EN BANC

[G.R. No. L-535. September 28, 1953.]

M. E. GREY, deceased, substituted by RUTH GREY , plaintiff and

appellant, vs . INSULAR LUMBER COMPANY , defendant-appellant.

Carlos Hilado and Jose V. Coruña for plaintiff and appellant.

Nolan & Manaloto and Ross, Selph, Carrascoso & Janda for
defendant and appellant.

SYLLABUS

1. APPEALS; RECONSTITUTION; WHERE APPEAL MAY BE DECIDED ALTHOUGH

RECONSTITUTION WAS INCOMPLETE. — The case was pending presentation of the
briefs when the war broke out and part of the records was lost. At the hearing had in
the lower court for the reconstitution of the missing exhibits, it turned out that, of the
906 exhibits introduced by defendant, only 18 were reconstituted, thereby leaving 888
exhibits unreconstituted. Defendant moved that the decision of the trial court be
declared without force and effect, reserving to plaintiff and defendant the right to
institute such action as they may deem proper in the premises. Held: Where the
ndings of fact of the lower court stand in the main undisputed, and the only things to
be reviewed are the conclusions drawn from those facts and the rulings made on the
different contentions of the parties, and the issues and questions raised by both parties
in their briefs may be passed upon without need of annulling the whole proceedings or
instituting a new action, the appellate court may proceed with the determination of the
issues raised in the appeal.
2. EMPLOYER AND EMPLOYEES; BONUS; CONTRACT THEREON. — As a general
rule, bonus is a voluntary act dependent upon the goodwill of the employer. But in this
case it ceased to be a unilateral act; it became contractual. Here it was clearly agreed
that bonus may be given to the employee provided that certain condition is met. There
is nothing in the contract to indicate that that bonus should be subject to approval by
the board of directors of the company. If the condition speci ed in the contract is met,
the obligation to pay the bonus cannot be eluded.
3. ID.; ONE MONTH EXTRA SALARY UPON SEPARATION. — The defendant
company disputes the allowance given by the lower court to the plaintiff for one month
extra salary upon his separation from the service. Held: In the rst place, while it is true
that there is no speci c claim in the complaint concerning this extra compensation,
such lack of specific claim is immaterial where the complaint contains a prayer for such
other relief as the court may deem just and equitable. In the second place, while under
article 300 of the Code of Commerce an employee may be separated for serious
disregard and lack of consideration to an employer, however, where the employee was
separated due to serious differences between him and the company on matters of
policy which are bound to arise in the management of a business so intricate and
complicated as the one in which the defendant corporation was engaged, or even
where he was separated from the service because of lack con dence, these are not a
su cient cause for depriving him of such extra compensation, there being no showing
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 that he had acted in bad faith or in a manner that would warrant his dismissal for cause.
4. ID; PRESCRIPTION OF ACTIONS; ADDITIONAL COMPENSATION FOR
ADDITIONAL POSITIONS TO WHICH THE EMPLOYEE WAS DESIGNATED. — Plaintiff
was the highest o cial of the defendant company in the Philippines. He has always
insisted on his right to receive additional compensation for new positions assigned to
him, for which he rendered additional services. He made his claim for additional
compensation, not with the management in Manila, but with his superior o cers in
America. The President of the defendant company promised him, in a cablegram
containing his dismissal, an equitable settlement of his claim. Defendant company
claims that his right of action to collect the additional compensation has already
prescribed for the reason that he allowed almost ten years to elapse before taking the
matter to court. Held: Considering as basis the promise of settlement made in writing,
plus his written designations to the said new positions, the right to claim the additional
compensation can only prescribe in ten years, and this period has not yet elapsed.
5. ID.; ID.; ACTION FOR REIMBURSEMENT FOR EXPENSES INCURRED BY
EMPLOYEE FOR HIS EMPLOYER. An action by an employee for reimbursement for
expenses he incurred for his employer prescribes in six years.

DECISION

BAUTISTA ANGELO , J : p

Plaintiff brought this action in the Court of First Instance of Negros Occidental to
recover from defendant certain amounts of money for services rendered to the latter
itemized as follows:
(a) For salary as lumber manufacturing expert,
bonus, and expenses incurred in the discharge
of his duties (first cause of action) P64,372.85
(b) For services rendered as General Superin-
tendent and expenses incurred in the
discharge of his duties (second cause of action) 7,785.80
(c) For services rendered as General Manager
and for expenses incurred in the discharge
of his duties (second cause of action) 133,972.91
(d) Amount deposited by plaintiff with defendant
(fourth cause of action) 1,000.00
(e) Cost of first-class steamer ticket from Fabrica,
Negros Occidental to, the United States
(fifth cause of action) 1,000.00
After trial, the court rendered judgment sentencing defendant to pay to plaintiff
the sum of P42,916.48 as follows:
(a) Salary for services as lumber manufacturing
expert, from February 16 to March 22, 1932 P4,999.82
(b) One month extra salary from March 23, to
April 22, 1932 4,166.66
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 (c) Additional compensation for services as General
Superintendent 1,500.00
(d) Additional compensation for services
as General 31,250.00
(e) Additional compensation for plaintiff's trip
to Pangil, Laguna 1,000.00
—————
P42,916.48
From this decision both parties have appealed. Defendant appealed in so far as
the decision orders defendant to pay plaintiff the sum of P42,916.48, with legal interest
thereon from the date of the ling of the complaint until paid, and to pay similar interest
on the sum of P22,800.68 from the date of the ling of the complaint until the date
plaintiff collected the sum of P20,567.60 from the clerk of court. Plaintiff appealed
from the decision in so far as it overruled his claim for the rest of the sums itemized in
the complaint.
It should be noted that the above decision was rendered on October 7, 1941, or
two months before the war broke out in the Philippines, and this notwithstanding,
plaintiff and defendant perfected their appeal to the Supreme Court. On June 19, 1946,
defendant led a petition with this court praying that the record of the case be returned
to the trial court in order that the missing exhibits may be reconstituted to enable
defendant to prepare its brief. This petition was granted but at the hearing had at the
lower court for the reconstitution of the missing exhibits, it turned out that, of the 906
exhibits introduced by defendant, only 18 were reconstituted, thereby leaving 888
exhibits unreconstituted. Considering that without these missing exhibits, which were
lost or destroyed during the war, it will not be possible for defendant to prepare its
brief, nor for the court to render a correct decision, invoking section 30, of Act 3110,
defendant, on January 5, 1951, moved this court that an order be entered declaring the
decision of the trial court rendered on October 7, 1941 without force and effect,
reserving to plaintiff and defendant the right to institute such action as they may deem
proper in the premises. This motion was denied without prejudice to considering the
matter when the case is decided on the merits.
We have carefully gone over the record of the case and examined the issues and
questions raised by both parties in their respective briefs in connection with the
ndings made by the lower court in its decision, and we have come to the conclusion
that said issues and questions may now be passed upon without need of annulling the
whole proceedings, or instituting a new action, as suggested by defendant, because we
have found that the ndings of fact of the lower court stand in the main undisputed, the
only things to be reviewed being the conclusion drawn from those facts and the rulings
made on the different contentions of the parties. As a matter of fact, most of the facts
and gures on which a divergence of opinion has arisen, and as to which a ruling is
expected from this court, are not now controverted, as they appear well explained and
discussed in the briefs of both parties. We have therefore decided to proceed with the
determination of the issues raised in this appeal.
On September 14, 1928, plaintiff, a consultant engineer in lumber business, and
A. E. Edgcomb, President of the defendant corporation, entered into a contract of
employment the terms of which are contained in two letters marked Exhibits A and B.
These letters are quoted hereunder for ready reference:
"Philadelphia
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 Sept. 14, 1928
Mr. M. E. GREY
Franklinville, N. J.
Dear Mr. Grey:
This is to con rm my understanding of our agreement. Mr. Welhaven
wanted me to get him a man who was capable of taking full charge of the
manufacturing of our lumber, and you have agreed to accept this position at a
salary of $10,000 per year, which is to start as soon as you arrive at the mill. In
addition to this, you are to receive a bonus the same as the other Americans on
our staff when the Insular pays dividends.
The INSULAR LUMBER COMPANY also agrees to pay all of your expenses
from here to the mill, and to furnish you and your wife a house in which to live,
but they are not to pay your wife's expenses from here to the mill.
While I have been showing you what our trade here wants, and giving you
come of my ideas as to the best way to get this, yet I want it' clearly understood
that when you get to our mill you will be subject to the orders of Mr. Alf Welhaven,
our General Manager and Mr. F. S. Baker, our General Superintendent. I also
understand that you will give them the bene t to our experience in any other line
which would be of benefit to our Company.
I am enclosing herewith an extra copy of this letter.
If the above is according to your understanding, please sign one copy and
return same to me.
Very truly yours,
(Sgd.) A. E. EDGCOMB
President
The above is in accordance with my understanding.
(Sgd.) M. E. GREY."
(Plaintiff's Exhibit A)
"Philadelphia
Sept. 14, 1928
Mr. M. E. GREY
Franklinville, N. J.
Dear Mr. Grey:
Supplementing my letters of this date to you, this is to con rm my
understanding of our supplemental arrangement.
In addition to the $10,000.00 salary and bonus referred to in my letters of
this date, you are to receive P15,000.00 plus the bonus at the end of the year,
provided that, in the opinion of the President of the Company, your services have
benefited the Company to the extent of $100,000.00.
The basis of determining the bene t of your services to the Company will
be largely.
1. The reduction of the cost per M feet in the production of the lumber.
2. Increased percentages of the high grades.
3. Better manufacturing, handling and care of the lumber preparatory to
shipment.
4. The bene t to the Company in the changes and installation of
machinery.
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 5. The general schooling of and bene t to the men in the way of educating
them to produce better lumber, and at lower cost.
6. Any other additional bene ts which are self evident as a result of your
efforts.
Very truly yours,
(Sgd.)A. E. EDGCOMB
President
The above is in accordance with my understanding.
(Sgd.) M. E. GREY."
(Plaintiff's Exhibit B)
Pursuant to the terms of the contract of employment contained in the above
quoted letters, plaintiff came to Fabrica, Negros Occidental, on October 28, 1928, and
assumed his duties as lumber manufacturing expert. On August 3, 1929, in addition to
his original employment, he was designated general superintendent, and on October 1,
1929, he was made general manager to take the place of Alf Welhaven, resigned, and
due to some disagreement with the president of the defendant, A. E Edgcomb, he was
dismissed on March 22, 1932. On October 30, 1939, he instituted the present action,
and on October 7, 1941, the court decided the case as pointed out in the early part of
this decision.
First Assignment of Error
Two of the items disputed by plaintiff-appellant in this assignment of error are
(1) the amount of P273.97 representing unpaid salary corresponding to October 28
and 29, 1928 which, it is claimed, was not credited to plaintiff, and (2) the additional
bonus of P10,000 based on the 20 per cent dividend declared on October 25, 1930.
Plaintiff claims that he began working for defendant on October 28, 1928 and yet the
books of the corporation show that he has been credited for his salary only from
October 30, 1928 to February 15, 1932 on the basis of an annual salary or of P50,000
as agreed upon. This is disputed by counsel for defendant who contends that,
according to accountant A. G. Leukart, plaintiff was credited with the salary of P161.29
corresponding to October 29, 30 and 31, 1928 on the basis of his salary of P20,000 a
year, but after considering these con icting claims in the light of the contract of
employment, we nd that the claim of plaintiff is more tenable because it cannot be
disputed that he is entitled to be paid from October 28 on the basis of his salary of
P50,000 a year. Plaintiff, therefore, should be credited with this additional salary of
P273.97.
The contention of plaintiff regarding the additional bonus of P10,000 seems also
to be well taken. In the rst place, this is apparent from the contract of employment
embodied in the letters Exhibits A and B. Thus, in the supplementary letter Exhibit B, the
following stipulation appears: "In addition to the $10,000 salary and bonus referred to
in my letter of this date, you are to receive $15,000 plus the bonus at the end of the
year, provided that, in the opinion of the President of the Company, your services have
bene ted the Company to the extent of $100,000." In the foregoing stipulation it
appears clear that the company agreed to pay plaintiff a bonus at the end of every year
of service subject only to the condition that his services should bring to the company a
pro t of not less than $100,000. This seems to be the only condition for the granting of
the bonus. Indeed, this condition is reasonable enough for, if that pro t is not obtained,
or even if obtained but not through his services, plaintiff would have no right to the
bonus stipulated. It is true that in the letter Exhibit A, in referring to the payment of
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 bonus, the following sentence also appears, "you are to receive a bonus the same as the
other Americans on our staff when the insular pays dividend." But, as explained by
plaintiff, that sentence only meant that the bonus should be computed in the manner
the bonus given to other Americans is computed but not that its payment should be
dependent upon the giving of bonus to other American employees.
We nd that explanation reasonable considering the peculiar nature of the
contract of employment of the plaintiff with the company. For one thing, bonus is a
voluntary act dependent upon the goodwill of the employer. Here it ceased to be a
unilateral act. It became contractual. Here it was clearly agreed that bonus may be
given to plaintiff provided that certain condition is met and if this condition is met the
obligation to pay the bonus cannot be eluded. It does not appear that a similar
condition was imposed upon other American employees, and there being no such
showing, it is unfair to place plaintiff under a similar predicament more so when the
condition imposed refers to the special service to be rendered by the plaintiff.
Considering that plaintiff has rendered this service and has given to the company the
pro t expected of him, it is fair and just that he be given the bonus to which he is
entitled under the contract.
The contention that the executive committee of the board of directors of the
defendant corporation never authorized the payment of such bonus on the special
dividend of 20 per cent declared on October 25, 1930, cannot defeat this claim of the
plaintiff considering that this is a special feature of the contract of employment entered
into between plaintiff and defendant. There is nothing in that contract to indicate that
that bonus should be subject to approval by the board of directors.
The contention that this bonus should not be paid because the dividend that was
distributed was based on the proceeds of the use and occupation insurance and not on
ordinary pro ts realized by the company, is also of no moment, for it cannot be
disputed that because of that insurance the company was able to save its surplus
which was ample enough to warrant the distribution of dividends to its stockholders.
This is borne out by the letter of the company to its stockholders dated October 25,
1930.
Another claim of plaintiff under this assignment of error refers to certain
erroneous and unjusti able deductions or charges made by defendant from plaintiff's
salary as lumber manufacturing expert. These deductions amount to P12,173.62 and
are itemized on pages 32 and 33 of the brief of plaintiff-appellant.
In this connection, the following observation should be made. It appears that
defendant had from the very beginning followed the practice of not paying actually to
the American employees their salaries and other allowances that may be due them at
the end of every month, but of allowing them to draw so much money that they may
need for their expenses during the month provided that the amounts drawn be not be
more than the amounts credited to them, and that at the end of every month these
American employees were furnished written statements showing the status of their
account with the company. And in these statements are shown not only the amount of
salary that is credited to them but also the charges or deductions that are made from
their account for their information and veri cation. It is also a practice followed by the
company that every time these statements are submitted to said American employees
they are required to verify them and, if agreeable, to sign them as a sign of their
conformity. The evidence shows that during the period plaintiff has been in the employ
of defendant, this practice has been followed and plaintiff has always signed those
statements without any complaint or objection on his part. Plaintiff was separated
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 from the service on March 22, 1932 and he only led the present action on October 30,
1939. This shows that he kept silent for over seven years, if not more, for he has never
been heard of to complain about these alleged erroneous charges until he brought the
matter to court. It is for this reason that defendant disputes now this claim not only on
the ground of estoppel but because the action, if any, to press this claim has already
prescribed.
In the light of the practice followed by the company as above outlined, we are
inclined to sustain this objection of defendant. The very document submitted by
plaintiff shows that the alleged erroneous charges were made by defendant during the
years 1929, 1930, 1931 and some in the month of March, 1933. Plaintiff had six years
within which to ask for reimbursement for these charges from defendant through court
proceedings, but he did so only on October 30, 1939, or more than seven years after his
right of action had accrued. The contention of plaintiff that the period of limitation that
should apply to his claim is 10 years because his right of action for the recovery of said
charges is based on his contract of employment as well as on the cablegram dated
March 21, 1932 sent by the President of the defendant company, cannot be entertained
not only because there is nothing in said documents which may in any way refer to
reimbursement of charges but because such claim has been raised by plaintiff for the
rst time in this appeal. In the lower court the theory he entertained was that the liability
of defendant for reimbursement was statutory. He cannot be allowed to change that
theory now in this stage of the proceedings.
On the other hand, defendant disputes the allowance given by the lower court to
plaintiff for one month extra salary in the sum of P4,166.66 on the following grounds:
(1) Plaintiff did not claim for it in his complaint; (2) plaintiff was dismissed from the
service because of a gesture of de ance and insubordination he evinced in his letter to
the president of the defendant which the latter could not countenance; (3) he was
separated because the company lost con dence in him; and (4) the action of plaintiff
has prescribed.
There is no legal basis for this contention of defendant. In the rst place, while it
is true that there is no speci c claim in the complaint concerning this extra
compensation, such lack of speci c claim is immaterial considering that the complaint
contains a prayer for such other relief as the court may deem just and equitable. In the
second place, while under article 300 of the Code of Commerce an employee may be
separated for serious disregard and lack of consideration to an employer, however, it
appears that plaintiff was separated due to serious differences between him and the
company on matters of policy which are bound to arise in the management of a
business so intricate and complicated as the one in which the defendant corporation
was engaged. In the third place, even granting that plaintiff was separated from the
service because of lack of con dence, such is not a su cient cause for depriving him
of this extra compensation, there being no showing that he had acted in bad faith, or in
a manner that would warrant his dismissal for cause. Lastly, the claim of plaintiff for
such extra compensation is germane to his contract of employment which, in this case,
is written, and as such the period of prescription that should be considered is ten years.
The lower court, therefore, did not err in granting plaintiff an extra compensation under
article 300 of the Code of Commerce.
Second and Third Assignments of Error
In the second assignment of error, plaintiff-appellant contends that in the latter
part of the month of July, 1929, F. S. Baker and M. R. Arick, General Superintendent and
Woods Superintendent, respectively, of the defendant company were dismissed; that
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 plaintiff was subsequently appointed General Superintendent; that plaintiff also took
over the work of the Woods Superintendent; that at the time of their dismissal, Baker
and Arick were receiving a salary of P1,500 and P1,100 per month, respectively, and
that taking into consideration the salaries of Baker and Arick, plaintiff should be given
an additional compensation of P1,600 a month, without bonus.
The record, however, shows that plaintiff did not actually render service as
Woods Superintendent because this position was abolished by plaintiff himself on May
31, 1929. His order abolishing this position is contained in Exhibit 6-A. We will therefore
omit any reference to this position in our discussion of this matter.
In connection with the third assignment of error, plaintiff also contends that
subsequent to his appointment as General Superintendent he was also appointed
General Manager to take the place of Alf Welhaven, who resigned; that the salary of
Welhaven was P80,000 a year, plus bonus and reimbursement for expenses incurred by
him; that Welhaven did not devote his whole time to his duties as General Manager
because he was at the same time the manager of a mining company from which he was
also drawing a salary; and that considering the nature and extent of the service
rendered by plaintiff as General Manager, he was entitled to an additional monthly
compensation of P4,000, without bonus. Plaintiff, however, admits that there is no
previous agreement between him and the defendant as to the amount of compensation
to be paid to him when he temporarily assumed the duties and responsibilities of the
additional positions for which reason, he avers, he can only claim for such
compensation as his services may warrant.
Counsel for defendant, on his part, objects to this claim on the ground of
estoppel and prescription. With regard to the rst ground, defendant contends that
plaintiff assumed the additional positions without claiming for any extra compensation
and that in the monthly statements that were given to him showing the status of his
account he never objected to any of said statements even if the same only showed the
salary that was paid him in his original capacity as a lumber manufacturing expert. It is
contended that his failure to object to the non-payment to him of additional
compensation operates as estoppel on his part to claim for such compensation. And in
connection with the second objection, it is claimed that his right of action to collect has
already prescribed for the reason that he allowed almost 10 years to elapse before
taking the matter to court.
We nd no merit in the argument that plaintiff is in estoppel in claiming additional
compensation for the new positions for the simple reason that, contrary to the claim of
defendant, plaintiff did not remain silent on this matter during the period he rendered
the additional services. The evidence shows that plaintiff had always insisted on his
right to receive additional compensation, not of course with the management in Manila,
which was under his jurisdiction while acting as General Manager, but with his superior
o cers in America. It was to them that plaintiff had submitted his claim for additional
compensation and for which he was promised an equitable settlement by the
defendant through its President, A. E. Edgcomb. Being then the highest o cial of the
company in the Philippines he could not be bound by his failure to object to whatever
de ciency may be found in the o cial statements given to him at the end of every
months for after all, such matter has to be acted upon by the superior o cers of the
company who were then in America. His failure therefore to make such a claim in the
Philippines cannot be interpreted as a estoppel on his part to claim for such additional
compensation.
We can make the same consideration with regard to the defense of prescription.
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 It appears that the defendant company through its President Edgcomb had promised
to make equitable settlement of his claim for additional compensation, which promise
was contained in a cablegram sent by Edgcomb to the plaintiff in the order containing
his dismissal. Considering this promise in writing as basis, plus his written
designations, we believe that the right to claim this additional compensation can only
prescribe in 10 years and this period has not yet elapsed.
As to the worth of these extra services of plaintiff, we can do no better than to
refer to the decision of the lower court. On this matter, the lower court has made a
painstaking and conscientious discussion of the nature of the duties rendered by the
plaintiff and the di culties he had undergone during his incumbency especially
because of the re that had occurred on April 15, 1930 which burned down the mill and
other buildings of the company. We have taken notice of these observations to help us
determine whether plaintiff is entitled to this additional compensation and if so, the
worth of his services and the compensation he should be given. These observations
were made after a conscientious study of the nancial condition of the company during
the years 1929, 1930, 1931 and 1932 and the vicissitudes it had gone through during
that period. They include an appraisal of the work done by plaintiff not only in his
capacity as lumber manufacturing expert but also in the double capacity he assumed
as General Superintendent and General Manager of the company, and after a thorough
study of the whole situation the court reached the conclusion that plaintiff was entitled
to a reasonable compensation. We fully subscribe to its findings on this matter.
Fourth Assignment of Error
In the fourth assignment of error, plaintiff-appellant tries to collect from
defendant the amounts of P8,138.98, P14,532.92 and P12,658.98 by way of
reimbursement for money allegedly advanced by him for the business of defendant.
These amounts are itemized in the bill of particulars submitted by plaintiff to the court
upon request of defendant. With few exceptions these items are covered by their
corresponding vouchers. Plaintiff testi ed that he had disbursed this money for the
benefit of the company but he has never been reimbursed therefor.
While these disbursements are not now disputed, the propriety of their collection
is questioned by the defendant. Counsel contends that plaintiff can no longer recover
them because his right of action has already prescribed. Considering the evidence
submitted by plaintiff, it appears that the alleged disbursements were incurred by
plaintiff from November, 1928 to April 3, 1932, and if plaintiff was entitled to
reimbursement he would have brought the action for the recovery of expenses incurred
in 1928, not later than the year 1934; the action to recover the expenses incurred in
1929, not later than the year 1935; the action to recover the expenses incurred in 1930,
not later than the year 1936; and the action for expenses incurred in 1932, not later than
April 3, 1938. Plaintiff's complaint, however, was led on October 30, 1939, or more
than six years after the cause of action had accrued. We nd this contention tenable
considering that under the law an action of this nature prescribes in six years.
Defendant also objects to the collection of these accounts on another ground.
According to witnesses Pope and Leukart, both of defendant corporation, plaintiff
would have been paid all the items of expenses asked for by him in the present case if
he had only claimed for them while he was yet the General Manager of the company.
This testimony is very signi cant. It shows that the defendant has never refused to
reimburse to plaintiff all the money he has spent for its bene t. This shows its good
faith. In fact, occasions there were when plaintiff, while still the General Manager of the
company, sought reimbursement for disbursements made by him by giving appropriate
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 instructions to that effect to its accounting department and that office readily made the
reimbursement. On this score, the record shows that he was reimbursed by the
company expenses totalling the sum of P6,483.73. Again, from March 28 to April 27,
1932, shortly after his separation, he submitted a list of expenses totalling P13,351.24
and again that amount was reimbursed to him. And these amounts were reimbursed
because the company found that they were incurred for its bene t. Indeed, if plaintiff
really spent for the bene t of the company the sums that he now seeks to recover, why
did he not claim reimbursement therefor while he was still the General Manager of the
company and had waited for over seven years before bringing action for their recovery?
At any rate, even if said expenses be considered legitimate, plaintiff's right to collect is
now barred because of his failure to le the action within the period prescribed by the
statute of limitations.
Fifth Assignment of Error
The remaining question to be determined refers to the rate of interest that
should be charged against the defendant on the various sums of money awarded to
plaintiff. The latter claims that it should be 9 per cent because, according to him,
sometime in 1931, to minimize the loan of the defendant to a local bank as far as
possible and to encourage its employees to leave their salaries with the company, the
latter agreed to pay 9 per cent interest on money deposited by its employees in their
savings or current accounts, which was the same rate of interest the defendant was
paying the bank for its loan. But counsel for the defendant has successfully disproved
this contention by showing that, if there was ever such a proffer on the part of the
company, that was made by plaintiff himself who, as General Manager, issued on
November 28, 1931, a circular stating that as of November 1, 1931 all money placed in
the savings account by the employees which will not be withdrawn for a period of one
year will earn interest at the rate of 9 per cent. But, as it should be noted, the privilege
only refers to money deposited as savings account and not as current account as is the
case of the plaintiff. It is true that in December, 1931, twenty- ve employees of the
defendant were paid a sum equivalent to 9 per cent interest on the money left by them
with the company for one year, but such payment was made only as a Christmas gift
upon instructions given by plaintiff himself. Aside from that circular, defendant never
pursued any policy of paying on any money deposited with it by its employees an
interest of 9 per cent, as claimed.
With regard to the claim that the lower court erred in sentencing the defendant to
pay interest at the rate of 6 per cent per annum on all sums awarded to plaintiff, we nd
that the contention is well founded in so far as the sum of P22,800.68 is concerned, for
defendant has always been willing to pay said amount to plaintiff upon demand, but not
so with regard to other items awarded to plaintiff. We are of the opinion that said sum
of P22,800.68 should not pay interest because the same was paid to plaintiff
immediately after demand thereof has been made, but the rest of the decision with
regard to the rate of interest should be respected.
Conclusion
In resume, we wish to state that, with the exception of the sums of P273.97 and
P10,000 which should be awarded to the plaintiff under his rst assignment of error,
and the elimination of the interest charged on the sum of P22,800.68 covered by the
fth assignment of error, the decision of the lower court should be a rmed in all other
respects.
Wherefore, with the modi cation in the sense indicated in the preceding
paragraph, the judgment appealed from is a rmed, without pronouncement as to
CD Technologies Asia, Inc. 2018 cdasiaonline.com
 costs.
Paras, C.J., Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo and
Labrador, JJ., concur.

CD Technologies Asia, Inc. 2018 cdasiaonline.com