TIO CHE CHI VS CA DIGEST

0. Tio Khe Chio v. CA

GR No. 76101-02 September 30, 1991

Facts: 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%.

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

Held: 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 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 6% per annum.

The adjusted rate mentioned in the Circular No. 416, from which the CFI
based its decision, refers only to loans or forbearances 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.