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Reformina vs. Tomol Digest

Petitioners suffered losses from a fire and claimed insurance. When the insurance was not paid, petitioners argued they were owed 12% annual interest per the Central Bank Circular. However, the court ruled that absent a stipulation, the legal interest rate under Article 2209 is 6% annually. The Central Bank Circular setting 12% interest applies only to loans and debts under the Usury Law, not to insurance claims. Therefore, petitioners were not entitled to 12% interest for the unpaid insurance, but only the 6% legal interest rate.

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361 views1 page

Reformina vs. Tomol Digest

Petitioners suffered losses from a fire and claimed insurance. When the insurance was not paid, petitioners argued they were owed 12% annual interest per the Central Bank Circular. However, the court ruled that absent a stipulation, the legal interest rate under Article 2209 is 6% annually. The Central Bank Circular setting 12% interest applies only to loans and debts under the Usury Law, not to insurance claims. Therefore, petitioners were not entitled to 12% interest for the unpaid insurance, but only the 6% legal interest rate.

Uploaded by

Dany
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Tickler: Legal interest of 6 per cent per annum

PACITA F. REFORMINA vs. HON VALERIANO TOMOL

GR NO. L-59096 October 11, 1985

Doctrine: If the obligation consists in the payment 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.

Facts:

Petitioners suffered as a result of fire and claim its insurance. Article 2209 provides for the payment of
interest, in the absence of stipulation, the legal interest should be 6% per annum. Petitioner contends
that they should have 12% per annum as provided in the CENTRAL bank Circular No. 416. Respondents
argued that such provision is applicable to section 1 of Act No. 2665 which deals about loans,
forbearances of money, good or credits, and rate allowed in judgment.

Issue: WON Petitioner can have the 12% interest per annum.

Ruling:

No.

Article 2209 remains untouched despite the grant of authority to the CENTRAL Bank Act No. 2655. To
make the CENTRAL bank Circular No. 416 applicable to any case other than those specifically provided
for by the Usury Law will make the same of doubtful constitutionality since the Monetary Board will be
exercising legislative functions which was beyond the investment of P.D. No. 116.

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