G.R. No. L-15208; September 30, 1960
ALIPIO N. CASILAN and PURITA GALAGNARA, plaintiffs-appellants, vs. SANTIAGO GANGCAYCO, MANUEL GANGCAYCO, RAYMOND TOMASI and ENRIQUE BASEA, defendants-appellees.

FACTS

On April 6, 1950, plaintiffs-appellants sued defendants-appellees for damages in the Court of First Instance of Leyte. The defendants answered with a denial and a counterclaim. After trial, the court rendered judgment on September 5, 1953, ordering the plaintiffs to pay specific sums to the defendants “with legal interest on all said sums.” This judgment was affirmed in toto by the Court of Appeals on January 27, 1956, and subsequently by the Supreme Court on August 29, 1958. Upon remand for execution, the trial judge issued an order directing that the legal interest on the awarded sums be computed from the date of its original decision, September 5, 1953. The plaintiffs appealed this order, contending that interest should be computed only from the date the Supreme Court’s judgment became final in August 1958, arguing that their right to appeal precluded a demand for payment and thus they incurred no delay during the pendency of the appeal.

ISSUE

When does the legal interest on a money judgment, affirmed on appeal, begin to run—from the date of the trial court’s original decision or from the date the appellate judgment becomes final?

RULING

The Supreme Court affirmed the trial court’s order, ruling that legal interest on the affirmed judgment should be computed from the date of the trial court’s original decision, September 5, 1953. The Court held that:
1. The defendants’ judicial demand for payment was made in their answer, and the judgment should have required interest from that time. However, since the trial court’s judgment ordered interest without specifying a start date, and this judgment was affirmed in toto, the interest runs from the date of that original judgment.
2. Section 510 of Act No. 190 (the Code of Civil Procedure) provides that when the Supreme Court affirms a money judgment, it shall direct interest to be added from the date of the former (lower court’s) judgment until the date of the final judgment. This provision was not expressly repealed by the New Rules of Court.
3. Jurisprudence supports this rule, establishing that under analogous circumstances, legal interest begins to run from the decision of the court of first instance, not from the confirmatory judgment of the appellate court. An appeal does not stop the running of such interest, as the judgment debtor could have deposited the amount when the judgment was first rendered to stop the accrual of further interest.
DISPOSITIVE PORTION:
Wherefore, the appealed order is affirmed, with costs.