Spouses Antonio and Soledad Consing vs

Court of Appeals and Sugar Producers

Cooperative Marketing Association
G. R. No. 143584; March 10, 2004

Applicable Law: Article 2210

 Parties
• Spouses Antonio and Soledad Consing - Sps. Consing

• Philippine National Bank Victorias Branch - PNB

• Sugar Producers Cooperative Marketing Association -

SPCMA
 FACTS
purchased on
credit various
grades of fertilizer

a promissory note was

issued a certification stating that
Sps. Consing have an Agricultural
Crop Loan Line of P3,907,000.00
out of which has a Fertilizer
allotment of P1,389,400.00 and
would hold for SPCMA's account
the proceeds of said allotmen
made chargeable against
PNB amounting to
P481,660.52 as payment
for the anticipated fertilizer
allotment
 presented the promissory note

refused to honor the note

filed a
complaint
for
collection
of sum of
money
 Side of Sps. Consing
• admitted their indebtedness with SPCMA regarding the
cost of fertilizer, but deny the accuracy of the account
• the promissory note executed by them in favor of SPCMA
was novated by a subsequent agreement
 Side of SPCMA
• delivered voluminous fertilizers of various grades to Sps.
Consing
• presented the note to PNB but was dishonored
• demanded payment from Sps. Consing, spouses offered
temporary payment arrangement but failed to comply
• As of April 30, 1983, the total obligations due to SPCMA
amounted to P1,243,325.25.
 Ruling of the trial court
• ordered spouses to be jointly and severally liable to pay
SPCMA the sum of P1,243,325.25, with legal interest rate
from Nov. 8, 1977 until fully paid
• pay attorney's fees of 10% of the total unpaid obligation
and pay the costs of the suit.
 Ruling of the CA
• held that PNB was not guarantor or surety of Sps.
Consing.
• affirmed the decision of the trial court.

• motion for reconsideration was denied.

 Issue
• WON both the trial court and the appellate court erred in
imposing a legal interest of 6% per annum on the amount
of damages awarded.
 Supreme Court's Ruling
• Yes. Both the trial court and the appellate court erred in
imposing a legal interest of 6% per annum on the amount
of damages awarded.

• While it is true under Article 2210 of the Civil Code that

the court in its discretion may award interest at the rate of
6% per annum on the amount of damages, the Court finds
no ground to impose a legal interest.
• Sps. Consing and SPCMA had already agreed in writing
that all of the overdue accounts of the spouses should
earn interest at the rate of 1% per month or 12% per
annum. SPCMA also made provisions of 25% attorney's
fees and 10% liquidated damages in case of their default.
SPCMA has undoubtedly amply protected itself.
• the stipulated interest can still be applied once the
judgment becomes final and executory, and the amount
adjudged is still not satisfied.