G.R. No. 165116; August 4, 2009
MARIA SOLEDAD TOMIMBANG, Petitioner, vs. ATTY. JOSE TOMIMBANG, Respondent.

FACTS

Petitioner Maria Soledad Tomimbang and respondent Atty. Jose Tomimbang are siblings. Their parents donated an eight-door apartment to petitioner, who was to act as administrator. In 1995, petitioner sought a loan from PAG-IBIG to renovate Unit H for her residence but failed. Respondent then offered a credit line under conditions including that petitioner would start repayment upon completion of the renovations and that a formal loan and mortgage agreement would be executed thereafter. Petitioner accepted, and renovations on several units commenced.
A family altercation led to a new agreement in 1997, wherein petitioner agreed to start monthly loan payments. She made payments from June to October 1997 totaling ₱93,500.00. However, after another quarrel in October 1997, petitioner allegedly told respondent to forget the money since there was no signed agreement, left her unit, and ceased payments. Respondent filed a complaint demanding payment of ₱3,989,802.25 plus interest.

ISSUE

The main issues are: (1) whether petitioner’s loan obligation is already due and demandable; (2) whether respondent is entitled to attorney’s fees; and (3) whether and at what rate interest should be imposed on the loan.

RULING

The Supreme Court affirmed with modification the Court of Appeals’ decision. On the first issue, the Court ruled the obligation is due and demandable. While the original agreement made repayment contingent upon completion of renovations, the parties subsequently entered into a new oral agreement during a family meeting in 1997. Petitioner’s act of making monthly payments from June to October 1997 constituted clear performance under this new agreement, effectively novating the original terms and rendering the obligation immediately demandable irrespective of the unfinished renovations. Her subsequent default justified the action for collection.
On the second issue, the Court deleted the award of attorney’s fees. The general rule is that attorney’s fees are not awarded as a matter of course; they must be specifically prayed for and proven. While respondent prayed for them in his complaint, he failed to present substantive evidence, such as a retainer agreement or official receipts, to justify the amount awarded. The Court found no compelling reason to depart from this rule.
On the third issue, the Court upheld the imposition of interest at the rate of 12% per annum from the date of extrajudicial demand. Citing established jurisprudence, the Court held that where an obligation involves a loan or forbearance of money and no written stipulation on interest exists, the applicable rate is 12% per annum, computed from the time of judicial or extrajudicial demand. The reckoning point from the date of demand was deemed proper under the circumstances of the case. The petition was thus AFFIRMED with the MODIFICATION deleting the award of attorney’s fees.