer be located, summons was not served on them, hence, only petitioner actively
participated in the case.

After trial, the Regional Trial Court of Davao (RTC) rendered judgment against petitioner. 7 The
dispositive portion of the RTC Decision reads as follows:

Wherefore, judgment is hereby rendered ordering defendant Lim to pay the following sums.

1. The principal sum of two million pesos plus nineteen percent interest of the outstanding
principal interest due and unpaid to be computed from January 28, 1997 until fully paid, plus
two percent interest per month as penalty to be computed from February 28, 1997 until fully
paid.

2. Four hundred thousand pesos as attorney's fees.

3. Thirty thousand pesos as litigation expenses.

SO ORDERED.8

Petitioner appealed to the CA, but the appellate court, in its Decision dated July 30, 2008, affirmed
the RTC judgment with the modification that interest be computed from August 1, 1997; the penalty
should start only from August 28, 1997; the award of attorney's fees is set at 10% of the total amount
due; and the award for litigation expenses increased to ₱92,321.10.9

Petitioner's motion for reconsideration of the CA Decision was denied per Resolution dated June 1,
2009.

Petitioner then elevated the matter to this Court via a petition for review on certiorari, where the main
issue is whether petitioner may validly be held liable for the principal debtor's loan obtained six
months after the execution of the Continuing Suretyship.

The other issues, such as the proper computation of the total indebtedness and the amount of
litigation expenses are factual matters that had been satisfactorily addressed by the CA, to wit: (1)
the CA ruled that respondent should recompute the total amount due, since the proceeds from the
foreclosure of the real estate and chattel mortgages were deducted only on June 20, 2001, when the
public auctions were conducted on August 26, 1998 and September 7, 1999, respectively, thus, the
amount of the proceeds from the foreclosure of the mortgaged properties should have been
deducted from the amount of indebtedness on the date the public auction was held; and (2) the CA
likewise pointed out that as can be seen from the Legal Fees Form,10 the litigation expense incurred
by respondent was ₱92,321.10, the amount it paid as filing fee. It is hornbook principle that this
Court is not a trier of facts, hence, such issues will not be revisited by this Court in the present
petition. With regard to the propriety of making petitioner a hostile witness, respondent is correct that
the issue cannot be raised for the first time on appeal. Thus, the Court will no longer address these
issues which had been improperly raised in this petition for review on certiorari.

The main issue deserves scant consideration, but the matter of the award of attorney's fees
deserves reexamination.

The nature of a suretyship is elucidated in Philippine Charter Insurance Corporation v. Petroleum

Distributors & Service Corporation11 in this wise:

A contract of suretyship is an agreement whereby a party, called the surety, guarantees the
performance by another party, called the principal or obligor, of an obligation or undertaking in favor
of another party, called the obligee. Although the contract of a surety is secondary only to a valid
principal obligation, the surety becomes liable for the debt or duty of another although it possesses
no direct or personal interest over the obligations nor does it receive any benefit therefrom. This was
explained in the case of Stronghold Insurance Company, Inc. v. Republic-Asahi Glass Corporation,
where it was written:

The surety's obligation is not an original and direct one for the performance of his own act, but
merely accessory or collateral to the obligation contracted by the principal. Nevertheless, although
the contract of a surety is in essence secondary only to a valid principal obligation, his liability to the
creditor or promisee of the principal is said to be direct, primary and absolute; in other words, he is
directly and equally bound with the principal.

xxxx

Thus, suretyship arises upon the solidary binding of a person deemed the surety with the principal
debtor for the purpose of fulfilling an obligation. A surety is considered in law as being the same
party as the debtor in relation to whatever is adjudged touching the obligation of the latter, and their
liabilities are interwoven as to be inseparable. x x x.12

In this case, what petitioner executed was a Continuing Suretyship, which the Court described in
Saludo, Jr. v. Security Bank Corporation13 as follows:

The essence of a continuing surety has been highlighted in the case of Totanes v. China Banking
Corporation in this wise:

Comprehensive or continuing surety agreements are, in fact, quite commonplace in present day
financial and commercial practice. A bank or financing company which anticipates entering into a
series of credit transactions with a particular company, normally requires the projected principal
debtor to execute a continuing surety agreement along with its sureties. By executing such an
agreement, the principal places itself in a position to enter into the projected series of transactions
with its creditor; with such suretyship agreement, there would be no need to execute a separate
surety contract or bond for each financing or credit accommodation extended to the principal
debtor.14

The terms of the Continuing Suretyship executed by petitioner, quoted earlier, are very clear. It 1âw phi 1

states that petitioner, as surety, shall, without need for any notice, demand or any other act or deed,
immediately become liable and shall pay "all credit accommodations extended by the Bank to the
Debtor, including increases, renewals, roll-overs, extensions, restructurings, amendments or
novations thereof, as well as (i) all obligations of the Debtor presently or hereafter owing to the Bank,
as appears in the accounts, books and records of the Bank, whether direct or indirect, and
(ii) any and all expenses which the Bank may incur in enforcing any of its rights, powers and
remedies under the Credit Instruments as defined hereinbelow."15 Such stipulations are valid and
legal and constitute the law between the parties, as Article 2053 of the Civil Code provides that "[a]
guaranty may also be given as security for future debts, the amount of which is not yet known; x x x."
Thus, petitioner is unequivocally bound by the terms of the Continuing Suretyship. There can be no
cavil then that petitioner is liable for the principal of the loan, together with the interest and penalties
due thereon, even if said loan was obtained by the principal debtor even after the date of execution
of the Continuing Suretyship.

With regard to the award of attorney's fees, it should be noted that Article 2208 of the Civil Code
does not prohibit recovery of attorney's fees if there is a stipulation in the contract for payment of the
same. Thus, in Asian Construction and Development Corporation v. Cathay Pacific Steel
Corporation (CAPASCO),16 the Court, citing Titan Construction Corporation v. Uni-Field Enterprises,
Inc.,17 expounded as follows:

The law allows a party to recover attorney's fees under a written agreement. In Barons Marketing
Corporation v. Court of Appeals, the Court ruled that:

[T]he attorney's fees here are in the nature of liquidated damages and the stipulation therefor is aptly
called a penal clause. It has been said that so long as such stipulation does not contravene law,
morals, or public order, it is strictly binding upon defendant. The attorney's fees so provided are
awarded in favor of the litigant, not his counsel.

On the other hand, the law also allows parties to a contract to stipulate on liquidated damages to be
paid in case of breach. A stipulation on liquidated damages is a penalty clause where the obligor
assumes a greater liability in case of breach of an obligation. The obligor is bound to pay the
stipulated amount without need for proof on the existence and on the measure of damages caused
by the breach.18

However, even if such attorney's fees are allowed by law, the courts still have the power to reduce
the same if it is unreasonable. In Trade & Investment Corporation of the Philippines v. Roblett
Industrial Construction Corp.,19 the Court equitably reduced the amount of attorney's fees to be paid
since interests and penalties had ballooned to thrice as much as the principal debt. That is also the
case here. The award of attorney's fees amounting to ten percent (10%) of the principal debt, plus
interest and penalty charges, would definitely exceed the principal amount; thus, making the
attorney's fees manifestly exorbitant. Hence, we reduce the amount of attorney's fees to ten percent
(10%) of the principal debt only.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals, dated
July 30, 2008, in CA-G.R. CV No. 00462, is AFFIRMED with MODIFICATION in that the award of
attorney's fees is reduced to ten percent (10%) of the principal debt only.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
12. Gilat Satellite Network vs. United Coconut Planters Bank
Gilat Satellite vs. United Coconut Digest
G.R. No. 189563 : April 7, 2014

GILAT SATELLITE NETWORKS LTD., Petitioner, v. UNITED COCONUT PLANTERS BANK

GENERAL INSURANCE CO., INC., Respondent.

SERENO, C.J.:

FACTS:

On September 15, 1999, One Virtual placed with GILAT a purchase order for various
telecommunications equipment, accessories, spares, services and software, at a total purchase
price of Two Million One Hundred Twenty Eight Thousand Two Hundred Fifty Dollars
(US$2,128,250.00). Of the said purchase price for the goods delivered, One Virtual promised to pay
a portion thereof totalling US$1.2 Million in accordance with the payment schedule dated 22
November 1999. To ensure the prompt payment of this amount, it obtained defendant UCPB
General Insurance Co., Inc.s surety bond dated 3 December 1999, in favor of GILAT.

During the period between September 1999 and June 2000, GILAT shipped and delivered to One
Virtual the purchased products and equipment, as evidenced by airway bills/Bill of Lading. All of the
equipment (including the software components for which payment was secured by the surety bond,
was shipped by GILAT and duly received by One Virtual. Under an endorsement dated December
23, 1999, the surety issued, with One Virtuals conformity, an amendment to the surety bond, Annex
A thereof, correcting its expiry date from May 30, 2001 to July 30, 2001.

One Virtual failed to pay GILAT the amount of Four Hundred Thousand Dollars (US$400,000.00) on
the due date of May 30, 2000 in accordance with the payment schedule to the surety bond,
prompting GILAT to write the surety defendant UCPB on June 5, 2000, a demand letter for payment
of the said amount of US$400,000.00. No part of the amount set forth in this demand has been paid
to date by either One Virtual or defendant UCPB. One Virtual likewise failed to pay on the
succeeding payment installment date of 30 November 2000 of the surety bond, prompting GILAT to
send a second demand letter dated January 24, 2001, for the payment of the full amount of
US$1,200,000.00 guaranteed under the surety bond, plus interests and expenses and which letter
was received by the defendant surety on January 25, 2001. However, defendant UCPB failed to
settle the amount of US$1,200,000.00 or a part thereof, hence, the instant complaint.

On 24 April 2002, petitioner Gilat Satellite Networks, Ltd., filed a Complaint against respondent
UCPB General Insurance Co., Inc., to recover the amounts supposedly covered by the surety bond,
plus interests and expenses. After due hearing, the RTC rendered its Decision for the plaintiff.

On 18 October 2007, respondent appealed to the CA. The appellate dismissed the case for lack of
jurisdiction.

On 9 September 2008, petitioner filed a Motion for Reconsideration with Motion for Oral Argument.
The motion was denied for lack of merit in a Resolution issued by the CA on 16 September 2009.

ISSUES: 1. Whether or not the CA erred in dismissing the case and ordering petitioner and One
Virtual to arbitrate; and 2. Whether or not petitioner is entitled to legal interest due to the delay in the
fulfilment by respondent of its obligation under the Suretyship Agreement.

HELD:
CIVIL LAW: suretyship agreement

The existence of a suretyship agreement does not give the surety the right to intervene in the
principal contract, nor can an arbitration clause between the buyer and the seller be invoked by a
non-party such as the surety.

Petitioner alleges that arbitration laws mandate that no court can compel arbitration, unless a party
entitled to it applies for this relief. This referral, however, can only be demanded by one who is a
party to the arbitration agreement. Considering that neither petitioner nor One Virtual has asked for a
referral, there is no basis for the CAs order to arbitrate.

Moreover, Articles 1216 and 2047 of the Civil Code clearly provide that the creditor may proceed
against the surety without having first sued the principal debtor. Even the Surety Agreement itself
states that respondent becomes liable upon mere failure of the Principal to make such prompt
payment. Thus, petitioner should not be ordered to make a separate claim against One Virtual (via
arbitration) before proceeding against respondent.

On the other hand, respondent maintains that a surety contract is merely an accessory contract,
which cannot exist without a valid obligation. Thus, the surety may avail itself of all the defenses
available to the principal debtor and inherent in the debt that is, the right to invoke the arbitration
clause in the Purchase Agreement.

We agree with petitioner.

In suretyship, the oft-repeated rule is that a suretys liability is joint and solidary with that of the
principal debtor. This undertaking makes a surety agreement an ancillary contract, as it presupposes
the existence of a principal contract. Nevertheless, although the contract of a surety is in essence
secondary only to a valid principal obligation, its liability to the creditor or promise of the principal is
said to be direct, primary and absolute; in other words, a surety is directly and equally bound with the
principal. He becomes liable for the debt and duty of the principal obligor, even without possessing a
direct or personal interest in the obligations constituted by the latter. Thus, a surety is not entitled to
a separate notice of default or to the benefit of excussion. It may in fact be sued separately or
together with the principal debtor.

After a thorough examination of the pieces of evidence presented by both parties, the RTC found
that petitioner had delivered all the goods to One Virtual and installed them. Despite these
compliances, One Virtual still failed to pay its obligation, triggering respondents liability to petitioner
as the formers surety. In other words, the failure of One Virtual, as the principal debtor, to fulfill its
monetary obligation to petitioner gave the latter an immediate right to pursue respondent as the
surety.

Consequently, we cannot sustain respondents claim that the Purchase Agreement, being the
principal contract to which the Suretyship Agreement is accessory, must take precedence over
arbitration as the preferred mode of settling disputes.

First, we have held in Stronghold Insurance Co. Inc. v. Tokyu Construction Co. Ltd., that the
acceptance of a surety agreement, however, does not change in any material way the creditors
relationship with the principal debtor nor does it make the surety an active party to the principal
creditor-debtor relationship. In other words, the acceptance does not give the surety the right to
intervene in the principal contract. The suretys role arises only upon the debtors default, at which
time, it can be directly held liable by the creditor for payment as a solidary obligor. Hence, the surety
remains a stranger to the Purchase Agreement. We agree with petitioner that respondent cannot
invoke in its favor the arbitration clause in the Purchase Agreement, because it is not a party to that
contract. An arbitration agreement being contractual in nature, it is binding only on the parties
thereto, as well as their assigns and heirs.

Second, Section 24 of Republic Act No. 928542 is clear in stating that a referral to arbitration may
only take place if at least one party so requests not later than the pre-trial conference, or upon the
request of both parties thereafter. Respondent has not presented even an iota of evidence to show
that either petitioner or One Virtual submitted its contesting claim for arbitration.

Third, sureties do not insure the solvency of the debtor, but rather the debt itself. They are
contracted precisely to mitigate risks of nonperformance on the part of the obligor. This responsibility
necessarily places a surety on the same level as that of the principal debtor. The effect is that the
creditor is given the right to directly proceed against either principal debtor or surety. This is the
reason why excussion cannot be invoked. To require the creditor to proceed to arbitration would
render the very essence of suretyship nugatory and diminish its value in commerce. At any rate, as
we have held in Palmares v. Court of Appeals, if the surety is dissatisfied with the degree of activity
displayed by the creditor in the pursuit of his principal, he may pay the debt himself and become
subrogated to all the rights and remedies of the creditor.

CIVIL LAW: interest; delay

Interest, as a form of indemnity, may be awarded to a creditor for the delay incurred by a debtor in
the payment of the latters obligation, provided that the delay is inexcusable.

Anent the issue of interests, petitioner alleges that it deserves to be paid legal interest of 12% per
annum from the time of its first demand on respondent on 5 June 2000 or at most, from the second
demand on 24 January 2001 because of the latters delay in discharging its monetary obligation.
Citing Article 1169 of the Civil Code, petitioner insists that the delay started to run from the time it
demanded the fulfilment of respondents obligation under the suretyship contract. Significantly,
respondent does not contest this point, but instead argues that it is only liable for legal interest of 6%
per annum from the date of petitioners last demand on 24 January 2001.

In rejecting petitioners position, the RTC stated that interests may only accrue when the delay or the
refusal of a party to pay is without any justifiable cause. In this case, respondents failure to heed the
demand was due to the advice of One Virtual that petitioner allegedly breached its undertakings as
stated in the Purchase Agreement.49 The CA, however, made no pronouncement on this matter.

We sustain petitioner. Article 2209 of the Civil Code is clear: if an obligation consists in the payment
of a sum of money, and the debtor incurs a 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.

Delay arises from the time the obligee judicially or extrajudicially demands from the obligor the
performance of the obligation, and the latter fails to comply. Delay, as used in Article 1169, is
synonymous with default or mora, which means delay in the fulfilment of obligations. It is the
nonfulfillment of an obligation with respect to time.52 In order for the debtor (in this case, the surety)
to be in default, it is necessary that the following requisites be present: (1) that the obligation be
demandable and already liquidated; (2) that the debtor delays performance; and (3) that the creditor
requires the performance judicially or extrajudicially.

Having held that a surety upon demand fails to pay, it can be held liable for interest, even if in thus
paying, its liability becomes more than the principal obligation. The increased liability is not because
of the contract, but because of the default and the necessity of judicial collection.
However, for delay to merit interest, it must be inexcusable in nature.

In Guanio v. Makati-Shangri-la Hotel, citing RCPI v. Verchez, we held thus:

In culpa contractual the mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of
contracts, will not permit a party to be set free from liability for any kind of misperformance of the
contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers
upon the injured party a valid cause for recovering that which may have been lost or suffered. The
remedy serves to preserve the interests of the promissee that may include his expectation interest,
which is his interest in having the benefit of his bargain by being put in as good a position as he
would have been in had the contract been performed, or his reliance interest, which is his interest in
being reimbursed for loss caused by reliance on the contract by being put in as good a position as
he would have been in had the contract not been made; or his restitution interest, which is his
interest in having restored to him any benefit that he has conferred on the other party.

Indeed, agreements can accomplish little, either for their makers or for society, unless they are made
the basis for action. The effect of every infraction is to create a new duty, that is, to make
RECOMPENSE to the one who has been injured by the failure of another to observe his contractual
obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence
or of the attendance of fortuitous event, to excuse him from his ensuing liability.

We agree with petitioner that records are bereft of proof to show that respondents delay was indeed
justified by the circumstances that is, One Virtuals advice regarding petitioners alleged breach of
obligations. The lower courts Decision itself belied this contention when it said that plaintiff is not
disputing that it did not complete commissioning work on one of the two systems because One
Virtual at that time is already in default and has not paid GILAT. Assuming arguendo that the
commissioning work was not completed, respondent has no one to blame but its principal, One
Virtual; if only it had paid its obligation on time, petitioner would not have been forced to stop
operations. Moreover, the deposition of Mr. Erez Antebi, vice president of Gilat, repeatedly stated
that petitioner had delivered all equipment, including the licensed software; and that the equipment
had been installed and in fact, gone into operation.

Notwithstanding these compliances, respondent still failed to pay.

As to the issue of when interest must accrue, our Civil Code is explicit in stating that it accrues from
the time judicial or extrajudicial demand is made on the surety. This ruling is in accordance with the
provisions of Article 1169 of the Civil Code and of the settled rule that where there has been an
extra-judicial demand before an action for performance was filed, interest on the amount due begins
to run, not from the date of the filing of the complaint, but from the date of that extra-judicial demand.
Considering that respondent failed to pay its obligation on 30 May 2000 in accordance with the
Purchase Agreement, and that the extrajudicial demand of petitioner was sent on 5 June 2000, we
agree with the latter that interest must start to run from the time petitioner sent its first demand letter
(5 June 2000), because the obligation was already due and demandable at that time.

GRANTED.

13. Trade and Investment Devt. Vs., Asia Paces Corp