JOINT LIABILITY OF CARRIER AND ARRASTRE OPERATOR reasonably ascertained).

reasonably ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
EASTERN SHIPPING LINES, INC. vs. CA, GR. No. 97412, July 12, 1994

FACTS: Two fiber drums of riboflavin were shipped from Yokohama, Japan on board the vessel
owned by herein petitioner Eastern Shipping Lines. When it arrives in Manila, it was put unto the 3. When the judgment of the court awarding a sum of money becomes final and executory,
custody of Metro Port Service, Inc. The latter excepted to one drum which is said to be in bad order the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above,
and which damage was unknown to Eastern Shipping Lines. Later, Allied Brokerage Corporation shall be 12% per annum from such finality until its satisfaction, this interim period being
received the shipment from Metro Port Service, Inc. With one drum damaged, Allied Brokerage deemed to be by then an equivalent to a forbearance of credit.
Corporation made deliveries to the consignee's warehouse. The latter excepted to one drum that is
damaged. Eastern Shipping Lines averred that due to the one drum that is damaged and due to the ARRASTRE VS STEVEDORE
fault and negligence of Metro Port Service, Inc. and Allied Brokerage Corporation, the consignee
suffered losses. The two failed and refused to pay the claims for damages. Consequently, Eastern
Shipping Lines was compelled to pay the consignee being subrogated to all the rights of action of
said consignee against Metro Port Service, Inc. and Allied Brokerage Corporation. Trial ensued and
on appeal of the case, the appellate court affirmed the decision of the trial court ordering Metro Port
Service and Allied Brokerage to pay Eastern Shipping Lines, jointly and severally, the amount of
P19,032.95, with the present legal interest of 12% per annum from the date of filing of the complaints,
until fully paid. Metro Port Service and Allied Brokerage opposed especially as to the payment of
interest contending that the legal interest on an award for loss or damage should be 6% in view of
Article 2209 of the Civil Code.

ISSUE: Whether or not the payment of legal interest on an award for loss or damage is twelve
percent (12%) or six percent (6%).

HELD: Article 2209 of the New Civil Code provides that if the obligation consists in the payment of a
sum of money, and the debtor incurs in 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 six percent per annum. 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, 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 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