GR 134972; (March, 2001) (Digest)
G.R. No. 134972 March 22, 2001
SPS. ERNESTO AND MINA CATUNGAL, petitioners, vs. DORIS HAO, respondent.
FACTS
Petitioners, the Spouses Catungal, purchased a building from Aniana Galang. Respondent Doris Hao was a lessee of portions of the building under separate contracts. Upon the expiration of the leases, petitioners demanded that Hao vacate the premises. Upon her refusal, petitioners filed ejectment cases. The Metropolitan Trial Court (MeTC) ruled in favor of the petitioners, ordering Hao to vacate and pay monthly rentals. However, the MeTC’s initial decision and a subsequent clarifying order contained conflicting amounts for the accrued rentals for the different floors of the building.
The Regional Trial Court (RTC), on appeal, modified the rental awards, setting them at specific amounts per floor. The Court of Appeals (CA) further modified the RTC decision by reducing the rental rates for the second and third floors. The CA also ruled that legal interest on the accrued rentals should only run from the finality of its judgment, not from the date of extrajudicial demand. The petitioners elevated the case to the Supreme Court, contesting the CA’s reduction of the rental rates and its ruling on the accrual of interest.
ISSUE
The primary issues were: (1) whether the Court of Appeals erred in modifying the factual findings of the RTC regarding the reasonable rental rates; and (2) whether legal interest on the accrued rentals should be computed from the date of extrajudicial demand or only from the finality of judgment.
RULING
The Supreme Court reinstated the RTC’s determination of rental rates and modified the computation of interest. On the first issue, the Court held that the RTC’s factual findings on the reasonable rental value, based on the evidence presented and the peculiar circumstances of the case including Hao’s prolonged unlawful possession, were entitled to great respect. The CA’s reduction of these rates was found to be unsupported and constituted a reversible error. The RTC’s assessment was reinstated.
On the second issue, the Court ruled that the accrued rentals or back rentals due from Hao constituted a forbearance of money. Applying Central Bank Circular No. 416, the legal interest of 12% per annum should be imposed from the time of extrajudicial demand, not merely from the finality of judgment. The CA erred in postponing the accrual of interest. Consequently, the Supreme Court ordered Hao to pay the rentals as determined by the RTC, with 12% legal interest per annum computed from the date of demand until fully paid, plus attorney’s fees and costs.