Norsk Hydro v. Premiere Development Bank

J. JR., J.:

Assailed in this Petition for Review on Certiorari1 under Rule 45 of the 1997 Rule on Civil Procedure are the Orders dated February 19, 2016,2 and August 5, 2016,3 both promulgated by the Regional Trial Court (RTC), Branch 148, Makati City in Civil Case No. 03-1203 entitled "Norsk Hydro (Philippines), Inc. and Norteam Seatransport Services v. Premiere Development Bank, Bank of the Philippine Islands, Citibank, N.A., Skyrider Brokerage International, Inc. and Marivic-Jong Briones." The said Orders resolved to issue a writ of execution against respondents and enjoined them to pay the remaining unpaid obligation amounting to One Million Three Hundred Twenty-Eight Thousand Two Hundred Sixty-Three Pesos and Seven Centavos (P1,328,263.07) with 6% per annum from November 30, 2015 until fully paid, and costs of suit. The case stemmed from a Complaint for Sum of Money and Damages with an Application for the Issuance of a Writ of Preliminary Attachment filed on October 9, 2003, by petitioners against herein respondents.

Petitioners alleged that respondent Skyrider Brokerage International, Inc. (Skyrider Brokerage) did not remit to the Bureau of Customs (BOC) the 19 crossed manager's check transmitted unto it (Skyrider Brokerage) by petitioner Yara Fertilizers (Philippines), Inc. [formerly known as Norsk Hydro (Philippines), Inc.], for the purpose of payment of the custom duties and taxes for the fertilizers that were imported by the latter. On April 14, 2010, the RTC rendered a Decision4 finding respondents Security Bank Corporation (formerly known as Premiere Development Bank), Skyrider Brokerage, Marivic-Jong Briones (Jong-Briones), and the Bank of the Philippine Islands (BPI) jointly and severally liable to petitioners for the amount of P26,176,006.06 covering the 18 crossed manager's checks purchased from the BPI, plus interest; finding respondents Security Bank Corporation (Security Bank), Skyrider Brokerage, Jong-Briones and the Citibank, N.A. (Citibank) jointly and severally liable to petitioners for the amount of P1,907,784.00 covering the Citibank Manager's Check No. 338583 dated November 16, 2001, plus interest; finding respondents BPI and Citibank to have the right to claim reimbursement against respondent Security Bank for whatever amounts they would be obligated to pay herein petitioners; dismissing respondent Security Bank's counterclaim against petitioners for lack of merit; finding respondents Security Bank and Skyrider Brokerage jointly and severally liable to petitioners for the amount of P400,000.00 as exemplary damages, and; finding respondents Security Bank, Skyrider and Jong Briones jointly and severally liable to petitioners for the amount of P400,000.00 as moral damages, P700,000.00 as attorney's fees and litigation expenses, and costs of suit.

Upon appeal, the appellate court rendered a Decision5 dated November 20, 2014, denying respondents' appeal and dismissing the instant case for lack of merit. The appellate court affirmed the findings of the RTC that respondents acted in gross, wanton, and inexcusable negligence in the unauthorized encashment and conversion of the subject checks, to the prejudice of herein petitioners. Unsatisfied, respondents filed their Petition for Review on Certiorari before this Court on January 27, 2015.

On March 16, 2015, this Court issued a Resolution denying the instant petition "for failure to sufficiently show that the appellate court committed any reversible error in the challenged decision as to warrant the exercise by the Court of its discretionary appellate jurisdiction." Since no motion for reconsideration was filed, the Resolution dated March 16, 2015, became final and executory and a corresponding Entry of Judgment dated May 26, 2015, was issued by this Court thereon. Thus, on September 18, 2015, petitioners filed a Motion for Execution of the Decision dated April 14, 2010, issued by the RTC and prayed that they be awarded the amount of P109,460,770.61.

Petitioners asserted that in the absence of an expressed stipulation as to the rate of interest that should govern the parties, the legal interest to be imposed or the actual damages awarded in their favor should be 12% per annum, compounded annually from the date of extrajudicial demand up to June 30, 2013. The legal interest to be imposed from July 1, 2013, until full payment by the respondents of their obligation should be six percent (6%) per annum, compounded annually, by virtue of Bangko Sentral ng Pilipinas (BSP) Circular No. 799-13, which fixed such legal interest to the same. In its Comment, respondent Security Bank contended that the interest on the actual damages awarded should only be imposed at 6% per annum from the date of finality of the Decision on May 26, 2015, until the obligation is fully paid, considering that respondents' obligation did not arise from a loan or forbearance of money, but as a result of fraud and negligence.

Furthermore, there is no basis to impose compounding interest on the said damages, and that the Decision dated April 14, 2010, did not impose interest for the other damages awarded to petitioners, e.g., moral and exemplary damages, and attorney's fees. Ruling of the RTC On February 19, 2016, the RTC issued an Order6, granting the Motion for Execution and ordered that a writ of execution be issued in favor of petitioners, to wit: Accordingly and in accordance with the foregoing discussions, defendants['] remaining obligation under the subject Decision as of November 30, 2015 should be computed as follows: Computation of legal interest due on the Actual Damages Awarded in the amount of [P]28,083,790.02 from judicial demand to finality of judgment Period Covered: October 09, 2003 (date of judicial demand) - May 26, 2015 (date of finality of the decision) P28,083,790.02 x 6% x 11 years, 7 months and 17 days = P19,596,714.72 P19,596,714.72 - interest due on the actual damages from judicial demand up to finality of judgment + P28,083,790.02 - actual damages awarded (value of the Manager's checks)