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    Rodolfo M. Morelos For Petitioner. Ferrer, Mariano, Sangalang & Gatdula For Private Respondent

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    Ana Adolfo
    1. This case concerns the legal interest rate that should apply to an unpaid insurance claim for damaged goods. The petitioner argued it should be 12% under the Insurance Code, while the respondent insurance company argued it should be 6% under the Civil Code. 2. The Court of Appeals ruled that the legal interest rate is 6% annually in accordance with Article 1965 of the Civil Code, as there was no finding that the refusal to pay was unreasonable. 3. The Supreme Court affirms and denies the petition, finding that the higher interest rates under the Usury Law do not apply here as this case involves damages, not a loan. The applicable law is the Civil Code which sets the legal interest rate at 6%

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    Rodolfo M. Morelos For Petitioner. Ferrer, Mariano, Sangalang & Gatdula For Private Respondent

    Uploaded by

    Ana Adolfo
    94 views3 pages
    1. This case concerns the legal interest rate that should apply to an unpaid insurance claim for damaged goods. The petitioner argued it should be 12% under the Insurance Code, while the respondent insurance company argued it should be 6% under the Civil Code. 2. The Court of Appeals ruled that the legal interest rate is 6% annually in accordance with Article 1965 of the Civil Code, as there was no finding that the refusal to pay was unreasonable. 3. The Supreme Court affirms and denies the petition, finding that the higher interest rates under the Usury Law do not apply here as this case involves damages, not a loan. The applicable law is the Civil Code which sets the legal interest rate at 6%

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    TIO KHE CHIO VS CA

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    1. This case concerns the legal interest rate that should apply to an unpaid insurance claim for damaged goods. The petitioner argued it should be 12% under the Insurance Code, while the respondent insurance company argued it should be 6% under the Civil Code. 2. The Court of Appeals ruled that the legal interest rate is 6% annually in accordance with Article 1965 of the Civil Code, as there was no finding that the refusal to pay was unreasonable. 3. The Supreme Court affirms and denies the petition, finding that the higher interest rates under the Usury Law do not apply here as this case involves damages, not a loan. The applicable law is the Civil Code which sets the legal interest rate at 6%

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    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    94 views3 pages

    Rodolfo M. Morelos For Petitioner. Ferrer, Mariano, Sangalang & Gatdula For Private Respondent

    Uploaded by

    Ana Adolfo
    1. This case concerns the legal interest rate that should apply to an unpaid insurance claim for damaged goods. The petitioner argued it should be 12% under the Insurance Code, while the respondent insurance company argued it should be 6% under the Civil Code. 2. The Court of Appeals ruled that the legal interest rate is 6% annually in accordance with Article 1965 of the Civil Code, as there was no finding that the refusal to pay was unreasonable. 3. The Supreme Court affirms and denies the petition, finding that the higher interest rates under the Usury Law do not apply here as this case involves damages, not a loan. The applicable law is the Civil Code which sets the legal interest rate at 6%

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    of 3

    Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. !

    "#"$#% Septe&be' (#) "**" TIO +HE CHIO) petitione') ,s. THE HONOR-./E COURT O0 -PPE-/S an1 E-STERN -SSUR-NCE -ND SURET2 CORPOR-TION)'espon1ents. Rodolfo M. Morelos for petitioner. Ferrer, Mariano, Sangalang & Gatdula for private respondent. 0ERN-N) C.J.:p The issue in this petition fo' certiorari an1 p'ohibition is the le3al 'ate of inte'est to be i&pose1 in actions fo' 1a&a3es a'isin3 f'o& unpai1 insu'ance clai&s. Petitione' Tio +he Chio clai&s that it shoul1 be t4el,e 5"%67 pe' cent pu'suant to -'ticles %8( an1 %88 of the Insu'ance Co1e 4hile p'i,ate 'espon1ent Easte'n -ssu'ance an1 Su'et9 Co'po'ation 5E-SCO7 clai&s that it shoul1 be si: 5!67 pe' cent un1e' -'ticle %%#* of the Ci,il Co1e. The facts a'e as follo4s; On Dece&be' "<) "* <) petitione' Tio +he Chio i&po'te1 one thousan1 5")###7 ba3s of fish&eal ,alue1 at =(!)###.(# f'o& -3'o I&pe:) U.S.-. Dallas) Te:as) U.S.-. The 3oo1s 4e'e insu'e1 4ith 'espon1ent E-SCO an1 shippe1 on boa'1 the M>V Pes?o,) a ,essel o4ne1 b9 0a' Easte'n Shippin3 Co&pan9. @hen the 3oo1s 'eache1 Manila on Aanua'9 %<) "* *) the9 4e'e foun1 to ha,e been 1a&a3e1 b9 sea 4ate' 4hich 'en1e'e1 the fish&eal useless. Petitione' file1 a clai& 4ith E-SCO an1 0a' Easte'n Shippin3. .oth 'efuse1 to pa9. @he'eupon) petitione' sue1 the& befo'e the then Cou't of 0i'st Instance of Cebu) .'anch II fo' 1a&a3es. E-SCO) as the insu'e') file1 a counte'clai& a3ainst the petitione' fo' the 'eco,e'9 of P"<)(< .<! 'ep'esentin3 the unpai1 insu'ance p'e&iu&s. On Aune (#) "*<%) the t'ial cou't 'en1e'e1 Bu13&ent o'1e'in3 E-SCO an1 0a' Easte'n Shippin3 to pa9 petitione' soli1a'il9 the su& of P"#C)*<!.!< less the a&ount of P"<)(< .<! fo' unpai1 p'e&iu&s 4ith inte'est at the le3al 'ate f'o& the filin3 of the co&plaint) the su& of P"C)###.## as atto'ne9Ds fees an1 the costs. " The Bu13&ent beca&e final as to E-SCO but the shippin3 co&pan9 appeale1 to the Cou't of -ppeals an1 4as absol,e1 f'o& liabilit9 b9 the sai1 cou't in -C$G.R. No. ##"!") entitle1 "Tio K e C io vs. !astern "ssurance and Suret# Corporation." The t'ial cou't) upon &otion b9 petitione') issue1 a 4'it of e:ecution a3ainst E-SCO. The she'iff enfo'cin3 the 4'it 'epo'te1l9 fi:e1 the le3al 'ate of inte'est at t4el,e 5"%67. Respon1ent E-SCO &o,e1 to Euash the 4'it alle3in3 that the le3al inte'est to be co&pute1 shoul1 be si: 5!67 pe' cent pe' annu& in acco'1ance 4ith -'ticle %%#* of the Ci,il Co1e an1 not t4el,e 5"%67 pe' cent as insiste1 upon b9 petitione'Ds counsel. In its o'1e' of Aul9 (#) "*<!) the t'ial cou't 1enie1 E-SCODs &otion. E-SCO then file1 a petition fo' ce'tio'a'i an1 p'ohibition befo'e the Cou't of -ppeals. On Aul9 (#) "*<!) the -ppellate Cou't 'en1e'e1 the assaile1 Bu13&ent) the 1ispositi,e pa't of 4hich states; @HERE0ORE) the o'1e' 1ate1 Aul9 (#) "*<! is he'eb9 SET -SIDE in so fa' as it fi:es the inte'est at "%6 on the p'incipal a&ount of P< )C*<.<% f'o& the 1ate of filin3 of the co&plaint until the full pa9&ent of the a&ount) an1

    the inte'est that the p'i,ate 'espon1ent is entitle1 to collect f'o& the petitione' is he'eb9 'e1uce1 to !6 pe' annu&. No p'onounce&ent as to costs. % In 1isputin3 the afo'esai1 1ecision of the Cou't of -ppeals) petitione' &aintains that not onl9 is it unBust an1 unfai' but it is also cont'a'9 to the co''ect inte'p'etation of the fi:in3 of inte'est 'ates un1e' Sections %8( an1 %88 of the Insu'ance Co1e. -n1 since petitione'Ds clai&s is base1 on an insu'ance cont'act) then it is the Insu'ance Co1e 4hich &ust 3o,e'n an1 not the Ci,il Co1e. @e 'ule fo' 'espon1ent E-SCO. The le3al 'ate of inte'est in the case at ba' is si: 5!67 pe' annu& as co''ectl9 hel1 b9 the -ppellate Cou't. Section %8( of the Insu'ance Co1e p'o,i1es; The a&ount of an9 loss o' 1a&a3e fo' 4hich an insu'e' &a9 be liable) un1e' an9 polic9 othe' than life insu'ance polic9) shall be pai1 4ithin thi't9 1a9s afte' p'oof of loss is 'ecei,e1 b9 the insu'e' an1 asce'tain&ent of the loss o' 1a&a3e is &a1e eithe' b9 a3'ee&ent bet4een the insu'e1 an1 the insu'e' o' b9 a'bit'ationF but if such asce'tain&ent is not ha1 o' &a1e 4ithin si:t9 1a9s afte' such 'eceipt b9 the insu'e' of the p'oof of loss) then the loss o' 1a&a3e shall be pai1 4ithin ninet9 1a9s afte' such 'eceipt. Refusal o' failu'e to pa9 the loss o' 1a&a3e 4ithin the ti&e p'esc'ibe1 he'ein 4ill entitle the assu'e1 to collect inte'est on the p'ocee1s of the polic9 fo' the 1u'ation of the 1ela9 at the 'ate of t4ice the ceilin3 p'esc'ibe1 b9 the Moneta'9 .oa'1) unless such failu'e o' 'efusal to pa9 is base1 on the 3'oun1 that the clai& is f'au1ulent. Section %88 of the afo'e&entione1 Co1e also p'o,i1es; In case of an9 liti3ation fo' the enfo'ce&ent of an9 polic9 o' cont'act of insu'ance) it shall be the 1ut9 of the Co&&issione' o' the Cou't) as the case &a9 be) to &a?e a fin1in3 as to 4hethe' the pa9&ent of the clai& of the insu'e1 has been un'easonabl9 1enie1 o' 4ithhel1F an1 in the affi'&ati,e case) the insu'ance co&pan9 shall be a1Bu13e1 to pa9 1a&a3es 4hich shall consist of atto'ne9Ds fees an1 othe' e:penses incu''e1 b9 the insu'e1 pe'son b9 'eason of such un1eniable 1enial o' 4ithhol1in3 of pa9&ent plus inte'est of t4ice the ceilin3 p'esc'ibe1 b9 the Moneta'9 .oa'1 of the a&ount of the clai& 1ue the insu'e1) f'o& the 1ate follo4in3 the ti&e p'esc'ibe1 in section t4o hun1'e1 fo't9$t4o o' in section t4o hun1'e1 fo't9$th'ee) as the case &a9 be) until the clai& is full9 satisfie1F P'o,i1e1) That the failu'e to pa9 an9 such clai& 4ithin the ti&e p'esc'ibe1 in sai1 sections shall be consi1e'e1 p'i&a facie e,i1ence of un'easonable 1ela9 in pa9&ent. In the case at ba') the Cou't of -ppeals &a1e no fin1in3 that the'e 4as an unBustifie1 'efusal o' 4ithhol1in3 of pa9&ent on petitione'Ds clai&. In fact) 'espon1ent cou't ha1 this to sa9 on E-SCODs 'efusal to settle the clai& of petitione'; ... E-SCODs 'efusal to settle the clai& to Tio +he Chio 4as base1 on so&e 3'oun1 4hich) 4hile not sufficient to f'ee it f'o& liabilit9 un1e' its polic9) ne,e'theless is sufficient to ne3ate an9 asse'tion that in 'efusin3 to pa9) it acte1 unBustifiabl9. ::: ::: ::: The case pose1 so&e 3enuine issues of inte'p'etation of the te'&s of the polic9 as to 4hich pe'sons &a9 honestl9 1iffe'. This is the 'eason the t'ial cou't 1i1 not sa9 E-SCODs 'efusal 4as unBustifie1. ( Si&pl9 put) the afo'ecite1 sections of the Insu'ance Co1e a'e not pe'tinent to the instant case. The9 appl9 onl9 4hen the cou't fin1s an un'easonable 1ela9 o' 'efusal in the pa9&ent of the clai&s. Neithe' 1oes Ci'cula' No. 8"! of the Cent'al .an? 4hich too? effect on Aul9 %*) "* 8 pu'suant to P'esi1ential

    Dec'ee No. ""! 5Usu'9 /a47 4hich 'aise1 the le3al 'ate of inte'est f'o& si: 5!67 to t4el,e 5"%67 pe' cent appl9 to the case at ba' as b9 the petitione'. The a1Buste1 'ate &entione1 in the ci'cula' 'efe's onl9 to loans o' fo'bea'ances of &one9) 3oo1s o' c'e1its an1 cou't Bu13&ents the'eon but not to cou't Bu13&ents fo' 1a&a3es a'isin3 f'o& inBu'9 to pe'sons an1 loss of p'ope't9 4hich 1oes not in,ol,e a loan. 8 In the case of $ ilippine Ra%%it &us 'ines, (nc. vs. Cru)) G.R. No. "#" ) Aul9 %<) "*<!) "8( SCR- "C<) the Cou't 1ecla'e1 that the le3al 'ate of inte'est is si: 5!67 pe' cent pe' annu&) an1 not t4el,e 5"%67 pe' cent) 4he'e a Bu13&ent a4a'1 is base1 on an action fo' 1a&a3es fo' pe'sonal inBu'9) not use o' fo'bea'ance of &one9) 3oo1s o' c'e1it. In the sa&e ,ein) the Cou't hel1 in GS(S vs. Court of "ppeals) G.R. No. C%8 <) Octobe' (#) "*<!) "8C SCR- ("") that the 'ates un1e' the Usu'9 /a4 5a&en1e1 b9 P.D. ""!7 a'e applicable onl9 to inte'est b9 4a9 of co&pensation fo' the use o' fo'bea'ance of &one9) inte'est b9 4a9 of 1a&a3es is 3o,e'ne1 b9 -'ticle %%#* of the Ci,il Co1e. Clea'l9) the applicable la4 is -'ticle %%#* of the Ci,il Co1e 4hich 'ea1s; If the obli3ation consists in the pa9&ent of a su& of &one9 an1 the 1ebto' incu's in 1ela9) the in1e&nit9 fo' 1a&a3es) the'e bein3 no stipulation to the cont'a'9) shall be the pa9&ent of inte'est a3'ee1 upon) an1 in the absence of stipulation) the le3al inte'est 4hich is si: pe' cent pe' annu&. -n1 in the li3ht of the fact that the conten1in3 pa'ties 1i1 not alle3e the 'ate of inte'est stipulate1 in the insu'ance cont'act) the le3al inte'est 4as p'ope'l9 pe33e1 b9 the -ppellate Cou't at si: 5!67 pe' cent. @HERE0ORE) in ,ie4 of the fo'e3oin3) the petition is DENIED fo' lac? of &e'it. SO ORDERED. Gutierre), Jr., Feliciano, &idin and *avide, Jr., JJ., concur.

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