G.R. No. 96494 May 28, 1992
FACTS:
Jose Valenzuela, Jr., filed a complaint against Casa Filipina Development Corporation before the Office of Appeals, Adjudication and Legal Affairs (OAALA) [now Housing and Land Use Regulatory Board (HLURB)] for its failure to execute and deliver the deed of sale and the transfer certificate of title (TCT). Valenzuela alleged that he entered a contract to sell with Casa Filipina for the purchase of a lot to be paid in 12 equal monthly installments with 24% interest. He also alleged that despite full payment, the Casa Filipina refuses to execute the deed of sale and deliver the TCT. Valenzuela had also offered to pay for or reimburse Casa Filipina the expenses for the transfer of the title but the petitioner refuses to accept the same. OAALA rendered judgment in favor of Valenzuela and ordered Casa Filipina to execute the deed of sale and deliver the TCT. OAALA also ordered that in the event petitioner is unable to deliver the title to the said lot, Casa Filipina should refund to Valenzuela his total payments plus 24% interest per annum from the date of the filing of the complaint, until fully paid.
Casa Filipina then filed an appeal before the HLURB which the HLURB dismissed for lack of merit. Casa Filipina appealed further to the Office of the President which was also dismissed for lack of merit.
ISSUE:
Whether or not the legal interest or the interest rate stipulated in the contract is to be applied.
HELD:
The Supreme Court ruled that the interest rate stipulated in the contract is to be applied. The Supreme Court emphasized that in cases where damages in the form of interest is due but no specific rate has been previously set by the parties, the legal interest of 12% per annum must be applied. In the present case, however, the interest rate of 24% per annum was mutually agreed upon
by petitioner and private respondent in their contract to sell. There is no reason why this same interest rate should not be equally applied to petitioner which is guilty of violating the reciprocal obligation.